(Fwd) More on the Database AntiPiracy Act (Was"This Bill Is Mo


Subject: (Fwd) More on the Database AntiPiracy Act (Was"This Bill Is Mo
From: ODI LIBRARY (library@odi.org.uk)
Date: ti 19 syys   2000 - 09:46:58 EEST


Yet another critique of the WIPO proposals, from cyberia-l list.
Specifically critiques the database and technical devices provisions.

------- Forwarded Message Follows -------
Date: Tue, 17 Sep 1996 00:10:13 -0700
Reply-to: Law & Policy of Computer Communications
               <CYBERIA-L@LISTSERV.AOL.COM>
From: Mike Godwin <mnemonic@WELL.COM>
Subject: More on the Database AntiPiracy Act (Was"This Bill Is More
               Frightening Than You Think")
To: CYBERIA-L@LISTSERV.AOL.COM

It appears that others are beginning to recognize the threat inherent in
H.R. 3531. See below.

--Mike

**************************

Some Public Interest Considerations Relating to H.R. 3531 Database
Investment and Intellectual Property Antipiracy Act of 1996

Peter Jaszi
Professor of Law
Washington College of Law,
American University
August 28, 1996

Summary:

On May 23, 1996 Representative Carlos Moorhead, chair of the House
Judiciary Subcommittee on Courts and Intellectual Property, introduced H.R.
3531. This bill would create a strong new form of sui generis intellectual
property protection -- an unprecedented right "of its own kind," distinct
from and additional to copyright. This would apply to compilations of
"works, data, or other materials." Indeed, it proposes a novel
reconfiguration of American intellectual property law, which deserves to be
carefully scrutinized by libraries, educational institutions, consumers,
and others interested in the maintenance of reasonable balance between the
interests of proprietors and those of information users.

As an exercise of the congressional Commerce Power, H.R. 3531 isn't
governed by the important limiting language of the constitution's
Intellectual Property Clause (Art. I, Sec. 8, cl. 8.) In other words, the
new legislation isn't necessarily designed to "Promote the Progress of
Science and Useful Arts." To the contrary, its goal appears to be to
promote the economic well-being of the information industries. The result
is a legislative scheme which defines the rights of owners more broadly,
and subjects those rights to fewer exceptions in favor of information
consumers, than do traditional intellectual property laws, such as
copyright.

It is none to soon for the scrutiny to begin; although no hearings are
scheduled on the bill, and it seems unlikely to be enacted in this session
of Congress, it promises to be an important item in the intellectual
property agenda of the 105th Congress. Moreover, if the United States
delegation to the World Intellectual Property Organization (WIPO) has its
way, the approach to database protection outlined in H.R. 3531 may be the
basis of major international treaty negotiations in December 1996 -- before
any of its merits are debated in this country or many other countries
including Canada.

Key Facts and Findings:

o H.R. 3531, "Database Investment and Intellectual Property Antipiracy Act
of 1996" was introduced on May 23, 1996 by Rep. Moorhead (R-CA).

o The bill was introduced to address concerns of the information industry
regarding the 1991 Supreme Court decision in Feist v. Rural Telephone, a
decision which held that comprehensive collections of facts arranged in
conventional formats were not protected under copyright, and could not
constitutionally be protected under copyright.

o In 1996, the European Union (EU) approved a directive on the legal
protection of databases and it is now in the process of being implemented
in domestic law throughout the member countries of the EU.

o H.R. 3531 incorporates many though not all of the features of the EU
Directive. Key provisions of the bill include:

1) Protection would be available for any "database" which was "the result
of a qualitatively or quantitatively substantial investment of human
technical, financial or other resources in the collection, assembly,
verification, organization or presentation of the database contents." Most
directories, anthologies, CD-ROM and on-line databases, reference works
would be included under this definition.

2) Databases "made by a governmental entity" would be excluded from
protection, but those prepared by private firms or persons using
governmentally generated or collected data could be covered.

3) The effective term of protection for databases would be potentially
perpetual, at least for dynamic compilations in electronic form.

o This would be a new legal regime distinct from copyright law and these
protections would "trump" copyright law. Thus the rights the legislation
would create would not be subject to "fair use" nor would the first sale
doctrine apply.

o H.R. 3551 includes controversial anti-circumvention provisions included
in the NII Copyright Protection Act of 1995.

o If enacted and signed into law as introduced, H.R. 3531 would usher in a
new era in information commerce -- one in which a "pay-per-use" model would
be the norm.

o Provisions in the bill represent an unprecedented erosion of the rights
of the American research and education community and would have detrimental
impacts on the conduct of research and education activities in this country.

o A full and complete domestic discussion needs to occur on this
legislation. If this proposal is included in the December 1996 WIPO
Diplomatic Conference, this would represent an end-run around the U.S.
Congress and domestic discussions. Many other nations including Canada
would be in a similar predicament - no discussion of a crucial intellectual
property issue to reflect "local" concerns.

Background

International Dimensions:

The information industry would argue that the "need" for legislation on
this topic can be traced to the 1991 Supreme Court decision in Feist v.
Rural Telephone. This decision held that comprehensive collections of facts
arranged in conventional formats were not protected under copyright, and
could not constitutionally be protected under copyright -- squarely
rejecting the notion that the compiler's "sweat of the brow" ever can
substitute for the "original authorship" that the statute and the
constitutional Copyright Clause require as the condition of
copyrightability. While confirming the view of the law that most copyright
experts (and a number of courts) had held for some time, and bringing the
law of the U.S. into conformity with that of most of the rest of the world,
Feist also created some consternation among businesses with large capital
investments in massive data compilations, especially (although not
exclusively) those in electronic form. Shortly after the decision, there
was some discussion of the possibility of enacting "database legislation"
as an exercise of the congressional Commerce Power, but many questions were
raised about the advisability -- and even the constitutionality -- of such
an approach. Rather than pushing for immediate legislation, therefore, the
information industry took a "wait and see" approach.

What they were watching was the progress of a 1992 proposal by the
Commission of the European Communities for a "directive" -- that is, a
community-wide legislative initiative binding on member countries -- on the
legal protection of databases. Such an initiative had been under general
consideration in the European Union since 1988 but the Commission's
proposal was the first tangible step toward its realization. Extensive
interventions by governments and private companies -- both European and
American after 1992 -- brought about crucial modifications in the proposal,
mainly in the direction of intensifying the protection afforded and
curtailing exceptions to it. The directive became final on February 26,
1996. It is now in the process of being implemented in domestic law
throughout the member countries of the EU. H.R. 3531 incorporates many --
though not all -- of the features of the EU Directive.

Analysis of H.R. 3531:

Protection would be available under H.R. 3531 for any "database" (broadly
defined) which was "the result of a qualitatively or quantitatively
substantial investment of human technical, financial or other resources in
the collection, assembly, verification, organization or presentation of the
database contents." This would include most (if not all) directories,
anthologies, CD-ROM and on line databases, reference works, and much more.
Although databases "made by a governmental entity" would be excluded from
protection, those prepared by private firms or persons using
governmentally-generated or collected data could be covered. Given the
nature of the processes by which data is commercialized, the requirement of
the investment of "qualitatively or quantitatively substantial...
resources" would not appear to be a significant limitation on the
availability of protection for these -- or other -- compilations.

The effective term of protection for databases under H.R. 3531 would be
potentially perpetual, at least for dynamic compilations in electronic
form. Technically, protection for any given database would last 25 years
from the moment when it was first published or otherwise commercialized;
however, any "change of commercial significance" to an existing database
(including, for example, current updating of its contents) would constitute
the making of a new database, subject to a new 25 year term. Significantly,
the rights in such a "new database" would extend not only to the material
added or changed, but to its contents as a whole.

Where protected "databases" were concerned, H.R. 3531 would prohibit any
unauthorized person to:

o extract, use or reuse all or a substantial part qualitatively or
quantitatively, of the contents of a database if there is a conflict with
the database owner's normal exploitation of the database or if it adversely
affects the actual or potential market for the database;

o engage systematic extraction, use or reuse of insubstantial parts,
qualitatively or quantitatively, of the contents of a database subject that
cumulatively conflicts with the database owner's normal exploitation of the
database or adversely affects the actual or potential market for the
database.

The breadth of these prohibitions creates real risks that they would be
enforced not only between competitors in the database industries, but also
against end-users and providers of value-added information products (such
as indexes and search engines.)

The bill does not define "substantial part," but its language points to an
essentially circular understanding of this crucial term: If there would or
could be measurable consumer demand for the data, then it would be unlawful
to "extract, use, or reuse" it. A full range of civil penalties (including
treble damages, an innovation in intellectual property law along with
awards of attorneys' fees) is available against violators; those who act
for "commercial advantage" or cause more than $10,000 in "harm" in a given
year are liable to fines and imprisonment.

Other key sections of the legislation provide criminal and/or civil
penalties to those who:

o import, manufacture or distribute devices which have the primary purpose
of circumventing any system which prevents or inhibits the extraction, use
or reuse of the contents of the database; or

o knowingly provide, distribute, alter, database management information
that is false.

These prohibitions track the controversial "anti-circumvention" and
"copyright management information" provisions (Sec. 1201 and 1202) of the
National Information Infrastructure Copyright Protection Act of 1995. This
bill is stalled in the 104th Congress in significant part because of
controversy over these very provisions.

H.R. 3531 provides for only scant exceptions. For example, provisions in
the bill do not prohibit independent collection and recompilation of the
data contained in a protected database -- provided, of course, that the
would- be recompiler has the access and the resources necessary to
undertake the project. Another provision would permit the use of
"insubstantial" portions of protected databases though the significance of
this provision is questionable. First, it is unlikely that any data worth
extracting will be deemed "insubstantial;" second, the bill states
elsewhere that serial extractions of "insubstantial" parts of a database
may be considered "substantial" in combination; and third, unlike the EU
Database Directive, H.R. 3531 makes even the privilege of "insubstantial"
extraction waivable thus encouraging vendors to "contract out" of this
limitation.

Meager as they are, these are the only exceptions to the new right
explicitly provided in H.R. 3531. Importantly, there are no exceptions or
limitations of broader scope -- or of any scope whatsoever -- implicit in
the proposed legislation. Since this is not copyright legislation, the
rights the legislation would create would not be subject to "fair use." Nor
would the "first sale" doctrine apply -- thus, the vendor of a copy of a
database -- on CD- ROM or in book form -- could continue to charge the
purchaser license fees for using, or permitting others (students or library
patrons, for example) to use that copy for its intended purpose.

If enacted and signed into law as introduced, H.R. 3531 would usher in a
new era in information commerce -- one in which a "pay-per-use" model would
be the norm. Startlingly the bill -- which defines "database" in the
broadest possible terms and permits cumulation of copyright and sui generis
protection for qualifying works -- raises the possibility that this model
would be applicable to many works (like collated editions of public domain
texts or collections of public domain images) which fall within the
traditional subject- matter of copyright.

Compilations of data are essential tools of scholarship, personal research,
science and engineering, marketing, and new business development. The
movement to a pay-per-use model which H.R. 3531 would bring about would
have significant detrimental impacts on users whose access to data has
previously been available at no fee or at a reasonable cost. Moreover,
implementation of the model is likely to accelerate the already notable
tendency toward single-sourcing and niche marketing of data.

A familiar example may help to show how enactment of H.R. 3531 could change
the information environment. Today, the public information essential to
legal practice and scholarship is in the public domain as a matter of
copyright law. Some of that data is already only available through private
firms which compile decisions, statutes, and regulations, of which the best
known (but by no means the only) example is the West Publishing Company.
Today, a lawyer or researcher (or her institution) must buy the books or
CD-ROMs, or subscribe to the on-line services, in order to have full access
to the law. Despite this, the copyright principle that legal protection
does not attach to data (including information about the content of the
law) operates to check the monopolistic tendencies inherent in this
situation. Once access is established, there are no restrictions on how
public domain information "extracted" from print or electronic "databases"
can be used, so long as the "value added" by the compiler (such as
annotations) is not taken.

Under H.R. 3531, the situation would be different. Unlicensed reproduction
or other use of the text of even a single judicial decision, if it were
deemed "qualitatively substantial," would be enough to trigger liability on
the part of the user, potentially on that of the educational institution or
library through which the user accessed the database from which the text
was extracted. In this new legal environment, further movement toward "pay-
per-use" licensing regimes would be inevitable. In turn, the heightened
control over the re-use of public domain data which the H.R. 3531 approach
would support database publishers offering chronically underfunded
government agencies more generous arrangements in exchange for exclusive
opportunities to compile the public domain information they generate.

While promoting the trend toward single-sourcing of government data, the
model of protection proposed in H.R. 3531 would likely raise the operating
costs of libraries, universities, and schools, and other institutions
significantly. Moreover, enactment of H.R. 3531 -- with its sweeping
conception of proprietary rights -- might actually slow the "Progress of
Science." Building legal fences around "raw" scientific data and
experimental results could mean less competition among researchers, leading
to fewer new discoveries. Of course, the costs associated with the
commodification of data may be worth paying, if the effect of the
legislation would be to assure greater investment in the creation of new
databases. It is worth noting, however, that the absence of such protection
has not inhibited significant investments to date.

Conclusion:

One thing is clear: legislation of this potentially sweeping character
should not be enacted without in-depth study and full input from all
interested parties. Given the fact that intellectual property legislation
has sometimes been propelled through Congress on ideological bases, without
full consideration, potentially affected communities should lose no time in
focusing on this bill.

The urgency is all the greater because, as part of an ongoing process to
revise and update international agreements in the field of intellectual
property. The United States delegation to WIPO recently proposed a new
treaty on "Sui Generis Protection of Databases." This proposal contains
provisions substantially similar to those of H.R. 3531 and is set to be
negotiated and signed in December 1996 during a WIPO Diplomatic Conference.
In the U.S., legislation is unlikely to be considered until sometime in
1997. This "end-run" around the domestic legislative process, were it to
occur, would create an unfortunate dynamic in which the U.S. Congress might
feel compelled to ratify and implement the new "international norm" without
substantive consideration of its merits. Many other nations would be in a
similar predicament - no discussion of a crucial intellectual property
issue to reflect "local" concerns. If enacted in the U.S., this would
represent an unprecedented erosion of the rights of the American research
and education community with predictable, detrimental impact on the conduct
of research and education activities in which this country is an
international leader.

Peter Jaszi
Prue Adler
8/28/96

----------------------------------------------------------------------------
'Indeed, the Government's asserted "failure" of the Internet rests on the
implicit premise that too much speech occurs in that medium, and that
speech there is too available to the participants. This is exactly the
benefit of Internet communication, however. The Government, therefore,
implicitly asks this court to limit both the amount of speech on the
Internet and the availability of that speech. This argument is profoundly
repugnant to First Amendment principles.'
   --Judge Stewart Dalzell, ACLU v. Reno.

      Mike Godwin, EFF Staff Counsel, can be reached at mnemonic@eff.org
                   or at his office, 510-548-3290.
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