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the right to extract, reanalyze, repeat, build upon, and extend the work. These rights typically have been available to any reader of paper publications, subject only to the limits of patent law. As other speakers have noted, however, the online environment facilitates technologically enforceable restrictions on access and acquiescence to contract terms that could restrict further use of the data. Moreover, these terms usually will not be negotiated in the usual sense of the word because of the unequal bargaining power of subscriber and publisher.

Will licensing provisions that restrict further use of data be upheld? Will such contracts become commonplace? For the remainder of this discussion, I will talk about the applicable legal principles and then will highlight some developments in scientific publishing that may indicate which way the wind is blowing.


The primary legal principle applicable to licensing provisions, or at least the starting point for any analysis, is “freedom of contract.” Freedom of contract is not unlimited, however, and traditionally has been subject to limitations imposed by various other legal doctrines and policies, such as preemption by federal law (including copyright and patent law), competition policy, the doctrine of unconscionability in contracts, and perhaps even First Amendment principles. Lemley, Reichman, and others have written extensively about these possibilities in limiting objectionable terms in electronic licenses. 2

With regard to restrictions on the use of scientific data, preemption under copyright law seems the most promising because the U.S. Supreme Court held in Feist Publishing v. Rural Telephone that copyright does not protect facts, and protects compilations of facts only to the extent that the selection and arrangement are original. 3 Thus, copyright does not prohibit the extraction of isolated facts from a compilation, even significant portions of them, so long as the selection and arrangement are not copied (assuming it is original enough to be protected in the first place). The Supreme Court has not had occasion to decide, however, whether Feist's declaration that facts are free for all to use can be trumped by contract. That question has been addressed in a number of lower court decisions considering “shrinkwrap” and “click-wrap” licenses that typically accompany commercial software and other digital or electronic products.

For a time, most courts held, on contract formation grounds, that the shrinkwrap licenses were invalid and that their terms did not bind the purchaser. Because the consumer was not aware of the terms of the license before making the contract (i.e., agreeing to purchase for the stated price), the license was not part of the contract between buyer and seller. (This problem need not be an obstacle in the online publishing environment, in any event, because the subscription to an online journal or database can be conditioned on acceptance of terms made known to the subscriber at the time of the subscription, before the contract is made.)

The trend toward invalidating shrinkwrap licenses began to wane in later cases, however. In ProCD v. Zeidenberg, the Seventh Circuit upheld a shrinkwrap license that accompanied a CD-ROM containing a nation-wide telephone directory, overcoming the contract formation issue. 4 More significantly for our purposes, Judge Easterbrook held that the license's prohibition on further copying and use of the data on the CD-ROM was enforceable, rejecting the argument that the Copyright Act preempted terms that were in conflict with the policy of copyright as expressed in Feist.

The ProCD court appeared to be concerned about the impact of the defendant's complete copying of the database on the plaintiff's investment of about $10 million and on the incentives for others to invest in electronic databases of public information. The problem with the decision, however, is that the court's reasoning suggests that other kinds of restrictions, such as a prohibition of extraction of any part of the database or reach-through provisions attempting to capture royalties on downstream uses and developments, would be upheld. The Supreme

2See, e.g., Lemley, Mark A. 1999. Beyond Preemption: The Law and Policy of Intellectual Property Licensing, 87 Cal. L. Rev. 111; and Reichman, J. H. and Jonathan A. Franklin. 1999. “Privately Legislated Intellectual Property Rights: Reconciling Freedom of Contract with Public Good Uses of Information,” 147 U. Penn. Law Rev. 875.

3See Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991).

4See ProCD v. Zeidenberg, 86 F.3d. 1447 (7th Cir. 1996).

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