Cyberlaw: Intellectual Property in the Digital Millennium
by Jay Dratler, Jr.
(Law Journal Press 2000)
§ 1.02[2] [Footnotes Omitted]
Copyright © 2000 Law Journal Press. All Rights Reserved.
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[2]—The Digital Millennium Copyright Act: A New Departure
As the turn of the Millennium approached, the view that new law was needed
[for cyberspace] ripened. By 1996, the international community had
identified deficiencies in copyright protection sufficient to justify two
new international compacts: the WIPO Copyright Treaty and the WIPO Performances
and Phonograms Treaty. Both treaties, among other things, obligated
contracting parties to implement a regime of legal protection for technological
measures designed to prevent copyright infringement. In late 1998,
Congress implemented these treaties and made other changes in relevant law
through the Digital Millennium Copyright Act, which passed into law on October
28, 1998 ("Millennium Act"). Although the Millennium Act had five
titles, the two most important were intended to address Internet issues.
As a result, the Millennium Act was the first real example of "cyberspace
law."
The Millennium Act's most important titles are Titles I and II. Title
I implemented the two WIPO treaties, first by providing the necessary copyright
protection in the United States for protected foreign works and second by
implementing the treaties' prohibitions against circumventing protective
technology and against removing or altering copyright management information.
The Millennium Act's second most important innovation was to provide a narrow
"safe harbor" consisting of limitations of remedies for Internet service
providers acting as intermediaries in the transmission, caching, storage,
and linking of copyrighted content. Title II of the Act attempted
to accomplish this objective by codifying certain excruciatingly complex
and detailed limitations on remedies while leaving the common law of direct
and secondary liability otherwise intact. In following the path the
courts had already broken in this field, the Act gave the lie to the notion
that "cyberspace law" is as revolutionary as the technology that it governs.
The Millennium Act's prohibitions against circumventing protective technologies
are its most important innovation, for they changed a copyright enforcement
paradigm that was nearly three centuries old. Whereas all copyright
law previously, with limited exceptions, had focused on the activities of
copiers, the Millennium Act focused on the dissemination and protection
of copy-control technology. There had been some precursors of this
change, but they applied to limited forms of copyrighted works in specified
media. In contrast, the Millennium Act shifted the focus of protection
from copying to copy-control technology for all works in all
media. In that respect it was revolutionary.
The dramatic change in the copyright enforcement paradigm appears to have
been justified by circumstances. Nevertheless, it posed and poses
significant dangers to progress in technology, media, and creative expression,
against which both Congress and the courts will have to be vigilant.
[a]—Deficiencies in Copyright Enforcement Addressed by the Millennium
Act
Because the Copyright Act of 1976 had been specifically designed to accommodate
new technology, the early trumpeting of "cyberspace law" was largely hyperbole.
Unlike the 1909 Act, whose structure had been too rigid to accommodate
the player piano, the 1976 Act was drafted so as to accommodate new media
and new technologies for communicating creative expression without substantive
change.
Yet the 1976 Act was hardly perfect. Its drafters could foresee the
inevitable advent of new technology and new media and their use to record
and dissemination creative expression. What they could not foresee
was the effect of the new technologies and new media in fostering industries
and uses of creative works that, from an economic or business perspective,
were qualitatively new. As consumers' and businesses' experience with
the Internet and the World Wide Web accumulated, it became apparent that
copyright law was inadequate to address these bold new media in two respects.
First, despite the efforts of its drafters to make the law technology independent,
the 1976 Act did not foresee the trend in the "copyright industries" that
changed the locus of publishing from substantial businesses to small businesses
and individuals' homes. Second, it did not foresee a need to adjust
the common-law rules of direct and secondary liability to provide proper
incentives for Internet service providers and their subscribers.
The Millennium Act addressed both these deficiencies. It addressed
the first—failure to reflect a change in the locus of copying—by implementing
two changes in technology and business that had already achieved sufficient
support in the marketplace to have been required by international consensus.
These were the use of protective technology to prevent unauthorized
use and copying of copyrighted works and the dissemination of copyright
management information with copies and phonorecords of copyrighted works.
The Millennium Act reinforced these international business developments
by prohibiting circumvention of protective technology and removing or altering
copyright management information without authorization.
To address the second deficiency, the Millennium Act included complex provisions
giving Internet service providers a "safe harbor" from direct and secondary
liability for copyright infringement in connection with their transmitting,
caching, storing or linking to infringing material. The "safe harbor"
left the law of both direct and secondary liability and its future development
intact; it merely provided limitations on remedies against service providers
under carefully defined circumstances. Congress calibrated the limitations
carefully to avoid burdening service providers and the Internet, while providing
balanced incentives for copyright owners to give notification of infringement,
service providers to "take down" infringing material in response to that
notification (or knowledge from other sources), users to challenge mistaken
claims of infringement, and copyright owners to refrain from making false
infringement claims.
While the statutory rules for limiting remedies against service providers
are unnecessarily obtuse and complex, they are modest in both scope and
effect. They do not replace the statutory law of direct liability
for infringement or the federal common law of secondary liability. Rather,
they supplement them. Indeed, the rules were designed to reflect,
augment, and make more certain developments in limiting liability that already
begun in the courts.
More important, the new rules primarily affect the liability of only one
class of businesses—Internet service providers. Except for a general
cause of action for certain misrepresentations, all of Section 512's various
and complex provisions are expressed in terms of conditions for limiting
remedies against service providers. If a service provider relies on
defenses under the copyright statute or the common-law doctrines of secondary
liability, and not the statutory exemption, the incentives that these provisions
seek are ineffective. Thus, the Millennium Act's Internet liability
provisions can be viewed as a limited, partial, special-purpose first codification
of the doctrine of secondary liability in copyright law, restricted to service
providers acting as conduits for others' copyrighted content.
[b]—The Justification for Focusing on Protective Technologies
Although the Millennium Act made two significant general changes in U.S.
copyright law, its prohibitions against circumventing copy-control technology
are conceptually the most important. They reflect a paradigm shift
in the focus of copyright law, backed by a strong international consensus.
For the first time ever in the United States, they impose primary
or direct liability in general not upon those who make unauthorized
copies, but upon those who provide or use the technology for doing so. To
see why this represents a fundamental change in copyright law and to appreciate
its rationale and its implications for the future require some discussion.
Since its advent as a distinct field of law, copyright has always assumed
that authors' and producers' interests, and therefore the incentive to create,
could be advanced by controlling unauthorized copying at the source. As
its very name suggests, copyright law seeks to control the making of unauthorized
copies of copyrighted works by giving content producers a right to control
copying of their recorded creative expression through civil and criminal
sanctions. The copyist, rather than the maker of copying machines
or devices, has traditionally been the focus of these sanctions. Providers
of copying technology have been subject, if at all, only to potential secondary
liability for inducing or contributing to infringement or vicariously profiting
from it.
Moreover, the standard of liability for contributory infringement, announced
for copyright law in the famous Sony decision, requires that general-purpose
copying equipment be incapable of "substantial noninfringing use" before
secondary liability may be imposed for making or marketing it. For
example, a videocassette recorder or photocopier must be shown to have no
substantial use, other than making unauthorized copies, before its manufacture
of sale can be enjoined on ground that they contribute to others' copyright
infringement. As the Sony decision itself illustrated, this
is a tough standard to meet. It allows most general-purpose copying
equipment to be manufactured, imported and sold without liability, despite
incidental and sometimes significant use for infringing purposes.
This regime of copyright, which controlled copying but not the machines
that make copying possible, worked well from the dawn of copyright law until
the 1990s. Yet its effectiveness reflected the capabilities of then-available
copying technology and the consequent structure and organization of the
"copyright industries." Until the advent of the Internet, producing
books, magazines, phonorecords, and movies required a significant investment
in production or copying equipment, which generally had a bulk and weight
comparable to its price. In addition, the results of production—the
tangible copies of books, magazines, records, and movies—had a certain physical
bulk. Consequently, their production and distribution required plants
and distribution systems analogous to those for other tangible products.
These economic and physical realities required production, copying and distribution
of copyrighted products to take place almost exclusively upon the business
premises of publishers, producers and distributors of financial substance
and some physical size. The law could control copying and distribution
of copyrighted works simply by focusing on the activities of these businesses
and subjecting their unauthorized activities to civil sanctions and criminal
penalties, which it did. Enforcing copyright protection presented
little practical difficulty, since it was easy to find these substantial
firms and to monitor their activities.
Of course anyone could make unauthorized copies, but technology then existing
did not give anyone but relatively substantial firms the economies of scale
necessary to make a profitable business of copying rapidly, in high volume,
at low cost, and with high quality. Photocopying technology is a good
example. In adopting the Copyright Act of 1976, Congress feared that
then-new photocopying machines might undermine the traditional copyright
industries and require new legislation. The threat, however, never
materialized, for reasons that in retrospect appear obvious. Photocopiers
can make copies of whole books, but only at a cost and with levels of quality
that are unacceptable for mass production. Although many a student
has stood over a copy machine to copy textbooks or parts of them, there
are no reports of businesses doing similar things in mass production because
other technologies, such as offset and typeset printing, are faster, cheaper
and better.
The so-called "digital revolution" changed all that. With digital
technology, it is now possible to make a copy of a substantial work—whether
a book, a collection of songs, a movie, a library of computer programs,
or an audiovisual work—with absolute accuracy and lightning speed, at the
click of a mouse. The new technology changed the economics of copying
and therefore the assumptions underlying copyright law.
Today the speed and accuracy of digital reproduction are well known. Yet
these aspects of digital technology are not the only source of the threat
to copyright industries that the new technologies pose. To see this,
one need only consider the compact discs (CDs) used to publish sound recordings.
When these disks first appeared, they were available only in "read
only" form. It took complex, expensive, special-purpose equipment,
economically analogous to printing presses, to produce them. As a
result, only record companies could afford to produce them with acceptable
quality. Despite the fact that these machines could stamp out new
disks, with perfect digital accuracy, every few seconds, they posed no threat
to the traditional copyright industries. Their accuracy, speed, and
low cost were irrelevant because their mass production required a substantial
capital investment and substantial operating expertise, which only a substantial
business could provide. As with books and films, acts of illicit copying
could be policed by locating and scrutinizing these substantial businesses,
so no change in the copyright regime was required.
What changed this picture was not greater speed or accuracy, which could
hardly have been possible, but a drastic reduction in the cost of capital
equipment for copying. As compact-disc technology improved, the equipment
to make CDs became cheaper and cheaper. As of late 1999, a compact-disc
aficionado can purchase reliable equipment for copying CDs at a cost of
several hundred dollars from on-line sources. With copying technology
now available to anyone at prices that any consumer or backyard business
can afford, illicit copying is no longer limited to substantial businesses.
The Internet changed the economics of copying similarly. Moreover,
it did so not just for a single medium, like compact disks. Rather,
it did so for virtually any recorded expression. Using electronic
mail attachments and Web browsers, a single small business or individual
can now distribute a file of digital data to innumerable persons and places
in seconds. That file may contain data, computer programs, or digitized
sound recordings, such as those taken from compact disks. Thus a single
person, with a minimal capital investment in a personal computer system,
can become a publisher of text, images, software, music, or music videos.
As the bandwidth and consequently the speed of Web access connections
increases, digitized television programs and eventually full-length movies
will become subject to this sort of instantaneous, high-quality digital
piracy.
These changes in technology, and the consequent changes in capital costs,
thus produced a sea change in the locus of copying, from substantial
businesses to anyone with an interest in copying and a modest capital investment.
With fast, reliable, and accurate copying technology now available
to anyone at prices that any consumer or garage business can afford, illicit
copying is no longer limited to substantial businesses. Anyone with
the will and a credit card can become a music, software, or video pirate
overnight—with the whole world as his or her commercial marketplace. In
short, the changes in technology made it possible for almost anyone who
wanted to do so to become a publisher or a pirate.
Even this turn of affairs, however, was not by itself sufficient to undermine
the practical basis of copyright enforcement, at least inside the United
States. There, the dike that we call the "rule of law" still held
back floodwaters of piracy that the sea change in the locus of copying made
possible. What finally broke the dike was another sea change, this
time in the nature of the use of copyrighted works.
For most of copyright history a principal object of the copyright industries
has been to provide customers with tangible, physical copies of copyrighted
works. Whether books, magazines, reels of tape or film, audiocassettes,
videocassettes, CDs, or now videodiscs, these copies and records have physical
bulk and require tangible distribution. It is therefore relatively
easy, at least in theory (although often difficult in practice), to control
illicit copying and distribution by following the chain of distribution
of the tangible objects embodying creative expression. The Copyright
Act of 1976 facilitated this aspect of copyright enforcement by including
distribution of copies and phonorecords within the copyright owner's
exclusive rights, [see 17 U.S.C. § 106(3),] as well as by its explicit
coverage of all media "now known or later developed[.]" [17 U.S.C.
§ 102(a)]
The final sea change, which indeed threatened a coup de grace to
traditional copyright enforcement, was a shift in consumer preferences—away
from the possession of tangible copies and phonorecords that must be physically
distributed and toward intangible and transient use of copyrighted content.
In the last three decades of the twentieth century, consumers came
to value transient use of copyrighted works, which copyright law calls "performances"
or "displays," as much or more than tangible copies of those works. The
so-called "digital revolution" and the Internet no doubt assisted and accelerated
this trend, but the change in consumer preferences was and is a separate
economic phenomenon independent of any particular technology.
This change in consumer preference has several sources. First, the
broadcast industries (radio and television), as well as the cable industry,
had accustomed consumers to taking information and entertainment "on the
fly," making copies only occasionally, as needed or desired, with the aid
of audio and video recording equipment. Second, copy-rental industries,
such as videocassette rental stores, reinforced this preference by allowing
consumers to pay a lower price to make one or several performances of a
work of creative expression at their leisure, rather a higher price to buy
a durable copy of it. The ubiquity of video-rental stores testifies
to the strong response that both this opportunity and its price advantage
has evoked in consumers.
Third—and perhaps most important for the future—the rapid pace of change
and development in every field of human endeavor often makes tangible copies
of information works obsolete soon after they are produced. Today's
developments in technology, business, science, law and politics are rapidly
replaced by tomorrow's and are often soon rendered incomplete or obsolete.
Everyone wants the latest news, and whole industries have grown up
to supply it, in every field from law to investing to medicine for
the layperson. The result of this shift in consumer preferences toward
absolutely current information has been a marked transition to continuously
updated sources, such as continuous television newscasts, frequent newsletters,
centralized databases, and the Internet. There is even a trend toward
accessing and using software over the Internet, so that the software used
is always the latest version and release.
Thus, what ultimately motivated the Millennium Act thus was not just a change
in technology. Rather, it was a coalescence of changes—in business,
economics, and consumer tastes—all ultimately wrought by the changes in
technology but having independent causes and distinct legal and social significance.
All of these forces motivated and are still motivating consumers to
prefer—and businesses to produce—transient performances or displays of copyrighted
works rather than tangible copies that, like old books on a dusty shelf,
may be unwanted, unused, too expensive, or practically obsolete.
This trend toward greater reliance on transient use and less reliance on
tangible copies is unlikely to reverse. Youth today are raised in
an environment of ubiquitous transient entertainment and information, in
which they are literally bombarded with new sounds, images and information
that change from second to second. As a result, few growing up in
the developed world today are unlikely ever to have the same veneration
for physical copies that once attached, for example, to a good book when
in was the only way of preserving either information or entertainment. The
immediate post-Gutenberg days, in which a single book by itself may have
been enough to motivate a marriage on economic grounds, are probably gone
forever.
From the legal perspective, this trend toward transient use of copyrighted
content has an important consequence. It makes copyright enforcement
much more difficult. Intangible "distribution" of transient copies
over computer networks does not leave a physical trail of copies or phonorecords
to follow to an illicit source. Nor does it involve a series of rentals
or transfers, which may be noticed by third parties, if not documented.
Instead, there is often nothing to follow but a cold trail of evanescent
electrons, undocumented except perhaps in "back-up" archives of Internet
nodes by unknown service providers. Where anyone can make and distribute
high-quality copies quickly, with minimal capital investment, and where
there is no trail of tangible items to pursue, tracing illicit copies to
their source becomes an untenable approach to copyright enforcement.
It might have been otherwise. Just as electronic technology can facilitate
the rapid and widespread distribution of intangible copies, it is capable
of accounting for and tracing that distribution "on the fly." Requiring
this sort of accounting, however, would risk contravening two fundamental
policies that are both crucial to healthy development of the Internet and
central to the American way of life: freedom and privacy.
From its inception, Americans have viewed the Internet as a reflection of,
and central to, their rights as free citizens. Long before the Internet
became a viable tool of multinational business, its effects on citizens'
awareness and participation in the political process were predicted and
welcomed. To a great extent that prediction has been realized. The
Internet has become, for many, a free-speech forum that compares with the
old Hyde Park in London as a jetliner to an ox cart.
Perhaps the Internet and the Web will become indispensable tools of democracy
and citizen participation in the new Millennium. The Internet, the
argument goes, will realize its greatest potential only when it and those
who use it are free to do what they will, subject only to the restraints
of civilized behavior and civil and criminal sanctions generally.
At the same time, policies of privacy and personal autonomy demand that
the Internet not be used to monitor or control the lives of individual citizens
or to collect or reveal private information about them in individually identifiable
form. These policy choices are so central to the ethos and constitutional
structure of the United States that the Millennium Act itself reiterates
them explicitly, although no reiteration is necessary because, at least
as concerns state action, they have constitutional force.
Even if practical considerations of cost and speed did not, these fundamental
policy choices—freedom and privacy—would preclude enforcing copyright law
by tracing and scrutinizing the acts of individual consumers as they make
private, individual, transient use of copyrighted works on the Internet.
Thus these important policies preclude the types of technical expedients—tracing
of individual works and their uses by all users—that might make copyright
enforceable in the Internet age even against atomized and widely dispersed
pirates.
These, then, are the facts of life in the copyright industries at the dawn
of the Third Millennium. Copying with great speed, ease and accuracy
involves extremely low capital costs. As a result, virtually everyone with
an interest in doing so can be a publisher or a pirate; indeed, this fact
has been identified as one of the chief characteristics of the new technology.
Infringers are thus widely dispersed and difficult to locate and identify.
Add to this mix an accelerating trend in consumer tastes toward increasing
transient use of copyrighted works, and a political and legal regime that
precludes monitoring transient uses of copyrighted works, even if doing
so were economically feasible, thereby insuring that most individual infringers
remain anonymous and unprosecuted. The result is a business, economic,
and social environment that makes it virtually impossible to control copying
by the means used by copyright since its advent—identifying, locating, and
imposing legal sanctions on the acts of producing tangible, physical copies
of creative expression.
These facts highlight the limited choices available to the international
community as it considered the two WIPO treaties, and consequently to Congress
as it considered the Millennium Act. In essence, there were only three
reasonable alternatives in addressing the practical deficiencies of copyright
enforcement. First, Congress could have taken the traditional approach
of focusing on substantial businesses. Doing so, however, would have
raised a risk of watching copyright enforcement dissolve like sugar in a
hard rain. Second, Congress could have encouraged the tracing of individual
transactions in copyrighted matter, in the face of immense practical difficulties
in doing so, and at the risk of undermining fundamental policies of freedom
and privacy and impairing the vast potential of the Internet for promoting
democratic values. Finally, Congress could and did shift the focus
of copyright enforcement from copying to copying and copy-control technology,
in an attempt to control illicit copying by controlling the technology used
to make illicit copies. Given this Hobson's choice, both Congress
and the international community understandably chose the last one as the
only realistic alternative consistent with democratic values.
[c]—The Risks of Focusing on Protective Technologies
As Congress considered the bills that became the Millennium Act, some sixty
copyright professors wrote a letter advising against this approach.
They correctly noted that copyright law has traditionally focused on the
makers of copies, rather than purveyors of copying technology. Their
ultimate advice, however, was misguided, for Congress really had no other
choice. Not only was Congress required to do what it did by international
agreements already signed at the diplomatic level. It also was constrained
by economics and politics—including the fundamental goals of freedom and
privacy—to do what it did or to watch copyright protection and its vital
economic incentives for creativity wither and die as the Internet developed.
Understandably, Congress refused to take the latter course.
Nevertheless, the approach that Congress took is a great gamble insofar
as its practical and economic consequences are concerned. At a basic
practical level, it is unclear whether even the most sophisticated protective
technology will be able to survive the sort of persistent and determined
worldwide assault of "hackers" that the Internet itself makes possible.
At the level of economic policy, Congress encouraged private groups
to set technical standards, including those for identifying and protecting
copyrighted works, updating cached information, and providing copyright
management information. Indeed, much of the Millennium Act's conceptual
scheme depends upon privately developed technical standards for its successful
operation. Yet in prohibiting others from defeating standard technologies
or marketing devices to do so, Congress gave the standard-setters dangerously
formidable economic power, with a risk of ripening into social and political
power. Moreover, by giving the imprimatur of law to technical standards
set by private bodies, Congress risked allowing those private bodies to
hinder or halt the progress of technology for private ends.
Human history is filled with examples of group action for ostensibly laudable
purposes that went awry and held back progress. The Guilds of the
Middle Ages helped provide employment security, train new generations of
apprentices, and insure the quality and consistency of products and services.
Yet they used their considerable economic power to hold back progress
in industry, technology and commerce for centuries.
As if to underscore this danger, the Millennium Act itself engraves into
stone, in the very substance of the United States Code, five specific technologies
for videocassette technology. [See 17 U.S.C. § 1201(k), omitted from
edited version in these materials.] A less appropriate use of the federal
legislative process, and one more at variance with the forward-looking,
technology- independent approach of the Copyright Act of 1976, would be
difficult to imagine. More than anything else in the Millennium Act,
these explicit prohibitions against new or alternative technology suggest
the real danger that lies down the road of technological copyright enforcement
on which the WIPO treaties and the Millennium Act started; for they are
nothing less than prohibitions on technological progress by legislative
fiat.
To be sure, these specific technology mandates are minor in scope and narrow
in application. Nevertheless, the trend they represent is as inimical
to the spirit of the Copyright Clause and the ethos of progress motivated
by the protection of intellectual property as the medieval Church's threat
to excommunicate Galileo if he did not recant his heliocentric theory of
the solar system. No person who values scientific and technological
progress and the freedom to innovate can read these provisions—as dry, technical
and narrow as they may be—without feeling a shiver. For they
state, in no uncertain terms and with all the authority of the Congress
of the United States, that progress stops here. Ben Franklin's and
Thomas Jefferson's souls will not rest easy while such statutes remain in
force.
Having relied so much on private groups to set technological standards for
what may well by the dominant media of the Third Millennium, Congress should
exercise extreme diligence to insure that those do not use that power to
hold back progress as the Guilds once did. The courts, within the
limitations set by Congress, should do likewise. It would be ironic
indeed if copyright law, designed as it is to encourage progress in entertainment,
publishing, and the arts, were used as a pretext for, or had the effect
of, holding back progress in the information technology that supports and
advances all of these industries. And it would, of course, be a much
greater irony if the technologies used for copyright protection were to
degenerate into instruments for controlling the dissemination and substance
of copyrighted content, thereby rendering illusory the promise of the Internet
as a tool of freedom. Only Congress and the courts can insure that this
does not happen, and that the producers of copyrighted works or the technologies
that protect them do not become the Guilds of the Third Millennium.
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