May 14, 1999
Federal Trade Commission
600 Pennsylvania Ave., N.W.
Washington, D.C. 20580
Re: "Law Book Guides, 16 C.F.R. Part 256--Comment."
The American Association of Law Libraries (AALL) was founded in 1906 to promote and enhance the value of law libraries to the legal and public communities, to foster the profession of law librarianship, and to provide leadership in the field of legal information. Today, with over 4,800 members nationwide, the Association represents law librarians and related professionals who are affiliated with a wide range of institutions: law firms; law schools; corporate legal departments; courts; and local, state and federal government agencies. Our members serve a clientele comprising judges, lawyers, law professors, law students and members of the public who rely on the collections and services of law libraries for access to and assistance in using the information products created and supplied by the legal publishing industry. Collectively, we are probably the major consumers of legal information in all forms, print as well as electronic.
Cooperation between law librarians and legal publishers is crucial to the daily work of our members, and for this reason AALL actively participated with the Federal Trade Commission in developing the Guides for the Law Book Industry (16 C.F.R. Part 256) in the 1970s. These Guides were created in response to widespread abuse of trade practices by the law book industry. The unique format of legal publications, which are time-sensitive and require frequent updating, make them more susceptible to problems with regard to subscriptions, billing, product descriptions and quality. The purpose of the Guides was to provide a standard for fair trade practices with regard to the marketing, sales and upkeep of legal information products, a need that continues today.
AALL members believe that these guidelines, in effect since 1976, have been very beneficial to consumers of legal information by curbing some of the anti-consumer practices that had existed before they were first issued. We thank you for the opportunity to respond to the F.T.C.'s request for Comment Concerning the Guides for the Law Book Industry (64 F.R. 13370) because we believe that they provide important guidance for legal publishers while concurrently protecting consumer rights. In addition, given the sea change in technology since the Guides were first developed, we believe that this is a propitious time to update them to apply to electronic information products.
- Question 1: Is there a continuing need for the Law Book Guides?
- (a): What benefits have the Guides provided to purchasers of the legal reference materials affected by the Guides?
(b): Have the Guides imposed costs on purchasers?
AALL believes that there is a continuing need for the Law Book Guides. They have been very useful to consumers in setting a standard of expectations for legal information publishers. They have improved publisher-customer relations by establishing a common ground for discussion of what a consumer can reasonably expect of a law publisher. In addition, the Guides give consumers needed leverage in seeking fair treatment.
The Guides are a benchmark of acceptable practices for the legal publishing industry and are especially beneficial in providing these practices to companies which are new to the field, along with an understanding of their obligations towards consumers. This is particularly important in an era of publisher consolidation because it provides newer and smaller publishers with a level playing field in relation to their larger, more established competitors.
To our knowledge, the Guides have imposed no additional direct costs on purchasers. In fact, the opposite may well be true, not only for consumers but also for publishers, because when sufficient and timely information about legal publications is available, in accordance with the Guides, libraries are able to make more informed decisions about their purchases of legal materials. In our view, the standards contained in the Guides result in an improved system of acquisitions, with fewer orders made in error because of insufficient information. The resulting benefits apply not only to consumers but also to publishers.
Question 2: What changes, if any, should be made to the Guides to increase the benefits of the Guides to purchasers? How would these changes affect the costs the guides impose on firms who conform to the guides? How would these changes affect the benefits to purchasers?
AALL appreciates the opportunity to propose three areas in which changes should be made to the Guides to increase their benefits to purchasers. We do not believe that these proposals impose any needless new costs on legal publishers but rather that they should be viewed as useful additions to the accepted good practices already contained in the Guides. The three areas for which we recommend changes are: first, mergers, acquisitions and divestitures; second, unsolicited shipments; and third, billing.
FIRST: MERGERS, ACQUISITIONS AND DIVESTITURES
One of the greatest sources of problems for customers of legal publishers has been the series of mergers, acquisitions and divestitures that has occurred within the industry in the past two decades. These changes in publishers' ownership have resulted in much confusion and a lack of communication between company and customer. AALL suggests that the following additions to the Guides may ease the transition process in such situations:
- The Guides should require that publishers inform customers immediately of any changes in the company's status.
- If a product is sold to another publisher, or if it changes divisions within a reorganized company, the customer should be informed of the change and of the status of the customer's subscription to that product. Publishers should provide customers with a list of divested products and where those products were sold or transferred.
- Prior to selling or transferring a list of publications, the publisher should make certain the customer account information is up to date. Many problems have been created when a company sold certain titles to another company without correcting the data for the subscriptions, resulting in widespread problems with accounts and unwanted shipments.
- Customers should be informed of, or provided with the means to readily determine, the current status of their accounts and also the name and contact information for their current account representatives. This information should be available and updated on an ongoing basis.
SECOND: UNSOLICITED SHIPMENTS
Unsolicited shipments pose a constant problem for consumers of legal information products. This is addressed in footnotes of 256.14, where they refer to Section 3009 of the Postal Reorganization Act. It would be helpful to expand the language within 256.14 to specifically state that unsolicited shipments are an unfair trade practice, and to better define situations in which a shipment can be considered "unsolicited."
The publisher should display the customer's purchase order numbers on all invoices, and provide the purchase order numbers for each item on a statement. (256.15(d) and (e)).
Question 5: Do the Guides overlap or conflict with other federal, state, or local laws or regulations?
Not to our knowledge.
Question 6: Since the Guides were issued, what effects, if any, have changes in relevant technology or economic conditions had on the guides? For example, do sellers use E-mail or the Internet to promote or sell legal reference materials covered by the Guide? If so, in what manner? Does use of this new technology affect consumers' rights or sellers' responsibilities under the Guides?
Significant changes in technology since the Guides were created in 1975 require that they be updated to reflect new forms of publication that are now essential components of the legal publishing industry. The introduction of electronic formats such as online, Internet, and CD-ROM are only the latest of a long progression of media formats that are not reflected in the Guides. Rules pertaining to print publications do not adequately cover a myriad of issues that are unique to electronic products. AALL proposes the following changes to bring the Guides in accord with changing technology:
Question 6 (contd): Does use of this new technology affect consumers' rights or sellers' responsibilities under the Guides?
- The title of the Guides should be changed to Guides for the Legal Publishing Industry. 256.0 All general language in the Guides should be amended to format neutral language so that it applies equally to print, electronic, and all other publication formats.
For example, in 256.1(d), change "in the event of a loose-leaf . . . publication" to "supplemented product;" in 256.1(h), change "type of binding" to "type of binding, medium, or format" and add to the parenthetical list examples of electronic formats and media. AALL will be pleased to provide, upon request, a more comprehensive list of specific changes that should be made.
- Add definitions to explicitly provide for electronic resources and formats, including other successor technologies, to 256.0 as needed.
- Change the term "seller" to "seller or licensor" throughout the Guides.
- The optimal term for electronic disk format is "optical disk," which includes CD-ROMs, DVD, and any other optical disk technology that might eclipse these two formats.
- The Guides should expand their disclosure requirements to include software versions, media format, date spans of material covered (not just the date of the upgrade), site licenses, and restrictions on use.
- In reference to the suggestion in (5) above, a new Guide might be added on "License Agreement for Electronic Resources" to accommodate the practice of becoming a party to a license for access to an information product. The following provisions ought to be considered for inclusion:
- Form of Agreement -- Publishers should not use "shrink wrap," "clickable," or other types of adhesion contracts for electronic resources that restrict or abrogate the rights of the licensee or its user community.
- Disclosure--The licensed resources should be accurately identified by title, edition, names of authors/editors, copyright and supplementation dates, etc., in the licensing agreement and the beginning of the document (on the first screen, home page, etc.)
- Copyright Law--The publisher should use contract language that acknowledges and respects customers' rights under federal copyright law, such as fair use, interlibrary loan, and other library and educational uses.
- Users and Uses--A license agreement should clearly define and specifically describe the "user community"; "acceptable uses"; and what access rights are being acquired by the licensee, for example, permanent use of the content or access rights only for a defined period of time.
- Preservation and Archiving--A license agreement should allow the licensee to copy data for the purposes of preservation and/or the creation of a usable archival copy when the permanent use of a resource has been licensed. If a license agreement does not permit the licensee to make a usable preservation copy, a license agreement should specify who has permanent archival responsibility for the resource and under what conditions the licensee may access or refer users to the archival copy.
- Obligation to Perform--Licensors should state clearly and specifically their obligations to provide access, support services, and products necessary for the use of the electronic resource.
- Duration and Renewal--The exact dates of the subscription and license should be clearly stated. The subscriber should be entitled to notice of impending renewal or termination of service.
- Warranties--Licensors should be liable for direct damages, and for damages incurred by the subscriber if the electronic resource becomes unavailable or contains errors and omissions.
- Governing Law, Remedies, and Dispute Resolution--Licensors should be willing to negotiate with subscribers over the jurisdiction of the law governing the license; to provide injunctive relief in the case of a material breach; and to discuss with subscribers the location of a forum for dispute resolution.
- Security and Usage Monitoring--Subscribers should be required to take only reasonable measures to adhere to the usage provisions of the license. The licensor should be able to provide security and authentication functions suitable for the use of the subscriber.
- Pricing--Licensors should express clearly the terms of pricing arrangements and provide for price renegotiation within a reasonable period before the renewal date.
- Sharing of Information--The licensor should not restrict the subscriber from disclosing any but the most sensitive terms of the license.
- Data Collection--Licensors should be able to provide the subscribers with data on the usage of the product, in keeping with recognized standards.
- Customers who subscribe to more than one format, such as print and CD-ROM, should be given clear and complete information about what the subscription includes, where one starts and the other ends, what the total annual cost will be, etc. Differences in the coverage and cost between different formats of the same title should be clearly stated.
- Part 256.3 should include references to multiple units (volumes, discs, etc) rather than volumes; "databases and electronic resources" should be added to "texts and treatises."
- In the general description of the product, hardware and software requirements should be fully disclosed for electronic products.
- References to revisions (256.4) should be expanded to include upgrades in software or database modifications.
- In advertisements, the publisher should indicate all available formats. Advertising should avoid misleading titles (256.1 and 256.6), including inconsistencies between different formats for the same text. The term "texts or treatises" should be changed to "publications or products."
- Comparable standards for electronic billing should be incorporated into 256.15.
- Upkeep service (256.14) should be updated to include a provision preventing a publisher from forcing a customer to accept an alternative format if the customer's preferred format is available.
- In 256.9, "on the front cover" should be changed to "at the beginning of the document or product."
Librarians have noted the impact of technology on the marketing techniques of legal publishers, and AALL proposes the following additions to bring the Guides in accord with these changes:
- Customers should have the right to be removed promptly from a publisher's telemarketing list, including independent telemarketing firms employed by the publisher.
- Customers should be able to curtail solicitations by e-mail.
- References to catalogs (256.9) should be defined to include Web sites and other electronic forms of communication that are used to supply information about products to customers. In this regard, information required to be included in print catalogs (e.g., price, update costs and frequency) should also be required to be included on Web sites and other electronic advertisements.
Question 7: Are there private industry standards addressing the practices covered by the Guides?
Not to our knowledge.
Question 8: Are there any abuses occurring in the promotion, sale, or distribution of legal reference materials covered by the Guides that are not dealt with in the Guides? If so, what mechanisms should be explored to address such abuses (e.g., consumer education, industry self-regulation, revisions to the Guides)?
AALL believes that the F.T.C. should take certain steps to increase the Guides' effectiveness. The Guides do not have regulatory authority and, as many law librarians have suggested, were they to be upgraded to regulations, it is certain that legal publishers would take them more seriously. Over the years, AALL's Committee on Relations with Information Vendors (CRIV) has received numerous reports of continuing violations of the Guides by individual publishers.
For instance, many publishers still neglect to supply prices of their products in advertisements, contrary to Guide 256.1. A number of publishers habitually send unrelated material to subscribers of other products in violation of Guide 256.16. Upgrading the guides to regulations should be explored by the F.T.C. as a means of addressing these and other abuses. The lack of enforcement of the current guides is a problem for consumers.
In addition, however, AALL believes that simple awareness on the part of the publishers would be a positive step. We have observed that many representatives of legal publishers are unaware of the very existence of the F.T.C.'s Guides to the Law Book Industry. If the F.T.C., perhaps in coordination with AALL, regularly sent a letter to publishers reminding them of the existence of the Guides, there might well be an increase in compliance. At the very least, librarians who refer to the Guides in discussions with publishers would know that the publishers should be aware of these standards.
The American Association of Law Libraries thanks the Federal Trade Commission for its current and timely review of the Guides for the Law Book Industry. These standards have served our members well in the past. However, particularly in light of the advances of new technologies, they require updating for the electronic age. We believe that the many changes proposed in our comments will serve to strengthen the Guides and we would like to work with the F.T.C. in developing these changes and in discussing improved mechanisms for compliance and enforcement of the Guides by the legal publishing industry.
Our comments today reflect many of the important principles developed and endorsed by the American Association of Law Libraries and five other national library associations to guide libraries in negotiating license agreements for access to electronic resources, and to provide licensors with an understanding of the issues of importance to libraries and their user communities during such negotiations. Since the Principles for Licensing Electronic Resources (July 1997) may provide useful background to the F.T.C. in its review of the changes we have proposed for updating the Guides to apply to electronic information products, a copy is attached. They are also available electronically at: http://arl.cni.org/scomm/licensing/principles.html.
Please do not hesitate to contact me if the F.T.C. or its staff have any questions concerning our letter. In addition, the American Association of Law Libraries would be very pleased to participate in discussions with the Commission on the continuing need of the Guides for the Law Book Industry and the best means to bring them into the electronic age.
Robert L. Oakley
American Association of Law Libraries
Washington Affairs Representative
Attachment: Principles For Licensing Electronic Resources (July 1997)