Andrea Foster has written a short piece summarizing the university's position.
http://chronicle.com/free/2008/06/3583n.htm
Her piece appears in the Chronicle of Higher Education. Basically it sounds like the university is arguing both fair use and in the alternative, sovereign immunity. I haven't read the answer yet, but will do so soon.
Here is a quote from the first paragraph of Foster's article:
"In a closely watched copyright-infringement lawsuit, Georgia State University fired back this week at its accusers, three academic publishers that say the institution invites students to illegally download and print readings from thousands of works. The university asserts that its online distribution of course material is permitted under copyright law's fair-use exemption."
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