4 September 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

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[Congressional Record: September 3, 1998 (Senate)]
[Page S9935-S9937]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr03se98-38]


                     UPDATE ON THE WIPO LEGISLATION

  Mr. ASHCROFT. Mr. President, I wanted to take a few minutes to advise
my colleagues that H.R. 2281, a bill to implement the World
Intellectual Property Organization copyright treaties, has been adopted
by the House, but in a substantially different form than the Senate
bill to implement these treaties. The House version of the bill
includes some improvements agreed to by representatives of the affected
industries, but it also includes some extraneous provisions, which in
some cases were negotiated without the full participation of important
affected individuals. A number of my colleagues have expressed to my
office their continuing interest in this legislation, and so I thought
it would be helpful to provide an update on the legislative
developments in the House, and to share with you some of my concerns
about the many extraneous provisions added to the bill.
  On July 22, the Committee on Commerce filed its report on H.R. 2281,
the Digital Millennium Copyright Act of 1998. In drafting the bill, the
Committee used as the base text the bill approved by the Senate, and
then made some substantive and clarifying changes. I understand that
the Commerce Committee version of the legislation represents an agreed
upon compromise by the content community and the fair use community.
Moreover, I understand that these groups have agreed to support the
agreement throughout the remaining process. Some aspects of this
agreement concern important issues that I worked to have addressed in
the Senate version of the bill. Let me describe a few of the most
important aspects of the agreement.
  First, with respect to ``fair use,'' the Committee adopted an
alternative to section 1201(a)(1) that would authorize the Secretary of
Commerce to waive selectively the prohibition against the act of
circumvention to prevent a diminution in the availability to individual
users of a particular category of copyrighted materials. As adopted by
the Senate, this section would have established a flat prohibition on
the circumvention of technological protection measures to gain access
to works for any purpose, and thus a system that some have described as
the beginning of a ``pay-per-use'' society. Under the compromise
embodied in the Commerce Committee's version of the bill, the Secretary
of Commerce would have authority to address the concerns of libraries,
educational institutions, and others potentially threatened with a
denial of access to categories of works in circumstances that otherwise
would be lawful today.
  Second, the Committee made an important contribution by eliminating
the potential for misinterpretation of the ``no mandate'' provision of
the bill. I had been very concerned that S. 2037 could be interpreted
as a mandate on product manufacturers to design products so as to
respond affirmatively to or to accommodate technological protection
measures that copyright owners might use to deny access to or prevent
the copying of their works. To address this potential problem, I
offered an amendment providing that nothing in the bill required that
the design of, or design and selection of parts and components for, a
computing product, a consumer electronics, or a telecommunications
product must provide

[[Page S9936]]

for a response to any particular technological protection measures. The
amendment reflected my belief that product manufacturers should remain
free to design and produce the best available products, without the
threat of incurring liability for their design decisions. Technology
and engineers--not lawyers--should dictate product design. This
provision reflected the working assumption that this bill is aimed
fundamentally at so-called ``black boxes'' and not at legitimate
products that have substantial non-infringing uses. The Commerce
Committee has tightened this language even further making it crystal
clear that nothing in this legislation should be interpreted to limit
manufacturers of legitimate products with substantial non-infringing
uses--such as VCRs and personal computers--in making fundamental design
decisions or revisions.

  Third, as an important related matter, the Committee on Commerce
reaffirmed my view that technological protection measures that cause
``playability'' problems may not be deemed to be ``effective'' under
this legislation. As I pointed out in my floor speech just prior to
final passage of S. 2037, ``playability'' problems may arise because
technological protection measures may cause noticeable and recurring
adverse effects on the normal operation of products. Adjustments may
need to be made either in the factory or after sale to correct these
playability problems. It was my view that the legislation did not make
such adjustments illegal, and I was pleased to note that the Commerce
Committee made this point explicit in its Committee Report. The
Commerce Committee's report also included helpful language
circumscribing the potential breadth of the bill by narrowly defining
the types of technological protection measures that control access to,
or the copying of, a work.
  In addition, the Committee of Commerce adopted specific provisions
making it clear that the bill is not intended to prohibit legitimate
encryption research. As my colleagues know, Senator Burns, Leahy and I
have lead the effort in the Senate to ensure that U.S. business can
develop, and export world-class encryption products. By explicitly
fashioning an affirmative defense, the Committee has made an important
contribution to our overall efforts to ensure that U.S. industry
remains at the forefront in developing secure encryption methods.
  Finally, the Committee built on my efforts to ensure that this
legislation would not harm the efforts of consumers to protect their
personal privacy by adopting two important amendments. The first
amendment would create incentives for website operators to disclose
whenever they use technological protection measures that have the
capability to gather personal data, and to give consumers a means of
disabling them. The second amendment strengthened section 1202 of this
legislation by making explicit that the term ``copyright management
information'' does not include ``any personally identifying information
about a user of a work or a copy, phonorecord, performance, or display
of a work.'' In my view, these amendments help preserve the critical
balance that we must maintain between the interests of copyright owners
and the privacy interests of information users.
  In sum, the House version of the bill by and large reflects the
substantial improvements proposed by the House Committee on Commerce.
In his floor statement, Congressman Bliley of Virginia, made clear the
importance the Committee attaches to the ``fair use'' and ``no
mandate'' provisions included in the bill. He and others reaffirmed as
well the Committee's report language with respect to the definition of
technological measures and the inapplicability of the legislation to
manufacturers, retailers, product servicers, and ordinary consumers
when faced with playability problems caused by either protection
measures or copyright management information systems. None of the
Members of the Judiciary Committee present offered contrary views about
these important provisions, which represent a delicate compromise
agreement of the interested parties. I thus would hope we can assume
that these matters have been definitively settled.

  Since the passage of the House language several issues have begun to
arise that have either been caused by the drafting in the House, or as
is more often the case, through the unintended consequences of
outlawing technology. Perhaps the most troubling of these issues is
making security system testing illegal and criminally punishable.
Currently, the federal government agencies, companies, state
governments, anyone with a computer system can hire professional
consultants to survey and test their IT security systems for
vulnerabilities.
  Two of the best known organizations that engage in this sort of
consulting are Price Waterhouse Coopers and Ernst & Young, clearly two
well-known and responsible corporate citizens. With the language
currently in the WIPO legislation these critical services will no
longer be legal. The impact will be destructive to existing businesses
and to any future promise of electronic commerce. Moreover, without
this type of beneficial testing, our country's critical infrastructure
will be at risk from domestic and international hackers and cyber-
terrorists. This effect must surely be unintended, as even those who
support the current language would be at grave risk if our
communications, security, and Internet systems were left without
adequate protection.
  On August 4, the House adopted H.R. 2281 by voice vote. For reasons
not explained on the floor, the bill contains a series of extraneous
measures that have little or nothing to do with the underlying WIPO
copyright treaties. I would call to the attention of my colleagues in
particular sections 414, 416, and 417, as well as titles V and VI, of
the bill. Unfortunately, the floor debate in the House offered little
insight into the anticipated effect or scope of these provisions. They
appear to have been added by the House Committee on the Judiciary, but
none of the Members of the Committee described in any way the substance
of these measures on the floor.
  Section 414 makes what ostensibly is only a clarifying change to
section 107 of the Copyright Act. No one from the House Committee on
the Judiciary, however, said a word on the floor about why this change
to the ``fair use'' provision is necessary.
  Section 415 inhibits the continued development and the further
introduction of new digital subscription music services. Again, I am
left to wonder why this provision is necessary, or even whether it has
been carefully considered by anyone here in the Senate. Apparently, the
1995 Act regarding digital performance rights in sound recordings was
reopened to resolve ambiguous issues. What has resulted seems to be a
two tiered approach to subscription service. One tier consisting of
existing providers that may compete effectively and a second tier of
providers without an up and running system who will be hobbled by many
new restrictions and at a greater cost. Not surprisingly, this second
group was not represented in the negotiations.

  The net result of this will be a significant advantage for incumbent
providers that reflects a legislative advantage, not a competitive
advantage. For those of us who believe that the market, not the
government, should pick winners, this is a disturbing development. Even
worse, there is a small group of companies who paid the government for
spectrum based on the assumption that they could provide subscription
service unencumbered, but because they have not yet provided service
will now have to operate under these new, anti-competitive rules. The
result is that the spectrum they purchased will have a vastly
diminished value. This is precisely the type of regulatory taking that
discourages and demoralizes the kind of investment and innovation the
country needs to take full advantage of the promise of new
technologies.
  Section 416 concerns the assumption of contractual obligations
related to transfer of rights in motion pictures. No one from the House
Committee on the Judiciary said a word on the floor about why this
provision is necessary to WIPO implementing legislation.
  Section 417 makes what ostensibly is only a clarifying change to the
first sale doctrine. No one from the House Committee on the Judiciary,
however, said a word on the floor about why this change to the first
sale doctrine is necessary, or what relation the provision has to a
recent Supreme Court decision. Before the Senate is asked to act

[[Page S9937]]

on any of these extraneous matters, we need to be convinced that the
measures belong in this bill.
  Title V apparently sets forth the views of the House Committee on the
Judiciary on how best to provide legal protection against
misappropriation of collections of information such as databases. I
understand that the Administration has indicated that it has serious
reservations about this approach, including a concern that it may be
unconstitutional. This is a matter the Senate Judiciary Committee plans
to address in scheduled hearings. Until those hearings take place, I
see no reason to endanger the WIPO bill with a potentially
controversial issue that the full Senate Judiciary Committee has not
had an opportunity to examine.
  Title VI would provide protection for certain boat hull designs. As
in the case of the other extraneous provisions added in the House, no
one from the House Committee on the Judiciary said a word on the floor
about why this change to current law is necessary. At worst, this
provision represents fundamental shift in the tradition and breadth of
copyright law. At best, it is a dubious idea that was attached without
discussion or consideration. The Senate should not include this
extraneous matter in the WIPO bill without deliberation.
  I would hope all parties to the debate would recognize that much has
been done to calibrate the WIPO copyright treaties implementing
legislation. Each of us, working alone, would undoubtedly have produced
a different bill. In fact, last fall I introduced a bill that I believe
did a far better job of implementing the treaties and did not need
dozens of carve-outs to deal with the problems created by the approach
recommended by the Administration. In any event, we are now late in the
session. Much important work has been done in the Senate, and I want to
thank the Chairman and Ranking Member of the Judiciary Committee for
working with me this spring to address my concerns with this bill. I
think the House Committee on Commerce has made additional important
contributions. This bill is not a perfect bill, but it is an important
bill. Before taking any final action, we should eliminate the
extraneous provisions in this bill, while preserving the true heart of
the legislation: the WIPO legislation. However, once that analysis has
been completed, I would hope we could move this legislation forward.

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