14 October 2010

Ownership of User Generated Content

(This post was inspired by a conversation between @gkjohn and @nsaikia/myself. It is about websites which accept/solicit UGC only to state that all UGC belongs to themselves.)

An uncle once wrote, to his nephew, something to the effect of, "Unless I hear from you to the contrary, I shall presume that you have sold me your horse for the amount I have decided." This was in the 19th century, and the matter not only found its way to court but also went on to become a seminal case in contract law.1 Quite reasonably, the uncle failed to convince the court that he had legitimately bought the horse from his nephew.

Fast forward to the 21st century. The sale of horses is not generally at issue, but while the subject matter may have changed, the substance of the argument may often be considered to be similar. What are the legalities involved in not only announcing that one owns the property of another person but in doing so while being factually accurate? In fact, going a step further, would it be legally possible to effectively decide that one owns the property of another person without paying that person anything?

One context in which such questions could arise is in the context of User Generated Content (UGC) which is submitted to websites. Such sites which solicit/accept submissions from users often have, somewhere in the fineprint of their Terms, clauses which state that '(1) all submissions shall be the exclusive property of the website, (2) the submitting-artist/user (hereinafter referred to as the "artist") shall have no right to his/her submission/"work" or therein or to any profits which may be derived therefrom, and (3) the website may deal with the work in any manner it chooses without any reference to the artist, and without making any payment to the artist'. Some websites may acknowledge that the work once belonged to the artist and draft clauses in the form of an "assignment" of copyright or "transfer" of the work.

There will, of course, also usually be clauses stating that the artist "warrants and represents" that the submitted work is original, and later on, that should any representation or warranty be incorrect, the artist will indemnify the website. The result is that the website is left with ownership of the work without actually shouldering any responsibility or obligation whatsoever. Whether such agreements (hereinafter referred to as the "UGC Agreements") are legal is debatable. There are, without doubt, arguments which can be articulated in their favour (and they've all been ignored in this post).

One aspect of the matter is the question whether the appropriation of the ownership of UGC by websites is morally acceptable. Should such appropriation be allowed when on the face of it, it appears to be unconscionable to solicit/accept the work of an artist, pay that artist nothing, inform him/her that you (as the website) own his/her work, possibly profit from the work, and, then should there be an issue with the work such as infringement, require the artist to reimburse you for all expenses you have incurred as a result thereof? Basic decency would seem to necessitate one's shouldering some, if not all of the "burden" if one were to reap all of the "benefits", so to speak.

While "basic decency" may not be a legal term, the law is not oblivious to it; one of the doctrines of contract law is the Doctrine of Unconscionability. Under this doctrine, if a contract is excessively one-sided, a court may intervene to aid the injured party. The doctrine is usually applied where no consideration has been paid, and where the contract is a standard form -- both factors which would be present in the situation described. Further, under Indian law, the doctrine is on its firmest footing when considered in conjunction with Section 23 of the Contract Act, 1872, which states that the consideration or object of an agreement is not lawful if it is immoral or opposed to public policy. And if the consideration or object is not lawful, the contract is void and unenforceable.

In this case, it should be possible to argue that the agreement is immoral because it flies in the face of basic decency consequent to its structure as described earlier. Further, it should also be possible to argue that the agreement opposes "public policy", that marvellously malleable idea, for surely, it cannot possibly be public policy to strip author-creators of their rights to their own works vide boilerplate contracts such as UGC Agreements.

Artists who are not well-established need the use of whatever venues they can find to promote and publicise themselves. Till they do become well-established, they do not have the bargaining power to negotiate better (or for that matter, any) contracts for themselves. They cannot pick-and-choose venues whether online or offline simply because there is a severe dearth of venues which are prestigious or associated with a well-known brand. And knowing all this, websites impose on them agreements, which the artists are often unable to challenge assuming they are aware of them in the first place, and appropriate their rights. Allowing persons in a more powerful position to institutionalise the "theft" of artists' property is unconscionable and it cannot possibly be public policy. It is, at any rate, certainly not the ostensible aim of copyright law.

In fact, even leaving aside issues relating to public policy, the letter of the Copyright Act, 1957, may find such UGC Agreements legally untenable. A copyright assignment would, inter alia, be governed by Sections 18 and 19 of the copyright statute. Whether or not an assignment requires consideration is an issue on which divergent opinions exist. If consideration is necessary, the assignments of UGC described would automatically be void for want of it.

Another opinion (which I support) is that an assignment does not need consideration to be valid because it is a deed and not a contract. However, even if consideration is not required, it could be argued that both Sections 18 and 19 of the Copyright Act, 1957, contemplate a situation where the assignor assigns his/her rights. Section 18 begins by stating: "The owner of the copyright in an existing work or the prospective owner of the copyright in a future work may assign to any person the copyright...," while Section 19 clarifies that "no assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorised agent." Neither one of these Sections contemplates the prospective assignee unilaterally declaring ownership of the work of an artist it hopes would be an assignor. Assignment, it could be argued, is contemplated as a proactive act of the assignor, and not mere passive acceptance on the part of the purported assignor in a UGC Agreement.

In this context, if one were to play the Devil's Advocate, one could point out that various software licences which are non-negotiated and effectively unilateral (as are the UGC agreements being discussed) have been routinely upheld by courts. However, it is pertinent to note that software contracts satisfy of the requirement of pro-activeness: it is the licensor who, as the copyright owner, lays down the terms under which the end-user may use the software, and not the other way around as in the case of UGC Agreements.

As such, it could be argued that regardless of whether one looks at the issue from the point of view of equity or statute, such UGC Agreements would be legally untenable.


Note:

1. Felthouse v. Bindley, (1862) EWHC CP J 35. Brogden v. Metropolitan Railway Company, (1876-77) LR 2 App Cas 666, may be used to argue against the applicability of Felthouse v. Bindley with reference to UGC Agreements.


(This post is by Nandita Saikia and was first published at Indian Copyright.)

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