Are the SEC's S&M copyright rules pre-empted by federal law?

The Attorney General of Tennessee recently opined that the SEC was within its rights to limit media access to college sporting events to those news organizations who were willing to sign away large sections of their intellectual property rights as part of a credentialing scheme.

It’s a neat idea, and I’m sure it would be expedient for the SEC if the world really did work that way, but I’m afraid the Attorney General’s opinion raises more copyright questions than it answers—not the least of those questions being whether the SEC’s credentialing scheme is actually preempted by federal copyright law.

Preemption is a doctrine that says, when there’s a disagreement between state laws and federal laws, the federal law wins. The Copyright Act expressly preempts state laws that would purport to create new copyright schemes in conflict with the Act.

The SEC itself is made up of 11 schools, 10 of which are public institutions; it is, essentially, a bunch of states making an organization. For the time being, however, let’s put aside the question of whether the government can launder itself of its governmental nature by creating subordinate governance structures that include private members (perhaps a question better directed toward Halliburton or Blackwater). Let’s look strictly at a hypothetical state school—unquestionably a state entity—that happens to participate under SEC rules.

As quoted in the Attorney General’s opinion, the rules impose a laundry list of restrictions on photographers, including but not limited to the following:

  1. Images cannot be licensed, sold or used in a way designed to profit on the image of any individual, the name of any SEC member organization, or the SEC itself;
  2. Images cannot be reproduced on “products,” whatever those are;
  3. Images cannot be resold unless the SEC is named as a third party beneficiary to the contract, such that it can sue to enforce the terms.
Attorney General Robert E. Cooper, Jr. defends these restrictions by saying that state law gives the University of Tennessee board of trustees broad powers to make “bylaws, rules and regulations.”

The problem starts here: Copyright law is not simply contract law. Under contract law, two competent individuals have a virtually unlimited universe with which to construct any legal arrangement they would like. But under copyright law, the regulatory framework limits the ways in which a copyright can be sliced up.

This is because many of the underpinnings of intellectual property have their roots in real property, i.e., land transactions. If you have a parcel of land, you can divide that land up in a number of ways, but you face some limitations. For one thing, you couldn’t place a restriction on the land that’s against public policy (e.g., “this land may never be used by women”). You couldn’t divide it up so small as to be useless (e.g., “I bequeath one square inch of this land to the first hundred thousand people to visit it”). And if you actually transferred ownership of the land or any part of it, you would have to record that transfer with the state.

The Copyright Act has some parallel restrictions. If you put so many restrictions on the right of a copyright owner that they don’t really have the rights of an owner anymore, you’re not really writing a license—you’re trying to effectuate the transfer of some rights of copyright without complying with the recording requirement. In the case of these SEC rules, a state government agency is trying to impose a bondage-and-discipline copyright scheme on journalists by saying, “We’ll restrict your access to state facilities unless you agree that we have the perpetual right to tell you when and how you can use your images.”

But states don’t have the authority to make their own copyright schemes. And the federal Copyright Act doesn’t tolerate unlimited restrictions on the right of an owner any more than state property law schemes would. If it is the SEC’s position that it isn’t trying to carve out a copyright interest by requiring that it be named the third-party beneficiary of any attempt to alienate that interest, it should be treated for multiple personality disorder. The entire idea behind being a third-party beneficiary is that you have some interest in the transaction.

If the SEC wants an interest in journalists' works, it has to have that interest transferred in a properly executed document and recorded with the Copyright Office. Of course, that would just raise another set of questions: can the government require you to surrender your property as a condition of acting as a journalist?

But, hey, one silly question at a time.

Tagged: copyright, newsgathering