The Copyright Act contains a mesh of rights and exceptions to those rights. Some of the exceptions are exemptions, like Section 108; some are compulsory licenses, like Sections 111 and 119 and parts of Sections 114 and 115. Some are privileges like Section 107, fair use. Exclusive rights are things copyright owners in the particular work own. Exclusive rights arise either through creation, or by transfer. If by transfer, the assignment of exclusive rights must be in writing, signed by the freelance author, and, as with all exclusive rights in property, will endow the owner thereof with the exclusive ability to exclude all others from using the property. Privileges are not rights and are not licenses either. They must be proved by the party asserting entitlement thereto and may not be transferred to third parties.
There is one provision which states on its face that it is a privilege, but has not been treated as such by the courts. This is Section 201(c):
(c) Contributions to Collective Works. — Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.
The first sentence of Section 201(c) states unequivocally that all rights vest initially in freelancers and remain there unless transferred, while the structure of the second sentence limits availability of the privileges that follow “in the absence of an express transfer of the copyright or any of the rights under it. . . .” Congress thus clearly contrasted transfer of exclusive rights with privileges: if you get a transfer of exclusive rights, your transfer governs and you get no privileges under this section. If you have no such transfer of rights, you get (presumptively) the privileges set forth therein. Non-exclusive licenses are transferable without permission.
All this was clear enough until the district court decision in Tasini v. New York Times, 972 F. Supp. 804 (S.D.N.Y. 1997), which held:
In plaintiffs' view, the fact that Section 201(d)(2) provides for the transfer of “rights” can only be taken to mean that the “privileges” identified in the preceding section of the Act are nontransferable. This approach distorts the relationship between Section 201(c) and Section 201(d).
Section 201(d)(2) does not speak only of “rights,” but also of any “subdivision” of rights. The potential for such a subdivision of rights is created in the preceding section, 201(d)(1), which permits the transfer of copyright, “in whole or in part,” either by conveyance or by “operation of law.” This recognition of the potential for a partial transfer of copyright “by operation of law” follows from the fact that exactly such a transfer is effected in the preceding Section of the Act, Section 201(c), which extends certain enumerated “privileges” to publishers. In other words, the three provisions operate in tandem: Section 201(c) transfers plaintiffs' copyrights, “in part,” to defendants-a permissible exercise under Section 201(d)(1)-and therefore, under Section 201(d)(2), defendants are left with full authority over the “subdivision” of rights they acquire.
When Sections 201(c) and 201(d) are placed into historical context, the weakness in plaintiffs' position is all the more apparent. The 1976 Act, in significant part, amounts to a repudiation of the concept of copyright indivisibility, a principle pursuant to which the assorted rights comprising a copyright could not be assigned in parts, i.e. subdivided. See Nimmer, § 10.01 [A], at 10-5. Under this former regime, individual authors were at risk of inadvertently surrendering all rights in a contribution to a collective work either to the publisher of that work, or to the public. Id. Under Sections 201(c) and (d) of the 1976 Act, that threat is gone. Authors are no longer at risk of losing all rights in their articles merely because they surrender a small “subdivision” of those rights-either by operation of Section 201(c) or by express transfer-to the publishers of collective works.
The aim of Section 201(c)-to avoid the “unfair[ness]” of indivisibility-would not be further served by equating “privileges” with nonexclusive licenses.
The term “privilege” is used in Section 201(c) to underscore that the creators of collective works have only limited rights in the individual contributions making up their collective works; the term does not indicate that the creators of collective works are limited in exercising those few rights, or “privileges,” that they possess. Thus, to the extent that the electronic reproductions qualify as revisions under Section 201(c) the defendant publishers were entitled to authorize the electronic defendants to create those revisions.
The court however confused rights in the collective work with privileges in the individual contributions thereto. Unfortunately, the issue wasn't reached on appeal and remains.