[HTML version available at
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at the EFF Web Site.]
A Preliminary Draft of the Report of the Working Group on Intellectual Property
Rights
_BRUCE A. LEHMAN, ASSISTANT SECRETARY OF COMMERCE AND COMMISSIONER OF PATENTS
AND TRADEMARKS, CHAIR_
INFORMATION INFRASTRUCTURE TASK FORCE
_RONALD H. BROWN, SECRETARY OF COMMERCE, CHAIR_
JULY 1994
_________________________________________________________________
INTRODUCTION 1
BACKGROUND 5
I. LAW 11
A. COPYRIGHT 11
1. SUBJECT MATTER AND SCOPE OF PROTECTION 11
a. ELIGIBILITY FOR PROTECTION 11
b. PUBLISHED AND UNPUBLISHED WORKS 15
c. WORKS NOT PROTECTED 18
d. CATEGORIES OF PROTECTIBLE WORKS 20
2. COPYRIGHT OWNERSHIP 28
a. TRANSFER OF OWNERSHIP 31
b. LICENSING 32
3. TERM OF PROTECTION 34
4. EXCLUSIVE RIGHTS 34
a. THE RIGHT TO REPRODUCE THE WORK 35
b. THE RIGHT TO PREPARE DERIVATIVE WORKS 37
c. THE RIGHT TO DISTRIBUTE COPIES 38
d. THE RIGHT TO PERFORM THE WORK PUBLICLY 42
e. THE RIGHT TO DISPLAY THE WORK PUBLICLY 44
5. LIMITATIONS ON THE EXCLUSIVE RIGHTS 44
a. FAIR USE 45
b. FIRST SALE DOCTRINE 53
c. LIBRARY EXEMPTIONS 56
d. EDUCATIONAL USE EXEMPTIONS 60
e. OTHER LIMITATIONS 61
6. COPYRIGHT INFRINGEMENT 65
a. GENERAL 65
b. INFRINGING IMPORTATION 72
c. CONTRIBUTORY AND VICARIOUS LIABILITY 73
d. CONFLICT OF LAWS 82
7. INTERNATIONAL IMPLICATIONS 82
a. BACKGROUND 82
b. THE INTERNATIONAL FRAMEWORK 85
c. COPYRIGHT HARMONIZATION 89
d. NATIONAL TREATMENT 90
e. PRIVATE COPYING ROYALTY SYSTEMS 94
f. MORAL RIGHTS 94
B. PATENT 95
C. TRADEMARK 102
D. TRADE SECRET 106
II. TECHNOLOGY 108
A. CONTROLLING ACCESS TO PROTECTED WORKS 108
1. CONTROLLING ACCESS AT THE SERVER LEVEL 109
2. CONTROLLING ACCESS AT THE FILE LEVEL 110
B. CONTROLLING USE OF THE WORK 112
C. AUTHENTICATING THE WORK 113
D. MANAGING RIGHTS IN THE WORK 114
E. DEVELOPMENT OF STANDARDS 116
III. EDUCATION 117
IV. PRELIMINARY FINDINGS AND RECOMMENDATIONS 120
A. LAW 120
1. DISTRIBUTION BY TRANSMISSION 120
a. THE DISTRIBUTION RIGHT 120
b. PUBLICATION 123
c. FIRST SALE DOCTRINE 124
d. OTHER RELATED AMENDMENTS 125
2. TECHNOLOGICAL PROTECTION 125
3. COPYRIGHT MANAGEMENT INFORMATION 130
4. PUBLIC PERFORMANCE RIGHT 131
5. FAIR USE 133
6. LICENSING 134
7. INTERNATIONAL 135
B. TECHNOLOGY 139
C. EDUCATION 140
_INTRODUCTION_
In February 1993, President Clinton formed the Information
Infrastructure Task Force (IITF) to articulate and implement the
Administration's vision for the National Information Infrastructure
(NII). The IITF is chaired by Secretary of Commerce Ronald H. Brown
and consists of high-level representatives of the Federal agencies
that play a role in advancing the development and application of
information technologies. Guided by the principles for government
action described in _The NII Agenda for Action,_[1] the participating
agencies are working with the private sector, public interest groups,
Congress, and State and local governments to develop comprehensive
telecommunications and information policies and programs that best
meet the country's needs.
To drive these efforts, the IITF is organized into three committees:
the Telecommunications Policy Committee, which formulates
Administration positions on key telecommunications issues; the
Committee on Applications and Technology, which coordinates
Administration efforts to develop, demonstrate and promote
applications of information technologies in key areas; and the
Information Policy Committee, which addresses critical information
policy issues that must be dealt with if the NII is to be fully
deployed and utilized. In addition, the IITF recently established a
Security Issues Forum to asses the security needs and concerns of
users, service providers, information providers, State governments and
others.
The Working Group on Intellectual Property Rights, which is chaired by
Assistant Secretary of Commerce and Commissioner of Patents and
Trademarks Bruce A. Lehman, was established within the Information
Policy Committee to examine the intellectual property implications of
the NII.
This Report represents the Working Group's examination and analysis to
date. While it addresses each of the major areas of intellectual
property law, it focuses primarily on copyright law and its
application and effectiveness in the context of the NII.[2]
To prepare this Report, the Working Group drew upon the expertise of
its members from the Executive Branch and observers from the
Legislative Branch. In addition, the Working Group received and
considered views of the public.
The Working Group held a public hearing on November 18, 1993, at which
30 witnesses testified. The Working Group also solicited written
comments and received some 70 statements during a public comment
period which closed on December 10, 1993. Through this process, the
Working Group heard from representatives of a wide variety of
interested parties, including the computer software, motion picture,
music, broadcasting, publishing and other information industries, as
well as various electronic industries. Views of the academic,
research, library and legal communities were also heard, as well as
those of individual copyright owners and users.
The special intellectual property concerns and issues raised by the
development and use of the NII are the subject of this Report; it does
not attempt to address all existing intellectual property issues.[3]
Because of the legal nature of the subject, this Report uses certain
words and phrases that may be unfamiliar to some readers or that do
not have their ordinary meaning when used in the context of
intellectual property law. The Working Group has attempted to identify
these terms of art and provide their legal definitions.
The Working Group is issuing this Preliminary Draft of its Report to
solicit public comment on the Report and, particularly, its
preliminary findings and recommendations. An original and four copies
of written comments should be submitted on or before September 7,
1994, to:
The Commissioner of Patents and Trademarks
U.S. Patent and Trademark Office
Box 4
Washington, D.C. 20231
Attention: Terri A. Southwick
Attorney-Advisor
Office of Legislative and International Affairs
Alternatively, comments may be submitted electronically to the
following Internet address: nii-ip@uspto.gov.
Comments received will be available for public inspection at the
Scientific and Technical Information Center of the U.S. Patent and
Trademark Office, Room 2CO1, Crystal Plaza 34, 2021 Jefferson Davis
Highway, Arlington, Virginia, between the hours of 9 a.m. and 4 p.m.,
Monday through Friday.
Reply comments may be submitted electronically or in writing no later
than September 28, 1994.
This Report is also available on the IITF Bulletin Board. The Bulletin
Board can be accessed through the Internet by pointing the Gopher
Client to iitf.doc.gov or by telnet to iitf.doc.gov (log in as
gopher). The Bulletin Board is also accessible at 202-501-1920 using a
personal computer and a telephone modem. The Report may be found under
"Speeches, Testimony and Documents" and is listed as "Intellectual
Property Working Group Draft Report."
Public hearings will be held on this Report, and will be announced in
the press, on the IITF Bulletin Board and in the _Federal Register_.
_BACKGROUND_
Intellectual property is a subtle and esoteric area of the law that
evolves in response to technological change.[4] Copyright law, in
particular, responds to technological challenges for authors and
copyright owners, from Gutenberg's moveable type printing press to
digital audio recorders, and everything in between -- photocopiers,
radio, television, videocassette recorders, cable television and
satellites. The use of computer technology -- such as digitization --
and communications technology -- such as fiber optic cable -- has had
an enormous impact on the creation, reproduction and dissemination of
copyrighted works. The development of the National Information
Infrastructure will merge computer and communications technology into
an integrated information technology, and will generate both
unprecedented challenges and important opportunities for the copyright
marketplace.
A national information infrastructure already exists. Telephones,
televisions, radios, computers and fax machines are used every day to
receive, store, process, perform, display and transmit data, text,
voice, sound and images in homes and businesses throughout the
country. Fiber optics, wires, cables, switches, routers, microwave
networks, satellites and other communications technologies connect
telephones to telephones, computers to computers, and fax machines to
fax machines. The NII of tomorrow will be much more than these
separate communications networks; it will integrate them into an
advanced high-speed, interactive, broadband, digital communications
system. Computers, telephones, televisions, radios, fax machines, and
more will be linked by the NII and will be able to communicate and
interact with other computers, telephones, televisions, radios, fax
machines and more -- all in digital format.[5]
The NII has great potential to increase access to information and
entertainment resources that will be delivered quickly and
economically anywhere in the country in the blink of an eye. For
instance, hundreds of channels of "television" programming, thousands
of musical recordings, and literally millions of "magazines" and
"books" can be made available to homes and businesses across the
United States and, eventually, the world.[6] It can improve the
nation's educational and health care systems. It can enhance the
ability of U.S. firms to compete and succeed in the global economy,
generating more jobs for Americans. New job opportunities can also be
created in the processing, organizing, packaging and dissemination of
the information and entertainment products flowing through the NII.
Yet, the potential of the NII will not be realized if the information
and entertainment products protectible by intellectual property laws
are not protected effectively when disseminated via the NII. Owners of
intellectual property rights will not be willing to put their
interests at risk if appropriate systems -- both in the U.S. and
internationally -- are not in place to permit them to set and enforce
the terms and conditions under which their works are made available in
the NII environment. Likewise, the public will not use the services
available on the NII and generate the market necessary for its success
unless access to a wide variety of works is provided under equitable
and reasonable terms and conditions, and the integrity of those works
is assured. All the computers, telephones, fax machines, scanners,
cameras, keyboards, televisions, monitors, printers, switches,
routers, wires, cables, networks and satellites in the world will not
create a successful NII, if there is not _content_. What will drive
the NII is the content moving through it.
The development of the NII is obviously neither the first nor the last
technological challenge to copyright owners' ability to prevent
unauthorized uses of their works.[7] For instance, the advent of the
photocopying machine caused great apprehension among copyright owners
of printed works.[8] But time, cost and quality were on the copyright
owner's side. It was, and still is, more efficient and cheaper to buy
an extra copy of most books than to photocopy them -- and the quality
of a book from the original publisher is typically higher than that of
a photocopy. The introduction of audio tape recorders also posed
problems for copyright owners. But again, the physical attributes of
the work made reproductions cheaper, but lower in quality -- until, of
course, the introduction of _digital_ audio recorders, which reproduce
sound recordings both cheaply and with no degradation of sound
quality. Congress responded to this threat to sound recordings with
enactment of the Audio Home Recording Act of 1992, which combined
legal and technological safeguards.[9]
Advances in digital technology and the rapid development of electronic
networks and other communications technologies raise the stakes
considerably. Any two-dimensional work can readily be "digitized" --
i.e., translated into digital code (a series of zeros and ones). The
work can then be stored and used in that digital format. This
dramatically increases: the ease and speed with which a work can be
reproduced; the quality of the copies (both the first and the
hundredth "generation"); the ability to manipulate and change the
work; and the speed with which copies (authorized and unauthorized)
can be "delivered" to the public. Works also can be combined easily
with other works into a single medium, such as a CD-ROM, which is
causing a blurring of the lines that typically divide types of works.
The establishment of high-speed, high-capacity electronic information
systems makes it possible for one individual, with a few key strokes,
to deliver perfect copies of digitized works to scores of other
individuals -- or to upload a copy to a bulletin board or other
service where thousands of individuals can download it or print
unlimited "hard" copies on paper or disks. The emergence of integrated
information technology is dramatically changing, and will continue to
change, how people and businesses deal in information and
entertainment products and services, and how works are created, owned,
distributed, reproduced, displayed, performed, licensed, managed,
presented, organized, sold, accessed, used, and stored. This leads,
understandably, to a call for change in the law.
Thomas Jefferson stated:
I am not an advocate for frequent changes in laws and constitutions.
But laws and institutions must go hand and hand with the progress of
the human mind. As that becomes more developed, more enlightened, as
new discoveries are made, new truths discovered and manners and
opinions change, with the change of circumstances, institutions must
advance also to keep pace with the times. We might as well require a
man to wear still the coat which fitted him when a boy . . . .[10]
Our task is to determine whether the coat still fits in this new
information age.
Our intellectual property regime must (1) recognize the legitimate
rights and commercial expectations of persons and entities whose works
are used in the NII environment, whether at their instance or without
their permission, and (2) ensure that users have access to the
broadest feasible variety of works on terms and conditions that, in
the language of the Constitution, "promote the progress of science and
the useful arts."[11]
For more than two centuries copyright law, with periodic amendment,
has provided protection for an increasing variety of works of
authorship. The most recent complete revision of the law -- The
Copyright Act of 1976 -- was enacted in response to "significant
changes in technology [that had] affected the operation of the
copyright law."[12] The legislative history of the 1976 Act noted that
those changes had "generated new industries and new methods for the
reproduction and dissemination of copyrighted works, and the business
relations between authors and users have evolved new patterns."[13]
We are once again faced with significant changes in technology, and
views on the appropriate response to these changes vary widely. There
are some who argue that the Copyright Act is adequate without any
modification. Others suggest that a complete overhaul of the
intellectual property regime is in order.[14] We believe that with no
more than minor clarification and amendment, the Copyright Act, like
the Patent Act, will provide the necessary protection of rights -- and
limitations on those rights -- to promote the progress of science and
the useful arts. There must be, however, effort in three disciplines
-- the law, technology and education -- to successfully resolve the
intellectual property issues raised by the development and use of the
NII.
_I. LAW_
_ A. COPYRIGHT_
_ 1. SUBJECT MATTER AND SCOPE OF PROTECTION_
_ a. ELIGIBILITY FOR PROTECTION_
The subject matter eligible for protection under the Copyright Act[15]
is set forth in Section 102(a):
Copyright protection subsists . . . in original works of authorship
fixed in any tangible medium of expression, now known or later
developed, from which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or
device.[16]
From this provision, the courts have derived three basic requirements
for copyright protection -- originality, creativity and fixation.
The requirements of originality and creativity are derived from the
statutory qualification that copyright protection extends only to
"original works of authorship."[17] To be original, a work merely must
be one of independent creation -- i.e., not copied from another. There
is no requirement that the work be novel (as in patent law), unique or
ingenious. While there must also be a modicum of creativity in the
work, the level of creativity required is exceedingly low; "even a
slight amount will suffice."[18]
The final requirement for copyright protection is fixation in a
tangible medium of expression. Protection attaches automatically to an
eligible work of authorship the moment the work is sufficiently
fixed.[19] Congress provided considerable room for technological
advances in the area of fixation by noting that the medium may be "now
known or later developed."[20]
The Copyright Act divides the possible media for fixation into
"copies" and "phonorecords":
"Copies" are material objects, other than phonorecords, in which a
work is fixed by any method now known or later developed, and from
which the work can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or
device.[21]
"Phonorecords" are material objects in which sounds, other than those
accompanying a motion picture or other audiovisual work, are fixed by
any method now known or later developed, and from which the sounds can
be perceived, reproduced, or otherwise communicated, either directly
or with the aid of a machine or device.[22]
According to the House Report accompanying the Copyright Act of 1976,
Congress intended the terms "copies" and "phonorecords" to "comprise
all of the material objects in which copyrightable works are capable
of being fixed."[23]
The form of the fixation and the manner, method or medium used are
virtually unlimited. A work may be fixed in "words, numbers, notes,
sounds, pictures, or any other graphic or symbolic indicia"; may be
embodied in a physical object in "written, printed, photographic,
sculptural, punched, magnetic, or any other stable form"; and may be
capable of perception either "directly or by means of any machine or
device 'now known or later developed.'"[24]
All works created for placement on the NII or transmission through it
will be "fixed" in a manner that requires their protection by
copyright. In a digital format, a work is fixed in a series of zeros
and ones, which fits within the House Report's list of permissible
manners of fixation.[25] Virtually all works also will be fixed in
acceptable material objects. For instance, floppy disks, compact discs
(CDs), CD-ROMs, optical disks, CD-Is, digital tape, and other digital
storage devices are all stable forms in which works may be fixed and
from which works may be perceived, reproduced or communicated by means
of a machine or device.[26]
The question of whether interactive works are fixed (given the user's
ability to constantly alter the sequence of the "action") has been
resolved by the courts in the context of video games and should not
present a new issue in the context of the NII. Such works are
generally considered sufficiently fixed.[27] The sufficiency of the
fixation of works transmitted via the NII, however, where no copy or
phonorecord has been made prior to the transmission, is not so clear.
A transmission is not a fixation. While a transmission may result in a
fixation, a work is not fixed by virtue of the transmission alone.
Therefore, works transmitted "live" via the NII will not meet the
fixation requirement, and will be unprotected by the Copyright Act
unless the work is being fixed at the same time as it is being
transmitted.[28] The Copyright Act provides that a work "consisting of
sounds, images, or both, that are being transmitted" meets the
fixation requirement "if a fixation of the work is being made
simultaneously with its transmission."[29] To obtain protection for a
work under this "simultaneous fixation" provision, the simultaneous
fixation of the transmitted work must itself qualify as a sufficient
fixation.
A simultaneous fixation (or any other fixation) meets the requirements
if its embodiment in a copy or phonorecord is "sufficiently permanent
or stable to permit it to be perceived, reproduced, or otherwise
communicated for a period of more than transitory duration."[30] Works
are not sufficiently fixed if they are "purely evanescent or
transient" in nature, "such as those projected briefly on a screen,
shown electronically on a television or cathode ray tube, or captured
momentarily in the 'memory' of a computer."[31] Electronic network
transmissions from one computer to another, such as e-mail, may only
reside on each computer in RAM (random access memory), but that has
been found to be sufficient fixation.[32]
_b. PUBLISHED AND UNPUBLISHED WORKS_
Although prior to 1978, Federal copyright protection generally was
available only for published works, such protection is now available
for published as well as unpublished works.[33] The Copyright Act
provides a definition of "publication" to draw the line between
published and unpublished works.
"Publication" is the distribution of copies or phonorecords of a work
to the public by sale or other transfer of ownership, or by rental,
lease, or lending. The offering to distribute copies or phonorecords
to a group of persons for purposes of further distribution, public
performance, or public display constitutes publication. A public
performance or display of a work does not of itself constitute
publication.[34]
The definition was intended to make clear that "any form of
dissemination in which a material object does not change hands --
performances or displays on television, for example -- is not a
publication no matter how many people are exposed to the work."[35]
Therefore, unless otherwise published, a work only displayed or
performed via the NII would not be considered "published" under the
Copyright Act, no matter how many people have access to it. The House
Report also states, however, that the definition was intended to
clarify that the offering of copies or phonorecords to a group of, for
instance, wholesalers, broadcasters or motion picture theater
operators constitutes publication if the purpose of the offering is
"further distribution, public performance, or display."[36] Therefore,
if sufficient numbers of actual copies of the work are offered to
bulletin board system ("BBS")[37] operators or others for upload onto
systems on the NII, publication may occur.
The classification of a work as either published or unpublished has
significant repercussions under the Copyright Act. For example:
. works that are published in the United States are subject to
mandatory deposit in the Library of Congress;[38]
. unpublished works are eligible for protection without regard to the
nationality or domicile of the author;[39]
. published works must bear a copyright notice if published before
March 1, 1989;[40]
. certain limitations on the exclusive rights of a copyright owner are
applicable only to published works;[41]
. deposit requirements for registration with the Copyright Office
differ depending on whether a work is published or unpublished;[42]
and
. the duration of protection for works made for hire may be determined
by the date of publication.[43]
_c. WORKS NOT PROTECTED_
Certain works of authorship are expressly excluded from protection
under the Copyright Act, regardless of their originality, creativity
and fixation. Copyright protection, for example, does not extend to
any "idea, procedure, process, system, method of operation, concept,
principle, or discovery, regardless of the form in which it is
described, explained, illustrated, or embodied" in such work.[44]
Thus, although a magazine article on how to tune a car engine is
protected by copyright, that protection extends only to the expression
of the ideas, facts and procedures in the article, not the ideas,
facts and procedures themselves, no matter how creative or original
they may be. Anyone may "use" the ideas, facts and procedures in the
article to tune an engine -- or to write another article on the same
subject. What may not be taken is the expression used by the original
author to describe or explain those ideas, facts and procedures.[45]
Copyright protection is not extended under the Copyright Act to works
of the U.S. Government.[46] A work of the U.S. Government may,
therefore, be reproduced and distributed without infringement
liability under U.S. copyright laws.[47] Titles, names, short phrases,
and slogans[48] also do not enjoy copyright protection under the
Copyright Act.[49]
_d. CATEGORIES OF PROTECTIBLE WORKS_
The Copyright Act enumerates eight broad categories of protectible
subject matter:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.[50]
_LITERARY WORKS_
Although many categories of works will be available via the NII, the
majority of works currently available on computer networks such as the
Internet are literary works.
"Literary works," are works, other than audiovisual works, expressed
in words, numbers, or other verbal or numerical symbols or indicia,
regardless of the nature of the material objects, such as books,
periodicals, manuscripts, phonorecords, films, tapes, disks, or cards,
in which they are embodied.[51]
Literary works include computer programs,[52] articles, novels,
directories, computer databases, essays, catalogs, poetry,
dictionaries, encyclopedias, and other reference materials.[53]
_MUSICAL WORKS_
A musical work consists of the musical notes and lyrics (if any) in a
musical composition.[54] A musical work may be embodied in any form,
such as a piece of sheet music or a compact disc.[55] Musical works
may be "dramatic," i.e., written as a part of a musical or other
dramatic work, or "nondramatic," i.e., an individual, free-standing
composition.
_DRAMATIC WORKS_
Generally, a dramatic work is one in which a series of events is
presented to the audience by characters through dialogue and action as
the events happen, such as in a play.[56]
_PANTOMIMES AND CHOREOGRAPHIC WORKS_
This category was first added to the list of protectible subject
matter in 1976.[57] While pantomimes and choreographic works, such as
dances, can be fixed in a series of drawings or notations, they are
usually fixed on film or videotape.
_PICTORIAL, GRAPHIC AND SCULPTURAL WORKS_
A significant percentage of the works traveling through the NII will
be pictorial and graphic works. Works in this category include:
[T]wo-dimensional and three-dimensional works of fine, graphic, and
applied art, photographs, prints and art reproductions, maps, globes,
charts, diagrams, models, and technical drawings, including
architectural plans.[58]
_MOTION PICTURES AND OTHER AUDIOVISUAL WORKS_
The Copyright Act provides definitions of "audiovisual works" and the
subcategory "motion pictures."
"Audiovisual works" are works that consist of a series of related
images which are intrinsically intended to be shown by the use of
machines, or devices such as projectors, viewers, or electronic
equipment, together with accompanying sounds, if any, regardless of
the nature of the material objects, such as films or tapes, in which
the works are embodied.[59]
"Motion pictures" are audiovisual works consisting of a series of
related images which, when shown in succession, impart an impression
of motion, together with accompanying sounds, if any.[60]
The House Report notes that the key to the subcategory "motion
pictures" is the conveyance of the impression of motion, and that such
an impression is not required to qualify as an audiovisual work.[61]
_ARCHITECTURAL WORKS_
An "architectural work" is "the design of a building, as embodied in
any tangible medium of expression, including a building, architectural
plans, or drawings."[62] It includes the overall form as well as the
"arrangement and composite of spaces and elements" in the design of
the building.[63]
_"MULTIMEDIA" WORKS_
Increasingly, works from different categories are fixed in a single
tangible medium of expression.[64] This will certainly be true as
development of the NII progresses and the ability to create and
disseminate interactive so-called "multimedia" or "mixed media"
products increases.
A prefatory note may be warranted because of the manner in which these
terms are used in the context of copyright law. The terms "multimedia"
and "mixed media" are, in fact, misnomers. In these works, it is the
_types_ or _categories_ of works included that are "multiple" or
"mixed" -- not the _media_. The very premise of a so-called
"multimedia" work is that it combines several different elements or
types of _works_ (e.g., text (literary work), sound (sound recording),
still images (pictorial works), and moving images (audiovisual work)
into a _single medium_ (e.g., a CD-ROM) -- not multiple or mixed
media.[65] However, in recognition of the prevalent use of the term,
this Report refers to this type of work as a "multimedia" work.
Multimedia works are not categorized separately under the Copyright
Act; nor are they explicitly included in any of the eight enumerated
categories. While most current multimedia works would be considered
compilations,[66] that classification does not resolve the issue of
subject matter categorization.[67]
Despite the fact that the Copyright Act enumerates eight categories of
works, works that do not fit into any of the categories may,
nevertheless, be protected. The list of protectible works in Section
102 is intended to be illustrative rather than exclusive. The House
Report explains that the categories of works "do not necessarily
exhaust the scope of 'original works of authorship' that the [Act] is
intended to protect."[68] However, absent the addition of a new
category, a work that does not fit into one of the enumerated
categories is, in a sense, in a copyright no-man's land.[69]
Categorization of works (and, specifically, _proper_ categorization)
holds a great deal of significance under the Copyright Act. For
instance, two of the exclusive rights granted in Section 106 apply
only to certain categories of works.[70] In addition, many of the
limitations on rights in Sections 108 through 120 are not applicable
to all types of works.[71] Therefore, categorization of multimedia
works is an important issue.
Generally, multimedia works include two or more of the following
preexisting elements: text (literary works), computer programs
(literary works), music (sound recordings), still images (pictorial
and graphic works) and moving images (audiovisual works). The
definition of "literary works" begins with the phrase "works, _other
than audiovisual works_, . . . "[72] Therefore, a reasonable
interpretation is that text and computer programs that would otherwise
be categorized as literary works may be considered part of an
audiovisual work if included in a work of that type. Such is also the
case with sound recordings. A music video is not categorized as both a
sound recording and an audiovisual work; it is categorized as an
audiovisual work.[73] Thus, in the case of literary works and sound
recordings, the "audiovisual works" category appears to "trump" the
others. Audiovisual works also include still images -- at least
related ones.[74] Therefore, generally, multimedia works would likely
be considered audiovisual works.
The somewhat strained analysis needed to find a category for
multimedia works and the increasing "cross-breeding" of types of works
demonstrate that categorization may no longer be useful. Its necessity
is also questionable, except, perhaps, in the case of sound
recordings, which are not granted the full panoply of rights.[75]
Consideration may be given to eliminating categorization under the
Copyright Act in the future.
_COMPILATIONS AND DERIVATIVE WORKS_
A "compilation" is "a work formed by the collection and assembling of
preexisting materials or of data that are selected, coordinated, or
arranged in such a way that the resulting work as a whole constitutes
an original work of authorship."[76] Directories, magazines and
anthologies are types of compilations. A "derivative work" is a work
"based upon" one or more existing works.[77] A derivative work is
created when one or more existing works is "recast, transformed, or
adapted" into a new work, such as when a novel is used as the basis of
a movie or when a drawing is transformed into a sculpture.[78]
Translations, musical arrangements and abridgments are types of
derivative works.
The Copyright Act makes clear that the subject matter of copyright
specified in Section 102 (literary works, musical works, sound
recordings, etc.) includes compilations and derivative works.[79] The
copyright in a derivative work or compilation, however, extends only
to the contribution of the author of the derivative work or
compilation (the compiler), and does not affect the copyright
protection granted the preexisting material.[80] The copyright
protection for an individual musical work, for instance, is not
reduced or enlarged, or shortened or extended if the work is included
in a compilation, such as a medley of songs. Copyright in a
compilation or derivative work does not imply any exclusive right in
the preexisting material employed in the compilation or derivative
work.[81]
_2. COPYRIGHT OWNERSHIP_
Copyright ownership in a work initially vests in the author of the
work. [82] If the work is a "joint work" with two or more authors,
those authors are co-owners of the copyright in the work.[83]
Under certain circumstances, the copyright in a work is not granted to
the actual preparer of the work. In the case of "works made for hire,"
the employer of the preparer or the person for whom the work was
prepared is considered the "author" for purposes of the Copyright
Act.[84] There are two types of works made for hire -- those prepared
by an employee and those prepared by an independent contractor under
special order or commission. The copyright in a work prepared by an
employee within the scope of employment vests in the employer, and the
employer is the author.[85] The copyright in a work specially ordered
or commissioned vests in the person for whom the work was prepared if
the work falls into one of nine specified categories and if the
parties expressly agree in writing that the work will be considered a
work made for hire.[86]
Copyright ownership, or ownership of any of the exclusive rights (or
subdivision thereof), may be transferred to one or more persons, but
the transfer must be in writing and must be signed by the
transferor.[87]
Copyright ownership entitles the copyright owner to:
(1) exercise the exclusive rights granted under Section 106;
(2) authorize others to exercise any of those exclusive rights; and
(3) prevent others from exercising any of those exclusive rights.
An important distinction to understand is the difference between
ownership of a _copyright_ in a work and ownership of a _copy_ of a
work. Ownership of a copy -- a material object in which a copyrighted
work is fixed (e.g., a book, CD or videocassette) -- carries with it
no interest in the copyright.[88]
Ownership of a copyright, or any of the exclusive rights under a
copyright, is distinct from ownership of any material object in which
the work is embodied. Transfer of ownership of any material object,
including the copy or phonorecord in which the work is first fixed,
does not of itself convey any rights in the copyrighted work embodied
in the object; nor, in the absence of an agreement, does transfer of
ownership of a copyright or of any exclusive rights under a copyright
convey property rights in any material object.[89]
Ownership, possession or any other attachment to or relationship with
a copy of a copyrighted work (including obtaining access to it through
a computer network or other service) does not entitle one to exercise
any of the exclusive rights of the copyright owner (e.g., to reproduce
it or distribute it).
_a. TRANSFER OF OWNERSHIP_
A copyright in a work is divisible; the exclusive rights of a
copyright owner may be transferred in whole or in part.[90] A transfer
of copyright ownership may occur through an assignment, exclusive
license, mortgage "or any other conveyance, alienation, or
hypothecation" of a copyright or any of the exclusive rights.[91] A
transfer of copyright ownership may be limited in time or in place,
but it must be an exclusive transfer of whatever right or rights are
involved (i.e., nonexclusive licenses are not considered transfers of
ownership).[92] Any of the exclusive rights in the work[93] may be
separately transferred and owned, and the owner of a particular right
is considered the "copyright owner" with respect to that right.[94]
In the case of any copyrighted work other than a "work made for hire,"
all transfers of copyright ownership (as well as all nonexclusive
licenses) executed by the author of the work may be terminated by the
author after 35 years.[95] This right to terminate, intended to
protect authors, cannot be waived by contract or other agreement.[96]
However, termination is not automatic; an author must assert his or
her termination rights and comply with certain statutory requirements
to regain copyright ownership.[97]
_b. LICENSING_
The exclusive rights of a copyright owner may be licensed on an
exclusive basis (i.e., copyright ownership in one or more rights is
transferred by the copyright owner) or on a nonexclusive basis (i.e.,
the copyright owner retains ownership of the copyright and may grant
similar licenses to others). A nonexclusive licensee is not a
copyright owner and thus does not have standing to sue for any
infringement of the copyright in the work by others.[98]Unlike
exclusive licenses, nonexclusive licenses need not be in writing.[99]
Licensing issues are, and will continue to be, significant in the
context of the development of the NII. Services on the NII will
provide the opportunity for new uses for copyrighted works. If rights
with respect to these new uses are not expressly granted or retained
in license agreements, conflicts will arise between copyright owners
and licensees. For instance, public display on a bulletin board system
may not have been contemplated in licenses granting the public display
right that were executed before the advent or proliferation of such
systems. Failure to contemplate possible future developments, of
course, is not a new problem, and is one based primarily in contract
rather than copyright law. Whenever new technologies have produced a
new use for works, courts have been called upon to decide whether the
new use is covered by old licenses.[100]
A variety of licensing methods will be possible as the NII develops.
For instance, rights in copyrighted works offered via the NII may be
licensed off-line or on-line. They may be licensed directly (through
individual transactions between the rightsholder and the licensee) or
through other licensing arrangements, such as voluntary collective
licensing. Licensing of rights may be on a per-use, per-work or other
basis.
The licensing of rights for the creation of multimedia works -- whose
creators may wish to include dozens of preexisting works (or portions
thereof) -- can be difficult. Because registration and copyright
notices are not required for copyrighted works, identification of
copyright owners alone can be complicated. The relative newness of the
multimedia industry can result in an uncertainty on the part of
copyright owners and multimedia creators with regard to appropriate
terms and conditions for such uses.
_3. TERM OF PROTECTION_
Generally, a copyrighted work is protected for the length of the
author's life plus another 50 years.[101] In the case of joint works,
copyright protection is granted for the length of the life of the last
surviving joint author plus another 50 years.[102] Works made for
hire, as well as anonymous and pseudonymous works, are protected for a
term of either 75 years from the year of first publication or 100
years from the year of creation, whichever is shorter.[103] When the
term of protection for a copyrighted work expires, the work is said to
"fall into the public domain."
_4. EXCLUSIVE RIGHTS_
The Copyright Act grants to the copyright owner of a work a bundle of
exclusive rights:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to
the public by sale or other transfer of ownership, or by rental,
lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and motion pictures and other audiovisual works, to
perform the copyrighted work publicly; and
(5) in the case of literary, musical, dramatic, and choreographic
works, pantomimes, and pictorial, graphic, or sculptural works,
including the individual images of a motion picture or other
audiovisual work, to display the copyrighted work publicly.[104]
These rights, in most instances, have been well elaborated by Congress
and the courts. For the most part, the provisions of the current
copyright law can serve the needs of creators, owners, distributors
and users of copyrighted works in the NII environment. In certain
instances, small changes in the law may be necessary to optimize the
intellectual property component of the NII.
_a. THE RIGHT TO REPRODUCE THE WORK_
This fundamental right -- to reproduce copyrighted works in copies and
phonorecords[105] -- appears likely to be implicated in innumerable
NII transactions. Indeed, because of the nature of
computer-to-computer communications, it appears to be a right that
will be implicated in most NII transactions. For example, when a
computer user simply "browses" a document resident on another
computer, the image on the user's screen exists -- under contemporary
technology -- only by virtue of the copy that has been reproduced _in
the user's computer memory_. It has long been clear under U.S. law
that the placement of a work into a computer's memory amounts to a
reproduction of that work (because the work may be, in the law's
terms, "perceived, reproduced, or . . . communicated . . . with the
aid of a machine or device").
In each of the instances set out below, one or more copies[106] is
made, and, necessarily, in the absence of a proof of fair use or other
relevant defense,[107] there is an infringement of the reproduction
right:[108]
. When a work is placed into a computer, whether on a disk, diskette,
ROM, or other storage device or in RAM for more than a very brief
period, a copy is made.
. When a printed work is "scanned" into a digital file, a copy -- the
digital file itself -- is made.
. When other works -- including photographs, motion pictures, or sound
recordings -- are digitized, copies are made.
. Whenever a digitized file is "uploaded" from a user's computer to a
bulletin board system or other server, a copy is made.
. Whenever a digitized file is "downloaded" from a BBS or other
server, a copy is made.
. When a file is transferred from one computer network user to
another, multiple copies are made.[109]
. Under current technology, when a user's computer is being used as a
"dumb" terminal to "look at" a file resident on another computer (such
as a BBS or Internet host), a copy of the portion viewed is made in
the user's computer. (Without such copying into the RAM or buffer of
the user's computer, no screen display would be possible.) As long as
the amount viewed is more than _de minimis_, it is an infringement
unless authorized or specifically exempt.
_ b. THE RIGHT TO PREPARE DERIVATIVE WORKS_
The copyright law grants copyright owners the right to control the
abridgment, adaptation, translation, revision or other
"transformation" of their works.[110] A user who modifies -- by
annotating, editing, translating or otherwise significantly changing
-- the contents of a downloaded file creates a derivative work.
(Although the law does not provide an exemption for the purely private
creation of derivative works for personal use, such acts are largely
undetectable by the law unless and until the derivative work is
reproduced, distributed, publicly performed or publicly displayed.)
_c. THE RIGHT TO DISTRIBUTE COPIES_
Before addressing issues raised by the distribution right in the
context of the NII, it is necessary to understand its application and
shortcomings with respect to conventional modes of exploitation and
infringement.
The right to distribute copies of works is substantially circumscribed
by the "first sale" doctrine set out in Section 109(a):
Notwithstanding the provisions of section 106(3), the owner of a
particular copy or phonorecord lawfully made under this title, or any
person authorized by such owner, is entitled, without the authority of
the copyright owner, to sell or otherwise dispose of the possession of
that copy or phonorecord.[111]
This doctrine limits copyright owners' rights by making only the
initial distribution of a particular copy of a copyrighted work
subject to their control.
The first sale doctrine's importance in the NII context should not be
underestimated: if a transaction by which a user obtains a "copy" of a
work is characterized as a "distribution," then, under the current
law, the user may be entitled to make a like distribution without the
copyright owner's permission (and without liability for
infringement).[112] This may demonstrate the unintended consequence of
characterizing many electronic disseminations as "distributions."
Indeed, the system encompassed by Sections 106(3) and 109(a) appears
to "fit" only "conventional" transactions in which possessory
interests in tangible copies are conveyed in the first instance, for
example, from publisher to wholesaler (exclusive distribution right
applies) and thereafter from wholesaler to retailer (first sale
doctrine denies publisher any control), from retailer to user (first
sale doctrine denies publisher any control), and from user to user
(first sale doctrine denies publisher any control). Electronic
disseminations, by contrast, typically involve the proliferation of
copies, with the "publisher" retaining its copy and the user acquiring
a new one. This suggests that, under the current law, the reproduction
right, rather than the distribution right, may be both more logically
applicable and more legally appropriate (by virtue of its more limited
exceptions).[113]
One court decision has construed the unauthorized downloading of
digitized photographic images by BBS subscribers as implicating the
distribution right.[114] The court's discussion in _Playboy
Enterprises Inc. v. Frena_[115] reflects some uncertainty over the
meaning and scope of the various rights provided in Section 106:
Public distribution of a copyrighted work is a right reserved to the
copyright owner, and usurpation of that right constitutes infringement
. . . . [Playboy Enterprise's] right under 17 U.S.C. [[section]]106 to
distribute copies to the public has been implicated by Defendant Frena
[the bulletin board service operator]. Section 106(3) grants the
copyright owner "the exclusive right to sell, give away, rent or lend
any material embodiment of his work." There is no dispute that
Defendant Frena supplied a product containing unauthorized copies of a
copyrighted work. It does not matter that Defendant Frena claims it
did not make the copies itself.[116]
The court appears to have glossed over the reproduction right,
apparently because of its uncertainty whether the operator of the
bulletin board system could be held to have reproduced a work that was
(a) uploaded by one subscriber and (b) downloaded by another. (As
discussed below, the BBS operator publicly displayed the works by the
same conduct, and was found liable by the court for infringing the
display right.)
Whether the litigants in _Playboy_ put the issue properly in dispute
or not, the right to distribute copies of a work has traditionally
covered the right to convey a possessory interest in a tangible copy
of the work. Indeed, the first sale doctrine implements the common
law's abhorrence of restraints on alienation of property by providing
that the distribution right does not generally prevent owners of
lawfully made copies from alienating them in a manner of their own
choosing.[117] It is clear that a Frena subscriber, at the end of a
transaction, possessed a copy of a Playboy photograph, but it is
rather less clear whether, under the current law, Frena "distributed"
that photograph or the subscriber "reproduced" it (and, if the latter,
whether current law clearly would have made Frena contributorily
liable for the unauthorized reproduction.)[118]
In a similar case, _Sega Enterprise Ltd. v.MAPHIA_,119 a court, on a
motion for a preliminary injunction, made findings of fact regarding
(a) the use of a bulletin board system to "make and distribute" copies
of copyrighted video games, (b) the "unauthorized copying and
distribution" of the games on the bulletin board, and (c) the profits
made by the defendant from the "distribution " of the games on the
bulletin board.[120] The court's conclusions of law, however, did not
specify infringement of the distribution right.[121]
_d. THE RIGHT TO PERFORM THE WORK PUBLICLY_
The public performance right is available to all types of
"performable" works -- literary, musical, dramatic, and choreographic
works, pantomimes, motion pictures, and other audiovisual works --
with the exception of sound recordings.[122] While some have urged
that many NII transactions be characterized as "performances," it is
important to understand:
. the definition of "perform" in the copyright law,[123]
. that only "public" performances are covered by the copyright
law,[124]and
. the limitations set out in the statute that render the performance
right ineffective in a variety of circumstances (mostly of a nonprofit
nature).[125]
A distinction must be made between transmissions of copies of works,
transmissions of performances of works, and performances of works in
the NII context. When a copy of a work is transmitted over wires or
satellite signals in digital form so that it may be captured in a
user's computer, without being "rendered" or "shown," it has rather
clearly not been performed. Thus, for example, a file comprising the
digitized version of a motion picture might be transferred via the
Internet without the public performance right being implicated. When,
however, the motion picture is literally "rendered" -- by showing its
images in sequence -- so that users with the requisite hardware and
software might watch it _with or without copying the performance_,
then, under the current law, a "performance" has occurred.
The "public" nature of a performance -- which brings it within the
scope of copyright -- is sufficiently broadly defined to apply to
multiple individual viewers who may watch a work being performed in a
variety of locations at several different times. Courts have
repeatedly imposed public performance infringement liability upon
entities that, for example, develop novel modes of delivering motion
picture performances to customers (and novel legal arguments as to why
their performances are not "public").[126]
_ e. THE RIGHT TO DISPLAY THE WORK PUBLICLY_
The right to display a work publicly is extremely significant in the
context of the NII. The analyses that attend the determination of
whether a particular transmission might amount to a "distribution" or
a "performance" are rarely necessary. To display a work means to "show
a copy of it, either directly or by means of a . . . television image,
or any other device or process . . . ."[127] The definition of
"display" clearly encompasses the behavior of, for instance, the
defendant BBS operator in the _Playboy_ case.[128] Thus, when any NII
user visually "browses" through copies of works in any medium (but not
through a list of titles or other "menus" that are not copies of the
works),[129] a public display occurs. A display is "public" on the
same terms as a "performance"; therefore, virtually all NII uses would
appear to fall within the law's current comprehension of "public
display."
_5. LIMITATIONS ON THE EXCLUSIVE RIGHTS_
The exclusive rights of copyright owners are not without exception.
The Copyright Act specifies certain violations of a copyright owner's
exclusive rights that the copyright owner cannot prevent.[130]
_a. FAIR USE_
The most significant and, perhaps, murky of the limitations on a
copyright owner's exclusive rights is the doctrine of fair use.[131]
Fair use is an affirmative defense[132] to any action for copyright
infringement. It is potentially available with respect to all
unauthorized uses of works in all media. If it is proven, then the use
may continue without any obligation on the user's part to seek the
permission of the copyright owner, pay royalties, or the like. The
doctrine of fair use is rooted in some 200 years of judicial decisions
and is, in general, most likely to be found when a user incorporates
some of a pre-existing work into a new work of authorship._133 It is
thus widely accepted, for example, that quotation from a book or play
by a reviewer, or the capturing of copyrighted music in a television
news broadcast is fair use. As one moves away from such favored uses
into the area of uses that are -- for practical purposes --
competitive with the copyright owner's exploitation of the work, the
ease of analysis shrinks (as the number of litigated cases grows).
Before examining the doctrine developed by the courts, it is useful to
examine the statutory language concerning fair use. Section 107 of the
Copyright Act provides:
Notwithstanding the provisions of sections 106 and 106A, the fair use
of a copyrighted work, including such use by reproduction in copies or
phonorecords or by any other means specified by that section, for
purposes such as criticism, comment, news reporting, teaching
(including multiple copies for classroom use), scholarship, or
research, is not an infringement of copyright. In determining whether
the use made of a work in any particular case is a fair use the
factors to be considered shall include --
(1) the purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to
the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of
the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of
fair use if such finding is made upon consideration of all the above
factors.[134]
The language may usefully be divided into two parts: the introduction,
which is largely tautological ("fair use . . . is not an infringement
of copyright"), and the analysis required by the second sentence. The
recitation of assorted uses in the middle of the first sentence has
been held neither to create a presumption that such uses are fair[135]
nor to prevent a fair use analysis from being applied to other
"unlisted" uses.
The core of Section 107 is the second sentence, in which Congress
elaborates a test little different from that articulated by Justice
Story more than a century ago.[136] It is clear that courts must
evaluate all four factors in determining whether a particular use is
fair, but may also take into account unenumerated "extra" factors,
when appropriate.
_ THE PURPOSE AND CHARACTER OF THE USE_
Although, as discussed below, the fourth factor has repeatedly been
held to be the most important, the first factor often plays a major
role in determining the result when a defendant asserts a fair use
defense.
The first factor contrasts "commercial" uses with "nonprofit
educational" uses. There is, of course, a continuum between these two
opposites, with most uses not falling neatly into either the favored
or disfavored pigeonhole. The weight of the factor may be inferred
from the Supreme Court's very limited fair use jurisprudence: In the
four fair use cases that it has decided, one noncommercial
noneducational use was held fair,[137] two commercial uses were held
unfair,[138] and one commercial use was held potentially fair.[139]
In the _Sony_ case, the Court announced a "presumption" that helps
explains courts' near universal rejection of fair use claims in
commercial contexts. It declared that all commercial uses were to be
presumed unfair, thus placing a substantial burden on a defendant
asserting that a particular commercial use is fair. The _Campbell_
case made clear that the _Sony_ presumption was of greatest
applicability in the context of verbatim copying, thus giving greater
leeway to commercial but transformative uses.
Indeed, "mere reproduction" has fared very badly in court under the
Copyright Act, even in actual and ostensible educational contexts.
Courts have denied fair use, for example, to:
. a teacher's reproduction, in text materials, of the copyrighted
material of another teacher,[140]
. a school system's practice of taping educational broadcasts for
later use in classrooms,[141] and
. off-campus copy shops' manufacture -- to teachers' specifications --
and distribution of photocopies of anthologies containing portions of
textbooks and periodicals.[142]
Taken together, these cases indicate that, for the most part,
educational fair use is limited to the type of copying expressly
authorized in the "classroom guidelines," a part of the legislative
history incorporating provisions to which copyright owners and
educators agreed.[143]
_ THE NATURE OF THE COPYRIGHTED WORK_
This second factor tends to play a smaller role than the first in fair
use litigation. Courts have held that it weighs in the copyright
owner's favor when works of fiction[144] and unpublished works[145]
are copied, and in defendant's favor when factual works[146] and
published works[147] are copied.
_ THE AMOUNT AND SUBSTANTIALITY OF THE PORTION USED_
This is probably the least important factor, given that the taking of
even a small amount -- if it is considered the "heart" of the work --
can lead to a finding of infringement.[148] Indeed, the most cited
copyright treatise devotes only some four sentences to its discussion:
The third factor listed in [[section]] 107 is "the amount and
substantiality of the portion used in relation to the copyrighted work
as a whole." This raises an issue discussed in a preceding section
[concerning the quantum of copying that constitutes infringement], and
may be regarded as relating to the question of substantial similarity
rather than whether the use is "fair." This includes a determination
of not just quantitative, but also qualitative substantiality. In any
event, whatever the use, generally it may not constitute a fair use if
the entire work is reproduced.[149]
_ THE EFFECT OF THE USE_
Courts have repeatedly identified this as the most important of the
four factors.[150] It is important to recall that it weighs against a
defendant not only when a current market exists for a particular use,
but also when a potential market could be exploited by the copyright
owner. Harm in either market will, in most instances, render a use
unfair.[151]
The Supreme Court's decisions demonstrate the significant weight given
this factor:
. In _Sony_, the absence of any market for home taping licenses,
combined with the testimony of some copyright owners that they were
indifferent to home copying, led the Court to conclude that there was
no cognizable harm.[152]
. In _Harper & Row_, the Court accepted the argument that the
"scooping" of "Time" magazine's right to make the first serial
publication of President Ford's memoirs, which caused cancellation of
the magazine's contract with Harper & Row, caused harm to the
copyright owner.[153]
. In _Stewart_, performances of the movie palpably harmed the economic
interests of the owner of the copyright in the underlying short
story.[154]
. In _Campbell_, the Court -- because the parody was "transformative"
-- rejected the court of appeals' determination that the commercial
purpose of the parody required its creator to overcome _Sony_'s
presumption of market harm.[155]
It is reasonable to expect that courts would approach claims of fair
use in the context of the NII just as they do in "traditional"
environments. Commercial uses that involve no "transformation" by
users will likely always be infringing, while nonprofit educational
transformative uses will likely often be fair. Between these extremes,
courts will have to engage in the same type of fact-intensive analysis
that typifies fair use litigation and frustrates those who seek
"bright lines" clearly separating the lawful from the infringing.[156]
Courts in two cases decided to date concerning the unauthorized
"uploading" and "downloading" of copyrighted materials have held that
such uses were not fair uses.[157] In the _Playboy_ case, the court
characterized the issue as whether "unrestricted and widespread
conduct of the sort engaged in by the defendant bulletin board system
operator (whether in fact engaged in by the defendant or others) would
result in a substantially adverse impact on the potential market for
or value of [Playboy's copyrighted photographs],"[158] and determined
that it would. This, in turn, led the court to conclude that there was
market harm, and, thus, infringement.
In the other case, _Sega Enterprise Ltd. v. MAPHIA_,159 the court
found that Sega established a _prima facie_ case of direct and
contributory infringement in the operation of the defendant's bulletin
board system (where Sega's copyrighted video game programs were
uploaded and downloaded).[160] In issuing a preliminary injunction,
the court found that each of the four factors weighed against a
finding of fair use, but found that the fourth factor, in particular,
weighed "heavily" against such a finding:
Based on Defendant's own statement that 45,000 bulletin boards like
MAPHIA operate in this country, it is obvious that should the
unauthorized copying of Sega's video games by Defendants and others
become widespread, there would be a substantial and immeasurable
adverse effect on the market for Sega's copyrighted video game
programs.[161]
Cases already decided in other contexts will give valuable guidance to
courts confronted with NII-related cases. Just as courts have
distinguished between home use of a VCR to make time-shifting tapes of
materials broadcast over the air (fair use) and school systems'
attempts to use VCRs to download broadcast instructional materials for
the creation of an educational film library (not fair use), courts
will subject users of copyrighted works available via the NII to like
scrutiny. Educational uses that serve the same ends and are
constrained in the same manner as the copying permitted under the
Classroom Guidelines may be fair, while attempts to supplant the
market for books, films, software and other materials by proliferating
them without permission via the NII will likely be infringing.
Finally, it may be that technological means of tracking transactions
and licensing will lead to reduced application and scope of fair use.
Thus, one sees in _American Geophysical Union v. Texaco Inc._,162 a
court establishing liability for the unauthorized photocopying of
journal articles based in part on the court's perception that
obtaining a license for the right to make photocopies via the
Copyright Clearance Center was not unreasonably burdensome.
_b. FIRST SALE DOCTRINE_
A fundamental tenet of copyright law, and another limitation on the
exclusive rights, is the "first sale doctrine," which prevents an
owner of copyright in a work from controlling subsequent transfers of
copies of that work. Once the copyright owner has transferred
ownership of a particular copy (a material object) embodying the work,
the copyright owner's exclusive right to distribute copies of the work
is "extinguished" with respect to that copy.[163]
Section 109(a) of the Copyright Act provides:
Notwithstanding the provisions of section 106(3) [which grants
copyright owners the exclusive right to distribute copies or
phonorecords of a work], the owner of a particular copy or phonorecord
lawfully made under this title, or any person authorized by such
owner, is entitled, without the authority of the copyright owner, to
sell or otherwise dispose of the possession of that copy or
phonorecord.[164]
This limitation on the copyright owner's distribution right allows
wholesalers who buy books to distribute those copies to retailers and
retailers to sell them to consumers and consumers to give them to
friends and friends to sell them in garage sales and so on -- all
without the permission of (or payment to) the copyright owner of the
work.[165] The first sale doctrine does not allow the transmission of
a work (through a computer network, for instance), because a
transmission would necessarily also involve a reproduction of the work
(which would not be exempt under Section 109). Moreover, a
transmission does not appear to constitute a distribution of a copy
under the current law.[166]
The first sale doctrine allows the owner of a particular copy of a
work to "dispose" of possession of that copy in any way -- for
example, by selling it, leasing it, loaning it or giving it away.
However, there is an exception to this exemption with respect to two
types of works -- sound recordings and computer programs. The owner of
a particular copy of a computer program or a particular phonorecord of
a sound recording may not rent, lease or lend that copy or phonorecord
for the purpose of direct or indirect commercial advantage.[167] These
exceptions were enacted because of the ease with which reproductions
of those works can be made at a lower cost than the original with
minimum degradation in quality.[168] The rationale for these
exceptions may apply to other types of works as more types of works
become available in digital format, and the "nexus" of rental and
reproduction of those works "may directly and adversely affect the
ability of copyright holders to exercise their reproduction and
distribution rights under the Copyright Act."[169]
A copyright owner's exclusive right to publicly display copies of a
work is also limited by Section 109:
Notwithstanding the provisions of section 106(5) [which grants
copyright owners the exclusive right to display publicly copies of a
work], the owner of a particular copy lawfully made under this title,
or any person authorized by such owner, is entitled, without the
authority of the copyright owner, to display that copy publicly,
either directly or by the projection of no more than one image at a
time, to viewers present at the place where the copy is located.[170]
Thus, an art gallery that purchases a painting may publicly display it
without liability. The owner of a particular copy of an electronic
audiovisual game intended for use in coin-operated equipment may also
publicly perform or display that game in that equipment.[171]
This exemption from liability would not apply to the public display of
a copy of a work on a bulletin board system or other computer or
communications network, as more than one image would likely be
displayed at a time (to different viewers) and viewers would not be
"present at the place where the copy is located."
_c. LIBRARY EXEMPTIONS_
The Copyright Act provides that in certain circumstances and under
certain conditions it is not an infringement of copyright for a
library or archives, or its employees acting within the scope of their
employment,[172] to reproduce or distribute one copy or phonorecord of
a work.[173] The conditions of the library exemption are that (1) the
reproduction or distribution is made without any purpose of direct or
indirect commercial advantage; (2) the collections of the library are
open to the public or available not only to researchers affiliated
with the library, but also to other persons doing research in a
specialized field; and (3) the reproduction or distribution of the
work includes a notice of copyright.[174]
The circumstances under which a library may reproduce or distribute a
copyrighted work without infringement liability include:
_ARCHIVAL COPIES_
A library may reproduce and distribute a copy or phonorecord of an
unpublished work reproduced in facsimile form if the sole purpose is
preservation and security, and if the copy or phonorecord reproduced
is currently in the collection of the library.[175] The House Report
notes that this right "would extend to any type of work, including
photographs, motion pictures and sound recordings." However, the copy
or phonorecord made must be in "facsimile form." A library may "make
photocopies of manuscripts by microfilm or electrostatic process, but
[may] not reproduce the work in 'machine-readable' language for
storage in an information system."[176] Thus, this exemption does not
appear to allow for preservation in electronic or digital form, which,
arguably, would not constitute "facsimile form" (unless, perhaps, the
original copy in the collection was fixed in electronic or digital
form).
_REPLACEMENT COPIES_
A library may reproduce a published work duplicated in facsimile form
solely for the purpose of replacing a copy or phonorecord that is
damaged, deteriorated, lost or stolen, if the library has, after
reasonable efforts, determined that an unused replacement cannot be
obtained at a fair price.[177] Again, the copy or phonorecord made
must be in "facsimile form." The exemption does not allow for
replacement of a published work by reproduction in digital form (at
least when the original copy of the published work was not in digital
form).
_ARTICLES AND SHORT EXCERPTS FOR USERS_
A library may make and distribute a copy of one article or other
contribution to a copyrighted collection or periodical issue, or a
copy or phonorecord of a small part of any other copyrighted work at
the request of a user, subject to two conditions.[178]
_OUT-OF-PRINT WORKS FOR SCHOLARLY PURPOSES_
A library may make and distribute a copy or phonorecord of an entire
work if it has determined that a copy or phonorecord of the
copyrighted work cannot be obtained at a fair price, subject to two
conditions.[179]
_NEWS PROGRAMS_
A library may reproduce and distribute by lending a limited number of
copies of an audiovisual news program.[180]
_INTERLIBRARY LOANS_
The Copyright Act allows a library to make single copies of
copyrighted works and to enter into interlibrary lending arrangements,
but prohibits copying "in such aggregate quantities as to substitute
for a subscription to or purchase of [a copyrighted] work."[181] CONTU
developed guidelines to interpret the quoted phrase, which were later
included in the House Report and Conference Report on the Copyright
Act of 1976.[182] The guidelines provide that a library may "borrow"
not more than five copies per year of articles from the most recent
five years of any journal title.[183]
The exemptions granted under Section 108 extend only to isolated and
unrelated reproduction of a single copy or phonorecord of the same
material on separate occasions,[184] and do not apply to (1) musical
works; (2) pictorial, graphic, or sculptural works; or (3) motion
pictures or other audiovisual works, except news programs.[185]
Libraries may provide many works in digital format in the future.
However, Section 108 does not permit libraries to convert printed
works to a digital format without the authority of the copyright
owners. Such conversion would constitute "reproduction" of those
works,[186] and would require the authorization of the relevant
copyright owners.
_d. EDUCATIONAL USE EXEMPTIONS_
Section 110(1) exempts from infringement liability the performance or
display of a copyrighted work in the course of face-to-face teaching
activities by a non-profit educational institution in a classroom or
similar setting.[187]
Section 110(2) exempts from liability the transmission of a
performance or display of a copyrighted work if (1) the performance or
display is a regular part of the systematic instructional activities
of the non-profit educational institution; (2) the performance or
display is directly related and of material assistance to the teaching
content of the transmission; and (3) the transmission is made
primarily for reception in classrooms or similar places or by persons
to whom the transmission is directed because of their
disabilities.[188]
Like the library exemptions, the educational use exemptions are
provided in addition to the fair use and other general exemptions,
which are also available to educational institutions.
_e. OTHER LIMITATIONS_
_REPRODUCTION OF COMPUTER PROGRAMS_
The rights of an owner of a copyright in a computer program are
limited such that the owner of a particular copy of a computer program
may make a copy or adaptation of the program as an "essential step" in
using the computer program in a computer or for archival
purposes.[189] This limitation applies only with respect to "owners"
of copies of programs, not licensees, borrowers or mere possessors.
_CERTAIN PERFORMANCES AND DISPLAYS_
Certain performances and displays are exempt from infringement
liability under Section 110 of the Copyright Act, including:
. the performance or display of certain works in the course of
religious services;[190]
. the performance of certain works by governmental or non-profit
agricultural or horticultural organizations;[191]
. the performance of certain musical works in retail outlets for the
sole purpose of promoting retail sales;[192]
. the transmission of performances of certain works to disabled
persons;[193] and
. the performance of certain works at non-profit veterans' or
fraternal organizations for charitable purposes.[194]
The "communication of a transmission embodying a performance or
display of a work by the public reception of the transmission on a
single receiving apparatus of a kind commonly used in private homes"
is also exempted if there is no direct charge to see or hear the
transmission and the transmission is not further transmitted to the
public.[195] This exemption allows proprietors to play radios or
televisions (i.e., to perform or display copyrighted works in those
transmissions) in public establishments such as restaurants, beauty
shops and bars.[196] The applicability of this exemption is extremely
fact-specific and what qualifies as a type of receiving apparatus
"commonly used in private homes" will certainly change as home
equipment merges (into, for example, radio/television/computer units)
and becomes more sophisticated.[197]
_EPHEMERAL RECORDINGS_
Section 112 provides that it is not an infringement of copyright for a
"transmitting organization" that has the right to transmit to the
public a performance or display of a work "to make no more than one
copy or phonorecord of a particular transmission program embodying the
performance or display" under certain conditions.[198]
_COMPULSORY LICENSES_
Section 111 and Section 119 are compulsory licensing provisions that
allow cable systems and satellite operators to retransmit copyrighted
programming without infringement liability if they pay a statutory
licensing fee (which is then distributed among the copyright owners of
the programming retransmitted).[199] These, as well as other,
provisions of the Copyright Act will have to be reviewed as the merger
of creative, communications, and computer entities continues. For
instance, a compulsory license under Section 111 is only available to
a "cable system," which is defined as "a facility . . . that in whole
or in part receives signals transmitted or programs broadcast by one
or more television broadcast stations . . . ." Terms such as "network
station," "independent stations," and "noncommercial educational
station" are also defined and used in Section 111, and may warrant
review in the future.[200]
Compulsory licenses are also available for the public performance of
nondramatic musical works by means of jukeboxes,[201] for the use of
certain works in connection with noncommercial broadcasting,[202] and
for the reproduction and distribution of nondramatic musical works in
the course of making and distributing phonorecords of such works.[203]
_6. COPYRIGHT INFRINGEMENT_
_a. GENERAL_
Anyone who, without the authorization of the copyright owner,
exercises any of the exclusive rights of a copyright owner is an
infringer of copyright.[204] Thus, any activity that falls within the
scope of the exclusive rights of the copyright owner is an
infringement.[205]
Copyright infringement is determined without regard to the intent or
the state of mind of the infringer; so-called "innocent" infringement
is infringement nonetheless.[206] Moreover, although the exclusive
rights refer to such rights with respect to "copies" (plural) of the
work,[207] there is no question that under the Act the making of even
a single unauthorized copy may constitute an infringement.[208]
Courts generally use the term "copying" as shorthand for a violation
of any of the exclusive rights of the copyright owner (not just the
reproduction right). Courts usually require a copyright owner to prove
ownership of the copyrighted work and "copying" by the defendant to
prevail in an infringement action.[209]
Since there is seldom direct evidence of copying (witnesses who
actually saw the defendant copy the work, for instance), a copyright
owner may prove copying through circumstantial evidence establishing
that the defendant had access to the original work and that the two
works are substantially similar. Other indications of copying, such as
the existence of common errors, have also been accepted as evidence of
infringement.[210]
The copying of the copyrighted work must be copying of protected
expression and not just ideas;[211] likewise, the similarity between
the two works must be similarity of protected elements (the
expression), not unprotected elements (the facts, ideas, etc.). The
portion taken must also be more than _de minimis_.
The similarity between the two works need not be literal (i.e.,
phrases, sentences or paragraphs need not be copied verbatim);
substantial similarity may be found even if none of the words or brush
strokes or musical notes are identical.[212] Various tests have been
developed to determine whether there has been sufficient non-literal
copying to constitute substantially similarity between a copyrighted
work and an allegedly infringing work.[213] Judge Learned Hand
articulated the well-known "abstractions test," where the expression
and the idea are, in essence, treated as ends of a continuum, with
infringement found if the allegedly infringing work crosses the line
delineating the two.[214] Such a line, as Judge Hand recognized, is
not fixed in stone; indeed, as he put it, its location must
"inevitably be ad hoc . . . ."[215] The "pattern" test has also been
suggested, where infringement is found if the "pattern" of the work is
taken (in a play, for instance, the "sequence of events, and the
development of the interplay of characters").[216]
The "subtractive" test -- which dissects the copyrighted work,
disregards the noncopyrightable elements, and compares only the
copyrightable elements of the copyrighted work to the allegedly
infringing work -- historically has been the traditional method for
determining substantial similarity.[217] Following the 1970 Ninth
Circuit decision in _Roth Greeting Cards v. United Card Co_.,[218]
however, the "totality" test became popular for determining
substantial similarity. The totality test compares works using a
"total concept and feel" standard to determine whether they are
substantially similar. Although predominantly used by the Ninth
Circuit throughout the 1970s and 1980s,[219] the test was used by
other circuits as well.[220] The Ninth Circuit further defined an
"extrinsic/intrinsic" test in proof of substantial similarity in _Sid
& Marty Krofft Television Productions, Inc. v. McDonald's Corp_.221
The intrinsic portion of the test measures whether an observer "would
find the total concept and feel of the works" to be substantially
similar.[222] The extrinsic portion of the test, meanwhile, is an
objective analysis of similarity based on "specific criteria that can
be listed and analyzed."[223] Thus, this test requires substantial
similarity "not only of the general ideas but of the expressions of
those ideas as well."[224]
More recently, however, both the Ninth and Second Circuits have moved
away from the totality test with respect to computer applications. In
_Data East USA, Inc. v. Epyx, Inc_.225 the Ninth Circuit rediscovered
"analytic dissection of similarities" in the substantial similarity
determination of video games. Similarly, the Second Circuit in
_Computer Associates International, Inc. v Altai, Inc_.226 fashioned
an "abstraction-filtration-comparison test" for a computer program
that combined Judge Learned Hand's "abstraction" test (to separate
ideas from expression) and "filtration" reminiscent of traditional
"subtraction" analysis in filtering protectible from non-protectible
material.
In addition to the shifting tide of substantial similarity tests,
there is dispute as to the appropriate "audience" for determining
substantial similarity. The "ordinary observer test" alluded to in
_Arnstein v. Porter_,227 and followed in a number of Second Circuit
decisions[228] considers the question of substantial similarity from
the viewpoint of the "average lay observer."[229] The Fourth Circuit,
however, set forth a modified test in _Dawson v. Hinshaw Music
Inc_.,[230] requiring the ordinary observer to be the "intended"
audience for the particular work. Relying on decisions by both the
Ninth and Seventh Circuits,[231] the court in _Dawson_ stated:
[i]f the lay public fairly represents the intended audience, the court
should apply the lay observer formulation of the ordinary observer
test. However, if the intended audience is more narrow in that it
possesses specialized expertise, . . . the court's inquiry should
focus on whether a member of the intended audience would find the two
works to be substantially similar.[232]
The challenge of this test, especially in more advanced technologies,
is determining when, if ever, a work is not directed to an audience
possessing specialized expertise.
The ability to manipulate works in digital format raises an issue with
respect to infringement of the reproduction and derivative works
rights. A copyrighted photograph, for instance, can be manipulated in
the user's computer in such a way that the resulting work is not
substantially similar to the copyrighted work (in fact, it may bear
little or no resemblance to the copyrighted work upon which it was
based). The initial input of the copyrighted work into the user's
computer may be an infringement of the copyright owner's reproduction
right, but the infringing (or noninfringing) nature of the resulting
work is less clear. Although courts traditionally rely on a
"substantial similarity" test to determine infringement liability,
neither the meaning of "derivative work" nor the statutory standard
for infringement appears to require an infringing derivative work to
be substantially similar.[233]
_b. INFRINGING IMPORTATION_
The exclusive right to distribute copies or phonorecords includes the
right to limit the importation of copies or phonorecords of a work
acquired outside the United States into the U.S. without the authority
of the copyright owner.[234] Such unauthorized importation, whether it
be of pirated items (i.e., "copies or phonorecords made without any
authorization of the copyright owner")[235] or "gray market" products
(i.e., those copies or phonorecords legally produced overseas for
foreign distribution, but not authorized for the U.S. market), is an
infringement of the distribute right.[236]
The applicability of the importation provisions to the transmission of
works into the United States via the NII (or GII) may be debated.
Nevertheless, the importation right is an outgrowth of the
distribution right, both of which refer to "copies or
phonorecords."[237] A data stream can contain a copyrighted work in
the form of electronic impulses, but those impulses do not fall within
the definition of "copies" or "phonorecords." Therefore, the
transmission of copyrighted works via international communication
links fails to constitute an "importation" under the current law
because no "copies" or "phonorecords" are being imported. If an
infringing literary work, for instance, was physically shipped into
the U.S. in the form of a paper copy, a CD-ROM disk or even stored on
a memory chip, then it could be an infringing importation if the above
discussed conditions exist, but it would appear that Section 602, as
currently written, could not be used to block the electronic
transmission of such material.[238]
_c. CONTRIBUTORY AND VICARIOUS LIABILITY_
Direct participation in infringing activity is not a prerequisite for
infringement liability, as the Copyright Act grants to copyright
owners not only the right to exercise the exclusive rights, but also
the right "to authorize" the exercise of those rights. According to
the House Report, the inclusion of the right "to authorize" was
"intended to avoid any questions as to the liability of contributory
infringers" -- those who do not directly exercise the copyright
owner's rights, but "authorize" others to do so.[239] Other than the
reference to a copyright owner's right "to authorize" exercise of the
exclusive rights, however, the Copyright Act does not mention or
define "contributory infringement" or "vicarious liability," the
standards for which have developed through case law.[240]
If someone has the "right and ability" to supervise the infringing
action of another, and that right and ability "coalesce with an
obvious and direct financial interest in the exploitation of
copyrighted materials -- even in the absence of actual knowledge" that
the infringement is taking place, the "supervisor" may be held
vicariously liable for the infringement.[241] Vicarious liability is
based on a connection to the direct infringer (not necessarily to the
infringing activity).
The best known copyright cases involving vicarious liability are the
"dance hall" cases, where vicarious liability was found when dance
hall owners allowed the unauthorized public performance of musical
works by the bands they hired, even when the owners had no knowledge
of the infringements and had even expressly warned the bands not to
perform copyrighted works without a license from the copyright
owners.[242]
"Contributory infringement" may be found when "one who, with knowledge
of the infringing activity, induces, causes or materially contributes
to the infringing conduct of another."[243] Contributory infringement
is based on a connection to the infringing activity (not necessarily
to the direct infringer). A contributory infringer may be liable based
on the provision of services or equipment related to the direct
infringement.[244]
_SERVICES_
A contributory infringer may be liable based on the provision of
services related to the infringement. Courts have found contributory
infringement liability, for instance, when a defendant chose the
infringing material to be used in the direct infringer's work,[245]
and when a defendant was responsible for the day-to-day activities
where the infringement took place.[246]
Copyright owners may allege contributory infringement in NII-related
cases against service providers, such as BBS operators. As noted
earlier, the court in _Playboy_ 247 found the BBS operator _directly_
liable for the display of the unauthorized copies on the service, as
well as the "distribution" of unauthorized copies to subscribers.
However, another court recently cited the _Playboy_ case in finding
that the plaintiff had established a prima facie case of
_contributory_ infringement by a BBS operator. In _Sega Enterprises
Ltd. v. MAPHIA_,248 the court issued a preliminary injunction against
the BBS operator based on the operator's "role in copying [Sega's
copyrighted video games], including provision of facilities,
direction, knowledge and encouragement."[249] The court found that the
BBS operator had knowledge of the uploading and downloading of
unauthorized copies of Sega's copyrighted video games and that it
solicited the copying of the games.[250]
Two recent libel decisions may provide additional guidance.[251] In
_Auvil v. CBS "60 Minutes"_[252] the court held that a network
affiliate which exercised no editorial control over the network
broadcast (although it had the power to do so) served only as a
conduit and was not liable for republishing defamatory
statements.[253] Despite the fact that the affiliate had some idea of
the content and had access to the broadcast hours before it aired, the
court refused to hold it liable for any defamation contained therein.
The court found it unrealistic to force, in effect, the creation of
editorial boards "which possess sufficient knowledge, legal acumen and
access to experts to continually monitor incoming transmissions and
exercise on-the-spot discretionary calls or face . . . million dollar
lawsuits at every turn."[254] The court borrowed reasoning from book
seller cases -- "one who only delivers or transmits defamatory
material published by a third person is subject to liability _if, but
only if, he knows or had reason to know of its defamatory
character_"255 -- finding "no logical basis for imposing a duty of
censorship on the visual media which does not likewise attach to the
print chain of distribution."
It should be noted, however, that in the _Auvil_ case, the court found
that the injured parties were not impaired by limiting conduit
liability to those situations where culpability is established; "[t]he
generating source, which in a national broadcast will generally be the
deepest of the deep pockets, may still be called upon to defend."[256]
This likely would not be true in BBS cases, where the generating
source -- a BBS subscriber -- may not have as deep pockets as the BBS
operator and, in fact, may be unidentifiable.
A similar result was reached in _Cubby, Inc. v. CompuServe Inc_.257 In
that case, the court held that libelous material uploaded to a
bulletin board system by a subscriber did not subject the BBS operator
to damages for libel. The court determined that a BBS was a
"distributor" (akin to a public library or bookstore) rather than a
"republisher," and thus the operator was liable only if it "knew or
had reason to know of the allegedly defamatory . . . statements" that
had been uploaded.[258]
_EQUIPMENT_
Contributory infringement liability may also be based on the provision
of equipment or other instrumentalities or goods used in or related to
the infringement. The leading case is _Sony Corp. v. Universal City
Studios, Inc_.,[259] a 5 to 4 decision by the Supreme Court in which
the majority of the Court held that the manufacturer of videocassette
recorders was not a contributory infringer for providing the equipment
used in the unauthorized reproduction of copyrighted works. Borrowing
a patent law principle, the Court reasoned that manufacturers of
staple articles of commerce that are _capable_ of substantial
noninfringing uses should not be held liable as contributory
infringers.[260] The Court held:
[T]he sale of copying equipment, like the sale of other articles of
commerce, does not constitute contributory infringement if the product
is widely used for legitimate, unobjectionable purposes. Indeed, it
need merely be capable of substantial noninfringing uses.[261]
The Court determined that the key question was whether the
videocassette recorder was "capable of commercially significant
noninfringing uses."[262] The Court also held that in an action for
contributory infringement against a manufacturer of copying devices,
"the copyright holder may not prevail unless the relief that he seeks
affects only his programs, or unless he speaks for virtually all
copyright holders with an interest in the outcome."[263]
The dissent[264] did not agree that the patent "staple article of
commerce" doctrine of contributory infringement was applicable to
copyright law.[265] Recognizing the "concerns underlying the 'staple
article of commerce' doctrine," the dissent concluded that "if a
_significant_ portion of the product's use is _noninfringing_, the
manufacturers and sellers cannot be held contributorily liable for the
product's infringing uses."[266]
If virtually all of the product's use, however, is to infringe,
contributory liability may be imposed; if no one would buy the product
for noninfringing purposes alone, it is clear that the manufacturer is
purposely profiting from the infringement, and that liability is
appropriately imposed. In such a case, the copyright owner's monopoly
would not be extended beyond its proper bounds; the manufacturer of
such a product contributes to the infringing activities of others and
profits directly thereby, while providing no benefit to the public
sufficient to justify the infringement.[267]
Other cases against producers or providers of the instrumentalities of
infringement since _Sony_ generally have not been successful.[268]
However, the court in the recent _Sega_ case[269] issued a preliminary
injunction against a BBS operator who sold special copiers, the "only
substantial use" of which was to copy Sega's copyrighted video
games.[270] The court found that Sega established a _prima facie_ case
of contributory infringement by the BBS operator based on the
operator's "advertising, sale and distribution" of the video game
copiers.[271]
_d. CONFLICT OF LAWS_
Conflict of laws issues may arise in NII-related copyright
infringement actions. Resolution of these issues determines what law
the court should apply. If the infringer and the infringement are in
the United States, the U.S. Copyright Act would apply. However,
different situations may present themselves which will raise conflict
issues. For instance, users in country A, where certain actions are
not considered copyright infringements, may use works located on
servers in country B, where such actions are. Which country's law
controls the resolution of a copyright infringement dispute -- the
country from which a copyrighted work is uploaded or to which it is
downloaded, or the country where the host server is located? In the
case of direct transmissions, which country's law applies -- the
country of origin of the transmission or the transmitter, or the
country of the reception? It may be that rights of the copyright owner
are exercised in each country. These issues, however, may be no more
problematic than the current conflict issues that arise due to the use
of telephones, fax machines or modems in international commerce.
_7. INTERNATIONAL IMPLICATIONS_
_ a. BACKGROUND_
Other countries -- including Finland, Japan and Sweden -- and the
European Union are initiating their own studies of the means to
promote the development of national information infrastructures. For
example, on February 7, 1994, Swedish Prime Minister, Carl Bildt,
addressed the Swedish Academy of Engineering Sciences and called for
the creation of a national coalition to spearhead the development of
an advanced Swedish information infrastructure. It is important to
note that the task force which the Prime Minister is assembling will
include, among others, representatives of the Ministry of Justice who
will be responsible for the development of rules for the protection of
intellectual property in the system. On March 3, 1994, Commissioner
Bangemann, Vice President of the European Commission met with
Secretary of Commerce Ronald Brown and Assistant Secretaries Bruce
Lehman and Larry Irving to discuss the possibilities for U.S.-EU
cooperation in regard to the NII.
Without taking into account, from the outset, rules for the effective
protection of intellectual property, the development of the
international information superhighway will be severely hindered. How
disparate domestic information superhighways will evolve into a Global
Information Infrastructure (GII) will depend on the rules of the road,
and one of the most important of those sets of rules is ensuring
protection for the works of intellectual property that moves through
international channels and into the emerging national information
infrastructures. Adequate and effective protection of intellectual
property in international commerce must be ensured.
Development of the GII will make international copyright laws a
concern for every user of the system. When the globe is blanketed with
digital information dissemination systems, a user in one country will
be able to manipulate information resources in another country in ways
that may violate that country's copyright laws. Because copyright laws
are territorial, and the standards of protection embodied in the
international conventions leave room for national legislative
determinations, acts that may be an infringement in one country may
not be an infringement in another country. The complexity that such a
system creates will make doing "electronic business" over the
information superhighways difficult unless we move promptly to
identify needs for protection and initiate efforts to work toward a
new level of international copyright harmonization.
U.S. copyright industries are significant contributors to the United
States' current trade accounts, reducing our balance of payments
deficit by some $34 billion in 1990. Inadequacies in the present
system of intellectual property protection for copyrights and
neighboring[272] or related rights and the consequent losses to these
industries from piracy and from trade barriers arising from
differences in forms of protection have been estimated to cause losses
to these industries of $12 to 15 billion annually. Improved protection
for copyrights and neighboring rights would contribute to reducing
these losses and improving the balance of payments.[273]
An important aspect of the participation of foreign entities through a
GII in the United States domestic information infrastructure is the
provision of adequate and effective intellectual property protection
in the country wishing to participate. To the extent that
participation in the NII can be linked to the provision of
intellectual property protection, it will promote the ability of U.S.
businesses to use the NII and the GII to communicate works to foreign
consumers via other countries' information infrastructures. If we are
to ensure that commercial enterprises will make full use of the
capabilities of the NII to communicate and deliver information and
entertainment products, there must be assurances that their
intellectual property rights will be protected effectively under
strong copyright laws in all countries participating in a GII.
However, in considering such linkages, careful consideration will have
to be given to obligations under international intellectual property
treaties and other international agreements such as the North American
Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and
Trade (GATT), especially in view of the recently completed Uruguay
Round with its various intellectual property and market access
provisions.
_ b. THE INTERNATIONAL FRAMEWORK_
In the 1970's, then-U.S. Register of Copyrights Barbara Ringer
observed that if Justice Story considered copyright to be the
metaphysics of the law, then international copyright is its cosmology.
That message is brought home to us in 1994 by the need to evaluate the
applicability of copyright in the context of the complexities of
international commerce in information and entertainment products via
advanced information infrastructures.
First, we must understand that there is no such thing as an
international copyright, but rather a system of international
copyright law. There are several international treaties that link
together most of the major trading nations of the world and provide
nations with a means for protecting, under their own laws, each others
copyrighted works and similar materials. This situation is further
complicated because there are two major legal traditions applicable to
the protection of what we in the United States regard as copyrighted
works. To understand the complexities of the international copyright
law system and the international treaties, it is necessary to have a
basic appreciation of these two major legal regimes.[274]
The United States and other countries that follow the Anglo-American
legal tradition have "copyright systems," the principal focus of which
is on protecting the author's economic rights. The theory of our
system is that providing such protection will induce the creation of
more works which will "promote the progress of science" and redound to
the public benefit.
Countries that follow the civil law tradition, however, regard
authors' rights as natural human rights, or part of one's right of
personality. As a part of this tradition, the protection of so-called
"moral rights" of the author is an essential part of the system.[275]
Moral rights normally include the right of an author to be named as
the author of a work and the right to object to uses of the work which
could bring dishonor or discredit on the author's reputation. In these
civil law systems, moral rights reflect a part of the author's
personality and are non-transferable, and may be not waivable.
Economic rights, in many instances, may be subordinated to moral
rights. Under these systems, only works which are original, in that
they reflect the personality of the author, are entitled to
protection. Productions that do not meet this originality requirement,
but still merit some protection, are protected under a system of
"neighboring rights." Needless to say, with such divergent theoretical
bases sometimes the copyright and the authors' rights systems are in
conflict. One of these areas of conflict is in the nature and level of
rights for owners of neighboring rights.
Neighboring rights are similar to the rights protected by copyright or
authors' rights and are applied to protect the rights of producers of
phonograms, performers and broadcasters. Under the copyright system,
many of the rights covered under neighboring rights are actually
copyright rights. For example, under the U.S. copyright law, sound
recording producers and performers are regarded as joint authors of
sound recordings. Under _droit d'auteur_ (or authors' rights) systems,
such producers' and performers' rights would be protected as
neighboring rights. Neighboring rights, while similar in economic
character to authors' rights, are protected generally at a lower level
and are entirely separate and distinct from the higher-level rights
granted to authors.
_INTERNATIONAL TREATIES_
The World Intellectual Property Organization (WIPO) is responsible for
the administration of, and activities concerning revisions to, the
international intellectual property treaties.[276] The principal WIPO
copyright conventions include the Berne Convention for the Protection
of Literary and Artistic Works (Paris 1971) (hereinafter "Berne
Convention"),[277] the International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations
(hereinafter "Rome Convention"),[278] and the Geneva Convention for
the Protection of Producers of Phonograms Against the Unauthorized
Reproduction of their Phonograms (Geneva Phonograms Convention).[279]
WIPO also administers the Paris Convention for the Protection of
Industrial Property (Stockholm 1967) which is not discussed in this
report. UNESCO[280] and WIPO jointly administer the Universal
Copyright Convention (Paris 1971) (hereinafter "UCC"),[281] which is a
lower-level copyright convention that was negotiated in the years
following World War II largely to bring the United States into the
world of international copyright. Virtually all of the members of the
UCC are also members of the Berne Convention, and by the terms of the
conventions the Berne Convention governs relations between members of
both.
The Berne Convention is the principal international copyright
convention, and is the largest and most detailed. The United States
joined the Berne Convention in 1989. While it is generally regarded as
providing adequate international standards of protection, some believe
that it should be updated account for advances in electronic
communications and information processing technology. Its members come
from the world's major legal traditions -- the Anglo-American common
law copyright system and the European civil law _droit d'auteur_
system. However, despite its level of detail, as previously noted, and
in part because it must accommodate differing legal traditions, in
some areas its standards may be insufficient to deal with the world of
digital dissemination of copyrighted works.
The principal treaty for the protection of neighboring rights, the
Rome Convention, was adopted in 1961, and is considered by many to
include standards that are inadequate for dealing with the problems
raised by current technological advances and the level of trade in the
products and services affected by its operation. It provides for the
protection of producers of phonograms against unauthorized
reproduction of their phonograms, for performers to prevent certain
reproductions and fixations of their performances and it provides
limited rights for broadcasting organizations. It also provides for
protection against certain "secondary uses" of phonograms, such a
broadcasting, but it contains the ability for members to reserve on
this right. The United States does not belong to the Rome Convention.
The Geneva Phonograms Convention provides for the protection of
phonograms against unauthorized reproduction and distribution for a
minimum term of 20 years. It does not provide for a performance right
in sound recordings. The United States belongs to the Geneva
Phonograms Convention.
WIPO has convened a Committee of Experts on a Possible Protocol to the
Berne Convention to account for developments since the 1971 revision
of the Convention, and a Committee of Experts on a New Instrument for
the Protection of Performers and Producers of Phonograms to consider
how to provide improved rights for performers and producers of
phonograms.
_ c. COPYRIGHT HARMONIZATION_
The performers and the kinds of performances to which neighboring
rights apply are not universally agreed. This has led to divergent
regimes for the protection of economically important rights, both
among industrialized and developing countries. A consequence of this
divergence is that U.S. performers and producers have been denied the
ability to share in remuneration for the use of their products and
performances in some countries. Heretofore, there has not been strong
support for the establishment of a system of statutory performers'
rights in the United States. Historically, this has been because of
the opposition of producers who are concerned that the establishment
of performers' rights could upset the balance of power among producers
and performers in contractual negotiations and collective bargaining.
Also, broadcasters have concerns over the possible implications that
such a course of harmonization might have for the establishment of
performance rights in sound recordings.
In addition to the traditional WIPO forum, other international bodies
now have a significant role in intellectual property policy
formulation. The recently-concluded Trade-Related Aspects of
Intellectual Property Agreement (hereinafter "TRIPs Agreement") under
the Uruguay round of trade negotiations in the General Agreement on
Tariffs and Trade (hereinafter "GATT") sets significant standards for
the protection of copyright and related rights. And most importantly,
it contains provisions to ensure that parties to the TRIPs Agreement
fully implement its obligations.
_ d. NATIONAL TREATMENT_
The principle of national treatment is the cornerstone of the great
international intellectual property treaties -- Berne and Paris. It is
also the keystone of international trade treaties, including, of
course, the GATT. It is of enormous significance to our copyright
industries. Generally, the principle of national treatment means that
under a nation's laws, a foreigner enjoys no lesser rights and
benefits than a citizen of that nation receives, subject to the
specific terms of the relevant international conventions. In other
words, a German work as to which copyright enforcement is sought in
the United States would be treated under the law exactly as if it were
a U.S. work for the purposes of the copyright law.
However, some argue that rights should be granted only on the basis of
reciprocity. This concept, called "material reciprocity," means that
we should grant a right to a foreigner only if his or her country
grants our citizens the same right. Under this scenario, the German
citizen would only be able to obtain protection under the U.S. law to
the extent that German law provided the same, or at least equivalent,
rights to a U.S. citizen.
_THE BERNE CONVENTION_
Article 5(1) and 5(2) of the Berne Convention establish the principle
of national treatment for works protected by copyright.[282] Under
Article 5(1), there is an obligation to grant to nationals of
countries of the Berne Union national treatment in respect of the
rights specifically covered by the Convention. This point is not
disputed.[283] However, with respect to any new rights which may be
hereafter granted, some have taken the position that the national
treatment obligation applies only to the minimum rights in the
Convention.[284]
_ THE ROME CONVENTION_
The fundamental problem with the Rome Convention is that, while it
generally imposes a national treatment obligation, it permits a number
of reservations and exceptions that allow a Member to avoid that
obligation for important rights otherwise provided for in the
Convention. Article 3.1 of the TRIPs Agreement provides that "[i]n
respect of performers, producers of phonograms and broadcasting
organizations, this obligation [national treatment] only applies in
respect of the rights provided under this Agreement."[285] It also
provides that a Member may avail itself of the "possibilities provided
in . . . paragraph 1(b) of Article 16 of the Rome Convention . . ."
relating to reciprocity for the broadcasting right in respect of
phonograms.[286]
_THE TRIPS AGREEMENT_
Additionally, the TRIPs Agreement includes a national treatment
obligation.[287] In respect of copyright the TRIPs national treatment
provision incorporates the standards of the Berne Convention, but in
respect of neighboring rights, it allows members to impose the
exceptions to national treatment permitted by the Rome
Convention.[288] Permitting such exceptions can lead to problems in
the implementation of a GII.
_THE NAFTA_
The NAFTA includes a very broad national treatment provision that does
not include the possibility of making the broad exceptions provided
for under the TRIPs agreement.[289]
_e. PRIVATE COPYING ROYALTY SYSTEMS_
The manner in which portions of the audio and video private copying
royalties that are collected in some European countries are
distributed to claimants may prove to be an impediment to future
development of the GII if a similar approach is adopted in respect of
digital information dissemination systems. As an example, France's Law
of July 3, 1985 (1985 Law) establishes a system of neighboring rights
protection for performers, audiovisual communication enterprises,
producers of phonograms and producers of videograms. The 1985 Law,
_inter alia_, grants specified right holders an entitlement to
equitable remuneration in respect of the private copying of their
works. Some of the 1985 law's provisions are based on reciprocity and
thus discriminate against, for example, foreign motion picture
interests. Consequently, those provisions may be inconsistent with
France's obligations under the Berne Convention and the UCC. If this
pattern is followed in implementing future legislation, serious
impediments to the development of the GII may arise.
_f. MORAL RIGHTS_
The author's moral rights are provided for under Article 6_bis_ of the
Berne Convention.[290] The nature and scope of moral rights varies
considerably from country to country. The fact that these rights are
non-transferable may create difficulties for the commercialization of
works in the NII environment. A current draft report of the multimedia
study committee of the Japanese Institute for Intellectual Property
suggests that there may be a need to either permit the specific waiver
of the right of integrity or to limit its application in the digital
world.[291]
_ B. PATENT_
Development of the NII will depend upon, and stimulate innovation in,
many fields of technology, especially computer software, computer
hardware and telecommunications. An effectively functioning patent
system that encourages and protects innovations in these fields of
technology is, therefore, important for the overall success of the
NII. The most significant issues related to the effects of the NII on
the patent system include the impact the NII will have on the quantity
and quality of information available from which to determine the
patentability of inventions, as well as to judge the validity of
patents.
The goals of the patent system are to encourage innovation and public
disclosure of advances in technology. To this end, the patent system
offers an incentive to inventors to publicly disclose their inventions
in exchange for the exclusive right to prevent others from making,
using or selling the patented inventions for 17 years.
Patent protection is available in the United States for inventions
without differentiation as to the field of technology:
". . . any new and useful process, machine, manufacture, or
composition of matter . . ." can be patented.[292] However, unlike
copyright protection, an inventor must specifically request protection
by filing a patent application and demonstrating that the invention
meets all of the statutory requirements of patentability.
Specifically, an invention must be new,[293] useful[294] and
nonobvious.295 In addition, the inventor must fully describe and
disclose the invention in the patent application. 296
Once a patent application has been filed with the Patent and Trademark
Office (PTO), the application is reviewed by an Examiner against the
"prior art" to determine whether the patentability requirements of
novelty ("new") and nonobviousness have been met. While there are
instances where non-public information constitutes prior art,
generally speaking, prior art includes information that is publicly
available prior to the filing date of a patent application.[297] An
invention satisfies the novelty requirement if it has not been
publicly disclosed prior to the filing date of the patent
application.[298] Novelty exists unless the prior art completely
discloses the invention that is claimed by the patent applicant.[299]
An invention satisfies the nonobviousness requirement if a "person of
ordinary skill in the art" would not have viewed the invention as
obvious in view of the prior art at the time the patent application
was filed.[300]
The specific categories of prior art that are defined in Section 102
of the Patent Act can be used to deny the grant of a patent, or to
invalidate a patent, on the grounds that the invention lacks novelty
or is obvious.[301] These include, generally speaking, patents issued
by the United States or by other countries; printed publications
distributed in the United States or abroad; evidence of public use or
public disclosure of an invention in the United States; and evidence
of a sale or offer to sell an invention in the United States.[302] The
NII will significantly improve the amount and availability of prior
art. This, in turn, will have an impact on patentability
determinations, whether made during the patent examination process or
during challenges to patent validity through litigation in the Federal
courts.
For example, a patent grants the owner the exclusive right to prevent
others from making, using or selling the invention as it is defined in
the patent.[303] A patent owner must exercise these patent rights
against alleged infringers or run the risk of not being able to do so
if found to have waited too long.[304] The patent owner has the burden
of establishing patent infringement. Patent infringement is
established by demonstrating that the accused product or process falls
within the scope of the patent claims.[305] A party accused of
infringement can avoid liability by asserting that the patent does not
cover, either literally or under the doctrine of equivalents, the
accused product or process.[306] The accused infringer can also assert
that the patent is either invalid or unenforceable, or both.
Parties can challenge the validity of a patent in the Federal district
courts or before the PTO. By statute, a patent is presumed valid.[307]
Thus, in district court, the party challenging patent validity must
demonstrate through clear and convincing evidence that the patent
fails to satisfy one or more of the statutory criteria of
patentability (e.g., novelty, utility, obviousness, or adequate
disclosure).[308] This is most often accomplished by submitting new
prior art which was not considered by the PTO Examiner. The accused
infringer then argues that this new prior art anticipates the claimed
invention (i.e. the invention is not new because someone else had done
it before the inventor) or that the claimed invention would have been
obvious to one of ordinary skill in the art based on this new "prior
art."
Likewise, prior art impacts the enforceability of a patent. For
example, parties can preclude the enforcement of a patent, without
specifically addressing the patent's validity. This is accomplished by
establishing that the patent owner either misused its patent rights,
or committed a fraud on the PTO incident to obtaining patent
protection. For example, if it can be shown that the inventor withheld
material prior art from the patent office so as to commit fraud on the
PTO, the patent may be found to be unenforceable against infringers,
even if the patent satisfies all patentability requirements.
In each of these scenarios, prior art plays an important role both in
defining the state of the art at the time a patent application is
filed and in justifying conclusions on the patentability of an
invention or the validity of a patent. Because of this, it is
imperative that all sources of information that relate to an invention
be integrated into patentability determinations.
Access to these sources of information, particularly patents and
printed publications, has been vastly improved through the use of
electronic or on-line database services. These services document the
existence and content of patents and printed publications, and in some
instances, provide access to the complete text and electronic images
of such documents. It is important to recognize that the information
that can be retrieved through these services invariably exists as an
original, paper document disseminated through traditional publication
channels (e.g., technical journals or publications, domestic and
foreign patent documents).
The NII will dramatically change the way information is prepared and
disseminated. It will improve the number, accessibility and quality of
traditional on-line services. It will also foster creation of new
forms of "electronic publications" that are different in character
from traditional paper-based publications. Examples of such electronic
publications could include electronic versions of traditional
paper-based publications that supplement or reorganize presentation of
the content of the paper-based publication; informally prepared
information such as postings on electronic information forums and
dissemination of news articles with technical content; and formally
designed and developed electronic publications that are not printed on
paper, but are entirely electronically disseminated.
Electronic publications such as these will supplement the wealth of
publicly accessible information that is used in patentability
determinations and validity challenges to issued patents. However,
these new types of electronically disseminated documents are different
in character from traditionally printed and indexed patents and
publications. For example, the information contained in the disclosure
of electronic documents may not be printed originally on paper, and as
such, may have no tangible evidence regarding the date the information
was first publicly disclosed or even as to its existence. No
guidelines or industry standards presently govern the memorialization
of either the contents or the date of public disclosure of information
in such documents. The degree of distribution of, or public
accessibility to electronic documents is not presently measured and
may prove unmeasurable. Yet, these are key factors used to determine
whether a document is in the prior art. In addition, the content of
such documents, particularly informally created documents, may not be
subject to any form of peer review or content screening. This, in
turn, could influence the evaluation of information in electronic
documents that could affect patentability. Likewise, these factors may
also have a direct impact on the challenges made to the validity of an
issued patent based on prior art.
_ C. TRADEMARK_
A trademark is quite different from either a copyright or a patent. A
trademark is any word, name, symbol or device, or any combination
thereof, that serves to identify and distinguish the source of one
party's goods or services from those of another party. A service mark
is the same as a trademark, except that it identifies and
distinguishes the source of services rather than goods. In this
report, the terms "trademark" and "mark" are intended to refer to all
types of marks.
The purpose of a trademark is twofold -- to identify the source of
products or services and to distinguish the trademark owner's goods
and services from those of others. As long as a trademark fulfills
these functions, it remains valid. Trademark ownership rights in the
United States arise through use of a mark. Continued use of a mark is
necessary to maintain trademark rights. The owner of a trademark is
entitled to the exclusive right to use the mark. This entitlement
includes the ability to prevent the use, by unauthorized third
parties, of a confusingly similar mark. Marks used by unrelated
parties are confusingly similar if, by their use on the same, similar,
or related goods or services, the relevant consumer population would
think the goods or services come from the same source.
Unlike patent and copyright law, Federal trademark law coexists with
state and common-law trademark rights. Therefore, registration at
either the Federal or state level is not necessary to create or
maintain ownership rights in a mark. For example, priority of
trademark rights between owners of confusingly similar marks,
regardless of whether the marks are Federally registered, is based
upon first use of the mark.[309]
Federal trademark law is embodied in the Lanham Act[310] and is based
upon the commerce clause of the Constitution.[311] Therefore, to
obtain a Federal trademark registration, in most cases[312] the owner
of a mark must demonstrate that the mark is used in a type of commerce
that may be regulated by Congress.[313] Additionally, the Trademark
Law Reform Act of 1988[314] amended the Lanham Act to establish
trademark rights, which vest upon registration following use of the
mark in commerce, as of the filing date of a trademark application
indicating a bona fide intent to use the mark in commerce.[315]
Remedies against trademark infringement and unfair competition are
available to trademark owners under both state and Federal law.[316]
In this regard, the owner of a Federal trademark registration has
certain benefits. In a court proceeding, registration on the Principal
Register constitutes _prima facie_ evidence of the registrant's
ownership of the mark.[317] Registration on the Principal Register may
also be used as a basis to block importation of infringing goods[318]
or to obtain remedies against a counterfeiter.[319] The Lanham Act
provides that under certain conditions the right to use a registered
mark may become incontestable.[320] Additionally, the Lanham Act
provides for cancellation of registrations on certain grounds.[321]
Existing legal precedent accepts electronic transmission of data as a
service and, thus, as a valid trademark use for the purpose of
creating and maintaining a trademark.[322] Additionally, existing
legal precedent applies the available remedies for infringement and
unfair competition to such acts occurring through the unauthorized use
of trademarks electronically.[323] However, in the future, with
widespread access to and use of the NII, both the legitimate and
infringing electronic uses of trademarks may increase. Further, unfair
competition may increase in the context of the NII to the extent that
it may be easier to copy or remove trademarks from electronically
transmitted information than from labeled products or from services
identified in print media.
The first opportunity for a court to define the legal relationship
between trademarks and the registration and use of site names on the
Internet is presented in a recently filed action in Federal district
court in the Southern District of New York. The owners of the MTV
cable network ("MTV") have filed an action seeking injunctive relief
and monetary damages from a former employee who is offering a daily
report about the rock music industry on the Internet using the site
name "mtv.com." MTV is alleging, _inter alia_, trademark infringement
and unfair competition.[324]
_ D. TRADE SECRET_
Unlike many of the other forms of intellectual property protection
previously mentioned, trade secrets are protected solely through state
law, not Federal law. Trade secret protection is very limited. A trade
secret holder is only protected from unauthorized disclosure and use
of the trade secret by others and from another person obtaining the
trade secret by some improper means.[325]
There are several factors used to determine if subject matter
qualifies as a trade secret. Among the factors considered are the
extent of measures taken by the trade secret owner to guard the
secrecy of the information and the ease or difficulty with which the
information could be properly acquired or duplicated by others.[326]
Based on these considerations, the general rule is that subject matter
cannot be successfully protected as a trade secret if it is widely
distributed. However, if adequate security precautions are taken to
ensure that access to the subject matter being distributed is treated
as secret, the subject matter may still be considered a trade secret.
Whether trade secret owners distribute their trade secrets through the
NII will largely depend on the extent that they believe that the
secrecy of the trade secret will not be compromised by such a
distribution. Consequently, if the NII is going to be used as a tool
for disseminating trade secret information the NII must be equipped
with adequate security measures to ensure that trade secrets
distributed through the NII will remain secret.[327]
In addition to the concerns regarding security precautions, issues of
jurisdiction may also arise in the context of using the NII as a
vehicle to transmit trade secrets. Because trade secret protection is
protected by state law, not Federal law, which state law controls the
resolution of a trade secrecy issue -- the place where the information
is downloaded off the NII or the place where the trade secret owner
first distributes the information via the NII for distribution -- may
become an issue in trade secret disputes. These jurisdictional issues,
however, are no more problematic than present jurisdictional issues
associated with the distribution of trade secrets and can be
adequately resolved by the choice of law rules presently codified in
state law.
To some degree whether trade secret owners distribute their trade
secrets through the NII may also depend on the type of information
products and services being disseminated. For instance, it has been
suggested that the most common way to protect software is through
trade secret protection.[328] Unlike most trade secret information,
computer programs can be copied and used without the copier ever
understanding or viewing the information in a comprehensible form.
Although the trade secrecy problems associated with computer programs
are not unique to the NII, the capabilities of the NII may cause these
problems to become more prevalent.
_II. TECHNOLOGY_
Technology can be used to help protect copyrighted works against
unauthorized access, reproduction, manipulation, distribution,
performance or display. It can also be useful in the authentication of
the integrity of copyrighted works and in the management and licensing
of the rights in such works. Protection and management schemes based
strictly on specific technologies may have limited usefulness due to
the rapidly evolving nature of these technologies. Furthermore, if the
systems developed are too cumbersome or complicated, consumers may
reject works protected under such systems. However, to the extent that
the marketplace will tolerate such measures, they can be useful in
protecting copyrighted works.[329]
Technology-based protection of digital works can be implemented
through hardware, software or a combination thereof. It can be
implemented at the level of the copyrighted work or at other, more
distant levels. It can be used to prevent or restrict access to a
work, as well as reproduction, adaptation, distribution, performance
or display of the work.
_A. CONTROLLING ACCESS TO PROTECTED WORKS_
Unauthorized access to copyrighted works can be denied in two general
ways: by restricting access to the source of the work, and by
restricting manipulation of the electronic file containing the work.
_1. CONTROLLING ACCESS AT THE SERVER LEVEL_
Distribution of digital works can be controlled by controlling access
to the source of the works -- information or data servers. Access to
these servers can vary from completely uncontrolled access (e.g., the
full contents of the server are accessible without restriction) to
partially controlled access (e.g., unrestricted access is granted to
only certain data on the server) to completely controlled access
(e.g., no uncontrolled access in any form is permitted). Access
control is affected through user identification and authentication
procedures (e.g., log-in name and password) that deny access to
unauthorized users to a server or to particular information on a
server.[330]
Nearly all information providers, including commercial on-line
services such as Compuserve and America Online and dial-up private
bulletin boards, not only control access to their systems but also
vary the nature of that access depending on the information a user
wishes to access (e.g., access to certain data is conditioned on
paying a higher fee, having greater access rights, etc.). On the
Internet, users can connect to public servers through protocols such
as gopher, file transfer protocol (ftp), telnet or the world wide web
(www). Some information providers on the Internet grant full
unrestricted access to all the information contained on their servers.
This means that anyone can access any data stored on the servers.
Other information providers restrict access to users with accounts or
grant only limited access to unregistered users. For example, using
ftp a user can often log on as an "anonymous" user (e.g., a user for
which no account has been created in advance), but access through
anonymous ftp is limited to certain data. Of course, an information
provider can elect not to provide uncontrolled access (e.g., permit
only those with accounts to access the server), provided appropriate
security measures are implemented.
Thus, control over access to a server may be used as one of the first
levels of protection for the works found on it.
_ 2. CONTROLLING ACCESS AT THE FILE LEVEL_
A second level of control over protected works can be exerted through
control measures tied to the electronic file containing the work. One
type of restriction can be implemented through "rendering" or
"viewing" software. Such systems require (1) a proprietary or unique
file format that can only be read by certain software and that is
developed or controlled by the information provider and (2) software
that incorporates both a "control" measure to prevent viewing or use
of a work without authorization from the information provider and
"manipulation" functions to permit the user to view or use the work.
Rendering or viewing software can be written to deny access if the
user enters unauthorized identification or an improper password.
Rendering software can also be written to deny access if the work is
not an authorized copy (provided that sufficient information regarding
authorized use is included in header information and it is sealed with
a digital signature).[331]
Another type of restriction is encryption. In its most basic form,
encryption amounts to a "scrambling" of data using mathematical
principles that can be followed in reverse to "unscramble" the data.
Encryption technologies can be used to deny access to the work in a
usable form. File encryption simply converts a file from a
manipulatable file format (e.g., a word processor document or a
picture file that can be opened or viewed by appropriate general
purpose software packages) to a scrambled format.[332] Authorization
in the form of possession of an appropriate password or "key" is
required to "decrypt" the file and restore it to its manipulatable
format.
Encryption techniques use "keys" to control access to data that has
been "encrypted." Encryption keys are actually numbers that are
plugged into a mathematical algorithm and used to scramble data using
that algorithm. Scrambling simply means that the original sequence of
binary digits (i.e., the 1s and 0s that make up a digital file) is
transformed using a mathematical algorithm into a new sequence of
binary digits (i.e., a new string of 1s and 0s). The result is a new
sequence of digital data that represents the "encrypted" work.[333]
Anyone with the key (i.e., the number used to scramble the data
according to the specified mathematical algorithm) can decrypt the
work by plugging the number into a program that applies the
mathematical algorithm in reverse to yield the original sequence of
digital signals.[334] Although perhaps most commonly thought of as a
tool for works transmitted via computer networks, encryption can be
and is used with virtually all information delivery technologies,
including telephone, satellite and cable communications. Of course,
once the work is decrypted by someone with the key, there may be no
technological protection for the work if it is stored and subsequently
distributed in its "decrypted" or original format.
Requests for the export of cryptographic technologies are reviewed by
the U.S. State Department. Although some cryptographic technologies
used to encrypt communications are restricted from export,
technologies used to identify and authenticate users and files are
generally not restricted. There is an ongoing review of policies
governing the export of computer and networking technologies, and
there has been some relaxation of prior controls.
_B. CONTROLLING USE OF THE WORK_
Hardware and/or software can provide protection against unauthorized
uses of copyrighted works. For instance, the Audio Home Recording Act
requires circuitry in digital audio recording devices and digital
audio interface devices that controls serial copying.[335] The
circuitry in the hardware is programmed to read certain coding
information contained in the "digital subcode channel" of digital
sound recordings and broadcasts. Based on the information it reads,
the hardware circuitry will either permit unrestricted copying, permit
copying but label the copies it makes with codes to restrict further
copying, or disallow copying. The serial copy management system
implemented by this circuitry allows unlimited first generation
copying -- digital reproduction of originals (such as CDs distributed
by record companies), but prevents further digital copying using those
reproductions.[336]
Systems such as these can be implemented through hardware, software or
both, using the concepts discussed above (e.g., rendering software and
encryption technology). For example, files containing works can
include instructions used solely to govern or control distribution of
the work. This information might be placed in the "header" section of
a file[337] or another part of the file. In conjunction with receiving
hardware or software, the information, whether in the header or
elsewhere, can be used to limit what can be done with the original or
a copy of the file containing the work. It can limit the use of the
file to read-, view-, or listen-only. It can also limit the number of
times the work can be retrieved, opened, duplicated or printed.
_C. AUTHENTICATING THE WORK_
Mathematical algorithms can be used to create digital signatures that,
in effect, place a "seal" on a digitally represented work. These
algorithms can be implemented through software or hardware, or both.
Digital signatures can play an important role in ensuring data
integrity.
A digital signature is a unique sequence of digits that is computed
based on (1) the work being protected, (2) the digital signature
algorithm being used, and (3) the key used in digital signature
generation.[338] Generating a digital signature uses cryptographic
techniques, but is not encryption of the work; the work may remain
unencrypted so it can be accessed and used without decryption. In
fact, digital signatures and encryption can be used simultaneously to
protect works. Generally, a signature is computed for a copyrighted
work first and then the work (including the seal) is encrypted. When
the work is to be used, the work is decrypted, then the signature
(i.e., the seal) is verified to be sure the work has not been modified
(either in its original or encrypted form). If the work is never
changed, the seal need never be removed or changed. If the work is
changed, a new seal must be computed on the revised information.
Generating a digital signature is called "signing" the work. Both the
digital signature and the public key are often appended to signed
copyrighted works (or they may be stored in a header). The signature
serves as a "seal" for the work because the seal enables the
information to be independently checked for unauthorized
modification.[339] If the seal is verified (independently computed
signature matches the original signature), then the copyrighted work
is a bona fide copy of the original work -- i.e., nothing has been
changed in either the header or the work itself.
_ D. MANAGING RIGHTS IN THE WORK_
Software-based systems for tracking and monitoring uses of copyrighted
works are contemplated in the development of the NII. Software-based
systems may also be used to implement licensing of rights and metering
of use. A combination of access controls, encryption technologies and
digital signatures can be used by copyright owners to protect, license
and authenticate their works on the NII. These security measures must
be carefully designed and implemented to ensure that they protect the
copyrighted works and are not defeated.
Information included in files can be used to inform the user about
ownership of rights in a work and authorized uses of it. For instance,
information can be stored in the header of a file regarding
authorship, copyright ownership, date of creation or last
modification, and terms and conditions of authorized uses. It can also
support search and retrieval based on bibliographic records.
Electronic licenses may be used in connection with works offered via
the NII. Electronic contracts may be analogous to the "shrink wrapped"
licenses used for prepackaged software.[340] Providers may inform the
user that a certain action -- the entering of a password, for
instance, to gain access to the service or a particular work, or
merely the use of the service -- will be considered acceptance of the
specified terms and conditions of the electronic license. Payments for
such licenses also may be made via the NII.[341]
The Library of Congress' Electronic Copyright Management System may be
instrumental in rights management. The proposed system, which is under
development, has three distinct components: (1) a registration and
recordation system, (2) a digital library system with affiliated
repositories of copyrighted works, and (3) a rights management
system.[342] The system will serve as a testbed to gain experience
with the technology, identify issues, prototype appropriate standards,
and serve as a working prototype if full deployment is pursued later.
_E. DEVELOPMENT OF STANDARDS_
Some level of interconnection, interoperability and standardization of
telecommunications, computer, wireless, satellite, broadcast and cable
TV technologies and networks may be essential to achieve the
Administration's vision of the NII. Government, industry or the
marketplace may desire or require certain technological standards
related to the NII. There has been much discussion of standardization
of encryption technology, protocols, interfaces, headers and
electronic licenses for purposes such as interoperability,
interconnectivity and ease of information management or use.
_III. EDUCATION_
Effective education of the public about intellectual property rights
is crucial to the successful development of the NII. There seems to be
an attitude by some on the Internet, for instance, that you check your
copyrights at the door when you enter that domain. There is a general
lack of awareness by the public about intellectual property rights in
their own works, as well as in the works of others. The task of
education, however, is not without difficulty.
Perhaps the best places to start will be the schools, where millions
of children will be connected to the NII. There is, however, no
"national curriculum" to which a special section on NII-related
intellectual property rights could be added. However, a development
and distribution process for wide-spread intellectual property
education can be established, by working with, among others, those
responsible for defining the role the advanced information
infrastructure will play in schools, as well as the state and national
educational organizations involved in setting the educational
principles and standards utilized in the curricula of more than 17,000
school districts throughout the United States.
A brief review of the major organizations involved in education
technology for schools is set forth below. This list is not intended
to be exhaustive. Efforts to effectively distribute an intellectual
property education program will involve national, state and local
organizations.
In addition to local school district officials, there are numerous
educational organizations actively involved in devising plans and
recommendations on how services available via the NII should be
delivered and used by schools. The school audience to be reached
includes students of all ages, as well as administrators, teachers and
professors. Both public and private school systems must be involved.
The kindergarten to twelfth-grade (K-12) school audience to be
educated about intellectual property and the NII can be broadly
classified into three segments: learners, pre-service, and in-service
or professional development. The "learners" segment consists of
children who are in the school system. The "pre-service" segment
includes students currently in the school system who will go on to
become teachers. The "in-service" or "professional development"
segment consists of those professionals who are currently teachers or
education administrators. Each group must be reached. The teachers who
are educated about intellectual property rights today will be replaced
in the future by the children moving through the school systems now. A
similar approach can be taken in defining the audience to be reached
on the university and graduate school level.
An intellectual property education program could be developed by
individual state school officials, or distributed to them for their
consideration. The Council of the Chief State School Officers (CCSSO)
could be helpful in that regard.
Other educational organizations could also be useful in the promotion
of intellectual property education. These organizations include the
National Education Association, the American Federation of Teachers,
the National Board for Professional Teaching Standards, the National
Association of Teachers Colleges, the American Association of
Community Colleges, the National School Board Association, the
National Association of Elementary School Principals, the National
Association of Secondary School Principals, the National Association
of Independent Schools , the National Council of Teachers of
Mathematics, the National Council of Teachers of English, and the
National Science Teachers Association. Contact with the National
Parent Teachers Association may also prove useful in reaching the
parents of school-age children.
Intellectual property education can also be incorporated into the
plans and recommendations that are currently being developed by
educational organizations on how educators can best utilize the NII.
The National Education Goals Panel and the recently created National
Educational Standards and Improvement Council ("NESIC") are both
involved in the mission of promoting national education goals,
including educational standards. As part of this effort, for example,
the National Education Goals Panel is working on a set of principles
for technology and how technology can be used in promoting education.
Intellectual property education materials could be included as part of
the Panel's principles under development in the area of staff and
child development. Educational technology specialists in the
Department of Education and other educational organizations, who share
the objective of bringing the NII to schools, are also great
resources.
The public library is another ideal place for intellectual property
education. National library organizations, such as the American
Library Association, the American Association of Law Libraries and the
Special Libraries Association, could provide invaluable assistance.
The nationwide network of 78 Patent and Trademark Depository Libraries
could also be instrumental in the dissemination of intellectual
property information to the public. Many of these depository libraries
are affiliated with universities and colleges throughout the country.
Additional means of education, particularly those that use the NII
itself, will also be explored and developed.
_IV. PRELIMINARY FINDINGS AND RECOMMENDATIONS_
These findings and recommendations represent the result of the Working
Group's examination and analysis to date. While the findings and
recommendations are preliminary, specific language is offered with any
proposals for legislative change to elicit and facilitate more
detailed public comment.
_A. LAW_
It is difficult for intellectual property laws to keep pace with
technology. When technological advances cause ambiguity in the law,
courts rely on the law's purposes to resolve that ambiguity. However,
when technology gets too far ahead of the law, and it becomes
difficult and awkward to apply the old principles, it is time for
reevaluation and change. "Even though the 1976 Copyright Act was
carefully drafted to be flexible enough to be applied to future
innovations, technology has a habit of outstripping even the most
flexible statutes."[343]
The coat is getting a little tight.[344] There is no need for a new
one, but the old one needs a few alterations.
_1. DISTRIBUTION BY TRANSMISSION_
_ a. THE DISTRIBUTION RIGHT_
The Copyright Act gives a copyright owner the exclusive right "to
distribute _copies or phonorecords_ of the copyrighted work" to the
public. A copy or phonorecord is a _material object_ in which a
copyrighted work is fixed, such as a compact disc, a videocassette or
a paperback book. It is not clear under the current law that a
transmission can constitute a distribution of copies or phonorecords
of a work. Yet, in the world of high-speed, communications systems, it
is possible to transmit a copy of a work from one location to another.
This may be the case, for instance, when a computer program is
transmitted from one computer to ten other computers. When the
transmission is complete, the original copy remains in the
transmitting computer and a copy resides in the memory of, or in
storage devices associated with, each of the other computers.[345] The
transmission results essentially in the distribution of ten copies of
the work. Therefore, the Working Group recommends that the Copyright
Act be amended to reflect that copies of works can be distributed to
the public by transmission, and such transmissions fall within the
exclusive distribution right of the copyright owner.
The Working Group recommends that the Copyright Act be amended to
recognize that copies or phonorecords of works can be distributed to
the public by transmission, and that such transmissions fall within
the exclusive distribution right of the copyright owner. The Working
Group recommends that Section 106(3) be amended to read as
follows:[346]
(3) to distribute copies or phonorecords of the copyrighted work to
the public by sale or other transfer of ownership, or by rental,
lease, or lending_, or by transmission_.
The Working Group also recommends other related amendments to the
definition of "transmit" and the importation prohibitions.
A transmission is not necessarily a transmission of a _performance_ or
_display_ of a work.[347] A transmission may be a transmission of a
_reproduction_ of a work. Therefore, the Working Group recommends that
the definition of "transmit" in Section 101 of the Copyright Act be
amended to clarify that reproductions, as well as performances and
displays, can be transmitted, and to delineate between those
transmissions that are communications of performances or displays and
those that are distributions of reproductions.
How to delineate between these types of transmissions is a difficult,
but necessary, issue to resolve. The transmissions themselves hold no
clues; one type often looks the same as the other during the
transmission. To delineate between those transmissions that are
communications of performances or displays and those that are
distributions of reproductions, then, one must look at both ends of
the transmission. Did the transmitter intend to communicate a
performance or display of the work or, rather, to distribute a
reproduction of the work? Did the receiver simply hear or see the work
or, rather, receive a copy of it? If the transmitter intends to both
communicate a performance or display and distribute a reproduction --
or if the receiver hears or sees a performance or display of the work
and receives a copy of it, what is the transmission? The resolution of
these issues should rest upon a "primary purpose or effect" analysis
of the transmission.
The Working Group, therefore, recommends that the definition of
"transmit" be amended to read as follows:
To "transmit" a performance or display is to communicate it by any
device or process whereby images or sounds are received beyond the
place from which they are sent. _To "transmit" a reproduction is to
distribute it by any device or process whereby a copy or phonorecord
of the work is fixed beyond the place from which it was sent. In the
case when a transmission may constitute both a communication of a
performance or display and a distribution of a reproduction, such
transmission shall be considered a distribution of a reproduction if
the primary purpose or effect of the transmission is to distribute a
copy or phonorecord of the work to the recipient of the transmission.
_
The Working Group also recommends that the prohibitions on importation
be amended to reflect the fact that, just as copies of copyrighted
works can be distributed by transmission in the United States, they
can also be imported into the United States by transmission. Although
we recognize that the U.S. Customs Service cannot, for all practical
purposes, enforce a prohibition on importation by transmission, given
the global dimensions of the information infrastructure of the future,
it is important that copyright owners have the other remedies for
infringements of this type available to them. Therefore, the Working
Group recommends that Section 602 of the Copyright Act be amended to
read as follows:
(a) Importation into the United States, _whether by carriage of
tangible goods or by transmission,_ without the authority of the owner
of copyright under this title, of copies or phonorecords of a work
that have been acquired outside the United States is an infringement
of the exclusive right to distribute copies or phonorecords under
section 106, actionable under section 501.
_b. PUBLICATION_
The legislative history to the Copyright Act makes clear that "any
form of dissemination in which a _material object_ does not _change
hands_ . . . is not a publication no matter how many people are
exposed to the work."[348] Thus, a transmission of a performance or
display via the NII would not constitute publication, because,
technically, a material object does not change hands.[349] However, in
the case of a transmission of a reproduction, the recipient of the
transmission ends up with a copy of the work. Therefore, the Working
Group recommends that the definition of "publication" in Section 101
of the Copyright Act be amended to include the concept of distribution
by transmission:
"Publication" is the distribution of copies or phonorecords of a work
to the public by sale or other transfer of ownership, or by rental,
lease, lending, _or by transmission_. The offering to distribute
copies or phonorecords to a group of persons for purposes of further
distribution, public performance, or public display, constitutes
publication. A public performance or display of a work does not of
itself constitute publication.[350]
_c. FIRST SALE DOCTRINE_
The first sale doctrine allows the owner of a particular,
lawfully-made copy of a work to dispose of it in any manner, with
certain exceptions,[351] without infringing the copyright owner's
exclusive right of distribution. It seems clear that the first sale
model -- in which the copyright owner parts company with a tangible
copy -- should not apply with respect to distribution by transmission,
because under current applications of technology, a transmission
involves both the reproduction of the work and the distribution of the
reproduction. In the case of transmissions, the owner of a particular
copy of a work does not "dispose of the possession of _that_ copy or
phonorecord." A copy of the work remains with the first owner and the
recipient of the transmission receives a reproduction of the work.
Therefore, to make clear that the first sale doctrine does not apply
to transmissions, the Working Group recommends that Section 109 of the
Copyright Act be amended to read as follows:
(a) _(1)_ Notwithstanding the provisions of section 106(3), the owner
of a particular copy or phonorecord lawfully made under this title, or
any person authorized by such owner, is entitled, without the
authority of the copyright owner, to sell or otherwise dispose of the
possession of that copy or phonorecord.
_(2) This subsection does not apply to the sale or other disposal of
the possession of that copy or phonorecord by transmission._
_d. OTHER RELATED AMENDMENTS_
The legislative changes outlined above give rise to some difficult
issues. The term "distribute" (or a variant form of the term), which
is not defined, is used more than 90 times in the Copyright Act.[352]
Moreover, the term is used in the definition of "publication," which,
in its variant forms, is used more than 100 times. Therefore, care
must be taken to identify and analyze all of the ramifications of a
change in the Section 106 right to distribute.
The Working Group is in the process of completing that process and
welcomes public comment in this regard. The Working Group is analyzing
whether each of the limitations of the copyright owner's distribution
right should apply with respect to distribution by transmission.[353]
_2. TECHNOLOGICAL PROTECTION_
The ease of infringement and the difficulty of detection and
enforcement will cause copyright owners to look to technology, as well
as the law, for protection of their works. However, it is clear that
technology can be used to defeat any protection technology provides.
The Working Group finds that legal protection alone may not be
adequate to provide incentive to authors to create and to disseminate
works to the public, unless the law also provides some protection for
the technological processes and systems used to prevent unauthorized
uses of copyrighted works.
Sufficient protection cannot be gained through suits for contributory
infringement. Under the _Sony_ decision, a manufacturer is not liable
for contributory infringement if the device is _capable_ of a
"substantial noninfringing use," even if the device is _rarely_ or
_never_ put to those uses, and even if the use to which it is
_primarily_ put is infringing.
The Working Group finds that prohibition of devices, products,
components and services that defeat technological methods of
preventing unauthorized use is in the public interest. Consumers of
copyrighted works pay for the acts of infringers. The price of
copyrighted works for legitimate users is higher due to infringement
losses suffered by copyright owners. The public will also have access
to more works via the NII if copyright owners can more effectively
protect their works from infringement.
Therefore, the Working Group recommends that the Copyright Act be
amended to prohibit the importation, manufacture and distribution of
devices, as well as the provision of services, that defeat
anti-copying systems.
Legislation of this type is not unprecedented. The Copyright Act
already protects sound recordings and musical works by prohibiting the
circumvention of any program or circuit that implements a serial copy
management system or similar system included in digital audio
recording devices and digital audio interface devices. Section 1002
provides:
No person shall import, manufacture, or distribute any device, or
offer or perform any service, the primary purpose or effect of which
is to avoid, bypass, remove, deactivate, or otherwise circumvent any
program or circuit which implements, in whole or in part, a [serial
copy management system or similar system].[354]
The Communications Act includes a similar provision:
Any person who manufactures, assembles, modifies, imports, exports,
sells, or distributes any electronic, mechanical, or other device or
equipment, knowing or having reason to know that the device or
equipment is primarily of assistance in the unauthorized decryption of
satellite cable programming, or is intended for any other activity
prohibited by [Section 605(a)] shall be fined not more than $500,000
for each violation, or imprisoned for not more than 5 years for each
violation, or both. For purposes of all penalties and remedies
established for violations of this paragraph, the prohibited activity
established herein as it applies to each such device shall be deemed a
separate violation.[355]
Precedent for this type of legislation is also found in the
international arena. The North American Free Trade Agreement requires
each party to make it a criminal offense to "manufacture, import,
sell, lease or otherwise make available a device or system that is
primarily of assistance in decoding an encrypted program-carrying
satellite signal without the authorization of the lawful distributor
of such signal . . . ."[356] In 1988, the United Kingdom enacted
legislation prohibiting the manufacture, distribution or sale of a
device designed or adapted to circumvent copy-protection systems.[357]
The Working Group recommends that Chapter 5 of the Copyright Act be
amended to include the following new section 512:
_No person shall import, manufacture or distribute any device,
product, or component incorporated into a device or product, or offer
or perform any service, the primary purpose or effect of which is to
avoid, bypass, remove, deactivate, or otherwise circumvent, without
authority of the copyright owner or the law, any process, treatment,
mechanism or system which prevents or inhibits the exercise of any of
the exclusive rights under Section 106._
The Working Group recommends other related amendments to provide civil
causes of action and remedies for violations of the proposed
prohibition. The Working Group recommends that Section 501 of the
Copyright Act be amended to read as follows:
(a) Anyone who violates any of the exclusive rights of the copyright
owner as provided by sections 106 through 118 or of the author as
provided in section 106A(a), or who imports copies or phonorecords
into the United States in violation of section 602, is an infringer of
the copyright or right of the author, as the case may be. _Anyone who
violates section 512 is an infringer of the copyright in a work that
utilizes the process, treatment, mechanism or system which the
violator's device, product, component or service circumvents._
The Working Group recommends that Section 503 of the Copyright Act be
amended to read as follows:
(a) At any time while an action under this title is pending, the court
may order the impounding, on such terms as it may deem reasonable, of
all copies or phonorecords claimed to have been made or used in
violation of the copyright owner's exclusive rights, and of all
plates, molds, matrices, masters, tapes, film negatives, or other
articles by means of which such copies or phonorecords may be
reproduced_, and of all devices, products or components claimed to
have been imported, manufactured or distributed in violation of
section 512_.
(b) As part of a final judgment or decree, the court may order the
destruction or other reasonable disposition of all copies or
phonorecords found to have been made or used in violation of the
copyright owner's exclusive rights, and of all plates, molds,
matrices, masters, tapes, film negatives, or other articles by means
of which such copies or phonorecords may be reproduced_, and of all
devices, products or components found to have been imported,
manufactured or distributed in violation of section 512._
The Working Group also recommends that Section 506 of the Copyright be
amended to read as follows:
(a) Criminal Infringement. -- Any person who infringes a copyright
willfully and for purposes of commercial advantage or private
financial gain shall be punished as provided in section 2319 of title
18.
(b) Forfeiture and Destruction. -- When any person is convicted of any
violation of subsection (a), the court in its judgment of conviction
shall, in addition to the penalty therein prescribed, order the
forfeiture and destruction or other disposition of all infringing
copies or phonorecords and all implements, devices_, products,
components_ or equipment used in the manufacture of such infringing
copies or phonorecords _infringement_.
The proposed prohibition on the importation, manufacture and
distribution of devices, products and components, and the provision of
services, that circumvent anti-copying systems is intended to assist
copyright owners in the protection of their works.[358] Copyright
owners who use anti-copying systems to protect their works may bring
actions for infringement against persons who, _inter alia_,
manufacture or distribute devices whose primary purpose or effect is
circumvention of those systems. The Working Group recognizes, however,
that copyright owners may wish to use such systems to prevent the
unauthorized reproduction, for instance, of their works, but may also
wish to allow some users to deactivate the systems. Therefore, the
proposed legislation prohibits only those devices or products, the
primary purpose or effect of which is to circumvent such systems
_without authority_. That authority may be granted by the copyright
owner or by limitations on the copyright owner's rights under the
Copyright Act.
Standing to bring actions for violations of the proposed legislation
is granted only to copyright owners whose works are protected by the
system that the violator's device, product, component or service
circumvents; the manufacturers of anti-copying systems defeated by
violators may not bring actions for the defeat of such systems.
The Working Group is not without some concerns regarding this
proposal, particularly with regard to works whose term of copyright
protection expires but are still protected by anti-copying systems,
and works in the public domain. However, the Working Group believes
the "primary purpose or effect" standard will allow for the
distribution of devices that deactivate the anti-copying systems used
in such works, and that the benefits of the proposed legislation
outweigh the possible problems.
_3. COPYRIGHT MANAGEMENT INFORMATION_
In the future, the copyright management information associated with a
work -- such as the name of the copyright owner and the terms and
conditions for uses of the work -- may be critical to the efficient
operation and success of the NII. The public should be protected from
fraud in the creation or alteration of such information. Therefore,
the Working Group recommends that the Copyright Act be amended to
prohibit fraudulent inclusion of copyright management information and
fraudulent removal or alteration of such information. The Working
Group recommends that Section 101 of the Copyright Act be amended to
include the following definition:
_"Copyright management information" means information associated with
a copyrighted work, including, but not limited to, the name and other
identifying information of the copyright owner, the terms and
conditions for uses of the work, and identification codes such as an
ISBN number._
The Working Group also recommends that Section 506 of the Copyright
Act, which contains the prohibitions against fraudulent copyright
notices and fraudulent removal of copyright notices, be amended to
include the following new subsections (g) and (h):
_(g) Fraudulent Copyright Management Information. -- Any person who,
with fraudulent intent, digitally links with a copy of a copyrighted
work copyright management information that such person knows to be
false, or who, with fraudulent intent, publicly distributes or imports
for public distribution any work with which copyright management
information that such person knows to be false is linked, shall be
fined not more than $2,500._
_(h) Fraudulent Removal of Copyright Management Information. -- Any
person who, with fraudulent intent, removes or alters any copyright
management information digitally linked with a copy of a copyrighted
work shall be fined not more than $2,500._
_ 4. PUBLIC PERFORMANCE RIGHT_
Transmissions of sound recordings may eventually replace the current
forms of distribution of phonorecords. In the very near future,
consumers will be able to receive digital transmissions of sound
recordings on demand -- for performance in the home or for downloading
-- from the so-called celestial jukebox. The legal nature of such
transmissions -- whether they are performances or distributions -- has
been widely debated. As discussed above, the Working Group recommends
that Section 106 of the Copyright Act be amended to make clear that
copies or phonorecords can be distributed by transmission. The Working
Group also recommends that a "primary purpose or effect" test be used
to determine whether a transmission is a performance (or display) or a
distribution. However, many of these transmissions will clearly
constitute exercise of the public performance right -- a right which
the Copyright Act fails to grant to copyright owners of sound
recordings.[359]
The lack of a public performance right in sound recordings under U.S.
law is an historical anomaly that does not have a strong policy
justification -- and certainly not a legal one. Sound recordings are
the only copyrighted works that are capable of being performed that
are not granted that right. Therefore, to play a record on the radio
without infringement liability, a radio station must get a license
from, and pay a royalty to, the copyright owner of the underlying
musical work (i.e., the person or entity who owns the rights in the
notes and the lyrics), but it does not have to obtain permission from,
or pay a license fee to, the copyright owner of the sound recording or
the performer on the record. The Working Group believes that it is
time to rectify this inequity.
The Working Group notes that the Administration supports two bills
introduced in Congress that would grant a limited performance right to
sound recordings. The bills, H.R. 2576 and S. 1421, would add to the
exclusive rights of a copyright owner in a sound recording the right
to perform or authorize the performance of the sound recording by
"digital transmission." The right granted in the bill is not the full
performance right granted to other copyrighted works. For instance,
the legislation would not change the law with respect to live public
performances. It would also not touch analog transmissions -- the
transmissions currently received over the radio. It would only grant a
right with respect to transmissions in a digital format -- those that
pose the greatest threat to the copyright owners of sound recordings.
_ 5. FAIR USE_
The Working Group has significant concerns regarding the ability of
the limitations on copyright owners' exclusive rights -- particularly
those limitations found in Sections 107 (fair use), 108 (library
exemptions) and 110(1) and (2) (educational uses) -- to provide the
public with adequate access to copyrighted works transmitted via the
NII. As more and more works are available primarily or exclusively
on-line, it is critical that researchers, students and other members
of the public have opportunities _on-line_ equivalent to their current
opportunities _off-line_ to browse through copyrighted works in their
schools and public libraries.
The Copyright Act exists for the benefit of the public. To fulfill its
constitutional purpose, the law should strive to make the information
contained in protected works of authorship freely available to the
public. "Freely available," of course, does not necessarily mean
"available free." The Working Group does not believe that authors
should be required to donate access time to their works on-line, but
some reasonable approach must be adopted to ensure that the
economically disadvantaged in this country are not further
disadvantaged or disenfranchised by the information revolution. Public
libraries and schools, and the access to information that they
provide, have been important safeguards against this nation becoming a
nation of information "haves" and "have nots." We must ensure that
they continue to be able to assume that role.
Guidelines for library and educational use of printed matter and music
were voluntarily adopted by diverse parties and set out in the House
and Conference reports accompanying the 1976 revisions to the
Copyright Act.[360] While the principles should still be applicable,
it is difficult and, perhaps, inappropriate, to apply the specific
language of some of those guidelines in the context of digital works
and on-line services.
Therefore, the Working Group will sponsor a conference to bring
together copyright owner and user interests to develop guidelines for
fair uses of copyrighted works by and in public libraries and schools.
To increase the productivity of the conference, the number of
_participants_ will be limited. However, attendance at the conference
will be open to the public. Those wishing to participate in the
conference should send a one-page request to Terri A. Southwick,
Attorney-Advisor, Office of Legislative and International Affairs,
U.S. Patent and Trademark Office, Box 4, Washington, D.C. 20231.
Requests must be received by July 25, 1994, and should include a brief
description of the interests that would be represented at the
conference by the requestor.
The location and date of the conference will be announced in the
press, on the IITF Bulletin Board, and in the _Federal Register_.
_ 6. LICENSING_
With limited exceptions, intellectual property law leaves the
licensing of rights to the marketplace. In certain circumstances,
particularly where transaction costs are believed to dwarf
per-transaction royalties, Congress has found it necessary to provide
for compulsory licenses.[361] The Working Group finds that under
current conditions, additional compulsory licensing of intellectual
property rights is neither necessary nor desirable. Transaction costs
-- and the attendant savings from compulsory licensing -- can be
minimized in a digital environment. The marketplace should be allowed
to develop whatever legal licensing systems may be appropriate for the
NII.
_7. INTERNATIONAL_
There is little dispute that worldwide high-speed digital
communications networks will have an enormous effect on the way in
which works of authorship will be created, stored, communicated to the
public, distributed and paid for. This communication revolution is now
bringing new opportunities and new challenges to creators and users of
intellectual property. The full implementation of the NII and the GII
will have an immense effect on our economy, and implementation of such
systems internationally will have an equally broad impact on
world-wide commerce. We must be committed to finding the means to
preserve the integrity of intellectual property rights in the
materials that will flow in the commerce created in this environment.
This is a daunting challenge in the context of the U.S. domestic
market. Today we are faced with an even greater challenge, to lay the
groundwork for an international basis which ensures that the digital
revolution will not disadvantage those whom we seek to protect.
As we move toward a world where dissemination of entertainment and
information products through on-demand delivery services operating
through interactive digital information communications networks is the
norm, it may be necessary to harmonize levels of protection under
disparate systems of copyright, authors' rights and neighboring
rights, and consideration should be given to ways to bridge the gaps
among these systems.
If the GII as well as national NIIs are to flourish, then the
intellectual property rights that will undergird the economic
structure supporting these infrastructures must unequivocally be
granted in national legislation fully on the basis of national
treatment for _all_ rights and benefits. However, there is some
controversy over the scope of the national treatment obligation under
the Berne Convention and its application to what some may regard as
newly created rights and subject matter. Similar questions arise under
other international copyright and neighboring rights conventions as
will be later discussed.
U.S. copyright legislation has granted rights that some may regard as
new rights -- rental rights in computer programs, sound recordings,
and musical works embodied in sound recordings -- exclusively on the
basis of national treatment. The United States has instituted a system
of royalties on blank digital audio recording media and digital audio
recorders. Benefits from these rights have all been granted on the
basis of full national treatment. We believe that this is consistent
with our obligations under the Berne Convention and other
international intellectual property and trade treaties and agreements.
The author or rights holder should be able to realize fully the
economic benefits flowing from the free exercise of his or her rights
in any country participating in a GII. This is required by Article 5
of the Berne Convention. To do otherwise in either a Berne Protocol or
another agreement on copyright protection would be contrary to Article
20 because it would be a derogation of rights existing under Berne and
not be an Agreement to "grant to authors more extensive rights than
those granted by the Convention, or contain other provisions not
contrary to this Convention" as provided for under Article 20.[362] To
protect new works or to grant new rights in respect of those or
presently protected works on the basis of reciprocity, would be
contrary to the letter and the spirit of the Convention.
As the GII continues to develop through the international
interconnection of NIIs, rules must be formulated to protect the
economic rights of providers of entertainment and information
products. Such rules should be based on principles of national
treatment along the lines of the following:
1. Each country participating in the GII shall accord to nationals of
another country participating in the GII no less favorable treatment
than it accords to its own nationals with regard to all rights and
benefits now, or hereafter, granted under its domestic laws in respect
of literary and artistic works or fixations[363] embodying such works.
2. Benefits shall include the same possibility to exploit and enjoy
rights in the national territory of a country participating in the GII
as the respective country grants to its own nationals.
3. No country participating in the GII shall, as a condition of
according national treatment, require rights holders to comply with
any formalities in order to acquire rights in respect of literary and
artistic works or fixations embodying such works.
One of the most important issues will be what is the nature of a
dissemination of a work or a fixation of a work in digital format? Is
it a public performance of the work or fixation, an act of
reproduction, or a distribution? How do rules concerning the right of
importation apply in a digital environment? Just as these questions
are critical in the domestic context, they are equally acute in the
context of international treaties and harmonization of laws.
Additionally, the issue of multimedia works will take on an important
international dimension. If these are regarded at the international
level as works in a new, separate category, the issue of their
coverage under the existing conventions and the rule of national
treatment will be open to debate. If, however, they are subsumed into
the existing categories of works, establishing meaningful rules
internationally will be simplified.
Further study to determine what other rights may need to be adapted to
the emerging digital environment are underway both in domestic and
international fora. However some issues merit identification here, and
one of those is the level of protection to be accorded to sound
recordings.
Many believe that the time has come to bring protection for performers
and producers of sound recordings into line with the protection
afforded to the creators of other works protected under the Berne
Convention. This includes providing high-level standards for rights
and benefits granted on the basis of national treatment. This is
necessary for a number of reasons. First, there is no just reason to
accord a lower level of protection to one special class of creative
artists. Second, the extent of international trade in sound recordings
makes it imperative that standards of protection be harmonized at a
high level. Third, and perhaps most importantly, the digital
communications revolution -- the creation of advanced information
infrastructures -- is erasing the distinctions among different
categories of protected works and sound recordings and the uses made
of them.
Concerns have been raised over the extent and scope of moral rights in
the world of digital communications. Some believe that the ability to
modify and restructure existing works make moral rights more important
than ever before. Others take the view that moral rights must be
rethought in the digital world. We agree with this view. New thought
must be given to the scope, extent and waivability of moral rights in
digitized information.
The harmonization issues most relevant to the NII arise in the context
of WIPO efforts to establish a Possible Protocol to the Berne
Convention (Berne Protocol) and a Possible New Instrument for the
Protection of Performers and Producers of Phonograms (New Instrument).
In the Berne Protocol, the relevant activities concern the protection
of computer programs as literary works, protection for databases as
compilations of information other than works, the possible elimination
of compulsory licensing for broadcasting, and special provisions for
the use of materials in digital distribution systems. In the New
Instrument, the most relevant issues are the possible establishment of
a public performance right for sound recordings (possibly limited to
digital broadcasting) and the possibility of a digital distribution or
dissemination right for sound recordings.
To attain the needed level of protection internationally, we must find
ways to span the differences between the continental _droit d'auteur_
and neighboring rights systems and the Anglo-American copyright
systems. An essential element of this effort will be to harmonize
levels of protection by establishing standards that can be implemented
through either system.
_ B. TECHNOLOGY_
Interoperability and interconnectivity of networks, systems, services
and products operating within the NII will enhance its development and
success. Standardization of copyright management (standardized header
information and format, for instance) as well as technological
protection methods (such as encryption) may also be useful. The
question of whether any standards should be established, either
through government regulation or industry consensus, however, is not
within the purview of this Working Group. The issue of what those
standards should be, if established, is similarly outside the scope of
the area of inquiry of the Working Group.[364] If a standard is
established, however, protection of intellectual property rights used
in that standard is of concern to this Group.
The intellectual property rights implications of the standards-setting
process are not new with the development of the NII. The Federal
Communications Commission, for instance, has established standards in
related areas without interfering with the legitimate rights of
intellectual property rights owners.[365]
The Working Group finds that in the case of standards to be
established, by the government or the private sector, the owner of any
intellectual property rights involved must be able to decline to have
its property used in the standard, if such use would result in the
unauthorized exercise of those rights. If the rights holder wishes to
have its intellectual property as part of the standard, an agreement
to license the necessary rights on a nondiscriminatory basis and on
reasonable terms may be required. In the case of _de facto_ standards,
arising out of market domination by an intellectual property rights
holder, unfair licensing practices can be dealt with through the
antitrust laws.
_C. EDUCATION_
Effective education of the public about intellectual property rights
is crucial to the successful development of the NII. Therefore, the
principles of intellectual property law must be taught in our schools
and libraries. Educational efforts to increase the public's awareness
of their own intellectual property rights, as well as those of others,
will increase respect for those rights. Clearer guidelines with
respect to the exclusive rights of copyright and other intellectual
property rights holders, as well as the limitations on those rights,
will make compliance with the law easier.
Following its conference on fair use, the Working Group will sponsor a
second conference on intellectual property education. The purpose of
that conference will be to develop curricula that may be used in
schools and libraries. Additional means of education, particularly
those that use the NII itself, will also be explored and developed. To
increase the productivity of the conference, the number of
_participants_ will be limited. However, attendance at the conference
conference should send a one-page request to Terri A. Southwick,
Attorney-Advisor, Office of Legislative and International Affairs,
U.S. Patent and Trademark Office, Box 4, Washington, D.C. 20231.
Requests must be received by July 25, 1994, and should include a brief
description of the interests that would be represented at the
intellectual property education conference by the requestor.
The location and date of the conference will be announced in the
press, on the IITF Bulletin Board, and in the _Federal Register_.
ENDNOTES
[1] Information Infrastructure Task Force, National Telecommunications
and Information Administration, _The National Information
Infrastructure: Agenda for Action_ (Sept. 15, 1993).
[2] The "National Information Infrastructure," as it is discussed in
this Report, is intended to encompass the digital, interactive
services now available, such as the Internet, as well as those
contemplated for the future. To make our analysis more concrete,
however, we have, in many instances, evaluated the intellectual
property implications of activity on the Internet, the superstructure
whose protocols and rules effectively create (or permit the creation
of) a "network of networks." This reflects neither an endorsement of
the Internet nor a derogation of any other existing or proposed
network or service that may be available via the NII, but, rather, an
acknowledgment that a currently functioning structure lends itself
more readily to legal analysis than a hypothetical construct.
[3] For instance, the current debate over whether or to what extent
certain aspects of computer programs are or should be protected under
copyright law is not covered by this Report. Likewise, certain patent
issues, such as pre-grant publication and reexamination, are not
addressed.
[4] Supreme Court Justice Story found that copyright and patent cases
come "nearer than any other class of cases belonging to forensic
discussions, to what may be called the metaphysics of the law where
the distinctions are, or at least may be, very subtile [sic] and
refined, and, sometimes, almost evanescent." _See_ _Folsom_ v.
_Marsh_, 9 F. Cas. 342, 344 (C.C.D. Mass. 1841) (No. 4,901).
[5] These devices will be linked not only to each other (computer to
computer, for example) but will also be cross-linked (computer to
television).
[6] The United States and other countries are working toward the
development of a Global Information Infrastructure (GII) that "will
allow us to share information, to connect, and to communicate as a
global community." And as that information moves through international
channels, "[p]rotecting intellectual property is absolutely
essential." _See_ Remarks Prepared for Delivery by Vice President Al
Gore at the International Telecommunications Union in Buenos Aires,
Argentina (March 21, 1994).
[7] _See_ _Sony Corp_. v. _Universal City Studios, Inc_., 464 U.S.
417, 430-31 nn. 11-12 (1984) (hereinafter "_Sony_") (significance of
changes in technology and their effect on copyright law).
[8] The Commission on New Technological Uses of Copyrighted Works
(hereinafter "CONTU") reported about the issues raised by photocopiers
and computers back in 1978, using language that is applicable again
today:
The ownership and control of information and the means of
disseminating it are emerging as national and international policy
issues. Concerns about the impact on individual freedom posed by the
control of the flow of information are at the forefront of public
debate. The adequacy of the legal structure to cope with the pace and
rate of technological change frequently has been called into question.
Final Report of the National Commission on New Technological Uses of
Copyrighted Works (hereinafter "CONTU Final Report") at 3 (citations
omitted).
[9] _See_ 17 U.S.C. [[section]] 1001 _et_ _seq_. (Supp. V 1993). The
Audio Home Recording Act requires a serial copy management system in
all digital audio recording devices and digital audio interface
devices imported, manufactured or distributed in the United States.
Such a system allows unlimited first generation digital copying of
sound recordings, but prevents the making of digital copies from
copies. The Act prohibits the importation, manufacture or distribution
of any device, or the offering or performance of any service, the
primary purpose of which is to circumvent any program or circuit which
implements a serial copy management system. The Act also establishes a
royalty system through which importers and manufacturers of digital
audio recording devices and digital audio recording media make royalty
payments on each device or medium they distribute. Such payments are
collected by the Copyright Office and distributed annually to record
companies, performers, music publishers and songwriters.
[10] _See_ Inscription at the Jefferson Memorial. As Secretary of
State, Thomas Jefferson was the first head of the U.S. Patent Office.
[11] Congress' authority to grant certain intellectual property rights
is derived from Article I, Section 8, Clause 8 of the U.S.
Constitution: "The Congress shall have Power . . . To promote the
Progress of Science and useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to their respective Writings
and Discoveries."
[12] _See_ H.R. Rep. No. 1476, 94th Cong., 2d Sess. 47 (1976),
_reprinted_ _in_ 1976 U.S.C.C.A.N. 5659 (hereinafter "House Report")
("During the past half century a wide range of new techniques for
capturing and communicating printed matter, visual images, and
recorded sounds have come into use, and the increasing use of
information storage and retrieval devices, communications satellites,
and laser technology promises even greater changes in the near
future.").
[13] _See_ House Report at 47, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5660.
[14] It has even been suggested that intellectual property law is an
antiquated system which has no place in the NII environment.
[15] The Copyright Act of 1976, as amended, is codified at 17 U.S.C.
[[section]] 101 _et_ _seq_. (1988 & Supp. V 1993). Hereinafter, the
Act is cited as "17 U.S.C. [[section]] _ _." The Copyright Act
preempts any grant of equivalents rights for works of authorship
within the specified subject matter. Section 301 provides:
On and after January 1, 1978, all legal or equitable rights that are
equivalent to any of the exclusive rights within the general scope of
copyright as specified by section 106 in works of authorship that are
fixed in a tangible medium of expression and come within the subject
matter of copyright as specified by sections 102 and 103, whether
created before or after that date and whether published or
unpublished, are governed exclusively by this title. Thereafter, no
person is entitled to any such right or equivalent right in any such
work under the common law or statutes of any State.
17 U.S.C. [[section]] 301(a) (1988).
[16] 17 U.S.C. [[section]] 102(a) (1988 & Supp. V 1993). The Copyright
Act specifically excludes from protectible subject matter any "idea,
procedure, process, system, method of operation, concept, principle or
discovery" even if it meets the criteria for protection. _See_ 17
U.S.C. [[section]] 102(b) (1988).
[17] _See_ 17 U.S.C. [[section]] 102(a) (1988 & Supp. V 1993). The
statutory qualification is derived from Congress' limited
Constitutional authority to grant copyright protection to "authors"
for their "writings." _See_ U.S. CONST., art. I, [[section]] 8, cl. 8.
[18] _Feist Publications, Inc_. v. _Rural Tele. Serv. Co_., 499 U.S.
340, 345 (1991) ("vast majority of works make the grade quite easily,
as they possess some creative spark").
[19] Formal requirements for obtaining or enjoying copyright
protection -- such as registration or a copyright notice -- have been
abolished.
[20] _See_ 17 U.S.C. [[section]] 102(a) (1988 & Supp. V 1993).
[21] 17 U.S.C. [[section]] 101 (1988) (definition of "copies").
[22] 17 U.S.C. [[section]] 101 (1988) (definition of "phonorecords").
[23] House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5666-67.
[24] House Report at 52, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5665-66.
[25] _See_ _id_.
[26] _See_, _e_._g_., _Stern Elecs., Inc_. v. _Kaufman_, 669 F.2d 852,
855 (2d Cir. 1982) (putting work in "memory devices" of a computer
"satisf[ies] the statutory requirement of a 'copy' in which the work
is 'fixed'").
[27] _See_, _e_._g_., _Atari Games Corp._ v. _Oman_, 888 F.2d 878
(D.C. Cir. 1989).
[28] Unfixed broadcasts are not within the subject matter of Federal
copyright law. Therefore, protection of such works is not preempted
and may be provided in state statutory or common law. _See_ 17 U.S.C.
[[section]] 301 (1988 & Supp. V 1993).
[29] _See_ 17 U.S.C. [[section]] 101 (1988) (definition of "fixed");
_see_ _also_ _Baltimore Orioles, Inc_. v. _Major League Baseball
Players Assoc_., 805 F.2d 663, 668 (7th Cir. 1986) (telecasts that are
videotaped at the same time that they are broadcast are fixed in
tangible form), _cert_. _denied_, 480 U.S. 941 (1987). It is
understood that the "fixation" must be made or authorized by the
author.
[30] 17 U.S.C. [[section]] 101 (1988) (definition of "fixed").
[31] House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5666-67.
[32] _See_ _Advanced Computer Services of Michigan Inc_. v. _MAI
Systems Corp_., 845 F. Supp. 356, 363 (E.D. Va. 1994) (conclusion that
program stored only in RAM is sufficiently fixed is confirmed, not
refuted, by argument that it "disappears from RAM the instant the
computer is turned off"; if power remains on (and work remain in RAM)
for only seconds or fractions of a second, "the resulting RAM
representation of the program arguably would be too ephemeral to be
considered 'fixed'"). There may be too much of a delay between
transmission and "fixation" (if any) on the receiving computer's
screen or RAM to qualify as a "simultaneous" fixation.
[33] _See_ 17 U.S.C. [[section]] 104 (1988 & Supp. V 1993). Prior to
1978, certain unpublished works, particularly dramatic works and
musical compositions, could obtain copyright protection through
registration with the Copyright Office. Since 1978, all otherwise
eligible unpublished works are protected. _See_ 17 U.S.C. [[section]]
104(a) (1988 & Supp. V 1993).
[34] 17 U.S.C. [[section]] 101 (1988) (definition of "publication").
[35] _See_ House Report at 138, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5754. _See_ _also_ discussion of transmissions and the "distribution"
of copies _infra_ pp. 38-42.
[36] _See_ House Report at 138.
[37] A bulletin board system is a computer system to which subscribers
have telecommunications access for many purposes, including sending
and receiving electronic mail, and obtaining and delivering files
(which may consist of software, text, graphic images, or anything else
that may be placed in a digital format). A BBS may be (1) commercial,
as in the examples of CompuServe, Prodigy, and the like, (2)
institutional, as in the case of a university BBS, or (3) individually
owned and operated.
[38] 17 U.S.C. [[section]] 407 (1988). "[T]he owner of copyright or of
the exclusive right of publication in a work published in the United
States shall deposit, within three months after the date of
publication -- (1) two complete copies of the best edition; or (2) if
the work is a sound recording, two complete phonorecords of the best
edition, together with any printed or other visually perceptible
material published with such phonorecords." 17 U.S.C. [[section]]
407(a) (1988). The deposit requirements are not conditions of
copyright protection, but failure to deposit copies of a published
work may subject the copyright owner to significant fines. _See_ 17
U.S.C. [[section]] 407(a), (d) (1988).
[39] 17 U.S.C. [[section]] 104(a) (1988 & Supp. V 1993); _see_ _also_
17 U.S.C. [[section]] 104(b) (1988 & Supp. V 1993) (national origin
requirements for published works).
[40] 17 U.S.C. [[section]] 405 (1988). For such works, failure to
include a copyright notice risks total loss of copyright protection.
_See_ _id_. Works published after March 1, 1989 (the effective date of
the Berne Implementation Act) may (but are not required to) bear a
copyright notice identifying the year of publication and the name of
the copyright owner. _See_ 17 U.S.C. [[section]] 401 (1988).
[41] _See_ _generally_ 17 U.S.C. [[section]][[section]] 107 - 120
(1988 & Supp. V 1993). _See_, _e_._g_., 17 U.S.C. [[section]] 118
(1988 & Supp. V 1993) (compulsory license is available for the use of
certain published works in connection with noncommercial
broadcasting). Whether a work is considered published or unpublished
is also relevant in a fair use analysis. _See_ discussion of fair use
_infra_ notes 145, 147 and accompanying text.
[42] _See_ 17 U.S.C. [[section]] 408(b) (1988) ("the material
deposited for registration shall include -- (1) in the case of an
unpublished work, one complete copy or phonorecord; (2) in the case of
a published work, two complete copies or phonorecords of the best
edition; (3) in the case of a work first published outside the United
States, one complete copy or phonorecord as so published; (4) in the
case of a contribution to a collective work, one complete copy or
phonorecord of the best edition of the collective work").
[43] _See_ 17 U.S.C. [[section]] 302(c) (1988).
[44] 17 U.S.C. [[section]] 102(b) (1988).
[45] This is usually referred to as the "idea/expression dichotomy."
The ideas are not protected; the expression is. The line between idea
and expression is not easy to draw. The distinction is not that one is
fixed and the other is not -- they are both fixed in the copyrighted
work of authorship. At some point, the idea becomes detailed enough to
constitute expression. Judge Learned Hand explained:
Upon any work . . . a great number of patterns of increasing
generality will fit equally well, as more and more of the incident is
left out. The last may perhaps be no more than the most general
statement of what the [work] is about, and at times might consist only
of its title; but there is a point in this series of abstractions
where they are no longer protected, since otherwise the [author] could
prevent the use of his "ideas," to which, apart from their expression,
his property is never extended.
_Nichols_ v. _Universal Pictures Corp_., 45 F.2d 119, 121 (2d Cir.
1930).
[46] 17 U.S.C. [[section]] 105 (1988). While Section 105 leaves works
created by the U.S. Government unprotected under U.S. copyright laws,
Congress did not intend for the section to have any effect on the
protection of U.S. government works abroad. _See_ House Report at 59,
_reprinted_ _in_ 1976 U.S.C.C.A.N. 5672. Further, while works created
by the U.S. Government are not protected by the Copyright Act,
copyright interests transferred to the U.S. Government by assignment,
bequest or otherwise may be held and enforced by it. _See_ 17 U.S.C.
[[section]] 105 (1988).
[47] A work of the U.S. Government is a work "prepared by an officer
or employee of the United States Government as part of that person's
official duties." 17 U.S.C. [[section]] 101 (definition of "work of
the United States Government"). Although the wording of this
definition is not identical to that of a "work made for hire," the
concepts "are intended to be construed in the same way." House Report
at 58, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5672. _See_ discussion of
works made for hire _infra_ notes 84-86 and accompanying text.
[48] _See_, _e_._g_., _Takeall_ v. _Pepsico Inc_., 29 U.S.P.Q.2d 1913
(4th Cir. 1993) (unpublished) (holding phrase "You got the right one,
uh-huh" is not copyrightable and, thus, was not infringed by
commercial using phrase "You got the right one baby, uh-huh"). While
short phrases are not copyrightable standing alone, they may be
protected as part of a larger, copyrighted work. _See_ _e_._g_. _Dawn
Assoc_. v. _Links_, 203 U.S.P.Q. 831 (N.D. Ill. 1978) (holding phrase
"When there is no room in hell . . . the dead will walk the earth" to
be an integral part of a copyrighted advertisement, and defendant's
unauthorized use of it was therefore infringing); _Grand Upright Music
Ltd_. v. _Warner Bros. Records, Inc_., 780 F. Supp. 182, 183-85
(S.D.N.Y. 1991) (finding lyric "alone again" to be protected as part
of a copyrighted work and infringed by defendant rap artist's
"sampling").
[49] Other material ineligible for copyright protection includes the
utilitarian elements of industrial designs; familiar symbols or
designs; simple geometrical shapes; mere variations of typographic
ornamentation, lettering or coloring; common works considered public
property, such as standard calendars, height and weight charts, and
tape measures and rulers.
[50] 17 U.S.C. [[section]] 102(a) (1988 & Supp. V 1993).
[51] 17 U.S.C. [[section]] 101 (1988) (definition of "literary
works").
[52] Following the recommendation of CONTU, Congress amended the
Copyright Act in 1980 to explicitly recognize that computer programs
were protected as literary works. _See_ Act of December 12, 1980, Pub.
L. 96-517, 1980 U.S.C.C.A.N. (94 Stat.) 3015. "Computer programs" are
defined as a "set of statements or instructions to be used directly or
indirectly in a computer in order to bring about a certain result."
_See_ 17 U.S.C. [[section]] 101 (1988 & Supp. V 1993).
[53] _See_ House Report at 54, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5667.
[54] Congress did not define the term "musical work" in the statute
based on the assumption that the term had a "fairly settled" meaning.
See House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5666-67.
[55] A phonorecord generally embodies two works -- a musical work or,
in the case of spoken word recordings, a literary work, and a sound
recording. Musical works available through services on the NII may
also be the subject of Musical Instrument Digital Interface ("MIDI")
recordings. A MIDI is a data stream between a musical unit in a
computer and a music-producing instrument. The data stream instructs
the instrument, such as a synthesizer, on what notes to play.
[56] _See_ H. Abrams, _The Law of Copyright _[[section]]
204[C][3][b][iv] (1993). The term "dramatic works" is not defined in
the Act. _See_ House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5666-67.
[57] Congress also declined to define the terms "pantomimes" and
"choreographic works," again relying on "fairly settled meanings."
_See_ House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5666-67.
[58] 17 U.S.C. [[section]] 101 (1988) (definition of "pictorial,
graphic, and sculptural works").
[59] 17 U.S.C. [[section]] 101 (1988) (definition of "audiovisual
works").
[60] 17 U.S.C. [[section]] 101 (1988) (definition of "motion
pictures").
[61] _See_ House Report at 56, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5669.
[62] 17 U.S.C. [[section]] 101 (Supp. V 1993) (definition of
"architectural work"). The category of architectural works was added
in 1990 by the Architectural Works Copyright Protection Act, Public
Law 101-650, 1990 U.S.C.C.A.N. (104 Stat.) 5089, 5133.
[63] _Id_.
[64] The embodiment of two or more different types of works in one
medium is not a new concept. For instance, a book may contain both a
literary work and pictorial works. A compact disc may contain a
musical work, a sound recording and a computer program.
[65] A true "multimedia" work would be one in which several material
objects, such as a book, a videocassette and an audiocassette, are
bundled into one product.
[66] _See_ discussion of compilations _infra_ pp. 27-28.
[67] While expressly protected under the Copyright Act, the category
of "compilations" is not a particularly useful subject matter
category. Works in any of the eight enumerated categories of
protectible subject matter outlined above may take the form of a
compilation, and a compilation may fit into one or more of the subject
matter categories.
[68] House Report at 53, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5666.
Indeed, Congress amended the Copyright Act in 1990 to add
"architectural works" as a category of protectible works. _See_
_supra_ note 62.
[69] It should be noted that the Copyright Office classifies works
into four broad categories for purposes of registration: nondramatic
literary works, works of performing arts, works of visual arts, and
sound recordings. _See_ 37 C.F.R. [[section]] 202.3(b)(i)-(iv). The
Copyright Office notes that in cases "where a work contains elements
of authorship in which copyright is claimed which fall into two or
more classes, the application should be submitted in the class most
appropriate to the type of authorship that predominates in the work as
a whole." _See_ 37 C.F.R. [[section]] 202.3(b)(2). However, the
Copyright Act makes clear that the Copyright Office classification of
works for purposes of registration "has no significance with respect
to the subject matter of copyright or the exclusive rights provided."
_See_ 17 U.S.C. [[section]] 408(c)(1) (1988); _see_ _also_ House
Report at 153, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5769 ("It is
important that the statutory provisions setting forth the subject
matter of copyright be kept entirely separate from any classification
of copyrightable works for practical administrative purposes.").
[70] _See_ 17 U.S.C. [[section]] 106(4),(5) (1988). The public
performance right is limited to literary, musical, dramatic, and
choreographic works, pantomimes, and motion pictures and other
audiovisual works. The public display right is limited to literary,
musical, dramatic, and choreographic works, pantomimes, and pictorial,
graphic, or sculptural works, including the individual images of a
motion picture or other audiovisual work. _Id_.
[71] _See_, _e_._g_., 17 U.S.C. [[section]] 108(h) (1988) (limitation
not applicable to musical works, pictorial, graphic or sculptural
works, or motion pictures or other audiovisual works other than
audiovisual works dealing with news); 17 U.S.C. [[section]] 109(b)
(Supp. V 1993) (certain limitations not applicable to sound recordings
or computer programs); 17 U.S.C. [[section]] 110(4) (1988) (limitation
applicable only to nondramatic literary or musical works); 17 U.S.C
[[section]] 110(8) (1988) (limitation applicable only to nondramatic
literary works); 17 U.S.C. [[section]] 110(9) (1988) (limitation
applicable only to dramatic literary works); 17 U.S.C. [[section]]
112(a) (1988) (limitation not applicable to motion pictures or other
audiovisual works); 17 U.S.C. [[section]] 113 (1988 & Supp. V 1993)
(limitation applicable only to pictorial, graphic, or sculptural
works); 17 U.S.C. [[section]] 114 (1988) (limitation applicable only
to sound recordings); 17 U.S.C. [[section]] 115 (1988) (limitation
applicable only to nondramatic musical works); and 17 U.S.C.
[[section]] 120 (Supp. V 1993) (limitation applicable only to
architectural works).
[72] _See_ 17 U.S.C. [[section]] 101 (1988) (definition of "literary
works") (emphasis added).
[73] The definition of "sound recordings" explicitly excludes from the
category of sound recordings musical, spoken or other sounds
"accompanying a motion picture or other audiovisual work . . . ."
_See_ 17 U.S.C. [[section]] 101 (1988) (definition of "sound
recordings"). The definition of "audiovisual works" also expressly
includes any "accompanying sounds." _See_ 17 U.S.C. [[section]] 101
(1988) (definition of "audiovisual works").
[74] Audiovisual works are "works that consist of a series of related
images which are intrinsically intended to be shown by the use of
machines, or devices such as projectors, viewers, or electronic
equipment . . . ." 17 U.S.C. [[section]] 101 (1988) (definition of
"audiovisual works").
[75] _See_ discussion _infra_ note 122 and accompanying text.
[76] 17 U.S.C. [[section]] 101 (1988) (definition of "compilation"). A
"collective work," which is one kind of "compilation," is "a work,
such as a periodical issue, anthology, or encyclopedia, in which a
number of contributions, constituting separate and independent works
in themselves, are assembled into a collective whole." 17 U.S.C.
[[section]] 101 (1988) (definition of "collective work").
[77] 17 U.S.C. [[section]] 101 (1988) (definition of "derivative
work").
[78] _See_ _id_.
[79] _See_ 17 U.S.C. [[section]] 103(a) (1988).
[80] 17 U.S.C. [[section]] 103(b) (1988).
[81] _Id_.
[82] 17 U.S.C. [[section]] 201(a) (1988).
[83] _Id_. A "joint work" is a work "prepared by two or more authors
with the intention that their contributions be merged into inseparable
or interdependent parts of a unitary whole." 17 U.S.C. [[section]] 101
(1988) (definition of "joint work").
[84] _See_ 17 U.S.C. [[section]] 201(b) (1988). This legal conclusion
may only be altered by the parties in a written instrument signed by
them expressly agreeing otherwise. _Id_.
[85] The Copyright Act does not define "employee." In 1989, the
Supreme Court held that an employment relationship determination for
copyright purposes should be made by reference to the "general common
law of agency." _See_ _Community for Creative Non-Violence_ v. _Reid_,
490 U.S. 730, 740-41 (1989). The central question in an agency law
inquiry is whether the hiring party has the "right to control the
matter and means by which the product is accomplished." _Id_. at 751.
The factors to be considered include the skill required, the source of
the instrumentalities and tools used in creating the work, where the
work was created, the duration of the relationship between the
parties, whether the hiring party has the right to assign additional
projects to the hired party, the method of payment, the extent of the
hired party's discretion over when and how long to work, the hired
party's role in hiring and paying assistants, whether the hiring party
is in business and whether the work is part of the regular business of
the hiring party, the provision of employee benefits, and the tax
treatment of the hired party. _Id_. at 751-52. The Court did not
specify any factors that should be weighed more heavily than others,
but made clear that an "employee" under the Copyright Act is not
limited to a formal, salaried employee.
[86] To qualify as a work made for hire under the second prong, the
work must be specially ordered or commissioned for use as (1) a
contribution to a collective work; (2) part of an audiovisual work;
(3) a translation; (4) a supplementary work; (5) a compilation; (6) an
instructional text; (7) a test; (8) answer material for a test; or (9)
an atlas. 17 U.S.C. [[section]] 101 (1988) (definition of "work made
for hire").
[87] 17 U.S.C. [[section]] 204(a) (1988). An exclusive license is
considered a transfer of copyright, and therefore must be in writing.
Although an exclusive license may be limited in time or place or
scope, it nevertheless extends the benefits of copyright ownership
with respect to the rights granted to the licensee for the duration of
the license. The rights of a copyright owner may also be licensed on a
nonexclusive basis to one or more licensees. The Copyright Act does
not require nonexclusive licenses to be in writing.
[88] _See_ 17 U.S.C. [[section]] 202 (1988).
[89] _Id_.
[90] _See_ 17 U.S.C. [[section]] 201(d)(1) (1988) ("The ownership of a
copyright may be transferred in whole or in part by any means of
conveyance or by operation of law, and may be bequeathed by will or
pass as personal property by the applicable laws of intestate
succession.").
[91] 17 U.S.C. [[section]] 101 (1988) (definition of "transfer of
copyright ownership"). With the exception of transfers by operation of
law, all transfers of copyright ownership must be in writing. 17
U.S.C. [[section]] 204(a) (1988) ("A transfer of copyright ownership,
other than by operation of law, is not valid unless an instrument of
conveyance, or a note or memorandum of the transfer, is in writing and
signed by the owner of the rights conveyed or such owner's duly
authorized agent.").
[92] _See_ 17 U.S.C. [[section]] 204(a) (1988).
[93] _See_ discussion of the exclusive rights of a copyright owner
_infra_ pp. 34-44.
[94] _See_ 17 U.S.C. [[section]] 201(d)(2) (1988); 17 U.S.C.
[[section]] 101 (1988) (definition of "copyright owner").
[95] _See_ 17 U.S.C. [[section]] 203(a) (1988). _See_ _also_ 17 U.S.C.
[[section]] 304(c) (1988 & Supp. V 1993).
[96] 17 U.S.C. [[section]] 203(a)(5) (1988) ("Termination of the grant
may be effected notwithstanding any agreement to the contrary,
including an agreement to make a will or to make any future grant.").
[97] _See_ 17 U.S.C. [[section]] 203(a) (1988).
[98] _See_ 17 U.S.C. [[section]] 501(b) (1988) ("The legal or
beneficial owner of an exclusive right under a copyright is entitled .
. . to institute an action for any infringement of that particular
right committed while he or she is the owner of it."). In certain
circumstances, television broadcast stations and others are treated as
legal or beneficial owners and may bring actions for infringement by
cable systems and satellite carriers. _See_ 17 U.S.C. [[section]]
501(c), (d), (e) (1988).
[99] However, like exclusive licenses, nonexclusive licenses are
subject to termination after 35 years. _See_ 17 U.S.C.
[[section]][[section]] 203(a) (1988), 304(c) (1988 & Supp. V 1993).
[100] _See_, _e_._g_., _Harper Bros_. v. _Klaw_, 232 F. 609 (S.D.N.Y.
1916) (license to dramatize "Ben Hur" in a play did not include right
to produce a movie, but licensor enjoined from producing movie because
licensee's right to produce a play would be harmed by licensor's
production of a movie); _L.C. Page & Co_. v. _Fox Film Corp_., 83 F.2d
196 (2d Cir. 1936) (grant of exclusive "moving picture" rights
embraced technical improvements in movies that might be developed
during the term of the license, thus license held to cover "talkies");
_Bartsch_ v. _Metro-Goldwyn-Mayer, Inc_., 391 F.2d 150 (2d Cir.),
_cert_. _denied_, 393 U.S. 826 (1968) (1930 license of film rights in
a play, when television was a known technology but its full impact not
yet realized, included television rights; as experienced businessman,
licensor had reason to know of new technology's potential and had
burden of negotiating exception).
[101] _See_ 17 U.S.C. [[section]] 302(a) (1988). The terms of
protection for works created before January 1, 1978 (the effective
date of the 1976 revisions to the Copyright Act) are set forth in
Sections 303 and 304 of the Act. _See_ 17 U.S.C.
[[section]][[section]] 303, 304 (1988 & Supp. V 1993).
[102] 17 U.S.C. [[section]] 302(b) (1988).
[103] 17 U.S.C. [[section]] 302(c) (1988). The term for anonymous or
pseudonymous works differs if the identity of one or more of the
authors is revealed before the end of the term of protection. _See_
_id_.
[104] 17 U.S.C. [[section]] 106 (1988 & Supp. V 1993). Section 106(A)
grants additional rights for certain works of visual art in single
copies or limited editions. The development of the NII does not raise
unique issues with respect to those rights. _See_ 17 U.S.C.
[[section]] 106(A) (Supp. V 1993).
[105] _See_ definitions of "copies" and "phonorecords" _supra_ pp.
12-13.
[106] This Report uses the term "copy" or "copies" to refer to copies
_and_ phonorecords except in those instances where the distinction is
relevant.
[107] One of the important aspects of defining a transaction as a
"reproduction" rather than something else is that the potentially
relevant exceptions to the reproduction right are substantially fewer
in number than those that apply to certain other rights, particularly
"distribution" and "public performance." A detailed discussion of fair
use and other statutory exemptions appears in later sections of this
Report.
[108] In some instances, the locus of the infringement and/or the
identification of the infringing party or parties may require analysis
not required with respect to "traditional" infringements, but this
would not appear to be a sufficient reason to reject the application
of "reproduction" analysis (coupled, where appropriate, with creative
examination of locus/party issues, and, perhaps, clarification of the
"contributory infringement" doctrine. Contributory liability for
copyright infringement may be imposed on persons not themselves
performing the proscribed acts, but either deriving direct benefits
from them or providing equipment or materials that may only be used in
furtherance of an infringement. _See_ discussion of contributory
infringement and vicarious liability _infra_ pp. 73-82.
[109] For example, if a PTO employee transfers a file (such as a
hearing announcement) to another person with an Internet account,
copies will typically, at a minimum, be made (a) in the PTO's Internet
server, (b) in the recipient's Internet server, and (c) in the
recipient's microcomputer.
[110] _See_ 17 U.S.C. [[section]] 106(2) (1988). "A 'derivative work'
is a work based upon one or more preexisting works, such as a
translation, musical arrangement, dramatization, fictionalization,
motion picture version, sound recording, art reproduction, abridgment,
condensation, or any other form in which a work may be recast,
transformed, or adapted. A work consisting of editorial revisions,
annotations, elaborations, or other modifications which, as a whole,
represent an original work of authorship, is a 'derivative work.'" 17
U.S.C. [[section]] 101 (1988) (definition of "derivative work").
[111] 17 U.S.C. [[section]] 109(a) (1988).
[112] "Conventional" analysis would entitle the user to dispose of his
or her copy by conventional means, such as giving it or selling it to
a third party, so that the user had no copy at the end of the
transaction. If, however, one characterizes as a "distribution" the
transaction that begins with a digitized copy in a host's computer,
and concludes with a digitized copy in the host's computer _and_ a
digitized copy in the user's computer, then the user would appear
privileged to serve as a host for another user under the umbrella of
the first sale doctrine.
[113] Furthermore, with respect to international distributions,
Section 602 of the law makes unauthorized importations a violation of
the distribution right. However, it also contains three exceptions to
the right, and courts are divided as to whether the first sale
doctrine limits the ability of copyright owners to enforce the
importation right (as it does with respect to the domestic
distribution right). _See_ 17 U.S.C. [[section]] 602(a) (1988)
(subsection does not apply to "(1) importation of copies or
phonorecords under the authority or for the use of the Government of
the United States or of any State or political subdivision of a State,
but not including copies or phonorecords for use in schools, or copies
of any audiovisual work imported for purposes other than archival use;
(2) importation, for the private use of the importer and not for
distribution, by any person with respect to no more than one copy or
phonorecord of any one work at any one time, or by any person arriving
from outside the United States with respect to copies or phonorecords
forming part of such person's personal baggage; or (3) importation by
or for an organization operated for scholarly, educational, or
religious purposes and not for private gain, with respect to no more
than one copy of an audiovisual work solely for its archival purposes,
and no more than five copies or phonorecords of any other work for its
library lending or archival purposes, unless the importation of such
copies or phonorecords is part of an activity consisting of systematic
reproduction or distribution, engaged in by such organization in
violation of the provisions of section 108(g)(2)"); _compare_ _BMG
Music_ v. _Perez_, 952 F.2d 318 (9th Cir. 1991) (first sale doctrine
does not apply to importation rights under Section 602) _with_
_Sebastian Int'l, Inc._ v. _Consumer Contacts (PTY) Ltd._, 847 F.2d
1093 (3d Cir. 1988) (contra).
[114] The court elsewhere in its opinion uses "implicate" to mean
"infringe."
[115] 839 F. Supp. 1552 (M.D. Fla. 1993).
[116] _Id_. at 1556.
[117] Owners of copyrights in computer programs and sound recordings
have the right to control post-first-sale rentals of copies of their
works; owners of copyrights in works fixed in other media do not.
_See_ 17 U.S.C. [[section]] 109 (1988 & Supp. V 1993). This
inconsistency may be important in the NII context, particularly with
respect to "multimedia works" that are not expressly or self-evidently
in any particular category of copyrighted work (and whose treatment
under various exemptions and special provisions may be unclear). _See_
discussion of multimedia works _supra_ pp. 24-27.
[118] _See_ discussion of contributory infringement and vicarious
liability _infra_ pp. 73-82.
119 No. C 93-4262 CW, 1994 U.S. Dist. LEXIS 5266 (N.D. Cal. Mar. 28,
1994).
[120] _Id_. at *8-9.
[121] The court stated that Sega had established that unauthorized
copies of its games are made when they are uploaded to the bulletin
board and when they are downloaded. _Id_. at *17.
[122] _See_ 17 U.S.C. [[section]] 106(4) (1988).
[123] "To 'perform' a work means to recite, render, play, dance, or
act it, either directly or by means of any device or process or, in
the case of a motion picture or other audiovisual work, to show its
images in any sequence or to make the sounds accompanying it audible."
17 U.S.C. [[section]] 101 (1988) (definition of "perform").
[124] To perform or display a work "publicly" means --
(1) to perform or display it at a place open to the public or at any
place where a substantial number of persons outside of a normal circle
of a family and its social acquaintances is gathered; or
(2) to transmit or otherwise communicate a performance or display of
the work to a place specified by clause (1) or to the public, by means
of any device or process, whether the members of the public capable of
receiving the performance or display receive it in the same place or
in separate places and at the same time or at different times.
17 U.S.C. [[section]] 101 (1988) (definition of "publicly").
[125] _See_ 17 U.S.C. [[section]] 110 (1988).
[126] _See_, _e_._g_., _Columbia Pictures Indus_. v. _Redd Horne,
Inc._, 749 F.2d 154 (3d Cir. 1984) (video store operator liable for
public performance violation where he rented tapes to customers and
provided semi-private screening rooms where the tapes could be
viewed); _Columbia Pictures Indus_. v. _Aveco, Inc._, 800 F.2d 59 (3d
Cir. 1986) (same result where customers also rented rooms for
viewing); and _On Command Video Corp_. v. _Columbia Pictures Indus_.,
777 F. Supp. 787 (N.D. Cal. 1991) (infringement found where hotel
guests in rooms selected tapes to be played on remote control console
in hotel basement with signal then sent to rooms).
[127] 17 U.S.C. [[section]] 101 (1988 & Supp. V 1993) (definition of
"display").
[128] _See_ discussion of _Playboy_ case _supra_ pp. 40-41.
[129] Of course, to the extent that such lists or menus are
protectible under the Copyright Act, the authors of such lists would
have the exclusive right to publicly display them.
[130] Although sometimes referred to as "rights" of the users of
copyrighted works, "fair use" and other exemptions from copyright
infringement are actually limitations on the rights of the copyright
owners. Users are not granted any affirmative "rights" under the
Copyright Act; rather, copyright owners' rights are limited by certain
exemptions from user liability. It has been argued, however, that the
Copyright Act would be unconstitutional if such limitations did not
exist, as they provide some alleviation of First Amendment and other
concerns.
[131] _See_ 17 U.S.C. [[section]] 107 (1988 & Supp. V 1993). The
judicially created doctrine, although now codified in the Copyright
Act, has been described as "so flexible as virtually to defy
definition." _See_ _Time Inc_. v. _Bernard Geis Assoc_., 293 F. Supp.
130, 144 (S.D.N.Y. 1968).
[132] As an affirmative defense, the burdens of persuasion and coming
forward with evidence both must be carried by defendants in order to
avoid liability, _i_._e_., a copyright owner need not prove an accused
use not fair, but a defendant must prove its fairness.
133 In the recent case of _Campbell_ v. _Acuff-Rose Music, Inc_., 114
S. Ct. 1164 (1994), the Supreme Court expressly accepted the
proposition that such "transformative" uses are more favored in fair
use analyses than uses that amount to little more than verbatim
copying.
[134] 17 U.S.C. [[section]] 107 (1988 & Supp. V 1993).
[135] _Harper & Row, Publishers, Inc_. v. _Nation Enters_., 471 U.S.
539, 561 (1985).
[136] Justice Story stated that courts should "look to the nature and
the objects of the selections made, the quantity and value of the
material used, and the degree in which the use may prejudice the sale,
or diminish the profits, or supersede the objects, of the original
work." _Folsom_ v. _Marsh_, 9. F. Cas. 342, 348 (C.C.D. Mass.
1841)(No. 4,901).
[137] _See_ _Sony_, _supra_ note 7, at 456 (videotaping by individuals
at home of off-the-air television broadcast programming for purpose of
"time-shifting" -- as distinguished from "librarying" -- held fair
use).
[138] _See_ _Stewart_ v. _Abend_, 495 U.S. 207, 216 (1990) (theatrical
and television distribution of motion picture over objection of owner
of renewal term in underlying short story held infringing); _Harper &
Row_, _supra_ note 135, at 569 ("Nation" magazine's scoop of "Time"
magazine's first serial rights in President Ford's memoirs held
infringing, notwithstanding newsworthiness of the account of the Nixon
pardon set out therein).
[139] _See_ _Campbell_, _supra_ note 133, at 1177-79 (parodic lyrics
of popular song not _per_ _se_ unfair by virtue of commercial purpose
of parody; case remanded for further factual determination).
[140] _Marcus_ v. _Rowley_, 695 F.2d 1171 (9th Cir. 1983).
[141] _Encyclopaedia Britannica Educational Corp_. v. _Crooks_, 558 F.
Supp. 1247 (W.D.N.Y. 1983).
[142] _Basic Books, Inc_. v. _Kinko's Graphics Corp_., 758 F. Supp.
1522 (S.D.N.Y. 1991).
[143] _See_ House Report at 68-74, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5681-88. The guidelines generally permit the copying, for classroom
purposes, of short extracts of works, provided that the copying is
spontaneously done or requested by the instructor (and the copies are
neither used nor re-made repeatedly over time).
[144] _See_ _Twin Peaks Prods_._, Inc. v. Publications Int'l, Ltd._,
996 F.2d 1366, 1376 (2d Cir. 1993).
[145] _See_ _New Era Publications Int'l, ApS_ v. _Henry Holt & Co_.,
684 F. Supp. 808 (S.D.N.Y. 1988), _cert_. _denied_, 493 U.S. 1094
(1990). The 1992 amendment to Section 107, clarifying that the "fact
that a work is unpublished shall not itself bar a finding of fair use
if such finding is based upon consideration of all the above factors,"
was intended, however, to "overrule the overly restrictive language of
_Salinger_ [_Salinger_ v. _Random House_, 811 F.2d 90 (2d Cir.),
_cert_. _denied_, 484 U.S. 890 (1987)] and _New Era_ with respect to
the use of unpublished materials . . . ." _See_ S. Rep. No. 102-141,
102d Cong., 1st Sess., at 5. According to some members of Congress,
those two cases "threatened to establish a virtual per se rule against
the fair use of any published materials, such as letters or diaries."
_See_ 138 Cong. Rec. S17,358 (daily ed. Oct. 7, 1992) (Statement by
Senators Simon, Leahy, Kennedy, Grassley, Metzenbaum, and Kohl).
[146] _See_ _National Rifle Ass'n v. Handgun Control Fed'n_, 15 F.3d
559, 562 (6th Cir. 1994).
[147] _See_ _New Era Publications Int'l, ApS v. Carol Publishing
Group_, 904 F.2d 152, 157 (2d Cir. 1990).
[148] _See_ _Harper & Row_, _supra_ note 135, at 569 (taking of some
300 words held infringing).
[149] 3 Melville B. & David Nimmer, _Nimmer on Copyright_ [[section]]
13.05[A] (1993) (hereinafter _Nimmer on Copyright_).
[150] _See_ _Stewart_ v. _Abend_, _supra_ note 138, at 238.
[151] _See_ _Salinger_ v. _Random House, Inc_., 811 F.2d 90, 99 (2d
Cir.), _cert_. _denied_, 484 U.S. 890 (1987) (protecting potential
market for author's letters notwithstanding his profound
disinclination ever to publish them).
[152] _See_ _Sony_, _supra_ note 7, at 443-47.
[153] _See_ _Harper & Row_, _supra_ note 135, at 562.
[154] _See_ _Stewart_, _supra_ note 138, at 238.
[155] _See_ _Campbell_, _supra_ note 133, at 1173.
[156] The inability of our common law system always to provide
guidance covering every possible permutation of behavior is not
necessarily a weakness. By permitting courts to reach decisions on a
case-by-case basis, our system permits both necessary gap-filling and
jurisprudential evolution without having to return to Congress for
additional elaboration on a frequent basis.
[157] _See_ _supra_ notes 114-18 and accompanying text (discussing
_Playboy_ decision).
[158] _Playboy_, 839 F. Supp. at 1558.
159 _Supra_ note 119.
[160] _Id_. at *16-17.
[161] _Id_. at *22.
162 802 F. Supp. 1 (S.D.N.Y. 1992).
[163] _See_ _T.B. Harms Co_. v. _Jem Records, Inc_., 655 F. Supp.
1575, 1582 (D.N.J. 1987); _Columbia Pictures Indus., Inc_. v. _Aveco,
Inc_., 612 F. Supp. 315, 319-20 (M.D. Pa. 1985), _aff'd_, 800 F.2d 59
(3d Cir. 1986).
[164] 17 U.S.C. [[section]] 109(a) (1988).
[165] The reproduction right is not affected by the first sale
doctrine; the owner of a particular copy of a copyrighted work may
distribute it freely, but may not reproduce it.
[166] _See_ discussion of the distribution right _supra_ pp. 38-42.
[167] _See_ 17 U.S.C. [[section]] 109(b)(1)(A) (Supp. V 1993). The
prohibition with respect to record rental does not apply to nonprofit
libraries or nonprofit educational institutions for nonprofit
purposes. _Id_. Nonprofit libraries may also lend a computer program
for nonprofit purposes if each copy has a copyright warning affixed to
the package. 17 U.S.C. [[section]] 109(b)(2)(A) (Supp. V 1993). The
prohibition with respect to computer program rental does not apply to
a computer program "which is embodied in a machine or product and
which cannot be copied during the ordinary operation or use of the
machine or product" or "a computer program embodied in or used in
conjunction with a limited purpose computer that is designed for
playing video games and may be designed for other purposes." 17 U.S.C.
[[section]] 109(b)(1)(B) (Supp. V 1993).
[168] Kenneth R. Corsello, _Note_, The Computer Software Rental
Amendments Act of 1990: Another Bend in the First Sale Doctrine, 41
Cath. U. L. Rev. 177, 192 (1991).
[169] _See_ H.R. Rep. No. 98-987, 98th Cong., 2d Sess. 2 (1984),
_reprinted_ _in_ 1984 U.S.C.C.A.N. 2898, 2899 (justifying the Record
Rental Amendment of 1984).
[170] 17 U.S.C. [[section]] 109(c) (1988).
[171] Section 109(e) reversed the decision in _Red Baron-Franklin
Park, Inc_. v. _Taito Corp_., 883 F.2d 275 (4th Cir. 1989), _cert_.
_denied_, 110 S.Ct. 869 (1990), which held that video games could not
be operated in an arcade without the permission of the copyright owner
because such operation entailed violation of the copyright owner's
exclusive rights to perform and display the work publicly. Section
109(e), however, does not allow the public display or performance of
any other work of authorship embodied in the audiovisual game if the
copyright owner of the game is not also the copyright owner of the
other work. _See_ 17 U.S.C. [[section]] 109(e) (Supp. V 1993).
[172] Hereinafter, the term "library" will be used to refer to a
library or archives, or any of its employees acting within the scope
of their employment.
[173] _See_ 17 U.S.C. [[section]] 108(a) (1988). Section 108
limitations are _additional_ exemptions provided specifically for
libraries. Libraries, of course, may also take advantage of the fair
use or any other exemptions of the Copyright Act. _See_ 17 U.S.C.
[[section]] 108(f)(4) (1988).
[174] _See_ 17 U.S.C. [[section]] 108(a) (1988).
[175] _See_ 17 U.S.C. [[section]] 108(b) (1988).
[176] House Report at 75, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5689.
[177] 17 U.S.C. [[section]] 108(c) (1988); _see_ House Report at 75,
_reprinted_ _in_ 1976 U.S.C.C.A.N. 5689.
[178] 17 U.S.C. [[section]] 108(d) (1988). First, the copy or
phonorecord must become the property of the user, and the library or
archives must have no notice that the copy or phonorecord will be used
for any purpose other than private study, scholarship, or research.
Second, the library or archives must prominently display a warning of
copyright at the place where orders are accepted and on its order
form. _Id_.
[179] 17 U.S.C. [[section]] 108(e) (1988). First, the copy or
phonorecord must become the property of the user, and the library or
archives must have no notice that the copy or phonorecord will be used
for any purpose other than private study, scholarship, or research.
Second, the library or archives must prominently display a warning of
copyright at the place where orders are accepted and on its order
form. _Id_.
[180] _See_ 17 U.S.C. [[section]] 108(f)(3) (1988).
[181] 17 U.S.C. [[section]] 108(g)(2) (1988).
[182] _See_ House Report at 68-79, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5659, 5681-92; H.R. Conf. Rep. No. 1733, 94th Cong., 2d Sess. 72-73
(1976), _reprinted_ _in_ 1976 U.S.C.C.A.N. 5810, 5813-14 (hereinafter
"Conference Report").
[183] _Id_. at 72, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5813.
[184] _See_ 17 U.S.C. [[section]] 108(g) (1988).
[185] 17 U.S.C. [[section]] 108(h) (1988).
[186] _See_ discussion of the scope of the exclusive right to
reproduce a work _supra_ pp. 35-37.
[187] _See_ 17 U.S.C. [[section]] 110(1) (1988).
[188] _See_ 17 U.S.C. [[section]] 110(2) (1988).
[189] Section 117 of the Copyright Act provides:
Notwithstanding the provisions of section 106, it is not an
infringement for the owner of a copy of a computer program to make or
authorize the making of another copy or adaptation of that computer
program provided:
(1) that such a new copy or adaptation is created as an essential step
in the utilization of the computer program in conjunction with a
machine and that it is used in no other manner, or
(2) that such new copy or adaptation is for archival purposes only and
that all archival copies are destroyed in the event that continued
possession of the computer program should cease to be rightful.
17 U.S.C. [[section]] 117 (1988 & Supp. V 1993). Any identical copies
made in accordance with Section 117 "may be leased, sold, or otherwise
transferred, along with the copy from which such copies were prepared,
only as part of the lease, sale, or other transfer of all rights in
the program." Adaptations made may be transferred only with the
authorization of the owner of the copyright in the original program.
_Id_.
[190] _See_ 17 U.S.C. [[section]] 110(3) (1988).
[191] _See_ 17 U.S.C. [[section]] 110(6) (1988).
[192] _See_ 17 U.S.C. [[section]] 110(7) (1988).
[193] _See_ 17 U.S.C. [[section]] 110(8), (9) (1988).
[194] _See_ 17 U.S.C. [[section]] 110(10) (1988).
[195] _See_ 17 U.S.C. [[section]] 110(5) (1988).
[196] _See_, _e_._g_., the decision in _Twentieth Century Music Corp_.
v. _Aiken_, 422 U.S. 151 (1975), which was essentially codified in
Section 110(5) (owner of a small food establishment exempt from
infringement liability for the performance of copyrighted works via a
radio and four small ceiling speakers). _See_ _also_ _Sailor Music_ v.
_The Gap Stores, Inc_., 516 F. Supp. 923 (S.D.N.Y.), _aff'd_, 668 F.2d
84 (2d Cir. 1981), _cert_. _denied_, 456 U.S. 945 (1982); _Rodgers_ v.
_Eighty Four Lumber Co_., 617 F. Supp. 1021 (W.D.Pa. 1985);
_Springsteen_ v. _Plaza Roller Dome, Inc_., 602 F. Supp. 1113
(M.D.N.C. 1985).
[197] _See_ _e_._g_._,_ _Cass County Music Co_. v. _Muedini_, 1993
U.S. Dist. LEXIS 4562 (E.D. Wisc. 1993) ("To say that [the defendant]
is liable because it has nine speakers and the shops in [another case]
had two (or four in _Aiken_) would be silly," taking note of the
multiple speakers in many home systems today).
[198] _See_ 17 U.S.C. [[section]] 112(a) (1988). This limitation of
the copyright owner's reproduction right is applicable only if:
(1) the copy or phonorecord is retained and used solely by the
transmitting organization that made it, and no further copies or
phonorecords are reproduced from it; and
(2) the copy or phonorecord is used solely for the transmitting
organization's own transmissions within its local service area, or for
purposes of archival preservation or security; and
(3) unless preserved exclusively for archival purposes, the copy or
phonorecord is destroyed within six months from the date the
transmission program was first transmitted to the public. _Id_.
[199] _See_ 17 U.S.C. [[section]][[section]] 111, 119 (1988 & Supp. V
1993). These provisions are referred to as "compulsory licenses"
because under such provisions, copyright owners are compelled to grant
the licenses. No license agreements are signed and the terms of such
licenses are set forth in the statute; the copyright owner cannot
object to the use of the work and must be satisfied with the license
fees collected under the statute, which are distributed among all of
the affected copyright owners by arbitrators impaneled by the
Librarian of Congress.
[200] _See_ 17 U.S.C. [[section]] 111(f) (1988).
[201] _See_ 17 U.S.C. [[section]] 116 (Supp. V 1993). This compulsory
license may only be invoked if private negotiations fail to produce a
consensual license.
[202] _See_ 17 U.S.C. [[section]] 118 (1988 & Supp. V 1993).
[203] _See_ 17 U.S.C. [[section]] 115 (1988).
[204] _See_ 17 U.S.C. [[section]] 501(a) (Supp. V 1993). Anyone who
"trespasses into [the copyright owner's] exclusive domain by using or
authorizing the use of the copyrighted work in one of the five ways
set forth in the statute" is an infringer of the copyright. _Sony_,
_supra_ note 7, at 433. For purposes of this discussion on
infringement, the lack of authorization by the copyright owner and the
absence of a valid defense are presumed.
[205] _See_ discussion of the scope of the exclusive rights _supra_ at
pp. 34-64. For instance, activities such as loading a work into a
computer, scanning a printed work into a digital file, uploading or
downloading a work between a user's computer and a BBS or other
server, and transmitting a work from one computer to another may be
infringements (in those cases, of the reproduction right). _See_,
_e_._g_._,_ _MAI Systems Corp_. v. _Peak Computer, Inc_., 991 F.2d 511
(9th Cir. 1993) (the turning on of the computer, thereby causing the
operating system to be copied into RAM, constituted an infringing
reproduction of the copyrighted software); _Advanced Computer
Services_ v. _MAI Systems Corp_., 845 F. Supp. 356 (E.D. Va. 1994)
(loading software into computer's random access memory constituted
infringing reproduction); _see_ _also_ 2 _Nimmer on Copyright_
[[section]] 8.08 at 8-103 (1993) ("The input of a work into a computer
results in the making of a copy, and hence . . . such unauthorized
input infringes the copyright owner's reproduction right.").
[206] The innocence or willfulness of the infringing activity may be
relevant with regard to the award of statutory damages. _See_ 17
U.S.C. [[section]] 504(c) (1988).
[207] _See_ 17 U.S.C. [[section]] 106 (1988 & Supp. V 1993).
[208] _See_ House Report at 61, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5674. Further evidence of the intent of Congress to make even a single
act of unauthorized reproduction an infringement is found in specific
exemptions created for certain single-copy uses. _See_, _e_._g_., 17
U.S.C. [[section]][[section]] 108(a), 108(f)(2), 112(a) (1988); _see_
_also_ _Texaco_, _supra_ note 162, at 17.
[209] Various remedies are available to copyright owners in an
infringement action. In a civil case, a copyright owner may seek a
preliminary or permanent injunction to prevent or restrain
infringement. _See_ 17 U.S.C. [[section]] 502 (1988). Courts may also
order the impounding of all copies or phonorecords at any time an
action is pending. _See_ 17 U.S.C. [[section]] 503(a) (1988). As part
of a final judgment, the court may order the destruction (or any other
"reasonable disposition") of the infringing copies or phonorecords.
_See_ 17 U.S.C. [[section]]503(b) (1988). Actual damages may be
awarded in the amount of the copyright owner's losses plus any profits
of the infringer attributable to the infringement (that are not taken
into account in the calculation of the losses). _See_ 17 U.S.C.
[[section]] 504(b) (1988). Or, at the election of the copyright owner,
statutory damages may be awarded in the amount of $500 to $20,000 per
copyrighted work infringed. _See_ 17 U.S.C. [[section]] 504(c)(1)
(1988). The court may reduce the statutory damage award (to a minimum
of $200) if it finds the infringement was "innocent" (_i_._e_., the
defendant was not aware of and had no reason to believe that its acts
constituted an infringement of copyright) or increase the award (to a
maximum of $100,000) if it finds the infringement was committed
willfully. _See_ 17 U.S.C. [[section]] 504(c)(2) (1988). Criminal
sanctions may also be levied against infringers if the infringement
was willful and for purposes of commercial advantage or private
financial gain. _See_ 17 U.S.C. [[section]] 506 (a), (b) (1988).
[210] _See_, _e_._g_., _Rockford Map Publishers, Inc_. v. _Directory
Serv. Co_., 224 U.S.P.Q. 851 (C.D. Ill. 1984), _aff'd_, 768 F.2d 145
(7th Cir. 1985), _cert_. _denied_, 474 U.S. 1061 (1986);
_Sub-Contractors Register, Inc_. v. _McGovern's Contractors & Builders
Manual, Inc_., 69 F. Supp. 507, 509 (S.D.N.Y. 1946). It is common for
publishers of directories and other compilations to deliberately
insert mistakes into the work (such as periodically adding a
fictitious name, address and phone number in a telephone directory) to
detect and help establish copying. _See_ 2 Howard B. Abrams, _The Law
of Copyright_ [[section]] 14.02[B][3][c], at 14-19 to 20 (1993).
[211] This should be implied in the requirement that there be copying
of the copyrighted work. Ideas and facts, of course, are not
copyrighted. In the case of compilations, such as databases, if enough
facts are copied, the copyrighted expression (the selection,
arrangement or coordination of the facts) may be copied and
infringement may be found. _See_ CONTU Final Report, _supra_ note 8,
at 42 ("The use of one item retrieved from such a work -- be it an
address, a chemical formula, or a citation to an article -- would not
. . . conceivably constitute infringement of copyright. The retrieval
and reduplication of any substantial portion of a data base, whether
or not the individual data are in the public domain, would likely
constitute a duplication of the copyrighted element of a data base and
would be an infringement.").
[212] _See_ _Donald_ v. _Zack Meyer's T.V. Sales & Service_, 426 F.2d
1027, 1030 (5th Cir. 1970) ("paraphrasing is equivalent to outright
copying"), _cert_. _denied_, 400 U.S. 992 (1971); _Davis_ v. _E.I.
DuPont de Nemours & Co_., 240 F. Supp. 612, 621 (S.D.N.Y. 1965)
("paraphrasing is tantamount to copying in copyright law"); _see_
_generally_ 3 _Nimmer on Copyright_ [[section]] 13.03[A], at 13-28 to
13-58 (1993). Nimmer identifies two bases upon which courts impose
liability for less than 100 percent verbatim copying: (1) "fragmented
literal similarity" (where words, lines or paragraphs are copied
virtually word-for-word, although not necessarily verbatim) and (2)
"comprehensive nonliteral similarity" (where the "fundamental essence
or structure" of a work is copied); _see_ _also_ II Paul Goldstein,
_Copyright_ [[section]] 7.2.1, at 13-17 (1989). Goldstein identifies
three types of similarity: (1) where the infringing work "tracks" the
original work "in every detail," (2) "striking similarity" (where a
brief portion of both works is "so idiosyncratic in its treatment as
to preclude coincidence,") and (3) similarities that "lie beneath the
surface" of the works ("[i]ncident and characterization in literature,
composition and form in art, and rhythm, harmony and musical phrases
in musical composition"). _Id_. at 13 (citations omitted).
[213] For a detailed analysis of the various tests that have been
used, _see_ 3 _Nimmer on Copyright_ [[section]] 13.03[A] at 13-28 to
13-58 (1993).
[214] _See_ _Nichols_ v. _Universal Pictures, Corp_., 45 F.2d 119, 121
(2d Cir. 1930).
[215] _See_ _Peter Pan Fabrics Inc_. v. _Martin Weiner, Corp_., 274
F.2d 487 (2d Cir. 1960).
[216] _See_ Zechariah Chaffee, _Reflections on the Law of Copyright:
I_, 45 Columbia Law Review 503, 513 (1945).
[217] _See_ _Universal Athletic Sales Co_. v. _Salkeld_, 511 F.2d 904,
908-09 (3d Cir.), _cert._ _denied_, 423 U.S. 863 (1975) (subtracting
all but the "stick figures" from chart as non-protectible subject
matter); _Alexander_ v. _Haley_, 460 F. Supp 40, 46 (S.D.N.Y. 1978)
(finding "alleged infringements display no similarity at all in terms
of expression or language, but show at most some similarity of theme
or setting. These items, the skeleton of creative work rather than the
flesh, are not protected by the copyright laws.").
[218] _See_ 429 F.2d 1106 (9th Cir. 1970).
[219] _See_, _e_._g_., _Sid & Marty Krofft Television Prods., Inc_. v.
_McDonald's Corp_., 562 F.2d 1157 (9th Cir. 1977); _McCulloch_ v.
_Albert E. Price, Inc_., 823 F.2d 316 (9th Cir. 1987).
[220] _See_, _e_._g_., _Reyher_ v. _Children's Television Workshop_,
533 F.2d 87 (2d Cir. 1976); _Atari, Inc_. v. _North American Philips
Consumer Elecs. Corp_., 672 F.2d 607 (7th Cir.), _cert. denied_, 459
U.S. 880 (1982); _Atari Games Corp_. v. _Oman_, 888 F.2d 878 (D.C.
Cir. 1989); _Whelan Assocs., Inc_. v. _Jaslow Dental Lab., Inc_., 797
F.2d 1222 (3d Cir. 1986), _cert. denied_, 479 U.S. 877 (1987).
221 562 F.2d 1157 (9th Cir. 1977).
[222] _See_ _Pasillas_ v. _McDonald's Corp_., 927 F.2d 440, 442 (9th
Cir. 1991).
[223] _See_ _Brown Bag Software_ v. _Symantec Corp_., 960 F.2d 1465,
1475 (9th Cir. 1992).
[224] _Krofft_, _supra_ note 221, at 1164.
225 862 F.2d 204 (9th Cir. 1988).
226 982 F.2d 693 (2d Cir. 1992); _see_ _Sega Enters. Ltd_. v.
_Accolade, Inc_., (9th Cir. 1993); _Autoskill Inc_. v. _National
Educational Support Systems, Inc_. (10th Cir. 1993).
227 154 F.2d 464 (2d Cir. 1946).
[228] _See_, _e_._g_., _Peter Pan Fabrics, Inc_. v. _Martin Weiner
Corp_., 274 F.2d 487 (2d Cir. 1960); _Ideal Toy Corp_. v. _Fab-Lu
Ltd_., 360 F.2d 1021 (2d Cir. 1966); _Eden Toys, Inc_. v. _Marshall
Field & Co_., 675 F.2d 498 (2d Cir. 1982).
[229] _Ideal Toy Corp_. at 1023 n.2
[230] 905 F.2d 731 (4th Cir. 1990).
[231] _See_ _Aliotti_ v. _R. Dakin & Co_., 831 F.2d 898, 902 (9th Cir.
1987) (holding that perceptions of children must be considered in
substantial similarity analysis because they are intended market for
product); _Atari, Inc_. v. _North American Philips Consumer Elecs.
Corp_., 672 F.2d 607, 619 (7th Cir.), _cert_. _denied_, 459 U.S. 880
(1982) (holding that "[v]ideo games, unlike an artist's painting, . .
. appeal to an audience that is fairly undiscriminating insofar as
their concern about more subtle differences in artistic expression").
[232] _Dawson_, _supra_ note 230, at 736.
[233] An infringer is anyone who violates "any of the exclusive
rights" of the copyright owner. 17 U.S.C. [[section]] 501(a) (Supp. V
1993). One of the exclusive rights is "to prepare derivative works
based upon the copyrighted work." 17 U.S.C. [[section]] 106(2) (1988).
A "derivative work" is a work "based upon one or more preexisting
works, such as a . . . condensation, or any other form in which a work
may be recast, transformed, or adapted." 17 U.S.C. [[section]] 101
(1988) (definition of "derivative work"). The Ninth Circuit has
suggested that "a work is not derivative unless it has been
substantially _copied_ from the prior work." _See_ _Litchfield_ v.
_Spielberg_, 736 F.2d 1352, 1357 (9th Cir. 1984) (emphasis added). It
is unclear, however, whether the court is suggesting that a derivative
work must be substantially _similar_ to the prior work or that it
simply must incorporate in some form a portion of the prior work, as
noted in the legislative history. _See_ House Report at 62,
_reprinted_ _in_ 1976 U.S.C.C.A.N. 5675. The court noted that there is
"little available authority" on infringement of the derivative works
right. _See_ _id_.
[234] 17 U.S.C. [[section]] 602(a) (1988).
[235] House Report at 169, _reprinted_ _in_ 1976 U.S.C.C.A.N. 5785.
[236] U.S. copyright law differs from trademark law in this respect.
Trademark law does not prohibit the parallel importation into the
United States of genuine trademarked products, _i_._e_., products
legally produced overseas for foreign distribution and imported into
the United States by other than the authorized U.S. manufacturer,
distributor or licensee. The quality or specifications of the product
produced for foreign distribution may differ from those of the product
manufactured for distribution in the U.S. market. Additionally,
warranties offered by the U.S. manufacturer, distributor or licensee
may not apply. However, the sale of the "gray market" trademarked
product in the United States does not generally constitute trademark
infringement or unfair competition.
[237] _See_ discussion of transmissions and the distribution right
_supra_ pp. 38-42.
[238] The Customs Service would be ill-equipped to deal with such
infringing transmissions if they did fall within Section 602.
[239] _See_ House Report at 61, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5674. There must be a direct infringement upon which contributory
infringement or vicarious liability to be based.
[240] The concepts of contributory and vicarious liability are
well-established in tort law. Contributory infringement of
intellectual property rights was first codified in patent law. _See_
35 U.S.C. [[section]] 271(c) (1988).
[241] _Shapiro, Bernstein & Co_. v. _H.L. Green Co_., 316 F.2d 304,
307 (2d Cir. 1963) (holding that company that leased floor space to
phonograph record department was liable for record department's sales
of "bootleg" records despite absence of actual knowledge of
infringement, because of company's beneficial relationship to the
sales).
[242] _See_, _e_._g_., _Dreamland Ball Room, Inc_. v. _Shapiro,
Bernstein & Co_., 36 F.2d 354 (7th Cir. 1929); _Famous Music Corp_. v.
_Bay State Harness Horse Racing & Breeding Ass'n, Inc_., 554 F.2d 1213
(1st Cir. 1977); _KECA Music, Inc_. v. _Dingus McGee's Co_., 432 F.
Supp. 72 (W.D. Mo. 1977). Indeed, the "cases are legion which hold the
dance hall proprietor liable for the infringement of copyright
resulting from the performance of a musical composition by a band or
orchestra whose activities provide the proprietor with a source of
customers and enhanced income. He is liable whether the bandleader is
considered, as a technical matter, an employee or an independent
contractor, and whether or not the proprietor has knowledge of the
compositions to be played or any control over their selection."
_Shapiro, Bernstein & Co_. v. _H.L. Green Co_., 316 F.2d 304, 307(2d
Cir. 1963)(citing some 10 cases).
[243] _Gershwin Publishing Corp_. v. _Columbia Artists Management,
Inc_., 443 F.2d 1159, 1162 (2d Cir. 1971) ( holding management firm's
authorization of clients' performances of copyrighted compositions to
be contributory infringement).
[244] A library is exempted from liability for the unsupervised use of
reproducing equipment located on its premises provided that the
equipment displays a copyright law notice. 17 U.S.C. [[section]]
108(f)(1). This exemption does not apply to the user of such
equipment, _see_ 17 U.S.C. [[section]] 108(f)(2), and no other
provider of equipment enjoys any statutory immunity.
[245] _See_ _Universal Pictures Co_. v. _Harold Lloyd Corp_., 162 F.2d
354, 366 (9th Cir. 1947) (rejecting defendant's argument that as an
employee, he was not responsible for his employer's decision to use
infringing material, in light of defendant's personal selection and
appropriation of the protected material).
[246] _See_ _Boz Scaggs Music_ v. _KND Corp_., 491 F. Supp. 908, 913
(D. Conn. 1980) (finding defendant liable based on own admission of
responsibility and control over radio performances of protected
works).
247 _Supra_ note 115.
248 _Supra_ note 119.
[249] _Sega_, _supra_ note 119, at *18. The court found a _prima_
_facie_ case for both direct infringement, based on the BBS operator's
permitting of the uploading of the copyrighted games onto the BBS,
_and_ contributory infringement, based on the operator's "role in
copying" the games. _Id_. at *17-18.
[250] _Sega_, _supra_ note 119, at *7. A class action against another
BBS operator was recently filed which seems to allege both direct and
contributory infringement. _See_ _Frank Music Corp_. v. _Compuserve
Inc_., Civil Action No. 93 Civ. 8153 (JFK) (S.D.N.Y.) (complaint filed
Nov. 29, 1993). The Complaint alleges that defendant, by providing
access to its BBS by subscribers, engaged in: (1) "permitting,
facilitating and participating in the recording of performances of the
[Plaintiffs' works] into, and storing such recordings in, Compuserve's
computer database by permitting and enabling its paying subscribers to
upload such performances thereto"; (2) "maintaining a storage of
unauthorized recordings of [the Plaintiffs' works] (uploaded by its
subscribers) in and as part of Compuserve's computer database"; and
(3) "permitting, facilitating and participating in the recording (i.e.
re-recording) of the performances of [the Plaintiffs' works]
(theretofore stored in its computer database) by permitting and
enabling its paying subscribers to download such recorded performances
therefrom." Complaint at 6-7. In addition, the Plaintiffs allege that
Compuserve had "control over the nature and content of materials
stored in its Bulletin Board and downloaded therefrom"; that
Compuserve "had actual knowledge of, or in the exercise of reasonable
diligence could have determined, the nature and content of materials
stored in its Bulletin Board and downloaded therefrom"; and that
Compuserve "had actual notice, or in the exercise of reasonable
diligence could have determined, that recordings of [the Plaintiffs'
works] were uploaded (recorded) to, stored in, and downloaded
(re-recorded) from its computer database." _See_ Complaint at 7.
[251] Defamation cases may be distinguished, however, based on the
knowledge requirement, which is absent in copyright infringement
cases.
[252] 800 F. Supp. 928 (E.D. Wash. 1992).
[253] _Id_. at 931. The state common law in this case holds a person
who "republishes" defamatory statements made by another liable. Given
the broadness with which the jurisdiction had interpreted
republication, the court assumed, for purposes of disposition of the
affiliate defendants' motion for summary judgment that the affiliates
did republish the defamation.
[254] _Id_.
255 _Id_. at 931-32 (quoting _Dworkin_ v. _Hustler Magazine, Inc_.,
634 F. Supp. 727, 729 (D. Wyo. 1986) (quoting _Restatement (Second) of
Torts_ [[section]] 581).
[256] _Id_. at 932.
257 776 F. Supp. 135 (S.D.N.Y. 1991).
[258] _Id_. at 141.
[259] 464 U.S. 417 (1984).
[260] _Id_. at 440.
[261] _Id_. at 442. The Court cited two principles of patent law, but
used only one as the appropriate analogy for copyright law:
The Copyright Act does not expressly render anyone liable for
infringement committed by another. In contrast, the Patent Act
expressly brands anyone who "actively induces infringement of a
patent" as an infringer, 35 U.S.C. [[section]] 271(b), and further
imposes liability on certain individuals labeled "contributory"
infringers, [[section]] 271(c).
_Id_. at 434-35. Section 271(b) of the Patent Act provides, "Whoever
actively induces infringement of a patent shall be liable as an
infringer." 35 U.S.C. [[section]] 271(b) (1988). Section 271(c)
provides, "Whoever sells a component of a patented machine,
manufacture, combination or composition, or a material or apparatus
for use in practicing a patented process, constituting a material part
of the invention, knowing the same to be especially made or especially
adapted for use in an infringement of such patent, and not a staple
article or commodity of commerce suitable for substantial
noninfringing use, shall be liable as a contributory infringer." 35
U.S.C. [[section]] 271(c) (1988).
[262] _Id_. at 442. "In order to resolve that question, we need not
explore _all_ the different potential uses of the machine and
determine whether or not they would constitute infringement. Rather,
we need only consider whether on the basis of the facts as found by
the District Court a significant number of them would be
noninfringing." _Id_. The Court declined to "give precise content" to
the issue of how much use is needed to rise to the level of
"commercially significant." _See_ _id_.
[263] _Id_. at 446.
[264] Of the four dissenting Justices, two remain on the Court today
(now-Chief Justice Rehnquist and Justice Blackmun, who recently
announced his impending retirement from the Court). Two of the
Justices in the majority remain on the Court (Justice Stevens, who
delivered the opinion of the Court, and Justice O'Connor).
[265] _See_ _Sony_, _supra_ note 7, at 490 n41 (Blackmun, J.,
dissenting) ("The doctrine of contributory patent infringement has
been the subject of attention by the courts and by Congress . . . and
has been codified since 1952, . . . but was never mentioned during the
copyright law revision process as having any relevance to contributory
_copyright_ infringement."); _see_ _also_ _id_. at 491 (disagreeing
that "this technical judge-made doctrine of patent law, based in part
on considerations irrelevant to the field of copyright . . . should be
imported wholesale into copyright law. Despite their common
constitutional source, . . . patent and copyright protections have not
developed in a parallel fashion, and this Court in copyright cases in
the past has borrowed patent concepts only sparingly.")
[266] _See_ _Sony_, _supra_ note 7, at 491. Examples of such products
would be typewriters, computers, cameras, and fax machines.
[267] _Sony_, _supra_ note 7, at 491-92.
[268] _See,_ _e.g_., _Vault Corp_. v. _Quaid Software Ltd_., 847 F.2d
255 (5th Cir. 1988) (seller of computer programs that defeat
anti-copying protection is not liable as contributory infringer
because programs can be used to enable user to make legal archival
copies of copyrighted computer programs under Section 117, which the
court found to be a substantial noninfringing use). _But_ _see_ _RCA
Records_ v. _All-Fast Sys., Inc_., 594 F. Supp. 335 (S.D.N.Y. 1984)
(operator is liable for contributory infringement based on its
provision of sound recording facilities where public could make
unauthorized phonorecords).
[269] _Supra_ note 119.
[270] _See_ _Sega_, _supra_ note 119, at *13.
[271] _See_ _Sega_, _supra_ note 119, at *19. The court found that
there was "no need to make archival copies of [Sega's] ROM game
cartridges" because the "ROM cartridge format is not susceptible to
breakdown" and Sega would replace defective cartridges. _See_ _id_. at
*13. The court also found that it was unlikely that customers would
buy the copiers, at a cost of $350, for the purpose of backing up
Sega's video game programs, which sold for $30 to $70 each. _Id_.
[272] "Neighboring rights" are discussed _infra_ pp. 89, 92.
[273] _See_ Stephen E. Siwek & Harold W. Furchtgott-Roth,
International Intellectual Property Alliance, _Copyright Industries in
the U.S. Economy_ (1993).
[274] _See_ _generally_ Stephen M. Stewart, _International Copyright
and Neighbouring Rights_, (2d ed. 1989) (hereinafter "Stewart").
Stewart presents a summary of international copyright principles and
summaries of the copyright laws of a number of countries. Stewart also
identifies socialist copyright laws as a category. However, since the
demise of the USSR, the former socialist countries have moved rapidly
to enact Western-type copyright legislation. The recently enacted
copyright law of the People's Republic of China also follows the civil
law model.
[275] Stewart at 6.
[276] There are 143 members of the Convention Establishing the World
Intellectual Property Organization (WIPO) as of January 1, 1994. Done
at Stockholm on July 14, 1967; entered into force for the United
States on August 25, 1970. 21 UST 1749; TIAS 6932; 828 UNTS 3.
[277] Berne Convention (with Appendix) for the Protection of Literary
and Artistic Works of September 9, 1886, completed at Paris on May 4,
1896, revised at Berlin on November 13, 1908, completed at Berne on
March 20, 1914, revised at Rome on June 2, 1928, at Brussels on June
26, 1948, at Stockholm on July 14, 1967, and at Paris on July 24,
1971, amended at Paris on July 24, 1979. Done at Paris on July 24,
1971; entered into force for the United States on March 1, 1989. There
are 105 members of the Convention.
[278] International Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting Organizations. There are 45
members of the convention, but the United States is not a member. The
Rome Convention is jointly administered by WIPO, the International
Labor Organization (ILO) and the United Nations Educational,
Scientific and Cultural Organization (UNESCO).
[279] Convention for the Protection of Producers of Phonograms against
Unauthorized Duplication of their Phonograms. Done at Geneva on
October 29, 1971; entered into force on April 18, 1973; for the United
States on March 10, 1974. 25 UST 309; TIAS 7808; 888 UNTS 67. There
are 50 members of the Convention as of January 1, 1994.
[280] UNESCO is the United Nations Educational, Scientific and
Cultural Organization.
[281] Universal Copyright Convention, as revised, with two protocols
annexed thereto. Done at Paris on July 24, 1971, entered into force on
July 10, 1974. 25 UST 1341; TIAS 7868.
[282] Article 5 provides:
(1) Authors shall enjoy, in respect of works for which they are
protected under this Convention, in countries of the Union other than
the country of origin, the rights which their respective laws do now
or may hereafter grant to their nationals, as well as the rights
specially granted by this Convention.
(2) The enjoyment and the exercise of these rights shall not be
subject to any formality; such enjoyment and such exercise shall be
independent of the existence of protection in the country of origin of
the work. Consequently, apart from the provisions of this Convention,
the extent of protection, as well as the means of redress afforded to
the author to protect his rights, shall be governed exclusively by the
laws of the country where protection is claimed.
(3) Protection in the country of origin is governed by domestic law.
However, when the author is not a national of the country of origin of
the work for which he is protected under this Convention, he shall
enjoy in that country the same rights as national authors.
(4) The country of origin shall be considered to be:
(a) in the case of works first published in a country of the Union,
that country; in the case of works published simultaneously in several
countries of the Union which grant different terms of protection, the
country whose legislation grants the shortest term of protection;
(b) in the case of works published simultaneously in a country outside
the Union and in a country of the Union, the latter country;
(c) in the case of unpublished works or of works first published in a
country outside the Union, without simultaneous publication in a
country of the Union, the country of the Union of which the author is
a national, provided that:
(i) when these are cinematographic works the maker of which has his
headquarters or his habitual residence in a country of the Union, the
country of origin shall be that country, and
(ii) when these are works of architecture erected in a country of the
Union or other artistic works incorporated in a building or other
structure located in a country of the Union, the country of origin
shall be that country.
[283] _See_ World Intellectual Property Organization, BCP/CE/III/3,
_Report of the Committee of Experts on a Possible Protocol to the
Berne Convention, Third Session, June 21 to 25, 1993_, 20-21 (June 25,
1993).
[284] _Id_. at 21
[285] _See_ Trade-Related Aspects of Intellectual Property, Final Act
Embodying the Results of the Uruguay Round of the Multilateral Trade
Negotiations, Office of the U.S. Trade Representative, Dec. 15, 1993.
[286] _Id_.
[287] Article 3 (National Treatment) provides:
1. Each Member shall accord to the nationals of other Members
treatment no less favourable than that it accords to its own nationals
with regard to the protection of intellectual property, subject to the
exceptions already provided in, respectively, the Paris Convention
(1967), the Berne Convention (1971), the Rome Convention and the
Treaty on Intellectual Property in Respect of Integrated Circuits. In
respect of performers, producers of phonograms and broadcasting
organizations, this obligation only applies in respect of the rights
provided under this Agreement. Any Member availing itself of the
possibilities provided in Article 6 of the Berne Convention and
paragraph 1(b) of Article 16 of the Rome Convention shall make a
notification as foreseen in those provisions to the Council for
Trade-Related Aspects of Intellectual Property Rights.
2. Members may avail themselves of the exceptions permitted under
paragraph 1 above in relation to judicial and administrative
procedures, including the designation of an address for service or the
appointment of an agent within the jurisdiction of a Member, only
where such exceptions are necessary to secure compliance with laws and
regulations which are not inconsistent with the provisions of this
Agreement and where such practices are not applied in a manner which
would constitute a disguised restriction on trade.
[288] Article 4 (Most-Favoured-Nation Treatment) provides:
With regard to the protection of intellectual property, any advantage,
favour, privilege or immunity granted by a Member to the nationals of
any other country shall be accorded immediately and unconditionally to
the nationals of all other Members. Exempted from this obligation are
any advantage, favour, privilege or immunity accorded by a Member:
(a) deriving from international agreements on judicial assistance and
law enforcement of a general nature and not particularly confined to
the protection of intellectual property;
(b) granted in accordance with the provisions of the Berne Convention
(1971) or the Rome Convention authorizing that the treatment accorded
be a function not of national treatment but of the treatment accorded
in another country;
(c) in respect of the rights of performers, producers of phonograms
and broadcasting organizations not provided under this Agreement;
(d) deriving from international agreements related to the protection
of intellectual property which entered into force prior to the entry
into force of the Agreement Establishing the MTO, provided that such
agreements are notified to the Council for Trade-Related Aspects of
Intellectual Property Rights and do not constitute an arbitrary or
unjustifiable discrimination against nationals of other Members.
[289] See North American Free Trade Agreement (hereinafter NAFTA),
H.R. Doc. No. 159, 103d Cong., 1st Sess. (1993); 32 I.L.M. 289-456,
605-799 (1993).
[290] Article 6_bis_ provides:
(1) Independently of the author's economic rights, and even after the
transfer of the said rights, the author shall have the right to claim
authorship of the work and to object to any distortion, mutilation or
other modification of, or other derogatory action in relation to, the
said work, which would be prejudicial to his honor or reputation.
(2) The rights granted to the author in accordance with the preceding
paragraph shall, after his death, be maintained, at least until the
expiry of the economic rights, and shall be exercisable by the persons
or institutions authorized by the legislation of the country where
protection is claimed. However, those countries whose legislation, at
the moment of their ratification of or accession to this Act, does not
provide for the protection after the death of the author of all the
rights set out in the preceding paragraph may provide that some of
these rights may, after his death, cease to be maintained.
(3) The means of redress for safeguarding the rights granted by this
Article shall be governed by the legislation of the country where
protection is claimed.
[291] _See_ "Exposure '94: A proposal for the new rule of intellectual
property for multimedia," Institute of Intellectual Property 18 (Feb.
1994).
[292] _See_ 35 U.S.C. [[section]] 101 (1988). This language has been
interpreted broadly by the Supreme Court in _Diamond v. Chakrabarty_,
447 U.S. 303, 309 (1980), wherein the Court held:
The subject matter provisions of the patent law have been cast in
broad terms to fulfill the constitutional and statutory goal of
promoting "the progress of science and the useful arts." Congress
employed broad language in drafting Section 101 precisely because such
inventions are often unforeseeable.
Judicial precedent does exist denying patentability under Section 101
for claims directed to laws of nature and methods of doing business.
_See_ Donald S. Chisum, _Patents_ [[section]] 1.01 (1992).
[293] _See_ discussion of 35 U.S.C. [[section]]102 _infra_ notes
297-99 and accompanying text.__
__
[294] To be eligible for patent protection, an invention must be
either a process, an article of manufacture, a composition or a
machine. Discoveries, laws of nature, mathematical algorithms, methods
of doing business and the like are not eligible for patent protection.
_See_ 35 U.S.C. [[section]] 101 (1988).
295 _See_ discussion of 35 U.S.C. [[section]] 103 _infra_ note 300 and
accompanying text.__
__
296 _See_ 35 U.S.C. [[section]] 112 (1988).
[297] Specifically, "prior art" is defined in 35 U.S.C. [[section]]
102 (1988):
A person shall be entitled to a patent unless --
(a) the invention was known or used by others in this country, or
patented or described in a printed publication in this or a foreign
country, before the invention thereof by the applicant for patent, or
(b) the invention was patented or described in a printed publication
in this or a foreign country or in public use or on sale in this
country, more than one year prior to the date of the application for
patent in the United States, or . . . .
* * *
(f) he did not himself invent the subject matter sought to be
patented, or
(g) before the applicant's invention thereof the invention was made in
this country by another who had not abandoned, suppressed, or
concealed it. In determining priority of invention there shall be
considered not only the respective dates of conception and reduction
to practice of the invention, but also the reasonable diligence of one
who was first to conceive and last to reduce to practice, from a time
prior to conception by the other.
[298] Under U.S. law, an inventor has a one-year "grace period" to
file a patent application. This grace period is invoked by inventors
to avoid being barred from obtaining a U.S. patent when the invention
has been publicly disclosed by another during the one year period
before the inventor has filed a patent application. This grace period
is not available in all countries. As a result, applicants must
exercise care before disclosing their invention to avoid forfeiting
patent rights in countries without a one year grace period.
[299] For example, if a patent application is filed after an article
is published in a technical journal which completely discloses the
invention claimed in the patent application, the application will be
rejected by the PTO on the grounds that the claimed invention lacks
novelty.
[300] Section 103 sets forth the nonobviousness requirement, in
pertinent part, as follows:
A patent may not be obtained though the invention is not identically
disclosed or described as set forth in section 102 of this title, if
the differences between the subject matter sought to be patented and
the prior art are such that the subject matter as a whole would have
been obvious at the time the invention was made to a person having
ordinary skill in the art to which said subject matter pertains.
Patentability shall not be negatived by the manner in which the
invention was made.
35 U.S.C. [[section]] 103 (1988).
[301] The definition of prior art information in Section 102 also
governs what information can be used in Section 103 non-obviousness
determinations.
[302] The specific requirements of these patent-defeating publications
and public disclosures are set forth in detail in 35 U.S.C.
[[section]] 102, discussed _infra_ pp. 99-100.
[303] _See_ 35 U.S.C. [[section]] 154 (1988) ("Every patent shall
contain . . . a grant to the patentee . . . for the term of seventeen
years . . . of the right to exclude others from making, using, or
selling the invention throughout the United States and, if the
invention is a process, of the rights to exclude others from using or
selling throughout the United States, products made by that process,
referring to the specification for the particulars thereof.")
[304] _See_ 35 U.S.C. [[section]] 271(a) (1988) ("Except as otherwise
provided in this title, whoever without authority makes, uses or sells
any patented invention, within the United States during the term of
the patent therefor, infringes the patent.")
[305] The claims of a patent define the metes and bounds of the
invention by specifically defining the features of an invention which
are protected.
[306] Literal infringement is established when the accused product or
process contains each and every element set forth in the patent
claims. However, in certain circumstances, a patent owner can
establish infringement even if the accused product or process does not
have each of the elements set forth in the claims. This type of
infringement is known as infringement under the doctrine of
equivalents, an equitable remedy designed to prevent misappropriation
of the essence of the patented invention. Under the doctrine of
equivalents, infringement is established by proving that the accused
product or process "performs substantially the same function in
substantially the same way to obtain the same result as the patented
invention." _See_ _Graver Tank & Mfg. Co_. v. _Linde Air Prods. Co_.,
339 U.S. 605, 607 (1950).
[307] _See_ 35 U.S.C. [[section]] 282 (1988):
A patent shall be presumed valid. Each claim of a patent (whether in
dependent, dependent, or multiple dependent form) shall be presumed
valid independently of the validity of other claims; dependent or
multiple dependent claims shall be presumed valid even though
dependent upon an invalid claim. The burden of establishing invalidity
of a patent or any claim thereof shall rest on the party asserting
such invalidity.
[308] A party can also challenge the validity of a patent in a
reexamination proceeding before the PTO. In such a proceeding,
however, the basis for challenge is limited to novelty and obviousness
in view of only certain types of prior art, namely, printed
publications and patents.
[309] Priority may also be established by the filing date of a Federal
registration based upon an intent to use a mark (15 U.S.C. [[section]]
1051(b) (1988)) or a foreign filing (15 U.S.C. [[section]] 1126
(1988)).
[310] 15 U.S.C. [[section]] 1051 _et_ _seq_. (1988 & Supp. V 1993).
The Lanham Act, as amended, forms Chapter 22 of Title 15 of the U.S.
Code.
[311] The first Federal trademark law in the United States was found
unconstitutional because it was premised on the patent clause of the
Constitution.
[312] Certain foreign-based applications may register without a
showing of use in commerce. 15 U.S.C. [[section]] 1126(e) (1988).
[313] 15 U.S.C. [[section]] 1127 (1988 & Supp. V 1993). "The word
'commerce' means all commerce which may lawfully be regulated by
Congress." This includes interstate commerce, commerce between the
United States and a foreign country, and territorial commerce.
[314] P.L. 100-667, 1988 U.S.C.C.A.N. (102 Stat.) 3935.
[315] 15 U.S.C. [[section]] 1051(b) (1988).
[316] _See_ 15 U.S.C. [[section]][[section]] 1114 - 1121, 1125(a)
(1988 & Supp. V 1993) for relevant Federal law provisions. State and
common law unfair competition provisions include such torts as passing
off and dilution.
[317] 15 U.S.C. [[section]] 1057(b) (1988).
[318] 15 U.S.C. [[section]] 1124 (1988).
[319] 15 U.S.C. [[section]] 1116(d) (1988); 18 U.S.C. [[section]] 2320
(1988).
[320] 15 U.S.C. [[section]] 1065 (1988).
[321] 15 U.S.C. [[section]] 1064 (1988).
[322] _See_ _In re Metriplex Inc._, 23 U.S.P.Q.2d 1315 (TTAB 1992),
where the PTO's Trademark Trial and Appeal Board authorized
registration of a mark identifying "data transmission services
accessed via computer terminal" and accepted, as evidence of use of
the mark, a print-out of the mark as it appeared on the computer
screen during transmission.
[323] In the recent case _Playboy Enters_. v. _Frena_, _supra_ note
115,_ _the operator of a subscription computer bulletin board system
(Frena) transmitted as part of its bulletin board system photographs
owned by Playboy Enterprises Inc. (PEI). PEI's trademarks were
obliterated on some photographs transmitted by Frena and PEI's
"Playboy" and "Playmate" marks appeared on other photographs
transmitted by Frena. These transmissions were without authorization
from PEI. The court found, in part, that Frena infringed PEI's
registered trademarks when it used PEI's "Playboy" and "Playmate"
marks in unauthorized transmissions of PEI's photographs as part of
its computer bulletin board system. The court also found Frena to have
committed acts of unfair competition, in violation of Section 43(a) of
the Lanham Act (15 U.S.C. [[section]] 1125(a) (Supp. V 1993)), both by
obliterating PEI trademarks from photographs and by placing its own
advertisement on PEI photographs. Such acts made it appear as if PEI
authorized Frena's use of the images on the bulletin board; _see_
_also_ _Showtime/The Movie Channel, Inc_. v. _Covered Bridge
Condominium Ass'n,_ 693 F. Supp. 1080 (S.D. Fla. 1988), in which the
court found that interception of cable television programming
broadcast via satellite which appropriates trademarks and trade names
in a manner likely to cause confusion is unfair competition in
violation of Section 43(a) of the Lanham Act (15 U.S.C. [[section]]
1125(a) (Supp. V 1993)).
In California, a U.S. District Court has entered a preliminary
injunction against the owner of a computer bulletin board system based
upon claims of copyright and trademark infringement and unfair
competition. In _Sega Enters. Ltd_. v. _MAPHIA_, _supra_ note 119,
Sega demonstrated that the bulletin board system knowingly solicited
the uploading and downloading of unauthorized copies of Sega's video
games, and that whenever such a copy is played, Sega's trademark
appears on the screen. Further, Sega's trademark appeared, with the
BBS operator's knowledge, on file descriptors on the bulletin board.
With regard to the trademark and unfair competition claims, the court
concluded that there is support for the conclusion that the
transferred games are counterfeit under the Lanham Act, and that
confusion, if not on the part of the bulletin board users, is
inevitable on the part of third parties who may see the copied games
after they enter the stream of commerce.
[324] To send and receive information on the Internet, various
organizations connected to the Internet must register their domains,
networks and autonomous systems numbers ("site names") with the
Internet National Information Center (InterNIC). InterNIC performs
this function under a cooperative agreement with the National Science
Foundation. Within the context of a prescribed format, the Internet
user may register any site name as long as the identical site name has
not been previously registered with InterNIC by another party.
According to InterNIC, there is no state or Federal statutory or
regulatory authority under which InterNIC performs this registration
function. Thus, InterNIC has no authority to refuse to register site
names for a reason such as likelihood of confusion with a trademark.
Furthermore, InterNIC does not conduct an examination of trademark or
other records before registering a site name.
[325] "A trade secret is commonly defined as any formula, pattern,
device or compilation of information which is used in one's business,
and which gives him an opportunity to obtain an advantage over
competitors who do not know or use it." Restatement of Torts
[[section]] 757, Comment b (1939).
[326] _Id_. The trade secret owner may communicate the trade secret to
others provided that those who the trade secret is communicated to
pledge not to reveal the trade secret to others. _Id_.
[327] _See_ discussion of methods of protection for material
distributed through the NII _infra_ pp. 108-113.
[328] _See_ CONTU Final Report at 127.
[329] For a detailed discussion of these and other applications of
technology that may be used to provide protection for copyrighted
works, _see_ Symposium, _Technological Strategies for Protecting
Intellectual Property in the Networked Multimedia Environment_,
cosponsored by the Coalition for Networked Information, Harvard
University, Interactive Multimedia Association, and the Massachusetts
Institute of Technology (April 2-3, 1993); _see_ _also_ Morton D.
Goldberg, _Copyright and Technology: The Analog, the Digital, and the
Analogy_, Symposium, _WIPO Worldwide Symposium on the Impact of
Digital Technology on Copyright and Neighboring Rights_, 37 (March 31
- April 2, 1993).
[330] Protection of works by means of access control mechanisms
assumes that the system is not vulnerable to external means to
circumvent access control. Existing systems may be vulnerable, for
example, through passive monitoring during the exchange of unencrypted
passwords. As a consequence, much current effort is directed to
improving security at the access control level.
[331] For example, the software may deny access to a work if the
electronic file containing the work has been altered or information
stored in the file does not match data supplied by a user necessary to
open and use the file. _See_ discussion of digital signatures _infra_
pp. 113-14.
[332] Rendering or viewing software may integrate encryption and file
manipulation into a single software package. In other words, the
rendering software, after getting a password, will decode the file and
permit the user to manipulate the work (_e_._g_., view it or listen to
it), but only with the provided rendering software.
[333] An algorithm is a set of logical rules or mathematical
specification of a process which may be implemented in a computer.
[334] A widely publicized encryption technique is referred to as
"public key" encryption. Public key encryption transforms the work
using an algorithm requiring _two_ particular keys -- a "public" key
and a "private" key. The keys have complementary roles. Data encrypted
using a public key can only be decrypted using a secret, private key.
For instance, a copyright owner could encrypt a work using the public
key of the intended recipient; then, only the intended recipient could
decrypt a copy of the work with his private key. No secret (private)
keys need to be exchanged in this transaction. Without the private key
of the intended recipient, the work cannot be read, manipulated or
otherwise deciphered by other parties. Of course, if a decrypted copy
is made and shared, then others could manipulate the work unless other
means are used to protect it.
[335] _See_ 17 U.S.C. [[section]] 1002 (Supp. V 1993).
[336] _See_ H.R. Rep. No. 102-873(I), 102d Cong., 2d Sess.,
_reprinted_ _in_ 1992 U.S.C.C.A.N. 3578, 3579-80, 3583 n15.
[337] A "header" is a section of a digital work where information,
data, codes and instructions may be embedded. Such information may
actually be embedded anywhere in the work, but for ease of reference,
this Report refers to such information as embedded in a header. Terms
such as "label" and "wrapper" are also used to refer to what this
Report refers to as a "header."
[338] The signature is generated using the binary digits of the work
plus the value of the private key as inputs to the computation defined
by the algorithm. Thus, the digital signature for an information
object is a unique sequence of digits for that work. Specifically, a
signature is not the same for different works using the same private
key.
[339] Anyone who has access to an information object, also has access
to the digital signature for the object and the public key of the
rightsholder. Consequently, the digital signature for the object may
be recomputed and used to independently confirm the integrity of the
object by comparing it to the digital signature appended to the
object.
[340] "Shrink wrapped" is a term used to describe licenses and
contracts which are enclosed with prepackaged software and which
contain a notice whose operative message is: "Opening this package
constitutes agreement to the terms and conditions of a legally binding
agreement stated below. If you do not agree to these terms and
conditions, then do not open the package."
[341] The IITF Committee on Applications and Technology is addressing
electronic commerce issues, including the electronic transfer of funds
through the NII.
[342] _See_ R.E. Kahn, "Deposit, Registration and Recordation in an
Electronic Copyright Management System," Proceedings of Technical
Strategies for Protecting Intellectual Property in the Networked
Multimedia Environment, Interactive Multimedia Assoc., Annapolis, MD,
21401-1933, Jan. 1994. The registration and recordation system will be
operated by the Library of Congress and will enable electronic filing
of documents, automated registration and recordation of transfers of
ownership and other copyright-related documents. The digital library
system will be composed of a set of distributed repositories for
copyrighted works, and will support search and retrieval based upon an
electronic bibliographic record. The rights management system will be
a distributed system which will permit use of selected copyrighted
materials on the Internet, and will have some on-line rights-granting
services. Electronic mail will be used to license nonexclusive rights,
with or without recordation of the transactions.
[343] H.R. Rep. No. 101-735, 101st Cong., 2d Sess. 7 (1990),
_reprinted_ _in_ 1990 U.S.C.C.A.N. 6935, 6938 (report accompanying
legislation granting copyright owners of computer software an
exclusive rental right).
[344] _See_ _supra_ p. 9.
[345] In contrast to "standard" distributions, in the case of a
distribution by transmission, the distributor also retains a copy of
the work.
[346] Any language added by a proposed amendment is _underscored_.
Proposed deletions are indicated by strike-throughs.
[347] _See_ 17 U.S.C. [[section]] 101 (1988) (definition of
transmissions of performances or displays, not of _all_
transmissions).
[348] _See_ House Report at 138 (emphasis added), _reprinted_ _in_
1976 U.S.C.C.A.N. 5754.
[349] _See_ discussion _supra_ notes 34-35 and accompanying text.
[350] The second sentence of the definition -- adopted originally to
ensure that theatrically distributed movies were "published" and thus
eligible for copyright protection under prior law -- would appear to
apply often to works made available by display on bulletin board
systems or similar services.
[351] _See_ discussion of rental rights with regard to phonorecords
and copies of computer programs _supra_ notes 167-69 and accompanying
text.
[352] This number does not include the use of the term in Chapters 9
and 10, which have separate definitions of the term for the purposes
of those chapters. It also does not include the 30 some times the Act
refers to the distribution of royalties collected under the compulsory
licensing systems.
[353] These limitations include the limitation with regard to
distribution by libraries ([[section]] 108), the limitation with
regard to ephemeral recordings ([[section]] 112(c)), and the
mechanical compulsory license ([[section]] 115).
[354] 17 U.S.C. [[section]] 1002(c) (Supp. V 1993).
[355] 47 U.S.C. [[section]] 605(e)(4) (1988).
[356] _See_ NAFTA, _supra_ note 289, at art. 1707(a). The NAFTA also
requires parties to make it a civil offense to "receive, in connection
with commercial activities, or further distribute, an encrypted
program-carrying satellite signal that has been decoded without the
authorization of the lawful distributor of the signal or to engage in
any activity prohibited under [the criminal provisions]." _See_ NAFTA,
_supra_ note 289, at art. 1707(b).
[357] _See_ Copyright, Designs and Patents Act of 1988, Part VII,
[[section]] 296.
[358] Legislation of a similar type has been introduced with respect
to technological protection of audiovisual works. _See_, _e_._g_., S.
1096, 102d Cong., 1st Sess., 137 Cong. Rec. S. 6034 (1991); H.R. 3568,
101st Cong., 1st Sess., 135 Cong. Rec. H. 7924 (1989).
[359] Some transmissions that clearly constitute public performances
may, in effect, substitute for distributions in the future. If
consumers are offered a service through which they can receive a
performance of any sound recording at any time, they may stop buying
phonorecords. The market for distributed phonorecords may shrink to
include only the providers of that service to consumers.
[360] _See_ House Report at 68-79, _reprinted_ _in_ 1976 U.S.C.C.A.N.
5659, 5681-92; Conference Report at 72-73, _reprinted_ _in_ 1976
U.S.C.C.A.N. 5810, 5813-14.
[361] _See_, _e_._g_., 17 U.S.C. [[section]] 111 (1988 & Supp. V
1993). The cable compulsory license was enacted to reduce the need for
negotiations among thousands of program copyright owners and hundreds
of cable systems for the right to retransmit the copyrighted works
programs that are included in the broadcast signals retransmitted by
cable systems.
_ _
[362] Article 20 states:
The Governments of the countries of the Union reserve the right to
enter into special agreements among themselves, in so far as such
agreements grant to authors more extensive rights than those granted
by the Convention, or contain other provisions not contrary to this
Convention. The provisions of existing agreements which satisfy these
conditions shall remain applicable.
[363] This reference to fixations includes the subject matter of
neighboring rights related to works and their performance.
[364] The IITF Committee on Applications and Technology has
responsibility for addressing the issue of standards.
[365] Recently, the FCC adopted technical standards that define a
patented system as the A.M. radio stereophonic transmitting standard
in the United States. _See_ 58 Fed. Reg. 66300 (daily ed. Dec. 20,
1993). The FCC conditioned the selection of the patented system as the
standard on the agreement of the patent owner to license its patents
to other parties "under fair and reasonable terms." _Id_. at 66301.