Instructions: As previously announced this is an open-book exam. You may refer to the course materials distributed via the Net, your notes, the course written conference, materials you gathered to do the course projects or to participate in other ways. You are particularly encouraged to refer to relevant provisions of the Copyright Act and decisions we read during the course. If you find any troubling ambiguities in the facts or questions posed, identify them, make what seem to you to be the most reasonable assumptions about their resolution, indicate those assumptions, and proceed with your answer.

Number of Questions: There are four questions of which you should answer only three. Which three questions you answer is completely up to you. Since all three will count equally in my evaluation of your performance on the exam, I recommend devoting roughly the same amount of time to each.

You are consulted by a college administrator who has an idea for reducing the institution's library costs and its students' book purchase expenditures. This administrator has observed that most of the texts assigned in the school's literature, history, and philosophy courses are now available in highly usable digital form on disk -- large collections at a very low price. She was overwhelmed to learn that the school library had acquired one CD-ROM for about $25 that contains over 2,500 works -- ranging from the principal writings of the world's major religions, through Darwin's The Descent of Man and the U.S. Constitution to the complete works of William Shakespeare. Slightly more expensive but under $100 are such digital collections as the CD Sourcebook of American History and the Published Works of Ludwig Wittgenstein.

Your client, having the understanding that these works are in the public domain, wants to use these disks and others like them to generate electronic and print coursepacks for college courses. She envisions having the library prepare lists of works available in its disk collection organized by field and title (a catalog of electronic resources). Faculty would select course reading lists by checking off items on print or electronic versions of this catalog and college staff would then compile the coursepacks from the library disk collection and sell them at cost to students.

 Despite the underlying works being out of copyright, all these disks carry a copyright notice. All of them hold their contents in data files that require special software (also on the disk) to read, download, or print. All are capable of selective downloads of particular works or portions of them to standard text formats. All can generate very usable print copies.

The "License Agreements" found on or inside the packages for these disks are remarkably similar, providing in essence as follows:

How would you advise your client about the copyright infringement and any other liability risks posed by her plan? Explain.

One of the most successful literary creative works in the English language (through successive versions in different media) is The Wonderful Wizard of Oz by Frank Baum. Baum's book (with illustrations by William Denslow) was first published in 1900 and has in the years since sold over 10 million copies. By virtue of its age it is now out of copyright. By contrast the MGM movie released in 1939 and the 1975 stage adaptation and subsequent film, The Wiz, remain under copyright.

A teacher at a public elementary school eager to introduce a class of fourth grade students to multi-media design and a more active view of literature wants to use the school's web site to create a multi-media version of the classic story. He plans to launch and coordinate the project, but have the students themselves edit and format the original pages, add scanned or original material, and do extensive linking.

The school, concerned about the many hazards of Net use, has created a committee that reviews all school web project proposals for potential infringement liability and other problems. You are the committee's copyright adviser.

The teacher proposes to ground this project on the full text of the Baum book which he has downloaded in HTML format from a site serving it in that form, linked chapter by chapter from a table of contents. That site places no copyright notice on its HTML version and appears to have done nothing more than digitize and add HTML mark-up (http://www.teachersoft.com/Library/lit/baum/wizoz/contents.htm).

While the downloaded book file doesn't include any images, the teacher has checked two books out of the local public library and scanned images from them -- a copy of the original Baum book and a book on the history of motion pictures that has a good set of stills from the MGM film. In addition he has scanned images from the jacket for a 70's recording of the stage version of The Wiz.

His plan would be to have his students manipulate these images and explore different ways to integrate them with the text, embedding them in appropriate spots in the text and also linking to them from other suitable places. In addition, the teacher has discovered countless other less familiar renditions of the cast of characters from the story available on the Net and is confident his students will find more. One of his aims is to have his students explore how Dorothy, the Tin Man, Lion etc. have been visualized at different times and places by including some of these other images in the work. This could either be done by downloading them and storing them on the school server or linking to them from appropriate spots in the project's multi-media pages. Examples of graphics the teacher wants to include in this way are the "The Wizard of OZ Barbie Collection" -- which includes color photos of Barbie and Ken dressed in the roles of: "Dorothy and the Tin Man: Barbie and Ken Dolls," "Glinda the Good Witch Barbie Doll," "Lion Ken Doll" -- and a set of the original Denslow line images that have been colored and given rudimentary animation by someone.

Last but not least the teacher wants his students to be able to include sound clips and has located several web sites offering downloadable audio of such memorable portions of the movie soundtrack as: the Lion saying "Courage," the Wizard saying "Pay no attention to the man behind the screen," the Witch of the West melting, etc. Here too the teacher would prefer to download and store at the school site but could have the class work with links to the other sites currently offering these sound files if that would remove a copyright problem.

What advice do you have for the school committee about the copyright risks posed by this proposal? Be as specific as you can about any steps you would recommend it or the teacher taking to avoid or minimize exposure, and, of course, explain.

Firm B sees a software product created by Firm A with which it wants to compete -- a courseware authoring product that allows teachers with word-processor skills and reasonable computer familiarity to create very sophisticated tutorials and exercises using a wide variety of question types. Lessons created with this "authorware" can incorporate text, computation, graphics (including graphics generated by computation), audio and video material. And the full range can be used in both "presentation or question segments" and in "answer segments" that follow some particular user response. The author can opt to have a lesson or exercise contain a module that keeps track of user identity and performance so that options or response at any point can be a function of who the user is and that user's relative level of mastery as reflected by performance on past questions or even other lessons.

 Both the author package and the user version of A's software required to run a lesson are totally stand-alone; the software and all associated lesson files are stored locally, i.e. on the computer being used by the student or in a local area network to which it is connected. Firm B conceives of a comparable product that would permit an lesson author to incorporate Web material. Record-keeping and logical operations would be handled on the user's machine, but explanations, responses to particular answers, and opportunities for deeper exploration could all be handled by Web links.

After reviewing all the other authoring packages currently in use in the U.S., Firm B has concluded that in terms of author options (question types, screen control), the means of keeping track of all the branches in a developing lesson, and other important features, including significantly ease of use, A's product is head and shoulders above the rest. A's market dominance is no accident; its software sets a standard that B must not only equal but surpass.

Working without access to source code and without consulting former employees of Firm A, B is confident it can build a competing program to its design with reasonable functional equivalence all at an affordable cost. It believes that by opening lessons to the Web it will at once expand the potential market for this type of software and compete successfully for a share of the existing market.

Advise Firm B about how to minimize the risk of copyright infringement liability and how great you judge that risk to be after B has taken all recommended precautions. (Firm B wants to spring its product on A and the other authorware competitors and consequently does not want to initiate any licensing discussions. B doubts that A is working on Web connectivity for its product yet but imagines that is only a matter of time.) Explain.

Firm B has achieved and begun to market the software described in Question 3 above. In terms of function it is all B hoped for. The Web gateway is, indeed, a strong attraction. However, in far too many cases that feature failed to overcome resistance from the market's pioneers and current opinion-leaders, teachers who had already built sizable numbers of lessons and exercises using Firm A's authorware. As one of that group explained, publicly: AChanging my course text is hard enough, but I have over three years of effort invested in my lessons. Each year I add to, update, and improve them. Building those lessons over again with new software, no matter how many "bells and whistles' it offers, is out of the question."

Faced with this problem B concluded that had to add a compatibility feature to its software. Working on a crash basis, Firm B added a module to its authoring package that can read the "proprietary" files holding a lesson or exercise created by A's software and convert it to a lesson that can be altered, added to, or simply republished with web links using B's software.

To achieve this result B acquired (licensed) several copies of A's software. The "shrinkwrap" terms on the packages B acquired contained the standard language framing the transaction as a license not a sale, setting out a list of permitted and forbidden uses. The latter included: "You may not reverse engineer, decompile, or disassemble the Software."

In building the compatibility module, B had software engineers test A's software in countless ways, inspect the files it generated, and relate those files to lesson content and logic. They also decompiled the code.

Set out and evaluate the arguments open to B in an action brought by A asserting copyright violation and breach of contract (license) based solely this file compatibility module and how it was created (and not on any other features of B's product).