The Associated Press has made no secret of its stance that bloggers who excerpt passages from stories should pay licensing fees. But the wire service might want to take a closer look at how its licensing policy is being implemented.

Today, New York Law School professor James Grimmelmann reported on his blog that he paid the AP $12 to license a 26-word quote from Thomas Jefferson. The quote, which takes aim at the concept of intellectual property, has long been in the public domain.

The AP says the rights were sold through iCopyright, which the news service tapped to sell licenses online in April of 2008. "It is an automated form, thus explaining how one blogger got it to charge him for the words of a former president," the AP said in a statement.

iCopyright CEO Mike O'Donnell says the company operates on the "honor system" and relies on "reasonable checks and balances to verify that people or companies getting licenses through the system are being honest." The platform asks users to cut and paste the text they wish to excerpt into a box, and then charges based on words used. O'Donnell says the company issues more than 25,000 licenses each day.

By Monday afternoon, iCopyright had revoked the license it had granted Grimmelmann and refunded his $12.

O'Donnell also dismissed Grimmelmann's demonstration as a prank, saying it was comparable to using a self-service kiosk at a grocery store to "purchase" an item that had already been bought. "Mr. Grimmelmann is attempting to make a point, but the point made is dull and juvenile," he said in an email to Online Media Daily.

But Grimmelmann says the incident shows a larger problem with the AP's approach to copyright. "It's indicative of their larger carelessness for what rights they actually have and their willingness to take money in situations in which their claim is weak at best."

He also bristles at suggestions that the incident should be dismissed as a mere stunt. "I did that to demonstrate how they prey on the unwary," Grimmelmann says.

In one highly publicized dispute, the AP demanded that the liberal blog Drudge Retort (a counter to the Drudge Report) stop excerpting quotes from wire service stories. Many observers said at the time that using brief quotes from stories didn't infringe on copyright because it's a fair use.

Brooklyn Law School professor and "copyfraud" expert Jason Mazzone says that many publishers are charging people licensing fees for material that's in the public domain. "You see it everywhere when you start looking for it," he says. "At the end of the day there are millions of dollars being paid out unnecessarily."

This news story is important. I recommend that everyone read it.