Consortia and Licensing of Electronic Products - the Wave of the Future?

by Johann van Reenen


INTRODUCTION

My talk is organized around a set of questions. This is not in an attempt to confuse you, rather it is to reflect the stage we find ourselves in; there are more questions than answers in the area of consortial licensing. Also, questions make us think; answers pretend that there are already solutions. Questioning will, I hope, involve all of you in arriving at some tentative answers today.

Electronic information, especially that provided by monopoly organizations, are often beyond the means of a single organization. There is a growing trend towards joint purchasing, consortial agreements, and partnerships. I will explore the potential and the pitfalls of implementing shared electronic information services.

  1. WHY CONSORTIAL LICENSING?

    Many electronic products are priced out of reach for a single institution. As budgets become tight, libraries look toward consortia as a way of reducing costs by subscribing as a group to commonly used databases, relying on the economics of scale to bring prices down. Furthermore, consortial licensing often serves the "greater good", in that larger partners carry some of the cost for the smaller ones (e.g. in the case of Academic Press electronic journals). The technological capacity of the group frequently jumps to that of the most advanced partner.There should be much less duplication of effort for even such products that could be afforded individually, e.g. in developing a single contract, in negotiating all customization of products together, and in joint implementation, publicity, problem solving, and training. Consortia are also more likely to be able, utilizing the expanded resources among the membership, to add value to the products that they purchase, e.g. by adding local holdings to citations. Traditionally, libraries networked products locally, but more and more people agree the CD-ROM LANs may be a thing of the past. As a recent quote1 puts it: " CD-ROM has always been more suitable as a publishing and distribution, rather than a retrieval, medium. Libraries have stretched the retrieval capabilities of the little discs right to the limits of the network, and in many cases, transferred the resource to hard disks to mimic more closely the on-line system that they really wanted but could not afford." As a member of a consortium, a library is much more likely to be able to afford, for instance, access to a flexible client/server search and retrieval system, preferably via the Internet.

    Finally, the vendors themselves are moving towards consortial licensing as a preference. Witness a recent e-mail from the National Federation of Abstracting and Information Services (NFAIS) to the members2, advertising a special event:

    WHAT'S THIS "THING" ABOUT LIBRARY CONSORTIA?

    • The days of building an independent reference library is over.
    • The days of selling single subscriptions to one institution at a time are past.
    • The days of providing online access exclusively through large centralized vendors are gone.
    • The days of networked information are upon us. But are any of us ready? The answer is NO! "

    Library and academic consortia should be ready before the vendors are!

  2. ARE THERE ANY SUCCESSFUL LICENSING CONSORTIA ?

    Yes and no. There are good outcomes from a number of consortial efforts:

  3. CAN CONSORTIA MAKE TIMELY DECISIONS ABOUT NETWORKED ELECTRONIC PRODUCTS?

    Can groups really get their act together to do the job? Yes, if due process is followed in establishing a legal entity and if bylaws are clarified before making consortial decisions. Also, keeping to the time-honored rules for conducting good meetings will make difficult decisions easier, especially if each member gets an opportunity, early on, to describe their local systems operation; what's good about it, what their machine and people strengths are, and what the organizational infrastructure and funding obstacles might be. In deciding on any joint purchase, decision making will be easier if there are clear goals and priorities for the group, e.g. priority is given to products serving undergraduates/the public/ researchers, or priority is given to products which require minimal implementation effort, for instance, access via the internet using a standard browser.

  4. IS THERE SUCH A THING AS A GOOD LICENSE?

    Possibly. One thing is for certain, it can only be as good as the group's planning and preparation, i.e. how many questions you ask and how assertive and cohesive the group is in negotiating with experienced commercial vendors. A great psychological "prop" for members is a list of what would constitute a "Fatal Flaw" in any contract - three Fatal Flaws and the deal is off.

    4.1. Know as much as you can. That means asking questions and the best way to do so is to develop guidelines to measure a contact against. At UNM we developed such guidelines (in your handout - appendix 1.) which is currently in draft only, but may be useful for you to look at.

    4.2 Have criteria that MUST be met, as well as preferred criteria. The UNM guidelines were written into a Check List (in your handout - appendix 2.) to ensure that we do not miss anything in the excitement of aquiring a new product. These should preferably be written into more detailed questions for those contract clauses that cause the most concern.

    For instance, item number B.13 in the UNM check list : "Does the license allow the library to define the user population ...?"(appendix 2.) can be refined into the following questions:

    Refining questions regarding legitimate uses could be :

    The latter is such an important issue that we decided at UNM to adapt a rider regularly attached to all licenses by Loyola University of Chicago4 for our own use. This "Rider to Modify an Agreement" is in your handout (appendix 3); see particularly clauses 3 and 4.

    Ultimately, the best solution to getting consistent licensing will be through the use of "License Brokers" somewhat like the current journal vendors. Tony Ferguson ( Columbia University), one of the negotiators for the Northeast Research Library Consortium (NERL) said: " ..what I hunger for is a vendor who will do all the work commercial e-journals seem to be requiring and let me get back to worrying more about user needs and collection content."5

  5. IS IT REALLY POSSIBLE TO NEGOTIATE BETTER CONDITIONS AND PRICES?

    Consortia has leveridge; the larger and/or wealthier and/or more influential the consortium is, the more leveridge it has. It is important to let the vendor know, early on, that the group will be tieing the fees they are prepared to pay to the degree to which their criteria has been met. Tough bargaining stances are also more creditable coming from a group, e.g. could you as an individual say the following to a vendor like ISI or Elsevier: "We can only afford a network license for your product if the price is within the X dollar ballpark" ? Probably not! As a well organized group with more financial clout, we could and should. The vendor then has the option to choose to get some money or none! When I was involved with negotiating a contract for COPPUL with Elsevier Inc. to pilot an electronic journals trail, that is just what we did ... and the company choose not to make money, rather than meet us halfway!

  6. HOW DOES CONSORTIAL LICENSING GET DONE?

    The best way to start negotiations is to ask for a free trial or offer to be a beta test group for an evolving product. This should be free to members of the consortium, except for their local investments of people's time and the use of existing hardware at each site.If members and their local users are satisfied with the product, the group should begin planning the contract negotiations, especially what the product is "worth" to them. Decide on the amount which will be the bottom line. Then ask for a draft contract and invoice from the vendor. Insist on a dedicated sales representative to whom the consortium's negotiators will direct all communications and questions. Explain the major issues and concerns to this person; being honest about whether and how these issues will affect the purchase decision. It is also important to try to find out if other organizations or consortia have signed licenses recently or are in a similar negotiating phase. This information is hard to get - using the library Internet grapevine and informal networks may be the best way to do this. Vendors are loath to divulge such information as they see this as weakining their bargaining position.

    Responding to the contract:
    This is the most problematic phase as individual members will have to "sell" and get approval for the contract and subsequent changes and additions from their "home" organization's decision makers. This is made easier if such persons or committees were kept informed at each step of the process and funds were identified in advance. Once a suitable contract is negotiated with the vendor, the group should decide on the best way to invoice members for their portion of the licensing fee. Either, directly from the vendor to each member, or as a single invoice to the consortium, to be paid from membership fees.

  7. WHAT HAPPENS TO COPYRIGHT UNDER A CONSORTIAL LICENSE ?

    The short answer is: you negotiate a license that over-ride copyright. Other speakers will be dealing with some of these issues at the conference, but for all intends and purposes, with the right license you should not have to worry about copyright. It is, however, prudent to protect the consortium members from third party liability, i.e. what your users do with the information they retrieve. An appropriate waiver should be attached to the contract. See the example of such a waiver in your handouts (Appendix 3; items 3 and 4)

  8. WHAT IS THE POTENTIAL FOR CONSORTIAL LICENSING IN N.M.? WHERE CAN WE GET FUNDING?

    Potential exist, especially for investing in a standard platform to mount common databases, like the Wilson databases. SilverPlatter's ERL platform would be ideal for this purpose. Where can we get funding? "The Government!" seems to be the obvious answer. However, good consortia look at their joint resources first, exploring how reallocation can help provide the needed funds or some of it. In New Mexico we also have the opportunity to work with the various Federal Laboratories and Dept. of Defense installations. We can also tie projects to objectives that will serve large underserved groups, like Native Americans, improving our chances to get funding from national programs like the NSF. International funding for links to or joint ventures with Latin American countries, may also be available.

  9. CAN I / MY ORGANIZATION TAKE THE RISKS NECESSARY IF WE ARE NOT IN SOLE CONTROL?

    This last point is actually not a question, but a hard reality consortias have to deal with. It is an issue of organizational culture and our ability to take managed risks in an uncertain environment, in uncertain times. Our options, however, are fairly clear: we can choose trailing edge technology which is individually affordable but ultimately pleases no one, or we can be part of a potential "New Mexico Virtual Library", that pool resources and take risks to serve its users better. If such risks pay off, State and other funding would be secured. If we fail as a Consortium, at least we are in it together and the political fall-out is distributed among the members! As a group we also have the potential to look more objectively at the lessons learned from both failure or success. What Barbara Steissand said about money in "Hello Dolly" is also true for success and failure: "Money [ or failure, or success] is like manure if you spread it around, it makes things grow!"

If you are now convinced that consortial licensing has greater benefits than going it alone, keep the following in mind. Be prepared to compromise and let go of control and/or preferred ways of working or preferred platforms, when the greater good is served. Also, be prepared to say NO when your local customers or conditions makes it impossible to join the group, and do it in such a way that it does not prevent the rest of the group from pursing the project further; you may be able to join at a later date.

CONCLUSION

I believe that the benifits of consortial licensing are greater than the drawbacks, which can be limited by careful planning. Consortial licensing might not be so critical if national organizations could put pressure on vendors to make licensing simpler and more affordable; as Warro4 recently suggested: " A great service to the profession that would benifit all libraries ... would be for the ALA and appropriate divisions such as LAMA to devise reasonable agreements and pressure appropriate producers and distributors to use them in place of the present agreements" (p.177) - the so-called "standard contract".

Because of New Mexico's relative isolation, Government, Academia, and Industry should be encouraged to fund statewide consortia for licensing information products for the use of all of the citizenry and for the benifit of the state's economy in an era where "knowledge" is a major product and "knowledge workers" a valued resource. We, as an organization and as individuals, can ensure that this happens by getting together to plan such proposals.


References
  1. Paul Nicholls as quoted in: Metha, Apurva. "Are CD-ROM LANs a thing of the past?" Computers in Libraries, Sept. 1996, pp 64-66.
  2. Kohl, David. "OhioLink: A vision for the 21st Century." Library hi tech, 1994, vol.12, no.4, pp.29-34.
  3. TRIP10@aol.com [to] sils-l@ubvm.cc.buffalo.edu. "Special Library Consortia Event!" Electronic mail message, Sun, 8 Sept. 1996; 20:53:01 - 0400.
  4. Warro, Edward A., "What have we been signing? A look at database licensing agreements." Library Administration & Management, Summer, 1994, Vol.8, No.3, pp. 173 - 77
  5. Ferguson, Tony. " I am begining to hate commercial E-journals." Against the Grain, Sept. 1996, p.86.



UNM Guidelines for licensing e-products

  1. LICENSING
    1. The license should include permanent rights to information that has been paid for in the event that a licensed database is subsequently canceled or removed. For instance: in consortial agreements at least one member should archive the information.
    2. As a public institution with a broad mandate to serve the State of New Mexico, UNM's "authorized users" of multidisciplinary electronic resources include faculty, staff, students and all on-site users of the campus or University, and UNM's "site" includes every campus location, physically and virtually, and the Office of the President. The library will define the user population for a particular resource, e.g. narrow (the Department of Physics), broad (all staff, faculty, and students), or regional (New Mexico and/or beyond).
    3. Information providers should employ a standard agreement that describes the rights of libraries and their authorized users in terms that are readable and explicit. The agreement should reflect realistic expectations concerning UNM's ability to monitor use and discover abuse. Agreements should contain consistent business and legal provisions, including, for example, indemnification against third-party copyright infringement liability and permission to use records in personal bibliographic systems. (See Appendix 1 : Rider to modify the Agreement).
    4. The licensed content, plus any associated features and capabilities, should be continuously accessible from all institutionally-supported computing platforms and networked environments; this access must be based on current standards (e.g., Z39.50 compliant in 1996) in use by the library community.
    5. The service cannot be withdrawn without due process during the active subscription period.
    6. Licenses should permit "fair use" of all information for non-commercial educational, instructional and research purposes by authorized users, including unlimited viewing, downloading, and printing.
    7. Information providers should be able to link their access control mechanisms to UNM's (or their Agent's) authentication infrastructure; access to their products should not require individual passwords and/or user ID's.
    8. Licenses should not limit UNM's rights to enhance or reformat data (if content integrity is preserved) to make it more visible or convenient for our users (e.g., by providing links to other UNM holdings, or annotating for use within the UNM community).
    9. UNM use data must be available to UNM as part of contractual provisions for a license. Use data generated by UNM may be available to the information provider.
    10. The confidentiality of individual users and their searches must be fully protected.
    11. Agreements should clearly state archival responsibility in perpetuity.
  2. COSTS & PRICING
    1. Electronic content should cost less than its print analog, unless there is substantial added value.
    2. When multiple electronic formats are available, UNM should pay only one price for the use of all or any.
    3. The UNM Library should not be required to purchase both print and its digital equivalent.
    4. Content and access costs should be separated. UNM should have flexibility in selecting appropriate access mechanisms (including local or remote server, resource sharing agreements with other institutions, etc.) and should be able to alter these agreements for an existing license, subject only to access and use restrictions in the license agreement. The information provider should inform UNM how much of the total cost is attributable to (1) licensing the content, and (2) providing access.
    5. Information providers should be expected to demonstrate that they are assuming a major share of the risk in developing and marketing new products. UNM, as an early participant and partner in piloting products prior to general release, is making a considerable investment in infrastructure, delivery mechanisms, training and support. The information provider's pricing should recognize this contribution.
    6. UNM will give preference to electronic products where pricing is based on the size of the actual community which will use the digital information, or the actual recorded use (either unlimited simultaneous use or transaction-based licensing, as appropriate), as opposed to pricing based on the size of the total UNM population.



Licensing Check List

  1. REQUIREMENTS THAT MUST BE MET

      Does the license :

    1. Include permanent rights to information ( either by local archiving or through the use of permanent, distributed mirror sites?)
    2. Clearly state the responsible agent for archiving the information?
    3. Describes the rights of libraries and their authorized users in terms that are readable and explicit?
    4. Reflect realistic expectations concerning UNM's ability to monitor use and discover abuse, i.e. accept our good faith effort?
    5. Allow linking of the information provider's access control mechanisms and UNM's (or their Agent's) authentication infrastructure?
    6. Make legal provisions for indemnification against third-party copyright infringement liability? (See Appendix 1 : Rider to modify the Agreement).
    7. Ensure that the service cannot be withdrawn during the active subscription period without due process?
    8. Permit "fair use" of all information for non-commercial educational, instructional, and research purposes by authorized users, including unlimited viewing, downloading, and printing?
    9. Protect the confidentiality of individual users and their searches?
    10. Ensures compliance with the Laws of the State of New Mexico?
    11. Does the information provider :

    12. Assume the major share of the risk in developing and marketing the product?
    13. Recognize early participation and partnering in piloting products prior to general release through preferential pricing?

  2. DESIRED CRITERIA THAT SHOULD BE NEGOTIATED IF AT ALL POSSIBLE

      Does the license :

    1. Allow the library to define the user population for a particular resource and pay accordingly?
    2. Ensure that the licensed content, plus any associated features and capabilities, will be continuously accessible from all institutionally- supported computing platforms and networked environments?
    3. Permit UNM to enhance or reformat data (if content integrity is preserved) to make it more visible or convenient for our users (e.g. by providing links to UNM holdings)?
    4. Provide UNM with use data?
    5. Allow the UNM Library to purchase print or its digital equivalent separately?
    6. Separate content and access costs?
    7. Allow flexibility in the selection of access mechanisms (including local or remote server, resource sharing agreements with other institutions, etc.)
    8. Allow the flexibility to alter selection of access mechanisms for an existing license, subject only to access and use restrictions in the license agreement?
    9. Clarify how much of the total cost is attributable to (a) licensing the content, and (b) providing access
    10. Does the electronic information product or service :

    11. Cost the same or less than its print analog?
    12. Add substantial value, not found in the print analog?
    13. Cost the same for multiple electronic formats (if available)?
    14. Provide separate pricing options for electronic and print versions?
    15. Allow the use of existing hard- and software to access the information? ( Is it compatible with our current systems?)
    16. Is this the sole:

    17. Vendor/ provider of this product or service?
    18. Format for obtaining this information?

APPENDIX.1.
RIDER TO MODIFY AN AGREEMENT

This rider modifies an agreement dated _____________________________ by and between the University of New Mexico General Library ( "Customer" ) and __________________________________ ( "Vendor" ). The parties agree that in the event of any conflict between the terms of the attached agreement and the terms of this Rider, the terms of the Rider prevail. The terms of the attached agreement are modified as follows:
  1. Vendor acknowledges that Customer is exempt from any New Mexico sales or use tax. The Customer's tax exemption number is _______________________.
  2. If the attached agreement provides for automatic renewal, Vendor shall notify Customer of the applicable notice requirements at least 30 days prior to the notice period, i.e., 60 days prior to the expiration of the then current term if the notice period is 30 days, or 90 days prior to the expiration of the then current term if the notice period is 60 days.
  3. Vendor will defend, indemnify, and hold Customer harmless from any action based on a claim that Customer's use of the database in accordance with the attached agreement, infringes any patent, copyright, or trade secrets of any third party.
  4. If any provision of the attached agreement provides that Customer shall indemnify Vendor, that provision shall be void.
  5. The attached agreement may not be assigned by Vendor or Customer without the prior written consent of the other party. Any assignment made without such consent shall be void.
  6. If Vendor (a) breaches any term of the attached agreement, (b) terminates or suspends its business, (c) becomes subject to any bankruptcy or insolvency proceedings under any Federal or State statute, or (d) becomes insolvent or becomes subject to direct control by a trustee, receiver or similar authority, Customer may, in addition to its other legal rights and remedies, terminate the attached agreement on seven day's notice to Vendor.
  7. The attached agreement is enforceable only by the parties who have executed it; the agreement creates no rights in third parties.
  8. The attached agreement shall be governed by and construed in accordance with the laws of the State of New Mexico.
University of New Mexico

By:____________________________________________________

Its____________________________________________________

Date:____________________________________________________


Vendor: ___________________________

By:____________________________________________________

Its____________________________________________________

Date:____________________________________________________

* Adapted from a Rider produced for Loyola University of Chicago. (Warro, Edward A., "What have we been signing? A look at database licensing agreements." Library Administration & Management, Summer, 1994, Vol.8, No.3, pp. 173 - 77)
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