Six freelancers sued The New York Times, Time, Inc. and Newsday in 1993, arguing they should have received extra pay when their pieces were included in electronic databases such as Lexis-Nexis or on a CD-ROM. In a 7-2 decision, the court sided with the writers.
"Both the print publishers and the electronic publishers, we rule, have infringed the copyrights of the freelance authors," Justice Ruth Bader Ginsburg wrote for the majority.
The case--which outlines rules for copyrights on digital versions of printed work in the same way the suit against file-swapping service Napster is defining rights to music--gives freelancers more leverage when negotiating online rights. But it also means publishers may purge their archives.
"It really is a loss for everyone involved," said Catherine Mathis, a spokeswoman for The New York Times. "It's a very anti-technology ruling."
At least two U.S. publishers are eliminating the pieces from their archives rather than paying the freelancers who wrote them, following up on threats they made in court filings.
The New York Times is removing 115,000 articles from its electronic database. That amounts to 8 percent of the pieces published between 1980 and 1995, when the paper began to include electronic rights in its freelance contracts. Most of the articles affected ran in features areas of the publication, including The New York Times Magazine and the book and travel sections.
Meanwhile, Time, Inc. is purging its database of all freelance pieces that did not include electronic rights--less than 10 percent of its database.
"We're extremely disappointed in the ruling," Time, Inc. spokesman Peter Costiglio said. "The publishers lose because they have to delete articles; researchers, readers and historians lose because they won't have access to complete archives; and freelancers lose because their pieces won't appear in the archives."
But freelancers are celebrating the victory, saying the ruling proves publications must pay for putting their work in electronic form.
"We want to settle past claims in a reasonable fashion and establish a mechanism so that freelancers can be compensated fairly from now on," freelancer Jonathan Tasini said in a statement issued after the ruling.
The decision is unlikely to affect recently published articles, illustrations or art because publicity surrounding the Tasini case has alerted publishers that they should include electronic rights in their freelance contracts. These days, few publishers assign freelance work without demanding both print and electronic rights.
Legal experts are still wrangling with what the decision means for digital archives, but all agree it's a setback for publishers.
"It's a big blow," said Mark Steiner, a partner in the trademark and copyright group at Townsend and Townsend and Crew, who predicted many publications will remove archival material because either tracking down the freelancers will be too difficult or compensating them will cost too much.
Still, Steiner said the decision was in line with other recent rulings in digital cases such as Napster, which sided with copyright holders.
"This upholds the notion that a copyright holder, in this case the author, doesn't give up rights he doesn't specifically grant to a publisher," he said.
John Wilson, an attorney with Jenkens & Gilchrist, predicted the ruling would spark more lawsuits from freelancers who haven't been compensated for electronic versions of their work.
"They're going to say, 'Who out there is using my work in ways I didn't intend in the contract?'" he said.
As a result, publishers who don't want to pony up may pull the works. "It's kind of like the shrinking of the nature of the collective knowledge as a whole," he said.
But at least one federal appeals court panel has tried to fight worries about incomplete archives. In ruling that National Geographic violated a freelance magazine photographer's rights by including his images in a CD-ROM, the panel asked a lower court to order the magazine to pay him rather than pull the photos.