Deal or No Deal – Licensing and Acquiring Digital Resources - Deal Breaking License Clauses

In an ideal world, licensing digital resources would be quick and painless. The license agreements would be suitable for both the vendor and the library. The language would be easy to understand, terminology would be specifically defined, and the needs of both sides would be addressed. Legal counsel would not need to review, draft, revise and approve the license. Libraries and vendors could engage in that most elusive of events – agreeing to the database service, content and price and then signing the license on the spot. Despite the progress that has been made with license agreements over the past several years, librarians and vendors must continue to carefully scrutinize each license agreement. In many cases, we still find ourselves negotiating the content and wording of specific provisions, changing them to reflect the needs of our particular information environment.

In preparation for a presentation on licensing for last year’s Western Pacific Chapter of the American Association of Law Libraries Conference (WESTPAC – this year’s conference will be held in Honolulu, Hawaii on October 11 – 13, 2007, I polled various law librarian list serves to identify which license provisions were still problematic. Although responses varied, on the whole, librarians still seem to face challenges in negotiating such terms as: authorized users (strict definitions on who can use the product, especially public or walk-in patrons or affiliated users), damages, indemnification (particularly mutual indemnification), perpetual access, pricing, privacy, multi-site licensing, and remote access.

Based on the literature, list serve responses and my own experience, I have listed my top ten deal breaking terms in license agreements:

1. Indemnity – I still see a number of license agreements in which the vendor avoids responsibility for any claims and even requires the library to indemnify the vendor should a lawsuit arise. It is surprising that so many indemnification provisions continue to pop up in license agreements when most public institutions are forbidden to sign a license with an indemnification clause. When it comes to indemnity clauses, I strike them out completely. I have only encountered one license agreement in which the vendor would not agree to the strike out.

2. Limitation of Liability – Hidden in their boilerplate provisions, vendors often disclaim liability for damages or severely limit them to the subscription fee paid. This might be fine for academic libraries whose patrons are typically not relying on the data for commercial purposes (most of our license agreements limit usage of products to academic or private research); however, for corporate or firm libraries, these clauses should be carefully examined.

3. Liability for Patrons Actions – The Library should not agree to be responsible or liable for the actions of their patrons. This clause should be modified to say that the library will make reasonable efforts to notify patrons of the restrictions on and proper usage of databases and will make reasonable efforts to assist the vendor in resolving any breaches.

4. Change in Terms Without Notice – Clauses which allow the vendor to change the terms of the product, service, pricing and/or license agreement without written notice or by posting them on their website are not acceptable. If the vendors have this right, then why sign a written license agreement in the first place? Most librarians do not have time to regularly peruse vendor websites for changes in terms and conditions. Rewrite these clauses so that there is written notice 30 to 60 days beforehand of any changes.

5. Disclaimers/As Is – Be careful of clauses that disclaim the accuracy, content and/or availability of the databases. If your library is paying good money for a product, it should work and it should be accessible. Add the following clause (or something similar) at the end of the disclaimer: notwithstanding the above, licensor warrants that the licensed product will adhere to reasonable standards of performance, reliability and availability in conformance with its advertised characteristics.

6. Termination – Many license agreements will state that the vendor can terminate the agreement for breach. Such a provision should also stipulate that the vendor must give written notice of the breach and give the library an opportunity to cure the breach within a specified time period. A termination clause should be mutual, giving both the library and the vendor rights to terminate.

7. Remote access - Remote access, despite the fact that it is widely available, is not always covered in a license agreement. In fact, some vendors charge an additional fee for remote access. Even if the vendor indicates that remote access is included as part of their service, it may be helpful to specify these rights in the license agreement. Librarians should also determine, in advance of signing the contract, whether their remote access method is acceptable to the vendor.

8. Authorized users – Vendors have come to understand that the definition of authorized user may vary depending on the type of library licensing their database. County, government, firm and academic libraries may have their own unique definitions; one size does not necessarily fit all. Walk-in patrons, affiliated patrons (researchers, independent contractors, subcontractors, temporary employees, interns, visitors, alumni, membership users), and distance program affiliates still present challenges.

9. Monitoring Use/Data Collection – Any data collection should respect patrons’ privacy rights.

10. Non-Disclosure Clause - Librarians generally loathe confidentiality clauses because they like to share information to other librarians about database terms, services and rates.

Additionally, provisions on interlibrary loan, course packs, e-reserves and online course management software linking can still present issues. If these services are important to patrons, be sure to write them into the license agreement as a matter of course. Though you may not need them immediately, you may in the future and it would be better to avoid contract renegotiation. If the vendor will not include these rights, see if the vendor will consider reasonable requests on a case by case basis and find out to whom your patrons should direct these requests.

For additional reading on license provisions and terms, check out the following sources:

Arlene Bielefield and Lawrence Cheeseman, Interpreting and Negotiating Licensing Agreements: A Guidebook for the Library, Research and Teaching Professions, Neal-Schuman Publishers (1999).

Melissa Nasea, The Joy of License Negotiation: Having Fun and Being Careful, 24 Library Collections Acquisitions and Technical Services 436 (2000).

LIBLICENSE: http://www.library.yale.edu/~llicense/index.shtml.

Ellen Finnie Duranceau, License Compliance, 26(1) Serials Review 53 (2000).

Lesley Ellen Harris, Licensing Digital Content: A Practical Guide for Librarians, ALA (2002).

Kim Guenther, Making Smart Licensing Decisions, 20(6) Computers in Libraries 58 (June 2000).

John Cox, Model Generic Licenses: Cooperation and Competition, 26(1) Serials Review 3 (2000).

Rick Anderson, NASI Guide: License Negotiation 101 (March 2005): http://www.nasig.org/publications/guides/license.htm.

Duncan Alford, Negotiating and Analyzing Electronic License Agreements, 94 Law Library Journal 621 (2002).

Fiona Durrant, Negotiating Licenses for Digital Resources, Facet (2006).