August 1, 2000

Distance Learning Courses: Who Owns Them?

Holland & Knight Newsletter
Ieuan G. Mahony

Developing an online distance learning course requires a significant commitment of effort and resources. Once captured in a form for digital delivery, the lectures and related visual effects can be re-used again and again, and may become a strong revenue source through, among other means, licensing beyond the “home” college or university. Accordingly, questions as to ownership will invariably arise.

No clear consensus has emerged as to ownership of online courses or how to allocate the revenue from them. For example, Duke University has a new policy (announced May 23, 2000) whereby online courses using substantial Duke resources will belong entirely to Duke, as works for hire. If the professor creates the course independently, the professor will enjoy full ownership. For courses that “fall in between,” a Committee appointed by the Provost will decide ownership. In contrast to the relative clarity of this policy, under the new policy of San Diego State University, the professor and the University must agree on who will own the course before it is developed, with no provision for situations where such an agreement does not exist.

Assessing Existing Copyright Ownership Policies

The first step in addressing these issues is determining whether the institution has an existing copyright ownership policy and whether it properly covers distance learning. Many institutions have in place a copyright ownership policy generally applicable to educational and research materials. To encourage professors to create such works, these policies expressly grant copyright ownership to the professors, with certain limited exceptions.

These ownership provisions, however, generally have not been drafted with distance education courses in mind, and thus are not well tailored to address the online environment. In particular, most copyright policies do not directly answer the question of whether a distance education course belongs to the professor or the institution: the course content generally appears to fit the definition of a “traditional work,” yet the delivery mechanism and certain features of the course are anything but traditional.

Resolving Ownership Issues By Contract

Institutions and instructors should seek to reach an agreement at the outset as to copyright ownership and revenue sharing. Developing an online course requires a significant commitment from the institution, often including the purchase of additional hardware and software as well as additional training for instructors. Similarly, the instructor will need to make a significant investment in the form of “sweat equity,” tailoring his or her lectures for online consumption. Once the course is complete, the instructor’s role and “indispensability” may diminish sharply. The instructor, therefore, may want to commit the institution to maintaining his or her continuing role. Given the potential return on a successful course, and the instructor’s need at the outset of the development project for institutional support and resources, a contractual resolution makes sense.

Certain universities are already changing traditional arrangements to determine who owns what in the distance learning field. Penn State, for example, has put in place a revenue splitting structure with faculty members who develop distance learning courses in their departments. New York University reports that its new subsidiary will hold ownership rights for all developed online courses.

Ownership Issues In the Absence of A Contract

Even without a contract or existing copyright policy, an institution may still have copyright claims to distance learning materials, if they were developed by the instructor using the institution’s resources. These claims fall under two headings: (1) the “work for hire” doctrine, and (2) the “shop right” doctrine.

The “Work for Hire” Doctrine

The Copyright Act recognizes the so-called “work for hire” doctrine by which the “author” for copyright purposes is the party who hires an individual to create the work. 17 U.S.C. § 201(b). The hiring party owns all of the rights comprised in the copyright unless the parties have expressly agreed otherwise in a signed writing.

A “work for hire” arises in two situations: (1) where the hiring party and the work’s creator enjoy an employer-employee relationship, such that the hiring party has the right to control the manner and means by which the work is created, and the employee prepared the work in the scope of his or her employment; and (2) where the hiring party and the work’s creator agree in writing that the resulting work will be a “work for hire,” and the work falls into certain specified categories, including a contribution to a collective work, part of a motion picture or other audiovisual work, or an instructional text. 17 U.S.C. § 101.

The “Academic Exception” to the “Work For Hire” Doctrine.

Some courts traditionally recognized a so-called “academic exception,” under which academic writing was presumed not to be work made for hire. The exception was based on the assumption that the work created by the instructor was not rendered “within the scope” of his or her employment because colleges and universities did not supervise their faculty in the preparation of academic books and articles, and because institutions were poorly equipped to exploit the works.

It is unlikely that the academic exception will apply to the creation of online courses. Its continued validity has been questioned in light of amendments to the Copyright Act and weaknesses in the underlying reasoning. Specifically, the academic exception is based in large part on the assumption that the work falls “outside” the instructor’s duties. Yet where an instructor is hired specifically to create an online course, the basis for the exception disappears. Nevertheless, the presence of this doctrine further emphasizes the benefits of clarity, as a written contract would resolve any doubts over application of the “academic exception.”

Non-Exclusive Licenses and the “Shop Right” Doctrine.

Worst case, if the instructor develops the materials using the institution’s resources, the institution at a minimum is entitled to a non-exclusive, royalty-free license to the materials. This “shop right” license arises by implication and through the conduct of the parties. Although the institution would not be able to prevent the instructor from using the distance learning materials on his or her own, the institution at least would also have the right to use the materials.

It is preferable by far to resolve ownership and revenue allocation issues at the outset by written agreement, rather than rely upon “work for hire” and “shop right” arguments after the fact. Substantial value may be present in an online distance learning course. To avoid disputes over ownership of the proverbial “goose with the golden eggs,” institutions and professors are well advised to develop clear policies and contracts proactively.

Related Insights