[Congressional Record: June 23, 1998 (Extensions)]
[Page E1207-E1209]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr23jn98-33]


             THE WIPO COPYRIGHT TREATIES IMPLEMENTATION ACT

                                 ______


                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                         Tuesday, June 23, 1998

  Mr. COBLE. Mr. Speaker, I submit for the Record a copy of
correspondence between myself and Congressmen Boucher and Campbell on
the WIPO Copyright Treaties Implementation Act.

                                         House of Representatives,

                                   Committee on the Judiciary,

                                    Washington, DC, June 16, 1998.
     Hon. Tom Campbell,
     U.S. Representative for the 15th District of California,
         Washington, DC.
     Hon. Rick Boucher,
     U.S. Representative for the 9th District of Virginia,
         Washington, DC.
       Dear Tom and Rick: Thank you for visiting with me in my
     office recently regarding H.R. 2281, the ``WIPO Copyright
     Treaties Implementation Act.'' I appreciate the concerns you
     expressed with respect to H.R. 2281 as it was reported from
     the House Committee on the Judiciary.
       I expressed to you that I would consider your thoughts and
     respond to you in detail, and am pleased to do so in this
     letter.
       I believe that many of your concerns, which are enumerated
     in your substitute bill, H.R. 3048, have been addressed
     already in a reasonable manner in amendments to the bill
     adopted by the Subcommittee on Courts and Intellectual
     Property and the Committee on the Judiciary in the House and
     by the Committee on the Judiciary and on the floor in the
     Senate (regarding the Senate companion bill, S. 2037). Others
     have been addressed in legislative history in House Report
     105-551 (Part I) which accompanies the bill, as well as in
     Senate Report 105-190, which accompanies the Senate companion
     bill. Still others may be addressed as the House Committee on
     Commerce exercises its sequential jurisdiction over limited
     portions of the bill and as I work with interested members on
     developing a manager's amendment to be considered by the
     whole House. I anticipate including many of the amendments
     made by the Senate in the manager's amendment, along with
     other provisions. I anticipate that a conference will be
     necessary to reconcile the House and Senate versions of the
     bills.
       While I am unable to support the specific provisions of
     H.R. 3048, for reasons I will explain in this letter, I am
     willing to work with you in the coming weeks to address
     additional concerns regarding the impact of this legislation
     on the application of the ``fair use'' doctrine in the
     digital environment and on the consumer electronics industry.
     I wish to stress, however, that I believe the bill, as
     amended by the House and Senate thus far, and explained by
     both the House and the Senate Judiciary Committee reports,
     already addresses these issues in several constructive ways.
       I believe it is important, in order to recognize properly
     the efforts undertaken by the Congress and the Administration
     to address the concerns of the consumer electronics and fair
     use communities, to review the history of H.R. 2281 and to
     evaluate all of the provisions that have been either added to
     or deleted from the bill since its development leading to
     introduction in this Congress. As I am sure you will
     appreciate, I am sensitive to your concerns and have worked
     diligently with members and all parties involved to create a
     balanced and fair proposal that will result in the enactment
     of legislation this Congress.
       In February, 1993, the Administration formed the
     Information Infrastructure Task Force to implement
     Administration policies regarding the emergence of the
     Internet and other digital technologies. This task force
     formed a Working Group on Intellectual Property Rights to
     investigate and report on the effect of this new technology
     on copyright and other rights and to recommend any changes in
     law or policy. The working group held a public hearing in
     November, 1993, at which 30 witnesses testified. These
     witnesses represented the views of copyright owners,
     libraries and archives, educators, and other interested
     parties. The working group also solicited written comments
     and received over 70 statements during a public comment
     period. Based on oral and written testimony, the working
     group released a ``Green Paper'' on July 7, 1994. After
     releasing the Green Paper, the working group again heard
     testimony from the public through four days of hearings held
     around the country. More than 1,500 pages of written
     testimony were filed during a four-month comment period by
     more than 150 individuals and organizations.
       In March, 1995, then-Chairman Carlos Moorhead solicited
     informal comments from parties who had submitted testimony
     regarding the Green Paper, including library and university
     groups, and computer and electronics groups, in order to work
     effectively with the Administration on jointly developing any
     proposed updates to U.S. copyright law that might be
     necessary in light of emerging technologies.
       In summer, 1995, the working group released a ``White
     Paper'' based on the oral and written testimony it has
     received after releasing the Green Paper. The White Paper
     contained legislative recommendations which were developed
     from public comment in conjunction with consultation between
     the House and Senate Judiciary Committees, the Copyright
     Office and the Administration.
       In September, 1995, Chairman Moorhead in the House and
     Chairman Hatch in the Senate introduced legislation which
     embodied the recommendations contained in the White Paper and
     held a joint hearing on November 15, 1995. Testimony was
     received from the Administration, the World Intellectual
     Property Organization and the Copyright Office. The House
     Subcommittee on Courts and Intellectual Property held two
     days of further hearings in February, 1996. Testimony was
     received from copyright owners, libraries and archives,
     educators and other interested parties. In May, 1996, the
     Senate Judiciary Committee held a further hearing. Testimony
     was received from copyright owners, libraries and other
     interested parties. These hearings were supplemented with
     negotiations in both bodies led by Representative Goodlatte
     (as authorized by Chairman Moorhead) in the House and by
     Chairman Hatch in the Senate. Further negotiations were held
     by the Administration in late summer and fall of 1996.
       During consideration of the ``NII Copyright Protection Act
     of 1995,'' Chairman Moorhead requested that Mr. Boucher and
     Mr. Berman of California lead negotiations between interested
     parties regarding the issue of circumvention. While these
     negotiations were helpful in streamlining and clarifying the
     issues to be discussed, they ultimately did not result in an
     agreement.
       It is important to note that shortly after its
     establishment, the Administration task force's working group
     convened, as part of its consideration, a Conference on Fair
     Use (CONFU) to explore the effect of digital technologies on
     the doctrine of fair use, and to develop guidelines for uses
     of works by libraries and educators. Because of the
     complexities involved in developing broad-based policies for
     the adaptation of the fair use doctrine to the digital
     environment, and due to much disagreement among the
     participants (including within the library and educational
     communities), CONFU did not issue its full report until
     nearly two years after it was convened. An Interim Report was
     released by CONFU in September 1997 on the first phase of its
     work. No consensus was reached on how to apply the fair use
     doctrine to the digital age. In fact, the CONFU working group
     on interlibrary loan and document delivery concluded in a
     report to its Chair that it is ``premature to draft
     guidelines for digital transmission of digital documents.''
     The work of CONFU continues today and a final report should
     be released soon with no agreed conclusions. As you can see,
     developing sweeping legislation, rather than relying on
     court-based ``case or controversy'' applications of the
     doctrine, is exceedingly difficult to do.
       Since before the debate began with the establishment of a
     task force in the United States in 1993, the international
     community had also been considering what updates should be
     made to the Berne Convention on Artistic and Literary Works
     in order to provide adequate and balanced protection to
     copyrighted works in the digital age. This culminated in a
     Diplomatic Conference hosted by the World Intellectual
     Property Organization at which over 150 countries agreed on
     changes needed to accomplish this goal.
       This goal was not reached easily, however, and many of the
     issues being debated by the Administration and the Congress
     in the United States concerning fair use and circumvention
     were aired at the Diplomatic Conference, with significant
     changes made to accommodate fair use concerns and the effect
     on the consumer electronic industries. Representatives of
     both groups participated in the Conference and aggressively
     sought to maintain proper limitations on copyright. They
     succeeded. For example, language was added to ensure that
     exceptions such as fair use could be extended into the
     digital environment. The treaty also originally contained
     very specific language regarding obligations to outlaw
     circumvention. It was changed to state that all member
     countries ``shall provide adequate legal protection and
     effective legal remedies against the circumvention of
     effective technological measures that are used by authors
     in connection with the exercise of their rights under this
     Treaty.'' This left to each country the development of
     domestic legislation to accomplish this goal.
       After the United States signed the WIPO Treaties, the
     Administration again began negotiations led by the Department
     of Commerce and the Patent and Trademark Office, in
     consultation with the Copyright Office and the Congress, to
     develop domestic implementing legislation for the treaties.
     It built upon the efforts already accomplished by the release
     of the Green Paper and the White Paper and all of the
     testimony and comments heard as part of that process, the
     House and Senate bills introduced in the 104th Congress and
     all of the hearing testimony and negotiations associated with
     them, and the negotiations held by the Administration leading
     up to and during the Diplomatic Conference. Again, comments
     were solicited from fair use and consumer

[[Page E1208]]

     electronics groups. In the summer of 1997, the Administration
     submitted to the Congress draft legislation to implement the
     treaties. In July, 1997, Chairman Hatch and I introduced the
     current pending legislation in each house. Importantly, the
     legislation was tailored to match the treaty language by
     establishing legal protection and remedies not against any
     technological measures whatsoever, but only ``against the
     circumvention of effective technological measures that are
     used by authors in connection with the exercise of their
     rights.''
       The fair use and consumer electronics groups succeeded,
     just as they had at the Diplomatic Conference, in assuring in
     the introduced version of the bills the maintenance of proper
     limitations on copyright. The Administration had considered
     originally banning both the manufacture and use of devices
     which circumvent effective technological measures and had no
     specific provision on fair use, since Section 107 of the
     Copyright Act would, of course, continue to exist after
     enactment of the legislation. The word ``use'' was eliminated
     in the device provision and a specific provision relating to
     the adoption of the fair use doctrine in the digital
     environment was added.
       As it was introduced, H.R. 2281 contained two important
     safeguards for fair use. First, the bill dealt separately
     with technological measures that prevent access and
     technological measures that prevent copying. As to the
     latter, the bill contained no prohibition on the act of
     circumvention itself, leaving users free to circumvent such
     measures in order to make fair use copies. Second, the
     savings clause in subsection 1201(d) ensures that defenses to
     copyright protection, including fair use, are unaffected by
     the prohibitions on circumvention. For example, circumvention
     of an effective technological measure that controls access to
     a work does not preclude, or affect in any way, a defense of
     fair use for copying the work. Moreover, the bill as
     introduced did not expand exclusive rights or diminish
     exceptions and limitations on exclusive rights.
       Again, a series of legislative hearings were held by the
     House and Senate Judiciary Committees at which testimony was
     again heard from copyright owners, libraries and archives,
     educators, consumer electronics groups and other interested
     parties. In February, 1998, almost five years to the date of
     the establishment of the Administration's working group,
     taking into account all of the concessions and negotiations
     leading up to it, the first markup was finally held in
     Congress by the Subcommittee on Courts and Intellectual
     Property on this important legislation. As is evident by the
     timetable involved in the development of this legislation,
     and considering the number of hearings, negotiations and
     conferences dedicated to its contents, this bill certainly
     has not been placed on any ``fast-track.''
       In the course of Subcommittee and Committee consideration
     of the bill in the House, the gentleman from Massachusetts,
     the Ranking Democratic Member of the Subcommittee, Mr. Frank,
     and I, proposed a number of improvements to the bill, which
     were adopted by the Committee, that benefit libraries and
     nonprofit educational institutions. We introduced a special
     ``shopping privilege`` exemption that permits nonprofit
     libraries and archives to circumvent effective technological
     measures in order to decide whether they wish to acquire
     lawfully a copy of the work. We added a provision that
     requires a court to remit monetary damages for innocent
     violations of sections 1201 or 1202. And we eliminated any
     possibility that nonprofit libraries and archives or
     educational institutions can be held criminally liable for
     any violation of sections 1201 or 1202, even when such
     violations are willful.
       These changes add protection to language already included
     in the bill which safeguard manufacturers of legitimate
     consumer electronic devices. Unlike the ``NII Copyright
     Protection Act of 1995,'' which would have prohibited devices
     ``the primary purpose or effect of which is to circumvent,''
     H.R. 2281 sets out three narrow bases for prohibiting
     devices. A device is prohibited under section 1201 only if it
     is primarily designed or produced to circumvent, has limited
     commercially significant use other than to circumvent, or is
     marketed specifically for use in circumventing. This
     formulation means that under H.R. 2281, it is not enough for
     the primary effect of the device to be circumvention. It
     therefore excludes legitimate multi-purpose devices from the
     prohibition of section 1201. Devices such as VCRs and
     personal computers do not fall within any of these three
     categories (unless they are, in reality, black boxes
     masquerading as VCRs or PCs).
       In addition, H.R. 2281 as introduced does not require any
     manufacturer of a consumer electronic device to accommodate
     existing or future technological protection measures.
     ``Circumvention,'' as defined in the bill, requires an
     affirmative step of ``avoiding, bypassing, removing,
     deactivating, or otherwise impairing a technological
     protection measure.'' Language added in the Senate, referred
     to below, clarified this even further.
       In addition to all of the foregoing, there are a number of
     amendments that were made in the Senate bill that will be
     included in the manager's amendment to H.R. 2281. These
     include: an expansion of the exemptions for nonprofit
     libraries and archives in 17 U.S.C. Sec. 108 to cover the
     making of digital copies without authorization, for purposes
     of preservation, security or replacement of damaged, lost or
     stolen copies; an expansion of section 108 to cover the
     making of digital copies without authorization in order to
     replace copies in the collection that are in an obsolete
     format; a provision directing the Register of Copyrights to
     make recommendations as to any statutory changes needed to
     apply the limitations on liability of online service
     providers to nonprofit educational institutions that act in
     the capacity of service providers; a provision directing the
     Register of Copyrights to consult with nonprofit libraries
     and nonprofit educational institutions and submit
     recommendations on how to promote distance education through
     digital technologies, including any appropriate statutory
     changes; a savings provision stating that nothing in section
     1201 enlarges or diminishes vicarious or contributory
     liability for copyright infringement in connection with any
     technology, product, service, device, component or part
     thereof; a provision that states explicitly that nothing in
     section 1201 requires accommodation of present or future
     technological protection measures; a provision to ensure that
     the prohibition on circumvention does not limit the ability
     to decompile computer programs to the extent permitted
     currently under the doctrine of fair use; and a provision
     ensuring that technology will be available to enable parents
     to prevent children's access to indecent material on the
     Internet.
       I believe that these are constructive provisions that
     precisely and carefully address specific concerns you have
     raised in H.R. 3048. In order to assure that fair use applies
     in the digital environment, in addition to the above changes,
     I have also agreed to include in the manager's amendment an
     amendment to Section 107 of the Copyright Act to make it
     continue to be technology-neutral with respect to means of
     exploitation.
       It may be helpful, in addition to discussing what is
     contained in H.R. 2281 and the Senate companion, and what
     will be included in the manager's amendment, to raise
     directly with you some of the identifiable problems I see
     associated with H.R. 3048 as introduced.
       Section 2 of H.R. 3048 would make two changes to Section
     107 of the Copyright Act. It would add a specific reference
     to make explicit that fair use can apply to both analog and
     digital transmissions and would direct courts, in weighing
     fair use, to give no independent weight to either (1) the
     means by which a work is exploited under the authority of the
     copyright owner, or (2) the copyright owner's use of a copy
     protection technology. By amending Section 107 in this
     manner, H.R. 3048 implies that, currently, Section 107 does
     not apply to digital transmissions, or at a minimum, suggests
     that uses that are not mentioned specifically in the statute
     are less favored than those that are. Given that courts have
     been applying presently the fair use doctrine to digital
     transmissions, the risks inherent in burdening Section 107
     with technology-specific language must be weighed against any
     benefit of added clarity the amendment would provide. Because
     no clarity is needed, since courts routinely apply the
     doctrine to digital transmissions, it is my opinion that the
     detriments of such a change outweigh any perceived benefits.
     As I mentioned, I would be pleased to clarify Section 107 by
     deleting any references to enumerated rights in Section 106
     to reaffirm the application of fair use on the digital
     environment, rather than by placing technology-specific
     language in the limitation itself.
       The other amendment to section 107 you propose would, for
     the first time, direct courts to ignore possibly relevant
     information in making a fair use determination. As it has
     developed over time, courts have been allowed to look,
     depending on the case or controversy in question, at the
     totality of the facts and circumstances surrounding a given
     use. This has enabled courts to reach a fair result. If, for
     example, a user breaks a ``technological lock'' in order to
     gain access to a work, the user has engaged in activity that
     goes beyond the bounds of traditional fair use. Fair use has
     never been interpreted to afford users a right of access. The
     provision you propose would grant to users a right of free
     access, rather than a right of fair use. H.R. 3048,
     therefore, in my opinion, changes U.S. policy in an extreme
     manner that undermines the free market principles protecting
     a creator's right to control initial access, as opposed to
     all uses, of his or her work.
       H.R. 3048 also would make the ``first sale doctrine,''
     codified in Section 109 of the Copyright Act, applicable to
     digital transmissions of copies of works. The first sale
     doctrine limits the exclusive rights granted a copyright
     owner with respect to a particular copy of a work to the
     first sale or transfer of that copy. Thereafter, the
     purchaser or transferee of that particular copy may generally
     sell, lend, rent or give it away without violating the
     copyright owner's distribution right. This doctrine was
     created by the courts to secure the alienability of tangible
     property and to curb any effort by a copyright owner to
     control the after-market for resales of the same copy of a
     work.
       Section 4 of H.R. 3048 would exempt the performance,
     distribution or display (and the reproduction, to the extent
     necessary for the performance, display or distribution) of a
     lawfully-acquired copy of a work (presumably including, under
     the bill, one obtained for free through circumvention, as
     long as such circumvention was done for obtaining a copy to
     make a fair use of portions of it), by means of a
     transmission to a single recipient, provided that the
     ``original'' copy is destroyed.
       In my opinion, this extension of the first sale doctrine is
     antithetical to the policies

[[Page E1209]]

     the doctrine was intended to further. The alienability of
     tangible property is not at issue, since no tangible property
     changes hands in a transmission. Further, it does not address
     specifically the ability to control the after-market for
     resales of the same copy of a work, wince in this case
     distribution of a work by digital transmission necessarily
     requires a reproduction--it is not the same copy. The bill's
     answer to this quandary--that the original copy must be
     destroyed--is unenforceable and certainly not a substitute
     for disposition of a tangible copy. Destruction involves an
     affirmative act, generally in the privacy of a home, that is
     difficult to police and would involve significant invasions
     of privacy if it were policed effectively.
       Further, regardless of whether the original copy is
     destroyed, the new copy would be free of contractual or other
     controls placed on the original copy by the copyright owner.
     It is also likely that this provision would have a much
     greater impact on an owner's primary market for new copies of
     a work than the current first sale doctrine has on the
     primary market for physical copies. Unlike used books,
     digital information is not subject to wear and tear. The
     ``used'' copy is just as desirable as the new one because
     they are indistinguishable. For this reason, Congress has
     curtailed the first sale doctrine as it applies to the rental
     of sound recordings and software in the past, to prevent
     posing so great a burden on a copyright owner so as to
     undermine the incentive to create works which is the driving
     force behind the Copyright Act.
       H.R. 3048 would also broaden Section 110(2) of the
     Copyright Act so that the performance, display, or
     distribution of any work (rather than just the performance of
     a nondramatic literary or musical work and the display of any
     work) through digital transmission (rather than just through
     audio broadcasts) would be allowed without the permission of
     the copyright holder, as long as it is received by students,
     or by government employees as part of their duties. This
     broad expansion of the distance learning provisions currently
     codified in the Copyright Act would permit the transmission
     of a wide variety of Internet-based or other remote-access
     digital transmission formats for distance education and
     raises serious questions about safeguards to prevent such
     transmissions from unauthorized access. In other words, it
     may facilitate piracy.
       Both CONFU and the Senate have discussed the intricacies
     involved in safeguarding transmissions used for distance
     learning purposes and have agreed that it is premature to
     enact specific legislation at this time. As discussed
     earlier, the Senate has included a provision in its companion
     bill, which I plan to include in the House manager's
     amendment, that will provide for a study with legislative
     recommendations on this issue, within a six-month time frame.
     This study will be better able to address the complex
     problems I have identified.
       Section 7 of H.R. 3048 would amend Section 301(a) of the
     Copyright Act to preempt enforcement of certain license terms
     under state law. Specifically, it would preempt any state
     statute or common law that would enforce a ``non-negotiable
     license term'' governing a ``work distributed to the public''
     if such term limited a copying of material that is not
     subject to copyright protection or if it restricted the
     limitations to copyright contained in the Copyright Act.
     In effect, it would prohibit standard form agreements,
     used in the context of copies distributed to the public,
     that purport to govern use of noncopyrightable subject
     matter or limit certain exceptions and limitations, such
     as fair use.
       The use of standard form licensing agreements has become
     prevalent in the software and information industries, as
     owners seek to protect their investment in these products
     against the risk of unauthorized copying. Section 7 would
     result in destroying the ability of the producer of a work to
     create specific licenses tailored to the circumstances of the
     marketplace, or, in the case of factual databases and other
     valuable but noncopyrightable works, destroy the most
     significant form of protection currently available. This
     could result, for example, in the loss of crucial revenues to
     stock and commodity exchanges who rely on such contracts to
     disseminate information.
       Attempts to introduce language similar to Section 7 of H.R.
     3048 into Article 2B of the Uniform Commercial Code (UCC)
     have been rejected repeatedly by the UCC Article 2B Drafting
     Committee on several occasions. The National Conference of
     Commissioners on Uniform State Laws also rejected a proposal
     similar to the one you propose as has the American Law
     Institute. I agree with these bodies that restricting the
     freedom to contract in the manner proposed in H.R. 3048 would
     have a negative effect on the availability of information to
     consumers.
       H.R. 3048 also proposes several changes to Section 108 of
     the Copyright Act regarding archiving and library activities.
     As you are aware, library groups and copyright owners have
     come to an agreement regarding changes in this section to
     update the Act for the digital environment and those changes
     were incorporated by the Senate in the companion bill. I will
     include those same provisions in the manager's amendment in
     the House.
       Finally, the new Section 1201 contained in H.R. 3048 would
     not prohibit manufacturing or trafficking in devices
     purposely created to gain unauthorized access to copyrighted
     works, and insofar as it prohibits conduct, would permit
     circumvention in the first instance for purposes of fair use.
     In other words, H.R. 3048, as I discussed earlier, would
     grant to users a right never before allowed--free access to
     copyrighted works in order to make a fair use. I believe that
     is unwise policy and tilts the balance away from the
     protection of works in a free market economy toward the free
     provision of works to anyone claiming to make a fair use.
     This would, I believe, ultimately lead to much more
     litigation against libraries and others who lawfully engage
     in fair use and ultimately would diminish the number of works
     made available over new media.
       While it would be impossible to communicate to you all of
     the problems contained in the exact language of H.R. 3048, I
     wanted to, in truncated form, reveal my serious concerns with
     the bill. In its current form, for the above reasons and
     others, I would oppose it as a substitute to H.R. 2281, as
     amended. I remain dedicated, however, to working with you, as
     I have in the past, to address your concerns in a reasonable
     manner that will result successfully in changes to our
     nation's copyright law that will benefit both owners and
     users of works.
       I truly believe that we are at the beginning of a long
     process of addressing adaptation to the digital environment.
     It is not possible at this point to enact legislation that
     will contemplate all uses of a work and, as CONFU members
     aptly point out, many will have to be addressed as we move
     forward. I am committed, however, to preserving fair use in
     the digital age and thank you for your valuable and
     continuing insight and interest.
           Sincerely,

                                                 Howard Coble,

                                                         Chairman,
                 Subcommittee on Courts and Intellectual Property.
