What does non-commercial mean?

The Creative Commons Non-Commercial (NC) clause allows others to copy, distribute, display, and perform your work – and derivative (i.e. modified) works based upon your work – but the work cannot be used for commercial purposes.

The Non-Commercial clause is a controversial and criticised condition available in the Creative Commons licence suite, particularly when related to educational courseware. There are several reasons for this.

At a basic level it is not clear what non-commercial means. Since Creative Commons licences emerged, there is little previous case law that exists to assist in interpreting this clause. Creative Commons’ initial belief was that the term ‘Non-Commercial’ should be left undefined so that communities would build their own definition and, if necessary, have recourse to the courts to set the standards of what the term meant.

Various interpretations of non-commercial include the following:

1. The most extreme interpretation of non-commercial is that no money should be exchanged as part of the transaction of using of the materials – regardless of whether the money represents a break-even of marginal cost, reimbursement or profit. This has been the view of the open source software community. But according to Hofman (2009), this is not how non-commercial is usually interpreted, especially within the educational community.
2. A second view is that non-commercial is determined by the type of user instead of whether there is a financial exchange.

For example, some consider any use of a licensed work by a corporation to be commercial and any use of a licensed work by a non-profit organization to be non-commercial. Under this definition, many licensors in the educational community believe that charging for course packs is permitted under the NC clause.

Rutledge (2008) notes that some believe that any for-profit businesses should not be able to charge course fees or make use of NC content.

Hofman (2009) argues that this would imply that a private school may not use NC materials for educational use, and that a for-profit company may not use NC materials for non-profit purposes such as corporate social investment activities.

However, Massachusetts Institute of Technology (MIT), in their OpenCourseWare (OCW), state that ‘Determination of commercial vs. non-commercial purpose is based on the use, not the user’. Thus, according to MIT OCW, for-profit companies may use materials with an NC clause depending on how the materials are used. For example, a commercial education and training business may not offer courses based on OCW materials if students pay a fee for the courses and the business intends to make a profit – although incidental charges to recover reasonable reproduction costs are permitted.

Likewise, the Commonwealth of Learning Copyright Guidelines specifically address the issue of the NC clause and make a distinction between profit (commercial) and cost recovery for operating costs (non-commercial). By this definition, a corporation or non-profit organization may still charge registration fees, and recover materials duplication costs and overhead costs incurred during customisation, duplication and distribution of materials – as long as there is no profit gained.

3. Others believe that a transaction is non-commercial unless the transaction is driven by a profit motive.
   While this approach may seem intuitive, the concept of motive or ‘intent’ is very complex and difficult to prove in court. In practice, if a non-commercial use is ever brought to court, the court will look at the licensor’s intent when determining the meaning of the term, and possibly also at what the licensee understood the term to mean, and/or at industry practice.

The discrepancies in understanding what is meant by non-commercial led Creative Commons to conduct a community survey in 2008, with the aim of better understanding the various interpretations of non-commercial. The survey revealed that different communities have developed their own understandings of the term, but each community has not necessarily respected the definitions of other communities.

The resulting report in 2009 examined various scenarios, such as whether the user is an ‘allowable non-commercial user’, such as an individual or a non-profit educational institution or a library; if the work is used in, or in relation to advertising; if there is a financial transaction; and finally what derivative uses are made of the work.

While the Creative Commons report may help users better understand what does and does not constitute permitted non-commercial use, in the end courts, not Creative Commons, will have the final say over what non-commercial use means.

Due to the varying interpretations of non-commerical, one concern with the NC restriction is that it is potentially incompatible with the other Creative Commons licences (see Möller 2006). In practical terms, it is more difficult to reuse NC content. For example, content licensed under a Creative Commons Share Alike (CC BY-SA) licence without commercial restrictions cannot be combined with content licensed under a Creative Commons Non-Commercial Share Alike (i.e. CC BY-NC-SA) licence.

Critics of the NC clause argue that the clause is harmful because it restricts content by limiting reuse, creating a significant barrier to the growth of free content in education, and it hinders the development of new economic models that add value around free content.