Re: HR 354 Antipiracy Bill

On Fri, 27 Aug 1999, Peter D. Junger <junger[_at_]samsara.law.cwru.edu> wrote:
>
> On Thu, 26 Aug 1999, Albert Henderson <noblestation[_at_]compuserve.com> wrote:
> >
> > FYI - following is a copy of my letter to Congress:
> >

[snip]
> >
> > Dear Rep. Coble:
> >
> > I wish to express my opinion of the "Collections of
> > Information Antipiracy Act (HR 354) which was
> > introduced earlier this year.
>
> Perhaps those of us who do not share Mr. Henderson's opinion should
> send Representative Coble a response.
>
> These are some of the points that I can think of off hand:
>
> 1. If Feist is a constitutional decision, as it says it is, then
> the proposed act would be unconstitutional.

I think this is inference, not fact. The constitution doesn't say anything about compilations of fact. It gives the power to Congress ... "securing for limited times to authors and inventors the exclusive right to their respective writings ..."

> 2. Print compilations are available for free in libraries.
 

Not relevant. Reprinting for commercial purposes is not as easy as copying digital sources. The threat of piracy makes conversion of print "not worth while" for many publishers.

> 3. Most users of the compilations that I know are interested in
> particular bits of information, not the entire compilation. They
> can just borrow the hard copy compilation and find the facts that
> they want and are not required to buy an entire copy.

We're talking piracy, not fair use. Why would the antipiracy measure apply to such benign small fry?  

> 4. If there is only a limited market for the entire compilation
> then it can be sold under contract to the few who want it with
> non-disclosure agreements, etc.

I don't think that would be realistic with, for instance, historical play-by-play baseball statistics or a bibliography of South American mosquitoes.

Pirates also may steal several compilations of related interest, combining -- for arguments' sake -- baseball statistics with football and basketball stats and undercutting the prices of all.

Pirates with a strong marketing / distribution network can steal the work of a lone entrepreneur and easily cream the world market with no input cost [while the entrepreneur is still trying to figure out who all the customers might be.

Pirates may steal an industry or association directory, turning it into a cheap knock-off that makes updates "not worth while." They may turn it into into a direct marketing project that association members detest. For this very reason, many associations do not even publish their directories in print.

> 5. Electronic compilations can be made available, as are Lexis and
> Westlaw, for a fee and be protected by technological means, such
> as passwords and encryption. (This is one of the areas where
> the EAR's restrictions on the publication of encryption software
> causes significant economic problems.)
 

It won't work with CRDOMs. Pirates bypass technical obstacles, copy, and sell at prices that do not need to recover substantial input costs.

It won't work if the pirates are customers, with passwords, etc. to bypass encryption.  

> 6. If users often consult the electronic database, they will want
> to buy the hard copy, even if the database is free. Note that
> the availability of Lexis and Westlaw has not destroyed the
> market for West's reports, although they may have dented it.
> And note that West still gets a nice return from Westlaw.

I have observed that many consumers who buy digital compilations don't buy hard copy and vice versa. It is true that some publishers stimulate sales for hard copy books by mounting PDF versions online. If you compare production qualities, it is obvious that the PDF is merely a "free trial" not a "free gift." Nor can it be manipulated -- sorted, for instance, like a phonebook.

> 7. Under standard economic theory the benefits to society is maximized
> when goods are sold as their marginal cost. And the marginal cost
> of supplying electronic copies is less than ten cents. Since
> contract and technological means and ordinary copyright law give
> electronic publishers a more than ample chance to recover their
> investment there is no need for additional legal protection for
> compilations of information.

"Standard economic theories" don't work very well when applied to information products that have specific values to specific customers. Many compilations have a finite market that is not much affected within a reasonable price range or cost.

Lowering prices infinitely will produce very few additional sales, if any.

There are no costs and no goods when investors are deterred by the threat of piracy.

> 8. If someone does succeed in copying an electronic database there
> will still be a market for the original if the original has a a
> reputation for accuracy, and particularly if it is updated. The
> fact that one can get all the modern federal cases from several
> free sources has not put Lexis and Westlaw out of the business
> of selling access to their compilations of federal cases; on the
> other hand it has made the contents of the law available to many
> who could not otherwise have afforded it.

Are you arguing that Lexis / Westlaw customers justify their subscriptions on the basis of federal cases?

Large instituional purchasers will take time to investigate what they get in return for thousands of dollars. Buyers of baseball statistics on CDROMs and other <$100 products will not.

> 9. Considering all of the above factors, if there are any
> compilations of such little value that they cannot get a decent
> return on their investment when published electronically, then
> it is hard to see how society would be harmed if the compilations
> were not made available by electronic means.

My point is that specialized compilations CAN indeed get a return IF the investment is protected by law. Many are in print now and society would benefit by dissmination in electronic form.

Albert Henderson
Editor, PUBLISHING RESEARCH QUARTERLY
<70244.1532[_at_]compuserve.com> Received on Mon Aug 30 1999 - 21:29:24 GMT