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Intellectual Property and the National Information
Intellectual Property
and the
National Information Infrastructure
The Report of the Working Group on Intellectual
Property Rights
Bruce A. Lehman
Assistant Secretary of Commerce and
Commissioner of Patents and Trademarks
Chair
Information Infrastructure Task Force
Ronald H. Brown
Secretary of Commerce
Chair
Intellectual Property
and the
National Information Infrastructure
The Report of the Working Group on Intellectual
Property Rights
Bruce A. Lehman
Assistant Secretary of Commerce and
Commissioner of Patents and Trademarks
Chair
Information Infrastructure Task Force
Ronald H. Brown
Secretary of Commerce
Chair
September 1995
Single copies of this Report may be obtained,
free of charge, 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
Copies will also be available from the IITF
Bulletin Board. The Bulletin Board can be
accessed through the Internet by pointing the
Gopher Client to iitf.doc.gov or by telnet to
iitf.doc.gov (log in as gopher). The
Bulletin Board is also accessible at 202-501-
1920 using a personal computer and a modem.
Library of Congress Cataloging-in-Publication
Data
United States. Information Infrastructure
Task Force. Working Group on Intellectual
Property Rights.
Intellectual Property and the National
Information Infrastructure: The Report of
the Working Group on Intellectual Property
Rights / Bruce A. Lehman, Chair.
1. Intellectual property -- United States.
2. Copyright -- United States.
3. Information superhighway -- United
States. 4. Information technology --
United States. I. Lehman, Bruce A.
II. Title.
KF2979.U55 1995
346.7304'8--dc20
[347.30648]
ISBN 0-9648716-0-1
Table of Contents
INTRODUCTION 1
BACKGROUND 7
I. LAW 19
A. COPYRIGHT 19
1. PURPOSE OF COPYRIGHT LAW 19
2. SUBJECT MATTER AND SCOPE OF PROTECTION
23
A. ELIGIBILITY FOR PROTECTION 23
B. PUBLISHED AND UNPUBLISHED WORKS 28
C. WORKS NOT PROTECTED 32
D. CATEGORIES OF PROTECTIBLE WORKS 35
3. COPYRIGHT OWNERSHIP 45
A. TRANSFER OF OWNERSHIP 47
B. LICENSING 49
C. ON-LINE TRANSACTIONS 53
4. TERM OF PROTECTION 59
5. NOTICE, DEPOSIT AND REGISTRATION 60
6. EXCLUSIVE RIGHTS 63
A. THE RIGHT TO REPRODUCE THE WORK 64
B. THE RIGHT TO PREPARE DERIVATIVE WORKS 66
C. THE RIGHT TO DISTRIBUTE COPIES 67
D. THE RIGHT TO PERFORM THE WORK PUBLICLY 70
E. THE RIGHT TO DISPLAY THE WORK PUBLICLY 72
7. LIMITATIONS ON EXCLUSIVE RIGHTS 73
A. FAIR USE 73
B. LIBRARY EXEMPTIONS 84
C. FIRST SALE DOCTRINE 90
D. EDUCATIONAL USE EXEMPTIONS 95
E. OTHER LIMITATIONS 96
8. COPYRIGHT INFRINGEMENT 100
A. GENERAL 100
B. INFRINGING IMPORTATION 107
C. CONTRIBUTORY AND VICARIOUS LIABILITY 109
D. ON-LINE SERVICE PROVIDER LIABILITY 114
E. CIVIL REMEDIES 124
F. CRIMINAL OFFENSES 126
G. DEFENSES 128
9. INTERNATIONAL IMPLICATIONS 130
A. BACKGROUND 130
B. INTERNATIONAL FRAMEWORK 132
C. INTERNATIONAL TREATIES AND AGREEMENTS 135
D. COPYRIGHT COMPARED TO AUTHORS' RIGHTS 139
E. NATIONAL TREATMENT 140
F. PRIVATE COPYING ROYALTY SYSTEMS 144
G. MORAL RIGHTS 145
H. CONFLICT OF LAWS 147
I. HARMONIZATION OF INTERNATIONAL SYSTEMS 147
B. PATENT 155
1. PATENTABILITY DETERMINATIONS 162
2. INFRINGEMENT DETERMINATIONS 165
3. PATENTABILITY OF SOFTWARE 166
C. TRADEMARK 168
D. TRADE SECRET 173
II. TECHNOLOGY 177
A. CONTENT SECURITY AND USER ACCESS NEEDS 178
B. THE INTERNET EXPERIENCE 179
C. ACCESS AND USE TECHNOLOGICAL CONTROLS 183
1. SERVER AND FILE LEVEL CONTROLS 183
2. ENCRYPTION 185
3. DIGITAL SIGNATURES 187
4. STEGANOGRAPHY 188
D. CONTROLLING USE OF PROTECTED WORKS 189
E. MANAGING RIGHTS IN PROTECTED WORKS 191
F. ENCRYPTION EXPORT CONTROL 194
G. DEVELOPMENT OF STANDARDS 197
III. EDUCATION 201
A. BACKGROUND 201
B. COPYRIGHT AWARENESS CAMPAIGN 203
IV. RECOMMENDATIONS 211
A. COPYRIGHT 211
1. THE TRANSMISSION OF COPIES AND
PHONORECORDS 213
A. THE DISTRIBUTION RIGHT 213
B. RELATED DEFINITIONAL AMENDMENTS 217
C. THE IMPORTATION PROVISIONS 221
2. PUBLIC PERFORMANCE RIGHT FOR SOUND
RECORDINGS 221
3. LIBRARY EXEMPTIONS 225
4. REPRODUCTION FOR THE VISUALLY IMPAIRED 227
5. CRIMINAL OFFENSES 228
6. TECHNOLOGICAL PROTECTION 230
7. COPYRIGHT MANAGEMENT INFORMATION 235
B. PATENT 236
C. TRADEMARK 237
APPENDICES
Introduction
In February 1993, President Clinton formed
the Information Infrastructure Task Force
(IITF) to articulate and implement the
Administration's vision for the National
Information Infrastructure (NII). The IITF
is chaired by Secretary of Commerce Ronald H.
Brown and consists of high-level
representatives of the Federal agencies that
play a role in advancing the development and
application of information technologies.
Guided by the principles for government
action described in NII Agenda for Action1
and GII Agenda for Cooperation,2 the
participating agencies are working with the
private sector, public interest groups,
Congress, and State and local governments to
develop comprehensive telecommunications and
information policies and programs that will
promote the development of the NII and best
meet the country's needs.
To drive these efforts, the IITF is
organized into three committees: the
Telecommunications Policy Committee, which
formulates Administration positions on
relevant telecommunications issues; the
Committee on Applications and Technology,
which coordinates Administration efforts to
develop, demonstrate and promote applications
of information technologies in key areas; and
the Information Policy Committee, which
addresses critical information policy issues
that must be dealt with if the NII is to be
fully deployed and utilized. In addition,
the IITF established a Security Issues Forum
to assess the security needs and concerns of
users, service providers, information
providers, State and local governments and
others. Finally, the U.S. Advisory Council
on the National Information Infrastructure
(NII Advisory Council) was established within
the Department of Commerce to advise the
Secretary of Commerce on a national strategy
for promoting the development of the NII.3
The Working Group on Intellectual Property
Rights, which is chaired by Assistant
Secretary of Commerce and Commissioner of
Patents and Trademarks Bruce A. Lehman, was
established within the Information Policy
Committee to examine the intellectual
property implications of the NII and make
recommendations on any appropriate changes to
U.S. intellectual property law and policy.4
This Report represents the Working Group's
examination and analysis of each of the major
areas of intellectual property law, focusing
primarily on copyright law and its
application and effectiveness in the context
of the NII.5 The approach of this Report is
to discuss the application of the existing
copyright law and to recommend only those
changes that are essential to adapt the law
to the needs of the global information
society.6 By providing a generalized legal
framework, based on the extensive analysis
and discussion of the way in which the law
has been and should be interpreted, we can
lay the groundwork for the rapid and
efficient development of the NII.
To prepare this Report, the Working Group
drew upon expertise within the participating
departments and agencies of the Federal
government.7 In addition, the Working Group
received and considered views of the public,
including those of the NII Advisory Council.
The Working Group held a public hearing in
November 1993, at which 30 witnesses
testified.8 The Working Group also solicited
written comments and received some 70
statements during a public comment period
which closed on December 10, 1993.9
Following its review of the public comments
and analysis of the issues, the Working Group
released a preliminary draft of its report
("Green Paper") on July 7, 1994.10 The
Working Group issued the report in
preliminary draft form to ensure broad
dissemination and ample opportunity for
public comment prior to making final
recommendations and issuing this Report.
Thousands of copies of the Green Paper were
distributed in paper form as well as
electronically via the IITF Bulletin Board.11
Following the release of the Green Paper,
the Working Group heard testimony from the
public in four days of hearings in Chicago,
Los Angeles and Washington, D.C., in
September 1994.12 In addition, more than
1,500 pages of written comments on the Green
Paper and reply 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 -- during the comment period, which
extended over four months.13
The Working Group convened a Conference on
Fair Use (CONFU) to bring 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 in sessions that are open to the public.
The Working Group also kicked off a Copyright
Awareness Campaign (CAC) in March 1995.
Approximately 40 participating individuals
and organizations are coordinating their
educational efforts and joining with the
Working Group and the Department of Education
to raise public awareness of copyright.
Meetings of the Campaign are also open to the
public.
Interested parties had numerous
opportunities to submit their views on the
intellectual property implications of the
development and use of the NII and on the
Working Group's Green Paper, including its
preliminary findings and recommendations.
The open process instituted by the Working
Group resulted in a well-developed,
voluminous record indicating the views of a
wide variety of interested parties, including
various electronic industries, 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 special intellectual property concerns
and issues raised by the development and use
of the NII are the subject of this Report.14
It does not, however, provide all of the
answers. It may not even present all of the
questions. There is much that we do not --
and cannot -- now know about how the NII will
develop. Technology is advancing at such an
incredible pace that issues will certainly
continue to arise in the future, perhaps
demanding more comprehensive legislation.
However, because there is much that we do
know, the fact that future developments will
raise additional issues not currently ripe
should not deter us from addressing those
that are.15
Background
Intellectual property is a subtle and
esoteric area of the law that evolves in
response to technological change.16 Advances
in technology particularly affect the
operation and effectiveness of copyright law.
Changes in technology generate new industries
and new methods for reproduction and
dissemination of works of authorship, which
may present new opportunities for authors,
but also create additional challenges.
Copyright law has had to respond to those
challenges, from Gutenberg's moveable type
printing press to digital audio recorders and
everything in between -- photocopiers, radio,
television, videocassette recorders, cable
television and satellites.17
Uses of computer technology -- such as
digitization -- and communications technology
-- such as fiber optic cable -- have had an
enormous impact on the creation, reproduction
and dissemination of copyrighted works. The
merger of computer and communications
technology into an integrated information
technology has made possible the development
of the National Information Infrastructure
which will generate both unprecedented
challenges and important opportunities for
the copyright marketplace.
An information infrastructure already
exists, but it is not integrated into a
whole. Telephones, televisions, radios,
computers and fax machines are used every day
to receive, store, process, perform, display
and transmit data, text, voice, sound and
images in homes and businesses throughout the
country. Fiber optics, wires, cables,
switches, routers, microwave networks,
satellites and other communications
technologies currently connect telephones,
computers and fax machines. The NII of
tomorrow, however, will be much more than
these separate communications networks; it
will integrate them into an advanced high-
speed, interactive, broadband, digital
communications system. Computers,
telephones, televisions, radios, fax machines
and more will be linked by the NII, and users
will be able to communicate and interact with
other computers, telephones, televisions,
radios, fax machines and more -- all in
digital form.18
The NII has tremendous potential to
improve and enhance our lives. It can
increase access to a greater amount and
variety of information and entertainment
resources that can be delivered quickly and
economically from and to virtually anywhere
in the world in the blink of an eye. For
instance, hundreds of channels of
"television" programming, thousands of
musical recordings, and literally millions of
"magazines" and "books" can be made available
to homes and businesses across the United
States and around the world.19
The NII can provide access to rich
cultural resources around the world,
transforming and expanding the scope and
reach of the arts and humanities. It will
provide opportunities for the development of
new markets for cultural products. It can
broaden our cultural experiences through
diversity of content, and increase our
understanding of other societies.
The NII can support our education systems
by, for example, linking students and
educators in remote locations around the
world. It can also improve the nation's
health care systems by increasing public
awareness of health issues, providing
continuing education of health care
professionals, and allowing patients to take
a more active role in their own health care.
The NII can dramatically increase the
opportunity for democratic participation in
government. The Task Force has shown some of
the potential in its work. For instance, the
IITF Bulletin Board makes available copies of
Task Force reports, testimony, speeches,
meeting schedules and minutes, hearing
notices, transcripts, and other documents
related to the work of the Administration and
opportunities for public participation.20 The
Task Force has also accepted comments from
the public through the Internet and has
conducted an on-line public conference.21
Individuals and entities that heretofore
have been predominately consumers of works
can now become authors and providers through
the NII. It can put easier, more
sophisticated communication and publishing
tools in the hands of the public, increasing
the ability to communicate with, and
disseminate works of authorship to, others.
The NII can boost the ability of U.S.
firms to compete and succeed in the global
economy, thereby generating more jobs for
Americans. It can spur economic growth.
More than half of the U.S. work force is in
information-based jobs, and the
telecommunications and information sector is
growing faster than any other sector of the
U.S. economy. New job opportunities can be
created in the processing, organizing,
packaging and dissemination of the
information and entertainment products
flowing through the NII.
The NII can provide benefits to authors
and consumers by reducing the time between
creation and dissemination. It will open
additional markets for authors. If authors
choose to enter those new markets, it will
provide a wider variety and greater number of
choices for consumers, which should increase
competition and reduce prices. The
availability of these benefits is by no means
assured, however. Authors are wary of
entering this market because doing so exposes
their works to a higher risk of piracy and
other unauthorized uses than any of the
traditional, current modes of dissemination.
Therefore, authors may withhold their works
from this environment. Further, even if
authors choose not to expose their works to
this more risky environment, the risk is not
eliminated. Just one unauthorized uploading
of a work onto a bulletin board, for instance
-- unlike, perhaps, most single reproductions
and distributions in the analog or print
environment -- could have devastating effects
on the market for the work.
Thus, the full potential of the NII will
not be realized if the education, information
and entertainment products protected by
intellectual property laws are not protected
effectively when disseminated via the NII.
Creators and other owners of intellectual
property rights will not be willing to put
their interests at risk if appropriate
systems -- both in the U.S. and
internationally -- are not in place 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,
fax machines, scanners, cameras, keyboards,
televisions, monitors, 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.
Ensuring consumer access to and enjoyment
of both copyrighted works and new
technologies is an attainable goal, and
recent experience has confirmed this.22 For
example, the introduction of digital audio
tape recorders recently posed significant
problems for copyright owners. Congress
responded to the increased threat of rampant
unauthorized use with legislation that
incorporated both technological and legal
measures to protect the interests of both
consumers and copyright owners.23
Advances in digital technology and the
rapid development of electronic networks and
other communications technologies raise the
stakes considerably. Any two-dimensional
work can readily be "digitized" -- i.e.,
translated into a digital code (usually a
series of zeros and ones). The work can then
be stored and used in that digital form.
This dramatically increases: the ease and
speed with which a work can be reproduced;
the quality of the copies (both the first and
the hundredth "generation" are virtually
identical); the ability to manipulate and
change the work; and the speed with which
copies (authorized and unauthorized) can be
"delivered" to the public. Works also can be
combined easily with other works into a
single medium, such as a CD-ROM, which
contributes to a blurring of the lines that
typically divide types of works and the
rights and limitations applicable thereto.
The establishment of high-speed, high-
capacity electronic information systems makes
it possible for one individual, with a few
key strokes, to deliver perfect copies of
digitized works to scores of other
individuals -- or to upload a copy to a
bulletin board or other service where
thousands of individuals can download it or
print unlimited "hard" copies. The emergence
of integrated information technology is
dramatically changing, and will continue to
change, how people and businesses deal in and
with information and entertainment products
and services, and how works are created,
reproduced, distributed, adapted, displayed,
performed, owned, licensed, managed,
presented, organized, sold, accessed, used
and stored. This leads, understandably, to a
call for adaptation of -- or change in -- the
law.
Thomas Jefferson stated:
I am not an advocate for frequent
changes in laws and constitutions.
But laws and institutions must go
hand and hand with the progress of
the human mind. As that becomes more
developed, more enlightened, as new
discoveries are made, new truths
discovered and manners and opinions
change, with the change of
circumstances, institutions must
advance also to keep pace with the
times. We might as well require a
man to wear still the coat which
fitted him when a boy . . . .24
Our task is to determine whether the coat
still fits in this new information age. An
effective intellectual property regime must
(1) ensure that users have access to the
broadest feasible variety of works by (2)
recognizing the legitimate rights and
commercial expectations of persons and
entities whose works are used in the NII
environment.
For more than two centuries, copyright
law, with periodic amendment, has provided
protection for an increasing variety of works
of authorship. The most recent complete
revision of the law -- The Copyright Act of
197625 -- was enacted in response to
"significant changes in technology [that had]
affected the operation of the copyright law."26
The legislative history of the 1976 Act notes
that those changes had "generated new
industries and new methods for the
reproduction and dissemination of copyrighted
works, and the business relations between
authors and users [had] evolved new
patterns."27
We are once again faced with significant
changes in technology that upset the balance
that currently exists under the Copyright
Act. Our goal is to maintain the existing
balance.
Some assert that copyright protection
should be reduced in the NII environment.
The public wants information to be free and
unencumbered on the NII, it is argued, and
the law should reflect the public interest.
Without doubt, this is a valid concern.
Information per se should not be protected by
copyright law -- nor is it. Facts and ideas
from any work of authorship may be freely
copied and distributed; the Copyright Act
expressly excludes such information from the
scope of the protection it accords.28 The
copyright law should also serve the public
interest -- and it does. While, at first
blush, it may appear to be in the public
interest to reduce the protection granted
works and to allow unfettered use by the
public, such an analysis is incomplete.
Protection of works of authorship provides
the stimulus for creativity, thus leading to
the availability of works of literature,
culture, art and entertainment that the
public desires and that form the backbone of
our economy and political discourse. If
these works are not protected, then the
marketplace will not support their creation
and dissemination, and the public will not
receive the benefit of their existence or be
able to have unrestricted use of the ideas
and information they convey.
Others assert that technological advances
justify reduced protection. Since computer
networks now make unauthorized reproduction,
adaptation, distribution and other uses of
protected works so incredibly easy, it is
argued, the law should legitimize those uses
or face widespread flouting. This argument
is not valid. Technology makes many things
possible. Computer networks can be and have
been used to embezzle large sums of money and
to commit other crimes. Yet, these acts are
prohibited by law. Simply because a thing is
possible does not mean that it should be
condoned.
Finally, there are those who argue that
intellectual property laws of any country are
inapplicable to works on the NII or GII
because all activity using these
infrastructures takes place in "Cyberspace,"
a sovereignty unto itself that should be self-
governed by its inhabitants, individuals who,
it is suggested, will rely on their own
ethics -- or "netiquette" -- to determine
what uses of works, if any, are improper.
First, this argument relies on the fantasy
that users of the Internet, for instance, are
somehow transported to "chat rooms" and other
locations, such as virtual libraries. While
such conceptualization helps to put in
material terms what is considered rather
abstract, activity on the Internet takes
place neither in outer space nor in parallel,
virtual locations. Satellite, broadcast, fax
and telephone transmissions have not been
thought to be outside the jurisdiction of the
nations from which or to which they are sent.
Computer network transmissions have no
distinguishing characteristics warranting
such other-world treatment. Further, such a
legal free-for-all would transform the GII
into a veritable copyright Dodge City. As
enticing as this concept may seem to some
users, it would hardly encourage creators to
enter its confines.
Nonetheless, content providers are
currently experimenting with a number of
business models in the networked environment,
and it is already clear that a wide variety
of such models may coexist. Some content
providers will choose not to enforce all --
or any -- of their rights; others may change
their business practices. For instance, some
newspaper publishers are selling individual
articles using electronic payment mechanisms,
in addition to selling subscriptions and
individual issues. Some software companies
are making their "client" software freely
available for individual use in an effort to
increase the market share of their "server"
software. Some hypermedia magazine
publishers on the World Wide Web are choosing
to give away their product but charge
sponsors for advertising space. A number of
information service providers are charging
for the use of the search engines that add
value to freely available public domain
content.
Some content providers will not be
motivated by any commercial considerations.
For instance, certain scientific communities
are working together to create archives of
freely available electronic pre-prints on the
Internet. The copyright law allows copyright
owners to exercise the rights granted to
them, to license their rights to others, or
to give them away. Those creators who wish
to dedicate their works to the public domain
may, of course, do so notwithstanding the
availability of protection under the
Copyright Act. Nothing in the law prevents
those who do not wish to claim copyright from
waiving their rights and allowing
unrestricted reproduction, distribution and
other use of their works. Indeed, notices to
that effect are not uncommon on the Internet.
The absence on the NII of copyrighted
works for which authors do wish to exercise
their rights -- fully or to some limited
extent -- under the copyright law, of course,
would not necessarily result in its demise.
The Internet, for instance, could continue to
serve as a communications tool and resource
for Government, public domain and works of
willing authors. However, 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 true, global marketplace.
Copyright protection is not an obstacle in
the way of the success of the NII; it is an
essential component. Effective copyright
protection is a fundamental way to promote
the availability of works to the public.
Preserving the framework does not require,
however, a dramatic increase in authors'
rights, such as more limited or no further
applicability of the fair use doctrine in the
NII environment. Some have argued that
because it may now be technically feasible to
"meter" each use of a copyrighted work, and
to charge a user a fee for the use, the
concept of fair use has no place in the NII
environment. They argue equally that other
limitations on rights should be abolished or
narrowed for similar reasons. The Working
Group believes that weakening copyright
owners' rights in the NII is not in the
public interest; nor would a dramatic
increase in their rights be justified.
With no more than minor clarification and
limited amendment, the Copyright Act will
provide the necessary balance of protection
of rights -- and limitations on those rights
-- to promote the progress of science and the
useful arts.29 Existing copyright law needs
only the fine tuning that technological
advances necessitate, in order to maintain
the balance of the law in the face of
onrushing technology. There must be,
however, effort in three disciplines -- law,
technology and education -- to successfully
address the intellectual property issues
raised by the development and use of the NII.
I. Law
A.Copyright
1.Purpose of Copyright Law
The Constitution of the United States
provides that Congress has the power to
"promote the Progress of Science and useful
Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to
their respective Writings and Discoveries."30
The framers of the Constitution did not
discuss this clause at any length prior to or
after its adoption.31 The purpose of the
clause was described in the Federalist Papers
by James Madison:
The utility of this power will
scarcely be questioned. The
copyright of authors has been
solemnly adjudged, in Great Britain,
to be a right of common law. The
right to useful inventions seems with
equal reason to belong to the
inventors. The public good fully
coincides in both cases with the
claims of individuals.32
The Constitution outlines both the goal
that Congress may try to achieve (to promote
the progress of science and useful arts) and
the means by which they may accomplish it (by
securing for limited times to authors and
inventors the exclusive right to their
respective writings and discoveries).33 The
Supreme Court has often spoken about the
purpose of copyright:
[I]t should not be forgotten that the
Framers intended copyright itself to
be the engine of free expression. By
establishing a marketable right to
the use of one's expression,
copyright supplies the economic
incentive to create and disseminate
ideas.34
We have often recognized the monopoly
privileges that Congress has
authorized, while "intended to
motivate the creative activity of
authors and inventors by the
provision of a special reward," are
limited in nature and must ultimately
serve the public good.35
The primary objective of copyright is
not to reward the labor of authors,
but "[t]o promote the Progress of
Science and useful Arts." To this
end, copyright assures authors the
right in their original expression,
but encourages others to build freely
upon the ideas and information
conveyed by a work.36
The economic philosophy behind the
[Constitutional] clause . . . is the
conviction that encouragement of
individual effort by personal gain is
the best way to advance the public
welfare through the talents of
authors and inventors . . . .
Sacrificial days devoted to such
creative activities deserve rewards
commensurate with the services
rendered.37
The monopoly privileges that Congress
may authorize are neither unlimited
nor primarily designed to provide a
special private benefit. Rather, the
limited grant is a means by which an
important public purpose may be
achieved. It is intended to motivate
the creative activity of
authors . . . by the provision of a
special reward, and to allow the
public access to the products of
their genius after the limited period
of exclusive control has expired.38
[C]opyright is intended to increase
and not to impede the harvest of
knowledge . . . . [T]he scheme
established by the Copyright
Act . . . foster[s] the original
works that provide the seed and
substance of this harvest. The
rights conferred by copyright are
designed to assure contributors to
the store of knowledge a fair return
for their labors.39
The copyright law, like the patent
statutes, makes reward to the owner a
secondary consideration . . . . It
is said that reward to the author or
artist serves to induce release to
the public of the products of his
creative genius.40
Copyright is "intended definitely to grant
valuable, enforceable rights to authors . . .
'to afford greater encouragement to the
production of literary works of lasting
benefit to the world.'"41 The purpose is not
to reward the author, but the law does so to
achieve its ultimate purpose -- "to induce
release to the public of the products of his
creative genius."42 The "immediate effect" of
the copyright law is that authors receive a
"fair return for [their] creative labor";
however, the "ultimate aim is, by this
incentive, to stimulate artistic creativity
for the general public good."43
Congress also interpreted the clause when
it enacted the Copyright Act of 1909:
The enactment of copyright
legislation by Congress under the
terms of the Constitution is not
based upon any natural right that the
author has in his writings, . . . but
upon the ground that the welfare of
the public will be served and
progress of science and useful arts
will be promoted by securing to
authors for limited periods the
exclusive rights to their
writings . . . .44
By granting authors exclusive rights, the
authors receive the benefit of economic
rewards and the public receives the benefit
of literature, music and other creative works
that might not otherwise be created or
disseminated. The public also benefits from
the limited scope and duration of the rights
granted.45 The free flow of ideas is promoted
by the denial of protection for facts and
ideas.46 The granting of exclusive rights to
the author "does not preclude others from
using the ideas or information revealed by
the author's work."47
While copyright law "ultimately serves the
purpose of enriching the general public
through access to creative works,"48 copyright
law imposes no obligation upon copyright
owners to make their works available. While
it is hoped that the potential economic
benefits to doing so will induce them,
copyright owners are not obligated to provide
access to their works -- either during the
term of protection or after. Hence,
unpublished works never distributed to the
public are granted as much (if not more)
protection as published works. However, once
an author publishes a work, copies of the
work must be deposited with the Library of
Congress for the benefit of the public.
2.Subject Matter and Scope of
Protection
a.Eligibility for Protection
The subject matter eligible for protection
under the Copyright Act is set forth in
Section 102(a):
Copyright protection subsists . . .
in original works of authorship fixed
in any tangible medium of expression,
now known or later developed, from
which they can be perceived,
reproduced, or otherwise
communicated, either directly or with
the aid of a machine or device.49
From this provision, the courts have derived
three basic requirements for copyright
protection -- originality, creativity and
fixation.50
The requirements of originality and
creativity are derived from the statutory
qualification that copyright protection
extends only to "original works of
authorship."51 To be original, a work merely
must be one of independent creation -- i.e.,
not copied from another. There is no
requirement that the work be novel (as in
patent law), unique or ingenious. To be
creative, there must only be a modicum of
creativity. The level required is
exceedingly low; "even a slight amount will
suffice."52
The final requirement for copyright
protection is fixation in a tangible medium
of expression. Protection attaches
automatically to an eligible work of
authorship the moment the work is
sufficiently fixed.53 A work is fixed "when
its embodiment in a copy or phonorecord . . .
is sufficiently permanent or stable to permit
it to be perceived, reproduced, or otherwise
communicated for a period of more than
transitory duration."54
Congress provided considerable room for
technological advances in the area of
fixation by noting that the method of
fixation in copies or phonorecords may be
"now known or later developed."55 The
Copyright Act divides the possible media for
fixation into "copies" and "phonorecords":
"Copies" are material objects, other
than phonorecords, in which a work is
fixed by any method now known or
later developed, and from which the
work can be perceived, reproduced, or
otherwise communicated, either
directly or with the aid of a machine
or device.56
"Phonorecords" are material objects
in which sounds, other than those
accompanying a motion picture or
other audiovisual work, are fixed by
any method now known or later
developed, and from which the sounds
can be perceived, reproduced, or
otherwise communicated, either
directly or with the aid of a machine
or device.57
According to the House Report accompanying
the Copyright Act of 1976, Congress intended
the terms "copies" and "phonorecords" to
"comprise all of the material objects in
which copyrightable works are capable of
being fixed."58
The form of the fixation and the manner,
method or medium used are virtually
unlimited. A work may be fixed in "words,
numbers, notes, sounds, pictures, or any
other graphic or symbolic indicia"; may be
embodied in a physical object in "written,
printed, photographic, sculptural, punched,
magnetic, or any other stable form"; and may
be capable of perception either "directly or
by means of any machine or device 'now known
or later developed.'"59
In digital form, a work is generally
recorded (fixed) as a sequence of binary
digits (zeros and ones) using media specific
encoding. This fits within the House
Report's list of permissible manners of
fixation.60 Virtually all works also will be
fixed in acceptable material objects -- i.e.,
copies or phonorecords. For instance, floppy
disks, compact discs (CDs), CD-ROMs, optical
disks, compact discs-interactive (CD-Is),
digital tape, and other digital storage
devices are all stable forms in which works
may be fixed and from which works may be
perceived, reproduced or communicated by
means of a machine or device.61
The question of whether interactive works
are fixed (given the user's ability to
constantly alter the sequence of the
"action") has been resolved by the courts in
the context of video games and should not
present a new issue in the context of the
NII. Such works are generally considered
sufficiently fixed to qualify for protection.62
The sufficiency of the fixation of works
transmitted via the NII, however, where no
copy or phonorecord has been made prior to
the transmission, may not be so clear.
A transmission, in and of itself, is not a
fixation. While a transmission may result in
a fixation, a work is not fixed by virtue of
the transmission alone. Therefore, "live"
transmissions via the NII will not meet the
fixation requirement, and will be unprotected
by the Copyright Act, unless the work is
being fixed at the same time as it is being
transmitted.63 The Copyright Act provides
that a work "consisting of sounds, images, or
both, that are being transmitted" meets the
fixation requirement "if a fixation of the
work is being made simultaneously with its
transmission."64 To obtain protection for a
work under this "simultaneous fixation"
provision, the simultaneous fixation of the
transmitted work must itself qualify as a
sufficient fixation.
A simultaneous fixation (or any other
fixation) meets the requirements if its
embodiment in a copy or phonorecord is
"sufficiently permanent or stable to permit
it to be perceived, reproduced, or otherwise
communicated for a period of more than
transitory duration."65 Works are not
sufficiently fixed if they are "purely
evanescent or transient" in nature, "such as
those projected briefly on a screen, shown
electronically on a television or cathode ray
tube, or captured momentarily in the 'memory'
of a computer."66 Electronic network
transmissions from one computer to another,
such as e-mail, may only reside on each
computer in RAM (random access memory), but
that has been found to be sufficient
fixation.67
b.Published and Unpublished Works
Historically, the concept of publication
has been a major underpinning of copyright
law. Under the dual system of protection
which existed until the 1976 Copyright Act
took effect, unpublished works were generally
protected under state law. Published works,
on the other hand, were protected under
Federal copyright law.68 On the effective
date of the 1976 Act, Federal copyright
protection became available for unpublished
as well as published works.69 The concept of
publication thus lost its "all-embracing
importance" as the threshold to Federal
statutory protection.70
However, while the importance of
publication has been reduced through
amendment to the law (e.g., granting Federal
protection to unpublished works and removing
the notice requirement for published works),
the status of a work as either published or
unpublished still has significance under the
Copyright Act. For example:
? only works that are published in the
United States are subject to mandatory
deposit in the Library of Congress;71
? deposit requirements for registration
with the Copyright Office differ
depending on whether a work is
published or unpublished;72
? the scope of the fair use defense may
be narrower for unpublished works;73
? unpublished works are eligible for
protection without regard to the
nationality or domicile of the author;74
? published works must bear a copyright
notice if published before March 1,
1989;75 and
? certain limitations on the exclusive
rights of a copyright owner are
applicable only to published works.76
The Copyright Act provides a definition of
"publication" to draw the line between
published and unpublished works:
"Publication" is the 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.77
The definition uses the language of Section
106 describing the exclusive right of
distribution, and was intended to make clear
that "any form of dissemination in which a
material object does not change hands --
performances or displays on television, for
example -- is not a publication no matter how
many people are exposed to the work."78 It
also makes clear that the distribution must
be "to the public."79 In general, the
definition continues principles that had
evolved through case law under previous
copyright laws,80 including the doctrine of
limited publication.81 The doctrine was
developed by courts to save works from losing
copyright protection when copies of the work
were only distributed to a restricted number
of people and for a restricted purpose
without a copyright notice.82 Those works
would not be considered distributed to the
public (i.e., published) and, therefore, not
subject to the notice requirement. Although
the notice requirement has been eliminated,
and thus the most critical justification for
the doctrine, the few cases dealing with
publication since 1989 suggest that courts
will continue to apply the doctrine of
limited publication.83
c.Works Not Protected
Certain works and subject matter are
expressly excluded from protection under the
Copyright Act, regardless of their
originality, creativity and fixation.
Titles, names, short phrases, and slogans
generally do not enjoy copyright protection
under the Copyright Act.84 Other material
ineligible for copyright protection includes
the utilitarian elements of industrial
designs;85 familiar symbols or designs; simple
geometrical shapes; mere variations of
typographic ornamentation, lettering or
coloring; and common works considered public
property, such as standard calendars, height
and weight charts, and tape measures and
rulers.
Copyright protection also does not extend
to any "idea, procedure, process, system,
method of operation, concept, principle, or
discovery, regardless of the form in which it
is described, explained, illustrated, or
embodied" in such work even if it meets the
criteria for protection.86 Thus, although a
magazine article on how to tune a car engine
is protected by copyright, that protection
extends only to the expression of the ideas,
facts and procedures in the article, not the
ideas, facts and procedures themselves, no
matter how creative or original they may be.
Anyone may "use" the ideas, facts and
procedures in the article to tune an engine -
- or to write another article on the same
subject. What may not be taken is the
expression used by the original author to
describe or explain those ideas, facts and
procedures.87
Copyright does not prevent subsequent
users from copying from a prior
author's work those constituent
elements that are not original -- for
example . . . facts or materials in
the public domain -- as long as such
use does not unfairly appropriate the
author's original contributions.88
This idea/expression dichotomy "assures
authors the right to their original
expression, but encourages others to build
freely upon the ideas and information
conveyed by a work."89 Although it "may seem
unfair that much of the fruit of the
[author's] labor may be used by others
without compensation," it is "a
constitutional requirement" -- the "means by
which copyright advances the progress of
science and art."90
As a matter of law, copyright protection
generally is not extended under the Copyright
Act to works of the U.S. Government.91
Therefore, nearly all works of the U.S.
Government -- including this Report -- may be
reproduced, distributed, adapted, publicly
performed and publicly displayed without
infringement liability in the United States
under its copyright laws.92 While the
Copyright Act leaves most works created by
the U.S. Government unprotected under U.S.
copyright laws, Congress did not intend for
the section to have any effect on the
protection of U.S. government works abroad.93
d.Categories of Protectible Works
The Copyright Act enumerates eight broad
categories of protectible subject matter:
(1) literary works;
(2) musical works, including any
accompanying words;
(3) dramatic works, including any
accompanying music;
(4) pantomimes and choreographic
works;
(5) pictorial, graphic and sculptural
works;
(6) motion pictures and other
audiovisual works;
(7) sound recordings; and
(8) architectural works.94
Literary Works
Although many categories of works will be
available via the NII, the majority of works
currently available on computer networks such
as the Internet are literary works.
"Literary works" are works, other
than audiovisual works, expressed in
words, numbers, or other verbal or
numerical symbols or indicia,
regardless of the nature of the
material objects, such as books,
periodicals, manuscripts,
phonorecords, films, tapes, disks, or
cards, in which they are embodied.95
Literary works include computer programs,96
articles, novels, directories, computer
databases, essays, catalogs, poetry,
dictionaries, encyclopedias, and other
reference materials.97
Musical Works
A musical work consists of the musical
notes and lyrics (if any) in a musical
composition.98 A musical work may be fixed in
any form, such as a piece of sheet music or a
compact disc.99 Musical works may be
"dramatic," i.e., written as a part of a
musical or other dramatic work, or
"nondramatic," i.e., an individual, free-
standing composition.
Dramatic Works
Generally, a dramatic work is one in which
a series of events is presented to the
audience by characters through dialogue and
action as the events happen, such as in a
play.100
Pantomimes and Choreographic Works
This category was first added to the list
of protectible subject matter in 1976.101
While pantomimes and choreographic works,
such as dances, can be fixed in a series of
drawings or notations, they are usually fixed
on film or videotape.
Pictorial, Graphic and Sculptural Works
A significant number of works traveling
through the NII will be pictorial and graphic
works. Works in this category include:
[T]wo-dimensional and three-
dimensional works of fine, graphic,
and applied art, photographs, prints
and art reproductions, maps, globes,
charts, diagrams, models, and
technical drawings, including
architectural plans.102
A work of art which is incorporated into the
design of a useful article, but which can
stand by itself as art work separate from the
useful article, is copyrightable, but the
design of the useful article is not.103
Motion Pictures and other Audiovisual Works
The Copyright Act provides definitions of
"audiovisual works" and the subcategory
"motion pictures":
"Audiovisual works" are works that
consist of a series of related images
which are intrinsically intended to
be shown by the use of machines, or
devices such as projectors, viewers,
or electronic equipment, together
with accompanying sounds, if any,
regardless of the nature of the
material objects, such as films or
tapes, in which the works are
embodied.104
"Motion pictures" are audiovisual
works consisting of a series of
related images which, when shown in
succession, impart an impression of
motion, together with accompanying
sounds, if any.105
The House Report notes that the key to the
subcategory "motion pictures" is the
conveyance of the impression of motion, and
that such an impression is not required to
qualify as an audiovisual work.106
Sound Recordings
A "sound recording" is the work that
results from the fixation of sounds,
including those that are musical or spoken.107
When those sounds are included in an
audiovisual work, such as a music video, they
are considered part of the audiovisual work
rather than a sound recording.108
Architectural Works
An "architectural work" is "the design of
a building as embodied in any tangible medium
of expression, including a building,
architectural plans, or drawings."109 It
includes the overall form as well as the
"arrangement and composition of spaces and
elements" in the design of the building.110
Compilations and Derivative Works
A compilation is "a work formed by the
collection and assembling of preexisting
materials or of data that are selected,
coordinated, or arranged in such a way that
the resulting work as a whole constitutes an
original work of authorship."111 Directories,
databases, magazines and anthologies are
types of compilations.
A derivative work is a work "based upon"
one or more preexisting works.112 A derivative
work is created when one or more preexisting
works is "recast, transformed, or adapted"
into a new work, such as when a novel is used
as the basis of a movie or when a drawing is
transformed into a sculpture.113 Translations,
musical arrangements and abridgments are
types of derivative works.
The Copyright Act makes clear that the
subject matter of copyright specified in
Section 102 (literary works, musical works,
sound recordings, etc.) includes compilations
and derivative works.114 The copyright in a
derivative work or compilation, however,
extends only to the contribution of the
author of the derivative work or compilation
(the compiler), and does not affect the
copyright protection granted to the
preexisting material.115 Protection for an
individual musical work, for instance, is not
reduced, enlarged, shortened or extended if
the work is included in a collection, such as
a medley of songs.
Moreover, copyright in a compilation or
derivative work does not imply any exclusive
right in the preexisting material employed in
the compilation or derivative work.116 The
copyright in a compilation, for example, is
limited to the original selection or
arrangement of the facts or other elements
compiled; protection for the compilation in
no way extends to the facts or elements.117
Copyright protection is not granted simply
for the hard work that may be involved in
compiling facts. The Supreme Court struck
down the doctrine that had protected such
efforts, known as the "sweat of the brow" or
"industrial collection" theory.118
"Multimedia" Works
Increasingly, works from different
categories are fixed in a single tangible
medium of expression.119 This will certainly
be true as development of the NII progresses
and the ability to create and disseminate
interactive "multimedia" or "mixed media"
products increases.
A prefatory note may be warranted because
of the manner in which these terms are used
in the context of copyright law. The terms
"multimedia" and "mixed media" are, in fact,
misnomers. In these works, it is the types
or categories of works that are "multiple" or
"mixed" -- not the types of media. The very
premise of a so-called "multimedia" work is
that it combines several different elements
or types of works (e.g., text (literary
works), sound (sound recordings), still
images (pictorial works), and moving images
(audiovisual works)) into a single medium
(e.g., a CD-ROM) -- not multiple media.120
However, in recognition of the prevalent use
of the term, this Report refers to this type
of work as a "multimedia" work.
Multimedia works are not categorized
separately under the Copyright Act; nor are
they explicitly included in any of the eight
enumerated categories. While most current
multimedia works would be considered
compilations,121 that classification does not
resolve the issue of subject matter
categorization.122
Despite the fact that the Copyright Act
enumerates eight categories of works, works
that do not fit into any of the categories
may, nevertheless, be protected. The list of
protectible works in Section 102 is intended
to be illustrative rather than inclusive.123
The House Report explains that the categories
of works "do not necessarily exhaust the
scope of 'original works of authorship' that
the [Copyright Act] is intended to protect."124
However, absent the addition of a new
category, a work that does not fit into one
of the enumerated categories is, in a sense,
in a copyright no-man's land.125
Under the current law, the categorization
of a work holds a great deal of significance
under the Copyright Act. For instance, two
of the exclusive rights granted in Section
106 apply only to certain categories of
works.126 In addition, many of the limitations
on rights in Sections 108 through 120 are not
applicable to all types of works.127
Therefore, categorization of multimedia and
other new types of works is an important
issue.
Generally, multimedia works include two or
more of the following preexisting elements:
text (literary works), computer programs
(literary works), music (musical works and
sound recordings), still images (pictorial
and graphic works) and moving images
(audiovisual works). The definition of
"literary works" begins with the phrase
"works, other than audiovisual works . . . ."128
Therefore, a reasonable interpretation may be
that text and computer programs that would
otherwise be categorized as literary works
may be considered part of an audiovisual work
if included in a work of that type. Such is
also the case with sound recordings. A music
video is not categorized as both a sound
recording and an audiovisual work; it is
categorized as an audiovisual work.129
Audiovisual works also include still images -
- at least related ones.130 Therefore, in many
instances, a multimedia work may be
considered -- as a whole -- an audiovisual
work. The legislative history makes clear
that a work in one category may contain works
in other categories.131
The somewhat strained analysis needed to
find a category for multimedia works and the
increasing "cross-breeding" of types of works
demonstrate that categorization may no longer
be useful or necessary. While the Working
Group does not recommend at this time the
consolidation or elimination of categories
(and harmonization of the differing
application of rights and limitations on
those rights), it is likely that such
consolidation or elimination will be
appropriate in the future.
3.Copyright Ownership
Copyright ownership in a work initially
vests in the author of the work.132 If the
work is a "joint work" (a work with two or
more authors), the authors are co-owners of
the copyright in the work.133
Under certain circumstances, the copyright
in a work is not granted to the actual
preparer of the work. In the case of "works
made for hire," the employer of the preparer
or the person for whom the work was prepared
is considered the "author" for purposes of
the Copyright Act.134 There are two types of
works made for hire -- those prepared by an
employee and those prepared by an independent
contractor by special order or commission.
The copyright in a work prepared by an
employee within the scope of employment vests
in the employer, and the employer is the
author.135 The copyright in a work specially
ordered or commissioned vests in the person
for whom the work was prepared if the work
falls into one of nine specified categories
and if the parties expressly agree in writing
that the work will be considered a work made
for hire.136
Copyright ownership entitles the copyright
owner to:
? exercise the exclusive rights granted
under Section 106;
? authorize others to exercise any of
those exclusive rights; and
? prevent others from exercising any of
those exclusive rights.
An important distinction to understand is
the difference between ownership of a
copyright in a work and ownership of a copy
of a work. Ownership of a copy -- the
material object in which a copyrighted work
is embodied (e.g., a book, CD or
videocassette) -- carries with it no interest
in the copyright.137
Ownership of a copyright, or any of
the exclusive rights under a
copyright, is distinct from ownership
of any material object in which the
work is embodied. Transfer of
ownership of any material object,
including the copy or phonorecord in
which the work is first fixed, does
not of itself convey any rights in
the copyrighted work embodied in the
object; nor, in the absence of an
agreement, does transfer of ownership
of a copyright or of any exclusive
rights under a copyright convey
property rights in any material
object.138
Ownership, possession or any other attachment
to or relationship with a copy of a
copyrighted work (including obtaining access
to it through a computer network or other
service) does not entitle one to exercise any
of the exclusive rights of the copyright
owner (e.g., to reproduce it or to perform it
publicly).
a.Transfer of Ownership
Copyright ownership, or ownership of any
of the exclusive rights (in whole or in
part), may be transferred to one or more
persons.139 A transfer of rights must be in
writing and must be signed by the transferor.140
A transfer may occur through an assignment,
exclusive license, mortgage, "or any other
conveyance, alienation, or hypothecation" of
a copyright or any of the exclusive rights.141
A transfer of copyright ownership may be
limited in time or in place, but it must be
an exclusive transfer of whatever right or
rights are involved (i.e., nonexclusive
licenses are not considered transfers of
ownership).142 Any of the exclusive rights in
the work143 may be separately transferred and
owned, and the owner of a particular right is
considered the "copyright owner" with respect
to that right.144
In the case of any copyrighted work other
than a "work made for hire," all transfers of
copyright ownership (as well as all
nonexclusive licenses) executed by the author
of the work may be terminated by the author
35 years after the transfer.145 This right to
terminate, intended to protect authors,
cannot be waived by contract or other
agreement.146 However, termination is not
automatic; an author must assert his or her
termination rights and comply with certain
statutory requirements to regain copyright
ownership.147
b.Licensing
The exclusive rights of a copyright owner
may be licensed on an exclusive basis (i.e.,
copyright ownership in one or more rights is
transferred by the copyright owner) or on a
nonexclusive basis (i.e., the copyright owner
retains ownership of the copyright and may
grant similar licenses to others). A
nonexclusive licensee is not a copyright
owner and thus does not have standing to sue
for any infringement of the copyright in the
work by others.148 Unlike exclusive licenses,
nonexclusive licenses need not be in writing.149
Limitations on the exclusive rights, such
as the first sale doctrine, fair use or
library exemptions, may be overridden by
contract.150 However, such contract terms can
be enforced only under state law. For
instance, the fair use of a work (outside the
scope of the license) by a licensee whose
license precludes any use other than that
specified by the license would not be an
infringement of copyright, but would be a
breach of the license agreement. Licenses
and other contracts cannot transform
noninfringing uses (such as fair uses) into
infringements; they can, however, make such
uses violations of the terms and conditions
of the agreements:
A library that has acquired ownership
of a copy is entitled [under the
Copyright Act] to lend it under any
conditions it chooses to impose.
This does not mean that conditions on
future disposition of copies or
phonorecords, imposed by a contract
between their buyer and seller, would
be unenforceable between the parties
as a breach of contract, but it does
mean that they could not be enforced
by an action for infringement of
copyright.151
Licensing issues are, and will continue to
be, significant in the context of the
development of the NII. Services on the NII
will provide the opportunity for new uses for
copyrighted works. If rights with respect to
these new uses are not expressly granted or
retained in license agreements, conflicts
will arise between copyright owners and
licensees. For instance, public display on a
bulletin board system may not have been
contemplated in licenses granting a public
display right that were executed before the
advent or proliferation of such systems.
Some argue that new uses which were not
contemplated at the time of licensing but
which fall within rights granted, such as the
public display example above, should
automatically fall within the scope of the
license. Others contend that new uses which
are not contemplated and, therefore, not
specifically mentioned in a grant of rights
should be considered retained by the licensor
-- even in the case of a complete assignment
of rights.
Failure to contemplate possible future
developments, of course, is not a new
problem, and is one based primarily in
contract rather than copyright law. Whenever
new technologies have produced a new use for
works, courts have been called upon to decide
whether the new use is covered by old
licenses.152 That is the proper jurisdiction
for such determinations. License agreements
must be interpreted individually and under
the law of the governing state.
A variety of licensing methods will be
possible as the NII develops. For instance,
rights in copyrighted works offered via the
NII may be licensed off-line or on-line.
They may be licensed directly (through
individual transactions between the
rightsholder and the licensee) or through
other licensing arrangements, such as
voluntary collective licensing. Licensing of
rights may be on a per-use, per-work or other
basis.
The licensing of rights for the creation
of multimedia works -- whose creators may
wish to include dozens of preexisting works
(or portions thereof) -- can be difficult.
Because registration and copyright notices
are not required for copyrighted works,
identification of copyright owners alone can
be complicated. Furthermore, the relative
newness of the multimedia industry can result
in an uncertainty on the part of copyright
owners and multimedia creators with regard to
appropriate terms and conditions for such
uses.
With limited exceptions, intellectual
property law leaves the licensing of rights
to the marketplace. In certain
circumstances, particularly where transaction
costs are believed to dwarf per-transaction
royalties, Congress has found it necessary to
provide for compulsory licenses.153 The
Working Group finds that, under current
conditions, additional compulsory licensing
of intellectual property rights is neither
necessary nor desirable. Compulsory
licensing disregards marketplace forces.
Such licensing schemes treat all works alike,
even though their value in a competitive
marketplace would likely vary dramatically.
It also treats all users alike. It alters
the free market relationship between buyers
and sellers. Moreover, transaction costs --
and the attendant savings from compulsory
licensing -- can be minimized in a digital
environment.
Technology will facilitate individual
licensing schemes.154 Many projects and
studies have been initiated to explore ways
in which technology can be used to enhance a
user's ability to identify the rightsholder
of a work and license its use. The inclusion
of copyright management information in copies
of works will also facilitate licensing.155
The marketplace should be allowed to
develop whatever legal licensing systems may
be appropriate for the NII. However, the
Working Group encourages copyright owners to
explore with libraries and schools special,
institutional licenses. These licenses would
enable the costs to be borne, for instance,
by the library so that its patrons might
access and use works without direct costs, as
they generally do in the print domain.156 The
Working Group also endorses increased funding
for libraries and educational institutions to
assist their ability to purchase and license
works in digital form.
c.On-Line Transactions
The NII will be a conduit for many types
of commercial transactions.157 Electronic
purchasing of goods facilitates the ordering,
shipment, and tracking of inventory for
nearly any manufactured product. Consumers
increasingly will have access to on-line
banking, catalogues, video tours of homes,
and countless other services. Payment for
these goods and services may be made through
conventional methods, such as checks or
credit cards, or through "digital cash" -- on-
line funds transfers between a consumer's
bank and an on-line provider.158 In addition,
certain NII uses of protected works will be
regulated through electronic licenses.
The law dealing with electronic commerce
is not clear -- especially for totally
paperless transactions.159 On-line contracting
and licensing raise a number of concerns
about the validity and enforceability of such
transactions. The NII will not be used to
its fullest commercial potential if providers
and consumers cannot be confident that their
electronic agreements are valid and
enforceable.
Considering a number of different
transactions that may take place on the NII
helps identify where contract law is strained
and the impact of this strain on NII users.
Although some of the transactions identified
may not involve the license or transfer of
rights in a copyrighted work, examination of
the principles involved in, for example, the
on-line sale of copies of copyrighted works
in the NII environment may provide useful
background and understanding of the overall
legal atmosphere for on-line transactions.
On-Line Contracts Not
Involving the Sale of Goods
At common law, a contract is formed when
the contracting parties manifest mutual,
voluntary assent to be bound by a set of
terms -- typically through an offer and
acceptance.160 In addition, under the "mirror
image rule," the parties must agree to
identical terms before a contract is formed -
- the so-called "meeting of the minds." The
threshold question is whether an electronic
message of offer or acceptance or the simple
use of the "accept" or "return" key in
response to a provider's offer or consumer's
request is assent.161
A second issue is whether an electronic
manifestation of assent meets the mirror
image rule162 -- that is, whether there was a
meeting of the minds. If the seller provides
an on-line contract form with terms that are
essentially non-negotiable, then, like the
"shrink wrap" licenses used by software
publishers,163 the purchaser can only accept or
reject the terms. If the purchaser accepts,
the mirror image rule is met. However, when
a consumer assents to such a "standard form"
contract, and there is no alternative source
for a similar service, the result may be a
contract of adhesion.164
Assent in contracts of adhesion has been
considered in the context of on-line services
and shrink wrap licenses.165 While there is no
clear "rule," a traditional analysis looks to
the reasonableness of terms and the
applicability of the agreement's terms to
similarly situated parties.166 The status of
shrink wrap licenses for software provides
some guidance; however, shrink wrap licenses
have not been treated consistently.167 In some
cases, the U.C.C. has been applied, thus
avoiding the question of adhesion by
inferring formation.168 In addition, Illinois
and Louisiana have both attempted to
statutorily "validate" such shrink wrap
licenses.169
A third issue involves writing and
signature requirements for certain contracts.170
In the NII, where transactions may be
entirely paperless, it may be unclear whether
electronic messages are written and what will
be considered an adequate signature.171
On-Line Sale of Goods
with Conventional Delivery
For the sale of goods, the U.C.C.
alleviates many of these common law concerns.172
With regard to assent, the U.C.C. states
that, "[a] contract for sale of goods may be
made in any manner sufficient to show
agreement, including conduct by both parties
which recognizes the existence of such a
contract."173 Likewise, "an offer to make a
contract shall be construed as inviting
acceptance in any manner and by any medium
reasonable in the circumstances."174 Thus,
application of the U.C.C. may infer assent
through any reasonable conduct -- including
transmission of electronic messages.
Similarly, the U.C.C. loosens the
requirements of the mirror image rule. The
U.C.C. infers formation and focuses on
establishing the contract's controlling
terms.175 The formalities necessary for
enforceability are also relaxed by the U.C.C.176
As sales of goods become more common via the
NII, the U.C.C. will likely become more
useful based on the flexible "course of
dealing" and "usage of trade" definitions.177
On-line Sale of Goods with
Electronic Delivery
A third transaction is where goods are
both ordered and delivered via the NII. The
primary difference between goods delivered
via the NII and those discussed earlier is
that the goods themselves may not "exist"
prior to the delivery. Rather, they are
reproduced upon transmission to the buyer's
computer system. Because the goods do not
exist prior to the sale, the goods are
considered "future goods" under the U.C.C.,
and remedies for breach of contract are
limited.178
On-Line Licenses for Uses of Works
The licensing of copyrighted works via the
NII is more problematic. Application of
U.C.C. Article 2 is questionable, because the
works involved may not be "goods" under the
U.C.C., and because the transaction itself is
not a "sale," but rather a license to use or
access the work.179 Common law principles of
contract law, therefore, may apply to on-line
licenses.180 Amendment of Article 2 of the
U.C.C. to cover such licensing transactions
is being actively considered by the Permanent
Editorial Board for the Uniform Commercial
Code.181
The challenge for commercial law, as for
intellectual property law, is to adapt to the
reality of the NII by providing clear
guidance as to the rights and
responsibilities of those using the NII.
Without certainty in electronic contracting,
the NII will not fulfill its commercial
potential. The Working Group believes that,
regardless of the type of transaction, where
parties wish to contract electronically, they
should be able to form a valid contract on-
line.
In particular, on-line licenses should be
encouraged because they offer efficiency for
both licensors and licensees. Moreover,
state validating statutes -- similar to those
used to validate shrink wrap licenses -- can
be used for on-line licenses to help overcome
concerns regarding adhesion; and such
statutes should not be preempted as long as
they do not attempt to grant rights
equivalent to any of the exclusive rights
within the general scope of copyright.182
Thus, a statute that merely recognizes the
validity of on-line licenses -- even those
licenses which cover the exclusive rights of
the copyright owner -- would not usurp
Federal power and should be upheld.
Further, just as the copyright law needs
minor clarifications to account for new
technology, so too might commercial law.
Historically, the U.C.C. has been extremely
successful in clarifying the law. However,
as technology advances, the way in which
business is conducted places strains upon the
U.C.C. -- especially Article 2. Therefore,
the Working Group supports the efforts
presently underway to revise Article 2 of the
U.C.C. to encompass licensing of intellectual
property.
4.Term of Protection
Generally, a copyrighted work is protected
for the length of the author's life plus
another 50 years.183 In the case of joint
works, copyright protection is granted for
the length of the life of the last surviving
joint author plus another 50 years.184 Works
made for hire, as well as anonymous and
pseudonymous works, are protected for a term
of either 75 years from the year of first
publication or 100 years from the year of
creation, whichever is shorter.185 When the
term of protection for a copyrighted work
expires, the work falls into the "public
domain."186
5.Notice, Deposit and Registration
Prior to the United States accession to
the Berne Convention and the concomitant
amendments to the Copyright Act, a copyright
notice was required on all publicly
distributed copies or phonorecords of works.
Omission of the notice could result in the
loss of copyright protection for the work.
However, in 1989, the use of a copyright
notice became permissive rather than
required.187 Section 401(a) of the Copyright
Act provides:
Whenever a work protected under this
title is published in the United
States or elsewhere by authority of
the copyright owner, a notice of
copyright . . . may be placed on
publicly distributed copies from
which the work can be visually
perceived, either directly or with
the aid of a machine or device.188
If a copyright notice is used, it
generally must consist of three elements:
? the letter "C" in a circle (?) or the
word "Copyright" or the abbreviation
"Copr." (in the case of sound
recordings embodied in phonorecords,
the letter "P" in a circle);
? the year of first publication of the
work; and
? the name of the owner of copyright in
the work.189
As a general rule, two copies of a
published work must be deposited in the
Copyright Office within three months of
publication for the benefit of the Library of
Congress.190 The Register of Copyrights may
exempt categories of works from the deposit
requirements. The Register may also require
only one copy of the work or allow
alternative forms of deposit.191 Although
required by the Copyright Act, the deposit of
copies is not a prerequisite to or condition
of copyright protection. Failure to deposit
copies of a work after a written demand by
the Register of Copyrights, however,
generally results in the imposition of a
fine.192
Registration with the Copyright Office is
permissive, rather than mandatory. It is not
a prerequisite to the grant of exclusive
rights.193 It is, however, generally a
prerequisite to the enforcement of those
rights in court.194 The copyright owner of a
work (or the owner of any of the exclusive
rights) may register the copyright in the
work by depositing with the Copyright Office
a completed application form, registration
fee and a copy or copies of the work.195 The
deposit requirement under the Act may be
fulfilled through the registration
procedures.196
Although not required, registration may be
advisable. A certificate of copyright
registration constitutes prima facie evidence
of the validity of the copyright and the
facts stated in the certificate, if
registration is made within five years of
first publication.197 In addition, certain
remedies are available in infringement suits
only if registration is made prior to the
date of the infringement or within three
months of first publication.198
The lack of notice and registration
requirements may make it harder to
differentiate between protected and
unprotected works, including those in the
public domain and those in which the author
does not wish to claim copyright. It may
also make it more difficult to identify the
copyright owner. This has led some to
suggest, at least with respect to works
disseminated via computer networks, that one
should be free to copy any work that does not
contain a copyright notice and that
registration should be required.
While these arguments may have some merit,
the balance of interests has not changed
since these issues were considered by
Congress and the requirements were
eliminated. Conditioning copyright
protection on the affixation of copyright
notices and/or registration would be
inconsistent with our obligations under the
Berne Convention.199 Further, the benefits of
utilizing Copyright Management Information
should encourage copyright owners to include
or affix information historically included in
copyright notices, as well as additional
useful information for consumers, such as the
terms and conditions for use.
6.Exclusive Rights
The Copyright Act grants copyright owners
certain exclusive rights that, together,
comprise the bundle of rights known as
copyright. (Limitations on the exclusive
rights and infringement of the rights are
discussed in subsequent sections. The fact
that a particular use of a copyrighted work
is said to implicate one or more of the
rights, therefore, does not necessarily mean
that such use is an infringement or
unlawful.)
The exclusive rights of the copyright
owner include --
(1) to reproduce the copyrighted work
in copies or phonorecords;
(2) to prepare derivative works based
upon the copyrighted work;
(3) to distribute copies or
phonorecords of the copyrighted work
to the public by sale or other
transfer of ownership, or by rental,
lease, or lending;
(4) in the case of literary, musical,
dramatic, and choreographic works,
pantomimes, and motion pictures and
other audiovisual works, to perform
the copyrighted work publicly; and
(5) in the case of 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, to display
the copyrighted work publicly.200
These rights, in most instances, have been
well elaborated by Congress and the courts in
both "conventional" and digital contexts.
For the most part, the provisions of the
current copyright law serve the needs of
creators, owners, distributors, users and
consumers of copyrighted works in the NII
environment. In certain instances, small
changes in the law may be necessary to ensure
public access to copyrighted works while
protecting the rights of the intellectual
property owner.
a.The Right to Reproduce the Work
The fundamental right to reproduce
copyrighted works in copies and phonorecords201
will be implicated in innumerable NII
transactions. Indeed, because of the nature
of computer-to-computer communications, it
will be implicated in most NII transactions.
For example, when a computer user accesses a
document resident on another computer, the
image on the user's screen exists -- under
contemporary technology -- only by virtue of
the copy that is reproduced in the user's
computer memory. It has long been clear
under U.S. law that the placement of
copyrighted material into a computer's memory
is a reproduction of that material (because
the work in memory then may be, in the law's
terms, "perceived, reproduced, or . . .
communicated . . . with the aid of a machine
or device").202
The 1976 Copyright Act, its legislative
history, the CONTU Final Report, and repeated
holdings by courts make it clear that in each
of the instances set out below, one or more
copies is made.203
? 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, a copy
is made.204
? When a printed work is "scanned" into
a digital file, a copy -- the digital
file itself -- is made.
? When other works -- including
photographs, motion pictures, or sound
recordings -- are digitized, copies
are made.
? Whenever a digitized file is
"uploaded" from a user's computer to a
bulletin board system (BBS) or other
server, a copy is made.
? Whenever a digitized file is
"downloaded" from a BBS or other
server, a copy is made.
? When a file is transferred from one
computer network user to another,
multiple copies generally are made.205
? Under current technology, when an end-
user's computer is employed as a
"dumb" terminal to access a file
resident on another computer such as a
BBS or Internet host, a copy of at
least the portion viewed is made in
the user's computer. Without such
copying into the RAM or buffer of the
user's computer, no screen display
would be possible.
b.The Right to Prepare Derivative
Works
The copyright law grants copyright owners
the right to control the abridgment,
adaptation, translation, revision or other
"transformation" of their works.206 A user who
modifies -- by annotating, editing,
translating or otherwise significantly
changing -- the contents of a downloaded file
creates a derivative work. Derivative works
may also be created by transforming a work,
such as an audiovisual work, into an
interactive work.
c.The Right to Distribute Copies
Before addressing issues raised by the
distribution right in the context of the NII,
it is necessary to understand its application
and limitations with respect to conventional
modes of exploitation and infringement.
The right to distribute legitimate copies
of works is substantially circumscribed by
the "first sale" doctrine:
Notwithstanding the provisions of
section 106(3), the owner of a
particular copy or phonorecord
lawfully made under this title, or
any person authorized by such owner,
is entitled, without the authority of
the copyright owner, to sell or
otherwise dispose of the possession
of that copy or phonorecord.207
This means that the copyright owner generally
has only the right to authorize or prohibit
the initial distribution of a particular
lawful copy of a copyrighted work.208 It is
important to understand, however, that the
distribution of an unlawfully made (i.e.,
infringing) copy will subject any distributor
to liability for infringement.209
One court decision has construed the
unauthorized downloading of digitized
photographic images (whose reproduction was
unauthorized) by BBS subscribers as
"implicating" the distribution right.210 The
discussion in Playboy Enterprises Inc. v.
Frena211 reflects the reach of the distribution
right with respect to infringing copies:
Public distribution of a copyrighted
work is a right reserved to the
copyright owner, and usurpation of
that right constitutes
infringement . . . . [Playboy
Enterprise's] right under 17 U.S.C.
?106 to distribute copies to the
public has been implicated by
Defendant Frena [the BBS operator].
Section 106(3) grants the copyright
owner "the exclusive right to sell,
give away, rent or lend any material
embodiment of his work." There is no
dispute that Defendant Frena supplied
a product containing unauthorized
copies of a copyrighted work. It
does not matter that Defendant Frena
claims it did not make the copies
itself.212
The court may not have focused on the
reproduction right, apparently because of its
uncertainty whether the operator of the
bulletin board system could itself be held to
have reproduced a work that was (a) uploaded
by one subscriber213 and (b) downloaded by
another. (As discussed below, the BBS
operator publicly displayed the works by the
same conduct, and was found liable by the
court for infringing the display right.)
Whether the litigants in Playboy put the
issue properly in dispute or not, the right
to distribute copies of a work has
traditionally covered the right to convey a
possessory interest in a tangible copy of the
work. Indeed, the first sale doctrine
implements the common law's abhorrence of
restraints |
