T R A N S M I T T A L M E M O R A N D U M TO: Ms. Terri A. Southwick Attorney-Advisor Office of Legislative and International Affairs U.S. Patent and Trademark Office Crystal Park II -- Room 902 2121 Crystal Drive Arlington, Virginia 22202 Internet: nii-ip@uspto.gov FROM: American Committee for Interoperable Systems (ACIS) 901 San Antonio Road, Mailstop PAL 1-521 Palo Alto, CA 94303 Attention: Peter M. C. Choy, Chair Telephone: 415/336-2482 Fax: 415/336-0530 Internet: peter.choy@sun.com RE: ACIS Comments on "Intellectual Property and the National Information Infrastructure" DATE: September 7, 1994 ______________________________________________________________________ The comments which follow are hereby submitted by the American Committee for Interoperable Systems ("ACIS"), in response to the solicitation for public comment on the preliminary draft report of the Working Group on Intellectual Property Rights entitled "Intellectual Property and the National Information Infrastructure." We have also this day submitted an original and four copies of these comments in hard copy form at your offices above. The contents of the hard copy version and the electronically submitted version should be the same, except for minimal typographical variations, and either may be taken to represent the views of ACIS. If there are any questions, or if any additional information is needed, please feel free to contact me at the phone number or Internet address listed above. ACIS Comments on ``Intellectual Property and the National Information Infrastructure" Introduction The American Committee for Interoperable Systems (``ACIS") submits these comments in response to the Working Group on Intellectual Property Rights (``Working Group") preliminary draft report entitled ``Intellectual Property and the National Information Infrastructure" (hereinafter ``the Green Paper"). ACIS is an informal organization of companies that develop innovative software and hardware products which interoperate with computer systems developed by other companies.1 ACIS was formed to support intellectual property law policies providing for a careful balance between the goals of strong protection and rewards for innovation on the one hand, and the goals of interoperability, fair competition, and open systems on the other. Because the success of the emerging National Information Infrastructure (``NII") will hinge on the interoperability of a multitude of hardware systems, computer programs and other devices, ACIS offers these comments to assist the Working Group in tackling these very difficult but vitally important issues. ACIS commends the Working Group for its efforts to examine the current American intellectual property rights regime in light of the emerging NII. President Clinton's formation of the Information Infrastructure Task Force (``Task Force") to address issues related to the development of the NII has been an important step forward ______________________ 1 A list of ACIS members is attached. -1- in the realization of a new information order. The Working Group's role in the Task Force's efforts cannot be underestimated because intellectual property law can either help or hinder the burgeoning NII. Beyond a doubt, the issues addressed in the Green Paper have no easy solutions. The number of potential problems involving intellectual property rights and the NII is potentially infinite; the Working Group's efforts to grapple with some of these issues should be applauded. Moreover, the Green Paper's analysis of the current state of copyright law is accurate and thorough yet presented in such a way that individuals not steeped in the complex and technical legal doctrine can grasp many of the potential issues of applying copyright law on the so-called ``information superhighway." ACIS concurs with much of the Green Paper's discussion and analysis of the issues addressed. At the same time, ACIS believes that some of the changes proposed by the Green Paper might be inimical to the fundamental purposes of the copyright system. These points of agreement and disagreement are discussed below. I. Points of Agreement With Green Paper ACIS wholeheartedly endorses the Green Paper's discussion of the Second Circuit's seminal opinion in Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 204 (2d Cir. 1988). Such an endorsement of the Computer Associates opinion follows from the Green Paper's recognition that the ``[i]nteroperability and interconnectivity of networks, systems, services and products operating within the NII will enhance its development and success." Green Paper at 139. The Second Circuit's abstraction-filtration-comparison test for copyright infringement, adopted in Computer -2- Associates and applied by federal courts of appeal in other circuits,2 embodies legal principles absolutely critical to innovators seeking to develop hardware and software that is interoperable with systems that have, for either technical or market reasons, become standards. ACIS urges the Working Group and other arms of the Task Force to endorse the principles enunciated in Computer Associates and the cases that have followed it. Such a step would solidify, from a policy perspective, well-founded principles in the copyright law that relate to interoperability. On the other hand, to extend copyright protection to interface specifications that become the standardized rules of interconnection in the NII would hinder interoperability, impede competition and innovation, and serve as a critical impediment to the implementation of the NII and the principles advanced by the Administration. A balance between access to these standards and protection of the implementation of these standards in program code is required and Computer Associates strikes the proper balance, at least with respect to copyright law.3 ACIS also agrees with the Green Paper's conclusion that implementation of the NII requires no fundamental changes in the current copyright law. Green Paper at 10 (only ``minor clarification and amendment" required to Copyright Act). The federal courts have balanced properly the competing concerns that arise in copyright _________________________ 2 See Sega Enters., Ltd. v. Accolade. Inc., 977 F.2d 1510 (9th Cir. 1992); Gates Rubber Co. v. Bando Am., Inc., 9 F.3d 823 (10th Cir. 1993); Autoskill Inc. v. National Educ. Support Sys., Inc., 994 F.2d 1476 (10th Cir.), cert. denied, 114 S. Ct. 307 (1993); Atari Games Corp. v. Nintendo of America. Inc., 975 F.2d 832 (Fed. Cir. 1992); Kepner-Tregoe, Inc., v. Leadership Software. Inc., 12 F.3d 527 (5th Cir. 1993). 3 Similarly, the recognized right to make interim copies of a work in order to separate protected and unprotected elements of a work is essential to interoperability. Such fair uses for the purposes of reverse engineering have been endorsed by at least two federal courts of appeals. See Sega Enters., 977 F.2d at 510; Atari Games Corp. v. Nintendo of America. Inc., 975 F.2d 832 (Fed. Cir. 1992). -3- cases, especially those cases involving standards and issues of interoperability. The courts are capable of interpreting the Copyright Act to address many if not all of the novel questions that will arise from the creation of the NII. II. Points of Disagreement With Green Paper ACIS is concerned, however, that some changes proposed by the Green Paper might, if adopted, upset the delicate balance of competing public policy considerations embodied in the Copyright Act, namely the desire to serve the public interest in the wide dissemination of information and the desire to provide incentives to authors to create new works.4 ACIS agrees that protection of content will play an essential role in the successful development of the NII. At the same time, protection of content cannot be the Working Group's only consideration; an equally important consideration is promoting interoperability. However, overly broad intellectual property protection for standard interface specifications in the NII could inhibit such interoperability, recognized by the Working Group as essential to the success of the NII. See Green Paper at 139. A. Proposed Section 512 The Green Paper's proposed new section 512 to the Copyright Act is particularly problematic. The thrust of the proposed section 512 is to prohibit the importation, manufacture and distribution of devices that circumvent a system or process that prevents illegal copying of protected works. While the goal of providing additional enforcement for section 106 rights is a laudable one, it need not be pursued at the _________________________ 4 These competing concerns have been at the heart of several recent Supreme Court cases addressing copyright issues. See Feist Pubs. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340 (1991); Campbell v. Acuff-Rose Music, 114 S. Ct. 1164 (1994); Fogerty v. Fantasy. Inc., 113 S. Ct. 1023 (1994). -4- expense of other goals embodied in the Copyright Act. The proposed section 512, as drafted, threatens to do just that. First, the ``primary purpose or effect" test contained in the proposed section is vague and hard to apply. Developers of worthwhile products that have completely non-infringing uses will not know how the ``primary purpose or effect" test will be interpreted in litigation years later and will therefore tend to avoid developing and distributing such products. Significantly, the proposed section does not clearly provide for the right to make copies of protected works for purposes of scholarship, research, news reporting and other fair uses specified in section 107 of the Copyright Act, or the right to make copies for other legitimate, legal uses such as making archival copies. See Sega v. Accolade (making interim copy for purpose of reverse engineering is fair use); Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988) (recognizing right to make archival copies). Without clear protection for legitimate, non-infringing, and fair uses of copyrighted material, and for devices that may be employed for these purposes, the balance will be shifted towards overprotection of individual property rights at the expense of the public good.5 _________________________ 5 One can easily imagine circumstances in which application of the ``primary purpose or effect" test will lead to undesirable results. For example, consider a software vendor who has incorporated an anticopy device in its business software applications. Another vendor develops a mechanism that can circumvent the anticopy device. A year after this mechanism is placed on the market, it is determined that 55% of the copies made using the mechanism are unlawful copies, while 45% of the copies are lawful section 117 archival copies. Under such circumstances, what would be the ``primary purpose or effect" of the mechanism? It seems clear that such a mechanism would be illegal under the proposed section 512. It seems equally clear that this result would be inconsistent with the purposes and policies underlying the Copyright Act. To be sure, the makers of the unlawful copies are infringers and should be liable for damages, and, where appropriate, criminal penalties. At the same time, the vendors of the circumvention mechanism should be free from liability. -5- Indeed, the proposed section is at odds with the rationale of the Supreme Court's opinion in Sony Corporation v. Universal City Studios. Inc., 464 U.S. 417 (1984). The Court in Sony found that Sony could not be held liable for contributory infringement merely because its Betamax video recorder might be used for infringing purposes. The Sony Court carefully balanced the copyright holder's legitimate rights against ``the rights of others freely to engage in substantially unrelated areas of commerce" Id. at 442, and concluded that manufacturers of copying devices cannot be liable for copyright infringement if the device is ``capable of substantial non-infringing uses." Id. ACIS urges that the balance struck in Sony not be disturbed. In addition, the analogies cited by the Green Paper in support of the proposed section are inapposite. The provision contained in the Audio Home Recording Act that prevents the importation, manufacture or distribution of devices that circumvent a Serial Copy Management System SCMS") provides no support for the proposed section 512. In digital audio recording systems that employ a SCMS, the scheme allows the end-user to make at least one digital-to-digital copy of a copyrighted digital original and unlimited copies of a digital source if made through the digital-to-analog converters of the recording device. Thus, the SCMS provides an adequate accommodation to the rights to make fair uses of copyrighted works and to make copies for other legal purposes. The proposed section 512 provides no such accommodation, however, because a copyright holder may implement a scheme whereby no copies of the work, lawful or unlawful, may be made. Therefore, a provision that bans the importation, manufacture or distribution of devices whose ``primary purpose or effect" is to circumvent such a scheme is too rigid and effectively prohibits the exercise of legitimate and legal rights to -6- duplicate protected works. Likewise, section 605 of the Communications Act is not analogous to most all situations that would be covered by the proposed section 512. Section 605 prohibits devices that allow the unauthorized decryption of satellite cable programming. Such decryption is fundamentally different from making copies of protected works because unauthorized decryption involves gaining access to material that the recipient has not paid for and has absolutely no right to see. On the other hand, the lawful owner of a copy of a work not only has the right to view the work but in some instances may make copies of the work without infringing the copyright. See, e.g., Green Paper at 133 (``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.") A broad prohibition on decryption devices is therefore tolerable in the satellite cable programming context, but a prohibition similar to the proposed section 512 is not appropriate in a broader copyright context. ACIS members agree with the Green Paper that the NII may present unique issues of enforcement and protection of legitimate copyrights. These concerns, however, can be addressed by a narrower, carefully crafted regulation of devices designed to defeat anti-copying systems that focuses on the uses to which those devices are put rather than the devices themselves. In particular, ACIS suggests a provision that tracks the approach taken by the European Union (EU) on this issue. Article 7 of the 14 May 1991 Council Directive provides in relevant part: 1. Without prejudice to the provisions of Articles 4, 5 and 6, Member States shall provide, in accordance with their national legislation, appropriate remedies against a person committing any of the acts listed in subparagraph[](c) below: -7- . . . . (c) any act of putting into circulation, or the possession for commercial purposes of, any means the sole intended purpose of which is to facilitate the unauthorized removal or circumvention of any technical device which may have been applied to protect a computer program. Notwithstanding this anti-copying provision, the Directive makes clear that such protection does not prohibit the legitimate copying of programs. Articles 4, 5 and 6 of the EU Directive describe the rights of the copyright holder and the rights of the public to copy or disassemble a work. These rights are similar to those granted to the public under the Copyright Act and recognized by the case law. For example, Article 5(2) allows the making of a backup copy; Article 5(3) allows a legal holder of a copy of a program to study the functioning of the program to determine its underlying ideas and principles; and Article 6 provides for the right to decompile a program to make interoperable programs. The EU provision provides clearer guidelines for legal and legitimate copying than the proposed section 512 while not sacrificing the important goal of prohibiting piracy. Moreover, the EU provision minimizes the risk of chilling the development of legitimate and desirable products by eschewing the ``primary purpose or effect" test in favor of a ``sole intended purpose" test. ACIS therefore suggests that any proposed changes to the Copyright Act follow the EU's approach. B. Proprietary Standards A second area of concern to ACIS is the uncertainty regarding the Working Group's views on whether elements of works that become standards may have proprietary content. The Green Paper as drafted contains some references to -8- intellectual property rights that may exist in standards, but the scope and nature of the rights to which the Working Group refers is unclear. The Green Paper outlines no concrete proposal on this issue; nonetheless, ACIS is concerned about the implications of the notion that standards for interoperability may have proprietary content. If the Working Group is referring to patents on an invention that has become an industry standard, the proposition is relatively uncontroversial, assuming that the invention can meet the strict statutory standards of novelty and non-obviousness. If, however, the reference is to asserted copyright interests in a software interface or other interface standard, the proposition is problematic in light of current copyright law. The Second Circuit's decision in Computer Associates and its progeny make clear that those elements of a software program that are essential to create interoperable systems or programs, i.e., interface specifications, are not protectible expression. Under the Computer Associates analysis, these functional elements are filtered out and the remaining, expressive elements of the work are accorded copyright protection. The question of access to critical interfaces in the context of the NII is still unclear. This is one of the issues being discussed in the context of telecommunications reform legislation currently pending in Congress. Section 405 of H.R. 3626, as passed by the House, deals with interoperability and access to interfaces and acknowledges that monopoly control of critical interfaces could produce bottlenecks at critical NII junctures.6 As the issue of standards and interoperability are central to the development ________________________ 6 In fact, the language of the bill passed by the House shows a strong preference for the development of open and accessible NII systems. See H.R. 3626 (``in order to promote diversity, competition, and technological innovation among suppliers of equipment and services, it may be necessary to make certain critical interfaces with such networks open and accessible to a broad range of equipment manufacturers and information providers"). -9- of a robust NII, the Working Group's conclusions should make clear its position on the issue, taking into account the case law and the relevant policy considerations. C. Antitrust and Intellectual Property ACIS is also concerned with the Green Paper's conclusion that intellectual property rights inhering in de facto technological standards pertaining to the NII can be ``reigned in" through federal antitrust laws. Given the importance of the development of an open and accessible NII, we must be vigilant in preventing control, through the exercise of ``intellectual property rights," of the standard interface specifications critical to the operation of the NII. The primary focus, however, for controlling the abuse of intellectual property rights that are or become de facto NII interface standards should be the intellectual property law itself, not the antitrust laws. The intellectual property law balances the goals of incenting and rewarding creativity, originality and innovation, on the one hand, and disseminating ideas and information for use by society generally, on the other hand. Thus, the intellectual property law promotes the maximization of consumer welfare and the progress of society. The public welfare is diminished if this balance tips in favor of overprotecting the first set of interests at the expense of the latter interests. Such loss of welfare occurs even in circumstances when the imbalance does not confer market power on particular individuals or firms, the point at which the imbalance triggers concern under the antitrust laws. Therefore, while the antitrust laws have an important role in policing open standards, they cannot be relied upon to be the sole, or even the primary focus for maximizing social welfare. -10- For additional reasons, it is doubtful that without a primary focus on properly defining intellectual property rights, the antitrust laws can be effective in making de facto NII interface standards sufficiently open to protect the public interest. The antitrust laws' concern about the unlawful use of market power becomes dangerously circular if the alleged abuse flows from overbroad intellectual property rights.7 Fundamentally, any market power created by the ownership of standards for interoperability is in part the result of the scope of protection afforded. If the scheme of such rights is too broad, we cannot expect the antitrust laws to remedy the situation. A second and more practical point is the difficulty of policing abuses of de facto NII standards through the antitrust laws. Comprehensive antitrust investigations and private enforcement are time-consuming and expensive; the time and expense _________________________ 7 This circularity is apparent from the following hypothetical example: A small vendor seeks to distribute its new and innovative product on the NII, but to distribute the product it must make use of a standard protocol owned by another company. Because the protocol has become a standard on the NII, the vendor must obtain a license from the protocol owner. The vendor negotiates with the owner of the protocol to obtain a license, but negotiations break down and the rights holder eventually refuses to license the protocol to the vendor. The vendor, apparently having no other recourse, approaches the Department of Justice, asserting that the rights holder's refusal to license the protocol is a violation of antitrust laws. The Department of Justice refuses to take any action against the rights holder, citing its Guidelines For the Licensing and Acquisition of Intellectual Property (presumably by this time the Guidelines would have been formally adopted by Justice). See Draft Antitrust Guidelines # 2.2, 59 Fed. Reg. 41,340 (1994) (``Nor does such market power [conferred by ownership of intellectual property] impose on the intellectual property owner an obligation to license that technology to others.") (citations omitted). The rationale is that if the rights holder has a valid property interest in the protocol, its decision to exclude a competitor from using the protocol should not be illegal. The problem of abuse of de facto NII standards, therefore, cannot be addressed solely by the antitrust laws. Under the scheme advanced by the Green Paper, however, the vendor has no recourse under the intellectual property laws either because of the mistaken notion that ``unfair licensing practices can be dealt with through the antitrust laws." Thus, the scope of any property rights in de facto standards should be addressed by defining properly the scope of the applicable intellectual property rights. -11- required to conduct an adequate investigation of monopolistic uses of NII standards could prove disastrous to free competition, and allow the holders of standards to kill their competitors at a critical time in the development of the NII. The uncertain outcomes of such antitrust ``solutions" are an additional impediment to businesses attempting rationally to structure strategies in relation to the NII. It seems far more efficient to focus on the scope of the rights in the first instance, rather than trying to curb their abuse after the fact. Conclusion ACIS believes that intellectual property law will play an important role in the successful development of the emerging NII. In general, intellectual property law is capable of addressing the issues likely to be raised during the development of the NII. Major changes or wholesale revision of intellectual property law is therefore unnecessary; instead, only some minor modifications are needed. The intellectual property law should be used to shape the emergence of the NII in the following ways: 1. The abstraction-filtration-comparison test in Computer Associates and adopted by other cases should be applied to all claims of copyright infringement of standards for interoperability. The government should endorse this approach and urge other courts to adopt it. 2. Protection of content that will flow over the NII is essential. Our zeal to protect it, however, should not be at the expense of other equally important considerations. In this regard, any regulation of devices designed to defeat anti-copying systems should be narrowly and carefully crafted. ACIS suggests a provision similar to Article 7 in the EU Directive or employing a ``substantial noninfringing use" test. -12- 3. Proprietary rights in NII standards for interoperability should be very narrow. Ensuring open access to NII standards for interoperability should not be made primarily the purview of antitrust law, although antitrust law will have a role to play. Rather, the proper balance between the public interest and the rights of creators of standards of interoperability falls within the traditional purview of intellectual property law. September 7, 1994 -13- MEMBERSHIP LIST Accolade, Inc. Advanced Micro Devices Amdahl Corporation America Online, Inc. AT&T Global Information Solutions Broderbund Software, Inc. Bull HN Information Systems Inc. Chips and Technologies, Inc. Clearpoint Research Corporation Color Dreams, Inc. Comdisco, Inc. Emulex Corporation Forecross Corporation The Fortel Group Fujitsu Systems Business of America, Inc. Hitachi Data Systems ICTV Integrated Document Applications Corporation Johnson-Laird, Inc. Kapor Enterprises, Inc. Landmark Systems Corporation LCS/Telegraphics MidCore Software, Inc. New York Systems Exchange, Inc. Octel Communications Corporation Phoenix Technologies, Ltd. Plimoth Research, Inc. Seagate Technology, Inc. Software Association of Oregon1 Software Entrepreneurs Forum2 Storage Technology Corporation Sun Microsystems, Inc. Tandem Computers, Inc. 3Com Corporation Western Digital Corporation Zenith Data Systems Corporation ------------ 1 The Software Association of Oregon consists of 430 software development firms, firms in associated industries, and individuals professionally involved in software development. 2 The Software Entrepreneurs Forum consists of over 1,000 software entrepreneurs and developers. September 1, 1994 I am not a U.S. citizen (I have not even visited there - why bother because I have seen it all on TV ;-) ) and therefore I can only participate in this discussion as a complete outsider. Yet all cultural development is based on the whole history of the mankind, all cultures and peoples have their mark in all new inventions or works, too. This is indeed one philosophical point we should consider when granting a right to benefit from an innovation to a single inventor or creator. What prompted me to write to you is that in the beginning of your report (http://www.uspto.gov/text/pto/nii/ipwg.html) you referred to Mr. Thomas Jefferson's words. I have my own favourite quote of Mr. Jefferson and I think it is even more appropriate here. I don't know the original source of this, but I picked it up from the Internet edition of the excellent Wired magazine. Mr. Jefferson says about intellectual property: "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself. But the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property." Thomas Jefferson Revaluation of Information I believe that Internet has made creating, gathering, processing and spreading of innovation, art and information so easy, that the VALUE of information is now HIGHER than before, because of the greater potential of benefiting of it. And so the right to restrict spreading of information is a bigger advantage for the owner of information than before. And the question is, is it a too big advantage? Purpose of the intellectual property laws has never been to protect some metaphysical absolute right of the owner but to promote new creation and innovation, i.e the progress of the society. However, need to promote creation must be balanced with the self evident need to promote the utilization of existing information. The Overheated Industrial Revolution I think that change and innovation is overheated in today's world. I think the biggest advantage for the mankind would be to better optimize the use of know-how and information we already have. We don't need to promote the massive production of new "art" i.e. bad entertainment. We don't need to promote the advancement of science too much, because it often seems profitable only because of the customers of these innovations share the religion like false belief in everything which is new. Or it is profitable because the tax legislation makes machines LOOK more productive than people. The industrial revolution started as a necessary process but it has largely become a piece of religion. We don't have the freshness of thinking needed to estimate the real benefits of new technology from a human point of view. We take for granted that new machines, new organizational structures, new drugs, new art, new entertainment are better and that the investments to these are justified. We underestimate the COST OF CHANGE and we overestimate the profitability of innovations. And thus we want to protect the inventors exclusive right to make money with the new, expensive innovations. This is necessary to promote the innovation which is so dear to us. But it is absolute intellectual lazyness to think that if innovation is commercially profitable it is good for the society. Skewed intellectual property and tax laws can make innovation look profitable even though it is not. How much innovation there would be if there were no copyright or patent laws of any kind? There would be very little. Would that prove that innovation is not good for the society? No, it would not. There is no such thing as the "market price" for innovations, because the price of them is controlled by legislation. The more protective the law is, the higher is the perceived value of innovation, and it is always a politically defined price. Do Not Overestimate The Value of Intellectual Property At The Cost of Real Productivity for The Society Copyright, patent and privacy of political or business institutions are all aspects of the same broad question of freedom of information. I think we need a more open world, where technology is used for a greater benefit for all societies. This might happen only at the cost of slowing down the speed of change and development. But I firmly believe that problems in world today are not resource problems but political problems. I am not a lawyer, I can't say if the current laws should be changed and how or how their interpretations should evolve in the age of The Internet. But I hope that the the potential of benefiting of more free information and the artificial, political nature of price of innovations are taken into consideration. Anssi.Porttikivi@helsinki.fi Helsinki University Computing Center Lab manager / Internet consultant / Computer science student Helsinki, Finland From: a_rubin (arthur rubin) Date: Tuesday, August 23, 1994 11:01:07 am (PDT) Subject: NII copyright panel draft recommendations To: nii-ip@uspto.gov I am submitting this solely as an individual -- no association of Beckman Instruments on the content of this should be assumed. Credentials: I have been working with computers since 1969; with networks such Internet since 1982. I have a Ph.D. in Mathematics from the California Institute of Technology (1978). Comments: I will restrict my comments to the recommendations in Section IV A. IV A 1 general comment: The NII also makes it possible to make a transfer-by-transmission, as opposed to distribution-by-transmission. In my opinion, transfer-by- transmission (of a legally owned copy of a copyrighted document) should be explicitly legalized, provided the end-conditions are legal. For example, suppose a person (N) owns a copy of program X, and machines A and B. If it would be legal for N to erase X from A, and reinstall it on B, it should be legal for N to transfer X from A to B by transmission, retaining no copy of X on A. IV A 1 a. This proposal seems to make USENet software illegal, without any possible remedy. If the copyright owner of program X "post"s it on a USENet newsgroup, he could still retain the right to prevent the program from being copied on a specific machine, say T. It would, however, automatically by copied to T, thereby making either T or T's feed and infringer. Also, there as the Working Group pointed out, but did not express a specific recommendation on, there is a need to define "import" in the context of GII. As an example, suppose a person (N) has an account at site B in the US, and "ftp"s a file from a site X in another country, and that file is transferred from X to Y (in another country) to A (in the US) to B to N. Is the "importer" (who may have committed a US copyright violation if the US owner of the copyright didn't authorize it) N, B, or A? N doesn't even know who A is, and it's possible no records are kept anywhere that could identify A. X knows B, and may know N, and of course B knows (and probably keeps records of) N and X. B and X may each keep records containing information regarding N, B, and X, and N probably knows X, but there are no guarantees. IV A 1 b. Looks good to me. IV A 1 c. I don't understand what the effect of the proposed change in section 109 would be. Does it mean that (1) transmission of a legally obtained copy of a copyrighted document is not allowed (without permission of the copyright holder), which would probably be covered by the recommendations in IV A 1 a, as "transmission" is defined as "distribution" rather than "sale"; or (2) sale of a document legally obtained by transmission is not allowed (without permission of the copyright holder), which seems to me to be a bad idea? Also, as I mentioned in my IV A 1 comment, perhaps the law could distinguish transfer-by-transmission and distribution-by-transmission, and allow the former but not the latter. IV A 1 d. See IV A 1 comment. IV A 2. In my opinion, this recommendation is a very bad idea. It seems, for instance to ban any disassemblers, which can be used to decipher copy- protection software, but can also be used to debug one's own programs, and can be the best tool for the latter. It's argueable whether the primary purpose of such programs as "PATCH" is to provide quick fixes for errors in computer programs, or to bypass protection schemes in computer programs. Even for such devices where it can be clearly seen that the primary purpose is to bypass software protection schemes, program developers may need them in order to (temporarily) bypass their own protection schemes, in order to debug the program, or the protection scheme itself. For these reasons, at the very least, devices which have a substantial "reasonable" non-infringing use, should be allowed. By "reasonable", I mean that a "reasonable person" would seek out the device and use the device for that purpose. IV A 3. I see the need for this section. Not having a copy of Sec. 506 of the Copyright Act in front of me, I can't comment on the precise content of the recommendations, or whether it is already covered by other sections of Sec. 506. IV A 6. Agreed. I have no comment on sections other than IV A 1, IV A 2, IV A 3, and IV A 6 at this time. Arthur L. Rubin, PO Box 9245, Brea, CA 92622-9245 Electronic addresses: a_rubin@dsg4.dse.beckman.com (work) Beckman Instruments/Brea 216-5888@mcimail.com 70707.453@compuserve.com arubin@pro-sol.cts.com (personal) Date: Wed, 7 Sep 1994 08:45:33 -400 (EDT) From: Bill Sohl Budd Lake To: nii-ip@uspto.gov Cc: whs70@cc.bellcore.com Subject: Comments to draft: "Intellectual Property and the NII" Attention Terri A. Southwick, Attorney Advisor The following are my personal comments to the Preliminary Draft document entitled: "Intellectual Property and the NII". These comments are not those of my employer. The document, on pages 36 and 37 make the following statements: page 36 - "In each of the instances set out below, one or more copies is made, and, necessarily, in the absence of a proof of fair use or other relenant defense, there is an infringement of the reproduction right." page 37 - "Under current technology, when a user's computer is being used as a dumb terminal to look at a file resident on another computer... As long as the amount viewed is more than de minimus, it is an infringement unless authorized or specifically exempt." In both of these statements there is an implied position that almost every Internet transaction today is a violation of existing copyright law, specifically the implication that no authorization to copy has been granted by the author/copyright owner. I (and many others) believe that the vast majority of Internet activity is authorized under an "implied license" to copy concept. That is, if the copyright owner puts his/her document/software/etc. in an FTP site, or posts a document in an Internet newsgroup, or in any other way knowingly contributes the document for use in any aspect of the Internet functioning, then the copyright owner has, in deed, given authorization to any and all who access the copyrighted material in accordance with the normal Internet functions. Such an implied authorization occurs in many ways today outside the Internet. Letters to the editor of a newspaper appear in print on the presumtion that unless the writer expressly denied permission to print the letter, it was, in fact, sent to the editor for publication (i.e. making authorized copies by printing the letter in the newspaper). Frankly, having read the entire draft document I am surprised that no discussion of "implied license" to copy was included. If that is simply an oversight, then it should be addressed in a final copy. If that has been omitted on purpose, then that is a serious ommission. ---- Page 115 - First Paragraph - This paragraph mentions an example of "shrinkwrap" licenses with no discussion of their validity in actual use and/or through existing case law. Again, there are varying opinions as to the applicability/enforceability of any claimed shrinkwrap license or any individual shrinkwrap license terms as part of the actual "sale" of most "over-the-counter" and or mail-order consumer software packages. Reliance, therefore, on the "shrinkwrap license" example in your discussion is inappropriate. Thank you for considering these comments. Bill Sohl 29 Netcong Road Budd Lake, NJ 07828 ------------------------ (billsohl@planet.net) Date: Tue, 6 Sep 1994 14:27:45 -0500 (CDT) From: Billy Barron To: nii-ip@uspto.gov Cc: rothman@clark.net Subject: Re: Draft Report I read your comments about copyright law and the NII. I was appalled to say the least. The implications of what is in here will kill basically all electronic copyrighted materials and the profit that copyright holders will make off of them. It will be a loss to not only the readers of information, but will mean lost opportunities for authors, publications, editors, etc. Some of the parts that I found to be the most distressing where in the definitions of when a copy is made. Let me quote the sections and what I find offensive about them: > . 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. > What is a very brief period? One of my key concerns are backups of data. Users may make a backup copy so they will not lose valuable information. Granted a copy is made, but there should be a discussion of this special type of copy. Even worse is the case where a user has a copyrighted file on a central server. The server adminstrator does not know this and proceeds to backup up the whole system. According to the way I was reading this, the adminstrator has violated copyright law. > . When a file is transferred from one computer network user to > another, multiple copies are made.[109] > First, the wording needs to be changed. It should say "a copy is made and possibly multiple copies are made." There are forms of file transfer that do not make multiple copies unless you are counting the time parts of the file exist in the RAM of routers, but hopefully that falls under the "very brief" definition above. >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 receipent. > I think this is missing the point. The "transmission" and intent of the sender is often not the issue and the intent of the receipent is the issue. > _(2) This subsection does not apply to the sale or other disposal of > the possession of that copy or phonorecord by transmission._ > It should be perfectly legal for the owner of a copy to sell his copy by tranmission provided that the owner immediately removes his own copy of the work. > 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. > Legal protection alone is all copyright holders have now and it works fine. According to these findings, you should outlaw FAXes, copiers, and other such devices. > 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. > Software vendors learned long again that consumers do not want copying systems and they were losing consumers because anti-copying systems inferred with the ability to use computer systems. The same will result with the NII. >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. > Notice that digital audio systems still haven't caught on though the devices can be produced cheaply enough. The demand for the technology is not there even though it is superior to cassettes because it is limiting to consumers. It is causing a situation where the pursuit of the owners rights is hurting the owners themselves. Also, I feel that the common practices on electronic mailing lists and newsgroups of quoting large parts of other people's letter to respond to their points may be considered outlawed by the wording. Please give this issue very careful consideration. Another issue that needs to be addressed here is "fair use". With these copy protection systems and proposed changes, how can one quote small pieces of information legally? Finally, in many ways, I think this document misses the point that this will not work anyway. Public libraries in the past have not been a large threat to the publishers because it was time-consuming to use and a lot of people preferred to get their own copy. If a public library has a copy on the NII, that work will never sell to an individual because the individual can "display" the work from a public library. A fundamental rethinking of the way copyright works is needed that some changes are not going to fix. I am for the rights of the copyright owners as much as you are especially since I do some writing (both documents and programs) for my income. However, with the changes proposed, I feel that not only will consumers lose, but the copyright owners themselves will end up losing out. Please note that the software industry remains an extremely profitable industry even though it faces these same problems on a daily basis. Billy Barron Plano, TX 1. 17 U.S.C. 117 Section 117 was added to the 1976 Copyright Act in response to the CONTU report. One significant change was made between the CONTU report and the law as enacted: in the enacted law the section was limited to the "owner" of the computer program, instead of the "rightful possessor" (Note that I did not reread the CONTU report, so this wording may be slightly inaccurate here). The distinction was pointed out in the case of MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) where the court refused to apply section 117 in the case of a licensee. I am suggesting that two changes be made to Section 117. a. Application of 117 regardless of ownership of copy. First, the section should apply regardless of the ownership of the copy of the work being executed or archived. One justification is that there is some debate whether any software is actually sold. Instead, software vendors invariably claim that ownership is retained since any transaction is a license and not a sale. Currently this argument is not taken very seriously in the case of mass market P.C. software, since the "license" agreement is invariably "shrinkwrap". However, there does not appear to be much debate as to the ownership of copies on mainframe and mini-computers since the software usually is subject to signed licenses. This was apparently the case in the above cited MAI v. Peak case. Shrinkwrap "licenses" are currently suspect regardless of whether subject to Uniform Commercial Code Article II (Sales) or the Restatement of Contracts, Second. In the case of UCC Article II, shrinkwrap terms were rejected in the case of Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F.2d 91 (3rd Cir. 1991) as after-supplied terms. In the case of non-merchant sales, the terms would be considered proposed terms, with no obligation of the non-merchant purchaser to reject the terms should they not be acceptable. In the case of the Restatement, shrinkwrap terms are invariably not supported by valid consideration. However, the above is probably changing in the very near future. Several of the changes to the U.C.C. by the committee chaired by Professor Raymond Nimmer appear to be primarily aimed at overcoming the Step- Saver problems with shrinkwrap "licenses". This would be accomplished by giving effect to after-supplied terms if this type of terms are standard in the relevant industry, regardless of whether or not the purchaser ever had seen the same or similar terms before. The relevancy of the proposed U.C.C. changes would be to put into question whether Section 117 applied to any software whatsoever, since it presumably would no longer apply to mass-marketed "shrinkwrap" software, as that software would be considered "licensed" instead of "owned". b. Application of 117(2) to non-software. The other proposed change to Section 117 is to apply 117(2) to all electronicly recorded works, and not limit it to computer programs. One of the reasons for this proposal is that programs and non-programs are frequently intermixed. For example, I backed the contents of a harddrive to tape this evening. This is a normal archival operation, performed primarily to protect against media failure. However, under a strict reading of Section 117, only the copying of computer programs was privileged. The copying of the numerous non-program files intermixed among the software programs would not be privileged, and thus presumably infringing. One could make the argument that any fair use copying has been codified by enactment of Section 117, and thus fair use would not apply. Archival is a standard practice with electronic media. It by its very nature creates one or more copies. The archival of computer programs is protected by Section 117(2). However, as currently written, the section does not apply to any other files stored on electronic media. Thus, archival of these non-software files is presumably infringing. This distinction makes no sense. 2. OWNERSHIP OF A COPY VERSUS OWNERSHIP OF THE MEDIUM. United States copyright law does not appear to address the question as to whether or not ownership of a copy of a work is inseparable from ownership of the medium in which the copy is fixed. As far as I have been able to determine, the closest that the Copyright Act seems to come is to state in Section 101 that "The term 'copies' includes the material object, other than a phonorecord, in which the work is first fixed". But this obviously only applies to the original work, when it is being created, and not subsequently created copies. Those that argue that the ownership of the two is inseparable often use the analogy of a book. There is no question that when you buy a (physical) book, you are purchasing both the paper that the book is printed upon, and the "copy" of the "work". But the analogy of a book is flawed since in that case the ownership of the copy and the medium it is affixed to is invariably the same through the application of the first sale doctrine. The situation is quite different when copyright law is applied to electronic and magnetic media. These media have the common characteristic that it is extremely quick and easy to fix a copy of a work in either type of media, then replace the copy with a copy of another work just as quickly and easily. Admittedly, software or copies of other works can often be purchased already fixed on an electronic or magnetic media. This is more analogous to the book situation. More interesting are the situations where the media and the copy are not purchased or otherwise legally acquired together. a. Shareware One situation of interest is that of Shareware. In the case of Shareware, software is usually downloaded electronically from a server or bulletin board to a user's disk. The user then is allowed to evaluate and test the software. If he should decide to keep the software, he is instructed to pay for it. Otherwise, he is supposed to delete the software. Creation of the copy of the program on a user's disk is obviously done under license. Likewise, any copies made through necessity during the testing and evaluation would be covered by license. Finally, creation of other evaluation copies is also usually under license. However, many have argued that ownership of the copy of the program downloaded to the disk is inseparable from the ownership of the media (disk) it is downloaded to. Thus, the owner of the media would now presumably own the downloaded copy. Since the copying was done under license, the copying did not constitute infringement. And since the owner of the media now owns a legally created copy, Section 117 would be applicable for any copies made subsequently either to execute the program, or for archiving. b. Transmitting a File Across Country Acquiring Shareware without paying for it as outlined above is only one of the more obvious situations where ownership of a copy of a work and ownership of the media it is fixed in is interesting. More importantly are the situations where a copy of a work is legally copied to magnetic or electronic media. One example is a file copied across a number of nodes as it transits the country. The intermediate copies of the file are fixed at least in RAM, and often on magnetic media. These copies are presumably legally made. Do the owners of the intermediate nodes now own copies of the work? If they do, the first sale doctrine may even give them the right to sell the work. Additionally, if the file contained a computer program, Section 117 may give the owners of the intermediate copies the right to make any additional copies necessary to operate the programs. Of course, one could also argue that if ownership of media and copy were inseparable, then since the copy is usually worth more than the media in the case of electronic and magnetic media, that the ownership should follow the copy, and not the media. Thus we would have the owner of the copyright in a work owning all of media into which the intermediate copies are fixed. This result of course is ridiculous, since ownership would change the minute someone else's file was staged through those intermediate nodes. Whether ownership of a copy can differ from ownership of the medium in which that copy is fixed is relevant in reference to almost all electronic and magnetic media in which copies of different works can be easily and quickly overlaid. This is the situation in the future, especially in the NII. c. Separation of Ownership of Copy and Media At least since the dawn of the computer age, de facto separation of the ownership of copy and media has been the rule rather than the exception. Originally, mainframe computer manufacturers licensed software essentially for free when someone purchased a computer. Later these vendors had to unbundle the software and hardware, but continued to insist on signed license agreements. Recently as software has become mass marketed, vendors have begun to dispense with signed licensing contracts, relying on "shrinkwrap" licenses of questionable merit. In the typical mainframe and mini-computer case, a software vendor will have a signed license agreement with a software user. The user licenses the software, agreeing to make periodic payments. The vendor usually supplies one copy of the program on magnetic media. The user will then copy the program onto his own hard drives and tapes. Since the user has licensed the software from the vendor, the user is not considered to be the owner of the copies of the software that he has on his hard drives and tapes. Instead, ownership remains with the vendor. But ownership of the magnetic media remains with the user. Software licensing agreements have been routinely approved and enforced by courts. More importantly the Ninth Circuit in MAI v. Peak (cited above) specifically refused to apply Section 117 to a licensee since THE LICENSEE DID NOT "OWN" THE COPY OF SOFTWARE AT ISSUE, despite the fact that the licensee owned the media on which the software resided. d. Dowling v. U.S. Reinforcing the above distinction is the Supreme Court case of Dowling v. U.S. (1985) where the high court refused to allow the illegal copying of a work (without removal of media) to be considered theft. In dicta they also questioned whether a copy of a work could be converted. The Court essentially held that the copyright in a work could be stolen, as could media. Both are personal property. However, a copy of a work could not be stolen or converted. It is not personal property. Rather the copying would be considered copyright infringement. e. Proposal - Distinguish between ownership of copy and media. My proposal is to make clear whether or not ownership of a copy and the medium it is fixed upon are separable. If they are not separable, then it should be clarified whether ownership of media follows the copy,or ownership of the copy follows the media. However, I believe that a number of copyright problems can be avoided by specifically declaring that copy and media are separable, in particular in the case of the NII and the rapidly proliferating use of magnetic and electronic media that have the significant characteristic that copies of various works can be rapidly and easily overlaid over each other upon such media. 3. PROPOSALS FOR CHANGING COPYRIGHT LAWS This section is in response to the Working Group Report's suggestions for changes in the Copyright Laws. a. Everything is Going Digital Soon most electronic communications will be digital, as will be many, if not most copyright protected media. This is due to a number of factors, including the inherent reliability of digital media - it is a simple matter to add error detection and error correction codes. We have seen this trend in the replacement of phonograph records and tapes with Compact Disk technologies. Another example of this trend is the availability of a $100 board that makes a computer/monitor into a television. Unfortunately, once digitized, copies of works are extremely easy to reproduce, duplicate, etc. as they can be viewed by a computer as just one more file type. Thus, a sound recording, photograph, movie, or almost anything else can be distributed internationally to thousands of sites in mere seconds through a single keystroke. The easiest way to manipulate digital data is through the use of software. That is one reason that patents containing significant amounts of software are becoming common. For example, Dolby sound processing used to be done in electrical circuitry. Now software is used. b. Suggestion that Works be Protected by Encryption One of the suggestions in the Report was that various types of encryption and encoding be used to protect works from theft. Unfortunately, even with the proposed legal sanctions, breaking these schemes is foreordained. First note that one of the prime security tenets is that security through secrecy is considered almost useless. Once the hacker pierces the secrecy, the security is compromised. It has been the experience of the computer industry that hackers can break a security system significantly faster than such a system can be created. There are a number of reasons for this. First the hackers are usually more motivated than the security system designers. Secondly, there are invariably many more people trying to break a security system than were used to design it. This is the many to one problem. Third, the hackers are as smart, if not smarter than the security system designers. Fourth, there can often be significant amounts of money involved. Finally, time is usually on the side of the hacker. One example of these dynamics at work is in the area of satellite TV signals. These are encrypted. But there is a thriving black market in decryption devices and in the encryption keys. Indeed, there are parties offshore that can apparently hack the encryption keys as fast as the TV people can change them. The keys are sent back into the United States electronically. As digital data, they can be made available in numerous different ways. For example, the keys can be posted to a Bulletin Board System (BBS). Alternatively, the Internet/Usenet can be used. Indeed, the NII is exceptionally well designed for just such rapid national distribution. Note the problems that the Canadian government recently faced when trying (unsuccessfully) to keep the particulars of a particularly gruesome case from the Canadian public. In that case, the information changed locations significantly faster than the Canadian government could react. Again, as evidenced by both the satellite encryption situation and the Canadian government's blackout attempts, national borders are becoming almost meaningless as barriers to data flow. Another recent example was the exportation of restricted encryption technology. Mr. Zimmerman of Boulder, Colo. had apparently written an implementation of a reasonably secure encryption algorithm. An export license was refused for national security reasons. Some other (possibly unknown) party recently posted the program to the Internet. Within minutes it was in dozens of foreign countries. Within hours it was in most of them. And note that the program, as with any other type of digitized work, was just another file type for the network. The result would have been no different for sound recordings, videos, photographs, or books. The obvious counter to the proposed copyright protection schemes and the like would be to do the hacking outside of the United States. As with data leaving this country, it is very nearly impossible to keep data from coming into the country. c. Solution I see the proposed technical solutions, bolstered with legal sanctions, as being no more than low speed bumps, marginally slowing the theft of copyrighted information. I see no real solutions to the problems. The value of most information and copyrighted works may be limited to its immediacy. >**************************************************************************** ------------------------------------------------------------------------ Bruce E. Hayden 29330 Lower Moss Rock Road bhayden@copatlaw.com Golden, Colorado 80401 (303) 526-2399 FAX (303) 526-2008 INSTITUTE FOR LEARNING TECHNOLOGIES TEACHERS COLLEGE | COLUMBIA UNIVERSITY NEW YORK, NEW YORK 10027 The following comments have been submitted to the Information Infrastructure Task Force Working Group on Intellectual Property Rights by the Institute for Learning Technologies. September 1994. Introduction These comments are submitted by the Institute for Learning Technologies (ILT) at Teachers College, Columbia University. Teachers College is a graduate school of education offering innovative programs in a wide range of professional specialties. ILT, which was founded in 1986, works to advance the role of computers and other information technologies in education and society. ILT supports the call in the Working Group report ("Green Paper") for a wide-ranging program to educate the public and educators about copyright. Students who are not yet in the market for digital material should have access to advanced technology and software, guided by educators who can teach the "what," "where" and "how" of electronic information. ILT also agrees with the Green Paper's emphasis on strong national and international protection for copyright owners, though with the qualifications stated below. The Clinton Administration has directly linked the use of NII services and technologies to major improvements in American education. Opportunities for student use of high-value-added databases and resources are increasingly available at all levels of American education, as a result of electronic information and the NII. Of particular importance to universities is the introduction of computer networks that connect students and faculty members to a wealth of information, both on and off campus. The Working Group's final recommendations and background report will be a significant guide in subsequent congressional and judicial proceedings. ILT suggests that the final report give fuller attention to ways that educational groups and public users can benefit from the new networking capabilities. First Amendment Considerations It is important for the final report to extend the public policy in favor of the free dissemination of ideas, which is grounded in both the First Amendment and the intellectual property clause of the Constitution, in relation to the NII. The significance of these interrelated Constitutional provisions for both national and international trade in copyrighted material is, unfortunately, not mentioned in the preliminary report. Article I, section 8, of the Constitution, upon which all copyright and patent laws are based, recognizes the value of the diverse contributions made by creators and scientific researchers to the public welfare. The exclusive rights given to the copyright owner by law have been amended by exceptions crafted in relation to each new technology, such as the compulsory licensing provisions for cable television (sec. 111) and the detailed permission to copy library material (sec. 108). This effort to balance the rights of copyright owners and the public carries forward the objectives set forth in the intellectual property clause of the Constitution and should be incorporated in new law governing electronic information networks. History has shown that each new major communications technology requires a reinterpretation of existing law in order to determine ways in which the basic Constitutional objectives can be reinforced. Therefore, it is reasonable to expect that the final Working Group report will relate its recommendations for changes in the copyright law to these Constitutional goals. Historical Information Educators recognize the importance of a secure intellectual property framework. At the same time, they have a keen interest in making use of the widest possible range of digital and nondigital material for research and classroom instruction. It is not sufficient to merely carry over the exceptions relating to education. Given that electronic information will play such a central role in the classroom of the future, policy makers should be looking for new ways to broaden lawful access and thereby encourage educators to make greater use of digital material. Copyright law has traditionally recognized the special status of education with regard to intellectual property. Fair use, which is contained in section 107 of the Copyright Act, allows the use of copyrighted materials without the consent of the copyright owner, under certain conditions. It has long been a vital resource in a wide range of educational activities. One of the first attempts to interpret this notion for new technology was the so-called Gentlemen's Agreement of 1935. A response to new duplicating technology, the agreement exempted the library from liability when material was copied for a researcher, although written confirmation was required that the copy was solely for research. Later, as Congress moved to legislate the fair use doctrine, educators demanded greater specificity than the general wording in the law. This led to the formation of several committees comprised of industry representatives, educators, librarians and others that developed fair use guidelines for photocopying and music used for educational activities. These were entered into the Congressional Record and were followed, several years later, with guidelines established for the taping of television broadcasts and use of computer software. It is pertinent to mention that the development of these guidelines was actively encouraged over a period of ten years by interested members in Congress. Educators, publishers and library groups worked intensively to formulate mutually acceptable guidelines. Such sustained effort aimed at achieving consensus on educational use of copyrighted material contributed to the overall viability of the 1976 Copyright Act's fair use provision, and bestowed legitimacy on the new copyright law. Today policy makers should renew the nation's commitment to fair use as copyright protection is reinterpreted for mixed media and online transmission. The Classroom and Library Exceptions Aside from fair use, there are two other exceptions to copyright that are of particular importance to schools and libraries. Section 110 provides an exemption for certain classroom displays and performances. The second exception, Section 108 for libraries and archives, sets forth detailed specifications according to which reproduction and interlibrary loans are permitted. The wording of these provisions was determined, in large measure, by the participation of educational organizations in hearings leading up to the new copyright law enacted in 1976. For example, testifying before the House copyright subcommittee in 1975 (which was then headed by Rep. Kastenmeier), Leo Raskind, speaking on behalf of the American Association of University Professors, The American Council on Education and The Association of American Law Schools, commented with great specificity on the provisions of section 108. Raskind's critique touched on a wide range of issues. He even reminded policy makers that Congress had recommended "the shared use of library materials" in an amendment to the Higher Education Act of 1965. Numerous other organizations were represented in the long course of congressional efforts to update the 1909 Copyright Act. Many of the same organizations, and others, are currently pressing for updates in provisions which directly affect the ways in which they utilize new computer technologies and information services. Updating Fair Use -- and Including the News The fair use principle and the educational exceptions must not be lost in the shuffle as copyright law is revised to deal with the new electronic networks. Contrary to the idea that fair use has no place in a digital environment, fair use facilitates the balancing of conflict between cultural objectives and property rights, combined with the First Amendment freedom-of expression guarantee. It is of particular importance in times of rapid technological change. Until now, news has not been included as one of the types of materials for which fair use guidelines were considered necessary. Yet it has become of tremendous importance due to the use of databases, online services, CD- ROMs and even interactive television to obtain information about recent and current developments in society. Many of today's newspapers can be viewed now via America Online and other networked services. Others such as ClariNet constitute independent combinations of portions of existing new services. Testimony by an educator in the late 1970s explained the way in which a news feature could enhance the classroom experience: "The quality of teaching is greatly improved by making available to the students the latest commentary about it while they are studying the topic. Denial of availability of such copyrighted material would not serve the interest of copyright proprietors. Students in the classroom situation are not potential subscribers to the Bureau of National Affairs, Antitrust & Trade Regulation Report, for example, or to the Prentice-Hall multi- volume Federal Income Tax Service, during their tenure as students...Denial of the use of this material will mean simply that the education process will be less well served and the copyright proprietor will be without even the benefit of having the availability of this material brought to the attention of students." (B. Freitag, Council Rock High School, New Town, Penn., hearing before House copyright subcommittee, May 15, 1975) As this testimony indicates, students are generally not in the market for most of the electronic information that can provide them with an accurate picture of the world. Yet, the eleventh grader who learns how to access these resources will later know how to search electronically for the information relevant to his or her own activities. ILT has seen this through its own experiences at a public high school in Los Angeles and at both public and private schools in New York City. Information equity can begin when students from dissimilar backgrounds are given access to similar technology and educational content. Unfortunately, despite the great importance of news transmission to history, cultural studies, and other courses of study, few electronic news services offer special licenses to educational institutions. The companies offering these services do not seem to find fair use relevant to their operations. However, to deny the classroom teacher and students access to such material will mean only that the students will be without current ands timely material, the educational process will be less well served and the copyright proprietor will be without even the benefit of having this material brought to the attention of students. The Working Group is urged to recommend that news be included in the agenda of the planned conference on educational fair use guidelines. The questions that need to be examined include: to what extent may professors and students make use of copyrighted electronic news transmission; whether a portion of a story may be incorporated into a student's production; whether stories or images may be included in a professor's course material, and what types of restrictions should pertain to educational use of such material. Libraries and the NII When they are fully operative, electronic information systems will touch every medium and form of communication. In this environment, almost all information other than that which is spoken to someone face to face will exist or have been converted to an electronic format, in which they will be available for manipulation and storage. It is therefore of very great importance that people have opportunities to learn about the hardware and software being introduced. The place where such learning is most likely to take place, for the widest population of Americans, is the library. Several organizations, including the Association for Research Libraries, the American Library Association and the Coalition for Networked Information, have been engaged in in-depth studies of the economic and technological options for libraries in the digital age. As a recent example, ILT would like to draw the Working Group's attention to the principles of the Association of Research Libraries which were formally approved in June 1994. The second of these seven principles states, in part, that: "Fair use and other relevant provisions are the essential means by which teachers teach, students learn, and researchers advance knowledge. The Copyright Act of 1976 defines intellectual property principles in a way that is independent of the form of publication or distribution. These provisions apply to all formats and are essential to modern library and information services." The other principles articulate the libraries' keen interest in seeing that a balanced policy framework is established for the emerging information infrastructure. Present Concerns of Libraries The two areas of greatest concern to libraries in this proceeding are the "Green Paper" recommendations regarding electronic transmission and the first sale doctrine. A) Electronic Transmission Regarding electronic transmission, the Green Paper states that any transmission of an electronic document is a "simultaneous fixation" and thereby comprises making a copy of the work However, the same report recognizes that the copyrightability of electronic transmission remains an unresolved issue. Equating all computer-to-computer transmission with the making of a copy, as indicated in the notion that every transmission is an electronic fixation, is not justified. The definition of "copy" in the digital context clearly calls for further analysis. As the 1986 OTA report on intellectual property and computers stated: "The advent of computer networks may mean the loss of the identifiable boundaries of works on which copyright has relied to distinguish "yours" from "mine." In this fluid environment, works of art may lose the singular thing-like quality that made copyright protection possible. The extent of the problem is hard to estimate given our limited understanding of the full impact of electronic networks on the creative environment." (Intellectual Property Rights in an Age of Electronics and Information, OTA, p. 68) There is a tendency to think that every time digital material on disk is used, the user is making a copy. Yet this involves a broad presumption, which may insinuate wrongdoing in situations where no real copying is being done. In educational settings, for example, a student may display online material on a classroom computer screen, yet be unable to create a copy that can be used at any other time. In other words, the classroom exercise could rely upon an ephemeral copy, and be controlled technically or by legal restrictions. In other situations, the student may be able to print the material out on paper, but not capture it to a floppy disk, thus making retransmission much more difficult. Having the work on-screen does not mean that the user possesses the file. There are features on the Internet, such as the World Wide Web, that make it easy for the user to display a variety of materials, some of a multimedia nature, from different sources. Yet, in some cases, it is impossible or impractical for the user to retain a permanent copy of the materials displayed. Thus it seems that the Copyright Act requirement of fixation has not been met. This presents a new and complex question of copyright eligibility for electronic intellectual property in general. But, at the same time, it shows the potential for allowing wider use of electronic materials in schools and libraries without the risk of violating the copyright owner's rights through unauthorized retransmission. In 1990 Congress amended the Copyright Act to proscribe the commercial lending of computer software. The amendment expressly states: Nothing in this subsection shall apply to the lending of a computer program for nonprofit purposes by a nonprofit library, if each copy of a computer program which is lent by such library has affixed to the packaging containing the program a warning of copyright in accordance with requirements that the Register of Copyrights shall prescribe by regulation. The purpose of the amendment was to restrict the lending of software for profit, but not to eliminate its use in the non-profit educational context. The Working Group is urged to recommend parallel protection for not-for- profit uses of electronic information by libraries. B) The First Sale Doctrine "First sale" is an expression that was coined to note that the distribution right in sec. 106 of the Copyright Act limits the copyright owner's right to control or prohibit distribution to the first sale of the work. The first sale doctrine has a venerable history. As early as 1908, the Supreme Court construed the right of exclusive sale held by copyright owners and decided that it did not create an additional prerogative enabling the original rights owners to restrict future resales (Bobbs-Merrill Co. v. Straus, 210 U.S. 339). More recently, in 1984, it was held that, "The first sale doctrine prevents the copyright owner from controlling the future transfer of a particular copy once its material ownership has been transferred." (Columbia Pictures Indus. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir.). The first sale doctrine is statutory but finds its origins in the common law aversion to controlling personal property. In addition to stimulating continuing sales of a copyrighted item, it is a firmly established anti-monopoly exception, which is of the utmost importance at a time when technology permits many works to be combined in a digital stream and controlled together. The 1992 report of the Office of Technology Assessment, entitled Finding a Balance: Computer Software, Intellectual Property, and the Challenge of Technological Change, highlights the complexity of digital media: "Digital information includes multimedia or mixed media databases, which may include images, music, text or other types of works. The status of mixed media works under copyright is not clear. Mixed media is a fairly new concept; the acquisition of rights to convert copyrighted works to digital form for incorporation in mixed media databases is often difficult because conventions and standards for royalties do not yet exist., nor are there organizations of rights holders to collect the royalties." (Finding a Balance, p.26) The Working Group should provide a fuller explanation and policy justification of its recommendation to eliminate the first sale doctrine from the NII. This is clearly a complicated matter, one that requires a complete examination of the technological and other enforcement mechanisms available before a major change in the copyright law takes place. In an unwarranted summary declaration, the Green Paper refers to the recent legislative amendments which made the first sale doctrine inapplicable to computer software and sound recordings. It then implies that this is the correct policy for the NII. On page 55 it states that "these exceptions were enacted because of the ease with which reproduction of those works can be made at a lower cost than the original with minimum degradation in quality ... . The rationale for these exceptions may apply to other types of works as more types of works become available in digital format." (emphasis added) Yet the recent exceptions mark a major departure from the long history of the first sale doctrine wherein its place in the Constitutional framework of copyright law was firmly established. The greater ease of reproduction is not, by itself, a sound policy justification for such a sweeping change. Until a fuller study is done, the current ad hoc formulation of rights through licensing negotiations and judicial proceedings is the reasonable way to proceed at this time. Need for a New Approach Language in future copyright legislation affecting the scope of copyright for electronic transmission will have a direct impact on interlibrary loans. Similarly, the Green Paper's recommendation that the Copyright Act be amended to make the first sale doctrine inapplicable to electronic transmissions will impede some of the major benefits which libraries can convey upon their patrons via the emerging electronic infrastructure. Extending the rights of the copyright owner to the NII requires a different approach than in the print context. The publisher of an electronic newsletter, for example, should have the right to control unauthorized retransmission. At the same time, if the broad scope of copyright suggested in the draft report were adopted, without exceptions, it would prohibit copyright-free lending and teaching of materials stored electronically. The transmission alone, no matter how temporary the viewing, would be sufficient to trigger the requirement of obtaining permission, unless companion legislation or government-approved guidelines were adopted in the areas of fair use and sharing by library or educational institutions. Not enough is presently known about the varied uses of electronic information, including interactive media and digitized audio and visual material. The Green Paper groups all forms of digital information together, and makes no mention of the emerging types of online transactions. Sound policy making for high speed electronic networks should involve a careful study of different types of content to be managed, stored, accessed and sold in commercial transactions on the NII. In ILT's view, any new copyright law, based on the findings in the "Green Paper," would be likely to overlook cutting edge developments and cut off valuable new forms of NII transactions. Additional analysis and attempts to balance the competing interests should be conducted. ILT thereby joins the call by the American Library Association, the Association of Research Libraries and other groups for the appointment of a high-level commission to analyze and report to Congress on possible new areas of copyright protection. The need for comprehensive study was also emphasized in a recent court decision regarding copyright for computer software, which suggested that a CONTU II was needed. (Computer Associates v. Altai, 982 F.2d 693, 712. 2d Cir. 1992). Summary and Conclusion Promoting education will be one of the primary goals of the National Information Infrastructure. In order for this to occur, policy makers will need to find a reasonable balance between the ownership interests of copyright holders and the desire of educators and libraries for the widest possible access to digital material. ILT believes that an effort at this time to codify copyright for electronic transmission would be premature. Formal study of the way in which various media can be combined and manipulated and controlled via computer are pivotal to national policy regarding rights on the information highway. ILT thereby supports the call by the American Library Association, the Association of Research Librariies and other organizations for the appointment of a high level commission to study and report to Congress on appropriate new areas of copyright protection.This suggestion for further investigation includes the need for fuller attention to educational and library uses of electronic information and should include a complete analysis of the the extension of the first sale doctrine. The Working Group is urged to review the exceptions for libraries and schools contained in sections 108 and 110 in its final report. It is important that the investigation of ways to expand the exceptions in section 108 and 110 begin as soon as possible. This is, in part, to allow equitable policies to be established in relation to the future rights and conditions for the ownership of and public access to networked information. The basis of the framework for such a compromise can be found in the long tradition of educational exceptions in the copyright law. Contrary to the position that fair use is obsolete, ILT believes that this equitable doctrine is more important than ever. Book publishers and other content providers have learned to live with fair use and the other educational exceptions; there is no reason why providers of online information cannot do the same. Respectfully submitted, Donna Demac, J.D. Senior Research Associate Institute for Learning Technologies Teachers College | Columbia University New York, New York 10027-6625 voice: 212 678-4076 email: dad26@columbia.edu -----BEGIN PGP SIGNED MESSAGE----- COMMENTS ON THE DRAFT REPORT OF THE INTELLECTUAL PROPERTY WORKING GROUP (mkj@world.std.com) September 7th, 1994 Commissioner Lehman, and Ladies and Gentlemen of the IPWG: First, allow me to apologize for the lack of detail in this letter of comment. There is much more I would have liked to say, but in the very limited time I had between discovering your report and this deadline for comments, it was all I could do to prepare these very general remarks. I must also point out that I am an authority in exactly NONE of these matters. I am not qualified to assess the acuity of your legal analysis, nor will I attempt to recommend any specific changes to any statute. My comments will be purely of a general nature, from the perspective of a long-time Internet user and interested U.S. citizen. Overview ======== I am very concerned about the recommendations your group has made for the protection of intellectual property on the NII. Each time I read your draft report, I see in my mind pictures of families being hauled into court and ruined because their 13-year-old uploaded the latest hit song to an ftp site; I see censorship and surveillance; friends turning in friends for money; a draconian and expensive government "war on piracy"; and many other equally unappealing images. I hope no one's idea of "progress" could encompass or endorse such scenarios! These consequences proceed from basic errors in your approach. I believe that your report falls short in the following major respects: (1) It fails to recognize the fundamental conflict between copyright and informational networking, and therefore makes recommendations which are futile and destructive; (2) It fails to appreciate many of the unprecedented benefits made possible by the NII, and therefore makes recommendations which may stifle those potentials; and (3) It concentrates too exclusively on the financial interests of existing information industries, and fails to adequately represent the changing interests of the general public. The Clash between Copyright and Networking ========================================== It is fundamental to the nature of networking to eliminate informational scarcity within its scope, by encouraging cheap, easy and ubiquitous copying and distribution of information. This is one of the principal purposes for which networking technology, as we currently know it, has been developed and optimized, and it therefore well describes some of the most predictable and inescapable effects which the deployment of networking is bound to have in any informational "ecology". It is also a general characterization of at least one of the principal benefits of networking. Frustrate this effect, and one might argue that there's not much point in having a network at all. Copyright, on the other hand, may be approximately described as a strategy of scarcity, based on scarcity. The appropriateness and practicality of copyright depends largely on the presumption that copying and distribution are in themselves valuable services, likely to be concentrated into isolated and identifiable ventures. It has become a maxim among computer users that information is different from other things; for better or worse, it is not amenable to the same protections or ethical guidelines. Other products are made of tangible atoms; informational products are made of intangible bits. The Copyright Act itself appears to recognize the impracticality of applying copyright to intangible products, in its requirement that works must be fixed in tangible form to qualify for protection. I don't believe that stories and songs passed by word of mouth were ever intended to qualify for copyright protection. And with the advent of the Internet and other precursors of the NII, the notion of "word of mouth" is taking on a very expanded meaning. Copyright and networking are in opposition at their very roots. It seems to me impossible to reconcile copyright with the deployment of an NII based on any known technologies or principles. The Strategy is Not The Goal ============================ Because of the long tradition of copyright, and its intimate association with most of our ideas about intellectual property, it is easy to lose sight of the fact that copyright is merely a means, not an end. Criticisms of copyright are sometimes interpreted as attacks on the principle of protecting intellectual property, but that is certainly NOT my intention here. For many of the best informational products and services to flourish on the NII, it is clear that some form of protection for related investment will be needed, as it has always been. But it is equally clear that copyright is no longer up to the challenge. New strategies are needed. What these new strategies might be is an enormous and difficult question, entirely beyond the scope or ambition of this letter. Some alternative ideas have already emerged. No "silver bullet" to compare with copyright has yet been found, but I believe that new and better strategies will arise out of usage, with more creativity than either I or a short-term government panel can possibly muster. What is clear is that the pursuit of copyright per se in the context of the NII will be inadequate to protect intellectual property, and at the same time will be destructive of other important goals and interests. Problems of Enforcement ======================= Enforcement even of existing copyright laws on the NII, let alone the expanded provisions recommended in the IPWG's draft report, would appear to pose a challenge of unprecedented difficulty, carrying with it unacceptable risks of social, moral and economic harm. Given the ease of copying information freely on networks, combined with the enormous financial and intellectual benefits which the average person will stand to gain by doing so, and the great difficulty of detecting violations, copyright is unlikely to be respected even by otherwise law-abiding citizens. The temptations are worse than leaving thousand-dollar bills lying around on the streets! Such law makes an increasingly large number of ordinary people into "criminals". Moreover, the moral implications of copyright violations on the nets are far from clear. Simplistic analogies to "stealing" and inflated claims of software companies notwithstanding, the true dimensions of harm and losses from common small-scale piracy have never been well established. It is not unreasonable to speculate that many instances of illicit copying do not in fact result in any actual harm to the copyright owner, and in some cases may even create an eventual related sale. I say this not to defend illicit copying in any general way, but merely to illustrate the ambiguity of the individual moral choice involved. Large-scale piracy operations as we currently think of them will have no reason to exist on the NII, since there will be no profit in them; most violators of copyright will be average people, many of them children. (Can you imagine trying to persuade teenagers not to trade music videos among their friends?) These people have no real ability to "repay" the damages, often unrealistic, which current law would impose. Because of the privacy in which most illegal copying will be done, evidence in net-piracy cases, whether civil or criminal, will have to come largely from surveillance, informants, and "stings". These are the most undesirable of law enforcement methods, which undermine our civil rights and liberties, and do serious damage to our social fabric. Fear of prosecution under a variety of laws is already having a chilling effect on the development of some NII services. Small and medium-size BBSs have been repeatedly targeted for seizures and other actions. Larger services have resorted to monitoring and censorship of content, and some appear to keep a bevy of trial lawyers hopping as well. Without relief, business on the NII will be increasingly reserved for only those firms which are able to afford a substantial legal staff. The IPWG's determination to lure commercial providers onto the NII with false promises of effective copyright protection can only lead to disastrous consequences. Once a few large corporations have invested heavily in the NII, and begin to realize that copyright isn't working, they can be expected to respond with strong measures, and strong political pressures for government to "get tough on net crime". And since only a small percentage of violators will ever be caught, there will be a temptation to pursue deterrence by "making an example" of these unfortunate few, out of all proportion to their actual crimes. There have been any number of recent cases in which NII explorers and pioneers have been harassed, prosecuted and/or imprisoned, chiefly as a result of pressure from industry, for the specific purpose of spreading fear in online communities. Need I mention Operation Sun Devil? Judge Louis Stanton, who recently sentenced 21-year-old "hacker" Mark Abene (a.k.a. Phiber Optik) to a year and a day in federal prison, admitted in open court that the harshness of the sentence had less to do with justice than with a notion that "The defendant ... stands as a symbol here today.... A message must be sent." These casualties are just the first on a list which I fear may grow to unimaginable proportions under the IPWG's recommendations. Predictably, the most significant effect of these cases so far has been to turn their victims into heroes and martyrs in the online community, giving rise to protests and the formation of civil-liberties organizations. The IPWG's recommendations could fan these flames into outright war. Copyright and the Existing Internet =================================== Out of necessity, the emerging culture of Internet users is rethinking and reshaping approaches to intellectual property thereon. Or, as the IPWG draft report very patronizingly characterizes it: "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." It is a fact that copyright, censorship, and other restrictions on the free flow of information do not work well on the Internet. Casual republishing of Internet material on and off the net is common and largely accepted, even among many who would never dream of doing such a thing in other contexts. Even the most high-powered interests and draconian sanctions have been unable to make the slightest dent in the Internet's technological imperative to distribute information. (The classic example is the unfettered proliferation of cryptographic software, despite severe penalties in the ITAR.) The reason is not, as the IPWG's characterization delicately suggests, that Internet users are ignorant and difficult, nor do we require any government "education", thank you very much. The facts are simply that present Internet technology and culture have already, inevitably, left copyright and similar restrictions far behind. Some NII Potentials Disparaged by the IPWG ========================================== The draft report states: "... the potential of the NII will not be realized if the information and entertainment products protectible by intellectual property laws are not protected effectively.... Owners of intellectual property rights will not be willing to put their interests at risk if appropriate systems ... 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.... All the [technology] in the world will not create a successful NII, if there is not _content_." [Emphasis in original] What is missing in the above description is any appreciation for the new, unprecedented potentials of the NII. Providers and consumers are depicted here as being clearly divided along traditional lines, almost as if they were two entirely different species! But this perspective ignores significant non-traditional content which is foreshadowed by current activity on the Internet. Much of the value in the current Internet has come from the blurring of lines between providers and consumers. The content which has built the Internet so far has come almost entirely from peer-to-peer interactions. Although admittedly the Internet carries a lot of utter garbage (what modern medium doesn't?), a substantial amount of high-quality content has emerged as well, including significant libraries and archives, award-winning periodicals, and top-quality software. The reason for this unprecedented spontaneous emergence of valuable content is largely that the economics of information have been changed. The normal cost barriers to becoming a provider, which have in the past divided society along neat lines, are wiped away by networking. Howard Rheingold eloquently described some of the effects of this change in his article, "Life in Virtual Communities": "This unwritten, unspoken social contract, a blend of strong-tie and weak-tie relationships among people who have a mixture of motives, requires one to give something, and enables one to receive something. I have to keep my friends in mind.... And with scores of other people who have an eye out for my interests while they explore sectors of the information space that I normally wouldn't frequent, I find that the help I receive far outweighs the energy I expend.... It's a neat way for a sufficiently large, sufficiently diverse group of people to multiply their individual degree of expertise, and I think ... it works better when the community's conceptual model of itself is more like barn-raising than horse-trading.... Different kinds of things become possible when this mindset pervades. Conversely, people who have valuable things to add to the mix tend to keep their heads down and their ideas to themselves when a mercenary or hostile zeitgeist dominates an online community." The tendency among some industry analysts has been to dismiss such benefits as "minor-league action" in comparison with traditional commercial systems. But to some extent the relatively youthful Internet is already challenging that presumption. Why is it growing at such an explosive pace if, as the IPWG suggests, the content to drive its success is not yet in place? The Linux operating system (a Unix work-alike for PCs) is a perfect example of a high complexity, labor intensive, high value product which traditionalists would undoubtedly insist could never come about without strong intellectual property protections. Yet Linux was created by the heroic efforts of scores of talented programmers all over the world, coordinating their work on the Internet, motivated by the vision of creating a powerful system which would be FREE to all Internet users. Not only did they succeed in that goal, but Linux has already given rise to new businesses, new jobs and economic growth. Only a few short years ago, when AT&T owned the rights to the only Unix-like systems available, Unix consultant Len Rose was charged with unlicensed possession of a single copy of the "login" program (a small part of the Unix system). AT&T representatives testified at trial that this scrap of code was worth many thousands of dollars, and Rose paid with a year in a federal penitentiary. Today there are any number of non-AT&T versions of the login program freely available on the Internet. It is not my intention to suggest that the Internet's "gift economy" can or should replace commercial activity. But I am very concerned that we not stifle these new benefits in a narrow headlong pursuit of commerce. We must shape policies which allow both approaches to coexist side by side, and which do not stifle unforeseen developments yet to occur. The most important benefits of the NII will come, if they come at all, from the radical changes that networking makes in the economics of information. Such changes will, of course, be resisted by those with a stake in the status quo. The recommendations contained in the IPWG draft report appear designed to discourage, if not to utterly stifle, the NII's potentials to support the kinds of benefits the Internet now provides. The NII would then be little more than a new marketplace for old businesses. In fact, this may be the IPWG's intention. The report makes the following analysis of a typical Internet transaction: "In each of the instances set out below, one or more copies is made, and, necessarily, in the absence of a proof of fair use or other relevant defense, there is an infringement of the reproduction right: ... "* When a file is transferred from one computer network user to another, multiple copies are made. {footnote: 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.}" Extrapolating from the IPWG's analysis, many current normal operations of the Internet (such as Usenet news) would appear to be quite illegal! Or at least, would appear to be such a quicksand of serious legal risks as to be utterly impractical. Far from attempting to alleviate these difficulties, the report goes on to compound the presumed violations by expanding infringements to cover almost every conceivable network transaction. And as if that weren't enough, the IPWG then sees fit to tack on (by creating a new link to an existing statute) an equipment forfeiture provision of the sort which has already motivated so many gratuitous prosecutions. It is tempting to wonder if the IPWG's analysis and recommendations are not designed, at least in part, as tools which can one day be used to suppress current grass-roots network activities. Summary and Conclusions ======================= The IPWG's draft report conjures the image of a group of industry representatives sitting around a table and fantasizing, "Wouldn't it be neat if we could get the public to behave like this?" Each of the report's recommendations sounds to me like a door slamming, a bit of public freedom cut off. But the IPWG's fantasy is not realistic. Public cooperation with law and government policy on the networks will not be achieved by strong-arm tactics, nor by euphemistic "education" programs. A truly workable approach must inspire voluntary cooperation, by fairly balancing the interests of ALL users of the NII, and by paying attention and respect to emerging network culture. The IPWG's approach is founded on the premise that the sole appropriate response to the NII is to strengthen existing copyright law. I realize that this approach does not come entirely from the IPWG alone; it derives from the Clinton Administration's "NII Agenda for Action". But if the IPWG does not inform the Administration of its error, who will? Bottom line: Regardless of law, the NII will necessarily function mostly as a "copyright-free zone", if it is allowed to function at all. If traditional providers do not find this attractive, let them stay off the nets for now; their goods are not worth the price! There will probably always be some informational products and services for which the NII will not be an appropriate venue; so be it. Most providers, driven by competition, will find ways to utilize and exploit the NII soon enough. The present unfolding of the Global Information Infrastructure is like a great natural force sweeping through civilization, creating a memorable turning-point in history. Any agendas which seek to force events into unnatural channels can only be pursued at great social, moral and economic costs. Our priorities now should be to bend and adapt, and to create policies which assure that the networks will not be hobbled in the future by any limitations on our vision today. Here end my comments. Thank you for your attention. --- mkj@world.std.com -----BEGIN PGP SIGNATURE----- Version: 2.6 iQCVAwUBLm2TyyvBReBlkkwhAQE4rQQAj3SWcssY9lJTRD/kbQ+yyEUNFTlkBJ1+ 3fmWFvkSqlM85+0Ugqg2u4Pil4enO+FWRgLJtV8fEWsolDsLyzBTy8ch1aqpAJtZ yFzSQtCqg5gZdlVfztVlqRyxRVkhY9oSnQoXnKR68/CxZlyewpJ0jJYgIrw9CJVM 52zSi/s74D8= =L774 -----END PGP SIGNATURE----- Please do not remove the PGP signature from this file. Comments of Paul Basista, the National Vice-President for Legislation of the Graphic Artists Guild. On behalf of the Graphic Artists Guild, I thank the Patent and Trademark Office for the opportunity to comment on the preliminary draft report of the Working Group on Intellectual Property Rights. The Working Group is to be commended for assuming the difficult task of directing the growth of intellectual property law to ensure the greatest possible fairness to producers and users of information on the NII. In attempting to anticipate developments in a rapidly changing field, the Working Group has made an admirable and comprehensive survey of the law as it stands. But the Working Group does not fully recognize how the law currently fails to adequately protect independent creators, and thus does not discuss how changes might best be made to protect those whose work is essential to the entire NII. For without thorough protection, producers of copyrighted material will be placed in jeopardy by the realities of the new environment which the NII is creating. 1) Existing law. The Working Group has noted some of the problems for creators that exist in the copyright law, but it has not addressed them: a) The proliferation of computer networks and of sophisticated reproduction technology has vastly increased the means whereby a copyright may be infringed, and the infringement rapidly disseminated, without any corresponding increase in means to detect or guard against such infringements. The Working Group has not suggested any practical means whereby the individual creator could monitor, much less prevent or gain redress for, the wholesale infringement of his or her work. The buyer of certain rights may be able to use an anti-copying system to protect itself from outside infringers (pp. 125-130). But the user/buyer's anti-copying system does not necessarily protect the creator of the work. b) The swiftly expanding group of users is not knowledgeable about the need for or desirability of intellectual property protection. Copyrighted artwork, with the signatures and notices removed, has already been circulated among subscribers to existing networks. The Working Group has suggested that the Copyright Act be amended to specifically include digital instances of fraudulent copyright management information or removal of same (pp. 130-131). But insofar as the digital networks allow greater damage to occur faster, the ceiling on the fine that can be imposed seems far too low. Perhaps the Group would consider a floor, rather than a ceiling, on the fine amount. c) Under current law, a buyer may claim, through contract with a creator, rights which do not yet exist, or which at the time of contract lack measurable economic value. Lack of a statutory prohibition enables the user/buyer to take advantage of expanding use possibilities (and therefore marketable rights) through the electronic media without compensating the creator for these additional benefits. The Working Group does not discuss the problem in its report. 2) Fair use. Members of the Graphic Artists Guild have reason to be concerned by the Working Group's statement that the Copyright Act exists for the benefit of the public (p. 133). Such a view is simplistic at best. The Copyright Act is designed to protect the private property rights of intellectual property creators. The law assumes that society, and thus the public, will benefit from the work of creators whose rights have been safeguarded. Fair use is a limited exception that should not be broadened in scope, but clarified in its application. That is, fair use should continue to be based on the nature and purpose of the work used and the impact of a particular use on potential markets, not on the status of the user who is taking. Non-commercial uses by libraries and educators should continue to be statutorily authorized. But a fine line exists between actual fair use and ostensibly educational or research-related uses that also undermine the market for copyrighted works. 3) Moral Rights. The Guild urges the Working Group to reconsider its conclusion that moral rights in digitized information should be waivable, or restricted in scope or extent (pp. 94, 95, 138). Because digitized works are so easily alterable, it is essential that creators be able to invoke moral rights to preserve the integrity of their work. If moral rights protection is waivable, it might as well not exist. Purchasers of artwork will insist on waiver as a precondition to doing business. In the commercial world today, clients are insisting that artists sign contracts which will allow alteration of the artist's work at the client's whim. The object is to build libraries of stock images which can be manipulated in-house. If moral rights are not waivable, they become an additional bargaining chip in commercial negotiations. By allowing the artist the legal power to insist on the integrity of his or her art, the artist has a chance to obtain something closer to the fair commercial value of the work. Conclusions. The Working Group is wise to recommend that transmissions be recognized as both a means of distributing reproductions (pp. 120-123), and a form of publication. The Group's support for private licensing systems (p. 134) is also welcome, albeit with the suggestion that there be government oversight of the operation of such systems. The Guild is pleased too that the Working Group recognizes the necessity for widespread eduction to increase public awareness of intellectual property laws, and their importance to the economy (p.140). Copyright laws are the rules of the road on the information highway. Protection of the work of small copyright holders is basic to the public interest. Without the protection of effective copyright law, creators lose the economic incentive to create. Such protection can only be achieved through partnership with the public via general education at every level, in academic settings, and in the public arena. But the direction of the Working Group's inquiry is of concern to creators. The Working Group's desire to make information readily accessible is necessary and laudable. But availability must not be achieved at the expense of the rights of creators. Users of intellectual property can be certain of what they have purchased only if the rights of the initial creator are safeguarded. The Graphic Artists Guild urges the Working Group to focus its continued deliberations less on the needs of NII users, and to keep in mind the necessity of protecting individual creators, without whose work the NII cannot exist. Legally Speaking: The NII Intellectual Property Report (publication forthcoming in Dec. 1994 issue of Communications of the ACM) by Pamela Samuelson In July 1994 the Clinton Administration's Working Group on Intellectual Property Rights issued a Preliminary Draft Report on Intellectual Property and the National Information Infrastructure[1]. This column reflects the principal comments I made about the Draft Report in response to a call for public comments on it. If the National Information Infrastructure (NII) is to achieve its potential as a channel for distribution of a wide range of creative works, says the Report, authors and publishers of those works will need reasonable assurance that their intellectual property rights will be respected. Digital networked environments pose particularly severe challenges for owners of intellectual property rights because digital networks make it so simple for members of the public to make multiple copies of those works and distribute them to whomever they choose at virtually no cost. Left unregulated, this activity would undermine the incentives of authors and publishers to invest in the creation and distribution of creative works, for the first distribution of a digital copy to the public would enable those who receive it to set themselves up as alternative publishers of the work, able to undercut the first publisher's price because they need not recoup any development costs. On this point, the drafters of the Report and I are in agreement. Where we principally disagree is about the wisdom of making certain changes to copyright law and about the Report's characterization of these proposed changes as "minor clarifications and changes" necessary to modernize copyright law for digital networked environments. The Report recommends: (1) making digital transmission of a copy of a copyrighted work an act of copyright infringement; (2) abolishing the "first sale" rule for works distributed by digital transmission (this rule generally permits owners of copies of copyrighted works to redistribute their copies without the copyright owner's permission); and (3) making it an infringement of copyright to construct or distribute any device intended to circumvent copy-protection systems by which owners of the copyright might attempt to protect their work. As the remainder of the column will demonstrate, the Report misrepresents the current state of copyright law in several important respects. In particular, it overstates the extent to which current law favors publisher interests. It downplays the extent to which the changes it recommends would, in fact, bring about a radical realignment in the historical balance between publisher interests and the public interest in access to information products, pushing the law in a direction that would favor publisher interests to the detriment of the public interest. It would abolish longstanding rights that the public has enjoyed to make use of copyrighted works, rights that have been consistently upheld in courts and in the copyright statute. The Report is full of legalistic terminology that makes it difficult for members of the public to read and comprehend. As a consequence, it doesn't provide an adequate basis from which the public, including the technical community who reads Communications, can make an informed judgment about whether the public should accept this revised copyright law. The remainder of this column will translate the Report and its recommendations into plain English so that readers can understand what is at stake and why I question whether the Report's recommendations would be in the public interest. To put the point plainly, let me say that not since the King of England in the 16th century gave a group of printers exclusive rights to print books in exchange for the printers' agreement not to print heretical or seditious material has a government copyright policy been so skewed in favor of publisher interests and so detrimental to the public interest. AN EXCLUSIVE RIGHT TO BROWSE? Until the NII Report came out in July, no one had ever thought to declare that merely browsing a copy of a copyrighted work could be regarded as an act of copyright infringement. The copyright statute grants authors five exclusive rights (i.e., rights to exclude other people from doing certain things with their work): (1) an exclusive right to reproduce the work in copies; (2) to make derivative works of it; (3) to distribute copies of it; (4) to publicly perform it; and (5) to publicly display it. Unlike patent law, copyright law does not grant rights to control all uses of the protected work. On occasion, copyright owners have tried to persuade courts to construe the exclusive rights more broadly than Congress had clearly intended; courts have often rejected expansionistic arguments, saying that those who seek broader rights than the statute clearly grants should take their case to Congress. One respect in which the Report interprets copyright law more expansively than Congress has intended is in its statement that "browsing" a work in digital form is an infringement of copyright (unless authorized by the copyright owner). Neither browsing nor reading a work has ever been regarded as an infringement of copyright. When I go to bookstore or a dentist's office, I can browse a book there without infringing its copyright. If I thereafter buy it or another book, I can lend the book to a friend so he or she can read it. Neither of us has interfered with any exclusive rights of copyright owners. (Although I will have distributed a copy to my friend, this does not violate the exclusive distribution right because the copyright owner is generally entitled to control only the first sale of a copy to the public. My personal property rights in the copy I purchase override the copyright owner's interests in further distributions of that copy.) So what makes the drafters of the Report think that browsing and reading--or any other use, for that matter--of digital works should be regarded as copyright infringement? It is because, in contrast with printed works, works in digital form can only be browsed, read or used if the machine on which they are displayed makes copies of them. But rather than explicitly recommending that copyright law be amended to make all browsing, reading, and uses of copyrighted works in digital form into acts of infringement--a recommendation likely to be highly controversial--the Report takes advantage of an incidental property of digital works (that they need to be copied in order to be browsed or otherwise used) to assert that existing law already allows publishers to control all uses of works in digital form. This lucky happenstance makes it unnecessary for the drafters of the Report to mention that they are advocating a vast expansion of copyright scope. AN EXCLUSIVE RIGHT OF DIGITAL TRANSMISSION? The Report is more express in its endorsement of another expansion of the exclusive rights of copyright. It would give copyright owners an exclusive right to control digital transmissions of their works. To understand why such a right might be needed, it is necessary to realize that the present copyright statute grants copyright owners an exclusive right to "distribute copies...to the public by sale or other transfer of ownership, or by rental, lease, or lending." The Report would change this phrasing to add "or by transmission" after "lending" in the statute. The Report recommends this change because the current statute is too focused on the distribution of physical objects and transfers of rights in physical objects. The term "copy," for example, is defined as a "material object[]...in which a work is fixed...." If the statute only gives copyright owners rights to distribute material objects, it may be ill-equipped to deal with digital transmissions, for they are distributions of bit streams, not of physical objects. Posed in this manner, the Report's argument for adding a provision that permits copyright owners to control digital transmissions seems quite plausible. Yet, by reading the Report as a whole, one might question whether an explicit digital transmission right is really necessary. The Report discusses two recent cases in which judges treated digital transmissions, such as up- and downloading software from a bbs, as violative of both the reproduction and distribution rights of copyright law. In truth, if the courts took the reproduction and distribution rights as literally as the Report sometimes does, it would be hard to argue that *any* digital copy infringes copyright since all digital copies are, by their very nature, immaterial. Despite the sophistical appeal of an argument that digital copies don't infringe because of their immaterial nature, courts have rejected such arguments. This too suggests that no statutory change may be necessary to give copyright owners the right to control digital transmissions. Before delving into a more subtle reason for questioning the desirability of the digital transmission right, I want to highlight another respect in which the Report takes a more expansive view of the exclusive rights of copyright than Congress intended. The Report endorses the conclusion of some relatively recent cases that digital copies "fixed" only in RAM infringe the reproduction right, notwithstanding language in the statute and the legislative history indicating that Congress intended to limit the scope of the reproduction right to those copies sufficiently permanent or stable to permit the work to be perceived or reproduced for more than a transitory duration. A legislative report about this provision gave as an example of a noninfringing reproduction the temporary display of images on a screen. Proponents of the view that RAM copies infringe copyrights argue that as long as the machine is on--and it can be on indefinitely--a copy of the copyrighted work stored there can be perceived or reproduced, thereby satisfying the "more than transitory duration" standard. (By this logic, holding a mirror up to a book would be infringement because the the book's image could be perceived there for more than a transitory duration, i.e., however long one has the patience to hold the mirror.) Applying the logic of these cases, the Report seems to view any digital transmission as an infringement of the reproduction right because of the copies made during the transmission as well as when the transmission arrives at its destination. This is a questionable interpretation of current law. The more subtle reason to question the need for and desirability of a digital transmission right is that it would change existing law far more than the Report admits. This change too would favor publisher interests over the public interest. To understand why, it is worth noticing that of the existing exclusive rights of copyright, the one that the proposed digital transmission right most closely resembles is the exclusive right on which broadcasters principally rely for the protection of their products. Broadcasters don't distribute physical objects; they transmit intangible information which the public can view with the aid of television and radio machines. Like broadcast television today, the NII may eventually be used to provide a wide variety of motion pictures and other programs to the public with the aid of satellite technologies. The NII Report invokes the image of a "celestial jukebox" by which consumers might order a particular movie which, with appropriate compensation to the holder of the copyright, could then be received by the consumer in the privacy of his or her home. Digital transmissions of copyrighted movies frequently violate two of the existing exclusive rights of copyright: those pertaining to public performances and public displays of copyrighted works. If these exclusive rights already provide a means for controlling many digital transmissions, surely it is fair to ask whether copyright owners really need a new exclusive right to control distributions by digital transmissions. Although the Report does not say so, its digital transmission right would rectify what copyright industries today regard as a very serious limitation on the scope of the rights current law gives to rightsholders. Copyright law does not grant owners rights to control all performances and displays of their works, but only *public* performances and displays of those works. (When you and I sit at home and watch a program on television, copyright law considers our viewing as a performance and a display of a copyrighted program. Because it is not a public performance or display of the work, this activity is not a copyright infringement.) The real purpose behind the proposed digital transmission right is to enable copyright owners to control *all* digital performances and displays of copyrighted works, without regard to whether they are public or private. Adoption of the digital transmission right would, in effect, repeal the public performance and display rights of copyright and replace them with exclusive rights to control all performances and displays of copyrighted works distributed in digital form. Had the Report explicitly recommended repeal of the public performance and display rights, its recommendations would provoke controversy. By seeking the repeal indirectly, the Report hopes to avoid this controversy. Perhaps a case could be made for such a repeal, but the Report does not make a persuasive argument on behalf of this vast expansion of the rights of copyright owners. To understand how fully the NII Report would limit public access to works in digital form, it is necessary to examine not only the proposed digital transmission right, but also the kindred proposals to abolish the "first sale" rule for works transmitted digitally and to ban devices aimed at defeating copy-protection schemes. Especially given the Report's highly constrictive view of the fair use doctrine, adoption of these three recommendations would dramatically change the historical balance of copyright law as between the interests of copyright owners and of the public. ABOLISHING THE FIRST SALE RULE? The "first sale" rule allows members of the public who have purchased a copy of a copyrighted work to sell it, give it away, lend it, or even rent the copy to other people. (In the United States, only sound recordings and software cannot be rented; in some countries, no works can be rented without permission from the copyright owner.) The first sale rule grew out of judicial decisions holding that Congress had not granted copyright owners monopoly power over all distributions of their works, but only a right to control the first sale of the work to the public. The first sale rule promotes public access to copyrighted works by allowing members of the public to borrow works from one another (and from libraries) without fear of infringement. It is this rule that the NII Report proposes to abolish for works distributed by digital transmission. The rationale for abolition of the first sale rule focuses attention on a difference between printed and digital works. The first sale rule presumes that when the owner of a physical copy of a work shares that copy with another person, he or she will give up possession of that copy. Although one copy may move from person to person, such a transmission does not result in more copies being made. With digital transmissions, however, someone who shares his or her copy of a work with another person may retain a copy of it as well. A digital transmission may result in a multiplication of copies. This poses a threat to the economic rights that copyright law gives to authors (and through them, to publishers). Abolition of the first sale rule may, however, be unnecessary to respond to this threat. A narrower approach would be to limit the application of the first sale rule to situations in which the digital transmitter did not delete his or her copy. (I don't know about the rest of you, but I routinely forward information I receive by email to people who would be interested in it, following which I delete the information. In truth, I delete this information less because I am concerned about abiding by copyright law than because I can only manage so much information at a time. Even if I retain a copy, I consider most of the information I forward to another person to be fair use because of its private, noncommercial character.) However, even without an abolition of the first sale rule, copyright owners can control this kind of potential consumer abuse of copyrighted works by means of the exclusive reproduction right. If the owner of a copy of digitally transmitted work begins transmitting copies of that copy to a thousand of his or her closest friends, that person will be responsible for multiple reproductions of copyrighted works. Since the first sale rule only limits the distribution right of copyright, not the reproduction right, there is way to deal with the multiplication of copies under existing law. (Just because you own a copy of a book, you do not think you are entitled to make a thousand copies of it for your friends. But you can share your copy with others.) The NII Report does not consider either alternative discussed here, but rather recommends abolition of the first sale rule. It does not provide persuasive reasons why the public should not be entitled to continue to enjoy the right to share their copy of a copyrighted work with a friend, regardless of whether it was received by digital transmission or otherwise. ABOLITION OF FAIR USE? U.S. law, like that of some other countries, regards some copying from copyrighted works as "fair" and noninfringing of copyright. Under the fair use doctrine, the author of a book on the assassination of President Kennedy, for example, did not infringe copyright when he reproduced several frames from Zapruder's movie of this tragic event in order to illustrate his theory about the assassination. It would be inaccurate to say that the NII Report recommends abolishing fair use law. And yet, it takes such a narrow view of existing fair use law and predicts such a dim future for fair use law when works are distributed via the NII that the Report might as well recommend its abolition. Since the fair use doctrine has been one of the historically important ways in which the law has promoted public access to copyrighted works, the virtual abolition of fair use law for which the Report argues would represent another vast expansion of copyright law in favor of publishers. As with its treatment of the browsing issue, the Report attempts to constrict user rights by acting as though this constriction has already occurred, rather than by admitting that the Report is coming down on one side of, at best, a debatable issue. Without even admitting that any controversy exists about fair use law, the Report purports to resolve definitely one of the pressing controversies of U.S. copyright law today: whether private, noncommercial copying of copyrighted works is noninfringing under fair use law or otherwise. On this issue, the public and the publishers could hardly have more different ideas. (On this issue, as on most of the rest of the copyright issues discussed in this column, I believe that authors are generally closer to the general public's view because so many of us rely on private noncommercial copying in the course of our research.) The public generally thinks that private noncommercial copying of copyrighted works is not, and should not be, copyright infringement. Publishers, however, regard all reproductions of copyrighted works as infringing. Publishers argue that private noncommercial copying cannot be justified as fair use because it provides a consumer with the benefit of a copy for which the consumer has not paid and usurps a sale that the publisher should have made if the consumer wanted a copy of the work. The NII Report comes firmly down on the publishers' side in this controversy and fails to mention that the Supreme Court's *Sony Betamax* decision told courts to *presume* that private noncommercial copying is fair use. Only if there is some meaningful likelihood of economic harm to the copyright owner arising from the use should the presumption of fair use be overcome. (The only fair use issue for which the Report cites the *Sony* case is for its statement that commercial uses of copyrighted works should be presumed unfair. Interestingly, the Report neglects to mention that this second *Sony* presumption was repudiated by the Supreme Court this spring in *Campbell v. Acuff-Rose* in which 2Live Crew claimed fair use for the groups' rap parody of "Pretty Woman.") The Report also neglects to mention other sources and precedents that would support the Supreme Court's view that private noncommercial copying should be presumed to be fair use. Another major fair use controversy concerns the extent to which it is fair to copy portions of copyrighted works for research or educational purposes. As with the private noncommercial copying issue, the Report cites cases that favor the publisher position on this issue without mentioning cases that do not favor the publisher position. For example, the Report mentions the *Basic Books v. Kinko* case in which publishers successfully sued a copying center for making and selling multiple copies of coursepacks to students without being sure that the professors submitting the coursepacks had gotten permission from copyright owners to make them. However, the Report fails to mention the *Williams & Wilkins* case in which a research library persuaded an appellate court that it had made fair use of articles from medical research journals when copying them for research scientists doing work in that field. As with the private noncommercial copying issue, the Report does not acknowledge the existence of genuine and principled differences of opinion on this issue. It simply acts as though the rule already is what the publishers want it to be. Although the Report says that the Working Group will hold a set of workshops to discuss educational fair use issues, it does not admit any educational use to be fair except if it meets a set of guidelines adopted some years ago that allow teachers to make photocopies of short articles pertinent to their classes that are published during the school term. The Report also predicts that fair use defenses will be unsuccessful when controversies arise in digital networked environments because it will be so much easier for consumers in these environments to license additional uses if they think they need them. The Report fails to mention two recent appellate decisions that prefigure a broader potential for fair use defenses in dealing with digital data and new technology issues: *Galoob v. Nintendo* in which a fair use defense was successful because kids using Galoob's Game Genie had already tithed to Nintendo by buying its games, and *Sega v. Accolade* in which an appellate court ruled that a competitor's disassembly of a Sega game in order to determine how to make its game cartridges compatible with the Sega machine was fair use[2]. By not acknowledging the existence of these cases, the Report underestimates the potential for fair use to remain a viable defense in disputes erupting in digital networked environments. OUTLAWING DEVICES TO DEFEAT ANTI-COPYING SYSTEMS? The NII Report foresees the potential for broad use of technological strategies to protect copyrighted works in digital networked environments. Copyright owners, for example, may distribute products in encrypted form so that, despite a distribution over the net, the work could not be enjoyed by one who had not paid the price for it. The Report recognizes that technological protections may not be entirely secure: what one technology can do, another technology can often undo. Thus, technological protection of copyrighted works may prove useless unless there is a ban on the manufacture and distribution of devices or services aimed at overcoming technological means of protecting copyrighted works. To remedy this problem, the Report recommends enactment of the following provision: "No person shall import, manufacture, or distribute any device, product, or component incorporated into a device or product, or offer 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 [of copyright]." The Report further recommends making manufacture or sale of such devices or services into an act of copyright infringement. It also recommends that any copyright owner whose works *could* be infringed by such a device should be able to sue the maker or seller of such a device or service for copyright infringement, regardless of whether anyone had ever used the device or service to infringe that owner's copyrights. (Sellers of the technological device being circumvented would not, however, be able to sue those who unlocked the device for copyright infringement.) The Report admits that these recommendations would overturn Supreme Court caselaw under which it does not infringe copyright to distribute a technology that can be used to infringe as long as the device is *capable* of substantial noninfringing uses (i.e., because videotape machines could be used for noninfringing purposes, the Supreme Court decided that Sony was not liable for copyright infringement despite the fact that some consumers might use Betamax machines to infringe copyrights in Universal or Disney movies.) The Report is not clear about whether adoption of its recommendations would overturn the *Vault v. Quaid* case in which an appellate court ruled that sale of a program to "unlock" the copy- protection program sold by the plaintiff was not copyright infringement because copyright law gave owners of copies of copyrighted software rights to make backup copies of their software. Since the unlocking software gave owners of copies of software an opportunity to exercise their rights to make backup copies, the court thought that the sale of this software promoted copyright policy, not undermined it. The drafters of the NII Report would probably say that their recommendation would not undo this case because that lawsuit was brought by the maker of the locking software, not by software publishers who had made use of the locking software. The ban the Report recommends would give rights to sue only to software publishers. Yet the issue of whether selling a product or service that would undo a technological lock on a copyrighted work so that a user could exercise fair use or backup copying rights is not addressed by the report. Given the publisher bias that pervades the Report, it seems likely that the drafters intend to restrict user access in this respect, although they do not say so directly. Nor does the Report address the question as to whether distribution of programs in object code form should be regarded as a technological means for protecting software, such that tools or services that would be useful in disassembling or decompiling object code would be within the scope of the ban. For those who are concerned about the future of interoperability, it should be of especial concern that the Report does not mention the caselaw favoring fair use to achieve interoperability and speaks only in vague terms about the value of interoperability. The NII Report acknowledges that its recommended ban on technological "keys" may restrict public access to both copyrighted and uncopyrighted works (the latter are as likely as the former to be distributed in encrypted form on the net). Although the Report expresses some regret that such restrictions may occur, it concludes that, on balance, such "incidental" restrictions on public access are necessary and that the public interest in access is outweighed by the countervailing need to protect the interests of copyright owners. The Report hopes that the "primary purpose and effect" language of the ban will provide a proper balancing of interests. This, of course, depends on the willingness of information providers to encrypt uncopyrighted materials with a different encryption algorithm than they use to encrypt copyrighted works. If the same encryption scheme is used for both, any unlocking technology can be kept off the market until a court rules that the primary purpose or effect of the technology would not be to promote copyright infringement. While I might be able to support a more narrowly drawn provision aimed at dealing with the problem of technological circumventions of technological strategies for protecting copyrighted works in digital networked environments, I cannot support the proposed provision. As WIRED magazine recently pointed out, the proposed ban is so broad, publishers could probably use it to ban sales of photocopy machines. And they wouldn't even have to prove that *any* of their copyrights had been infringed; it would be enough that the machine *could* infringe their copyrights. BUILDING ON THE STRENGTHS OF THE EXISTING NII A curious omission from the NII Report is any discussion of the extent to which existing digital networks, such as the Internet, have furthered the constitutional purposes of copyright. The drafters of the Report seem to view the existing digital networks as empty pipelines awaiting content that publishers today are afraid of putting there because copyright law today doesn't give them enough control over their works. The drafters also act as though the principal norm of the net is "to require copyright owners to check their copyrights at the door" when they enter the digital domain. Neither assumption is correct. The growth of the Internet has been one of the phenomenal success stories of our time. People have flocked to the net by the hundreds of thousands not because their favorite movies or books may be available there in another five to ten years, but because a wide variety of resources are available there already. Since its inception, the Internet has greatly facilitated and enhanced communication and learning of the very sort that copyright law is supposed to promote. It has enabled researchers to gather and share data more easily, to engage in collaborative work at remote locations, to criticize and refine one another's work, and to make research results and the like available at ftp sites, thereby enabling those interested in these results access to them. A large number of newsletters, journals, and listservs have sprung up and serve as forums for discussion of public policy and research issues in a wide variety of fields. Debate on the Internet could hardly be more robust. Notwithstanding the occasional "pirate" bulletin board on which commercially distributed software is posted for unauthorized copying and the pronouncements of some who would abolish copyright law, the Internet has promoted public access to information far more than it has promoted copyright infringements. I believe that the vast majority of net users are law-abiding citizens who generally make no more than fair and reasonable uses of copyrighted works. The NII Report does not recognize that there are already both formal and informal ways in which denizens of cyberspace are influencing one another about copyright concerns and the ethics of making certain kinds of uses of other people's work. Policies that actively discourage copyright infringement are one means by which bbs operators have an influence on the practices of those who use their systems. Violation of bbs policy may result in being kicked off the system, a punishment more feared by many users than being sued for copyright infringement. But if this is an effective sanction, this should be appreciated by drafters of an NII Report on intellectual property issues. Informal exchanges about copyright issues also occur in electronic newsletters, listservs, and on bbs's on the net. If one person makes an unauthorized use of another's writing, a third person may well question the fairness of this conduct and start a dialogue on the issue. The result of this dialogue is discouragement of unfair postings. "Netiquette" limits the extent to which users of the net appropriate other people's work. It simply isn't fair to repost someone else's message on another bbs or insert it into a newsletter without asking that person's permission. However, merely forwarding the message to one or a small number of people who would find it especially interesting is regarded as fair conduct, just as a telephonic exchange of the same information or photocopying a short article from a newspaper or magazine to mail to one's colleagues would be. The NII Draft Report should acknowledge and build upon the strengths of existing digital networked environments. Its policy recommendations should permit exchanges that promote the learning function of copyright law without having harmful effects on the economic interests of copyright owners. Before recommending dramatic changes to copyright law that would favor those who want to use the NII, the drafters of the Report should consider what effect those policies will have on existing user communities. It should seek to adopt solutions that would improve the lot of those who want to enter the net without harming the lot of the millions of people who now use the net. (Economists speak of this as the search for "Pareto optimal" solutions.) We can only hope that this omission will be cured in the Final Report of the NII Working Group on Intellectual Property Rights. CONCLUSION The problem with which the NII Report contends is a deep and important one. Members of the general public believe that copying of copyrighted material for private noncommercial purposes, whether it be a photocopy of an article or an audio tape of a compact disk recording of one's favorite artist, is not unlawful. Historically, private noncommercial copying has rankled publishers but there wasn't much they could do about it, and besides, as long as copying technology was relatively primitive or expensive, private noncommercial copying didn't cut into sales all that much. As reprography technology has improved and gotten cheaper, private noncommercial copying has become of greater concern to publishers. As the NII Report observes, owners of very valuable copyrights, such as motion picture producers, recording studios, and publishers of books, are unlikely to want to distribute their works via the NII unless they have reasonable assurance that their intellectual property rights will be respected. One can commend the drafters of this Report for tackling a very difficult problem and for offering recommendations that would overcome some of the fears that owners of valuable copyrights have about digital networked environments without approving of the strategy employed to achieve the Report's objectives and without concurring in its judgment about where a proper balance lies between the interests of copyright owners and the public. I remain unpersuaded that copyright owners really need the dramatic expansion of rights which the NII Report would give them. I believe this proposal would restrict public access to information far out of proportion to the harm likely to result to copyright owners, and that existing law provides plenty of ammunition with which publishers can attack infringers. But I admit the issue of what is proper copyright policy in the coming age of digital networked environments is a subject on which reasonable people can disagree. If the Report had been explicit about attempting to achieve a radical transformation of copyright law so that each and every use of a copyrighted work is infringing unless authorized by copyright owners, then at least there could have been public debate on the issues. The most objectionable aspect of the NII Report is, in my view, lies in its effort to avert the hard issues and controversy that a plain statement of its intentions would engender. It is simply not true that the Report recommends only minor clarifications and changes to copyright law, even though the press coverage of the Report dutifully echoed the Report's statements that they were. (Where are the investigative reporters when we really need them?) This column aims to provide readers with enough information about the policy issues raised by this Report so that they can begin the policy debate that is so sorely needed in this area and so that they can contribute their views about a solution that will achieve a fair balance between the public interest and the interest of copyright owners. SOURCES [1] Working Group on Intellectual Property Rights, Information Infrastructure Task Force, Green Paper: Intellectual Property And the National Information Infrastructure (Preliminary Draft, July 1994). [2] Pamela Samuelson, Legally Speaking: Copyright's Fair Use Doctrine and Digital Data, Comm. ACM 37: 21 (Jan. 1994). Jessica Litman Professor of Law Wayne State University Detroit, MI 48202 (Internet: p01046@psilink.com) Comments on INTELLECTUAL PROPERTY AND THE NATIONAL INFORMATION INFRASTRUCTURE: A PRELIMINARY DRAFT OF THE REPORT OF THE WORKING GROUP ON INTELLECTUAL PROPERTY RIGHTS released by the Information Infrastructure Task Force.(1) The federal government's Information Infrastructure Task Force has, with much fanfare, issued a Draft Report containing its preliminary analysis of copyright issues affecting and affected by the Information Infrastructure, and its suggestions for copyright revision.(2) The Draft Report recommends what it characterizes as minor clarifications of well-settled principles, and modest alterations to better secure copyright owners' control over works they produce.(3) The minor changes it recommends, however, would amount to a radical recalibration of the intellectual property balance. THE PRELIMINARY DRAFT REPORT'S RECOMMENDATIONS: The Report takes the position that current law secures to the copyright owner control over virtually any reproduction,(4) but finds the state of current law regarding transmission to be less than clear.(5) It therefore recommends amending the law in several respects: First, the distribution right should be amended to "reflect that copies of a work can be distributed to the public by transmission, and such transmissions fall within the exclusive distribution right of the copyright owner."(6) Second, the Draft Report recommends expanding the current definition of "transmit" in section 101, to encompass transmissions of reproductions as well as transmissions of performances or displays,(7) and to add a test distinguishing between transmissions of reproductions and transmissions of performances and displays based on "the primary purpose and effect of the transmission."(8) Third, the Draft Report suggests an amendment making it clear that transmission of a work into the United States violates the copyright owner's exclusive importation rights.(9) Fourth, the Report suggests that the first sale doctrine, which allows the owner of a lawfully made copy to sell, loan, rent or otherwise dispose of the possession of that copy, be repealed insofar as it might apply to transmissions.(10) Finally, the Draft Report offers miscellaneous suggestions to forestall the emergence of other perceived threats to the copyright owners' bundle of rights. By vesting copyright owners with control of any reproduction or transmission of their works, and then defining reproduction and transmission to include any appearance, even a fleeting one, of a protected work in any computer, and any transfer of that work to, from or through any other computer,(11) the Draft Report's recommendations would enhance the exclusive rights in the copyright bundle so far as to give the copyright owner the exclusive right to control reading, viewing or listening to any work in digitized form. The Draft Report comes down firmly on the side of increased rights for copyright owners in all relevant contexts, endorsing the goal of enhanced copyright protection without acknowledging any countervailing concerns. It appears to be an advocacy document: it at times misrepresents the state of current law,(12) and gives voice to only one side of complicated policy debates.(13) In some cases, the Report identifies a particular alternative as more desirable because it gives copyright owners rights subject to fewer exceptions.(14) THE REPORT WOULD GIVE COPYRIGHT OWNERS NEW AND EXPANSIVE RIGHTS: The IITF Draft Report presents its task as the proposal of modest adjustments to repair the unintended damage that the passage of time and the growth of technology have had on the copyright 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." The coat is getting a little tight. There is no need for a new one, but the old one needs a few alterations.(15) The Draft Report recapitulates oft-voiced complaints about the damage to the integrity of the rights in the copyright bundle caused by the unanticipated fallout from digital technology.(16) The ease of digital copying is frequently said to pose a profound threat to copyright at its core. The same technological miracles that pose the threat, however, have served up some unanticipated windfalls for the copyright owner. The most crucial example is the evolution of the reproduction right into something more encompassing than envisioned in any copyright revision until now. U.S. copyright law has always given copyright owners some form of exclusive reproduction right.(17) It has never before now given them an exclusive reading right, and it is hard to make a plausible argument that Congress would have enacted a law giving copyright owners control of reading. A handful of recent interpretations of the statute, however, insist that one reproduces a work every time one reads it into a computer's random access memory.(18) For all works encoded in digital form, any act of reading or viewing the work would require the use of a computer, and would, under this interpretation, involve an actionable reproduction. One might therefore expect an analysis proposing modest alterations to the law to fix unintended ambiguities to suggest clarifying this point: amending the law to provide explicitly that an individual's ordinary reading, viewing, or listening to an authorized copy of a work does not invade the copyright owner's rights. Instead, debates on the intellectual property underpinnings of the proposed National Information Infrastructure have proceeded on the assumption that copyright does, and should, assure such rights to the copyright owner.(19) The Draft Report adopts that view; it claims that "[i]t has long been clear that under U.S. law that the placement of a work into a computer's memory amounts to a reproduction of that work"(20) and suggests that the expansiveness of the reproduction right should be exploited to ensure copyright owners' enhanced control of protected works.(21) In fact, the Draft Report's characterization of current law is dubious, and the Report does not cite authority to support it. There is support available: the Report could have mentioned three recent cases,(22) a stray remark in the CONTU Report,(23) and brief discussions in a couple of recent law review articles.(24) This is some support, but it's hard to argue that the proposition "has long been clear under U.S. law." The CONTU reference is ambiguous; the other sources are recent. Authority on the other side of the question includes the statutory language,(25) and the following passage from the House Report accompanying the 1976 Act: Reproduction under clause (1) of section 106 is to be distinguished from "display" under clause (5). For a work to be "reproduced," its fixation in tangible form must be "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." Thus, the showing of images on a screen or tube would not be a violation of clause (1), although it might come within the scope of clause (5).(26) I would argue that the better view of the law is that the act of reading a work into a computer's random access memory is too transitory to create a reproduction within the meaning of section 106(1).(27) In any event, even if the Draft Report's characterization of current law were not skewed, its endorsement of what it presents as well-settled law deserves examination. If a bargain between the public and the authors and producers of copyrighted works were negotiated (at arms length) and drafted up today, it might include a reproduction right, but it surely wouldn't include a "reading" right. It might include a performance right but not a "listening" right; it might have a display right, but it wouldn't have a "viewing" right. From the public's vantage point, the fact that copyright owners are now in a position to claim exclusive "reading," "listening," and "viewing" rights is an accident of drafting: when Congress awarded authors an exclusive reproduction right, it did not mean what it may mean today. NEITHER THE REPORT NOR CURRENT STAKEHOLDERS HAVE SHOWN THAT ENHANCED COPYRIGHT PROTECTION WOULD ADVANCE THE NII: The Draft Report argues that its proposed enhancement of copyright owner's rights is without question in the public interest, for it is a necessary first step in the creation of the information superhighway. This is the central justification for further enhancing the rights in the copyright bundle: without strong copyright protection, there will be no national information infrastructure. If we let the public set the freight charges, we risk underproduction of freight. If authors and publishers cannot reliably control their works, they will decline to make them available at all. The Draft Report puts it this way: [T]he 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.(28) If the public wishes an NII, the argument goes, it must offer strong copyright protection as a bribe to those whom it hopes to persuade to create enough stuff to make an NII worthwhile. Relying on a hope that if the public only builds the infrastructure, the information to travel it will come is said to be naive; of course the owners of protectible works will refuse to permit those works to be exploited unless their ownership rights are secure. Yet, an examination of the historical record fails to back up that claim. The model suggesting that production and dissemination of valuable, protectible works is directly related to the degree of available intellectual property protection is much too simplistic.(29) In fact, history teaches us a more equivocal lesson. Whenever we have discovered or enacted a copyright exception, an industry has grown up within its shelter. Player piano rolls became ubiquitous after courts ruled that they did not infringe the copyright in the underlying musical composition;(30) phonograph records superseded both piano rolls and sheet music with the aid of the compulsory license for mechanical reproductions;(31) the jukebox industry arose to take advantage of the copyright exemption accorded to "the reproduction or rendition of a musical composition by or upon coin-operated machines."(32) Composers continued to write music, and found ways to exploit these new media for their works. The videotape rental business swept the nation shielded from copyright liability by the first sale doctrine.(33) The motion picture industry predicted that if Congress failed to rush in to correct the problems posed by the invention and marketing of the videocassette recorder, American television would slowly be destroyed, and American motion picture production would sustain grave injury.(34) Howard Wayne Oliver, Executive Secretary of AFTRA (American Federation of Television and Radio Artists) told the House Subcommittee: Unless we do something to ensure that the creators of the material are not exploited by the electronics revolution, that same revolution which will make it possible for almost every household to have an audio and video recorder will surely undermine, cripple, and eventually wash away the very industries on which it feeds and which provide employment for thousands of our citizens.(35) Notwithstanding all of the gloom and doom, however, both the motion picture and television industries discovered that the videocassette recorder generated new markets for prerecorded versions of their material. Cable television began spreading across America with the aid of a copyright exemption;(36) it eclipsed broadcast television while sheltered by the cable compulsory license.(37) Yet, there is no dearth of television programming,(38) and the popular media image of the new information superhighway includes 500 television channels to accommodate it all.(39) Even an erroneous assumption of copyright immunity can stimulate a nascent industry. The commercial photocopy shop prospered in part because of the university coursepack business made possible by a supposed fair use privilege.(40) Commercial and non-commercial subscriptions to services providing access to the Internet are increasing geometrically,(41) and much of the activity on the net takes place on the mistaken assumption that any material on the Internet is free from copyright unless expressly declared to be otherwise. Nonetheless, there are scores of electronic magazines and news services developed specifically for electronic distribution, and many commercial publishers are currently releasing their works over the Internet despite the absence of effective coercive means of protection.(42) Of course, copyright owners would prefer to maximize their own control over the works they produce. Of course, if we ask them to come up with an optimal copyright law, they will draft one that meets that specification. If the general public had a lawyer to sit at the copyright negotiating table on its behalf, however, the law that emerged from the negotiating process might be a different one. The Draft Report evinces no critical scrutiny of the proposals that copyright-owner interests made at the Working Group's November 18 Hearing on intellectual property issues; it simply presents them all as good. The public has not been paying close attention to discussions of intellectual property issues in the context of the NII, and is unlikely to start doing so. It is therefore easy to ignore the complaints the public might make about what would surely seem to it to be a power grab by copyright owners, and it is easy to be persuaded by the representatives of current stakeholders that modest revision of the intellectual property system to meet their specifications will assure economic growth, increase employment, improve competitiveness, reduce the trade deficit and make reelection of current incumbents more probable. But, if the public cedes control over reading, viewing, listening to and using copyright works to copyright owners, that would not be a modest revision; it would instead be a more fundamental shift than any in the history of copyright until now. FOOTNOTES: (1). An article incorporating these comments and other thoughts is being published as Jessica Litman, The Exclusive Right to Read, 13 CARDOZO ARTS & ENTERTAINMENT LAW JOURNAL ___ (forthcoming 1994). (2). INFORMATION INFRASTRUCTURE TASK FORCE, INTELLECTUAL PROPERTY AND THE NATIONAL INFORMATION INFRASTRUCTURE: A PRELIMINARY DRAFT OF THE REPORT OF THE WORKING GROUP ON INTELLECTUAL PROPERTY RIGHTS (1994) [hereinafter IITF Green Paper]. (3). See id. at 120-34. (4). See id. at 35-37. (5). See id. at 42-43, 121. (6). Id. at 121. (7). Id. at 122. (8). Id. I have been unable to figure out why the members of the Working Group believe such a test to be necessary. If, as the Draft Report asserts, a transmission involves an actionable reproduction in any event, it seems unnecessary to invent a test to resolve whether the right it violates in addition to the reproduction right is the display right, the performance right, or the distribution right. If it were necessary, I'm not sure what light the transmitter's purpose would shed in a statutory scheme in which intent is largely irrelevant. (9). Id. at 123. (10). Id. at 124-25 & n.353. The Draft Report promises that its ongoing work includes examining all of the statutory exceptions to the copyright owner's distribution right to ascertain whether they, too, should be rescinded in the context of distribution by transmission. Id. at 125. The statutory exceptions it mentions are ones that are incidental to a statutory reproduction privilege. Section 108(d) permits libraries to make photocopies of protected works in specific circumstances for the purpose of interlibrary loan and to distribute those photocopies to the users requesting them. Section 112(c) allows a non-profit organization to make a single copy of a performance of religious music and distribute it at no charge, so long as the copy is never publicly performed except pursuant to a license and is destroyed within a year. Section 115, the mechanical compulsory license, permits the making of cover versions of previously recorded music, and the distribution of those recordings to the public, on payment of a statutory royalty. Repealing the incidental distribution privileges would, of course, make the reproduction privileges pretty useless: what good does it do a library to be entitled to make a copy for purposes of interlibrary loan if the copy cannot be passed on to the person requesting it? (11). See IITF Green Paper, supra note 2, at 36-39, 54-55, 120-23. The Draft Report does appear to recognize that a work might, as a theoretical matter, reside in a computer's random access memory for too brief an interval to invade the copyright owner's rights, see id. at 37, but does not offer any examples of an appearance that would be sufficiently fleeting to qualify. (12). Two examples are the Report's assertion that it is settled law that loading a protected work into a computer's random access memory is an actionable reproduction, id. at page 36 (which I discuss infra notes 17-27 and accompanying text), and its crabbed reading of U.S. Supreme Court cases on fair use under 17 U.S.C. sec. 107, see id. at 45-52. (13). One example is the Draft Report's endorsement of a broad prohibition of devices and services that defeat technological copy-protection or other means of blocking access or reproduction. See IITF Green Paper, supra note 2, at 126: 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. Devices that overcome technological copy-protection methods can have legitimate uses. See, e.g., Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 (5th Cir. 1988); OFFICE OF TECHNOLOGY ASSESSMENT, U.S. CONGRESS, COPYRIGHT & HOME COPYING: TECHNOLOGY CHALLENGES THE LAW 52-61 (1989). Copy protection devices can, after all, block access in situations when the copyright statute would privilege it. In addition, relying on technological copy protection can be self-defeating: ... I would argue that initial efforts to protect digital copyright by copy protection contributed to the current condition in which most otherwise ethical computer users seems morally untroubled by their possession of pirated software. Instead of cultivating among the newly computerized a sense of respect for the work of their fellows, early reliance on copy protection led to the subliminal notion that cracking into a software package somehow "earned" one the right to use it. Limited not by conscience but by technical skill, many soon felt free to do whatever they could get away with. John Perry Barlow, The Economy of Ideas: A framework for rethinking patents and copyrights in the Digital Age (Everything you know about intellectual property is wrong), WIRED, March, 1994, at 84, 129. For these reasons, and others, requests to reinforce technological copy-protection tools with legal prohibitions have generated opposition from a variety of camps. Prior suggestions to outlaw such devices have therefore been narrowly drawn. See generally Audio Home Recording Act of 1991: Hearing Before the Subcomm. on Intellectual Property of the House Comm. on the Judiciary, 102d Cong., 2d Sess. (1992). Congress enacted one such prohibition in the Audio Home Recording Act of 1992 (codified at 17 U.S.C. secs. 1001 - 1010). The audio recording device prohibition was sufficiently controversial that, after the introduction of legislation in 1987, four years of negotiations among record companies, hardware manufacturers, songwriters, music publishers, and performing rights societies were required to reach agreement on the form and specifications of a limited prohibition. See H.R. REP. 873 pt. 1, 102d Cong., 2d Sess. 14-18 (1992); Gary S. Lutzker, Note, DAT's All Folks: Cahn v. Sony and the Audio Home Recording Act of 1991 -- Merrie Melodies or Looney Tunes, 11 Cardozo Arts & Entertainment L. Rev. 145 (1992). During the legislative process, the prohibition was narrowed and narrowed again to ensure that it would not be construed to apply to devices other than home audio recording devices. As enacted, it was balanced by a provision preventing the imposition of copyright liability for noncommercial copying of audio recordings, or for manufacturing, importing or selling audio recorders. See 17 U.S.C. sec. 1008. The Communications Act has a provision relating to the manufacture or distribution of descrambling equipment in 47 U.S.C. sec. 605. It, too, is narrow in scope, and carefully distinguishes between legal and illegal uses. Broadly phrased prohibitions can interfere with legitimate behavior, and can hamstring technology in unanticipated ways. In presenting its finding that such devices should be prohibited across the board, the Working Group's Draft Report does not mention any countervailing concerns. (14). Thus, on page 36, in footnote 107, the Draft Report notes: "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...." A few pages later, the Report discusses the exclusive distribution right, and notes that it is limited by the first sale doctrine codified in 17 U.S.C. sec. 109. Id. at 38. In considering how to characterize the dissemination of a work by means of the NII, the Report concludes that "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)." Id. at 39. The Report nonetheless proposes to amend the first sale doctrine to prohibit owners of copies of protected works from transmitting their copies. Id. at 124-25. See supra note 10 and accompanying text. (15). IITF GREEN PAPER, supra note 2, at 120 (footnotes omitted) (quoting H.R. Rep. 735, 101st Cong., 2d Sess. 7 (1990)). See also id. at 9-10. (16). See id. at 8, 71-72, 120-21. (17). See Act of May 31, 1790, ch. 15, sec. 1, 1 Stat. 124; Act of April 29, 1802, ch. 36, sec. 2, 2 Stat. 171; Act of Feb. 3, 1831, ch. 16, sec. 1, 4 Stat. 436; Act of July 8, 1870, ch. 230, sec. 86, 16 Stat. 198, 212; Rev. Stat. sec. 4952; Copyright Act of March 4, 1909 sec. 1(a), 35 Stat. 1075; 17 U.S.C. sec. 106(1); see generally L. RAY PATTERSON & STANLEY W. LINDBERG, THE NATURE OF COPYRIGHT: A LAW OF USERS' RIGHTS (1991); LIBRARY OF CONGRESS, COPYRIGHT ENACTMENTS: LAWS PASSED IN THE UNITED STATES RELATING TO COPYRIGHT (1963). (18). See Mai Systems Corp v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993); Triad Systems Corp. v. Southeastern Express Co., 1994 U.S. Dist. LEXIS 5390 (N.D. Cal. 1994); Advanced Computer Services v. MAI Systems Corp., 845 F. Supp. 356 (E.D.Va 1994). See also National Commission on New Technological Uses of Copyrighted Works, Final Report 98 (1978) ("The protection afforded by section 106 of the new law would seemingly prohibit the unauthorized storage of a work within computer memory, which would be merely one form of reproduction"). (19). See, e.g., United States Department of Commerce U. S. Patent & Trademark Office, National Information Infrastructure Task Force Working Group on Intellectual Property, Public Hearing on Intellectual Property Issues Involved in the National Information Infrastructure Initiative 14-23 (Thursday, November 18, 1993) [Hereinafter NII Hearing] (Testimony of Steven J. Metalitz for Information Industry Association); id. at 50-58 (testimony of Timothy B. King, John Wiley & Sons); id. at 201-11 (Testimony of Mark Traphagen for Software Publishers Association). (20). IITF GREEN PAPER, supra note 2, at 36. It is apparent from the Draft Report's examples of infringing reproductions, see infra note 21, that by "placement . . . into a computer's memory" the Report means reading a work into random access memory, or RAM. A work's appearance in RAM is, by its nature, temporary; the work will disappear from RAM when the computer is turned off. (21). The Draft Report puts it this way: This fundamental right -- to reproduce copyrighted works in copies and phonorecords -- 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 is made, and, necessarily, in the absence of a proof of fair use or other relevant defense, there is an infringement of the reproduction right: * 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. * 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. IITF GREEN PAPER, supra note 2, at 36-37 (emphasis in original). (22). Mai Systems Corp v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993); Triad Systems Corp. v. Southeastern Express Co., 1994 U.S. Dist. LEXIS 5390 (N.D. Cal. 1994); Advanced Computer Services v. MAI Systems Corp., 845 F. Supp. 356 (E.D.Va 1994). (23). See National Commission on New Technological Uses of Copyrighted Works, Final Report 98 (1978) ("The protection afforded by section 106 of the new law would seemingly prohibit the unauthorized storage of a work within computer memory, which would be merely one form of reproduction"). (24). See, e.g., Jane C. Ginsburg, Copyright Without Walls?: Speculations on Literary Property in the Library of the Future, 42 REPRESENTATIONS 53, 56, 70 n.17 (1993). (25). See 17 U.S.C. sec. 101(definitions): "Copies" are material objects, other than phonorecords, in which a work is fixed by any means now known or later developed . . . . A work is "fixed" in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the copyright owner, is sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration . . . . "Phonorecords" are material objects in which sounds . . . are fixed by any method now known or later developed . . . . See also 17 U.S.C. sec. 106 (1): the owner of copyright under this title has the exclusive right to do and to authorize any of the following: (1) to reproduce the work in copies or phonorecords (26). H.R. REP. NO. 1476, 94th Cong., 2d Sess. 62 (1976). (27). Indeed, the Draft Report itself seems a little confused about this; compare IITF Green Paper, supra note 2, at 14 ("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.") with id. at 36 ("when a computer user simply `browses' a document resident on another's computer, the image on the user's screen exists -- under current technology -- only by virtue of the copy that has been reproduced in the user's computer memory.") (emphasis in original)._ (28). IITF GREEN PAPER, supra note 2, at 6-7 (emphasis in original). (29). See Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 HARV. L. REV. 281, 291-323 (1970); William W. Fisher III, Reconstructing the Fair Use Doctrine, 101 HARV. L. REV. 1659, 1700-39 (1988). See also Barlow, supra note 13, at 127. (30). See Kennedy v. McTammany, 33 F. 584 (CC MA 1888); White-Smith Music Publishing v. Apollo Co., 209 U.S. 1 (1908). (31). Copyright Act of March 4, 1909, 1(e), 35 Stat. 1075. See U.S. Library of Congress, Second Supplementary Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law: 1975 Revision Bill, Ch. IX (1975). (32). Copyright Act of March 4, 1909, 1(e), 35 Stat. 107; see U.S. Library of Congress, supra note 31, at ch. X. (33). See 17 U.S.C. sec. 109. (34). See Video and Audio Home Taping: Hearing on S. 31 and S. 175 Before the Subcomm. on Patents, Trademarks and Copyrights of the Senate Comm. on the Judiciary, 98th Cong., 1st Sess. 276-306 (1983) (testimony of Jack Valenti, Motion Picture Association of America); id. at 307-09 (testimony of Kay Peters, Screen Actors Guild); Home Recording of Copyrighted Works: Hearings on H.R. 4783, H.R. 4794, H.R. 4808, H.R. 5250, H.R. 5488, and H.R. 5705 Before the Subcomm. on Courts, Civil Liberties and the Administration of Justice of the House Comm. on the Judiciary, 97th Cong. 2d Sess. 4-16 (1982) (testimony of Jack Valenti, Motion Picture Association of America). (35). Home Recording of Copyrighted Works, supra note 34, at 142. (36). See Teleprompter Corp. v. Columbia Broadcasting System, 415 U.S. 394 (1974); Fortnightly Corp. v. United Artists Television, 392 U.S. 390 (1968). (37). See 17 U.S.C. sec. 111; Jessica Litman, Copyright Legislation and Technological Change, 68 ORE. L. REV. 275, 342-46 (1989). (38). See, e.g., NII Hearings, supra note 19, at 130-41 (testimony of Richard Ducey and Benjamin F.P. Ivins, National Association of Broadcasters). (39). See, e.g., Paul Farhi, TCI's Malone Quietly Assembling an Empire, WASHINGTON POST, Oct. 14, 1993 at A1; Benjamin J. Stein, More Channels, More Laziness, WASHINGTON POST, Nov. 2, 1993, at A19. (40). See Basic Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522 (SDNY 1991); Princeton University Press v. Michigan Document Services, 1994 U.S. Dist. LEXIS 8541 (E.D. MI 1994). The popularity of the course-pack services provided by commercial photocopy shops eventually enabled publishers to establish a lucrative course-pack photocopy licensing business. See id. (41). See SOFTWARE 2000: A VIEW OF THE FUTURE 2-5 - 2-15 (Brian Randell et al., eds. 1994); Philip Elmer-Dewitt, Technology: Battle for the Soul of the Internet, TIME, July 25, 1994, at 50; Peter H. Lewis, A Boom for On-Line Services, NEW YORK TIMES, July 12, 1994, at D1, col. 3; Peter H. Lewis, Business Technology; Even in Cyberspace, Overcrowding, NEW YORK TIMES, Feb. 2, 1994, at D1, col.3. (42). An "Electronic Newsstand" at enews.com offers free samples from magazines including BUSINESS WEEK, the ECONOMIST, the NEW REPUBLIC and the NEW YORKER to encourage the purchase of subscriptions. Tor Books and Del Rey Books offer free excerpts from forthcoming novels on the Panix Gopher Server (gopher@panix.com). Associated Press, UPI and Reuters are available on Compuserve, and TIME magazine maintains a presence on America Online. Meanwhile, both West Publishing Company and Mead Data Corporation conduct extensive (and expensive) online information services notwithstanding the rudimentary state of available protections for the material they have at their disposal. COMMENTS ON THE PRELIMINARY DRAFT OF THE REPORT OF THE WORKING GROUP ON INTELLECTUAL PROPERTY RIGHTS "INTELLECTUAL PROPERTY AND THE NATIONAL INFORMATION INFRASTRUCTURE" Professor Lee A. Hollaar Department of Computer Science University of Utah Salt Lake City UT 84112 ------------------------------------------------------------------------------ BIOGRAPHICAL INFORMATION Lee Hollaar is a Professor of Computer Science at the University of Utah, where he teaches the senior software system development laboratory and computer intellectual property law and conducts research into information retrieval systems. He has been involved with computers for almost 30 years, working on both hardware and software systems, and received a PhD in Computer Science in 1975 from the University of Illinois. He has a BS degree in Electrical Engineering and is a Registered Professional Engineer. He is also a registered patent agent, working with the Salt Lake City law firm of Van Cott Bagley Cornwall and McCarthy primarily with computer-related inventions, and is on the faculty of the National Intellectual Property Law Institute. The views expressed are his own, and not necessary those of the University of Utah or any other organization. ------------------------------------------------------------------------------ While I am in general agreement with the preliminary recommendations of the draft report, I feel that it overlooks one problem with copyright that will cause problems as the National Information Infrastructure becomes a common means for distributing information. This problem occurs when the information exists only on a retrieval system and is not available from any other source. Most commercial information retrieval systems today provide access to material also available in printed form. The two major legal retrieval systems, Lexis and Westlaw, provide access to court decisions also available in printed reporters or from the courts that issued the decisions. Other retrieval systems provide access to scientific journal articles also available in the printed journals. It is important for the information in these systems to be identical to printed versions, and therefore the information remains the same over time since the printed version cannot change after it has been published. In the future, it is likely that information retrieval systems will also contain original works -- works placed by their authors directly in the information retrieval system and not published in printed form. These online publications could substantially reduce the time needed to disseminate information, such as scientific results or legal decisions, an important goal of the National Information Infrastructure. As pointed out in the draft report, these online-only works (available only from a retrieval system) would not be "published" under the current copyright laws. The Working Group recommends that the definition of publication be changed so that publication also results when the work is transmitted to the public. Even under the Working Group's recommendation, these online-only works may not be published if they are distributed under a restrictive license (which is common for commercial retrieval systems) so that they are not transmitted to the public. (This would be analogous to telling another of an invention under a non-disclosure agreement, which does not make the knowledge of the invention public.) However, one would not want any transmission to result in publication of a work. Information is commonly transmitted between businesses that they do not intend to be public information. It will be difficult to differentiate between these transmissions, which clearly should be regarded as unpublished, and accessing information in a retrieval system when it is covered by a restrictive agreement. So it is likely that online-only works will remain unpublished, even though many people access the work. Because online-only works would not be published, they would not have to be deposited with the Library of Congress under Section 407. Furthermore, deposit would not be required under Section 408 unless copyright registration was sought, and this deposit requirement may be eliminated under proposed legislation. This means that the owner of the online-only work (its author or the operator of the retrieval system, depending on their agreement) can change the work or even withdraw it completely at any time, with no legal copy of the work remaining. Prior to the 1976 Copyright Act, the only works that were eligible for federal copyright protection were published works. Once copyright owners had sold copies of a work, they no longer had control over that work. It could be placed on the shelf of a library and read by the public. When the copyright expired on the work, it entered the public domain and could be freely copied. If the author felt that the work needed to be changed, a new edition was produced but the prior editions remained available for reference. In contrast, if an online-only work has been criticized, its author may decide to remove it from the retrieval system or change it to address the criticism. But without the ability to reference the original work, the criticism cannot be placed in its proper context. It may be necessary for a person to copy the entire online-only work in a commentary on the work, to preserve the work in its state at the time of the commentary. Results presented in a scientific paper can change over time, as the results are refined by new research, with no generally-accessable copy of the previous results available. This is similar to the problem that occurs when a reference is made to a work that is periodically revised (such as Nimmer on Copyright). The material being referenced may have been changed since the reference was made, and the new material at that location could be quite different. (This might occur, for example, when an author has commented on a law before it has been interpreted by a court, a court then interprets it -- perhaps differently -- and cites the work, and then the author revises the work to reflect the court decision.) However, with a printed publication, at least the original version can be found in some archive if the date of the reference is known. Equally important, once users of a conventional work had purchased it, they were free to reference it as many times as they wanted. If the work were in a library, many users could access it at no additional cost. Prospective purchasers could review the work in a library, or possibly at a bookstore, before deciding whether to purchase their own copy of the work. In contrast, with most retrieval systems users must pay a fee whenever the work is retrieved. If a library has paid for one user's access to a work, it will generally have to pay again for a second user to access the work. The 1976 Copyright Act included unpublished work within federal protection and permitted the depositing of identifying material, rather than the actual work, in some cases. Currently, the Copyright Office exempts from the deposit requirement "Automated databases available only on-line in the United States." 37 CFR 202.19(c)(5). Databases distributed in machine readable form (like CD-ROM) are not covered by this exemption, but it appears that online- only works, available only through a retrieval system, are exempted from the deposit requirement. Under current law and even with the changes proposed by the Working Group, it is possible for online-only information to be changed or withdrawn at the whim of its owner (the author or the operator of the retrieval system on which it is stored), with its ideas and expression being lost to the public. Today, this is only a minor problem, since most retrieval systems provide access to material also available in printed form, such as journal articles or court decisions. But as the NII progresses, scientific articles, entire journals, and works of literature may exist only in online versions. Unless some provision is made in the copyright law, this information may be lost to the public. ------- Date: August 26, 1994 To : Terri A. Southwick Attorney-Advisor Office of Legislative & International Affairs U.S. Patent & Trademark Office From: Mary Brandt Jensen Director of Law Library Operations Professor of Law University of South Dakota School of Law 414 East Clark St. Vermillion, SD 57069-2390 CNICOPY@CHARLIE.USD.EDU Re : Comments on Green Paper "Intellectual Property and the National Information Infrastructure: A Preliminary Draft of The Report of the Working Group on Intellectual Property Rights" dated July 1994 I am a Professor of Law who specializes in copyright law, especially as it applies to the electronic environment and to libraries. I am also a law librarian. I moderate the CNI-COPYRIGHT discussion list on the Internet and serve as a copyright advisor to Project Gutenberg, one of the oldest projects which convert materials to electronic form for distribution over the nets. Although this information is relevant in describing my background and experience in the subject area of the Draft Report, I speak only for myself in these comments. My comments do not necessarily reflect the views of the University of South Dakota, the Coalition for Networked Information or Project Gutenberg. Specific Comments Page 15 footnote 32. This footnote is unclear. It appears to be somewhat contradictory. The problem appears to arise from the fact that the quotation from Advanced Computer Services is cut short too soon. It would be much clearer if it read: _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 the work remains 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'" but if "the computer, with the program loaded into RAM, is left on for extended periods of time, say months or years ... the RAM version of the program is surely not ephemeral or transient ... and thus plainly sufficiently fixed to constitute a copy under the Act." Although the _MAI_ case does support the proposition that loading a copy into RAM *may* be sufficient fixation, *in some cases*, to support a finding that a copy has been made, I don't think it supports the claim that I believe the Draft Report is making. Nor is the _MAI_ case necessarily a correct interpretation of the law. It appears that the Draft Report is stating that *any* loading of information into RAM is sufficiently fixed to support a finding that a copy has been made. Such an interpretation is contrary to the actual language of section 101 which says that fixation requires stability of more than transitory duration. Storage in RAM is transitory and decidedly not stable. This is especially true of the time that email spends in the RAM of various intermediary computers as it travels across the nets. The time that many email messages spend in the RAM is probably less than the time that television images remain on a cathode ray tube. The Draft Report recognizes that television images displayed on a tube are not fixed, and it should also recognize that email is not necessarily any more fixed than television images. RAM storage can be precisely the type of transitory duration that the drafters had in mind when they added that language to the definition. Page 27 first full paragraph This paragraph states that because of the strained analysis needed to find a category for multimedia works, categorization may no longer be useful and its necessity may be questionable, except, perhaps in the case of sound recordings which are not granted the full panoply of rights. The categorization of works may be strained, but at present, it is necessary to categorize works not only because sound recordings are not granted the full panoply of rights, but also because the limitation sections often apply differently to different categories of works. *If* the audiovisual category "trumps" the literary and sound recording categories, the categorization of all multimedia works as audiovisual works would be most unfortunate. While it may be appropriate to categorize a multimedia work that consists predominantly of video material as an audiovisual work, it is not appropriate to categorize the literary and musical parts of a collective multimedia work as an audiovisual work. The limitation sections as currently written may provide for a reasonable range of ordinary uses of literary works and sound recordings of musical works, but many of these limitations would be lost if literary works and sound recordings of musical works incorporated into collective multimedia works were categorized as audiovisual works. For example, libraries would not be able to use section 108(d) to provide copies of literary excerpts from multimedia works to patrons. Nor would a music professor be able rely upon section 110(2) to authorize the transmission of a sound segment embodying a song from a multimedia entertainment encyclopedia to her class via a campus wide network. p.34 first paragraph The difficulty in locating rights holders and obtaining permission to convert works to electronic form cannot be overemphasized. The lack of registration, copyright notices and a comprehensive licensing agency will make a large number of works unavailable via the National Information Infrastructure even though the rights holders may have no objection to conversion of their works to electronic form and distribution through the nets. On page 134 in the last paragraph, the Draft Report states "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." While this may be true for works which are being actively marketed and have a relatively large market, there is a substantial body of work still protected by copyright that is not being actively marketed. Rights holders in out of print works with small markets have little or no incentive to participate in voluntary licensing schemes particularly when collective rights organizations charge substantial fees for participation. In these cases, which represent a substantial part of the current knowledge base, the transaction costs are astronomical primarily because it is extremely difficult and costly to locate the rights holder. In most cases, the current interest in any particular one of these works is relatively small, but as a whole they are nevertheless important parts of the body of human knowledge which should be preserved and made accessible as part of the NII. Unless there is some sort of compulsory licensing scheme to serve as a backup to voluntary schemes and provide a relatively inexpensive method to pay royalties on such works, a major part of the body of scholarly knowledge may never make it to the electronic superhighway. It is precisely these types of problems that led to the abandonment of the American Memory Project, the Library of Congress' electronic preservation project. If the Library of Congress with all of its copyright records cannot find copyright holders to obtain permission to convert works to electronic form in a reasonably cost efficient manner, how can we expect other groups to handle the problem? How will we make sure that works like Henry Roth's "Call It Sleep" (which was not a major market success when first released) will exist on the information superhighway to be rediscovered and become classics at some later date? p. 36 footnote 107 This footnote says that "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." I disagree with this statement. I am in the process of writing a book in which I reduce the process of determining whether or not a given project has copyright problems to a series of questions that take the reader through the relevant exceptions. In drawing the flowcharts for this book, I discovered that there are 9 exceptions that apply in some manner to the reproduction right. There are only 7 that apply to the public performance right and 7 that apply to the public distribution right. Furthermore, the exceptions related to the reproduction right are likely to be broader than the exceptions related to the public performance right which tend to be very specific and narrowly drawn. In the process of my work on this book, I have found that activities that are ordinarily involved in the use of electronic works are far more likely to be permitted by the copyright laws if they are construed as reproductions than if they are construed as public performances. For example if delivery by a library of a portion of a copyrighted work from a central database to a user's computer screen in a public reading room of a library is viewed as a reproduction, it might be authorized by section 108(d) or 108(e). But those sections do not authorize public performances and displays. p. 43 second paragraph The Draft Report states "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 clearly not been performed." I do not think it can be said that the work has "clearly" not been performed. This issue was debated by a number of copyright experts for several weeks on the CNI-COPYRIGHT list. Although I think the implications of the argument are far from logical, a credible argument can be made based on a technical construction of the definitions that a performance or display occurs in such transmissions. I think the credibility of the Draft Report would be improved if the word "clearly" were removed from this sentence. The Working Group should then clearly recommend that if a transmission occurs in which the end result is to move a copy from point A to point B without point A retaining a copy, that transmission should be treated as the transfer of a particular copy. Such transmissions should not be treated either as reproductions or performances. The effect of such a transmission is no different than the effect of physically transferring possession of a particular copy. p 48 commercial presumption in fair use The first paragraph on page 48 continues to refer to a "presumption" set out in the _Sony_ case even after the Supreme Court rejected any presumption from commercial use in the _Campbell_ case. The _Campbell_ case says Sony itself called for no hard evidentiary presumption. ... the commercial or non-profit educational character of a work is `not conclusive' ... The Court of Appeals's elevation of one sentence from _Sony_ to a _per se_ rule thus runs as much counter to _Sony_ itself as to the long common-law tradition of fair use adjudication. Rather, as we explained in _Harper & Row_, _Sony_ stands for the proposition that the `fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use.' But that is all, and the fact that even the force of that tendency will vary with the context is a further reason against elevating commerciality to hard presumptive significance. 127 L.Ed. 2d at 519 Given the strength of the wording of this excerpt from _Campbell_, it would be useful to avoid using the word "presumption" completely in relation to the weight to be given to the commercial nature of a purpose in fair use analysis. While the final clause of the first paragraph is correct when it says "thus giving greater leeway to commercial but transformative uses," it is also likely that courts in general will give somewhat less weight to the commercial nature of the use after the _Campbell_ decision than they did between _Sony_ and _Campbell_ even where verbatim copying is involved. p49 first paragraph The Draft Report says 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,' This is far too strong a statement. The guidelines themselves indicate that they are minimum standards laying out safe harbors. This implies that in some instances copying outside the strict limits of the guidelines will be fair use. Particularly when so few cases are litigated, it is wrong to assume that these three cases alone restrict most educational fair use to what is covered by the guidelines. One of these cases is even an off air taping case which is not covered in any manner by the classroom guidelines on photocopying. There is a lot of room between what the guidelines expressly permit and the copying that occurred in the two photocopying cases mentioned in the Draft Report. And one of the reasons there may be so few litigated cases in this area is that there is no reason to litigate if what an educator does is fair use. Litigation only occurs if there is a dispute about whether or not particular actions constitutes fair use. This paragraph also states that the guidelines incorporate provisions to which copyright owners and educators agreed. Not all educators or even all the major associations of educators agreed to these guidelines. Both the Association of American Law Schools and the American Association of University Professors objected to the guidelines as being too restrictive for classroom use at the university and graduate levels. Since two of the three cases cited by the Draft Report are from K-12 schools and the third relates to reproduction by a commercial enterprise of material for undergraduate students, they do not support an assumption that educational fair use copying at the university and graduate level is limited to the type of copying expressly permitted by the `classroom guidelines.' p.53 final paragraph on fair use The Draft Report says 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._ a court establishing liability for 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. The idea that a particular use is less fair because it is not unreasonably burdensome to pay a license fee is a dangerous one. It assumes that a use is fair solely because the transactional costs involved in paying for the use are so high as to make licensing an unfeasible alternative. But the transactional costs theory is only one of many justifying the existence of the fair use doctrine. And it is a relatively recent reason. The transactional cost theory fails to take into account much of the historical development of the doctrine that Congress specifically said that it was not changing when it enacted section 107 and which the Supreme Court recently reaffirmed in _Campbell v. Acuff Rose Music_. As the Court said quoting _Carey v. Kearsley_, `while I shall think myself bound to secure every man in the enjoyment of his copy-right, one must not put manacles upon science.' 127 L.Ed 2d at 513. There are many fair uses of copyrighted works that few copyright holders would ever voluntarily choose to license. Among these uses are parody and criticism. Some copyright holders would probably even refuse to license the use of small portions of their works in competing works of a similar factual nature. Yet such a refusal flies in the face of the Constitutional reason for copyright - the promotion of the progress of science and the useful arts. Fair use of copyrighted works is also necessary to protect the constitutional right to freedom of speech. There is no relationship between the reason for finding fair use and the ease of paying a license fee in any of the these examples. Instead of allowing technological means of tracking transactions and licensing to lead to reduced application and scope of fair use, ways must be found to preserve the current application and scope of fair use even in the electronic environment. p. 55 rationale for exceptions to the first sale doctrine The Draft Report says that the rationale for the computer software and sound recording exceptions to the first sale doctrine may apply to other types of works as more types of works become available in digital format. The rationale behind the exceptions to the first sale doctrine do not eliminate the rationale behind the first sale doctrine itself. The rationale behind the first sale doctrine is that the copyright monopoly should not be so broad as to allow copyright holders to further restrict users from using copyrighted works after the copyright holder has been initially compensated. Without the first sale doctrine, no one could read a book in a public place or experience the viewing of a work of art in a public place. Without the first sale doctrine, the concept of libraries as we know them would not exist. If the exceptions to the first sale doctrine are expanded further in the electronic environment, libraries as we know them today, particularly free public libraries, will not be possible. If copyright holders are allowed to control every use of a work even after they have been compensated initially, one of the greatest benefits of the NII, the sharing of information, will not happen. People must have the ability to resell, give or lend copies of works they have legitimately acquired without the copyright holder controlling the price of that redistribution or the free market will not work in the electronic environment. In short, expanding the exceptions and giving the copyright holder the right to prohibit resale or lending gives the copyright holder the right to hold the NII hostage and prevent it from ever developing into an information superhighway. The free market doesn't work on a toll road where only one party sets the toll for a particular segment of the road. This is why most toll roads are operated by the government instead of the private sector. p. 57 last sentence The Draft Report says "Thus, this exemption [108(b)] does not appear to allow for preservation in electronic or digital form, which arguably, would not constitute "facsimile form" A scanned image is as much a facsimile as a photocopied or microfilmed image. When the statute is clear, legislative history should not be used to muddy the clarity of the statute. A scanned image clearly meets the dictionary definition of a facsimile. Both the statute and the legislative history clearly indicate that section 108(b) is not intended to authorize conversion of works to different formats that do not preserve the image of the work. Thus it is clear that section 108(b) does not authorize a library to type the contents of a work into an ascii file that does not preserve the image of the work. But aside from preserving the image in some facsimile form, section 108(b) is technology neutral. It does not limit facsimile reproduction to photocopying and microfilming. p. 60 first full paragraph The statement that "Section 108 does not permit libraries to convert printed works to a digital format without the authority of the copyright owners." is too broad. Section 108(b) and (c) both permit reproduction in facsimile form. As my previous paragraph indicates, there is nothing in the use of the word facsimile in the statute which would exclude digital image reproduction as facsimile reproduction. The legislative history should not be read in a manner which restricts the coverage of statutory language that requires no clarification. In fact the legislative history can be read in a manner which is consistent with treating digital imaging as facsimile reproduction. Given the intent of Congress that the 1976 Act be as technology neutral as possible, "facsimile form" should be interpreted in a technology neutral form. This is especially true since there is no case law or other authority which would conflict with the ordinary meaning of the word "facsimile." Section 108(b) and (c) are an area where the coat has grown a little tight. Electronic copies of works are more in need of preservation than traditional forms such as books. Without constant refreshment copying, an electronic copy of a work probably will not survive the current duration of copyright. We are in very real danger of having another situation similar to that which existed with films in the early part of this century. Many electronic works could easily be lost if libraries and archives or other historical preservation groups are not given the right to preserve these works so that they will still be in existence to enter the public domain when their copyrights expire. We cannot rely on corporate holders of copyrights who may go out of business or decide that preserving electronic works for 75 years or more is not economically feasible when most of the income is generated in the work's first few years of existence. We stand a very real danger of having a situation similar to what existed in the late sixties or early seventies when the major networks did not preserve the daily newscasts. Many works without large markets simply will not survive the duration of their copyrights unless someone whose motive does not depend on profit has the right to preserve works without a large continuing market. p. 60 second to last paragraph on section 110(2) The statement that "Section 110(2) exempts from liability the transmission of a performance or display of a copyrighted work" is inaccurate. Section 110(2) exempts the transmission of displays of all types of works, but it only exempts the transmission of performances of nondramatic literary and musical works. It does not exempt the transmission of performances of dramatic literary, dramatic musical, choreographic, pantomime, motion picture or audiovisual works. This is definitely one of the areas where the "coat is getting a little tight." By definition all uses of the NII involve transmissions. Thus without amendments to section 110(2), major portions of the NII will be locked out of the classroom even in the face to face teaching environment. This cannot be allowed to happen. How will students learn to use the NII if teachers must seek permission for every demonstration that involves a dramatic or audiovisual work? It serves no purpose to force teachers to use older and increasingly obsolete stand alone equipment and nondigital forms of copies in their classes in order to avoid copyright infringement. If the NII is to become truly useful in the educational environment, the copyright laws must also recognize that a networked classroom where the teacher and some of the students are physically located in different places linked by two way audio, video and perhaps document delivery is the functional equivalent of the traditional classroom. It makes no sense at all to a teacher when he is told that he must change his teaching style solely because he is moving to a classroom linked to an extension site. The teacher doesn't understand why he can show a film to his Wednesday night biology class if all the students are in the same room with him, but he can't show the film to his class if 5 of the students are in an electronically linked classroom 50 miles away. If the Working Group is serious about its goal of getting educators to instill a sense of respect for intellectual property in their students, they must first recommend some changes that will make the law easier for educators to understand and respect. p62 last paragraph to top of p 63 - Home Receiving Devices The last two sentences say that section 110(5) allow proprietors to play radios and televisions in public establishments such as restaurants, beauty shops and bars, but that the applicability of this exemption is extremely fact-specific. This exception is no more fact specific than many others such as those in section 108 and other parts of 110. The language of the statute does not mention either radio or television transmissions. It is technology neutral and applies to any apparatus of a type commonly found in homes that can receive transmissions embodying performances and displays of works. Personal computers equipped with modems have become quite common in homes and are likely to become even more common in the future. In the future, it is quite conceivable that SLIP and other forms of network connections may also become as common in the home as cable TV connections now are. Personal computers connected to the outside world via modems or other types of connections are single receiving apparatus which can receive transmissions containing performances and displays of works. In addition, section 110(5) is not limited to establishments such as bars and restaurants. It is equally applicable to libraries and schools. Thus section 110(5) has the potential to become extremely important in providing access to works via the NII. p. 84 first paragraph The last sentence of this paragraph says that Improved protection for copyright and neighboring rights would contribute to reducing those losses and improving the balance of payments. While strengthening copyright monopolies and further harmonization of U.S. copyright law with that of other nations may improve the balance of international payments, it can also lead to the loss of works to the public and the endangerment of constitutional rights. For example, the continued extension of the term of copyright law beyond the life of the media in which the works are stored can mean that works without a large continuing market may be lost before they can be preserved. This is particularly true when the U.S. extends grants in terms to all types of works including types that may not be protected by copyright in other countries. Another example is the manner in which U.S. law treats government works and the text of statutes and case law. Other countries extend copyright protection to both government works and the text of cases and statutes. If the U.S. were to harmonize this aspect of U.S. law with that of other countries, it would affect the right of access to the law which affects the constitutional right to due process of law. It would also affect the concept of freedom of information and the right to know what the government is doing. Extreme care must also be taken when harmonizing laws to protect the constitutional purpose of copyright - the promotion of the progress of science and the useful arts. p. 85 last paragraph The Draft Report says that the United States follows the Anglo American legal tradition in which the principal focus of copyright is the protection of the author's economic rights. This statement is inaccurate. As the Supreme Court has recently reaffirmed in _Feist Publications v. Rural Telephone Service_, 499 US 340(1991), "the primary objective of copyright is not to reward the labor of authors, but `to promote the Progress of Science and the useful Arts.'" The economic benefit to the author is merely a means of achieving the end of promoting science and the arts. pp. 108-114 - Using Technology to Restrict Use of Works Using technology based methods of controlling access to and use of works is an extremely dangerous idea. Rarely, if ever, has a technology based method of controlling access to or use of work been able to accommodate all of the exceptions and limitations in the law which allow access or use without the copyright holder's permission. And as long as any of those limitations are written in a flexible manner to accommodate situations in a changing environment, no technology based method of controlling access or use will be able to accommodate all the situations in which the law permits access and use without prior permission. Advocating the use of such mechanisms places a premium on the interests of one group, the rights holder, while discounting the interests of another larger group, the public. In addition to not addressing the issue of access and use authorized by law instead of by the copyright holder, using proprietary formats or software as a means of control, suggested at page 110, it particularly problematic because of the dangers of obsolescence. Copyright currently lasts an average of 75 years. What file format or software currently in existence is likely to be viable 75 years or more from now when works currently being created enter the public domain? If works become unreadable or unusable because of the lack of availability of viewing hardware and software before they enter the public domain, many works may be lost forever. Proprietary formats vest far too much control over future accessibility of a work in the hands of the copyright holder who, afterall, is only permitted rights in the work for a limited time by the Constitution. p. 114 - Managing Rights in the Work The Draft Report suggests using headers in files to inform users about ownership of rights in a work and authorized uses of it. This discussion in the Draft Report focuses entirely on the interests of rights holders and publishers. Nothing is said about how ownership would be authenticated in such a system. What would prevent a publisher from claiming ownership in a work that s/he did not have? For example, many print journals contain copyright notices which tend to indicate that the journal owns the copyright in all the articles. These notices are often based on journal policies that mere submission of an article for publication constitutes assignment of the copyright. Since copyright can only be assigned in a signed written instrument, these journals do not own the copyright in many of these articles. At least in the print world, where notices are not combined with hardware and software to restrict access, the informed user can get around the problem by contacting the author who is the true copyright holder. But without some means of authenticating ownership, an inaccurate header coupled with management hardware and software could prevent substantial lawful uses that had in fact been authorized by the lawful copyright holder. In addition, nothing in the Draft Report suggests methods for controlling and authenticating claims that copyright holders make about the scope of their rights in file headers. Many copyright holders currently take the position in their print notices today that absolutely no reproduction is permissible or authorized. This is clearly contrary to the statute which has several sections that permit some reproduction without permission of the copyright holder. In the print world, a user can ignore an overly broad statement concerning the scope of authorized use and rely instead on the law. But how would a user be able to bypass an overly broad restriction in a header coupled with management software that exceeded the scope of the copyright holder's rights? The inaccuracies in statements made by copyright holders concerning the scope of their rights is not a small problem. Publishers and copyright holders as a group are only slightly more knowledgeable about the copyright law than members of the general public. And they have as many misconceptions about the copyright law as the public does. Without controls on the accuracy of claims made by copyright holders, automatic rights management systems have the potential to completely wreck the balance of rights currently set out in the statute. p. 115 - Shrinkwrap Terms Many shrinkwrap license terms are currently unenforceable either as contracts of adhesion or as contracts lacking proper consideration. Many shrinkwrap licenses also make claims that go far beyond the scope of a copyright holder's rights. In addition, the terms of shrink wrap licenses, and the licenses proposed on page 115 for the NII, are unilateral terms in which the user has no opportunity to bargain for fairer terms. As a matter of public policy, unilateral terms should not be enforceable in a monopoly situation unless there are counterbalances in place to ensure a balance of fairness. In short, the NII should not rely on actions such as entering a password or selecting an item from a menu as a means of showing agreement to terms set entirely by one party. Some other means that clearly indicates knowledge of the terms should be found instead. And some mechanism for controlling abuse of such licenses should also be found. P.117-119 - Education The Draft Report suggests that educating the public concerning intellectual property rights is crucial to the viability of the NII. The Draft Report correctly points out that many users of the nets do not understand intellectual property law. The Draft Report also says that the current attitude on the Internet is that you check your copyrights at the door when you enter that domain. In response, I would say that this attitude is very understandable. It is a response to the current attitude of the copyright law which is that you check your sense of logic at the door when you enter the realm of intellectual property. For example, try explaining to a teacher why she can transmit a performance of a top 40 single in her voice class if the single is not a hit from a movie, but she can't if it is a hit from a movie or Broadway musical. Or try explaining to a student why he can check a video out from the library and take it home to view for a class, but he can't view the video in a private viewing room at the university library. Neither of these examples and countless others make any logical or common sense. The Draft Report also suggests that intellectual property education should start in grade school where it will be taught by ordinary teachers and librarians. I have taught intellectual property for several years to law students, university faculty and librarians. It is extremely difficult to explain the current law to these groups. My phone rings several times a day with questions from teachers, librarians and other members of the public who are trying to make sense out of the copyright law. These people cannot teach the law to others unless they themselves understand it. I often have great difficulty in bringing the law down to a level where these people can understand it. It would be impossible to make it understandable to grade school students. If we are going to try to teach the public to understand and respect intellectual property, we must simply the law somewhat so that it is understandable and logical. I also wonder why the Draft Report talks so much about educating the public and the users about intellectual property but says nothing about the need to educate copyright holders. Much of the confusion in the system is made worse by copyright holders who do not understand the law themselves. For example, a survey of the first few pages of a hundred journals in the humanities and social sciences would quickly indicate that there are a large number of publishers who do not understand that copyright assignments must be in writing and signed by the author. A sampling of copyright notices from title pages of directories would probably also indicate that a substantial number of publishers must not know about several limitations in the copyright law such as sections 107, 108, and 1008 which allow reproductions in specific circumstances. Why else would these works use notices such as the following: Reproduction of this book, in whole or part, without written permission of the publisher is prohibited. If we want to instill a respect for intellectual property in the public, we must first start by instilling in publishers and copyright holders a respect for the rights that the copyright law reserves to users and the public. Only when copyright holders stop trying to abuse the rights granted to them and respect the rights of the public can we hope that the public will respect the rights of copyright holders. pp121-132 - Revision of the definitions of distribution and transmission. The Draft Report recommends that the definition of a transmission be amended to cover both a transmission of a performance or display *and* the transmission of a reproduction. It then recommends that a transmission of a reproduction be treated as a distribution. Although the Draft Report recommends expanding the definition of distribution in this manner to accommodate the realities of the electronic environment, it does not recommend any concomitant expansions of the exceptions to the distribution right. On the contrary, it recommends narrowing the exceptions to the distribution right in the electronic environment by eliminating the applicability of the first sale doctrine to electronic transmissions. This recommendation has the effect of greatly enhancing the copyright holders rights in the electronic environment without any counterbalancing change on the public or user's side of the balance. There is no recognition that transmissions to members of the public are absolutely essential to read, view, listen to or make any other use, including any private use, of any electronic work in the NII. There is no recommendation of additional exceptions that might be needed simply to allow ordinary and expected uses of electronic works via the NII. In short, it is simply not fair. It gives the copyright holder truly monopolistic control over access to copyrighted works in the electronic environment. Copyright holders do not need absolute control in order to encourage them to make works available via the NII. They only need enough control to generate sufficient revenue to provide some incentive to produce. p 123-124 - Publication The current definition of publication is one of the areas where the current law makes little or no sense to the public. Under the current law, a database is not published if the copyright holder chooses to make it available to the public by direct transmission of displays to the public from the copyright holder. On the other hand, if the copyright holder chooses to deliver transmission of displays to the public through an intermediary, the database is deemed to be published. The revisions that the Draft Report suggest does nothing to correct this very confusing situation. In fact it makes it much more confusing by requiring a distinction between a transmission of a reproduction and a transmission of a display in order to determine whether or not an electronic work has been published -- a distinction that the Draft Report admits on page 122 is a very difficult one to make. It would make much more sense if the Draft Report recommended that any work be deemed published if copies, displays or performances of the work are made available to the public in any manner. p. 124-125 Further Restrictions of the First Sale Doctrine The Draft Report proposes that the First Sale Doctrine be further restricted by amending it to provide that the first sale doctrine does not apply to disposal of possession of a copy by transmission. As I have stated in other parts of this comment, this recommendation is yet another example of a proposal that expands the rights of the copyright holder with no counterbalancing recognition of the rights of users. In a situation where someone purchases a copy of a work, the proposed revision would penalize the purchaser by restricting the modes of delivery available to him should he choose to dispose of his copy of the work. This is an unnecessary restrain on alienation. The sole reason that the Draft Report gives for this recommendation is the concern that after the transmission, the sender is also left with a copy of the work so that a reproduction has occurred rather than a transfer. This problem could easily be remedied without restricting the use of the NII as a means of delivering copies of works which have been sold. An amendment which stated that section 109 applies to disposal by transmission only if the sender destroys the particular copies from which the transmission was made after the transmission is completed. This would be similar to the provisions in section 117 which require the transfer of archival copies and the destruction of adaptations when continued possession of those copies ceases to be lawful. p 125 Other Related Amendments The Draft Report states that other amendments may be needed because of its recommended changes in the definition of distribution which also affects the definition of publication. It also invites comment on such amendments. It is quite probable that the organized groups which represent publishers and other copyright holders will offer such suggestions. It is unlikely, however, that such comments will come from the public and users who tend not to be organized. Extreme care must be taken to make sure that changes suggested by publishers and rights holders do not further restrict the rights of the public to use copyrighted works. Additional restraints on the use of works by the public could seriously endanger the primary purpose of copyright under the Constitution which is the promotion of science and the useful arts which can only occur if the public has sufficient access to works to use the knowledge contained in those works to create additional works. Complete monopolistic control of all or even most reading, viewing or listening to work on the NII is not consistent with this Constitutional purpose. Means of public access for purposes of building on the existing knowledge base must be preserved. p. 126 Prohibition of Devices to Defeat Methods of Preventing Unauthorized Use The Draft Report says that the Working Group finds that prohibition of devices, products and components that defeat technological methods of preventing unauthorized use is in the public interest. So long as there are provisions in the law that permit certain uses of copyright works without the copyright holder's permission, there will be a need for devices, products and components that can be used to defeat measure that were intended to prevent unauthorized use but which also have the effect of preventing lawful use authorized by the copyright law. Devices and technological means of preventing use will never be able to tell the difference between an unauthorized illegal use and an unauthorized legal use so long as there is any flexibility in the law. Thus it is not in the public interest to prohibit means for getting around technological impediments to use. The Draft Report is far too one sided on this issue. p. 131 The Draft Report recommends changes which prohibit the fraudulent use of copyright management information. This amendment does not address the problem of people who mistakenly but without fraudulent intent, place incorrect copyright information in notices or in copyright management systems. The law needs to provide some mechanism other than a full fledged infringement suit to correct incorrect information in copyright management systems. As I have pointed out earlier in these comments, many publishers do not understand the requirements of a transfer of copyright and thus claim copyright in works for which they do not own the copyright. Some collective rights organizations and many users who pay royalties through collective rights organizations and publishers routinely refuse to correct such inaccurate information even after they have been put on notice that the publisher does not own the copyright in these works. They insist that they deal only with the publishers. The law needs to include a private right of action with attorneys fees to copyright holders whose rights continue to be abused in this manner after notice has been given to any party that a mistake has been made in a copyright management system. p. 133 - Fair use and other limitations The Draft Report says that 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 performances and displays) to provide the public with adequate access to copyrighted works via the NII. This statement is probably the most important statement in the Draft Report and the Draft Report should have spent considerably more time on these issues. Aside from this section, which really makes no recommendations, the remainder of the Draft Report is decidedly one sided taking into account only the concerns of copyright holders. There are a number of examples in early parts of this comment that indicate just a few of the reasons why these sections need revision to preserve the public's right of access. However, the Draft Report takes the wrong approach when it states "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. The whole idea of a limited copyright monopoly is that the copyright holder is not entitled to compensation for all uses of his work. He is granted some right to control use of his work in order to have an incentive to produce more works for the use of the public. But except in those limited areas as further limited by the exceptions, the copyright owner is not necessarily entitled to compensation for use of his work by the public when that use benefits the progress of science and the arts. Thus it is not a question of donating access time, but a question of not requiring payment when the law does not give the copyright holder a right for which he can charge payment. In order for this system to work, copyright holders cannot choose solely to license their works in a restrictive environment that charges for every use. Works must be available in a manner that allow some public purchasers to acquire works and provide access in those situations where the law does not give the copyright holder control over use of his work. The Draft Report is correct in its assumption that libraries and educational institutions are the logical institutions to continue to be the public purchasers that provide the access that makes it possible for the rest of the public to exercise their right to use works in ways that do not infringe copyright either because the uses don't fall within the scope of the exclusive rights or because the uses fall within one of the limitations under which permission of the copyright holder is not required. However, given the current licensing practices of electronic publishers, it will be exceedingly difficult for libraries and educational institutions to continue to serve in this role. Substantial changes to the limitations may be necessary to ensure continued public access in the electronic environment. p. 134 Compulsory licenses On page 134 in the last paragraph, the Draft Report states "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." While this may be true for works which are being actively marketed and have a relatively large market, there is a substantial body of work still protected by copyright that is not being actively marketed. Rights holders in out of print works with small markets have little or no incentive to participate in voluntary licensing schemes particularly when collective rights organizations charge substantial fees for participation. In these cases, which represent a substantial part of the current knowledge base, the transaction costs are astronomical primarily because it is extremely difficulty and costly to locate the rights holder. In most cases, the current interest in any particular one of these works is relatively small, but as a whole they are nevertheless important parts of the body of human knowledge which should be preserved and made accessible as part of the NII. Unless there is some sort of compulsory licensing scheme to serve as a backup to voluntary schemes and provide a relatively inexpensive method to pay royalties on such works, a major part of the body of scholarly knowledge may never make it to the electronic superhighway. It is precisely these types of problems that led to the abandonment of the American Memory Project, the Library of Congress' electronic preservation project. If the Library of Congress with all of its copyright records cannot find copyright holders to obtain permission to convert works to electronic form in a reasonably cost efficient manner, how can we expect other groups to handle the problem? How will we make sure that works like Henry Roth's "Call It Sleep" (which was not a major market success when first released) will exist on the information superhighway to be rediscovered and become classics at some later date? In addition, some sort of compulsory license or exception to the law is necessary for preservation purposes so that electronic works can be preserved before they are lost even if it is not economically feasible to track down and get permission from copyright holders who are no longer marketing a work. Conclusion I have tried to tie most of my comments to specific parts of the Draft Report because I believe that this format will be most useful to the Working Group. However, my general reaction to the Draft Report as a whole, is best expressed by quoting a paragraph (with permission) from a soon to be released article by my colleague Jessica Litman. By vesting copyright owners with control of any reproduction or transmission of their works, and then defining reproduction and transmission to include any appearance, even a fleeting one, of a protected work in any computer, and any transfer of that work to, from or through any other computer, these amendments would enhance the exclusive rights in the copyright bundle so far as to give the copyright owner the exclusive right to control reading, viewing or listening to any work in digitized form. The Draft Report comes down firmly on the side of increased rights for copyright owners and it endorses the goal of enhanced copyright protection without acknowledging any countervailing concerns. Because it is an advocacy document, it at times misrepresents the state of current law. It gives voice to only one side of complicated policy debates. In some cases, the Report identifies a particular alternative as more desirable _because_ it gives copyright owners rights subject to fewer exceptions. The Report's drafters apparently did not perceive objectivity or balance to be their job. from Jessica Litman, _The Exclusive Right to Read_ (to be published in 13 Cardozo Arts & the Entertainment Law Journal (1994)) As Professor Litman so aptly states in her article, the interests of the public are not well represented in the Draft Report. If I were the public's lawyer and were asked to express an opinion on whether or not the public should enter into an agreement that balanced rights the way the current law as the Draft Report proposes it should be amended does, I would clearly answer NO. From: HUHEPL::GOLDEN 7-SEP-1994 16:53:59.87 To: SMTP%"nii-ip@uspto.gov" CC: GOLDEN Subj: Comments on Draft Report Dear Sir/Madam: I would like to thank you for the opportunity to comment on the Preliminary Draft of the Report of the Working Group on Intellectual Property Rights. While I am not a lawyer, and I have little time to comment extensively on the report, I feel that my point of view will nonetheless be useful for the authors to consider. My view is that the document errs substantially by extending excessively the property protections associated with intellectual property. The interesting point is that aside from the NII making it easier to disseminate (either legally or illegally) copyrightable works, the concurrent technological revolution is making such works easier to _produce_. Thus, rather than extending the property protections on such works, they should be shrinking. The draft report appears to have concerned itself mostly with the issue of protecting the property rights traditionally granted to copyright holders, and how to stem the tide of change that is rendering them unenforcable and archaic. Not really addressed is how best to "promote the progress of science and the useful arts," the real reason for copyright and patent protection in the first place. For example, the software that runs NII as it exists now (ie. the Internet) was constructed without substantial protections for the ideas that underlie it. I think that if the original authors of the ftp program had patented the ideas that went into it, it is more than likely that I would not have been able to use it to get the nii-ip document from your computer. Thus, the interest of society was best served by their _not_ protecting their property, and their _not_ interfering in other people's use of it. As I mentioned, I am not a lawyer, and I do not have the time to comment on very much of the document. However, I mention this section as an example of the draconian approach taken: _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._ I construe this section as an attempt to criminalize the widely available software that defeats copy protection schemes. Such copy protection is not as common nowadays as it was several years ago, much to the relief of software purchasers. Partly copy protection disappeared because of the existence of the programs that defeat it, but it also vanished because of the hostility of users. There is a social _benefit_ to those users who no longer have to waste time contending with the nuisance of proving each time they run a program that they are the legal owner of it (for example by inserting a floppy disk into their machine). Moreover, the user no longer has to worry that the floppy disk will fail - as they all do eventually with use - and render the software useless. These social benefits _outweigh the social cost_ of the reduced sales by the software providers, whose work is stolen. (I was formerly a producer of copy protected software, so I am here arguing against my own personal interest.) As I said above, society's best interest is served when intellectual property protections are not excessive. What best served the development of art and science in the past no longer does. It is time that nation look at these issues afresh. I would recommend that the draft report should rethink the issue from the beginning. In my view: (1) The period of copyright protection should be shortened. (2) The liabilty of bulletin board operators should be explicitly restricted to those posts that were made by them, or that they knew were present. Today, the threat of libel and copyright infringement suits hang over these people's heads. Freedom of speech is best served if the people who give access to the NII to others are not held liable for other people's actions. In the realm of patents: (1) No patent should be extended to software. Software is too new an art, and once again the interest of the public is best served by continuing the freewheeling software development of the last twenty years. The vast majority of improvements in technology are not owned, and thus available to all. (2) If software patents are issued, the patenter should show that s/he spent a substantial sum of money developing the underlying algorithm. This could be used as a rudimentary test of "obviousness". (3) If software patents are issued, "prior art" should no longer be the sole criterion for invalidation. The patenter should have to prove very substantial novelty to the idea, not simply an assembly of current programming techniques to accomplish the goal. (4) If software patents are issued, they should be for a shorter duration, say three years. Once again I thank you for the opportunity to comment. Prof. Mitchell Golden Department of Physics Harvard University Cambridge, MA 02138 (617)495-4349 golden@physics.harvard.edu (These views are my own and in no way represent those of Harvard University.) September 2, 1994 The Commissioner of Patents and Trademarks U.S. Patent and Trademark Office Washington, D.C. Attention: Terri A. Southwick Attorney-Advisor Office of Legislative and International Affairs Via: e-mail to nii-ip@uspto.gov Dear Ms. Southwick: We teach copyright and computer law at the University of Texas School of Law. We are writing to set forth our comments on the Green Paper, Intellectual Property and the National Information Infrastructure; A Preliminary Draft of the Report of the Working Group on Intellectual Property Rights. In general, the Working Group is to be congratulated for tackling this complex issue in a timely fashion. We are in agreement with the majority of the report and most of its recommendations. Having said that, we do offer the following suggestions for your consideration. Our suggestions might be summed up in one overall point, which is that the Draft too often looks for technical or formal solutions for what are really broad policy issues. The development of the NII may fundamentally change the way information providers do business, and with it the economics of production and distribution of copyrighted works. These possible changes require additional study and discussion. Our principal comments on the Working Group's recommendations are as follows: 1. We disagree with the Draft's recommendations regarding the first sale doctrine. The Draft recommends that there be added to Section 109(a) a statement that the first sale doctrine does not apply to the sale or other disposal of the possession of the copy or phonorecord by transmission. The effect of this is to create for the first time a new category of works -- electronic works -- to which the first sale doctrine essentially does not apply at all. This seems unwarranted, at least based on present evidence. The difficulty posed by transmissions is clear -- just as with any other use of an electronic work, a transmission sends a copy rather than the original. We can envision two factual situations. In the first, the transmitting party sends a copy and keeps the original. Alternatively, it is certainly possible for someone to transmit a work without retaining his or her own copy of the work. For example, the transmitting party might erase his or her copy after transmission, or might merely be "passing on" a work that he or she has lawfully received through the NII. In this second case, the transmitting party holds a "copy" only temporarily while viewing the work on a computer screen. The Draft's definition of "transmit" would include both situations. In the first situation, where the transmitting party has kept her original and forwarded a copy, she will not be protected by the first sale doctrine as it is currently written. Because she has made a copy (so that there are now two copies instead of one), she is liable for copyright infringement. No changes in the language of section 109(a) are necessary to achieve this result. We see no reason at present why the first sale doctrine should not apply in the second situation. The practical effect of transmission of a message and deletion of the message1 is similar to the effect of mailing someone a physical copy of a literary work or a sound recording. In either case, only one copy of the work continues to exist. While technically a copy is made and the original is discarded, this is a necessary result of the technology. The policies underlying the first sale doctrine would seem to apply in this circumstance as well. The determination of whether the first sale doctrine should apply must reflect economics and policy considerations. The decision should not turn on whether or not such transmissions can be said superficially to resemble the disposal of a hard "copy." We fear that the effect of the Working Group's first sale proposal may be to stifle communication and commerce on the NII. Many everyday transactions involve the "disposal" of information by transmitting and deleting.2 If each such transaction requires the express prior permission of everyone involved, many people may simply choose not to do business on the NII at all. Of course, it is possible that the economics of electronic transmission differ fundamentally from those of physical distribution. If that is so, the Working Group may want to consider banning serial transmission outright at some point in the future. To date, however, we have not seen sufficient evidence to justify such a large step. 2. The Draft's recommended provision regarding technological bypasses, set forth on page 128, is far too broad. As drafted, the provision would likely prevent the distribution of equipment used for reverse engineering, home copying and other activities that, in certain circumstances, have been held to be fair use.3 Proposed section 512 adopts the "primary purpose or effect" test for contributory infringement. This test was proposed by the dissent in Sony v. Universal Studios. It was rejected by the majority in favor of the more lenient "capable of substantial noninfringing use" test. Had the Working Group's proposed statute been law in 1984, its effect would have been to reverse the decision in Sony. The effects on the VCR market -- a vibrant and competitive sector of our economy today -- would have been significant. Enacting section 512 as currently written may stifle emerging technologies. We recommend that the Working Group engage in further study of the potential effects of banning such devices before endorsing section 512. If the Working Group does decide to proceed with section 512, we suggest that the draft should be modified to make it clear that fair use copying, including reverse engineering, is a legitimate purpose for which the manufacturer should not be held liable. The development of digital technology and the NII will increasingly result in situations in which works are only accessible on line. Persons who control on-line access to those works may have the power to exert control and exact payment to a degree that exceeds that currently available under copyright law. For example, if no one has hard copies of works that are in the public domain, then no one will be able to use them without paying the owner of the data base that holds them. To ensure that the public has continued access to "public domain" works in this new environment, copyright law must permit certain forms of technological bypass and reverse engineering. Further, we believe the appropriate test for contributory infringement is the test adopted in Sony. The expectations of businesses, copyright owners and the public have been settled for ten years since the Sony decision. In the absence of compelling evidence that contributory infringement doctrine is in need of substantial reform, we do not believe the Working Group should change it. 3. On page 131 the Draft recommends that the Copyright Act be amended to prohibit fraudulent copyright management information. We suggest that the Working Group consider expanding this provision to include an affirmative right to have your authorship acknowledged in connection with a work. This suggestion parallels what Paul Geller has termed a "right of reference." Such a right would "require that any file digitally archiving a work include references to identify the persons who creatively contributed to the overall fabric of that work, along with their respective roles." Paul Edward Geller, The Universal Electronic Archive: Issues in International Copyright, 25 IIC 54, 66 (1994). The transformation of prior works would not infringe their authors' right of integrity, but any file digitally archiving a work would have to refer to those prior works that the authors of the archived work consciously transformed in generating it. A right of reference or identification online is important, as it is a relatively simple matter online to remove identification and thereby deny authors "credit" for their works. In addition to the above comments on the Working Group's recommended changes in the copyright laws, we note several areas in which the Working Group should consider making recommendations or engaging in further study: 1. The potential for private control over "public domain" works alluded to above also raises the specter of information providers "opting out" of copyright law. Form or "shrinkwrap" licenses are commonly used by vendors in the software industry in an attempt to obtain protection beyond that granted by copyright law. For example, such licenses often contain provisions preventing reverse engineering or copying for any purpose, even if that copying would constitute fair use. We are concerned that such unbargained contracts will proliferate in the environment of the NII, and (if enforced) upset the delicate balance maintained by copyright law. We believe that the Working Group should consider revising section 301 of the copyright law either to preempt such contract provisions, or to raise the threshold for "opting out" of copyright altogether. 2. On page 27 the Draft notes: "Consideration may be given to eliminating categorization under the Copyright Act in the future." The rationale that is given for this is that "multimedia works" are not easily categorized and that the necessity for categorization is questionable, except, perhaps in the case of sound recordings. But the Copyright Act accords different treatment to different categories of works in a number of places, each of which reflects various policy considerations and the economic structure of various industries. As noted in the Draft, for example, the limitations on rights in Sections 108 through 120 are not applicable to all types of works. Such other staples of copyright doctrine as the utilitarian function exception, works for hire doctrine, and performance and display rights are also dependent on categorization. Before categorization is eliminated, the reasons for each of these variations in treatment must be examined and weighed against the apparent elegance of eliminating categorization. 3. On page 37 the Draft indicates that "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," and is, therefore an infringement of the reproduction right unless viewing is de minimis. In reaching this conclusion the Draft essentially follows case law holding, on the basis of a technical description of the physical functioning of a computer, that loading a work in RAM constitutes a fixed copy. It seems to us that this approach incorrectly arrives at a formal result based on a technical description of current computer technology, rather than on the underlying policies of the Copyright Act. The question should not be whether a particular function of a computer can be construed as the making of a fixed copy. It should be whether, as a matter of policy, we want people who wish to use their computers in a certain way to have to obtain the permission of a copyright owner or to pay a statutory royalty in order to do so. Given the economics of the Internet and the desire to provide for the maximum production, distribution and use of creative works at reasonable cost, does it make sense to define looking at a work on an Internet host as an act that requires the permission of the owner of the copyright in the work? The Draft's discussion on this point may be helpful in describing how courts are likely to apply the Copyright Act as currently drafted. But the Draft lacks sufficient analysis of what the law ought to be in this respect. 4. Our comment with regard to the Draft's discussion (pages 40-42 and 73-82) of the liability of BBS operators for customer copying of items that appear on the bulletin board is similar. The Draft presents a helpful summary of cases enunciating current law. However, the Draft does not discuss whether and under what circumstances a BBS operator should be liable. If BBS operators are always liable for customer copying, this will create a tremendous disincentive to operate a BBS. How can we prevent this, while still holding responsible those operators who take an active role in infringement? Do we want to require that operators actively review all uploads and downloads for possible infringement? Should we view a bulletin board as a common carrier or as a product offered by its operator? These are basic policy questions that must be addressed if copyright is to contribute positively to the development of the NII. We hope you find these comments helpful. We would be happy to answer any questions you may have regarding them. Sincerely yours, Neil Netanel and Mark Lemley Assistant Professors, University of Texas School of Law Footnotes _________ 1 As a separate matter, we recommend that a message or document be considered "deleted" for purposes of the first sale doctrine if it has been removed from active or permanent archive files. Most electronic mail programs actually save "deleted" messages for a period of several days, to allow the message to be resent in case of transmission failure. The use of such a program should not automatically trigger copyright liability. 2 To give just one example, the Working Group's recommendation would make it impossible for corporations to "route" documents stored electronically without prior permission of the copyright owner for each serial transmission. 3 The draft provision would also contradict the spirit of the compromise reached in the Audio Home Recording Act of 1992. INFOSAFE SYSTEMS, INC. 342 MADISON AVENUE SUITE 622 NEW YORK NY 10173 TEL: (212) 867-7200 FAX: (212) 867-7227 randall@infosafe.com The Commissioner of Patents and Trademarks, U.S. Patent and Trademark Office, Box 4 Washington, DC 20231 Attention: Terri A. Southwick, Attorney-Advisor, Office of Legislative and International Affairs The Working Group should review what technologies are available for protecting intellectual property, as much progress has been made in this area recently. Just as digital audio recording devices have built-in safeguards against multiple copies, literary and multimedia works can be further protected by hardware and software solutions in addition to legal protections. Hardware and software technologies that can encrypt and meter should be encouraged, as they can go far both to protect the rights of copyright holders and to enable various proposals for payments to authors of intellectual property. Infosafe Systems is one of a number of companies that have made major progress in this area. Infosafe was featured as one of the "25 Cool Companies for Products, Ideas and Investments" in Fortune, July 11, 1994. We were also profiled in Forbes, June 6, 1994 and Business Week, February, 15, 1993. Infosafe received the 1994 Seybold Editors' Award for Excellence as "outstanding new product" and was a Finalist in "The Interactive Advertising and Media Awards," sponsored by Advertising Age in April 1994. One area in which metering and encryption technologies can have a major impact is libraries and schools. Using such technologies, libraries and schools around the country and around the world can have access to vast amounts of information, subject to whatever parameters are set for access and payment, while fully protecting the copyright owner. This will enable even the smallest libraries and schools to have access to much more information than might otherwise be possible without a secure metering system. If you have any questions, or would like to discuss this with us further, please let me know. Respectfully yours, Randall Stempler Date: Wed, Sep 7, 1994 6:49 PM EST From: SusanLesch@aol.com Subj: Attn: Terri Southwick: IRP Lehman Draft Report To: nii-ip@uspto.gov Thank you for the opportunity to respond to your document. As the author of a recent article on copyright of messages on the Internet, I would like to thank you for this sentence in the draft report, in section _III. EDUCATION: > 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. The prevailing understanding of many journalists, policy makers, and indeed _even members of the NIIAC_ whom I have interviewed is that messages posted publicly to the Internet and to Usenet by U.S. citizens are public domain! This is erroneous, dangerously not true, and in practice, is causing problems for participants on the Internet. I receive email from people who read my article and have been "taken" by such mistaken reporters and writers who believe they can quote such text without attribution. In addition, I am deeply concerned that the rights given U.S. citizens under Title 17 are being eroded by popular journalists, such as John Perry Barlow, contributors to WIRED magazine, and sometimes the Electronic Frontier Foundation (at a staff and board level). It is indefensible, in my opinion, to assert that created works posted in fixed form to the NII are not copyrighted. As I believe Mr. Lehman and his Working Group know, U.S. citizens need not even attach a copyright notice to such works to be covered by current U.S. copyright law. Though formal registration at the Library of Congress is advised for some published works, it is not practical for daily news and messaging on the NII. It would be sad indeed to see the forces in our society who believe current IPR law is outmoded win this argument. Therefore, I encourage you to continue your efforts, as presented in the section _BACKGROUND_: > 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. The time and date stamps of the Internet are a wonderful opportunity to document claims of ownership of written works. Please maintain the current U.S. system whereby a work is copyrighted at the time it is fixed, thereby protecting all "literary work," e.g. text, posted publicly on the NII! Best regards, Susan Lesch Forum Consultant, Macintosh Utilities Forum America Online, Inc. Phone: 612-332-9039 Email: susanlesch@aol.com U.S. Mail: 1520 Elliot Avenue South, 201 Minneapolis, MN 55404