The good, bad, ugly of copyright law rewrites

Subject: The good, bad, ugly of copyright law rewrites
From: Emanuella Giavarra (
Date: ti 13 tammi† 1998 - 13:25:31 EET

This message was posted on the US Lib-license list by Ann Okerson
Ann Okerson writes:
David Dillard of Temple University forwarded this to the list. We agree
with him that it offers an important perspective on both copyright
legislation (revision), particularly important new user-friendly bills
that have been introduced in Congress and copyright's intersection with
licensing. The work is reproduced here with permission of the author,
David Loundy.

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Published in the Chicago Daily Law Bulletin, January 8, 1998 at page 5.

               The good, bad, ugly of copyright law rewrites.

                       Copyright 1998 by David Loundy


Congress is actively trying to update the U.S. copyright law to account
for digital technology, in part because of a deep-seated need to
regulate, and in part to bring the law in line with the requirements of
a treaty sponsored by the World Intellectual Property Organization, the
WIPO Copyright Treaty). As is often the case, some pieces of legislation
are better than others. Also, as is frequently the case in the high-tech
context, the legislation that leaves something to be desired is being
signed into law.

To begin on a positive note, one of the best pieces of proposed digital
technology legislation I have seen in some time is H.R. 3048, the
"Digital Era Copyright Enhancement Act" proposed by Representatives Rick
Boucher (D-Va) and Tom Campbell (R-Ca). The legislation has merit on
several grounds

   * 1. It shows an understanding of the technology;
   * 2. It shows an understanding of the law and how it applies to the
technology; and
   * 3. It attempts to strike a balance between the rights of
     property owners and intellectual property users.

The Digital Era Copyright Enhancement Act begins by addressing the issue
of "fair use" of a digital work. The legislation offers that the
technology used for transmitting a copyrighted work should be irrelevant
for determining whether that transmission is a fair one. The
technological means of initially performing, displaying or distributing
a work should also be irrelevant in determining whether a subsequent use
of the work is a fair one. A controversial stance the legislation takes,
discussed in more detail later in this article, is that a fair use
analysis should not be affected by whether a digital work is protected
from reproduction by technological measures. Similarly, the legislation
would allow an expansion of the use of copyrighted works for classroom
teaching, even if the "classroom" constitutes remote locations
comprising a "distance learning" environment.

The bill also contains provisions for libraries and archives-- expanding
the ability to make copies of digital works to preserve such works. The
legislation particularly notes that some copies may be needed as a
of storage and display technologies becoming obsolete.

Another provision contained in the proposed legislation is one that
allows preservation of the "first sale" doctrine for digital works. The
first sale doctrine states that a copyright holder can control the first
sale of a work, but not any subsequent transfers of a particular copy of
a work. However, the exclusive right to reproduce a work is not
affected. This allows businesses such as used book and CD stores to
operate-- the
copyright holder cannot prevent the subsequent distribution of a work
after the first sale of a particular copy. In the digital context,
however, computers work by making copies. If you have a copy of an
electronic book on the hard drive of your computer, and you e-mail it to
someone, you have made a reproduction of the work-- a right still
reserved to the copyright holder-- and have not just made a transfer of
the work as allowed under the first sale doctrine.

The proposed legislation addresses this issue sensibly by allowing you
make a copy by transmitting a work to another, but only if you destroy
your copy of the work at "substantially" the same time.

The bill also clears up an issue I have been concerned about for some
time. Because the use of an electronic work requires that a copy be
made, any use of an electronic work is a potential infringement. Because
this is an obviously silly outcome, in the 1970s, the National
Commission on New Technological Uses of Copyrighted Works proposed
Section 117 of the Copyright Act to allow certain copies of computer
programs to be made as may be necessary to use or preserve such works.
Although Section 117 was adopted, it covers "computer programs," and
arguably dose not cover data. Thus, although you can copy your word
processor in order to use it, you may still be infringing by viewing
someone else's documents with your word processor.

The Digital Era Copyright Enhancement Act broadens Section 117 to apply
clearly to all digital works.

Perhaps the most striking aspect of the proposed legislation is that it
would overturn cases such as Pro-CD v. Zeidenberg, 1996 U.S. App. LEXIS
14951 (7th Cir. 1996), thus bringing the 7th Circuit in line with the
rest of the country in limiting "shrink-wrap" licenses. The bill
provides that non-negotiable contracts which attempt to limit use of
non-copyrightable material, such as the listings of telephone numbers at
issue in Pro-CD, would be specifically preempted. The same preemption
would apply to any non-negotiable licenses which attempt to restrict a
user's rights to use a copyrighted work as may be specifically allowed
under provisions of the Copyright Act, such as the fair use provision.
This provision would also throw a wrench into the proposed Article 2B to
the Uniform Commercial Code which would support such non-negotiated

Another provision of the bill would implement a requirement of the WIPO
Copyright Treaty that requires signatories to have in place legislation
which makes it illegal to bypass digital copyright protection management
systems. This requirement has been very controversial, which brings us
back to the fair use discussion.

Some people argue that an additional bypass prohibiting provision is
unnecessary under the U.S. Copyright Act, and that adequate protection
already provided by the current U.S. Copyright Act.

Others disagree, and have proposed strict prohibitions against any
attempts to bypass digital copyright protection schemes. H.R. 2281,
proposed by Representatives Coble, Hyde, Conyers and Frank, contains a
blanket prohibition against bypassing protection schemes. Such a blanket
prohibition risks removing the ability to make fair use of a digital
work, as is specifically provided for in the Constitution. The inability
to bypass protection schemes would also make it impossible to
reverse-engineer software to develop new products based on an existing
one. It also could potentially require a payment in order to so much as
read an electronic work-- with no allowance for use of such a work for
teaching or scholarship. For these reasons, H.R. 2281 has been opposed
60 law professors in a letter sent to Representative Coble.

The Digital Copyright Enhancement Act also prohibits bypassing copyright
protection schemes, but, unlike the Coble bill, would allow protection
schemes to be bypassed if the purpose of the circumvention does not
amount to an infringement. Both bills also allow a court to reduce or
remit damages if a violation is found to be "innocent."

Two bills are also pending which would address system operator liability
for infringements that occur on or through a provider's system. H.R.
2181, the "On-Line Copyright Liability Limitation Act" is a short
statute which would provide immunity from claims of copyright
infringement where the service provider merely transmits or provides
access to infringing
material where the provider does not know of the presence of infringing
material. The legislation sets forth a number of other requirements for
a service provider to remain free from liability, such as not receiving
financial benefit for any particular act of infringement. Such a
provision would strongly advise against a service provider imposing
"traffic charges" where any traffic, some of which might be infringing,
results in extra income for the service provider. The bill also
eliminates liability where the provider does not know of the presence of
infringing material, and provides some immunity from claims based on the
provider's removing infringing material once the provider has become
aware of its presence. Unfortunately, the draft legislation does not
adequately flesh out this provision, and will inevitably result in

The other bill to address service provider liability does provide more
detail for when a service provider has notice of infringements ocurring
on the provider's system-- it has an extensive provision for a service
provider's handling infringement claims. Unfortunately, the provisions
Senator Ashcroft's "Digital Copyright Clarification and Technology
Education Act of 1997" (S. 1146) require that any material which a
copyright holder asks to have removed be the subject of a copyright
registration or at least subject to an application for a registration--
requirement that is otherwise largely unnecessary, and is discouraged by
international convention.

The final piece of copyright legislation, the No Electronic Theft Act
(The NET Act-- H.R. 2265) was, unfortunately, recently signed into law.
The Act expands criminal penalties for non-profit copyright
infringement. The Act was intended to close the "LaMacchia Loophole"
which came to light in the attempted prosecution of a college student
for running a computer bulletin board system intended for the
distribution of pirated computer software (U.S. v. LaMacchia, No.
9410092-RGS (D. Mass. Dec. 28, 1994)). The prosecution in that case
failed because charges were brought under the Wire Fraud Statute, rather
than under the Copyright Act. The court held that because the bulletin
board operator was not profiting from any infringements, the
requirements for a fraud conviction were not present.

Under the NET Act, non-commercial copyright infringement of a sufficient
dollar value would now be a criminal act. Thus, copyright holders could
now ask the government to bear the cost of prosecuting infringers
of using the already-available remedies provided by the Copyright Act.
other words, the No Electronic Theft Act closes a loophole that does not
really exist.

Unfortunately, when put into an Internet context, the NET Act creates a
potential chilling effect and upsets the Constitutional balance provided
by the Copyright Act. The Internet works, in essence, by making copies.
If I post something to usenet news, I may create a million copies of
whatever I transmit. If I post a quote from a newspaper article, the use
of which I believe to be a fair one and thus protected from liability,
but if that use is not actually fair and the value of the work which I
post is even a fraction of a cent, arguably I could be subject to up to
a year in jail under the terms of this new law. This is clearly a stiff
deterrent to impose as a result of a failed attempt at a creative
prosecution in a case where another remedy was already readily

I have long claimed that the Copyright Act contains some legitimate
to be filled when the law is applied to a digital context.
too much of the resulting legislation is reactionary and poorly
considered. While the Digital Copyright Enhancement Act is a
refreshingly informed and balanced attempt to fill some of these holes,
why is it that Congress always seems to be most excited about mistakes
such as the NET Act?

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