I’m in Vancouver, British Columbia, for the Access 2011 meeting which starts tomorrow. Coming across from the eastern timezone I had to come a day early, so — being a self-confessed library nerd — I checked out the Vancouver Public Library. I’m impressed with not only the physical structure but also the obvious degree of community engagement. The Central Library was very busy on a Tuesday afternoon, and first impressions are that it is beloved by its patrons. Included below are some pictures and some notes; some of the pictures have annotations — you can mouse over the boxes to see them. You can also click on the pictures to go to larger versions on Flickr.

Outdoor Entrance to Library Atrium

The central library is a huge building with a unique atrium feature. The main entrance to the library itself isn’t open to the outside. To get to the library, you have to first enter these side doors to an atrium. Inside the atrium are a number of commercial businesses and open seating in addition to the library entrance itself.

View of Library Floors from Inside the Atrium

The atrium goes down a level from the ground floor and up an additional five floors. Lots of glass lets in plenty of light. The entrance level also has a friends-of-the-library bookstore. The most impressive architectural detail, though, (from my admittedly nerdy perspective) is that each floor of the building has a raised floor above the concrete. The annotations on this picture point them out, and you can see a closer example in the next picture. The glass extends below the raised floor, in places you can see the infrastructure under the raised floor.

Raised Floor Under Shelves

This picture was taken on the steps between the main floor (level 2) and the children’s library (level 1). It more clearly shows the support braces holding up the raised floor and the heating and air conditioning ductwork. This infrastructure is exposed in many parts of the building, and in some locations you can also see power and networking installations as well.

Compact Shelving

The Central Library has lots of compact shelving. Some of it is open to patron use and other sections are locked down to staff password entry on a keypad at each shelving range. The last place I encountered this much compact storage in open shelving spaces was in the Kelvin Smith Library at Case Western Reserve University. The only part of the collection that wasn’t in compact shelving when I worked there (in the late 1990s) was current periodicals. The use of compact shelving isn’t quite so extensive here, but it is quite pervasive throughout the building.

Compact Shelving over Raised Floor

Kelvin Smith Library also made use of raised flooring as a way to flexibly reconfigure space as needed, but the Central Library is the only place that I’ve seen where the compact shelving was put on raised flooring. (At Kelvin Smith Library, the concrete floor platform was raised to the raised floor level where the compact shelving was installed.) This picture shows, though, that the same heating and air conditioning ductwork exists in the compact shelving ranges. The floors under the compact shelving sounded a lot more solid — less “give” when you walked on them — but there was still a bit of an echo. The subfloor bracing must be significant to hold not only the shelving units but also the weight of the books.

Community Information and Library Guides

I don’t remember encountering a library before that had so much signage for the library as well as places for the community to post information. There are 8.5″x11″ pieces of paper mounted everywhere in the public spaces of the building. (I didn’t get a picture of the elevator, but the sides of the elevator car were covered with plexiglas sign hangers announcing library programs, services, and policies. This picture has a community information bulletin board and a rack of library guides.

Community Newspapers

Another point of community engagement is this location on the fifth level that is a distribution point for many community newspapers.

“Zine” Shelving

The main entrance floor of the library has two sections of shelves dedicated to displaying “zine” publications. A “zine” is “most commonly a small circulation publication of original or appropriated texts and images. More broadly, the term encompasses any self-published work of minority interest usually reproduced via photocopier. A popular definition includes that circulation must be 5,000 or less, although in practice the significant majority are produced in editions of less than 1,000, and profit is not the primary intent of publication.” (Thanks Wikipedia!) There are several hundred on display here. Each has been cataloged with a barcode, a spine label and an RFID tag. The Vancouver Public Library Zine brochure even describes an effort by its special collections department to collect zines of significant local interest. This is serious stuff!

Barcode-to-RFID Conversion Stations

Clearly the Vancouver Public Library is in the process of migrating its collections to RFID tags. These two stations were parked on the third level at what looked like a charging point. The self-checkout stations were still using barcode readers, so the process must not be complete yet. And yes — that is a 3M logo on the bottom of the cabinets.

Overall Impressions

My first impressions are very positive. I hope Vancouver citizens realize what kind of treasure they have.

A Google a Day screenshot

When this first came out I thought it was a stunningly good way to demonstrate the kinds of search skills that libraries teach patrons when demonstrating how to use the internet. So I sent a message to the generic service address and started a conversation with a product marketing manager at Google. After some back-and-forth with him and other librarians, it does seem like there is a possibility of a really neat collaboration. To start us off, Google put together the information below on how to embed the question in library websites (see below). On a conference call with other librarians we also talked about possibilities like a categorization of questions (so if you wanted a chemistry question or one that uses Google Street View you would be able to find it quickly) and “guest written” questions based off of real life reference interviews.

What is A Google a Day?

Why is it cool?

Even more exciting, the Google a Day widget can be embedded right on a library’s home page. With minimal effort and no programming experience required, each day the widget will automatically update so users have instant access to exciting and educational content on the landing page.

Why is it cool for libraries?

More importantly, every day we highlight awesome and useful search tricks to help find information quicker and easier. Give patrons instant ability to build the increasingly important skills of search engine utilization and internet research by embedding a Google a Day widget or linking to our page at www.agoogleaday.com

How do I get started?

<iframe width="300" height="250" src="http://agoogleaday.com/embed.html" frameborder="0"></iframe>

“How much effort do you want to spend securing your computer systems? Well, how much do you not want to be in front of a reporter’s microphone if a security breach happens?” I don’t remember the exact words, but that quote strongly resembles something I said to a boss at a previous job. Securing systems is unglamorous detail work. One slip-up plus one persistent (or lucky) attacker means years of dedicated efforts are all for naught as personal information is inadvertently released. See, for example, what happened recently with Sony Online Entertainment’s recent troubles.

It was in that frame of mind that I responded to a series of questions from a librarian taking a computer science class. (As someone else who straddles the computer-science/library-science divide, I wanted to encourage this line of thinking!) Now library systems typically don’t have credit card information, so they may not be attractive to individuals that seek to expose or exploit personal information. But our systems do have physical addresses, e-mail addresses, and sometimes birthdays or other personal data. And we have a professional ethic to keep patron use information private.

The person that sent me these questions asked that I not mention a name or affiliation, but that it was okay that I repost the questions along with my replies. I’m hoping this encourages some discussion because my understanding of the use of encryption in ILS products is very narrow and only somewhat deep (and is getting shallower by the day as my direct experience is going on ten years old).

Background on the project is that during our encryption unit, I realized that I didn’t know anything about what libraries to do back up our strongly stated policies about protecting patron privacy, so I wanted to find out more about it.

Questions:

1. What encryption tools/standards, if any, are used to safeguard patron accounts (name, items checked out, databases accessed, etc.) at the library?
2. Where in the systems do these tools typically fit — at the ILS level, or somewhere else? (e.g., university ID systems)
3. How are circulation and other records expunged? I.e., are they permanently deleted in such a way that hard drive forensics couldn’t bring them back?

In my experience, this patron information is not encrypted in integrated library systems. The difficulty is that if those bits of information are encrypted, they must be decrypted by the program in order to be useful (generating an overdue notice means the patron’s information must be known to the program, displaying the patron’s name on his/her account information screen, etc.). And for programs to decrypt they must have the secret key. And if the programs know the secret key it is trivial for an attacker to get the key as well. And since good encryption, by its nature, is computationally “expensive” there would be a lot of system load with all of the encryption and decryption of bits of information. (Computationally expensive is good because it makes it harder for an attacker to guess the correct key.)

Password Hashing Flowchart

Note that passwords are a special case. Passwords are not really encrypted in a database; rather the output of a “one way hash” algorithm is stored. When the user tries to log in, the same one way hash algorithm is applied to the text string entered as a password and if the output matches what is stored in the database the user is let in.

As the diagram shows, with the login attempts the hashed password is not decrypted; the output of the hash algorithm is compared to what is known to be the hashed password.

[Aside: I'm trying an experiment in this post. The diagram is a Scalable Vector Graphic (SVG) file. It seems to be showing up fine in the browsers I'm testing, but I have no idea how it will appear in the RSS feed or if you are using an RSS reader or receiving this post via FeedBurner e-mail. If you don't see the graphic, try viewing the post via the DLTJ website.]

The most effective encryption would be at the database management system layer. For instance, Oracle has “Transparent Data Encryption” feature. “Data is automatically encrypted when it is written to disk and automatically decrypted when accessed by the application.” Automatic encryption is not built into MySQL, but you can use a MySQL-specific function to encrypt a field. PostgreSQL has a contributed module that performs the function.

Another option — other than database-level encryption — is to have the operating system encrypt the underlying filesystem (for example, the Red Hat Encrypted Filesystem). That way all of the database storage files — stored in that filesystem directory — would be encrypted.

Note, though, that in any of these cases, the key is known to the computer somehow, and so it is possible for an attacker to recover the key and decrypt the data. There are, of course, varying levels of obscurity one can apply to the key, but I think we’re getting pretty far off on a tangent.

How often circulation and other records would be expunged would depend on implementations in each software system, but as a general guideline I don’t think a strong deletion mechanism is used to obliterate data on the disk. I’d be happy to be proven otherwise. And as you consider hard drive forensics, also think about pulling the same information off backup tapes; that would probably be easier to get to.

In a follow-up, I was asked:

WRT your response on Q2, do you have an idea of what level “most” or “some” libraries might have the encryption, or were you speaking purely from a view of what ideal/good situations might look like?

On 3, I have heard from a few others that there seems to be just deletion with no zeroing out features or the like and that it does take a period of time (1-2 months) for backup tapes to be overwritten. So it strikes me that the weakest link may be in the area we talk most about protecting.

With regards to the database-level or the filesystem-level encryption, I was speaking from a point of view of what idea/good situations might look like. One of the outcomes of posting these questions to a wider group of readers is, I hope, more real-world experience reports from people who might be running systems that actually do this.

Yes, I think those are weak links, with the backup tapes being the biggest problem. One can’t predict when blocks on a live filesystem disk will be overwritten, but overwriting tapes is pretty predictable — and easy because one doesn’t need access to the live system.

Almost a decade ago while at the University of Connecticut I conducted a survey of ARL libraries on their patron privacy practices. The full text of that survey and ARL member responses are available from Google Books and from HathiTrust. Lee Anne George of ARL confirmed via e-mail that permission has been given for full view of SPEC Kits up through 2005 as well as other ARL publications. Lee Anne said that there are over 400 titles now in full view.

This information is most likely of historical interest only — privacy on the internet has certainly moved from where it was eight years ago. The survey was done right at the height of concern over the USA PATRIOT Act and when models like the TRUSTe were gaining traction. (I don’t think the need for explicit privacy policies and defined practices has gone away. But any policy drafted on the interent the way it was eight years ago probably needs to be reviewed and updated.) So I’m glad that ARL has decided to make this and similar studies openly available.

Below is the text of an article I wrote for the LYRASIS member newsletter in which I talk about how a community of users of open source software is as important (if not more so) than the code. I’m reposting it here for the DLTJ readership.

One of the challenging and rewarding aspects of open source software is building and sustaining the community that surrounds the software. It is challenging because people and institutions use open source software for a variety of reasons. For some, having the computer source code means that they are empowered to adapt the software to fit their needs. For others, contributing talent and budget to a communal effort – something arguably aligned with the general ethos of libraries – means that ultimately a better solution is created for their own users. Yet another group sees an open source solution as simply the best tool to solve a particular problem.

The leaders of an open source software community can find it challenging to focus this wide array of motivating factors in a way that keeps the project moving forward and satisfying to everyone. This is particularly true once the first phase of the software is written and published. Will a community form around this project that has consumed a lot of local resources? What if we’re swamped with so many questions and requests for tweaks that we can’t get our own jobs done? What if we put it out there and no one notices?

Ah, but consider the rewards. Working with open source software can enable you to join a community with the potential for impacts that go well beyond what one can do with off-the-shelf software. Whether you are an active user submitting bug reports and feature requests, a software developer adding fixes and new functionality, a documentation writer, or just someone who answers questions from peers based on your own experiences, you can become part of the active life of the project. The transparency of open source projects allows you to more clearly see the fruits of your efforts and determine whether a particular piece of software is going to meet the needs of your users now and in the future.

One such community is now forming through LYRASIS. LYRASIS Technology Services, a new option for members, is starting to offer consulting and hosting options for open source software as well as selected commercial and hybrid applications. Whatever your motivations for considering open source software, I hope that you will not only think about the software itself, but also consider the impact the community will have on you and your effect on the community.

For additional information about LYRASIS Technology Services, please contact Peter Murray, Assistant Director for Technology Services Development by email or telephone at 800-999-8558 x2955.

In preparation for the last webinar of the three-part series “Using RDA: Moving into the Metadata Future“, I’m reading again Karen Coyle‘s “Library Data in a Modern Context” — the first chapter ofUnderstanding the Semantic Web: Bibliographic Data and Metadata. Right at the start she has a clear and useful definition of this thing we call “metadata.”

The most common definition of metadata is “data about data.” This short, catchy definition is worthy of a successful advertising campaign. Unfortunately, it doesn’t really help us understand metadata, and is actually somewhat incorrect. A more useful definition is decidedly less snappy, but can help us understand the helpful role that metadata can play in facilitating information access. In fact, a functional definition gives us a viable roadmap for our own studies of metadata utility and quality.

So here it goes—metadata is constructed, constructive, and actionable:

• Constructed: Metadata is not found in nature. It is entirely an invention; it is an artificiality.
• Constructive: Metadata is constructed for some purpose, some activity, to solve some problem. The proliferation of metadata formats that seem similar on the surface is often evidence of different definitions of needs or of different contexts. We may dream of a universal set of metadata for some set of things, like biological entities, printed books, or a calendar of events, but are likely to be disappointed in practice.
• Actionable: The point of metadata is to be useful in some way. This means that it is important that one can act on the metadata in a way that satisfies some needs.¹

A little further on Karen focuses on the actionablity of metadata. I have a heightened awareness of the need for other-than-visual access to information based on the last few months of activity with my previous employer, so I reread this section with “new eyes” (so to speak):

…today’s metadata must be in a form that can be processed by computers, and the sense that it is “actionable” really needs to be interpreted as being “actionable by electronic machines.” Even when the final goal is to display the data to humans in an understandable form, the data will undergo some machine processing on the way to its destination on a screen [or] in printed form or when read aloud by a screen reader.

I added that last part. The transformation of the meaning of the metadata into a visual form is but one possible sensory input across the human-computer divide. It is important to also design interfaces that bring meaning to data by supplying labels to values in alternate ways. For the MARC 300 field, it is the difference between “ix, 74 p. : ill. ; 23 cm” and “9 pages of introductory material followed by 74 numbered pages. Includes illustrations. 23 centimeters high.” If the only way to transmit this information was auditory, which one of these would you like spoken to you? Is it: “eye-ex, seventy four pee. ill. twenty three cem”?

Now let’s try to engineer that backwards. Is the auditory version easier to do with:

300    |aix, 74 p. :|bill. ;|c23 cm

or something like this made-up, MODS-like markup:

<physicaldescription>
  <extent>
    <pagination>
       <pages type="introductory">9</pages>
       <pages type="numbered">74</pages>
    </pagination>
    <illustration />
    <height unit="cm">23</height>
  </extent>
</physicaldescription>

With the second, we can produce something like the first — or even the abbreviated display version. But it is considerably more difficult to create the auditory version from the first, particularly with the wide variation of punctuation encoding ISBD offers. It just isn’t machine actionable, which makes it difficult to transform, reuse, and translate that data in another context.

I’m reminded too of this recent quote from Jonathan Rochkind: “Of course, our legacy environment is even worse, with the ‘data model’ being supplied by an unholy combination of ISBD … and MARC….” It would be good to stop doing our data entry in the language of the computer (e.g. MARC). Based on the chat from the first webinar in the series, we wouldn’t expect catalogers to type out the XML fragment above. There should be computer-assisted workflows to capture the data and store it with all the required semantics. That XML would be used for machine-to-machine communication and transformation into the output desired by the user — be it a short-hand visual display or an auditory reading of information.

Footnotes

1. Coyle, Karen. “Library Data in a Modern Context.” Library Technology Reports 46.1 (2010): 5-13.

This week I sat in on the first of the three “Using RDA: Moving into the Metadata Future” webinars being hosted by ALA. This one was hosted by Karen Coyle with the title New Models of Metadata where she talked about library-specific efforts such asRDA and FRBR as well as the linked data effort in the wider world of information. There was a great deal of concern expressed in the chat window by participants about the future of cataloging, of cataloguers, and of MARC. The latter brought up memories of Roy Tennant‘s “MARC Must Die” declaration. My take away, though, isn’t that MARC is dead as much as MARC is a dead end.

Cover art from 'Library of the Dead' audio book

MARC, not dead yet?

What trips up our community even more, I think, is that we have a tendency to equate this communications format with mental model of how we describe things from a bibliographic point of view. We think of discrete records that describe these things rather than a network (or, more accurately, a graph) of interrelated nodes. This forces us to focus on the textual content of fields and not on the relationships between things. And in doing so, we are not making the best use of our limited efforts to describe the things in our curatorial care.

MARC may not be dead, but it is a dead end.

One of the baffling elements I’ve found in discussions of the history of OCLC is that of its tax exempt status under Ohio law. The latest example of this comes from documents filed in the SkyRiver/Innovative-vs.-OCLC case that make disparaging remarks about how OCLC got its state tax-advantaged status. (The text of the remarks in those documents are included below.) I was curious about this a while back and so did some research on the topic. I had set it aside and forgotten about it until this latest lawsuit brought it up again. So, to set the record straight, here is at least one version — hopefully written from a neutral perspective — of what happened nearly three decades ago.

A couple of notes before we begin. First, the title of this post purposefully starts with an indefinite article. This is not the story; this is a story that I have managed to piece together. I don’t do legal research and legislative history for a living, but I did have a class in those topics during library school. (Hi, Professor Wise!) This should not be considered a definitive version…it is as best as I can piece together.

Second note. Many of the documents come from LexisNexis Academic Universe. Even though the documents themselves are in the public domain (being of government origin), I’m not sure the LexisNexis versions can be openly published because they contain information from the LexisNexis editors. ¹ I could publish the raw documents if I were to go to the various governement offices that have this information and make copies, but that — quite frankly — is more effort that I’m willing to put into this project. So you’ll either have to take my word for it or look up the citations (provided in the text below) yourself if you have access to LexisNexis Academic Universe.

Third note. This post only deals with the tax status of OCLC as it relates to Ohio law. In other words, the taxes that OCLC would owe to the State of Ohio. OCLC’s exemption from federal income taxes under section 501(c)(3) of the Internal Revenue Service Code is another matter entirely. I’m sure there is a paper trail to that as well (part of which includes the IRS Form 990 declarations from which details of the SkyRiver/Innovative complaint are drawn), but I don’t know how to get to it.

The Origin

On January 23, 1980, appellant, OCLC Online Computer Library Center, Inc. (hereinafter referred to as “OCLC”), filed an application for real property exemption pertaining to certain land located in Dublin, Ohio, together with the five-story building and other improvements thereon, relating to the tax year 1979 and thereafter. The Commissioner denied OCLC’s application for exemption. OCLC has appealed from such denial to this Board.

On September 3, 1981, the Ohio Tax Commissioner denied the appeal. I don’t have a copy of that decision, but the decision at the appellate level includes the text of the appeal from OCLC. Based on that text, it seems like the denial was based on the “fact that Appellant’s real property is not used exclusively for charitable purposes” as defined by the Ohio Revised Code (sections 5709.12 and 5709.121, if you must).

There are numerous references to case law in Ohio that OCLC used in its appeal that I won’t list here, but there are two references to what I would offer are core values of OCLC that were refuted by the Ohio Tax Commissioner:

The Commissioner erroneously held as a matter of law and fact that Appellant OCLC failed to establish its uniquely charitable purpose of furthering the growth of human knowlege. The Commissioner’s narrow focusing upon and findings regarding Appellant OCLC’s provision of services at a cost savings improperly ignored other substantial elements of Appellant OCLC’s charitable purpose and interactivity with its library members.

The Commissioner erroneously held as a matter of law and fact that there is nothing unique in the nature of Appellant OCLC’s services that would make it an unlikely service to be engaged in by private enterprise. The essence of Appellant OCLC is the cooperative sharing of the bibliographic records of all its member libraries and the completeness of the resulting data base in which all its library members have a beneficial right of ownership and use and without which Appellant OCLC as a national library resource would not exist. It is an accident of fate that the resource is physically located in the subject real estate.

The Appellate Court Decision

An institution which has as its essential purpose the accumulation of bibliographic catalog data supplied by members organizations which is then made available to and for the use of its member organizations is not a “public college,” “academy,” or “public institution of learning” as such terms are used in [Ohio Revised Code Section] 5709.07. While it may by true that OCLC may actually teach individuals concerning the nature of the data stored in OCLC’s computer data base and how to use OCLC’s equipment in obtaining such data information through the use of OCLC’s equipment, such teaching process primarily subserves OCLC’s fundamental purpose of providing information as to the existence, owner and holder of particular books and other educational materials and a means to make arrangements to obtain such educational materials, if desired.

In the last analysis, OCLC is not an institution having a teacher-student character. OCLC is in the business of selling, leasing or renting equipment and facilities capable of providing information and access to written information, primarily in form the of books, held in public or private libraries of OCLC’s member organizations. The providing of such information by OCLC in the form of printed bibliographic catalog cards or via telephonic terminal connections with OCLC’s computer facilities, is primarily, if not solely, for members contracting with OCLC and for an established per transaction price paid by the member organization obtaining such information.

[...]

Although a laudable purpose, the business of providing a computerized library network, the storing of library related bibliographical catalog data, and the selling or licensing the use of equipment necessary to gain access to such stored data or to communicate with member organizations having a contractual relationship with OCLC, is not a charitable purpose. There are many data processing corporations providing data storage capabilities for the benefit of its users. The providing of date storage or data processing services and equipment for an established price, whether for profit or otherwise, is not a charitable purpose or activity.

The fact that the particular users of data storage or data processing services may be charitable institutions that may benefit, in terms of cost, in obtaining information from a data storage or data processing organization below what would otherwise be involved, in terms of time and cost in obtaining like benefits, does not thereby make the supplier of such services and facilities a vicarious charitable institution merely because the facilities supplied are so immediate, intertwined and necessary to the efficient conduct of the users’ charitable activities.

…The subject real property is used to house, maintain and sell its computerized services and equipment to its member library organizations. Such services and facilities are not sold directly to the general public nor made available by OCLC directly to the public. Such sales are made only to member organizations having a contractual arrangement made with OCLC under which the member organizations agree and provide bibliographic data pertaining to their own library holdings of books and related materials and agree to pay a per transaction cost for use of OCLC’s data and system. OCLC does not offer or provide its services and facilities directly to the general public or offer or provide the same except upon a contractual arrangement and an obligation to pay therefor….

The evidence does indicate that OCLC has in fact produced a “profit” in the sense that it has accumulated operating revenues in excess of operating expenses although, by virtue of being a non-profit corporation, such profits are not directly distributable as such to its member organizations.

Although OCLC contends that the Commissioner’s findings of fact and conclusions of law are erroneous, upon review of the Commissioner’s findings and conclusions of law we find that they are reasonable and proper in all respects.

The Board of Tax Appeals finds and determines upon the record as a matter of law that all specifications of error are without merit.

IT IS ORDERED that the Commissioner of Tax Equalization’s final determination, rendered by Journal Entry, dated September 3, 1981, here involved, should be, and hereby is, affirmed.

The Ohio Supreme Court Decision

OCLC’s membership consists of one hundred eighty-four academic and public libraries in Ohio, and over two thousand six hundred libraries throughout North America. Its services are not directly available to the public at large. Members are charged a fee, and in return they receive terminal equipment for online access to OCLC’s computer facilities via dedicated telephone lines. OCLC further provides personnel and equipment in order to service and maintain its customers’ computer terminals and other associated computer hardware. The bibliographic holdings of member libraries are entered into the data base for access by all other member libraries, thus facilitating the location of books and materials held by member organizations, and simplifying procedures for inter-library book transfers.

OCLC also provides cataloging information to member libraries. For example, when a library purchases a book already owned by another member library, a search of OCLC’s data is made and, because the bibliographic record already exists in the data base, a catalogue record can be generated at a greatly reduced cost.

In addition to the aforementioned services, OCLC has engaged in research for companies, including Bank One of Columbus and Warner Amex QUBE, a cable television company. On one occasion, OCLC performed research for a telecomputing firm and, in return, was offered fifty percent of the firm’s stock for an additional price of one dollar.

The Commissioner of Tax Equalization (hereinafter “commissioner”) denied the exemption on the basis that OCLC is neither a “public college or academy” or “public institution of learning,” as those terms are employed under R.C. 5709.07, nor was the property found to be used “exclusively for charitable purposes” so as to entitle OCLC to an exemption under R.C. 5709.12. On appeal, the Board of Tax Appeals affirmed. In its appeal to this court, OCLC has abandoned its argument for an exemption as a public institution of learning in conjunction with R.C. 5709.07, and, as such, contests only the board’s determination that it failed to meet the qualifications for a charitable exemption under R.C. 5709.12.

Some excerpts from the legal reasoning in deciding the case:

OCLC submits that because it serves libraries, which in turn benefit the general public through the dissemination of knowledge for the edification and improvement of mankind, it qualifies as an institution furthering human knowledge and, therefore, is a charitable institution. This argument, however, simply constitutes an attempt by OCLC to obtain a vicarious charitable exemption by virtue of the activities of its customers.

In Joint Hospital Services v. Lindley (1977), we rejected a similar vicarious charitable exemption theory. In that case, a group of hospitals pooled their resources and established a laundry and linen service for their members, as well as for several other non-profit organizations.

As in the present case, the taxpayer relied upon the charitable status of its customers as the basis for seeking a charitable exemption. The court observed, however, that notwithstanding the charitable nature of the institutional customers who obtained the laundry and linen services, it is the charitable activities of the taxpayer seeking the exemption which must be considered when reviewing an application for a charitable exemption. Although a laudable purpose, the taxpayer’s laundry and linen service neither improved health nor alleviated illness and, accordingly, the exemption was denied.

So, too, in the instant cause, the record demonstrates that OCLC’s activities more closely resemble those of a publisher of library materials or a data base firm specializing in information retrieval, such as Lexis or the New York Times Information Bank, rather than that of a library. Although OCLC’s service may greatly enhance the ability of libraries to better serve the public, OCLC essentially offers a product to charitable institutions, for a fee exceeding its cost, and, as the board concluded, is not itself a charitable organization.

In addition, OCLC fails to address the effect that its commercial fee paying research endeavors have upon its status as an organization seeking a charitable exemption. … Such commercial research endeavors have previously been determined by this court to preclude the issuance of a charitable tax exemption. Moreover, although OCLC may have originated as a charitable organization upon its creation in 1967, the organization, which now operates throughout North America for any library willing to pay its fee, and which engages in fee paying research projects for the private gain of commercial industries, has since transcended the realm of a charitable institution.

For the foregoing reasons, the decision of the Board of Tax Appeals, being neither unreasonable nor unlawful, is affirmed.

The New Law

Section 5709.72. Library technology development exemption

All tangible and intangible personal property shall be exempt from taxation if the following conditions exist in the year for which exemption is sought:

1. The owner is a nonprofit corporation that is exempt from federal income taxes under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954, as amended, and the owner’s primary purposes are conducting research and development in library technology and providing computerized or automated services to public, charitable, or educational libraries;
2. The property is used in any of the following:
   1. Furnishing services to libraries and to similar information resource agencies or institutions whose activities directly benefit libraries, provided at least eighty per cent of the owner’s revenues from furnishing those services are paid by libraries, agencies, and institutions that are public, charitable, or educational;
   2. Conducting research and development in technology specifically for use in libraries, the majority of which are public, charitable, or educational;
   3. Providing products, internal support, or auxiliary services related to activities described in divisions (B)(1) and (2) of this section.

Section 5709 of the Ohio Revised Code contains the various types of organizations exempt from reporting personal property for the purposes of taxation. The legislative history of how this section came to be added to the Ohio Revised Code is probably lost in the mists of time; we don’t know who proposed it or why.

The Link to the “SkyOCLC” Case

OCLC argues that because the Complaint alleges that OCLC has abused its tax-exempt status, the interests of the Ohio court are greater than the interests of this California Court. The purported reason given is that the court’s decision may have an impact on other Ohio nonprofit corporations. This Court, however, is not going to determine OCLC’s state or federal tax-exempt status nor would an Ohio court. Moreover, OCLC has not explained how any impact on other nonprofits involved in other unrelated activities would result whether this case is tried in California or Ohio. Nor has OCLC explained why a federal court decision will affect only nonprofits in Ohio. In fact, the Supreme Court of Ohio in 1984 determined that OCLC was engaged in commercial activities and upheld an Ohio Board of Tax Appeals’ decision denying OCLC an exemption from property taxes. See OCLC Online Computer Library Center, Inc. v. Kinney, 11 Ohio St. 3d 198, 464 N.E. 2d 572 (1984), 1984 Ohio LEXIS 1136…. Apparently, OCLC had the political clout in Ohio to have the Supreme Court’s decision nullified legislatively.

OCLC, in its response, gets in its two cents as well (emphasis added):⁶

OCLC established in its Motion that Ohio courts have a stronger interest in the issues raised by this lawsuit because, among other concerns, Plaintiffs have raised allegations that OCLC is improperly exercising its non-profit status. In response, Plaintiffs cite a 1984 Ohio Supreme Court case which found that OCLC was not exempt from real estate and property tax under then-enacted Ohio law. In reality, as a result of that lawsuit, the Ohio Legislature demonstrated that it was concerned with OCLC’s non-profit mission by creating for OCLC a statutory exemption from the property tax requirements. Indeed, the language of the statute reinforces OCLC’s argument that the State of Ohio has a particularly strong interest in OCLC’s tax-exempt mission…. Plaintiffs’ unsupported claim that the Ohio Legislature acted because OCLC improperly exercised “political clout in Ohio” is an unwarranted attack on the Ohio Legislature and its members. Surely, Plaintiffs are not suggesting that the judges in the Southern District of Ohio would be unable to adjudicate fairly a lawsuit brought by an out-of-state litigant, or that they would improperly favor OCLC.

A Brief History of the State Support of Libraries in Ohio

State Support

Beginning in 1933, public libraries in Ohio were supported almost entirely from revenues from the intangible personal property tax. This was a tax levied on individuals’ holdings of intangible assets – mainly stocks and bonds. Though the tax was state-imposed and applied uniformly throughout Ohio, it was collected locally. The revenue remained in the county of origin, where it was distributed to library systems in that county in accordance with “need.”

This system of library finance, unique in the United States, had several results. Some counties, because of large holdings of taxable intangible property or vigorous local tax enforcement efforts, realized great revenue. Others received very little. By the late 1960s some of Ohio’s largest library systems were justly renowned for the strength of their collections, the breadth and variety of services offered, and their qualified professional staffs. However, there were many areas of Ohio where public library service was virtually nonexistent. In Adams County, with a 1970 population of about 19,000, the public library consisted of two small local libraries that received a total of only $19,100.

Library and Local Government Support Fund

In 1983, the Ohio General Assembly repealed the intangible tax based on recommendations from a bi-partisan study of the state’s entire tax system.
Governor Richard Celeste then created the Public Library Financing and Support Committee, consisting of members of the House and Senate, public library directors, the dean of the Kent State University School of Library Science, teachers, and financial experts, to determine how the state should replace the intangible tax funding for public libraries.

This committee determined that the loss libraries experienced through the repeal of the intangible tax was equal to 6.3% of Ohio’s personal income tax revenue. Therefore, 6.3% of Ohio’s personal income tax receipts were earmarked for the [Library and Local Government Support Fund].

The Public Library Finance and Support Committee set forth two goals for the state’s library fund distribution plan: 1. To preserve excellence in existing service, and 2. To improve library service in under funded and underserved areas. To accomplish these goals, the distribution formula divides the LLGSF among all of the state’s 88 counties in two ways. First, the formula guarantees each county the amount of revenue received from the fund in the preceding year plus an adjustment for inflation. This part of the distribution is called the “guarantee share.” Second, if any money remains in the fund after paying each county’s guarantee share, then that remainder is distributed according to an “equalization ration.” The equalization aspect of the formula distributes the excess over the guarantee in inverse proportion to per capita funding levels among the counties – those counties which received less per capita in the guarantee share, receive more in the equalization share. Thus, over time, the distribution to counties begins to balance.

Footnotes

1. See this discussion of FriendFeed to get a sense of the frustration in trying to figure out the LexisNexis Academic Universe Terms and Conditions.
2. OCLC Online Computer Library Center, Inc., Appellant, vs. Robert R. Kinney, Commissioner of Tax Equalization, Appellee. CASE NO. 81-D-602 (REAL PROPERTY TAX) STATE OF OHIO — BOARD OF TAX APPEALS. 1983 Ohio Tax LEXIS 162. October 11, 1983.
3. For instance, the decision from the appellate court says:
   

   On February 3, 4, 5, and 8, 1982, a hearing was held for the purpose of permitting the parties hereto to provide additional evidence, as authorized by R.C. 5717.02. Both parties were represented by counsel. A transcript of such proceedings (pp. 1 – 730, comprising 4 volumes) was subsequently filed.

   …to which I say, “Wow! 730 pages of transcripts!”

4. OCLC ONLINE COMPUTER LIBRARY CENTER, INC., APPELLANT, v. KINNEY, COMMR., APPELLEE. No. 83-1713 Supreme Court of Ohio. 11 Ohio St. 3d 198; 464 N.E.2d 572; 1984 Ohio LEXIS 1136; 11 Ohio B. Rep. 509
5. SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc., Document #20, page 13 line 21 through page 14 line 5
6. SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc., Document #25, page 11 lines 6 through 24

Within the span of a recent week we’ve had two views of the OCLC cooperative. In one we have a proposition that OCLC has gone astray from its core roots and in the other a celebration of what OCLC can do. One proposes a new mode of cooperation while the other extols the virtues of the existing cooperative. Both writers claim — independently — to “talk to librarians” and represent the prevailing mood of the profession. Can these two viewpoints be reconciled?

“Too Many Cooks?”

I spend quite a bit of time talking both to librarians and industry partners–publishers, booksellers, Web-technology providers, search engine companies–all kinds of people doing interesting things in our space. And in those talks, there is often a discussion of one of the following: content, technology or community. What I’ve come to realize, though, is that the best results come from places where all three come together.

Chip’s post is short but clear in its view that the community of OCLC members is something special and that it adds value to member libraries.

“The Cooperative We Need”

It appears to me that the interests of the OCLC we know today do not appear to be in total alignment with the needs and interests of its overall actual membership. Perhaps they are in alignment with the interests of the Board, Council, and other governing and administrative arms, but the feeling I get in talks with librarians is that it is not in alignment with what they want. As I talk to librarians, across the country today, I hear that what they want is an organization, a cooperative that is focused on developing and providing open and collaborative library content and services that are widely accessible by all in order that they (the librarians) can focus on re-establishing and/or maintaining the value of libraries in our society.

Carl goes on to propose the creation of a utility that aggregates the ratings and rankings of individual users into a database that can enhance the relevance ranking of the emerging generation of discovery layer products.

My Thoughts

Carl describes the problem in his post. When a not-for-profit vendor acquires a significant number of for-profit companies (and spins them back out again), how can we (members, vendors, and the library community in general) understand how the mix of commercial and non-commercial interests are playing out at the management level? Can the OCLC that is the bibliographic utility, the metadata switch between bibliographic-based services, and the R&D braintrust co-exist with the for-profit businesses, motivations, and operations? Or, to put it more sharply, does the negotiation of H.W. Wilson content for use on the subscription-based WorldCat database hinder the evolution of discovery layers that being developed by companies that don’t have the tax-advantaged not-for-profit status? (And don’t forget about the allegations of anti-competitive behavior in the SkyRiver/Innovative-versus-OCLC lawsuit.)

In closing this section, I want to pull out and emphasize another quotation from Carl’s post:

In the end, all of these business initiatives, and now resulting lawsuit, strongly work against OCLC being able to do what it does best—building collaboration, content, and related services as a non-profit entity to serve the larger profession.

Agreed.

Carl’s Grand Idea

I highly recommend reading Carl’s post and thinking about ways of answering the question “What Do We Want From OCLC?” I commend Carl for his courage and vision in articulating his points and proposing something new for the profession to drive towards.

On September 9th, OCLC filed its first substantial response with the court to the antitrust lawsuit file by SkyRiver and Innovative Interfaces. And in a motion where OCLC requests a change of venue from the Northern District of California to the Southern District of Ohio — something seemingly mundane — they certainly pulled no punches:

Through a lengthy recitation of inaccurate facts, Plaintiffs allege six claims against OCLC. In short, Plaintiffs allege that OCLC, a forty-year old non-profit entity, is making it difficult for Innovative and its one-year old sister-company, SkyRiver, to compete and gain market share in the ILL, ILS, and the online cataloging library world. Through a variety of uncited references in their Complaint to “prominent library-related internet blogs,” unnamed commentators, and unattributed articles and reports, as well as through creating an anti-OCLC website, Plaintiffs have levied a propaganda war on OCLC simply because Plaintiffs have been unable to compete successfully with OCLC’s membership base and bibliographic data which OCLC earned through forty years of dedicated service to its member libraries.SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Page 4. Retrieved from Justia Docs on 18-Sep-2010. (link added)

The question at hand seems to be a bit more than a propogada war between SkyRiver and OCLC. But the court is not yet at the meat of the matter.

The text accompanying the motion for change of venue, though, does not deal with the issues raised in the lawsuit. Instead, it requests the California court “transfer this action from this District to the Southern District of Ohio, Eastern Division, located in Columbus, Ohio.”

“Litigation should proceed where the case finds its center of gravity.” The “center of gravity” is determined by the location of key witnesses and documents. Here, the “center of gravity” is plainly the Southern District of Ohio, for these reasons:

• OCLC’s headquarters and virtually all of the key witnesses and documentary evidence are located in or near Central Ohio.
• OCLC has a relatively small presence in California, as compared to its much larger and longer-established presence in Ohio.
• OCLC made all decisions and actions operative to the allegations of Plaintiffs SkyRiver Technology Solutions, LLC (“SkyRiver”) and Innovative Interfaces, Inc. (“Innovative”) (collectively “Plaintiffs”) in Ohio.
• The State of California does not have an interest in this lawsuit beyond the fact that Plaintiffs are residents of California, whereas the State of Ohio has a great interest in this lawsuit because Plaintiffs have alleged that one of Ohio’s non-profit entities is abusing its non-profit status, an allegation that can impact other Ohio non-profit entities.

For these and other reasons discussed in more detail below, all parties and the Court will be better served by transferring this case to the Southern District of Ohio, Eastern Division. In making this Motion, OCLC reserves any defenses that it may have against Plaintiffs’ claims.SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Pages 1-2. Retrieved from Justia Docs on 18-Sep-2010. (Legal citations removed from text.)

The last point is probably the most interesting to the layperson watching this epic battle unfold. Pages 12 and 13 contain these statements:

The state of Ohio’s interest in adjudicating this matter within its borders also militates towards transferring this case. OCLC’s relevant policies and practices were developed and implemented in Ohio and the most important witnesses and evidence are located there.

Further, Plaintiffs have stated serious, albeit unfounded, allegations regarding OCLC’s non-profit status. Plaintiffs have stated that OCLC is “abusing its status as a tax exempt, non-profit entity and unfairly competes with for-profit companies, such as Innovative and SkyRiver, by using its non-profit status as leverage to monopolize the library services industry….” These baseless allegations could create serious implications for other Ohio non-profit entities, and Ohio courts have a greater interest in litigating these issues. While Ohio courts also have more experience applying Ohio’s laws, more importantly, they also have more experience with the routine customs and practices of non-profit entities in Ohio. In addition, the Ohio Attorney General has oversight over Ohio non-profit entities and would likewise have an interest in this lawsuit.

In contrast, California does not have an interest in litigating this action because none of the operative actions occurred in California. Though Plaintiffs asserted California state law claims, as explained below, Ohio courts will be equally skilled at applying and interpreting those laws.SkyRiver Technology Solutions, LLC et al v. OCLC Online Computer Library Center, Inc. Filing: 16. Pages 12-13. Retrieved from Justia Docs on 18-Sep-2010. (Legal citations removed from text.)

The question of OCLC’s tax exempt status is one that bubbles up on occasion. It would seem like OCLC’s legal team is willing to take this head on.

Accompaying the motion to transfer is a declaration by Bruce Crocco, Vice President, Library Services for the Americas for OCLC, and this is a more interesting document. It goes into the history of OCLC — its founding in 1967 on the Ohio State University campus, how OCLC revolutionized the production of paper cards for card catalogs and the movement into online catalogs, and the evolution of the WorldCat brand name.

Earlier this week, the judge in the case set this schedule for hearing from the parties on the motion:

This matter is set for a hearing on October 29, 2010 on Defendant OCLC Online Computer Library Center’s motion to transfer venue. The Court HEREBY ORDERS that an opposition to the motion shall be filed by no later than September 27, 2010 and a reply brief shall be filed by no later than October 4, 2010.

If the Court determines that the matter is suitable for resolution without oral argument, it will so advise the parties in advance of the hearing date. If the parties wish to modify this schedule, they may submit for the Court’s consideration a stipulation and proposed order demonstrating good cause for any modification requested.

To refresh your memory, the lawsuit was filed on July 28, 2010, and was assigned to Judge Jeffrey S. White on August 6, 2010. On August 12th, Judge White set a Case Management Conference for January 14, 2011, and on August 13th lawyers for OCLC filed a notice with their intent to request a change of venue. Stay tuned for an update as the case moves on…