In December 2013 I was really lucky to be able to attend the OpenAIR and Global Congress on IP and the Public Interest, a 5 day conference held at the UCT Graduate School of Business, hosted by the UCT IP Unit. I was really excited to meet a group of people who were talking about intellectual property in a way I hadn’t previously experienced. The attendees were mostly academics and Creative Commons affiliates. This group is opposed to maximalist protection of intellectual property rights, and they are all about open access and sharing culture. It was certainly a stark contrast with my experience at the US Copyright Office, and made me seriously consider doing an LLM in intellectual property law.
In May we were named as the Second Respondent in a law suit initiated by Mamphela Ramphele. She claimed she had not given permission for the re-release of her autobiography, a project being lead by New Africa Books, the First Respondent. We had been working with NAB to get the autobiography, A Life, onto Paperight, and Nick Mulgrew (Paperight’s in-house designer), had designed a spiffing new cover to replace the old one. Originally, A Life had been published by David Phillip publishers in 1995, and DP was later acquired by New Africa Books.
Ramphele claimed that NAB did not have the right to re-release her autobiography, and thus that Paperight had no right to distribute it. When NAB signed up with Paperight they signed our publishers agreement which includes a clause in which the publisher warrants that they are the owner of, or are authorised to license, all of the content they give to Paperight, and indemnifying Paperight from any third party claims arising from a breach of this warranty. So we were covered, but it was certainly disturbing to get served. I was able to digest the legal documents we received and liaise with our lawyer to assist with the drawing up of an affidavit. Thankfully, NAB and Ramphele settled the matter out of court fairly quickly and amicably, and we agreed to remove the book from the site. It was a big wake up call to us all.
(Also see Philippa’s post on this startling turn of events.)
An unexpected visitor
On the 7th May 2013 16h22 an attorney arrived at our office with a stack of papers giving us notice that Mamphela Ramphele intended to take a case up against New Africa Books (PTY) Ltd (First Respondent) and Paperight (PTY) Ltd (Second Respondent).
The notice prevented us from doing any act that related to the book authored by Mamphela Ramphele and entitled Mamphela Ramphele: A Life, including producing, publishing and distributing the book. We were ordered as the second respondent to remove all copies and references to this book from our website and our outlets within 10 days of receiving this order.
We were also notified that we would be liable as respondents to pay the costs of the application and possible further or alternative relief. This came as quite a shock to us as we were given permission to add this book to our website as New Africa Books was the title owner.
We got in touch with New Africa Books to find out what had taken place. There was quite a complex story involved where there was some confusion about who was the current title owner, New Africa Books or Mamphela Ramphele.
We took the book off of our website and drafted an affidavit which was sent through to our lawyer to explain what took place. The case against us was dropped as we had not infringed any copyright agreement.
Our drafted affidavit
Paperight acts as a distribution service for Rightsholders by allowing printing businesses to licence and legally print out books and other paper documents from its website.
Rightsholders register on the Paperight website and provide Paperight with content that they would like distributed through the Paperight network.
Rightsholders charge a licence fee through the Paperight website to printing businesses to allow them to legally print out copies of documents.
Paperight ordinarily takes 20% of each licence fee earned by a rightsholder through the Paperight website.
Rightsholders are required to agree to Paperight’s Rightsholder Agreement – or negotiate and sign a separate legal contract if the Rightsholder objects to any of the terms of the regular Agreement – when they sign up with the Paperight service.
New Africa Books (Pty) Ltd signed up with Paperight on 25 February 2013, and agreed to the standard Paperight Rightsholder Agreement in doing so.
Paperight was supplied with an original print copy of Mamphela Ramphele – A Life by New Africa Books (Pty) Ltd thereafter, as the latter was seeking to republish the book under its David Philip Publishers imprint.
The copy of Mamphela Ramphele – A Life supplied to Paperight from New Africa Books (Pty) Ltd was published by David Philip Publishers in 1995. Paperight digitised and uploaded Mamphela Ramphele – A Life onto the Paperight system on 17 April 2013.
Paperight released a press release, jointly with New Africa Books (Pty) Ltd, promoting the latter’s re-printing and “re-release” of Mamphela Ramphele – A Life and its distribution through bookstores and the Paperight network.
On 7 May 2013, Paperight was notified of a motion relating to copyright infringement of Mamphela Ramphele on behalf of New Africa Books (Pty) Ltd and Paperight, relating to the reprinting of Mamphela Ramphele – A Life.
As per Paperight’s Rightsholder Agreement, which New Africa Books (Pty) Ltd agreed to when they signed up to the Paperight service, “the Rightsholder warrants that it is the owner of, or is authorized to licence, the rights to all content provided to Paperight”.
The agreement further states that content provided by a Rightsholder “does not infringe on anyone else’s intellectual property or other rights”.
The Rightsholder Agreement states that “The Rightsholder will defend, indemnify and hold harmless Paperight […] against any third-party claims arising from a breach of this warranty”.
The onus of the legality of the content provided to and distributed by Paperight is therefore on the Rightsholder, in this case, New Africa Books (Pty) Ltd.
Paperight, therefore, cannot be held responsible for any infringement on Mamphela Ramphele’s copyright by New Africa Books. After being served with the notice, Mamphela Ramphele – A Life was taken off of the Paperight system at the discretion of Paperight’s employees.
From 17 April 2013 to 7 May 2013, New Africa Books (Pty) Ltd did not sell any copies of Mamphela Ramphele – A Life through the Paperight network.
As such, Paperight has earned no money or royalties from New Africa Books (Pty) Ltd’s distribution of Mamphela Ramphele – A Life.
Nine months into our Shuttleworth Foundation funding, I’m proud and pleased with where we are in large part because, in getting there, we’ve had to learn fast from mistakes and successes. Some of the lessons we’ve learned:
- The human story is more powerful than the financial one. I thought initially that publishers and copy shops would sign up because we offered them a new revenue stream. However, at first glance no one really believes it when someone promises them a ‘new revenue stream’. They really make their buying decision – which is always an emotional decision – because they connect with our social-impact vision. Then, they go on to justify that decision to themselves by calculating potential revenue, or by citing a need to look for new opportunities in tough times. Similarly, I’ve seen that when individuals don’t connect with our social-impact vision, they use the financial numbers to justify not participating. So most of our Paperight pitches now emphasise the human story – books are the key to upliftment, they save lives, we all have a responsibility to spread education – and then when necessary we move onto the numbers. This was a crucial lesson that took months of trial and error to learn.
- Perhaps the hardest lesson was realising that three months approaching big publishing companies early on was not a good use of my time. Paperight is a classic disruptive innovation: a simple, relatively low-margin product for a new market. No matter how well run they are, established companies cannot justify putting resources into a disruptive innovation very early on. They can only follow smaller, more nimble players for whom new, early-stage markets are attractive. (I wish I’d read The Innovator’s Dilemma sooner; it makes this so clear.) Now that we have a growing stable of publishers and outlet footprint, it’s easier for larger publishers to justify joining us.
- When pitching Paperight to outlets, it’s good to focus on the word ‘legal’. I initially emphasised concepts like ‘easy’, ‘more customers’ and ‘broader product offering’, thinking that the fact that Paperight is the first ever legal way to print books out was obvious and beside the point. While those features are important, we’ve also realised that ‘legal’ is a key feature: copy shops know they are often asked to copy books illegally, and this creates anxiety for managers. Our pitch then speaks to that emotion.
- Building good software requires patience and impatience simultaneously: planning and designing Paperight 1.0 (the current site) took much longer than expected. We had to very patiently thrash a great deal early on, and this paid off in a very smooth build process that resulted in a great site. But none of this would have been possible without the impatiently built Paperight 0.5, a duct-tape solution on which we impatiently registered our first users and delivered our first documents. Even though we had to use 0.5 for two more months than expected, we learned from it right to the end. The lessons included refining terminology, online agreements, book metadata and taxonomies, customer expectations around document quality, marketing strategies (customers love free credit more than books priced at free, even though they’re effectively the same thing), and search and browsing behaviour.
- My initial strategy was to create a large catalogue early on so that users could ‘walk into an outlet and ask for anything’. This was flawed – and not just because it’s very hard to build a large catalogue fast. The flaw is that with a new service, too much choice is paralysing. To gain new outlet sign-ups, we had to focus on one product: past exam papers for grade-12 learners. We have since got much better traction among outlets, who can visualise marketing that to their customers. We learned this lesson while distributing our first Paperight catalogue poster, and watching how outlets engaged with it. (That said, it’s important to note that many users want to browse a range of books not to buy but to evaluate the service before signing up.)
- Unique, tailor-made content is hard work but incredibly valuable. Creating packs of past grade-12 papers involved a serious investment of time and energy. (Nick Mulgrew tells the story on our blog.) Essentially, we’re creating this content from disparate sources (no one organ or government can provide all matric past papers; we’ve had to visit various offices, numerous websites, and beg favours of officials). It is possible that the creation of Paperight-specific content may form a key part of our content strategy over time – potentially more important for growing our customer base than simply gathering others’ content. This is something I’m keeping an eye on.
- A key future revenue model is selling integration with institutions’ user systems to deliver documents to specific people in remote places – for example, distance-learning students picking up their personalised printed course materials from a copy shop, using a code or student number plugged into Paperight, rather than relying on the post. However, to get in the door of large institutions – universities in particular – the outlet footprint has to be in place first. The first question I get is always ‘Where are your outlets?’. It’s a market where vaporware doesn’t cut it. In our first six months, this was a setback that wasted time. Now that our footprint is growing, we can begin making these pitches again.
- Copy shops don’t want to be selling advertising. We had reserved advertising space on the pages of our documents for copy shops to sell to local businesses. It seemed like a good idea. But, for a copy shop, the cost of acquiring advertising is much greater than the likely advertising revenue. We’ve discovered, however, that publishers are interested in using this ad space to cross-sell books. So I’m looking into this ad space as a potential revenue stream for Paperight instead, potentially using it to offset rights fees.