FALL 2010
Course No.: 9200-710 (& 810)-001
Course ID:  85723 & 85725
Time: M, W 4:45-6:15 p.m.
Room TBD
Professor Jay Dratler, Jr.
Across from Room 231D (IP Alcove)
Home: 330-835-4537
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008, 2010  Jay Dratler, Jr.  
For permission, see CMI.

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.

* * *

[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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