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INFORMATION & INFRASTRUCTURE

by Jonathan Rosenoer


I. Altering An Old Coat

As the pace of information technology quickens and increasing attention is paid to the national information infrastructure (NII), a working group chaired by the Commissioner of Patents and Trademarks, Bruce Lehman, is examining the intellectual property implications of the NII. Lehman's Working Group on Intellectual Property Rights has issued a preliminary draft report, in which the Working Group reviews the state of the law and recommends certain changes in the Copyright Act, among other things. According to the Group, the nation's intellectual property laws are beginning to fit like a tight coat under the weight of technological innovation. "There is no need for a new [coat]," says the Group, "but the old one needs a few alterations."
 
 

II. Fixation & Publication

The Working Group observes that under the Copyright Act, one fundamental test for copyright protection is fixation "in any tangible medium of expression, now known or later developed, from which [an original work of authorship] can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." Digital formats, such as floppy disks, CD-ROMs and other digital storage devices, have been found sufficiently stable so that works in such formats meet the fixation requirement. "Works are not sufficiently fixed if they are 'purely evanescent or transient' in nature," observes the Working Group. It questions, however, whether a work transmitted "live" via the NII, where no copy has been made prior to or simultaneous with transmission, meets the fixation requirement.

 "Publication" was a key requirement for protection under the Copyright Act. Publication under the Act is,

 "[T]he distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance or public display constitutes publication. A public performance, or display of a work does not of itself constitute publication."

 This definition, notes the Working Group, was intended to make clear there is no "publication" if a work does not change hands. If a sufficient number of copies of a work were offered to an online service (such as a bulletin board system) operator or others for upload onto the NII, the Group states that publication may occur.
 
 

III. Multimedia

Respecting "multimedia" works, the Working Group notes the terms "multimedia" and "mixed media" are misnomers. "In these works, it is the __types__ or __categories__ of works included that are "multiple" or "mixed" -- not the __media__." Multimedia works are not categorized under the Copyright Act, but the Working Group is confident they would be considered audiovisual works. Categorization of works, says the Working Group, "holds a great deal of significance under the Copyright Act." For example,

 "The public performance right is limited to 'literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works. The public display right is limited to literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work."

 According to the Working Group, "increasing 'cross-breeding' of types of works demonstrate that categorization may no longer be useful. Its necessity is also questionable, except, perhaps, in the case of sound recordings, which are not granted the full panoply of rights."
 
 

IV. Exclusive Rights

The Copyright Act grants owners certain exclusive rights, including the right to reproduce a work. According to the Working Group, in the absence of a defense the reproduction right is infringed whenever a work is "uploaded" from a user's computer to a bulletin board system or other server, downloaded from such a system or server, or transferred from one computer network user to another. The Working group also states that an infringing copy is made,

 "When a work is placed into a computer, whether on a disk, diskette, ROM, or other storage device or in RAM for more than a very brief period....

 When a printed work is 'scanned' into a digital file....

 When other works -- including photographs, motion pictures, or sound recordings -- are digitized....

 Under current technology, when a user's computer is being used as a 'dumb' terminal to 'look at' a file resident on another computer (such as a BBS or Internet host)...."

 Modification of the content of a downloaded file, states the Group, is also an infringement of a copyright owner's right to prepare derivative works.

 The right to distribute copies is another important right held by the copyright owner. But this right is qualified by the "first sale" doctrine, which allows the owner of a particular copy of a work to sell or otherwise dispose of possession of that copy. (Notably, the owner of a copy of a computer program may not rent, lease or rent that copy for commercial advantage.) Concerned that an owner could retain a work and simply provide another person with a copy, the Group suggests the first sale doctrine is not appropriate to transactions involving digitized works.

 With the exception of sound recordings, the right to perform a work publicly is another of the exclusive rights granted by the Copyright Act. States the Working Group,

 "When any NII user visually 'browses' through copies of works in any medium (but not through a list of titles or other 'menus' that are not copies of the works), a public display occurs. A display is 'public' on the same terms as a 'performance'; therefore, virtually all NII uses would appear to fall within the law's current comprehension of 'public display.'"
 
 

V. Technology & Fair Use

On the matter of "fair use" (which the Working Group believes to be a limitation on the rights of copyright owners, not a right of users), the Working Group acknowledges an argument that "the Copyright Act would be unconstitutional if such limitations did not exist, as they provide some alleviation of First Amendment and other concerns." Given recent court decisions, the Group anticipates litigation in the gray area between commercial uses that involve no "transformative" use by users which "will likely always be infringing" and "nonprofit educational transformative uses [which] will likely often be fair." The Group foresees that "technological means of tracking transactions and licensing will lead to reduced application and scope of fair use."
 
 

VI. Infringement

A person who infringes on the exclusive rights of a copyright holder is an infringer of copyright. As held in a recent court decision, "innocent" infringement is infringement all the same. In cases where there is no direct evidence of copying, the original work may be compared with the alleged infringing work to determine whether the two are sufficiently similar to infer copying and, therefore, infringement. In cases where the end product is not substantially similar to a copyrighted work, the Working Group notes that a finding of infringement may be based on the initial input of a copyrighted work into a user's computer.

 "Direct participation in infringing activity," notes the Working Group, "is not a prerequisite for infringement liability..." Infringement actions may be based on vicarious liability (e.g., a supervisor being held liable for the acts of an employee) or contributory infringement (e.g., a BBS operator who has knowledge of the uploading and downloading of unauthorized copies of a copyrighted video game, and who also solicited the copying).

On liability of operators of online systems for infringing material posted onto and downloaded from their systems, the Group notes that in one case an operator was held directly liable for the display and distribution of unauthorized copies of a copyrighted work, and in the other the operator was held liable for contributory infringement. (See, __Playboy Enterprises Inc. v. Frena__, 839 F.Supp. 1552 (M.D. Fla. 1993), __Sega Enterprises Ltd. v. MAPHIA__, No. C 93-4262 CW, 1994 U.S.Dist. LEXIS 5266 (N.D. Cal. Mar. 28, 1994).) Two recent libel cases may also provide guidance in this area. In those cases (one involving a television network and the other involving CompuServe), liability was not imposed for transmission of alleged defamatory material where it could not be shown that the defendant did not know or have reason to know of the defamatory content of the material at issue. (See, __Auvil v. CBS "60 Minutes__," 800 F.Supp. 928 (E.D. Wash. 1992), __Cubby Inc. v. CompuServe Inc.__, 776 F.Supp. 135 (S.D.N.Y. 1991).)
 
 

VII. Encryption & Other Matters

Other subjects reviewed by the Working Group include conflict of laws issues, international copyright treaties (with a focus on the principle of national treatment), copyright harmonization, private copying royalty systems, moral rights, patent and trademark law (the first case on the relationship between trademarks and Internet site names is pending).

 Technology may, of course, be used to restrict unauthorized access to copyrighted works. The Working Group discusses encryption as a method for controlling access at the file level, and notes there is an ongoing review of government policy concerning export of computer and networking technologies. (The Group notes the Audio Home Recording Act requires recording and interface devices to control serial copying.) "Software-based systems for tracking and monitoring uses of copyrighted works," says the Group, "are contemplated in the development of the NII." Electronic licenses, "analogous to the 'shrink-wrapped' licenses used for prepackaged software," may also be used in connection with works offered through the NII.

VIII. Proposed Amendments to the Copyright Act

The Working Group also recommends amendments to the Copyright Act, as it finds the pace of technological advance has outstripped intellectual property law. First, the Group recommends the Copyright Act be amended to make clear that copies of a work can be distributed to the public by transmission, and that this is within the exclusive distribution right of the copyright owner. The Group also suggests that the term "publication" include the concept of distribution by transmission, and that import prohibitions be amended to reflect that copies of copyrighted works can be imported by transmission.

Second, the Group would limit the first sale doctrine so that it does not apply where the owner of a copy transmits a copy of it to another. The reason for this is the owner has not relinquished possession of the particular copy owned.

Third, the Group would prohibit the "importation, manufacture and distribution of devices, as well as the provision of services, that defeat anti-copying systems." Interestingly, the Group includes a gaping loophole in its proposed legislation, allowing that such actions may be taken "with the authority of the copyright owner or the law."

Fourth, the Group seeks to prohibit the fraudulent inclusion, removal or alteration of copyright management information. Such information might include the name of the copyright owner and terms and conditions for use of the work, among other things.

 Fifth, a public performance right for sound recordings is suggested.

There are a number of other issues discussed by the Working Group. It will be sponsoring a conference to develop guidelines for fair uses of copyrighted works by schools and public libraries. Another conference will be held on intellectual property education.

IX. Request For Comments

Comments on the Working Group's Preliminary Draft (available by Gopher at iitf.doc.gov or via Telnet to the same address, logging in as Gopher) are due by September 7, 1994. They may be sent to: The Commissioner of Patents & Trademarks, U.S. Patent & Trademark Office, Box 4, Washington, D.C. 20231 -- Attention: Terri A. Southwick, Attorney-Advisor, Office of Legislative & International Affairs. Comments may also be sent via the Internet to nii-ip@uspto.gov.

 CyberLaw (tm) is published solely as an educational service. The author, a California attorney, is Executive Editor of LEXIS COUNSEL CONNECT CALIFORNIA. He may be contacted at jrosen03@reach.com or cyberlaw@cyberlaw.com; questions and comments may be posted on America Online (go to keyword "CYBERLAW"). Copyright (c) 1994 Jonathan Rosenoer; All Rights Reserved. CyberLaw is a trademark of Jonathan Rosenoer. CyberLaw on the World Wide Web (http://www.portal.com/~cyberlaw/cylw_home.html) is made possible with support from Portal Communications Co., an Internet provider based in Cupertino, CA (ph. 408/973-9111).

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