Copyright loophole?

[azur@netcom.com (Steve Schear)]

While doing research at a law library, I came across what appears to be a
legal loop-hole in the copyright law.  It seems a famous author's publisher
had a substantial number of unbound and unsold copies of his works sitting
around.  Another publisher purchased them from his publisher, without the
author's knowledge, and printed an anthology which included an index which
was not part of the purchased (copyrighted) items.

In Kipling vs. G.P. Putnam & Sons (1903, CA2 NY) 120 F 631, the 2nd circuit
found that (from 17 USCS � 501) "Publication of an index to accompany
copyrighted volume of author's work although containing words and phrases
found in text, does not constitute infringement."  From the original
opinion: "They were also at liberty to make and publish an index contained
in their volumes even though the index, as necessary must, contain words
and phrases found in the text."

Q1: Could this decision (which has stood since 1903) support the creation,
storage and distribution of "standalone" on-line indicies to copyrighted
works without infringement?  (I could not find a direct reference to
"fair-use" in the portion of the opinion referencing the index nor a
related ruling, using the 1976 Copyright Act, which overturned the "index'
provision.)

Q2: How much content can an index contain and still not infringe?

Q3: What would be the legal standing of these indicies, or several
unrelated "indexes", if they can jointly (but not separately) be used to
reconstitute the original copyright work by a private citizen?  (Anonymous
index posting, especially via a Ross Anderson style Eternity Service, might
"practically" circumvent government enforcement.)

-- Steve