H. R. Rep. No. 551 (Part 2), 105th Cong., 2d Sess., 23-26
(excerpts)
(July 22, 1998)
PURPOSE AND SUMMARY
The purpose of H.R. 2281, the Digital Millennium Copyright Act of 1998,
is to implement two international treaties (i.e., the ‘Copyright
Treaty,’ and the ‘Performances and Phonograms Treaty’)
signed by the United States and more than 125 other countries before the
World Intellectual Property Organization (WIPO). * * * With these
proposed revisions, the Committee believes it has appropriately balanced
the interests of content owners, on-line and other service providers,
and information users in a way that will foster the continued development
of electronic commerce and the growth of the Internet.
BACKGROUND AND NEED FOR LEGISLATION
LEGISLATIVE HISTORY
Much like the agricultural and industrial revolutions that preceded it,
the digital revolution has unleashed a wave of economic prosperity and
job growth. Today, the information technology industry is developing versatile
and robust products to enhance the lives of individuals throughout the
world, and our telecommunications industry is developing new means of
distributing information to these consumers in every part of the globe.
In this environment, the development of new laws and regulations
will have a profound impact on the growth of electronic commerce and the
Internet.
In recognition of these developments, and as part of the effort to begin
updating national laws for the digital era, delegates from over 150 countries
(including the United States) convened in December 1996 to negotiate the
Copyright Treaty and the Performances and Phonograms Treaty under the
auspices of the World Intellectual Property Organization (WIPO). In
July 1997, the Clinton Administration submitted the treaties to the Senate
for ratification and submitted proposed implementing legislation to both
the House and the Senate.
On May 22, 1998, the Committee on the Judiciary reported H.R. 2281, the
‘WIPO Copyright Treaties Implementation Act’ to the House. H.R.
2281 was sequentially referred to the Committee on Commerce for its consideration,
initially for a period not to extend beyond June 19, 1998. Meanwhile,
on May 14, 1998, the Senate adopted S. 2037, the ‘Digital Millennium
Copyright Act.’ The Senate included provisions to explicitly
authorize reverse engineering for purposes of achieving interoperability
between computer products. The Senate also added a provision to
ensure that librarians and archivists could use the latest technology
to preserve deteriorating manuscripts and other works. It also added
a so-called ‘no mandate’ provision with respect to the design of
consumer electronics, telecommunications, and computer products.
On June 5, 1998, the Subcommittee on Telecommunications, Trade, and Consumer
Protection held a legislative hearing on H.R. 2281. The Committee
had been advised that both H.R. 2281, as reported by the Committee on
the Judiciary, and S. 2037, as passed by the Senate, were ‘compromises’
that enjoyed `broad support.’ But it became apparent at the
hearing that both bills faced significant opposition from many private
and public sector interests, including libraries, institutions of higher
learning, consumer electronics and computer product manufacturers, and
others with a vital stake in the growth of electronic commerce and the
Internet. In light of the serious concerns raised at the hearing, and
in recognition of the complexity of the issues posed by the legislation,
Chairman Bliley requested that the Committee's referral be further extended.
The Committee's referral was subsequently extended, for a period not to
extend beyond July 22, 1998.
* * *
PROHIBITING CERTAIN DEVICES
H.R. 2281, as reported by the Committee on the Judiciary, would regulate–in
the name of copyright law–the manufacture and sale of devices that can be
used to improperly circumvent technological protection measures. * *
* The anti-circumvention provisions (and the accompanying penalty
provisions for violations of them) would be separate from, and cumulative
to, the existing claims available to copyright owners. * * *
Article 1, Section 8, Clause 8 of the United States Constitution authorizes
the Congress to promulgate laws governing the scope of proprietary rights
in, and use privileges with respect to, intangible ‘works of authorship.’
As set forth in the Constitution, the fundamental goal is ‘[t]o promote
the Progress of Science and useful Arts. * * *.’ In the
more than 200 years since enactment of the first Federal copyright law in
1790, the maintenance of this balance has contributed significantly to the
growth of markets for works of the imagination as well as the industries
that use such works.
Congress has historically advanced this constitutional objective by regulating
the use of information—not the devices or means by which the information
is delivered or used by information consumers—and by ensuring an appropriate
balance between the interests of copyright owners and information users.
For example, Section 106 of the Copyright Act (17 U.S.C. Sec. 106)
establishes certain rights copyright owners have in their works, including
limitations on the use of these works without their authorization. Likewise,
Sections 107 through 121 of the Copyright Act (17 U.S.C. 107-121) set forth
the circumstances in which such uses will be deemed permissible, or otherwise
lawful even though unauthorized. And Sections 501 through 511, as
well as Section 602 of the Copyright Act (17 U.S.C. 501-511, 602) specify
rights of action for copyright infringement, and prescribe penalties in
connection with those actions.
In general, all of these provisions are technology neutral. They do
not regulate commerce in information technology, i.e., products and devices
for transmitting, storing, and using information. Instead, they prohibit
certain actions and create exceptions to permit certain conduct deemed to
be in the greater public interest, all in a way that balances the interests
of copyright owners and users of copyrighted works. In a September
16, 1997, letter to Congress, 62 copyright law professors expressed their
concern about the implications of regulating devices in the name of copyright
law. They said in relevant part:
“Although [they] would be codified in Title 17, [the anti-circumvention
provisions] would not be an ordinary copyright provision; liability under
the section would result from conduct separate and independent from any
act of copyright infringement or any intent to promote infringement. Thus,
enactment of [the anti-circumvention provisions] would represent an unprecedented
departure into the zone of what might be called paracopyright—an uncharted
new domain of legislative provisions designed to strengthen copyright
protection by regulating conduct which traditionally has fallen outside
the regulatory sphere of intellectual property law.”
While the Committee on Commerce agrees with these distinguished professors,
the Committee also recognizes that the digital environment poses a unique
threat to the rights of copyright owners, and as such, necessitates protection
against devices that undermine copyright interests. In contrast to
the analog experience, digital technology enables pirates to reproduce and
distribute perfect copies of works–at virtually no cost at all to the pirate.
As technology advances, so must our laws. * * *
FAIR USE IN THE DIGITAL ENVIRONMENT
H.R. 2281, as reported by the Committee on the Judiciary, provided that
‘[n]o person shall circumvent a technological protection measure that effectively
controls access to a work protected under Title 17, United States Code.’
The Committee on Commerce devoted substantial time and resources to
analyzing the implications of this broad prohibition on the traditional
principle of ‘fair use.’ A recent editorial by the Richmond Times-Dispatch
succinctly states the Committee's dilemma:
“Copyrights traditionally have permitted public access while protecting
intellectual property. The U.S. approach–known as ‘fair use’—benefits
consumers and creators. A computer revolution that has increased
access to information also creates opportunities for the holders of copyrights
to impose fees for, among other things, research and the use of excerpts
from published works. And digital technology—whatever that
means—could be exploited to erode fair use.”
The principle of fair use involves a balancing process, whereby the exclusive
interests of copyright owners are balanced against the competing needs of
users of information. This balance is deeply embedded in the long
history of copyright law. On the one hand, copyright law for centuries
has sought to ensure that authors reap the rewards of their efforts and,
at the same time, advance human knowledge through education and access to
society's storehouse of knowledge on the other. This critical balance is
now embodied in Section 106 of the Copyright Act (17 U.S.C. Sec. 106), which
grants copyright holders a ‘bundle’ of enumerated rights, and in Section
107, which codifies the ‘fair use’ doctrine. Under the Copyright
Act, ‘fair use’ may be made of a copyrighted work ‘for purposes such
as criticism, comment, news reporting, teaching * * * scholarship
or research’ under certain circumstances without the permission of
the author.
Fair use, thus, provides the basis for many of the most important day-to-day
activities in libraries, as well as in scholarship and education. It
also is critical to advancing the personal interests of consumers. Moreover,
as many testified before the Committee, it is no less vital to American
industries, which lead the world in technological innovation. As more
and more industries migrate to electronic commerce, fair use becomes critical
to promoting a robust electronic marketplace. The Committee on Commerce
is in the midst of a wide-ranging review of all issues relating to electronic
commerce, including the issues raised by this legislation. The digital
environment forces this Committee to understand and, where necessary, modernize
the rules of commerce as they apply to a digital environment—including
the rules that ensure that consumers have a stake in the growth in electronic
commerce.
The Committee was therefore concerned to hear from many private and public
interests that H.R. 2281, as reported by the Committee on the Judiciary,
would undermine Congress’ long-standing commitment to the concept of
fair use. A June 4, 1998, letter to the Committee from the Consumers’
Union is representative of the concerns raised by the fair use community
in reaction to H.R. 2281, as reported by the Committee on the Judiciary.
The letter states in part:
“These newly-created rights will dramatically diminish public access
to information, reducing the ability of researchers, authors, critics,
scholars, teachers, students, and consumers to find, to quote for publication
and otherwise make fair use of them. It would be ironic if the great
popularization of access to information, which is the promise of the electronic
age, will be short-changed by legislation that purports to promote this
promise, but in reality puts a monopoly stranglehold on information.”
The Committee on Commerce felt compelled to address these risks, including
the risk that enactment of the bill could establish the legal framework
that would inexorably create a ‘pay-per-use’ society. At the
same time, however, the Committee was mindful of the need to honor the United
States’ commitment to effectively implement the two WIPO treaties,
as well as the fact that fair use principles certainly should not be extended
beyond their current formulation. The Committee has struck a balance
that is now embodied in Section 102(a)(1) of the bill, as reported by the
Committee on Commerce. The Committee has endeavored to specify, with
as much clarity as possible, how the right against anti-circumvention would
be qualified to maintain balance between the interests of content creators
and information users. The Committee considers it particularly important
to ensure that the concept of fair use remains firmly established in the
law. Consistent with the United States' commitment to implement the
two WIPO treaties, H.R. 2281, as reported by the Committee on Commerce,
fully respects and extends into the digital environment the bedrock principle
of `balance' in American intellectual property law for the benefit of both
copyright owners and users.
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