Tag: Valancourt Books

What Does the Valancourt Decision Mean for Most Creators?

As discussed in an earlier post, Valancourt Books, a small, on-demand publisher, filed suit against the Copyright Office and the Department of Justice and argued that the Office’s demand for physical copies of published books is unconstitutional. Valancourt alleged that the authority granted by §407 of the Copyright Act to demand the copies (or be fined) is a violation of both the First Amendment speech right and the Fifth Amendment prohibition against a government taking of private property without “just compensation.” This week, the DC Circuit Court of Appeals agreed with Valancourt’s Fifth Amendment takings claim and declined to weigh the First Amendment claim.[1]

We agree with Valancourt that Section 407’s demand for physical copies of works, as applied by the Copyright Office here, represents an uncompensated taking of private property under the Takings Clause. We need not reach Valancourt’s First Amendment claim, as it seeks the same relief through that challenge.

Background (Summarized from Post of August 2021)

Valancourt produces books on-demand from old, rare, and hard-to-find manuscripts, including some dating back to the 18th century. Although many of the underlying works Valancourt republishes are long in the public domain, the companion material in their editions (e.g., scholarly introductions and footnotes) are subjects of copyright; and some of the manuscripts they print are still under copyright protection and used by permission of living authors or their estates. So, although the publisher does not register its books with the Copyright Office, it does place copyright notices in the front matter to alert readers that either the underlying manuscript and/or supporting materials are protected.

In 2018, Valancourt began receiving letters from the Copyright Acquisitions Division (CAD) of the Copyright Office demanding physical copies under the statutory deposit copy provisions of §407. The initial demand was for two copies of each of Valancourt’s 341 published titles. The publisher stated that this represented a significant financial and logistical burden and, finding no satisfactory relief in the Office’s compromise offers, they filed suit on the constitutional allegations. The district court ruled in favor of the government, and the DC Circuit has now reversed.

The Heart of the Decision

The most substantive aspect of the Valancourt decision is the court’s holding that the demand for physical copies is a taking because the publisher does not receive any benefit for supplying the copies. “A voluntary exchange for a benefit…does not exist if the purported ‘benefit’ is illusory,” the opinion states. Because copyright attaches automatically to any work fixed in a medium of expression, a party like Valancourt truly gets nothing in exchange for providing physical copies.

What the Valancourt decision means for most individual creators is not much, but it may be easy to confuse the issues here with the registration process (§408) in which deposit copies are a requirement of the registration application. Many creators are aware that in order to apply for copyright registration, they have to send in a copy of their work. That is governed by §408. In contrast, §407 allows the Library of Congress – through the Copyright Office – to demand a copy of any work published in the United States. Sending a copy for registration under §408 can satisfy the requirement under §407, but because Valancourt does not register the books it publishes, that was not relevant here. Consequently, the Office’s demand for physical copies (based solely on the act of publication) is acutely unjust in this instance because Valancourt gets absolutely nothing for providing free copies for the Library’s collection at its expense. This is distinctive from the deposit copies required for registration.

The deposit copy submitted for a registration application, whether electronic or physical, is less likely to be viewed as a taking because the applicant voluntarily obtains key enforcement advantages by complying with the registration requirements. Registration is not mandatory for copyright rights to subsist but is (among other things) a prerequisite to filing an infringement claim in federal court. Physical copies are required with a registration application if the work is published at the time of the application and if the work is first published in physical form, but again, because this is a condition of registration, and registration provides tangible benefits, this deposit condition is less likely to be found a taking.

That said, where the Office may exercise its right to demand copies based on publication (§407), the Valancourt decision may have some interesting implications. For example, if an author registers a final-edit manuscript in electronic form and later publishes that material, she (or the publisher) may receive a demand to provide physical copies or face a fine for failing to comply. But after Valancourt, the demand for physical copies solely at the threshold of publication, would seem to be a taking because, again, the author/publisher gets no additional value in exchange for providing the copies. The underlying registration (e.g., in the previously unpublished manuscript) is not invalidated by a failure to provide post-publication physical copies.

This is More About the Library of Congress than Copyright Law

In Valancourt, we see one example of the tension that can arise between the interests of the Library of Congress and the efficient administration of copyright protection for creators. As discussed in other posts, the often-confusing formalities in U.S. copyright law are largely due to the historic, but not always compatible, relationship between the two institutions. The Copyright Act of 1870 consolidated registration and deposit at the Library for the purpose of growing the collection, and in 1897, the Copyright Office was established within the Library as both the administrative and expert agency.

But as the outcome in Valancourt highlights, the author/publisher’s copyright interests and the Library’s authority to demand copies are in conflict. With 1870 barely visible in the rearview mirror, the Library still wants free materials, but Valancourt shows that this mission is not wholly predicated on the author/publisher’s interest in obtaining the full advantages of copyright protection. And perhaps this is especially true in a modern, digital-age market.

Notwithstanding the unpublished manuscript scenario above, most publishers send physical deposit copies with registration applications for published—or about to be published—books.[2] But if the Valancourt decision stands, it is conceivable that many publishers, especially smaller presses, will argue that they are allowed to submit electronic copies or must be compensated for the cost of sending physical copies. We shall see whether the government appeals this decision to the Supreme Court, but in the meantime, most creators can file this case under the heading Conversation for Copyright Nerds and continue registering their works with electronic deposits. In any event, please remember to register immediately—before your work is published and before it can be infringed – to get the full protection of the Copyright Act.

[1] FWIW, I wonder whether Valancourt’s speech claim would have merit because it seems that Plaintiff would have to show that the demand for physical copies, though enforced inconsistently, is content based. City of Austin v. Reagan National Advertising of Austin, LLC, 142 S. Ct. 1464 (2022).

[2] There are good reasons to do this, not the least being that the physical book is the final draft of all the material being registered.

Rare Books Publisher Valancourt Versus The Deposit Requirement

On July 23, the District Court for the District of Columbia denied publisher Valancourt’s claims that the requirement to provide deposit copies of U.S. published works to the Library of Congress constitutes an unlawful taking under the Fifth Amendment and/or an infringement of speech under the First Amendment. Although many legal experts are likely to agree with the outcome, some may also find the reasoning a little tortured, while at the same time, rightsholders may be made aware of an obscure but significant hypocrisy in the Library’s authority to demand deposit copies. Namely, that in certain cases, the copyright owner receives no benefit in return for compliance.

There is nothing new, of course, about the general requirement that copyright owners submit deposit copies in order to participate in the copyright system. Or to put it more philosophically, the tradition of supplying deposit copies, dating back to England’s Statute of Anne (1710), is grounded in copyright’s modern purpose to incentivize the creation and dissemination of cultural works. In the United States, this principle was most expansively adopted in the 1870 revision to the copyright law, which consolidated the registration process at the Library of Congress with the clear purpose of growing that collection.

Today, the Library of Congress contains the largest collection of works in the world, thanks in no small part to its statutory authority to demand deposit copies of any work published in the United States. And in most cases, the deposit copy requirement is not terribly burdensome for authors or publishers, especially when submitting digital copies along with a registration application to the Copyright Office.

Nevertheless, §407 of the copyright law, which empowers the Library, via the Copyright Office, to demand copies, and even penalize scofflaws, contains an inherent conflict because the mandate is not explicitly a condition for the rightsholder to avail himself of full copyright protection. For this reason, Valancourt Books’s complaint against the Copyright Office, while perhaps strained on constitutional grounds, highlights an uncommon, but significant question of justice.

Background

The niche publisher Valancourt Books was founded by James Jenkins in 2015 and is today operated solely by Jenkins and his husband Ryan Cagle. Together they edit or oversee the production of books from old, rare, and hard-to-find manuscripts—some dating back to the 18th century—which are printed on-demand for customers, including educational institutions. Although many of the works they republish are long in the public domain, the companion material in the Valancourt editions, like scholarly introductions and footnotes, are subjects of copyright; and some of the books they print are still under copyright protection and are, therefore, used by permission of authors or their estates.

Valancourt does not register its books with the Copyright Office—or at least it did not register the 240 titles at issue in this litigation—but it does voluntarily place notices of copyright in the front material. The reason for the notices appears principally to let readers know that either the underlying manuscript and/or supporting elements in the book are protected by copyright. Particularly in a case in which Valancourt has obtained permission for limited, on-demand publication of an out-of-print book, they would reasonably not acquire a traditional publisher’s license but would need to notify readers that the author or her estate still owns the copyright.

In 2018, Valancourt began receiving letters from Copyright Acquisitions Division (CAD) of the Copyright Office demanding deposit copies (the “two copies of best editions” as articulated by statute) of all 341 titles in its catalog. Requiring a print-on-demand niche publisher to supply 682 books at its own expense is a substantial burden, which the Copyright Office has discretion to limit upon a request for “special relief.” However, it was only after Valancourt challenged the demand through legal counsel that the USCO eventually reduced the number of titles to 240 and amended the deposit format it would accept to electronic copies.

Valancourt averred that even the demand for electronic copies was too burdensome for a small operation to access and, in some cases, update older files into compatible deposit formats. Whether this claim is reasonable—files dating back to 2015 should generally work today—Valancourt elected to go big by filing a lawsuit against the Copyright Office and the DOJ, alleging that the deposit demand itself, as codified in §407 of the copyright act, is unconstitutional.

The First Amendment Claim

With regard to Valancourt’s First Amendment claim, the publisher is probably out on a legal limb when it argues that “because only those publishers that receive a demand letter from the Copyright Office can be fined for noncompliance, and because the letters are not sent out at random, the deposit requirement is also a content-based restriction in practice.”

Here, the court finds that there is nothing in the record to indicate that the discretionary practices of the CAD makes content-based decisions as to which publishers it contacts to demand compliance with the deposit requirement. As such, nothing about the nature of Valancourt’s claim appears to implicate an infringement of the speech right. Nevertheless, Valancourt is probably justified in feeling somewhat picked on due to the fact that the LOC/USCO rarely make deposit demands relative to the volume of works produced in the U.S.

The Fifth Amendment Claim

Under the Fifth Amendment, the state may not take private property without due process, which most commonly applies to real property and compensation for the taking of same. But here the court leans on Ninth Circuit precedent in response to another deposit demand case, reiterating, “[t]here is no question but that the materials are private property and that deposit with the Library is for public use,” but “Congress can reasonably place conditions on the grant of a statutory benefit.”

That may sound reasonable on its face because we are accustomed to complying with certain conditions when accessing various services provided by a state or federal agency. But copyright is a funny animal in this regard, and especially tricky in Valancourt’s unusual circumstance. The first problem is that copyright is not a conditional “statutory benefit,” but rather a statutory bundle of rights that attach automatically to any subject matter work fixed in the U.S. after January 1, 1978. The next problem is that although copyright notices are not required by law or administrative function of the Copyright Office, Valancourt’s placement of notices was the factor on which the court’s opinion turned in rejecting the takings claim. Here, it agreed with defendants that the notices constitute “receiving the benefits of copyright,” which obligates plaintiffs to comply with the deposit copy condition. But what benefits does Valancourt receive?

The big condition with which most creators are familiar is registration, which is not mandatory, but is a prerequisite to filing a claim of infringement in federal court. And, of course, submitting deposit copies is a condition of registration, which is reasonable enough as a bargain, but here’s the rub …

Section 407 of the copyright act, which gives the Copyright Office the authority to demand copies (and solely for the benefit of the Library) has nothing to do with the registration formality, which avails the owner of the full opportunity to enforce a copyright in federal court. Simply put, the Library has the authority to demand copies of works published in the U.S. (or levy fines for failure to do so), regardless of the rightsholder’s choice to avail himself of the benefits of registration. And while this disconnect may rarely be a conflict, and may not ultimately be found to rise to the standard of an unconstitutional taking, the Valancourt example reveals that it isn’t exactly equitable either.

Especially in this circumstance, in which this niche, on-demand publisher is responsibly providing rare books that comprise a mix of public domain and copyrighted materials, it is not unreasonable for Valancourt to feel it is trapped between a rock and a hard place. Its modest operation unquestionably supports copyright’s purpose to promote the progress of science, arts, and culture, which is the foundational principle on which the Library is authorized to demand copies in the first place.

A Case Worth Watching

Whether Valancourt’s complaint that providing the electronic copies is too burdensome is a question of fact that may yet be determined, and the publisher seems likely to appeal for a few reasons. For one thing, although the district court responded generally that the government may make services and privileges conditional within constitutional bounds, it did not directly address the underlying evidence that Valancourt arguably receives no benefit for compliance with the deposit demand. And there are certainly legal minds who may be inclined to call this a taking.

Further, if the publisher can show that even the electronic deposit burden is greater than de minimis (i.e. that it would be profoundly detrimental to the business), this may bolster a taking allegation and also animate an argument that, in this case, enforcement of §407 undermines the purpose of copyright. Simply put, if Valancourt can show that it cannot operate—and by extension other small publishers to which it alludes in its filings—that would clearly defeat the purpose to promote.

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