DFC Letter to Rep. Coble concerning H.R. 2652
October 30, 1997
Honorable Howard Coble
Dear Chairman Coble:
For the last eighteen months, the Digital Future Coalition has been following the discussion of new federal statutory protection for databases with interest and concern. The DFC, which was founded in 1995 to promote a balanced approach to intellectual property legislation affecting the networked digital environment, includes members who are proprietors of commercially valuable databases, as well as those whose cultural and business activities depend on the ability to make use of information derived from compilations of facts. Thus, where databases are concerned, the objective of the DFC is to assure that these valuable works receive sufficient protection to promote their continued creation, but not so much protection as may dampen competition among database providers, or discourage use by database consumers.
The undersigned DFC members appreciate that, with your introduction of H.R. 2652, the focus of debate has shifted away from the merits and demerits of a sui generis approach to database protection to the issues raised by a "misappropriation"-based approach. We concur that the relevant policy question is whether there exists a demonstrated need for new federal laws to supplement existing legal and technological safeguards for compilations, and (if so) precisely what form such protection should take. We are also gratified to know that you, the other members of your subcommittee, and your staffs intend to conduct an exhaustive inquiry into these issues before recommending any action on database protection. We followed the proceedings of the October 23 subcommittee hearing with interest, and we look forward to an opportunity to detail our coalition's views on H.R. 2652 and this issue at the hearing tentatively planned for February 1998. We wish to take this opportunity, however, to share with you the broad outlines of our concerns for incorporation into the record of the October 23 hearing.
The Empirical Case for New Database Protection Has Not Yet Been Made
To begin, we remain unconvinced that a threshold showing of necessity has been made for any new legislation which could have the effect of withdrawing the contents of factual compilation from the public domain. Without doubt, the phenomenon of "free-riding" by commercial competitors in the database industry is a matter of serious concern. However, we hope that in months to come it will be possible to address systematically the unanswered question of how well or poorly existing legal and technological protections address that concern.
Congress Should Take Testimony From All Substantially Affected Communities
The broadest possible input into Congress' inquiries is critical to a balanced outcome. For example, now that the Coalition Against Database Piracy has presented testimony before the subcommittee, it might be valuable to hear next year from a wide spectrum of companies involved in producing compilations of information about their self-help practices and their successes (and failures) in litigation based on copyright, contract, trademark, and state unfair competition or misappropriation theories. In this connection, we note that both Appendix E of the August 1997 Copyright Office report on "Legal Protection of Databases" (at pp. 4-5), and the public comments on the draft WIPO database treaty filed with the U.S. Patent and Trademark Office last Fall, indicate that there are significant numbers of database producers who may not support new legislation.
More broadly, it will also be important to hear from for-profit and not-for-profit entities which today make socially and economically valuable non-competitive uses of material from existing factual compilations, and which might be impeded from doing so by any new legislation. In addition, we think it is critical that before any new steps are taken to protect factual compilations, some accounting be made of the potential anti-competitive effects of such a measure.
The High Social and Commercial Stakes in this Arena Counsel Caution
Because the new rights that H.R. 2652 would create, and the stringent civil and criminal penalties it envisions, go considerably beyond those provided by traditional common-law misappropriation doctrine, the bill itself could chill both fair competition among providers of factual compilations and legitimate use on the part of information consumers. Both traditional misappropriation doctrine and the H.R. 2652 right to control extraction and use apply to information which a party has gathered or developed at a cost. But while traditional misappropriation applies only to "time-sensitive" data, H.R. 2652 covers the entire contents of a compilation, including historical or archival information. Protection under H.R. 2652 would thus be effectively open-ended in duration. Moreover, that protection apparently would apply retroactively to the contents of compilations made before the effective date of the enactment. Likewise, while traditional misappropriation doctrine penalizes only predatory "free-riding" that destroys the incentive to create or maintain a compilation, H.R. 2652 bars a substantial unauthorized "use in commerce" or "extraction" of a compilation's contents whenever it would "harm" the original compiler's actual or potential market. Rather than applying only between direct commercial competitors, H.R. 2652 could potentially reach cases where information in a compilation is extracted for use by a consumer or an educational, scientific or cultural institution.
H.R. 2652 Contains Broad New Rights Subject to Few Meaningful Exceptions
Our concern over the breadth of the rights provided in H.R. 2652 is especially important given the absence from the bill of a "fair use" provision or other meaningful exceptions for educational, scientific or research uses. The utility of the provision (in Subsection 1202[a]) permitting extraction or use of "insubstantial parts" of a compilation is uncertain, given that the bill contains no definition of "substantiality." And as we read the bill's provision on "permitted acts" relating to such not-for profit uses (Subsection 1202[d]) , it is no more than a restatement of the basic principle of liability, since it is applicable only when a use does not "harm the actual or potential market for the product." This limitation (which has no equivalent in the adjacent subsection providing a significant exemption for news reporting) renders the education, science and research exception virtually useless. We note, for example, that H.R. 2652 would create proprietary rights in compilations of scientific information which are now in the public domain; thus, unauthorized extraction or use of this information, of the kind which scientists are accustomed to make today, would appear to harm the market for the compilation as a matter of definition.
Closely related to our concern over the absence of a "fair use" provision in H.R. 2562 is our observation that the subject-matter to which the new right would operate is an extremely broad one, which takes in not only databases and various other factual compilations, but also a potentially wide range of other copyrightable works which today enjoy protection subject to Title 17's provisions on limitations and exceptions to exclusive rights. With respect to these works, the proposed legislation would bar acts which currently are permitted under copyright law. In this connection, we also note that the exclusion of computer programs from the bill's coverage may well be of quite limited significance, since it appears to leave "look-up tables" and other compilations of values integral to software interoperability subject to protection. Even the exclusion of government data, which certainly represents an improvement over other proposals for database protection, is rendered less satisfactory than it might be by its failure to address situations in which particular compilers are the de facto sole source suppliers of particular bodies of government data.
In sum, we have a number of questions about the current legislation -- as to both its general justification and its specific provisions. In closing, however, we would like to reiterate our support for reframing the discussion. We look forward to working with you to advance that discussion in months to come.
Association of Law Libraries
cc: Members of the Subcommittee on Courts and Intellectual Property