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FAIR USE & THE INTERNET: A SUMMARY OF S. 2037
DISTRICT OF COLUMBIA BAR
ARTS, ENTERTAINMENT AND SPORTS LAW SECTION
October 1, 1998

BACKGROUND - COPYRIGHT

• Copyright Act, 17 U.S.C. 106, exclusive rights –
• Reproduction, prepare derivative works, public distribution, performance and display, public performance of sound recordings by digital audio transmission.
• Fair use, 17 U.S.C. 107 –
• Affirmative defense
• Favored uses: criticism, comment, news reporting, teaching, scholarship or research.
• Four facts considered: purpose and character of use (commercial or nonprofit?); nature of work (published or unpublished?); amount of work used in relation to whole creation (qualitative or quantitative?); effect of use on market for work (probably most important factor).

COPYRIGHT AND THE INTERNET

• Domestic –  Because of ease of access and distribution in Internet environment, creators divested of control of dissemination of works. In 1994 and 1995, PTO published Green and White Papers, respectively, considering whether copyright laws needed to be changed in light of Internet technology. Limited changes were recommended. PTO also held Conference on Fair Use (CONFU), and published report in 1997.
• International – World Intellectual Property Organization (WIPO) meeting on Copyright and Performances and Phonograms Treaties.
• Concern - Digital encryption and electronic contracts in Internet environment as substitutes for copyright to protect creator’s rights. Problem with these systems is that user can be deprived of rightful access and use rights (e.g. fair use). With increased access and ease of distribution, difficulty is in striking fair balance between creator and user rights.

DIGITAL MILLENNIUM COPYRIGHT ACT OF 1998 (S. 2037)

• Senate version is presently combined with House version and in conference.
• Congress specifically states in legislative history that fair use applies equally to digital realm.

Title 1: WIPO COPYRIGHT AND PERFORMANCES AND PHONOGRAMS TREATIES

• Provides for national treatment and Berne minimum standards for digital works.
• Key Copyright Treaty provisions:
  • Explicitly recognizes that computer programs are covered by Berne;
  • Makes broad right of public distribution;
  • States that right of communication to public includes Internet;
  • States that reproduction right applies in digital environment;
  • Creates legal protection against circumventing technology measures, such as
  • encryption and password protection
  • Creates legal protection for rights management information.
  • Performances and Phonograms Treaty:
  • Legislation gives sound recording
  • copyright owners same protection as for other Berne works.

ANTICIRCUMVENTION

• Enforces private parties’ use of technological measures.
• Creates sanctions for circumvention, and producing and distributing products or providing services with the primary function of circumvention.
• Importantly, a distinction is drawn between technological measures that protect access to copyrighted works and those that protect rights of copyright.
• Manufacturers of consumer electronics, telecommunications and computing products are not required to accommodate particular technological measures.

LIBRARY BROWSING

• Permits nonprofit libraries, archives and educational institutions to access commercially exploited copyrighted works solely to determine whether they wish to acquire a copy of the work.

REVERSE ENGINEERING

• Allows reverse engineering and circumvention to achieve interoperability, i.e. to identify and analyze computer programs, per Sega decision.
• Encryption testing tools also permitted, as long as they have substantial legitimate use, e.g. testing of mathematical algorithms owned by government.

COPYRIGHT MANAGEMENT INFORMATION (CMI)

• CMI used to track and monitor uses of copyrighted works, license rights and indicate attribution , creation and ownership. Includes title of work, author, copyright owner, writer, performer or director.
• CMI is not mandated, but if included cannot falsify, remove or alter. The definition of CMI may by expanded by Copyright Office regulation.
• Prohibited acts:
  • Knowingly provide false CMI, or distribute false CMI with intent to induce, enable, facilitate or conceal infringement;
  • Intentionally remove or alter CMI, or knowingly distribute such information;
  • Distribute or perform works with knowledge or reason to know that they contain altered or removed CMI, and with knowledge or reason to know that the acts will induce, enable, facilitate or conceal infringement.
  • Safe harbor for broadcasting entities with problems transmitting CMI: radio and television broadcasters, cable systems and persons who provide programming who do not intend to induce, engage, facilitate or conceal infringement, may be eligible for limitation on liability.

CIVIL REMEDIES AND CRIMINAL PENALTIES

• Criminal penalties do not apply to nonprofit libraries, archives and educational institutions.
• Civil remedies include temporary and permanent injunctions, and impoundment and destruction of offending devices or products.
• Actual and statutory damages are available, with treble damages for repeat offenders.
• Innocent infringement for nonprofit libraries, archives and educational institutions that are not aware and have no reason to believe that an act is a violation.

PROTECTING PERSONALPRIVACY INTERESTS

• Permits Internet users to protect their privacy by disabling or bypassing technologies like cookies, which invade user privacy but may be described as technological protections measures.

LAW ENFORCEMENT

• Law enforcement and intelligence operatives may engage in actions that would otherwise be proscribed by this legislation.

TITLE II – INTERNET SERVICE PROVIDERS (see outline of other panelist)

TITLE III -- COMPUTER MAINTENANCE OR REPAIR

• Amends section 117 and overturns MAI v. Peak .
• Allows independent service providers not related to the owner or lessee of a computer to make repairs to the machine without liability for turning on the machine and thereby making an unauthorized reproduction into RAM.

TITLE IV – EPHEMERAL RECORDINGS

• Extends ephemeral recording exemption to broadcast radio and television stations when they make nonsubscription digital broadcasts. Exemption is similar to privilege that broadcasters have with analog broadcasts.
• Permits transmitting organizations to make ephemeral recordings, even though their activities would otherwise violate anticircumvention provisions.

DISTANCE EDUCATION

• In consultation with copyright owners, and nonprofit educational institutions, libraries and archives, the Copyright Office is required within six months of enactment of this bill to report to Congress on how to promote distance education through digital technologies, maintaining a balance between copyright owners and users.

EXEMPTIONS FOR LIBRARIES AND ARCHIVES

• Section 108 of the Copyright Act currently permits libraries and archives to make and distribute a limited number of copies of works without copyright owner permission.
• Legislation permits libraries or archives to make for themselves, or another library or archive, up to three copies (presently one copy) in digital as well as analog formats. Digital copies may not be distributed to public outside of premises of library or archive.
• Also allows library or archive to make and use three copies or phonorecords (currently one copy) in digital or analog format with same restriction of availability to library or archive premises.
• Copies may also be made to update obsolete formats, to ensure that copies of works remain available for patrons. Format is obsolete if machine or device is no longer manufactured or reasonably available commercially.
• Important: library or archives must be physical , not virtual premises.

UPDATE: The Digital Millennium Copyright Act passed the House in October 1998, and is expected to be signed by the President shortly. This important piece of legislation clarifies that works in the digital realm will receive the same level of protection as now exists in the traditional analog world. For example, the digital bits that make up a book on the Internet will be protected in the same way as the bound volume itself. Using technological and other measures, an Internet copyright owner can now prevent unauthorized access to and distribution of its works, and it will be a crime to disable or tamper with a system that blocks copying. The bill will also provide protection from liability for service providers that merely transmit materials of others.

© 1998 Elliott Alderman