INTELLECTUAL PROPERTY AND THE
NATIONAL INFORMATION
INFRASTRUCTURE:
THE REPORT OF THE WORKING GROUP
ON INTELLECTUAL
PROPERTY RIGHTS
EXECUTIVE SUMMARY
BACKGROUND
The convergence of computer and communications technologies has made possible
the development and rapid growth of the National Information Infrastructure
(NII). The NII will generate both unprecedented challenges and important
opportunities for the copyright marketplace, and has tremendous potential to
improve and enhance our lives. The NII affords the promise of:
- a greater amount and variety of information and entertainment resources,
delivered quickly and economically from and to virtually anywhere in the
world in the blink of an eye;
- access to rich cultural resources around the world, transforming and
expanding the scope and reach of the arts and humanities and broadening our
cultural experiences through diversity of content;
- support for our education and library systems;
- enhanced competitiveness for U.S. business and the promotion of job
creation, economic growth, and well-being for Americans;
- new job opportunities in the creation, processing, organizing, packaging and
dissemination of information, education and entertainment products;
- technology, trade and business opportunities for new products and new
markets for U.S. industries; and
- a wider variety and greater number of choices for consumers of books,
movies, music, computer programs and other copyrighted works; increased
competition and reduced prices.
The availability of these benefits is by no means assured, however. Creators,
publishers and distributors of works will be wary of the electronic marketplace
unless the law provides them the tools to protect their property against
unauthorized use. Advances in digital technology and the rapid development of
electronic networks and other communications technologies dramatically
increases: the ease and speed with which a work can be reproduced, the quality of
the copies, the ability to manipulate or change the work, and the speed with which
copies can be delivered to the public. The establishment of high speed,
high-capacity information systems makes it possible for one individual, with a few key
strokes, to deliver perfect copies of digitized works to scores of others -- or to
upload a copy to a bulletin board or other service where thousands can download
it or print unlimited "hard" copies. Just one unauthorized uploading could have
devastating effects on the market for the work.
Thus, the full potential of the NII will not be realized if the legal protections that
extend to education, information and entertainment products and their use in the
physical environment are not available when those works are disseminated via the
NII. Creators and other owners of intellectual property rights will not be willing
to put their investments and their property at risk unless appropriate systems are
in place -- both in the U.S. and internationally -- 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 a wide variety of works
are available under equitable and reasonable terms and conditions, and the
integrity of those works is assured. All the computers, telephones, scanners,
printers, switches, routers, wires, cables, networks and satellites in the world will
not create a successful NII, if there is no content. What will drive the NII is the
content moving through it.
Of course, the NII could continue to serve as a communications tool and resource
for Government, public domain and other material for which copyright protection
is either not granted or not sought, but that would deny the public the NII's and
GII's full potential to inform, entertain, enrich and empower. Unless the
framework for legitimate commerce is preserved and adequate protection for
copyrighted works is ensured, the vast communications network will not reach its
full potential as a truly global marketplace.
Copyright protection is not an obstacle in the way of the success of the NII; it is
an essential component. Copyright motivates the creative activity of authors and
thereby provides the public with the products of those creators. By granting
authors exclusive rights, the public receives the benefit of literature and music
and other creative works that might not otherwise be created or disseminated.
Effective copyright protection promotes a new Cybermarketplace of ideas,
expression and products.
DEVELOPMENT OF THE REPORT
The Working Group on Intellectual Property Rights was established within the
IITF to examine the intellectual property implications of the NII and make
recommendations on any appropriate changes to U.S. intellectual property law and
policy. The IITF was established by President Clinton to articulate and
implement the Administration's vision for the NII and to develop comprehensive
telecommunications and information policies and programs that will promote the
development of the NII and best meet the country's needs.
The Report is based on the Working Group's Preliminary Draft (Green Paper),
issued in July 1994, and on extensive public comment and testimony. In
September 1994, the Working Group convened four days of hearings in three
cities. In addition, more than 1,500 pages of written comments were filed, in paper
form and through the Internet, by more than 150 individuals and organizations --
representing more than 425,000 members of the public. The open process
instituted by the Working Group resulted in a well-developed, voluminous
record reflecting the views of a broad spectrum of interested parties, including
various electronic industries, telecommunications and information service
providers, the academic, research, library and legal communities, and individual
creators, copyright owners and users, as well as the computer software, motion
picture, music, broadcasting, publishing and other information and entertainment
industries.
The Working Group examined the adequacy of the intellectual property laws to
cope with the pace of technological change. It found that the patent, trademark and
trade secret laws need no adaptation at this time. It also found that the Copyright
Act is fundamentally adequate and effective. In a few areas, however, it has
recommended limited amendments of the Copyright Act to take proper account of
current technology. Technology has altered the copyright balance -- in some
instances, in favor of copyright owners and in others, in favor of users. The goal of
the recommendations is to clarify existing law and adapt it where the balance has
shifted.
SUMMARY OF RECOMMENDATIONS
CLARIFICATION OF EXISTING RIGHTS
The Report recommends that Section 106(3) of the Copyright Act be clarified
to expressly recognize that copies or phonorecords of works can be
distributed to the public by transmission, and that such transmissions fall
within the exclusive distribution right of the copyright owner. The Report
also recommends related amendments to the definitions of "transmit" and
"publication," as well as distribution-related provisions regarding
importation of copies or phonorecords.
APPLICATION OF FAIR USE PRIVILEGES
The Working Group recommends that the library exemptions be amended to
allow the preparation of three copies of works in digital format; to recognize
that the use of a copyright notice on a published copy of a work is no longer
mandatory; and to authorize the making of a limited number of digital copies
by libraries and archives for purposes of preservation.
The Working Group recommends that the Copyright Act be amended to
provide an exemption for non-profit organizations to reproduce and distribute
to the visually impaired -- at cost -- Braille, large type, audio or other editions
of previously published literary works, provided that the owner of the
exclusive right to distribute the work in the United States has not entered the
market for such editions during the first year following first publication.
TECHNOLOGICAL PROTECTION SYSTEMS AND INFORMATION
The Working Group recommends that the Copyright Act be amended to
include a new Chapter 12, which would prohibit the importation,
manufacture or distribution of any device or product, or the provision of any
service, the primary purpose or effect of which is to deactivate, without
authority of the copyright owner or the law, any technological protections
which prevent or inhibit the violation of exclusive rights under the copyright
law.
The Working Group recommends that the Copyright Act be amended to
prohibit the dissemination of copyright management information known to be
false and the unauthorized removal or alteration of copyright management
information. Copyright management information is defined as the name and
other identifying information of the author of a work, the name and other
identifying information of the copyright owner, terms and conditions for uses
of the work, and such other information as the Register of Copyrights may
prescribe by regulation.
SUPPORT OF PENDING LEGISLATION
The Report also generally supports legislation that would amend the copyright law
and the criminal law (which sets out sanctions for criminal copyright violations) to
make it a criminal offense to willfully infringe a copyright by reproducing or
distributing copies with a retail value of $5,000 or more (S. 1122). By setting a
monetary threshold and requiring willfulness, S. 1122 ensures that merely casual
or careless conduct resulting in distribution of only a few copies will not be
subject to criminal prosecution and that criminal charges will not be brought
unless there is a significant level of harm to the copyright owner's rights.
The Working Group also supports a public performance right for sound
recordings. Two bills now pending, S. 227 and H.R. 1506, would grant such a
right, although more limited than the Report recommends.
OTHER RECOMMENDATIONS AND FINDINGS
The Report also includes recommendations that the Patent and Trademark Office
(PTO) obtain public input related to measures that can be adopted to ensure the
authenticity of electronically disseminated publications, particularly with respect
to verifying the contents and date of first public dissemination of the publication,
and evaluating the substantive value of the information contained in the
publication as to its role in patentability determinations; and that the PTO explore
the feasibility of establishing requirements or standards that would govern
authentication of the date and contents of electronically disseminated information
for purposes of establishing their use as prior art. In addition, it recommends that
the PTO, in the context of World Intellectual Property Organization meetings on
the trademark International Classification system, propose changes to ensure that
the system accommodates the goods and services of modern information
technology; and that the PTO regularly update its trademark Manual for the
Identification of Goods and Services to reflect new goods and services used on or
in connection with the NII and GII.
In addition, the Working Group supports further study in the following areas:
- The Working Group encourages copyright owners to explore with libraries
and schools special institutional licenses, and endorses increased funding for
libraries and educational institutions to assist in their ability to purchase and
license works in digital format.
- The Working Group supports the efforts presently under way to revise
Article 2 of the U.C.C. to encompass licensing of intellectual property.
Where parties wish to contract electronically, they should be able to form a
valid, enforceable contract on-line.
- Recognizing the important role of encryption technology in fostering a secure
and useful NII, the Working Group supports efforts to work with industry on
key-escrow encryption technologies and other encryption products which
could be exported without compromising U.S. intelligence gathering and law
enforcement. Proliferation of such technology will enable U.S. industry to
meet the needs of the international marketplace for these products and
continue to lead the development of the GII.
- The Working Group believes it is -- at best -- premature to reduce the
liability of any type of service provider in the NII environment. Exempting
or reducing the liability of service providers prematurely would choke
development of marketplace tools that could be used to lessen their risk of
liability and the risk to copyright owners, including insuring against harm
caused by their customers, shifting responsibility through indemnification
and warranty agreements, licensing, education, and the use of technological
protections. At this time in the development and change in the players and
roles, it is not feasible to identify a priori those circumstances or situations
under which service providers should have reduced liability. However, it
is reasonable to assume that such situations could and should be identified
through discussion and negotiation among the service providers, the content
owners and the Government. The Working Group strongly encourages such
actions in the interest of providing certainty and clarity in this emerging area
of commerce.
The Working Group continues its work with the Conference on Fair Use and the
Copyright Awareness Campaign. The Conference on Fair Use brings together
copyright owner and user interests to discuss fair use issues and, if possible, to
develop guidelines for uses of copyrighted works by librarians and educators.
Some 60 interest groups are participants in the Conference and have been meeting
regularly since September 1994. The Copyright Awareness Campaign, co-
sponsored with the Departments of Education and Commerce, coordinates
educational efforts of approximately 40 individuals and organizations to increase
public awareness of the importance of intellectual property in the information age.
A copy of the Report may be obtained by calling the PTO Office of Public Affairs
at 703-305-8341 or by sending a written request to:
"Intellectual Property and the NII"
c/o Terri A. Southwick, Attorney-Advisor
Office of Legislative and International Affairs
U.S. Patent and Trademark Office
Box 4
Washington, D.C. 20231
|