A Digital Future Coalition statement on H.R. 2441-- The NII Copyright Protection Act of 1995

Submitted to the Subcommittee on Courts and Intellectual Property of the Judiciary Committee of the United States House of Representatives

February 15, 1996

Introduction

The undersigned members of The Digital Future Coalition welcome this opportunity to present their views on H.R. 2441, the "National Information Infrastructure Copyright Protection Act of 1995." We hope this submission may contribute to assuring that the Congressional debate over how the law of intellectual property can and should change in a digital age is thorough, broad, and balanced.

The DFC is a diverse coalition of national groups representing copyright holders and users of copyrighted materials, including: educators, educational administrators, librarians, technology companies, civil liberties organizations, consumers and creators. One thing the undersigned DFC member groups share is a vital interest in the continued development of the NII as a medium for education, recreation, research, commerce and creative exchange. The constituents of the DFC use the NII, but they also participate in the construction of the NII, as well as providing content to the NII. Thus, we support the overall goal of H.R. 2441: to provide a legal environment in which the NII can continue to flourish. As we wrote in our letter to Chairman Moorhead, on Nov. 9, 1995.

The members of the DFC are committed to supporting proposals which promote innovation in the information and technology industries, personal privacy in electronic communication, and public access to information resources, as well as appropriate protection for copyrighted content in the digital environment.

The American copyright system has always attempted to balance the interests of creators, distributors, and consumers of information: the different groups with a shared interest in "the progress of Science and the Useful Arts." This principle of balance is the source of extraordinary achievements on the part of our creative communities, our information technology industries, and our educational institutions. The particular balance of interests which has been struck in the law of copyright in the print environment, represents the outcome of years of legislative and judicial "fine tuning," and should not be discarded lightly.

Our primary concern about H.R. 2441 in its present form is that it fails to sustain the principle of balance, placing a nearly exclusive emphasis on the protection for copyrighted content, and doing so at the expense of promoting innovation, privacy, education and public information access. This emphasis is a matter of both commission and of omission. Thus, we are concerned with the specific provisions of the bill itself -- but we are equally concerned that it leaves many crucial issues, such as the place of "fair use" in the digital environment, unaddressed.

The provisions of H.R. 2441 are not mere"minor adjustments" to the law of copyright. As we will indicate below, they are major proposals which -- if enacted as written -- will undermine the delicately calibrated balance of interests which characterizes our law of copyright. Once lost through piecemeal legislation, this traditional balance will not easily be restored. Our copyright system is a unique and complex web, and the various sections of the law are intricately woven together. Any legislation which focusses on only one part of the fabric, to the exclusion of others, runs the risk of unraveling the whole.

The Transmission Right: Upsetting the Balance in Copyright Law

At the heart of H.R. 2441 is a series of amendments which would significantly enhance the level of protection afforded to copyrighted content on the NII by recognizing "transmission" as an aspect of the copyright owner's exclusive right "to distribute copies and phonorecords" to the public under Sec. 106 of the Copyright Act. In H.R. 2441, "transmission" is defined globally, so as to reach practically every electronic information transaction on the NII. While it is true that only those "transmissions" which constitute distributions to the "public" would fall within the ambit of the new provisions, copyright precedents indicate that any communication outside the immediate family circle could be considered a "public" one. Indeed, under the legal regime established by H.R. 2441 the communication of a single item of information over the Internet would involve tens or even hundreds of transmissions, as the digitized data passes from one server to another on the way to its destination.

Clearly the problem of electronic piracy is a serious one. However, we are not convinced that such a radical change to the law is required in order to deal with it. We view the current proposal as one which would have the effect of dramatically increasing the potential copyright infringement liability for individuals, companies, and institutions as they go about their normal activities in cyberspace. We are concerned that as currently drafted, H.R. 2441 could delay the emergence of new commercial technologies which "add value" to digital information, frustrate competition in the market for digital goods and services, stifle innovation and job creation in the private sector, threaten the growth of new educational technologies, reduce students' and educators access to information, and erode traditional concepts and practices of "fair use."

The "Transmission Right" and "Fair Use"

Among the most precious doctrines of American copyright law is that of "fair use," currently codified in 17 U.S.C. Sec. 107. This limited exemption from infringement liability applies to certain beneficial uses of copyrighted works which, in a more technical analysis, might be found to infringe. In the scheme of American copyright, "fair use" safeguards our collective interest in the flow of information -- which is, in turn, a source of economically valuable knowledge. "Fair use" provides the basis for many of our most important day-to-day activities in scholarship and education. It assures creators a reasonable degree of access to source material. And it facilitates innovation by technology companies which strive to offer products and services designed to promote connectivity. As the economic and cultural potential of the NII is gradually revealed, it is becoming clearer that at no time in the history of American copyright has the maintenance of a robust "fair use" doctrine been more important than it is at present.

Thus, it is critically important to extend to the digital environment the privileges that we enjoy today. Congress should assure that any legislation which enhances the rights of copyright owners in the networked environment also reaffirms the principle of fair use. It is not yet clear whether the Conference on Fair Use (CONFU) will in fact produce any useful consensus recommendations on the application of "fair use" in cyberspace. Even if it does so, those recommendations would (at best) govern only a part of the overall range of uses which currently fall within Section 107.

The "Transmission Right" and the "First Sale" Doctrine

The "first sale" doctrine is one of the special engines which drive the free flow of information in today's copyright laws. Under it, the owner of a copy of a protected work is free to give, sell or (subject to certain limits) otherwise transfer possession of it to another individual, without the permission from or payment to the copyright owner. "First sale" makes possible, among other things, used book shops, video rental stores, and free public lending libraries. But its applicability in cyberspace is in doubt. It will be important to legislate affirmatively to preserve first sale in connection with digital transmissions -- and thus to assure that users of new technologies enjoy the same privileges which book buyers and video buyers now enjoy.

The "Transmission Right" and Service Provider Liability

Many of the constituents of the DFC -- including businesses, schools and libraries -- are involved in building the National Information Infrastructure by developing the software and hardware necessary to access the Internet, and by providing others with Internet access services. In a networked environment where most -- if not all -- electronic information transactions are potential infringements of a ubiquitous "transmission right," commercial and non-commercial access providers have legitimate concerns about the possibility that they will be held liable, either directly or as vicarious and/or contributory infringers, for unauthorized transmissions of copyrighted material initiated by subscribers to listserves, bulletin boards, and on-line services.

Several recent decisions have held service providers directly liable for infringing activities engaged in by their subscribers. Moreover, existing copyright law principles relating to third party liability, which have been developed to apply to the use of analog works (books, movies, records, and so forth) are a poor fit for the new digital media. And if service providers are called upon to identify and stop subscribers' infringing activities, they would be required to monitor those activities as well, at whatever cost to the privacy interests of all who rely on network communications. We urge that, in connection with any legislation creating a new "transmission right," Congress also enact clear and certain rules governing service provider liability.

The "Transmission Right" and Educational Exemptions

Among other things, the creation of a general "transmission right" under Sec. 106(3) could seriously impair the development of educational technologies which permit the delivery of lessons to remote classroom sites, including those in rural areas, through electronic communications links. Thus, for example, students today enjoy the benefits of "distance learning" technology in large part because of the carefully-crafted provisions of Sec. 110(2) of the Copyright Act of 1976, which allow for the "performance or display" of certain works by means of "transmission"; in educational settings; these provisions, however, would not apply to "distribution" by means of "transmission" under H.R. 2441 -- and the effects on the burgeoning "distance education" movement could well prove devastating. Before enacting H.R. 2441, Congress should assure that such unintended consequences will not follow.

The "Transmission Right" and Library Exemptions

We agree with the sponsors of the legislation that a digital update to Sec. 108 of the Copyright Act -- the section exempting certain library activities -- is needed. To achieve that objective, minor amendments to Sec. 108 are required. We are pleased that the bill attempts to accommodate the needs of libraries and researchers, particularly with respect to the purpose of preservation of historic material. This issue is a crucial one today, when the preservation problem has emerged as nothing short of a national intellectual and historical crisis.

We support the revisions to Sec. 108 proposed by the American Association of Law Libraries, the American Library Association, the Association of Research Libraries, the Medical Library Association, and the Special Libraries Association, referred to in Register of Copyrights' Marybeth Peters testimony on H.R. 2441. These revisions would make Sec. 108 "technology-neutral" by striking the words "in facsimile" form in paragraphs (b) and (c), rather than adding the word "digital" as the present bill would do. These changes would allow libraries to meet the preservation challenge and to use any available format to carry out the activities authorized by Sec. 108. Such a digital update is essential to preserve the role of American libraries in the next century -- and beyond.

New Chapter 12: Copyright Carried Forward by Other Means

We recognize the importance of some technological measures to secure the NII against electronic copyright piracy. Indeed, some believe that the availability of new techniques and devices for "hardening" proprietary information against unauthorized access may prove as important a source of security for content providers as will the availability of new legal rights against infringers. But there is concern about the unwarranted sweep and breadth of the provisions of H.R. 2441 which prohibit and penalize various kinds of interference with "Copyright Protection and Management Systems. "In effect, if not by design, these provisions could have the effects of giving copyright owners de facto monopolies in material to which copyright protection does not extend, while forestalling the development or commercialization of precisely the kind of innovative new technologies which our laws of intellectual property should promote. At the same time, these provisions could impose severe burdens on the ordinary, otherwise lawful, commerce in intellectual property.

Section 1201's "Anti-Circumvention" Provision

The new section 1201 of the Copyright Act proposed by H.R. 2441 is far from a minor adjustment to current law. The thrust of the proposed section is to prohibit the importation, manufacture and distribution of devices that circumvent a system or process that prevents illegal copying of protected works. While we support in principle the goal of eliminating copyright piracy, any "anti-circumvention" provision must be carefully drafted so as not to prevent legitimate activities. We believe that proposed Sec. 1201 creates such a heavy burden of justification that, as a practical matter, many technologists and developers will simply avoid making or investing in technologies which could lead to legal entanglements.

As a result, under the regime of proposed Sec. 1201 information consumers with legitimate reasons to seek access to deencryption technology could well find that it was simply unavailable. Effective access to public domain materials would be restricted, as would consumers' practical ability to make lawful fair use of copyrighted materials -- a right recognized in the Supreme Court's decision in Sony v. Universal. Likewise, companies wishing to make lawful back-up copies of purchased, copy-protected software programs, as they are permitted to do under Sec. 117, might find their ability to do so frustrated by the unavailability of the necessary technology.

Section 1202's Prohibitions for the Integrity of Copyright Management Information

Under the terms of this section, and the associated remedial provisions of Sections 1203 or 1204, it is both a civil wrong and (in some cases) a criminal offense to knowingly provide or distribute false "copyright management information," or otherwise to tamper with such digitally embedded records. In general, we support the development of accurate copyright management information (CMI) systems, and we support the inclusion of entries about the actual authorship of works, as well as data about copyright ownership, in any definition of CMI. But we are concerned that the reach of Sec. 1202, like that of Sec. 1201, is over-broad. Imagine, for example, the case of a wholesaler who receives a shipment of digital copies from the manufacturer, and is aware that since the time those copies were made, the ownership of the work incorporated in them has changed hands. Under Sec. 1202(a), the wholesaler is flatly prohibited from redistributing those copies unless it makes changes in the "copyright management information," an operation perhaps involving considerable expense and certainly involving considerable delay.

Conclusion

 We support the concept of legislation to update the copyright law to meet the challenges of the digital networked environment and we welcome the opportunity to participate in the process by which it is formulated. But we have many concerns about the "NII Copyright Protection Act of 1995" as currently drafted. Legislation in the form of present H.R. 2441 could create more problems than it would solve. As clear from the two days of hearings conducted by the Subcommittee on Courts and Intellectual Property (February 7-8) many believe that the bill requires revision. This will require a thorough reconsideration both of the provisions it contains and of those it omits.

We believe that a deliberate process of copyright law revision is more likely to produce results which will withstand the tests of time and the marketplace than a process driven by a false sense of urgency. To date, we have heard only one argument that purports to explain why there is a need to act first and deliberate later, so to speak. It is the claim that some content providers are withholding their works from the NII, and thus from digital information users, until such time as they can be assured of higher levels of legal and technological protection against piracy. But the case for quick action on this basis has yet to be made: A review of the cultural riches available in cyberspace demonstrates that many content providers have chosen to make use of the NII as a channel of distribution. Creators, distributors and consumers of information share an interest in the continued expansion of the NII as a viable medium of communication. A carefully balanced legislative approach to the complex issues raised by copyright in the networked environment will help to realize the promise of the digital future.

Signed,

Digital Future Coalition Members