Pamela Samuelson's Critique of the NII Inteellectual Property Green Paper Part 1

[David Farber <farber () central cis upenn edu>]

Legally Speaking:  The NII Intellectual Property Report
by Pamela Samuelson


(to be published in the December 1994 issue of Communications of the ACM)






In July 1994 the Clinton Administration's Working Group on
Intellectual Property Rights issued a Preliminary Draft Report on
Intellectual Property and the National Information Infrastructure[1].
This column reflects the principal comments I made about the Draft
Report in response to a call for public comments on it.


If the National Information Infrastructure (NII) is to achieve its
potential as a channel for distribution of a wide range of creative
works, says the Report, authors and publishers of those works will
need reasonable assurance that their intellectual property rights will
be respected.  Digital networked environments pose particularly
severe challenges for owners of intellectual property rights because
digital networks make it so simple for members of the public to
make multiple copies of those works and distribute them to
whomever they choose at virtually no cost.  Left unregulated, this
activity would undermine the incentives of authors and publishers to
invest in the creation and distribution of creative works, for the first
distribution of a digital copy to the public would enable those who
receive it to set themselves up as alternative publishers of the work,
able to undercut the first publisher's price because they need not
recoup any development costs.  On this point, the drafters of the
Report and I are in agreement.


Where we principally disagree is about the wisdom of making certain
changes to copyright law and about the Report's characterization of
these proposed changes as "minor clarifications and changes
necessary to modernize copyright law for digital networked
environments.  The Report recommends:  (1) making digital
transmission of a copy of a copyrighted work an act of copyright
infringement; (2) abolishing the "first sale" rule for works distributed
by digital transmission (this rule generally permits owners of copies
of copyrighted works to redistribute their copies without the
copyright owner's permission); and (3) making it an infringement of
copyright to construct or distribute any device intended to
circumvent copy-protection systems by which owners of the
copyright might attempt to protect their work.


As the remainder of the column will demonstrate, the Report
misrepresents the current state of copyright law in several important
respects.  In particular, it overstates the extent to which current law
favors publisher interests.  It downplays the extent to which the
changes it recommends would, in fact, bring about a radical
realignment in the historical balance between publisher interests and
the public interest in access to information products, pushing the law
in a direction that would favor publisher interests to the detriment
of the public interest.  It would abolish longstanding rights that the
public has enjoyed to make use of copyrighted works, rights that
have been consistently upheld in courts and in the copyright statute.
The Report is full of legalistic terminology that makes it difficult for
members of the public to read and comprehend.  As a consequence, it
doesn't provide an adequate basis from which the public, including
the technical community who reads Communications, can make an
informed judgment about whether the public should accept this
revised copyright law.  The remainder of this column will translate
the Report and its recommendations into plain English so that
readers can understand what is at stake and why I question whether
the Report's recommendations would be in the public interest.


To put the point plainly, let me say that not since the King of England
in the 16th century gave a group of printers exclusive rights to print
books in exchange for the printers' agreement not to print heretical
or seditious material has a government copyright policy been so
skewed in favor of publisher interests and so detrimental to the
public interest.


AN EXCLUSIVE RIGHT TO BROWSE?


Until the NII Report came out in July, no one had ever thought to
declare that merely browsing a copy of a copyrighted work could be
regarded as an act of copyright infringement.  The copyright statute
grants authors five exclusive rights (i.e., rights to exclude other
people from doing certain things with their work):  (1) an exclusive
right to reproduce the work in copies; (2) to make derivative works
of it; (3) to distribute copies of it; (4) to publicly perform it; and (5)
to publicly display it.   Unlike patent law, copyright law does not
grant rights to control all uses of the protected work.  On occasion,
copyright owners have tried to persuade courts to construe the
exclusive rights more broadly than Congress had clearly intended;
courts have often rejected expansionistic arguments, saying that
those who seek broader rights than the statute clearly grants should
take their case to Congress.


One respect in which the Report interprets copyright law more
expansively than Congress has intended is in its statement that
"browsing" a work in digital form is an infringement of copyright
(unless authorized by the copyright owner).  Neither browsing nor
reading a work has ever been regarded as an infringement of
copyright.  When I go to bookstore or a dentist's office, I can browse
a book there without infringing its copyright.  If I thereafter buy it
or another book, I can lend the book to a friend so he or she can read
it.  Neither of us has interfered with any exclusive rights of copyright
owners.  (Although I will have distributed a copy to my friend, this
does not violate the exclusive distribution right because the
copyright owner is generally entitled to control only the first sale of
a copy to the public.  My personal property rights in the copy I
purchase override the copyright owner's interests in further
distributions of that copy.)


So what makes the drafters of the Report think that browsing and
reading--or any other use, for that matter--of digital works should
be regarded as copyright infringement?  It is because, in contrast
with printed works, works in digital form can only be browsed, read
or used if the machine on which they are displayed makes copies of
them.  But rather than explicitly recommending that copyright law
be amended to make all browsing, reading, and uses of copyrighted
works in digital form into acts of infringement--a recommendation
likely to be highly controversial--the Report takes advantage of an
incidental property of digital works (that they need to be copied in
order to be browsed or otherwise used) to assert that existing law
already allows publishers to control all uses of works in digital form.
This lucky happenstance makes it unnecessary for the drafters of the
Report to mention that they are advocating a vast expansion of
copyright scope.


AN EXCLUSIVE RIGHT OF DIGITAL TRANSMISSION?


The Report is more express in its endorsement of another expansion
of the exclusive rights of copyright.  It would give copyright owners
an exclusive right to control digital transmissions of their works.   To
understand why such a right might be needed, it is necessary to
realize that the present copyright statute grants copyright owners an
exclusive right to "distribute copies...to the public by sale or other
transfer of ownership, or by rental, lease, or lending."  The Report
would change this phrasing to add "or by transmission" after
"lending" in the statute.


The Report recommends this change because current statute is too
focused on the distribution of physical objects and transfers of rights
in physical objects.  The term "copy," for example, is defined as a
"material object[]...in which a work is fixed...."  If the statute only
gives copyright owners rights to distribute material objects, it may
be ill-equipped to deal with digital transmissions, for they are
distributions of bit streams, not of physical objects.  Posed in this
manner, the Report's argument for adding a provision that permits
copyright owners to control digital transmissions seems quite
plausible.


Yet, by reading the Report as a whole, one might question whether
an explicit digital transmission right is really necessary.  The Report
discusses two recent cases in which judges treated digital
transmissions, such as up- and downloading software from a bbs, as
violative of both the reproduction and distribution rights of
copyright law.  In truth, if the courts took the reproduction and
distribution rights as literally as the Report sometimes does, it would
be hard to argue that *any* digital copy infringes copyright since all
digital copies are, by their very nature, immaterial.  Despite the
sophistical appeal of an argument that digital copies don't infringe
because of their immaterial nature, courts have rejected such
arguments.  This too suggests that no statutory change may be
necessary to give copyright owners the right to control digital
transmissions.


Before delving into a more subtle reason for questioning the
desirability of the digital transmission right, I want to highlight
another respect in which the Report takes a more expansive view of
the exclusive rights of copyright than Congress intended.  The Report
endorses the conclusion of some relatively recent cases that digital
copies "fixed" only in RAM infringe the reproduction right,
notwithstanding language in the statute and the legislative history
indicating that Congress intended to limit the scope of the
reproduction right to those copies sufficiently permanent or stable to
permit the work to be perceived or reproduced for more than a
transitory duration.  A legislative report about this provision gave as
an example of a noninfringing reproduction the temporary display of
images on a screen.  Proponents of the view that RAM copies infringe
copyrights argue that as long as the machine is on--and it can be on
indefinitely--a copy of the copyrighted work stored there can be
perceived or reproduced, thereby satisfying the "more than
transitory duration" standard.  (By this logic, holding a mirror up to a
book would be infringement because the the book's image could be
perceived there for more than a transitory duration, i.e., however
long one has the patience to hold the mirror.)  Applying the logic of
these cases, the Report seems to view any digital transmission as an
infringement of the reproduction right because of the copies made
during the transmission as well as when the transmission arrives at
its destination.  This is a questionable interpretation of current law.


The more subtle reason to question the need for and desirability of a
digital transmission right is that it would change existing law far
more than the Report admits.  This change too would favor publisher
interests over the public interest.  To understand why, it is worth
noticing that of the existing exclusive rights of copyright, the one that
the proposed digital transmission right most closely resembles is the
exclusive right on which broadcasters principally rely for the
protection of their products.   Broadcasters don't distribute physical
objects; they transmit intangible information which the public can
view with the aid of television and radio machines.  Like broadcast
television today, the NII may eventually be used to provide a wide
variety of motion pictures and other programs to the public with the
aid of satellite technologies.  The NII Report invokes the image of a
"celestial jukebox" by which consumers might order a particular
movie which, with appropriate compensation to the holder of the
copyright, could then be received by the consumer in the privacy of
his or her home.


Digital transmissions of copyrighted movies frequently violate two of
the existing exclusive rights of copyright:  those pertaining to public
performances and public displays of copyrighted works.  If these
exclusive rights already provide a means for controlling many digital
transmissions, surely it is fair to ask whether copyright owners
really need a new exclusive right to control distributions by digital
transmissions.  Although the Report does not say so, its digital
transmission right would rectify what copyright industries today
regard as a very serious limitation on the scope of the rights current
law gives to rightsholders.  Copyright law does not grant owners
rights to control all performances and displays of their works, but
only *public* performances and displays of those works.  (When you
and I sit at home and watch a program on television, copyright law
considers our viewing as a performance and a display of a
copyrighted program.  Because it is not a public performance or
display of the work, this activity is not a copyright infringement.)


The real purpose behind the proposed digital transmission right is to
enable copyright owners to control *all* digital performances and
displays of copyrighted works, without regard to whether they are
public or private.  Adoption of the digital transmission right would,
in effect, repeal the public performance and display rights of
copyright and replace them with exclusive rights to control all
performances and displays of copyrighted works distributed in
digital form.  Had the Report explicitly recommended repeal of the
public performance and display rights, its recommendations would
provoke controversy.  By seeking the repeal indirectly, the Report
hopes to avoid this controversy.  Perhaps a case could be made for
such a repeal, but the Report does not make a persuasive argument
on behalf of this vast expansion of the rights of copyright owners.


To understand how fully the NII Report would limit public access to
works in digital form, it is necessary to examine not only the
proposed digital transmission right, but also the kindred proposals to
abolish the "first sale" rule for works transmitted digitally and to ban
devices aimed at defeating copy-protection schemes.  Especially
given the Report's highly constrictive view of the fair use doctrine,
adoption of these three recommendations would dramatically change
the historical balance of copyright law as between the interests of
copyright owners and of the public.