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A Penny for Your Thoughts:
Copyright into "Cogniright"

by Laura Fillmore
President, Open Book Systems (OBS)

Presented at the International Rights Directors meeting
Frankfurt Book Fair
October 10, 1995

Copyright © 1995 by Laura Fillmore; written permission required to reprint.
laura@obs-us.com

At this year's Frankfurt Book Fair, we witness yet once more the borders around books steadily changing, ever shifting, beginning to breathe, cool and electronic. Upon entering the Fair, passing through or by Halle 1.1 and now Halle 1.2, visitors will hear books talking, and see books illuminated on screens and animated, books to jump inside of and play with. And we wonder: Where do the books end, and I begin?

Just as Austria, the Focal Theme of the Fair this year, has continually redefined its borders over the last thousand or so years, so are we in book publishing wrestling inside the familiar terrain of the book business, struggling to understand and change the parameters which define our livelihoods. With the introduction of the Internet, that shape shifting has moved into fast forward, as the book business evolves into the knowledge business. Neither corporations nor nations take to the redrawing of borders easily, or with cheering on all sides. It's quite natural, then, that the incursion of networked computers into the publishing scene has met with a mixture of hope and hostility. The end of books? An Orwellian nightmare? Will the triumph of the geeks bring us a meritocracy of mind, or a quagmire of illiteracy and confusion?

The Online BookStore was the first commercial full-text online bookstore on the Net, and thanks to EUnet/Germany, we brought the Internet to the Frankfurt Book Fair back in 1993 at our collaborative Internet Start Up Booth. At that time, we thought we were in the business of selling copies of books on the Internet, the global network of networks which today has tens of millions of people communicating through computers. We've discovered, as our name became more and more generic, that we had to adapt to the direction our work was taking us, and instead of focusing on the sale of copies of books, we should concentrate on the thoughts and ideas inside the books, and the commercial systems evolving out of their access.

Our new name, "Open Book Systems," more appropriately describes what we do, using the Internet as a living palette on which to publish information and ideas. After all, we come to praise books, not to bury them. We come to demonstrate and celebrate the online book as a process of thinking, no longer only a finite and tangible copy of a thought product to be bought, distributed, and sold. On the Internet, Access is All. And it is access to human thought processes in response to books that we call "Cogniright". The digitally recorded thought machine renders visible and manipulable the new terrain in publishing, the thought paths in and around and between people and books. These thought paths constitute the ideas in process behind the books, accessible instantaneously and globally for the first time really in an easily accessible format. The work that needs to be done is adapting the terms and conditions of licensing and rights from tangible product-based media, to the intangible and fluid media of online.

Today, we hope to dispel the simplistic notion that Internet publishing means throwing away the past, discarding the old books and records and CDS, and surfing off to some "cool site" run by an eleven year old who stays up all night clicking icons. Tethered as we are to our past, we go about building new electronic publishing structures which complement and supplement those systems serving us in the tangible world of books. This coming week, in signing a rights deal with another publisher, a deal might be composed of terms such as "run-on's" and the cost of duplicate film. When dealing with the licensing of intellectual property on the Internet, licensing terms might include such issues as hit ratios, audience definition, and staged access reports. Instead of licensing rights to books, we may be licensing access to the people -- the editors, the authors and agents, the contributors, artists and researchers behind the books -- all the people who think about and produce books, who can keep the ideas evolving after the paper book is in print. And instead of publishers selling to readers on a per-copy basis, publishers may charge -- or pay -- readers on a use-based model, depending on how the readers think--digitally and online-- about the works accessed.

We are living in an internetworked climate where the definition of "publishing" itself is fast becoming so generic as to be meaningless. "Publishing" means living digitally in the recorded environment of the Net. This popularization of the profession means that there is a tremendous and growing need for the disciplined approach to the business of publishing, the knowledge about how to license access to intellectual property, how to establish and attribute relative values to that intellectual property based on use and need, ability, disability, and relative value of contribution.

The computer technology puts the audience-grabbing power of best-selling authors into the hands of anyone who can tap a keyboard. So we find ourselves at a new beginning, in an exciting formative time with the opportunity to define the rules of the game, to begin to draw the boundaries and map the terrain for what will become the knowledge business of tomorrow. That task beckons everyone in this room.

While you may or may not have experienced the fierce joys and frustration of jacking into cyberspace, that opportunity will repeatedly present itself until you graduate from aversion to curiosity, from email to hypermail. The task is becoming easier and easier. But what you have that no one else has, and what is decidedly *not* getting easier and easier for the rest of us to access day by day, is the knowledge and experience necessary to craft a functioning and sustainable knowledge system out of this powerful computing machine. While the engines of the Industrial Revolution have ceded ground to the invisible channels of electronic communication, the enablers, the people to define the access to the flood of traffic, need to begin their work in earnest. The Internet needs people who can not only study and debate, but who are willing to develop, collaborate with colleagues and experiment with and deploy their ideas about the relative worth of intellectual property online. This we will see is quite critical to anyone doing business on the net.

I mean that: Anyone doing business on the net. "Publishing" might be seen as a generic term for being alive on the web. Multinational corporations publish. Phone companies are publishing fairy stories. Grandmothers in attics and kids in treehouses publish. Foodstores, countries, and churches publish. CityNet, a publisher enabling people to publish the places they live in, is one of the most provocative publishing experiments on the Net. That's a giant leap and exponential increase in the size of the publishing business itself, and a significant business opportunity for those publishing companies who can successfully leverage their knowledge about licensing and intellectual property. The big shift is from a product- to process-based business, and we aim today to give you some ideas about the rights and licensing issues behind that process.

I have been asked not to name the names of the companies in this presentation, which is a challenge I welcome, because it enables us to talk objectively about the contractual and rights issues involved. The examples I cite in this presentation are real-world examples, primarily from large corporations. But before we leave the topic of names, it's instructive to note that this is a subject very familiar to Right Directors. The change in name from "Foreign Rights Directors" to "Right Directors", significantly subtle, came in early acknowledgment of the fact that today, nothing is "foreign" any more. The Internet just helps us to realize that. Of course, with the name change, and now with the added instantaneity of the Internet and the complete popularization of the publishing act, the job of Rights Director has become exponentially more complicated. Instead of selling book rights into foreign lands and languages, seeing the same product reproduced over and over again in different markets, World Rights Directors assume responsibility for the reincarnations of books into new media as well: CDS, disks, and, now, online.

This new media aspect of publishing can be seen as a deliberate kind of intellectual osmosis, where fluid ideas travel from an author to a book, through its many incarnations of first serials, multimedia CDS, disks, tapes, different world languages, to the reader and then back again to the author for comment. Using the palimpsest of internetworked computers as the publishing medium, all of this thought flow becomes instantaneous, intangible, and infinite. Access to that thought flow, that's the key, that's where the licensing rights issues come into play in order to turn the anarchy into a viable business system. And so we redefine the borders around copyright to become cogniright.

No one should be surprised by all this; we should have all seen the Internet coming years ago, when publishers' legal departments began adding that sweeping clause into the rights clauses of publishing contracts. Frequently authors are invited to assign to their publishers the rights for print, and paper, and audio, and recording, and magnetic "Or any other medium now known or hereafter invented". You asked for it! By Fair's end next Sunday, we might all be ready for the hereafter, but for now, the Internet is that medium now known. It is the superset because it enables all media, globally, running in real time.

Media--that means standing between the perceiver and the perceived. The Internet, being immediate, enables the reader to constantly jump from one file to the next, following and developing ideas through multiple media, to weave his own book out of pieces or threads of information he finds out on the Net. This reader-driven medium is kept alive by such linking of ideas which, on a computer, take the form of files. Files can be of any size and can contain anything digitized: text, pictures, video, sound, smell, live on line cameras showing other people in other rooms anywhere in the world. This internetworked linking of files, this associating of idea to idea on an individual reader basis, this is "linkthink" pure and true. It forms a new way for the human mind to use the global internetworked machines of the Internet to relate to other human minds. It's called hypertext. We will see how the labeling of those chunks of information, the naming of those files, will become vitally important for identification purposes for such things as authenticity, licensing rights, searching and retrieving, and determining and charging for access.

This standardization of the naming process is well underway. Recently, the InterNIC, which is the organization responsible for giving out Internet names, announced that it would end the free-for-all domain name system, where anyone can apply for a computer domain name, and it instituted a $50 per year registration fee system where names are approved and doled out like license plates. Furthermore, the U.S. Congress is eager to see what will presumably be a name-based rating system devised for Internet use, which can be used for things like online videos. The recent passage of the telecommunications bill by the U.S. Senate contained a hotly contested clause requiring a "V" chip be installed in all televisions sold in the US. These chips are designed to enable parents to censor incoming files with a particular rating. And while there are laws being passed for censoring what is deemed violent and obscene, still, there doesn't exist as far as I know at this time a functioning online system which calculates the weighted or relative worth values for accessing, combining, reusing and republishing hyperlinked files in a commercial publishing environment. This kind of custom combining and recombining of ideas is essential to successful Internet publishing and constitutes the fundamental challenge before us at this moment.

The combining and recombining of files, that's reading on line, recorded reading that is, because this hyperlinking leaves a trail. And that trail can then be republished so that others can follow it. So cogniright extends not only to the intellectual property of the original work created, but to all the contextual hyperlinks others may make to or from it--the recorded thinking about copyrighted works that becomes cogniright. The recording and transferability of peoples' thought processes is new with this medium, and can increase the value of the copyrighted work, while also assuming a value of its own. Who knows, thinking aloud online in the right places might even one day lead to a reader getting *paid* for reading, a delicious eventuality bookworms have been awaiting for five hundred years.

We learned the lesson about the value of linking from a major New York publisher two years ago, when we did a first serial Internet publication of Stephen King's short story "Umney's Last Case" here at Frankfurt. In those days of '92 and '93, publishers thought OBS should be paying them for Internet rights. We, however, held a different point of view, so for the King story we amicably arrived at zero, with OBS promising to pay the publisher once the project started to sell online. With King that was quick, and we sold the story rights for five figures to an Internet Service Provider. To make the Frankfurt release more meaningful, we licensed the German translation as well, this time for the cost of several thousand dollars. The translator's agent supplied us with files of the German translation, and we formatted all the files in German and in English, into Adobe Acrobat, Voyager Expanded Book, ASCII, and a brand new mark-up language at that time, HTML.

When I asked King's publisher about us taking advantage of the global hyperlinking possibilities of HTML and the new multimedia browser, Mosaic, they immediately said "Forget it! Putting in any links will change the meaning of the text, and no one is going to do that to Stephen King." I did talk them into one link, however, one dog barking somewhere out in the Internet beyond, a few yarks on a server in North Carolina. The publisher had put their finger right on the pulse, however. What reader can resist the temptation to jump through the looking glass, to do a mindmeld and become part of the author's work, to touch it and link it and make it his own?

That first dog barking on the Internet woke up a new age, identified a new empire, in which the linking and licensing of links has become the central point of the turning wheel. At a time of exponential growth such as this (some might call it chaos), the role publishers play in offering verifiable and authentic link paths on various topics becomes of increasing value. Licensing these international link paths involves crossing boundaries which have in the past been closely guarded and protected.

To illustrate the power and promise of linking as a means to associative thought, let's take a look a large project we prepared in time for this Fair. It is a reference publication, what we call an "encyclomedia," for a large New York Publisher. They plan that it will become an annual publication, featuring a guide to everything about everything. The publisher is paying us a flat fee out of their marketing and promotion budget for the book. We have agreed on what we call a bipolar linking arrangement with them, where we point or link to their server, and they link to ours, to increase the volume of traffic and ultimately, the sale of books. The topic areas we chose are health and travel, and we are posting approximately 100 pages of the book on the server in hyperlinked format.

Let's consider some of the rights issues that arise from the linking, from the access structure to the online version of this book. These should raise a lot more questions than they offer answers. At this point, where access to files on the Internet is still largely free and online publishing functions primarily as a marketing complement to draw in buyers for the paper books, many central issues having to do with intellectual property are not being dealt with. Once people start charging money online for timely and customized access to the ideas and information contained in books, we will have to have progressed beyond merely identifying potential rights issues concerning the new field of cogniright, but will have to be well on the road to implementing solutions. Thinking, like software, is an adaptive system that can become itself only through use.

We're in this first blush of Internet publishing, the beginning of the party when the name tags are just being handed out and the band hasn't arrived yet. We look around and see many publishers sticking their toes in the water and putting all or parts of some of their books up. We've gone ahead and linked to them, making them part of our encyclomedia. Our Living Footnotes in the travel section point to full or partial online texts of travel books published by a dozen different publishers all around the world. This act of pointing makes our client, a kind of superset among travel publishers. Our goal here is not to just to promote this particular contained publication of our client, but to increase the amount of traffic on the site. That's what will sell books. We are not paying any of the other publishers for access to their titles--they were posted on the net for free after all. So we are using their online files to promote and sell our client's books. And we are playing by the rules.

What would our licensing arrangement with these publishers look like if we were charging users for access to our online encyclomedia? If you publish a B&B book and include a bibliography or footnotes which cite other books on the same topic by competing publishers, that is accepted practice. The role of the successful book with a long shelf life is to serve the reader's needs for knowledge. But on the web, those useful appendages come alive and that pointing process no longer remains abstract, sending the reader scurrying to the library or back to the bookstore. On the net, there is no medium between the pointer and the files being pointed to. If we were charging for access to our encyclomedia and pointed at supplementary and valuable information published by other publishers, our licensing arrangement might include a use-based royalty for accessing those chunks of our competitor's book. That's one option. Another way is to follow the precedent set by the online services today, charging their users without themselves paying for the ideas and information they are pointing to out on the Internet.

Publishing companies are not the only sources for verifiable and authentic information--but by developing and implementing a system of authenticate pointing, they can take advantage of the new markets opening on the web together with the need for authentic and verifiable information. Consider the health chapter of our encyclomedia, which points to a U.S. Government source for a study cited in the book. Our link leads to the complete study about stress at Centers for Disease Control (CDC)-- click on the living, breathing footnote and go and check for yourself! So another component in the licensing agreement between publisher and linkee would involve the authenticity of pointed-to data, distributing the responsibility of fact-checking and verification among the linked community of a particular publication. Authenticity of files and accuracy of information is essential on the Web, a role that seems natural for publishers to play, one which will assure them of a prominent position in Internet publishing as it evolves.

Our encyclomedia is kept kinetic and up to date by many means, one of which is a link into news sources, specific to the topic areas of health and travel. The longer we work on the encyclomedia, the more news sources we are able to point to. Were this a for-pay publication, what licensing arrangement should exist between the news sources and the encyclomedia? Perhaps the news source customizes their news feeds for our publication, so that we receive all the stories on health from them, even the out takes that were not posted in their magazine because of lack of space. Or maybe we get a link to a news story that hasn't appeared in print yet, or one that was printed 6 months ago but is directly relevant to Prozac, one of the topics in the book. For that customization, they might receive a per-hit--based royalty.

The essential component in constructing any kind of licenses for intellectual property on the Net seems to be their flexibility and adaptability, their multidirectional nature, allowing for a potential income stream which might be unknown at the time of the licensing arrangement. Generally we elect to work on a percentage basis, allotting a certain percentage to all rights holders based on access and use of their files. Most of the publications we have produced online which are aimed at promoting hard copy sales, involve a clause in our agreement agreeing to split income from sponsoring sources 50/50 with the publisher, thus identifying a new source of revenue beyond that supplied by the reader when he buys the book.

Linking isn't limited only to inanimate files. Our encyclomedia has a chapter on health, where Prozac is discussed; we have connected an "Experts Rolodex" to the book, which is essentially the email Rolodex of the authors, two editors of a major news magazine in the U.S. This Rolodex contains the names of the experts who contributed the contents of the book. By featuring them online, every week a new expert, in discussion forums, we need to license access to the experts' time. Part of that license involves determining who is liable if any illegal sentiments are aired or embarrassing advice sought in an unmoderated Internet discussion about Prozac. The licensing at this stage involves the typical kind of disclaimer one would find in a book of this sort. Our agreements with the experts are based on emails back and forth scheduling the event. There is no payment involved for the experts at this time. All but one have accepted. Who owns the right to the prose that results from the discussion group? We have a sentence claiming that our publisher might decide to include the discussion in future editions of the book. And OBS can post it for as long as it pleases. Again, here with these projects we are identifying rather than fully implementing the areas of licensing and rights; as soon as money is being charged for access to files, the licensing will have to be in place. Or vice versa. As soon as effective licensing agreements allowing for custom hyperaccess to content chunks and online people, then publishers will take online publishing beyond its present marketing capacity and into a profitable knowledge system.

This leads us to a third area vital to cogniright as a whole. Say for example that as a reader of the encyclomedia, I am invited to participate in the book, to suggest new links to news sources, or to become a "bookbot" and research or annotate the links existing already in the book. Say I am a Nobel Prize winning scientist and post an astonishing hypothesis to this book's discussion group that causes the number of hits on the server to skyrocket. The income from sponsors, which is a primary source of the publisher's income, increases in response to that, which means that everyone downstream makes increased royalties, from the publisher to the author and the people being linked to. But what about the reader who made the posting which caused the surge in profitable traffic? What are his cognirights as a reader in a recorded medium, and how is he compensated for "thinking aloud" at our encyclomedia site?

There again, in our online world, we see the content rights extending into context rights, and the rights challenge becomes to assign value to the files accessed by the users as they thread through a cluster of intellectual property. That relative value of each chunk of information, each file, is reflected in the licenses for those links, which licenses make the publisher valuable to the reader by guaranteeing the authenticity, durability, and currency of those links at the publisher's site.

The determination of relative value seems like quite a subjective judgement for someone new to the business and unaccustomed to categorizing ideas and thoughts into commodities with relational price tags. You can't hand someone a rights handbook and expect them to emerge with anything but the rudimentary basics of law and practice and precedent. In fact, for a subjective, highly specialized, and people-based business such as rights, the notion of constantly shifting borders must seem like business as usual, oatmeal for breakfast. Introducing the intangible, the immediate, global and ubiquitous Internet -- with publishers pointing to publishers pointing to phone companies linking to movies just in time for a fast food on line Thai restaurant--adds new dimension to the problem. With Internet, publishers have the dual challenge of at once protecting our old recorded culture -- books-- while focusing their sites on tomorrow's online empires.

Publishing tomorrow is far more likely to contain pop-up and drop-down screens than it is pop-up books. The process becomes more important, the paper product more precious, the more we live and work online. "Cogito ergo sum:" "I think, therefore, I am." As we surf the wave of this fine fair, enjoying the Sachertorte from Austria and the heady business of seeing everyone in the world in less than one week, I'd like to challenge you to come by the OBS booth in Halle 1.2. Come and see if, after exploring the distributive Internet publications, you don't begin to see how the borders around the rights business have assumed a new and intangible dimension, pushing beyond the familiar parameters of selling and protecting the rights to copies of things. With the Net, we can access the thoughts contained inside the books and those inside the heads of readers. We begin to value the interplay electric, like seeing the lightning between the book and the eyes beholding it.

Copyright © 1995 by Laura Fillmore; written permission required to reprint. laura@obs-us.com

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