DFC Statement- August 1997


Before WIPO Treaties are Ratified, Congress Should Adopt Comprehensive and Balanced Implimenting Legislation

The Digital Future Coalition (DFC) welcomes President Clinton's submission of the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty for ratification. That action presents an important opportunity for Congress -- through the careful crafting and enactment of implementing legislation -- to ensure the continuation of balance in copyright law and policy as the nation moves into the next millennium.

Since its inception, the DFC has urged policymakers domestically and internationally to recognize the importance of both information creators and users to the successful development of the emerging digital, networked environment. The DFC believes that, just as the WIPO treaties recognize the principle of balance between the interests of copyright owners and information consumers, so should domestic law.

Regrettably, the proposed implementing legislation (S. 1121/H.R. 2281) introduced on behalf of the Administration in both Houses of Congress this July is seriously deficient in several respects -- both as to the provisions included, and equally to those omitted.

Thus, while the DFC supports the WIPO treaties, we strongly oppose S. 1121 and H.R. 2281 in their current form as contrary to our long-held and oft-stated commitment to balance in copyright law and policy. Far from representing a compromise among stakeholders, as was suggested upon the legislation's introduction, the proposed implementing legislation would upset the balance that has characterized U.S. copyright law for decades. The treaties should not be ratified until agreement is reached on legislation that would maintain balance in America's copyright law.

Concerns with the Proposed Legislation:

  • Section 1201 of the proposed Act attempts to ban all devices that could be used to circumvent technological measures designed to restrict access or prevent unauthorized reproduction of copyrighted works. This provision threatens to stifle innovation. Furthermore, whatever rights individuals may have in theory under copyright law, such as fair use, would be effectively negated by this far-reaching provision.
  • Section 1202 threatens with liability even individuals who, without any intention to infringe or promote infringement, incidentally alter copyright management information designed to identify copyrighted works. Taken together, sections 1201 and 1202 create significant risks to the privacy of individual users of digital information networks.
  • Just as significantly, a number of related issues -- fair use, first sale, library preservation, distance education, service provider liability, and the enforceability of non-negotiated license terms -- that should be resolved to assure continued balance in U.S. copyright law are not addressed by the proposed implementing legislation.


Last year, the Clinton Administration proposed so-called "black box" legislation that could have had serious consequences for the design of future general purpose computers, digital VCR's and other recording products. The DFC helped demonstrate to the 104th Congress that this approach was overly broad and needlessly anti-innovation and anti-consumer. Congress rejected the proposal. In December 1996, over 100 nations attending the World Intellectual Property Organization (WIPO) diplomatic conference rejected the same proposal. Instead, the WIPO nations adopted a provision that merely requires countries to provide "adequate legal protection . . . against the circumvention of effective technological measures."

With the introduction of its proposed treaty implementation legislation, the Administration has again taken a broader approach that will punish consumers, educators, librarians, researchers, and others by unreasonably impairing the capability of multi-purpose devices. This approach will have far-reaching negative ramifications for the future development and exploitation of digital information networks like the Internet.

Specifically, the proposed Act would:

  • damage education and research by allowing copyright owners to "lock up" public domain materials, and frustrate the "fair use" rights of information consumers;
  • impede encryption research which helps ensure secure networks;
  • prevent legitimate "reverse engineering" in the development of new software (effectively overturning a series of judicial decisions recognizing reverse engineering as a legitimate "fair use");
  • outlaw, or force the redesign, of perfectly legitimate devices with substantial non-infringing uses (effectively overruling the Supreme Court's Betamax decision that spawned the VCR revolution to the benefit of all American consumers);
  • give judges the authority to second-guess manufacturers' decisions about the best design for new generations of consumer electronic equipment and computers;
  • frustrate efforts to provide parents with the capability to monitor and control children's on-line activities; and
  • threaten the personal privacy rights of electronic consumers by penalizing those who resist efforts to track their on-line usage.

Of particular concern to DFC, violations of section 1201 are not tied to infringement of any intellectual property right held by a copyright owner. As a result, liability is imposed for "circumvention" even when the purpose of the activity is permitted by the Copyright Act today -- as in cases of fair use or access to public domain or non-copyrightable material. Such a provision is unprecedented under copyright law. Furthermore, such an extreme approach is not required by the WIPO treaties. In fact, this approach is inconsistent with the preambles of the WIPO treaties, which call for the recognition of the need to maintain balance between the rights of copyright owners and "the larger public interest."

The savings clause in Section 1201(d) does nothing to preserve this balance; while Section 1201 will not as a formal matter restrict existing limitations and exceptions to copyright, it will as a practical matter preclude the exercise of these limitations and exceptions by preventing the manufacture and use of the technologies necessary for their existence. Nor would the savings clause protect individuals who gain "access" to works in violation of 1201(a)(1), even if they do so for entirely lawful purposes.


The WIPO treaties do require enactment of domestic legislation to safeguard the integrity of so-called "copyright management information" -- digitally encoded data about the title, authorship, and ownership of works. Once again, however, the proposed implementing legislation goes too far. Section 1202 includes, in addition to criminal penalties protecting CMI, civil penalties applicable even in cases where no specific intent to infringe or promote infringement can be shown. In other words, even someone who alters digital identifiers casually could be liable for a minimum of $2,500 in damages plus costs and attorney's fees. Neither the letter nor the spirit of the WIPO treaties requires enactment of such an overreaching provision.

Section 1202 also authorizes the Register of Copyrights to expand the definition of copyright management information ("CMI") in the future. In doing so, the Register "may not require the provision of any information concerning the user of a copyrighted work." While a step in the right direction, this language is not adequate to address genuine privacy concerns about how personal information might be collected and used on the Internet. The DFC thus will recommend that this provision be amended to make explicit that the term "copyright management information" does not include information that could be used (or misused) to identify the user of a work or otherwise infringe on personal privacy.


The proposed Act establishes civil and criminal penalties for violations of sections 1201 and 1202. Most objectionable, section 1204 imposes criminal penalties of up to $500,000 and 5 years of imprisonment for a single, willful violation of section 1201 or 1202 for commercial advantage or personal financial gain. A person could be subjected to these severe criminal penalties simply for exercising fair use rights, if a court deems the person acted for personal financial gain.


Just as the proposed implementing legislation would do too much, it also would do too little. Since the release of the Administration's White Paper on Intellectual Property and the National Information Infrastructure in 1995, a number of issues have emerged during the domestic discussion of how to balance the rights of copyrights owners with the right to access in copyright law and policy. These issues should be resolved in connection with the WIPO treaties if a stable, balanced solution is to be achieved.

Currently, a good start has been made in resolving the issue of on-line service provider liability with the introduction of Representative Coble's bill, H.R. 2180, the On-Line Copyright Liability Limitation Act. Although DFC members believe that H.R. 2180 must be significantly modified to take more fully into account the concerns of both commercial and non-commercial access providers, we welcome this development. By contrast, other important issues have yet to be addressed in any pending legislation. These issues include:

  • fair use: this traditional exception to the rights of copyright owners should be reasserted in the digital information age;
  • first sale: a digital equivalent to this important doctrine should be created to ensure the realization of the potential of digital information networks;
  • library preservation: libraries should be permitted to continue the same sorts of archival activities which they have relied on in the print environment;
  • distance education: educators should be permitted to continue in the new communications environment the important innovations they have already begun (thanks to provisions of the 1976 Copyright Act) using conventional broadcast and closed circuit technologies; and
  • non-negotiated license terms: limits should be placed on use of such terms (including so-called "shrink-wrap" and "click-on" licenses) to assure that teachers, students, and other users are not forced to give up their use privileges as a condition of access to works in digital (and non-digital formats).

To ensure balance in the Copyright Act, any legislative package implementing the WIPO treaties should address these issues. Ratification of the treaties should await agreement on such legislation. Unless all these issues can be resolved, along with the issues of "anti-circumvention" and CMI with which they are intertwined, none can truly be resolved.

The need to move forward with copyright in cyberspace certainly is urgent, but it is far more important for Congress to get it right. The DFC looks forward to working with Congress and the Administration to enact comprehensive legislation that ensures balance in the Copyright Act into the next millennium.

 The Digital Future Coalition (DFC) is the result of a unique collaboration of 38 of the nation's leading non-profit educational, scholarly, library, and consumer groups, together with major commercial trade associations representing leaders in the consumer electronics, telecommunications, computer, and network access industries. The DFC is committed to striking an appropriate balance in law and public policy between protecting intellectual property and affording public access to it.

August 1997



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