    cartome.org

22 August 2001

Source: http://books.nap.edu/html/question_balance/index.html

## A Question of Balance

#### Private Rights and the Public Interest
in Scientific and Technical Databases

Committee for a Study on Promoting Access to
Scientific and Technical Data for the Public Interest

Commission on Physical Sciences,
Mathematics, and Applications

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C. 1999

## Contents

Title Page and Notice |
National Academies Statement |
Committee |
Preface |
Acknowledgments |
SUMMARY |
1 | IMPORTANCE AND USE OF SCIENTIFIC AND TECHNICAL DATABASES |
| Scientific and Technical Data and the Creation of New Knowledge |
| Scientific and Technical Databases as a Resource--The Current Context |
|  | Collection of Original Data and Production of New Databases |
|  | Dissemination of Scientific and Technical Data and the Issue of Access |
|  | Use of Scientific and Technical Databases |
| The Challenge of Effectively Balancing Private Rights and the Public Interest in Scientific and Technical Databases |
2 | INCENTIVES AND DISINCENTIVES AFFECTING THE AVAILABILITY AND USE OF SCIENTIFIC AND TECHNICAL DATABASES |
| Divergent Objectives of Organizations That Produce and Distribute Scientific and Technical Databases |
| Scientific and Technical Database Costs, Pricing, and Access |
|  | Production and Distribution Costs |
|  | Pricing and Access |
|  | Stronger Statutory Protection and the Incentives for Investment |
|  | Mounting Pressures on Government Producers and Distributors of Scientific and Technical Databases for Cost Recovery |
3 | ACCESS TO AND PROTECTIONS FOR DATABASES: EXISTING POLICIES AND APPROACHES |
| Access to U.S. Government-funded Scientific and Technical Data |
| Existing Protections for Databases in the United States |
|  | Legal Protections |
|  | Technological Protections |
|  | Market-based Database Protection Through Updating and Customizing |
| Tipping the Balance: The European Union's Database Directive |
4 | ASSESSMENT AND RECOMMENDATIONS |
| Assessment of Legislative Options, with Recommendations on Guiding Principles |
|  | The Standard of Harm |
|  | Scope of Protection |
|  | Term of Protection |
|  | Exemptions for Not-for-Profit Research and Education |
|  | Periodic Assessments of Effects Under Any New Statute |
|  | Exemptions for Government Databases |
| Assessment of Policy Options, with Recommendations for Government Action |
|  | Promoting Availability of Government Scientific and Technical Data |
|  | Maintaining Nonexclusive Rights by Not-for-Profits in Government-funded Databases |
|  | Organizing Discussions of Licensing Terms for Not-for-Profit Uses of Commercial Scientific and Technical Databases |
|  | Improving the Understanding of Complex Economic Aspects of Scientific and Technical Database Activities |
|  | Promoting International Access to Scientific and Technical Data |
| Recommended Approach for the Not-for-Profit Scientific and Technical Community |
APPENDIXES
A | Biographical Sketches of Committee Members |
B | Workshop Agenda and Participants |
C | Workshop Proceedings--Listing of Contents |
D | European Union Directive on the Legal Protection of Databases |

NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance.

Support for this project was provided by the National Science Foundation (under grant no. OCE-9729508), the National Institutes of Health (under purchase order no. 467-MZ-801699), the National Institute of Standards and Technology (under contract no. 43NANB909028), the National Aeronautics and Space Administration, the National Oceanic and Atmospheric Administration, and the United States Geological Survey (through the aforementioned National Science Foundation grant no. OCE-9729508), and the Department of Energy (under contract no. DE-FG02-96ER30277).

International Standard Book Number 0-309-06825-8

Library of Congress Catalog Card Number 99-68421

Additional copies of this report are available from National Academy Press, 2101 Constitution Avenue, N.W., Lockbox 285, Washington, D.C. 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet <http://www.nap.edu/>.

Copyright 1999 by the National Academy of Sciences. All rights reserved.

Printed in the United States of America

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering.

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The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

### COMMITTEE FOR A STUDY ON PROMOTING ACCESS TO SCIENTIFIC AND TECHNICAL DATA FOR THE PUBLIC INTEREST

Robert J. Serafin, National Center for Atmospheric Research, Chair

I. Trotter Hardy, College of William and Mary, School of Law

Maureen C. Kelly, BIOSIS

Peter R. Leavitt, Consultant

Lee E. Limbird, Vanderbilt University Medical Center

Philip Loftus, Glaxo Wellcome

Harlan J. Onsrud, University of Maine

Harvey S. Perlman, University of Nebraska, College of Law

Roberta P. Saxon, Skjerven, Morrill, MacPherson, Franklin & Friel, LLP

Suzanne Scotchmer, University of California at Berkeley

Mark Stefik, Xerox Palo Alto Research Center

Martha E. Williams, University of Illinois at Urbana-Champaign

#### National Research Council Staff

Paul F. Uhlir, Study Director

Julie M. Esanu, Program/Research Associate

Pamela Gamble, Administrative Assistant

Barbara Wright, Administrative Assistant

### COMMISSION ON PHYSICAL SCIENCES, MATHEMATICS, AND APPLICATIONS

Peter M. Banks, Veridian ERIM International, Inc., Co-Chair

W. Carl Lineberger, University of Colorado, Co-Chair

William F. Ballhaus, Jr., Lockheed Martin Corporation

Shirley Chiang, University of California at Davis

Marshall H. Cohen, California Institute of Technology

Ronald G. Douglas, Texas A&M University

Samuel H. Fuller, Analog Devices, Inc.

Jerry P. Gollub, Haverford College

Michael F. Goodchild, University of California at Santa Barbara

Martha P. Haynes, Cornell University

Wesley T. Huntress, Jr., Carnegie Institution

Carol M. Jantzen, Savannah River Technology Center

Paul G. Kaminski, Technovation, Inc.

Kenneth H. Keller, University of Minnesota

John R. Kreick, Sanders, a Lockheed Martin Company (retired)

Marsha I. Lester, University of Pennsylvania

Dusa M. McDuff, State University of New York at Stony Brook

Janet Norwood, U.S. Commissioner of Labor Statistics (retired)

M. Elisabeth Pat�-Cornell, Stanford University

Nicholas P. Samios, Brookhaven National Laboratory

Robert J. Spinrad, Xerox PARC (retired)

Norman Metzger, Executive Director (through July 1999)

Myron F. Uman, Acting Executive Director (as of August 1999)

## Preface

In response to a request from several federal science agencies, the Committee for a Study on Promoting Access to Scientific and Technical Data for the Public Interest (see Appendix A) undertook a study to identify and evaluate the various existing and proposed policy approaches (including related legal, economic, and technical considerations) for protecting the proprietary rights of private-sector database rights holders while promoting and enhancing access to scientific and technical (S&T) data for public-interest uses. Specifically, the sponsors asked the study committee to address the following issues:

1. Describe the salient characteristics and importance of scientific and technical databases in research, both in general categories and using specific examples.

2. Describe the practices of the production, dissemination, and use of S&T data in the federal, nonprofit, and commercial contexts.

3. Identify the major incentives and disincentives in the production, dissemination, and use of S&T data in the federal, not-for-profit, and commercial contexts.

4. Review the key elements of existing and proposed intellectual property rights regimes for noncopyrightable databases and other "collections of information," including technical protection measures, with specific emphasis on S&T databases. Also review the federal government policies regarding scientific data production, protection, dissemination, and use, particularly for data produced or disseminated by nongovernment entities under an agreement with government, including with government funding.

5. Consider the pros and cons of legal, policy, and technical options identified in response to item 4 above, with particular attention to balancing the interests of S&T database providers and disseminators in protecting their investments with the interests of promoting access to and use of S&T data for research and other public-interest uses.

6. Identify issues that require further analysis and resolution, and how to address them.

7. Provide conclusions and recommendations where possible, or otherwise provide an assessment of options.

In discussing the charge and the scope of the project with the committee, the sponsors asked the committee to focus in particular on the legislative proposals on database protection then pending in Congress as examples of the kinds of statutory options that might be adopted. Both the sponsors and the committee were well aware of the fact that those pending proposals would change further and therefore presented "moving targets" for the study. It is for this reason that the committee's recommendations regarding any potential legislation in this area are offered as guiding principles rather than as specific language for a specific bill.

The focus of the study was further constrained to domestic, rather than international, issues. The committee was cognizant of the fact that any new U.S. legislation would ultimately have substantial significance internationally, both in the economic and legal domains and in the S&T research community, but it limited its investigation and analysis of foreign laws and international legal issues, concentrating only on their direct influence on the U.S. domestic legal and policy situation. In addition, although the subject matter included all S&T databases, the committee was able to choose only representative examples for discussion and analysis in the report. For instance, the committee did not include specific examples from the social sciences or the space sciences, among other disciplines. Nevertheless, the committee believes that the relatively broad spectrum of S&T databases that it did use captured the most significant issues in the context of database protection and public-interest uses.

In responding to its charge, the committee made significant efforts to obtain broad input from representatives of the main identified interest groups, primarily through a workshop that was held on January 14-15, 1999, at the main Department of Commerce building in Washington, D.C. (Appendix B gives the agenda and lists the participants). The workshop Proceedings--taped, transcribed, edited, and published only in electronic form on the National Academies' Web site at <http://www.nap.edu/>--were a major source of information for this report (Appendix C lists the contents of the published Proceedings).1 The committee also met on two other occasions to gather information and to work on this report. In addition, the underlying technical factors and developments associated with digital networked information, and their impact on intellectual property rights protection, are examined in detail in a concurrent study, The Digital Dilemma: Intellectual Property in the Information Age (National Academy Press, Washington, D.C., 2000, in press), by the National Research Council's Computer Science and Telecommunications Board.

The report that follows reflects the deliberative consensus of the study committee. It is our hope that the committee's conclusions and recommendations will help the sponsors of the study, the legislators examining database protection proposals, and the broader S&T community to understand better the issues in striking a proper balance between protecting rights in and promoting public-interest uses of scientific and technical databases.

Robert J. Serafin, Chair
Paul F. Uhlir, Study Director

### Note

1 The views expressed in the committee's workshop Proceedings are solely those of the individual authors and workshop participants. The separate Proceedings report does not provide conclusions and recommendations.

## Acknowledgments

The study committee wishes to express its sincere thanks to the many individuals who played significant roles in the completion of this study. The committee sponsored the Workshop on Promoting Access to Scientific and Technical Data for the Public Interest: An Assessment of Policy Options on January 14-15, 1999, at the Department of Commerce in Washington, D.C., and it extends its thanks to the following individuals who made presentations during the January 14, 1999, plenary session: Q. Todd Dickinson, acting commissioner of Patents and Trademarks, Department of Commerce, gave the keynote address; Barbara Ryan of the U.S. Geological Survey and Barry Glick, formerly with GeoSystems Global Corporation, participated in the geographic data panel; G. Christian Overton of the University of Pennsylvania's Center for Bioinformatics, James Ostell of the National Library of Medicine's National Center for Biotechnology Information, and Myra Williams of the Molecular Applications Group participated in the genomic data panel; Richard Kayser of the National Institute of Standards and Technology, James Lohr of the American Chemical Society's Chemical Abstracts Service, and Leslie Singer of the Institute for Scientific Information, Inc. participated in the panel that discussed chemical and chemical engineering data; Kenneth Hadeen of the National Oceanic and Atmospheric Administration's National Climatic Data Center (retired), David Fulker of the University Corporation for Atmospheric Research's Unidata Program, and Robert Brammer of TASC participated in the meteorological data panel; Richard Gilbert of the University of California at Berkeley discussed economic factors in the production, dissemination, and use of scientific and technical (S&T) databases in the public and private sectors; Stephen Maurer, attorney, submitted a commissioned paper for the study (reproduced as Appendix C of the online workshop Proceedings); Teresa Lunt of the Xerox Palo Alto Research Center provided an overview of the current situation and future prospects with respect to technologies for protecting and also for misappropriating digital intellectual property rights; Marybeth Peters, Register of Copyrights in the Library of Congress, provided a summary overview of the existing and proposed intellectual property rights regimes for databases; and Justin Hughes, of the Department of Commerce's Patent and Trademark Office, summarized the relevant federal government information law and data policies. The aforementioned data panelists also participated in the January 14, 1999, discussion sessions on not-for-profit-sector data, government-sector data, and commercial-sector data.

The committee would also like to thank those who participated as panelists in the January 15, 1999, discussion sessions on the potential impacts of legislation and assessments of policy options during the workshop. Jon Baumgarten of Proskauer Rose, LLP, Peter Jaszi of the American University School of Law, James Neal of the John Hopkins University Library, and Ferris Webster of the University of Delaware joined Kenneth Hadeen, David Fulker, and Robert Brammer in discussing what would happen should Congress decide to enact a strong property rights model for protecting databases. Dennis Benson of the National Center for Biotechnology Information, Jonathan Band of Morrison & Foerster, LLP, and Thomas Rindfleisch of Stanford University's Lane Medical Library discussed, with Chris Overton and Myra Williams, the possible scenarios should Congress enact an unfair competition model for protecting databases. Prue Adler of the Association of Research Libraries, Eric Massant of Reed Elsevier, Inc., Tim Foresman of the University of Maryland, and Kenneth Frazier of the University of Wisconsin Libraries joined Barry Glick in a discussion assessing legal and policy options in promoting access to and use of government S&T data for the public interest. Finally, Jerome Reichman of the Vanderbilt University School of Law and R. Stephen Berry of the University of Chicago discussed possible legal and policy options associated with promoting access to and use of not-for-profit-sector S&T data for the public interest with Richard Kayser, James Lohr, and Leslie Singer. The committee is also very appreciative of the contributions of more than 100 individuals who attended the workshop. In addition, it extends its gratitude to Jean Schiro-Zavela of the National Oceanic and Atmospheric Administration and to Justin Hughes of the Patent and Trademark Office for helping to make arrangements for the workshop.

The committee would also like to express its gratitude to the following ex officio members, who provided liaison with other relevant activities: Goetz Oertel of the Association of Universities for Research in Astronomy and chair of the U.S. National Committee for CODATA; Shelton Alexander, of Pennsylvania State University, who is a member of the National Research Council's Computer Science and Telecommunications Board's committee studying intellectual property rights in the networked environment; and Francis Bretherton of the University of Wisconsin, chair of the National Research Council's Committee on Geophysical and Environmental Data.

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical and legal expertise, in accordance with procedures approved by the National Research Council's Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. The study committee would like to thank the following individuals for their participation in the review of this report: George Annas of Boston University, Lois Blaine of the American Type Culture Collection, Kenneth Dam of the University of Chicago School of Law, John Estes of the University of California at Santa Barbara, Richard Hallgren of the American Meteorological Society, Michael Keller of Stanford University Library and Highwire Press Inc., Gary King of Harvard University, Charles McClure of Syracuse University, Roger Noll of Stanford University, Pamela Samuelson of the University of California at Berkeley, William Sprigg of the University of Arizona, Hal Varian of the University of California at Berkeley, and Ronald Wigington of the American Chemical Society (retired).

In addition, the following individuals reviewed the workshop Proceedings: Bonnie Carroll of Information International Associates, Inc., David Lide, Jr., publishing consultant, and Goetz Oertel of the Association of Universities for Research in Astronomy.

Finally, the committee would like to recognize the contributions of the National Research Council staff without whom this report could not have been completed: Paul Uhlir, director of International Scientific and Technical Information Programs of the Office of International Affairs, who served as study director and organized the workshop and other study committee meetings; Julie Esanu, who provided research and program assistance to the committee, as well as editorial work on the workshop Proceedings; Barbara Wright and Pamela Gamble for the staff support to the committee; and Susan Maurizi and Janet Overton, who edited the final committee report and the Proceedings.

## Summary

Legislative efforts are currently under way in the United States, the European Union, and the World Intellectual Property Organization (WIPO) to greatly enhance the legal protection of proprietary databases. One of these efforts, the European Union's 1996 Directive on the Legal Protection of Databases,1 already has been finalized and is now being implemented by the European Union's member states, while other legislative initiatives in the U.S. Congress and WIPO are still pending action. As discussed in detail in the 1997 report Bits of Power: Issues in Global Access to Scientific Data2 and in subsequent publications,3 these new legal approaches threaten to compromise traditional and customary access to and use of scientific and technical (S&T) data for public-interest endeavors, including not-for-profit research, education, and general library uses. At the same time, there are legitimate concerns by the rights holders in databases regarding unauthorized and uncompensated uses of their data products, including at times the wholesale commercial misappropriation of proprietary databases.

Factual data are both an essential resource for and a valuable output from scientific research. It is through the formation, communication, and use of facts and ideas that scientists conduct research and educate students. Our nation has a vibrant and demonstrably productive sector of S&T database producers, disseminators, and users that has led the world. Advances in computing and communications technologies make S&T databases and the facts they contain increasingly valuable for producing new discoveries and for accelerating the growth of knowledge and the pace of innovation. The same technologies that facilitate the effective production, dissemination, and use of digital databases, however, can also expedite their unauthorized dissemination and use, undermining incentives to create new databases, enabling unfair competition and wholesale misappropriation, and in the most extreme cases, exposing the original database rights holder to market failure.

The institutions, organizations, and individuals involved form a highly complex web of interrelationships--some competing and some complementary, some creating or using original data collections or derivative productions, and spanning activities in both public and private, national and international, and scientific and non-scientific contexts (see Table S.1 for some representative examples of different types of S&T database activities). Although these diverse actors all have their own goals and motivations, they nonetheless may be broadly characterized in three fairly distinct groups. The first is the government sector, which produces S&T databases as a public good and has a mandate under OMB Circular A-1304 to disseminate the fruits of those activities as broadly and openly as possible, and to provide efficient access. The second is the commercial sector, which produces databases as a private good and typically maintains those data on a proprietary and restricted basis, either for internal purposes or for commercial vending, with the goal of full cost recovery plus profit. The third is the not-for-profit sector, which includes universities, research institutes, and various public-interest organizations that produce databases in support of their institutional mission and typically disseminate data on a cost-recovery basis, which can cause them to take a middle ground in terms of treating their databases as a public or a private good.

As users of databases, all three sectors support the public-good approach of the federal government to data distribution, and all seek to minimize the costs they may need to pay for access to and use of data from private-sector sources. A principal concern of the committee is that the development of any new database protection measures directed toward protecting private-sector investments take into account the need to promote access to and subsequent use of S&T data and databases not only by the not-for-profit sector, but by for-profit creators of derivative databases as well.

Numerous legal, technical, and market-based approaches already exist to protect proprietary rights in databases. Existing legal measures include (1) copyright law, recently updated and strengthened for the online digital environment; (2) licensing, a subset of contract law, which is increasingly the method of choice for online vendors of proprietary databases and other information products; (3) trade secret law, used in conjunction with contract law and various new technological protections; and (4) unfair competition law in state common law, which is of limited value for database protection at this time but is viewed as a potential model for a new federal database protection statute. These legal measures are being supported with increasing efficiency online by technological protections such as digital encryption, watermarks, download limitations, access controls, and both hardware- and software-based trusted systems. Finally, there are important market-based approaches to protecting databases, such as frequent updating or customizing of database content, that can help prevent stolen databases from undermining the rights holder's market for very long or very broadly.

For public-sector databases, including S&T databases, there are well-established laws and policies in place5 that generally prohibit proprietary protections of databases by the government and that treat those data as public goods and promote their full and open availability to the public. While many not-for-profit S&T database producers and vendors--especially those that receive government funding for their activities--adhere to the policy of full and open data availability for public-sector databases, other not-for-profits seek the full protection of the law for their proprietary databases. This division of interests has been further exacerbated by the enactment of the 1996 E.U. Database Directive, which provides strong and unprecedented property rights in public- and private-sector databases and the substantial components of such databases.

The current efforts to enact statutory federal database protection in the United States appear to be stimulated by three principal factors: (1) the possibility for rapid and complete database copying with the potential for instantaneous broad dissemination; (2) a gap in U.S. law created by the Feist6 decision, which served as the final blow to invalidating copyright protection on the basis of "sweat-of-the-brow" investments alone; and (3) the E.U. Database Directive, which requires non-E.U. nations to pass a similar law in order for their citizens to enjoy the directive's protections in Europe, thereby providing a potentially unfair advantage to European competitors of the U.S. private sector.

The committee believes, however, that the need for additional statutory protection has not been sufficiently substantiated. The high level of activity in the production and use of digital S&T (and other) databases in the United States serves as prima facie evidence that the threats of misappropriation do not constitute a crisis. Nor do the existing legal, technical, and market-based measures provide a chronic state of underprotection for proprietary databases. The almost universal use of licensing, rather than sale, of online databases and other digital information, coupled with technological enforcement measures, on balance potentially provides much stronger protections to the vendors vis-�-vis their customers than they enjoyed prior to Feist and under the print media copyright regime. While some of the current law providing protection to database rights holders remains uncertain in terms of scope of applicability, the trend in recent years has been to broaden, rather than narrow, applicable intellectual property protections. Moreover, for the many reasons discussed in this report, strong statutory protection of databases would have significant negative impacts on access to and use of S&T databases for not-for-profit research and other public-interest uses (see Table S.2). Nevertheless, although the committee opposes the creation of any strong new rights in compilations of factual information, it recognizes that limited new federal legal protection against wholesale misappropriation of databases may be appropriate. In particular, a balanced alternative to the E.U. Database Directive might be achieved in a properly scoped and focused new U.S. law, one that could then serve as a model for an international treaty in this area.

### RECOMMENDATIONS

Because of the complex, interdependent relationships among public-sector and private-sector database producers, disseminators, and users, any action to increase the rights of persons in one category likely will compromise the rights of the persons in the other categories, with far-reaching and potentially negative consequences.7 Of course, it is in the common interest of both database rights holders and users--and of society generally--to achieve a workable balance among the respective interests so that all legitimate rights remain reasonably protected. Therefore, as a general guiding principle, the committee recommends that any new federal protection of databases should balance the costs and benefits of the proposed changes for both database rights holders and users. In addition to this general principle, the committee makes a number of recommendations--based on its assessment of legislative options8 and related policy options--to the government, and it makes one recommendation to the not-for-profit S&T community.

#### Recommended Legislative Principles

The committee recommends that any new federal statutory protection of databases incorporate the following principles:

1. Limit any additional protection to prohibition of acts of unauthorized taking that cause substantial competitive injury to the database rights holder in the rights holder's actual market. The standard of harm should be sufficiently clear to permit good-faith users to know when they are infringing on a database rights holder's rights and should not undermine the nation's capabilities for innovation or competition in the marketplace.

2. Constrain the subject-matter scope to databases comprising a collection of discrete facts and items of information, and expressly exclude collections of copyrightable material, which is already protected. Protection under any new statute should extend only to a database that is the product of a substantial investment and not to any idea, fact, procedure, system, method of operation, concept, principle, or discovery disclosed by the database.

3. Limit the term of protection to a period of time sufficient to provide incentives found necessary for the creation of new databases. If legislation with a fixed term of protection is adopted, an appropriate term of protection most likely should be substantially shorter than the proposed 15-year term. It also should be based on an analysis of the economics of the database industry, rather than set arbitrarily.

4. In any new legislation with a fixed term of protection, require database rights holders to provide notice of expiration of the term of protection. Specifically, any such legislation should:

a. Require database rights holders to identify the date on which a database was created so that the user will know when it no longer enjoys statutory protection (of course, those databases that remain commercially valuable longer than the statutory period of protection can continue to be protected by other means, such as copyright, trade secret, contract, and technical and other measures); and

b. Require rights holders of databases that are updated continuously, or at periodic intervals, to identify with reasonable precision those substantial portions of the database that are and are not subject to protection. Failure to identify the date of creation for each new substantial portion of a database should serve as a basis for a defense against infringement after the expiration of the term of protection for the original portion of the database.

5. Apply protection only to databases created after the effective date of any new legislation, in recognition that a major purpose of enacting enhanced protection is to provide additional incentives for the development of new databases.

6. Expressly continue to provide legal rights of access to and uses of proprietary databases equivalent to those that not-for-profit researchers, educators, and other public-interest users enjoyed under traditional or customary practice prior to enactment of any new legislation. Courts should be allowed to invalidate any non-bargained9 licensing terms that are shown to interfere unduly with otherwise legislatively permitted customary uses by not-for-profit entities.

7. Provide either for a sunset provision with the possibility to renew, or for periodic assessments of the effects of new statutory database protection on competition in the database market and on consumers of databases, as well as on access to and use of data--including S&T data--by not-for-profit, public-interest users, in order to enable timely and appropriate revision of legislation as needed.

8. Although private-sector databases derived from government data should be eligible for protection, protection should not be extended to databases collected or maintained by the government. Any new legislation should expressly affirm the need for continuation of existing legal norms for wide distribution of government data and of data created pursuant to a government mandate or funding.

#### Recommended Policy Actions for Government

Although the committee believes that its recommended actions in these areas ought to be undertaken whether or not any new statutory database protection is enacted by Congress, all of these actions will take on an increased urgency and importance if relatively strong proprietary rights are established by federal statute.

1. Scientific and technical data owned or controlled by the government should be made available for use by not-for-profit and commercial entities alike on a nonexclusive basis and should be disseminated to all users at no more than the marginal cost of reproduction and distribution, whenever possible. While the private sector's creation of derivative databases from government data should be encouraged, the source of the original government data must ensure that those data remain openly available. Any information product derived from a government database also should be required to carry an identifier stating the government source(s) used.

2. Federal funding agencies should require university and other not-for-profit researchers or their employing institutions that use federal funds, wholly or in substantial part, in creating databases not to grant exclusive rights to such databases when submitting them for publication or for incorporation into other databases.

3. The Copyright Office should sponsor discussions between the representatives of private-sector producers of databases and user stakeholder representatives from government agencies and not-for-profit groups to help develop a common understanding and optimal terms for the licensing of S&T databases and data products.

4. Federal government agencies, including federal science agencies as appropriate, should undertake and fund external research that investigates the changing and complex economic aspects of S&T database activities, particularly in the context of any new legislative database protection measures that may be enacted and in support of legislative principle number 7 recommended above.

5. All departments and agencies of the federal government should continue to adopt international S&T agreements that include provisions to facilitate access to S&T data across national boundaries and should conduct periodic reviews of international policies and agreements to promote conformity to the above principles.

6. The U.S. government should negotiate with the Commission of the European Communities to revise its highly protectionist E.U. Database Directive.

#### Recommended Approach for the Not-for-Profit S&T Community

The not-for-profit S&T community should continue to promote and adhere to the policy of full and open exchange of data at both the national and international levels.

### Notes

1 The E.U. Database Directive--Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the Legal Protection of Databases, 1996 O.J. (L77) 20. The E.U. Database Directive is reprinted as Appendix D of this report.

2 National Research Council (1997), Bits of Power: Issues in Global Access to Scientific Data, National Academy Press, Washington, D.C.

3 See, e.g., J.H. Reichman and Paul F. Uhlir (1999), "Database Protection at the Crossroads: Recent Developments and Their Impact on Science and Technology," Berkeley Technology Law Journal, Vol. 14, No. 2, p. 793, and Stephen M. Maurer and Suzanne Scotchmer, "Database Protection: Is It Broken and Should We Fix It?" Science, Vol. 284, p. 1129.

4 Office of Management and Budget (1993), Circular A-130, "Management of Federal Information Resources," U.S. Government Printing Office, Washington, D.C.

5 See, e.g., 44 U.S.C., section 3506(d)(1)(A) (Supp. 1995), and Office of Management and Budget (1993), Circular A-130, note 4.

6 Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991). It is important to note, however, that Feist did not "overturn" the "sweat-of-the-brow" doctrine under copyright, which Congress had actually done already under the Copyright Act of 1976. Moreover, the sweat-of-the-brow doctrine under state law was never a prevailing legal approach.

7 The potential for unintended consequences from new sui generis intellectual property legislation and the need for caution were emphasized by the former chairman of the House Committee on the Judiciary, Robert W. Kastenmeier, in Kastenmeier and Remington (1985), "The Semiconductor Chip Protection Act of 1984: A Swamp or Firm Ground?" Minn. L. Rev., Vol. 70, pp. 417, 440-442, where the authors suggested that any proposal for such legislation should meet a four-point test: (1) that the protection would fit harmoniously with other intellectual property regimes; (2) that the new protection can be defined in a reasonably clear and satisfactory manner; (3) that the new proposal is based on an honest analysis of all the costs and benefits; and (4) that the legislation should show clearly that it would enrich and enhance the "aggregate public domain."

8 In response to its charge, the committee selected the three major legislative models that were introduced into the Congressional Record by Senator Orrin Hatch shortly after the committee's January 1999 workshop. See Cong. Rec., Vol. 106, S. 316 (Jan. 19, 1999). The committee evaluated and compared the major provisions of these three models in arriving at the consensus principles and recommendations presented here. The rationale for each recommended principle or action is contained in Chapter 4. In evaluating the three legislative proposals, the committee was well aware of the fact that they would change further and therefore presented "moving targets" for the study. It is for this reason that the committee's recommendations regarding any potential legislation in this area are offered as guiding principles, rather than as specific language for a specific bill.

9 By "non-bargained term" the committee means any term, usually contained in a standard form contract, over which, as a practical matter, no actual bargaining by the parties to the contract takes place.

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