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The Digital Dilemma Intellectual Property in the Information Age Committee on Intellectual Property Rights and the Emerging Information Infrastructure Computer Science and Telecommunications Board Commission on Physical Sciences, Mathematics, and Applications National Research Council
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NATIONAL ACADEMY PRESS • 2101 Constitution Avenue, N.W. • Washington, D.C. 20418
NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.
Support for this project was provided by the National Science Foundation. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the sponsors.
Library of Congress Catalog Card Number 99-69855
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Additional copies of this report are available from:
National Academy Press 2101 Constitution Ave., NW Box 285 Washington, DC 20055 800-624-6242 202-334-3313 (in the Washington Metropolitan Area) http://www.nap.edu
Copyright 2000 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
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THE NATIONAL ACADEMIES
National Academy of Sciences National Academy of Engineering Institute of Medicine National Research Council
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering.
The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine.
The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.
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COMMITTEE ON INTELLECTUAL PROPERTY RIGHTS AND THE EMERGING INFORMATION INFRASTRUCTURE
RANDALL DAVIS, Massachusetts Institute of Technology, Chair
SHELTON ALEXANDER, Pennsylvania State University
JOEY ANUFF, Wired Ventures
HOWARD BESSER, University of California, Los Angeles
SCOTT BRADNER, Harvard University
JOAN FEIGENBAUM, AT&T Labs-Research
HENRY GLADNEY, IBM Almaden Research Center
KAREN HUNTER, Elsevier Science Inc.
CLIFFORD LYNCH, Coalition for Networked Information
CHRISTOPHER MURRAY, O'Melveny & Myers LLP
ROGER NOLL, Stanford University
DAVID REED, Cable Television Laboratories Inc.
JAMES N. ROSSE, Freedom Communications Inc. (Ret.)
PAMELA SAMUELSON, University of California, Berkeley
STUART SHIEBER, Harvard University
BERNARD SORKIN, Time Warner Inc.
GARY E. STRONG, Queens Borough Public Library
JONATHAN TASINI, National Writers Union/UAW Local 1981
Staff
ALAN S. INOUYE, Program Officer
JERRY R. SHEEHAN, Senior Program Officer
MARJORY S. BLUMENTHAL, Executive Director
MARGARET MARSH, Project Assistant
NICCI T. DOWD, Project Assistant
MICKELLE RODGERS, Senior Project Assistant
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COMPUTER SCIENCE AND TELECOMMUNICATIONS BOARD
DAVID D. CLARK, Massachusetts Institute of Technology, Chair
FRANCES E. ALLEN, IBM T.J. Watson Research Center
JAMES CHIDDIX, Time Warner Cable
JOHN M. CIOFFI, Stanford University
W. BRUCE CROFT, University of Massachusetts, Amherst
A.G. FRASER, AT&T
SUSAN L. GRAHAM, University of California, Berkeley
JAMES GRAY, Microsoft Corporation
PATRICK M. HANRAHAN, Stanford University
JUDITH HEMPEL, University of California, San Francisco
BUTLER W. LAMPSON, Microsoft Corporation
EDWARD D. LAZOWSKA, University of Washington
DAVID LIDDLE, Interval Research
JOHN MAJOR, WirelessKnowledge
TOM M. MITCHELL, Carnegie Mellon University
DONALD NORMAN, Unext.com
RAYMOND OZZIE, Groove Networks
DAVID A. PATTERSON, University of California, Berkeley
LEE SPROULL, New York University
LESLIE L. VADASZ, Intel Corporation
Staff
MARJORY S. BLUMENTHAL, Executive Director
JANE BORTNICK GRIFFITH, Interim Director (1998)
HERBERT S. LIN, Senior Scientist
JERRY R. SHEEHAN, Senior Program Officer
ALAN S. INOUYE, Program Officer
JON EISENBERG, Program Officer
GAIL PRITCHARD, Program Officer
JANET BRISCOE, Office Manager
MARGARET MARSH, Project Assistant
MICKELLE RODGERS, Research Assistant
SUZANNE OSSA, Senior Project Assistant
DAVID (D.C.) DRAKE, Project Assistant
DANIEL LLATA, Senior Project Assistant
BRANDYE WILLIAMS, Office Assistant
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COMMISSION ON PHYSICAL SCIENCES, MATHEMATICS, AND APPLICATIONS
PETER M. BANKS, Veridian ERIM International Inc., Co-chair
W. CARL LINEBERGER, University of Colorado, Co-chair
WILLIAM F. BALLHAUS, JR., Lockheed Martin Corp.
SHIRLEY CHIANG, University of California, Davis
MARSHALL H. COHEN, California Institute of Technology
RONALD G. DOUGLAS, Texas A&M University
SAMUEL H. FULLER, Analog Devices Inc.
JERRY P. GOLLUB, Haverford College
MICHAEL F. GOODCHILD, University of California, Santa Barbara
MARTHA P. HAYNES, Cornell University
WESLEY T. HUNTRESS, JR., Carnegie Institution
CAROL M. JANTZEN, Westinghouse Savannah River Company
PAUL G. KAMINSKI, Technovation Inc.
KENNETH H. KELLER, University of Minnesota
JOHN R. KREICK, Sanders, a Lockheed Martin Co. (Ret.)
MARSHA I. LESTER, University of Pennsylvania
DUSA McDUFF, State University of New York, Stony Brook
JANET NORWOOD, Bureau of Labor Statistics (Ret.)
M. ELISABETH PATÉ-CORNELL, Stanford University
NICHOLAS P. SAMIOS, Brookhaven National Laboratory
ROBERT J. SPINRAD, Xerox PARC (Ret.)
NORMAN METZGER, Executive Director (through July 1999)
MYRON F. UMAN, Acting Executive Director
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Preface The revolution in information technology is changing access to information in fundamental ways. Increasing amounts of information are available in digital form; networks interconnect computers around the globe; and the World Wide Web provides a framework for access to a vast array of information, from favorite family recipes and newspaper articles to scholarly treatises and music, all available at the click of a mouse. Yet the same technologies that provide vastly enhanced access also raise difficult fundamental issues concerning intellectual property, because the technology that makes access so easy also greatly aids copying—both legal and illegal. As a result, many of the intellectual property rules and practices that evolved in the world of physical artifacts do not work well in the digital environment. The issues associated with computerization are also amplified by the rise of the Internet and broader and more pervasive networking. These are the issues that inspired The Digital Dilemma.
This project grew out of a long history of Computer Science and Telecommunications Board (CSTB) interest in the legal issues related to computer technology in general and to intellectual property in particular. In 1991, CSTB published Intellectual Property Issues in Software, the report of a strategic forum in which I participated, and in 1994, it published the report of its second strategic forum, addressing intellectual property and other issues, entitled Rights and Responsibilities of Participants in Networked Communities. Recognizing the growing questions about intellectual property in the networked environment, CSTB hosted a project-planning meeting in December 1994 chaired by Pamela Samuelson (now at the
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University of California, Berkeley) and involving experts from the areas of law, computer science, technology, library science, and publishing. In spring 1996, the former Federal Networking Council Advisory Committee (FNCAC) recommended that CSTB be asked to undertake a project in this area. After clarifying a division of labor with another part of the National Research Council (NRC) regarding the issues related to scientific databases as intellectual property,1 CSTB transmitted a proposal in late 1996 to the National Science Foundation (NSF), which then administered the FNCAC; the project was funded in the fall of 1997, and CSTB empaneled the Committee on Intellectual Property Rights and the Emerging Information Infrastructure at the end of 1997. The course of this project reflected the circumstances of the time in which it was undertaken: the climate in the late 1990s for thinking about intellectual property policy reflected the early and mid-1990s history of public debates associated with attention to national and global information infrastructure, a period in which information policy (which includes intellectual property, privacy, and free speech issues) began to inspire unusually vigorous public-interest-group and commercial advocacy activity.
CSTB's project was designed to assess issues and derive research topics and policy recommendations related to the nature, evolution, and use of the Internet and other networks, and to the generation, distribution, and protection of content accessed through networks. Box P.1 outlines the statement of task.
Committee Composition and Process The study committee convened by CSTB included experts from industry, academia, and the library and information science community, with expertise that spanned networks, computer security, digital libraries, economics and public policy, public and academic libraries, intellectual property law, publishing, and the entertainment, software, and telecommunications industries (see Appendix A for the biographies of study committee members). It did its work through its own expert deliberations and by soliciting input and discussion from key officials from the sponsoring agencies, other government officials, technologists, legal experts, economists, social scientists, librarians, industry experts, and advocacy
1A concurrent NRC study produced A Question of Balance: Private Rights and the Public Interest in Scientific and Technical Databases (National Academy Press, Washington, D.C., 1999), which identifies and evaluates the various existing and proposed policy approaches (including related legal, economic, and technical considerations) for protecting the proprietary rights of private-sector database rights holders while promoting and enhancing access to scientific and technical data for public-interest uses.
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BOX P. 1 Synopsis of the Statement of Task
1. Assess the state of the art and trends in network and document or content technologies relevant to intellectual property rights management. The challenge is to sort out which trends are relevant, enduring, and promising, and how new communications and information technology may vitiate existing protection for intellectual property that the law offers to creators, users, and distributors.
2. Identify emerging opportunities and forms of publishing that have no precedents in existing media or current copyright law that may present new needs and opportunities for managing intellectual property rights.
3. Describe how electronic distribution is changing the markets (scaia, distribution, cost incidence for information products, whether they are available in alternative media or only electronically. This includes the rapidly changing structure of information and communications industries that operate and provide content for networks.
4. Assess the kinds, quality, and sufficiency of available data for measuring and analyzing relevant trends in the supply and demand for networked information services and associated electronic publishing of various kinds.
5. Review the characteristics of existing and proposed intellectual property law for both copyrights works and noncopyrightable databases, in the United States and internationally, and the potential impacts of the proposed legal changes on the nation's research, education, and federal networking communities as information providers, distributors, and users of content.
6. Consider the mapping of technology and content elements, their owners, and their rights and responsibilities (e.g., the changing nature of liability and responsibility for service providers). Given that understanding, develop recommendations on how new technology might provide new mechanisms and tools to protect both necessary to respond adequately to the changing networked environment, while maintaining a reasonable balance between the protection of property rights and public interests.
group spokespersons (see Appendix B for a list of briefers to the committee). The committee met first in February 1998 and five times subsequently; it revised and strengthened its report during mid-1999.
Central to the content and flavor of The Digital Dilemma is the fact that the authoring committee is, by design, a microcosm of the diverse community of interest. Because of the contentious nature of intellectual property issues, every effort was made to ensure that a broad range of perspectives was represented—on the membership of the study committee, in the solicitation of briefings and other inputs to committee meeting agendas, and in the materials distributed to the study committee. The contention was evident throughout the course of the study, beginning
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Acknowledgment of Reviewers This report was reviewed by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council's (NRC's) Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the authors and the NRC in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The contents of the review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their participation in the review of this report:
Stephen Berry, University of Chicago,
Lewis M. Branscomb, Harvard University,
Julie E. Cohen, Georgetown University Law Center,
Charles Ellis, John Wiley & Sons,
Edward W. Felten, Princeton University,
Laura Gasaway, University of North Carolina, Chapel Hill,
Jane C. Ginsburg, Columbia University School of Law,
Stuart Haber, InterTrust,
Trotter I. Hardy, College of William and Mary Law School,
Peter F. Harter, EMusic.com Inc.,
Michael Hawley, Massachusetts Institute of Technology,
James Horning, InterTrust,
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Mitchell D. Kapor, Kapor Enterprises Inc.,
Kenneth H. Keller, University of Minnesota,
Eileen Kent, Consultant,
Andrew Lippman, Massachusetts Institute of Technology,
Deanna Marcum, Council on Library and Information Resources,
Michael Moradzadeh, Intel Corporation,
Andrew Odlyzko, AT&T Labs-Research,
Ann Okerson, Yale University,
Harlan Onsrud, University of Maine,
Bruce Owen, Economists Inc.,
Anthony Stonefield, Global Music One,
Morris Tanenbaum, AT&T (Ret.),
Hal Varian, University of California, Berkeley,
Frederick W. Weingarten, American Library Association,
Richard Weisgrau, American Society of Media Photographers,
Steven Wildman, Northwestern University, and
Kurt Wimmer, Covington & Burling.
Although the individuals listed above provided many constructive comments and suggestions, responsibility for the final content of this report rests solely with the study committee and the NRC.
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Contents Executive Summary
1
1 Emergence of the Digital Dilemma
23
An Enduring Balance Upset?
24
Scope of the Report
27
Origins of the Issues
28
Technology Has Changed: Digital Information, Networks, and the Web
28
Why Digital Information Matters
28
Why Computer Networks Matter: Economics and Speed of Distribution
38
Why the Web Matters
39
The Programmable Computer Makes a Difference
43
Technology Has Emerged into Everyday Life, Running Headlong into Intellectual Property
45
Intellectual Property Law Is Complex
47
Cyberspace Is an Odd New World
49
What Makes Progress Difficult?
51
Stakeholders' Interests Are Diverse
51
There Is a Variety of Forces at Work
52
Many Threads Are Intertwined: Technology, Law, Economics, Psychology and Sociology, and Public Policy
53
The Problems Are Global, with Differing Views, Laws, and Enforcement Around the World
54
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Potential Solutions Have to Be Evaluated from a Variety of Perspectives
58
Road Map for the Report
60
Addendum: The Concerns of Stakeholders
61
Creators of Intellectual Property
61
Distributors
65
Schools and Libraries
68
The Research Community
70
The General Public
71
Other Consumers and Producers of Intellectual Property
73
Governmental Organizations
73
Private Sector Organizations
74
Journalists
75
Standards Organizations
75
2 Music: Intellectual Property's Canary in the Digital Coal Mine
76
Why Music?
77
W(h)ither the Market?
78
What Can Be Done?
79
The Business Model Response
79
Make the Content Easier and Cheaper to Buy Than to Steal
80
Use Digital Content to Promote the Traditional Product
81
Give Away (Some) Digital Content and Focus on Auxiliary Markets
82
The Technical Protection Response
83
Mark the Bits
83
Reattach the Bits
84
A Scenario
86
Constraints on Technological Solutions
87
Industry Consequences of the New Technology
89
The Broader Lessons
94
3 Public Access to the Intellectual, Cultural, and Social Record
96
Public Access Is an Important Goal of Copyright
97
Access: Licensing Offers Both Promise and Peril
100
Access and Technical Protection Services
104
The New Information Environment Challenges Some Access Rules
106
The New Information Environment Blurs the Distinction Between Public and Private
107
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Noncopyrightable Databases Present Access Challenges
109
The Information Infrastructure Is Changing the Distribution of and Access to Federal Government Information
111
Archiving of Digital Information Presents Difficulties
113
Fundamental Intellectual and Technical Problems in Archiving
116
Intellectual Property and Archiving of Digital Materials
119
Technical Protection Services and Archiving
121
4 Individual Behavior, Private Use and Fair Use, and the System for Copyright
123
Understanding Copyright in the Digital Environment
123
The General Public
124
Rights Holders
128
The Challenge of Private Use and Fair Use with Digital Information
129
The Wide Range of Private Use Copying
130
Arguments That Private Use Copying Is Not Fair Use
132
Arguments That Private Use Copying Is Fair Use
133
Private Use Copying: The Committee's Conclusions
135
The Future of Fair Use and Other Copyright Exceptions
136
Is ''Copy" Still an Appropriate Fundamental Concept?
140
Control of Copying
140
Is Control of Copying the Right Mechanism in the Digital Age?
141
What Can Be Done?
144
Addendum: Sections 106,107, and 109 of the U.S. Copyright Law
145
5 Protecting Digital Intellectual Property: Means and Measurements
152
Technical Protection
153
Encryption: An Underpinning Technology for Technical Protection Service Components
156
Access Control in Bounded Communities
158
Enforcement of Access and Use Control in Open Communities
159
Copy Detection in Open Communities: Marking and Monitoring
164
Trusted Systems
167
Protection Technologies for Niches and Special-Purpose Devices
171
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Technical Protection Services, Testing, and the Digital Millennium Copyright Act of 1998
171
What Makes a Technical Protection Service Successful?
173
The Role of Business Models in the Protection of Intellectual Property
176
The Impact of the Digital Environment on Business Models
177
Business Models for Handling Information
179
Traditional Business Models
179
Intellectual Property Implications of Traditional Business Models
180
Less Traditional Business Models
181
Intellectual Property Implications of Less Traditional Business Models
182
Business Models as a Means of Dealing with Intellectual Property
183
Illegal Commercial Copying
186
The Impact of Granting Patents for Information Innovations
192
6 Conclusions and Recommendations
199
The Digital Dilemma: Implications for Public Access
201
The Value of Public Access
201
Consequences of the Changing Nature of Publication and the Use of Licensing and Technical Protection Services
202
Publication and Private Distribution
205
Mass Market Licenses
205
Archiving and Preservation of Digital Information
206
Digital Archives
206
Preservation
209
Access to Federal Government Information
211
The Digital Dilemma: Implications for Individual Behavior
212
Perceptions and Behavior of Individuals
212
Fair Use and Private Use Copying
213
Copyright Education
216
Moving Beyond the Digital Dilemma: Additional Mechanisms for Making Progress
217
Technical Protection Services
217
The Digital Millennium Copyright Act of 1998
221
Business Models
224
The Interaction of Technical Protection Services, Business Models, Law, and Public Policy
225
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Moving Beyond the Dilemma: A Call for Research and Improved Data,
225
Illegal Commercial Copying,
226
Research on the Economics of Copyright, Use of Patents, and Cyber Law,
227
Is "Copy" Still the Appropriate Foundational Concept?,
230
Content Creators and the Digital Environment,
232
The Process of Formulating Law and Public Policy,
233
Principles for the Formulation of Law and Public Policy,
235
Concluding Remarks,
239
Bibliography
240
Appendixes
A Study Committee Biographies
253
B Briefers to the Committee
261
C Networks: How the Internet Works
263
D Information Economics: A Primer
271
E Technologies for Intellectual Property Protection
282
F Copyright Education
304
G The Digital Millennium Copyright Act of 1998 and Circumvention of Technological Protection Measures
311
Index
331
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The Digital
Dilemma T
.
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