WIPO Proposals

From: Seth Greenstein <sethg[_at_]access.digex.net>
Date: Mon, 16 Sep 1996 09:28:09 -0400 (EDT)

FYI, the "basic proposals" to be negotiated at the December 1996 Diplomatic Conference at WIPO are now available electronically at the US Patent and Trademark Office website, www.uspto.gov, in Adobe PDF format. Look under What's New.

They also are supposed to be available at the Copyright Office website, but I haven't yet checked.

There are three aspects to the treaty proposals: One to update the Berne Convention on the rights of authors, including computer programs; one to update the rights of producers and performers in sound recordings; and one to create new protections for copyrightable and noncopyrightable databases.

These proposals include measures that were also incorporated in the U.S. NII copyright bill that has stalled in Congress, i.e., a communication or transmission right, a provision confirming that temporary copying in RAM is a reproduction (but permitting exceptions and limitations that may allow for caching), and a measure prohibiting certain circumventions of technological measures to protect against copying and unlawful access.

What follows is a letter from Gary Shapiro, President of the Consumer Electronics Manufacturers Association, to Commissioner Lehman outlining CEMA's objections to the draft proposals.

Best regards -- Seth Greenstein

September 13, 1996

The Honorable Bruce A. Lehman
Assistant Secretary of Commerce and
Commissioner of Patents and Trademarks
United States Department of Commerce
Washington, DC 20230

Re: Comments on WIPO Basic Proposals

Dear Commissioner Lehman:

On behalf of the Consumer Electronics Manufacturers Association, a sector of the Electronic Industries Association, and as Chairman of the Home Recording Rights Coalition, I write to express our comments and concerns regarding the basic proposals before the World Intellectual Property Organization for consideration in the December 1996 Diplomatic Conference. We believe that more uniform and higher international levels of protection for copyrighted works can be achieved now through agreements on "traditional" agenda issues that have been vetted fully domestically and at WIPO. But the "digital agenda" issues raised in the proposed treaties simply are not ripe for resolution in a manner that promotes the balanced interests of private stakeholders and the public.

While progress internationally is important, it should not be obtained by unbalancing domestic copyright law. We have worked diligently with members of Congress and representatives of all affected industries and public interests to describe and propose balanced improvements, and continue to do so. Given the interdependence of works and technology, such collaboration is essential to the formulation of durable policies and flexible legal structures. We remain convinced that these discussions can yield model legislation suitable for national and international implementation.

Unfortunately, the current basic proposals on the digital agenda unfairly prejudice the interests of the public and our member companies. Premature acceptance of these proposals could foreclose more consensual and forward-looking solutions.

Traditional issues in the basic proposals have been fully considered, and have achieved sufficient domestic and international consensus. Such issues include: confirmation of Berne protection for computer programs and original databases; elimination of non-voluntary licenses; rental rights for computer programs and sound recordings; and TRIPs enforcement provisions. There has emerged, however, no meaningful consensus in the U.S. or internationally on key digital agenda issues. Additional debate on these issues is needed.

The "Technological Measures" Provision is Overbroad and Unfair to Manufacturers and Consumers

We are concerned principally with the text on Technological Measures in each of the proposed treaties. This has been described inaccurately as a prohibition against only "black boxes" that have no legitimate purposes, or against the trafficking in codes that break encryption or scrambling. The provision contains no such limitations. It broadly encompasses "any device, product or component incorporated into a device or product... ." As such, the provision potentially ensnares a multitude of devices, manufactured by our member companies, that can be and are used for legitimate purposes.

The question then becomes whether other limitations in the proposal adequately protect the manufacture of devices for legitimate uses -- including the recording and use of non-copyrighted works and the fair use of copyrighted works -- notwithstanding the fact that these devices could also be used in a manner not authorized by law. We believe it does not, for the following reasons:

   o A "primary purpose or primary effect" test creates an

      unacceptable level of risk for our industries.  An "effect"-based 
      test places the legal status of a device in the hands of users.  
      As a consequence, devices with legitimate "primary purposes" would 
      be lost to consumers.
   o  A "primary" test is too indefinite and stringent.  It is 
      uncertain whether "primary" always means greater than 50 percent 
      or simply a plurality use among many.  Even if 50 percent, a 
      "primary" standard outlaws devices with 49 percent legitimate uses.
   o  Paragraph (1) applies to any person knowing or having reasonable 
      grounds to know that a device "will be used for" an unauthorized 
      exercise of rights.  This seems to impose liability if the importer, 
      manufacturer or distributor knows or has reason to know of even one 
      potential unauthorized use.  Moreover, it is unclear to us how this 
      clause interacts with the "primary purpose or primary effect" test.
   o  Although the Notes indicate that legislation should not "impede 
      lawful practices and the lawful uses of subject matter that is 
      in the public domain," the proposal itself provides no means to 
      enact such enabling exceptions.  Particularly troubling is that 
      Article 12, which permits such exceptions in other contexts, 
      purportedly would not apply to Article 13.
   o  The proposal does not define what is meant by "protection."  If 
      it means any protection applied by any copyright owner, the 
      provision could require machines to respect and implement 
      protection means that degrade product performance.  It is 
      extraordinarily difficult to control recording without 
      inadvertently damaging the audiovisual quality of watching or 
      listening to the same material.  The only way to safeguard quality 
      is to "circumvent" the damaging elements of the system.  This 
      problem is real, and has confronted our industry repeatedly over 
      the last 20 years.  The proposed text would restrict the ability 
      to design and improve products.  It also could make manufacturers 
      liable for failing to implement one protection technology although 
      it is incompatible with another.
   o  "Circumvent" is not defined.  The consequences for manufacturers 
      vary widely depending on where the definition of "circumvent" lies 
      on the wide spectrum between intentional negation of a technology 
      for unlawful purposes and the failure to adopt a potentially 
      infinite number of available technologies.

This "Technological Measures" provision has far-reaching implications for the public interest, in that it will be impossible for any consumer to exercise the fair use of protected copies. No manufacturer can know whether copies made using a particular device will be "primarily" for purposes of fair use, and the technology cannot distinguish fair from unauthorized use. As a result, devices that can remove protection for lawful uses are unlikely to be made. Fair use becomes an empty promise if there are no lawful means accessible to consumers to enable it.

The public policy implications of a Technological Measures provision are equally great under the Database proposal, since protected works can consist solely of non-original compilations of facts and public domain materials.

Finally, the proposal negates important legal principles established in Sony Corporation v. Universal City Studios, Inc., 464 U.S. 417 (1984). The essence of that case was that a manufacturer of a device cannot be held liable for potential unlawful acts by users of the device, unless the device is not capable of commercially significant noninfringing uses:

[T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.

464 U.S. at 442. To resolve this question, the Court continued, it was not necessary to quantify the noninfringing uses or determine whether these were the "primary" uses of the machines:

[W]e need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement. Rather, we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing. Moreover, in order to resolve this case we need not give precise content to the question of how much use is commercially significant.

Id.; emphasis added.

The Supreme Court did not adopt a "primary purpose or primary effect" test in Sony. As the Court held, a lawful device did not have to be
"primarily" used for unobjectionable purposes in order to avoid vicarious
liability. A minority use could be considered "wide," "substantial" or
"commercially significant."

Clearly, then, the Technological Measures proposal overturns the heart of the Supreme Court's ruling to the detriment of the manufacturers and consumers of recording equipment. Indeed, if the "primary purpose or effect" test were coextensive with the Sony standard, there would be no need to enact new legislation in the United States in order to comply with the WIPO proposals, and Section 1201 of the pending NII Bill would be unnecessary.

Notwithstanding differences in modalities between the Section 1201 proposal and determinations of contributory infringement liability, the fact is inescapable that Section 1201 and the WIPO proposals would impose vicarious liability on manufacturers where the Sony decision would not. As a result, consumers will be denied legitimate uses of recording and signal processing equipment, and copyright owners may be free to apply copy protection so as to foreclose consumer access to reasonable, customary and legal personal uses.

The Treaties Should Not Narrow the Scope of Fair Use and Other Limitations

Article 12 of the Berne Protocol, and by reference Articles 13 and 20 of the New Instrument, limit the potential scope of fair use and other necessary limitations and exceptions to exclusive rights. Article 12(1) contains what appears to be a significant difference from the text of its source, Article 9(2) of the Berne Convention, in that Article 12(1) permits limitations and exceptions "only" in certain special cases.... ."  The word "only" does not appear in Article 9(2). Although paragraph 12.02 of the explanatory notes states that the three-step test is identical in each, we question whether the differences in the text would be interpreted so as to restrict the scope of those "special cases" and, potentially, prejudice public interests.

Similarly, Article 12(2) limits the scope of other existing limitations and exceptions under the current Berne Convention to those meeting the three-part test. We have not had a full opportunity to consider the potential impact of this provision, but urge that there should be a full and open public discussion of its potential international and domestic effects.

The Scope of the Reproduction and Communication Rights

We appreciate that Chairman Liedes has attempted to provide for some limitations to exclusive rights of reproduction and communication. However, we question whether these efforts are sufficient and why limitations should not be mandatory rather than optional.

For example, numerous devices manufactured by our member companies temporarily store portions of works in memory. Such storage can occur for a wide variety of beneficial and creative purposes, and should clearly be permitted by law.

Similarly, we previously have expressed our concern that a broad communication right trumps the first sale doctrine under United States law. We believe that the need for this doctrine persists and becomes increasingly important when the mode of acquisition is electronic rather than tangible.

In a global marketplace, it is as desirable to have a uniform level of certain limitations to exclusive rights as it is to have the rights themselves. Any exceptions to these rights must be broad enough to encompass legitimate actions and should be mandatory obligations under the Protocol.

"Rights Management Information" Should be Limited to Distributions

Article 14(1)(i) of the Berne Protocol seems unnecessary. Since the location and nature of "rights management information" has not been specified either by the proposal or by common practice, this section unduly restricts consumers' ability to use portions of copyrighted works for private purposes. Unless a copy is distributed in some manner, there is no prejudice from the removal of rights management information. We also note that the Article omits the important element of the intent to remove or alter information for fraudulent purposes, which was present in the U.S.-proposed legislation.

Conversely, we support the definition of "rights management information" insofar as it does not include information that defines the terms and conditions of use. Such an overly broad definition, together with Article 13, would give copyright owners "two bites at the apple."

Despite your laudable efforts to seek comment while formulating the digital agenda proposals, the nature and impact of the proscriptions have not received sufficient debate and still are dimly understood in the United States and internationally. With your guidance, the United States has taken the leadership role internationally in intellectual property law by bringing these issues to the forefront at WIPO. Now, however, we fear that role will be jeopardized if we prematurely shut off the engaging debate and act precipitously.

We urge therefore that the United States at the WIPO Diplomatic Conference should work toward acceptance of the traditional agenda issues, and promote continued discussion of the digital agenda through WIPO. We look forward to working with you as the process moves forward in December and thereafter.

Respectfully submitted,

Gary Shapiro
President Received on Mon Sep 16 1996 - 13:30:15 GMT

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