FALL 2010
Cyberlaw
Course No.: 9200-710 (& 810)-001
Course ID:  85723 & 85725
Time: M, W 4:45-6:15 p.m.
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Professor Jay Dratler, Jr.
Across from Room 231D (IP Alcove)
Home: 330-835-4537
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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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