[Congressional Record Volume 142, Number 74 (Thursday, May 23, 1996)]
[Extensions of Remarks]
[Pages E890-E891]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  THE DATABASE INVESTMENT AND INTELLECTUAL PROPERTY ANTIPIRACY ACT OF 
                                  1996

                                 ______


                        HON. CARLOS J. MOORHEAD

                             of california

                    in the house of representatives

                         Thursday, May 23, 1996

  Mr. MOORHEAD. Mr. Speaker, I rise to introduce the Database 
Investment and Intellectual Property Antipiracy Act of 1996, a bill to 
encourage continued investment in the production and distribution of 
valuable new databases.
  Electronic databases, and other compilations of factual material, are 
absolutely indispensable to the American economy on the verge of the 
new century. These information products put a wealth of data at the 
fingertips of business people, professionals, scientists, scholars, and 
consumers, and enable them to retrieve from this haystack of 
information the specific factual needle that they need to solve a 
particular economic, research, or educational problem. Whether they 
focus on financial, scientific, legal, medical, bibliographic, news, or 
other information, databases are an essential tool for improving 
productivity, advancing education and training, and creating a more 
informed citizenry. They are also the linchpin of a dynamic commercial 
information industry in the United States.
  Developing, compiling, distributing, and maintaining commercially 
significant databases requires substantial investments of time, 
personnel, and money. Information companies must dedicate massive 
resources to gathering and verifying factual material, presenting it in 
a user-friendly way, and keeping it current and useful to customers. 
U.S. firms have been the world leaders in this field. The have brought 
to market a wide range of valuable databases that meet the information 
needs of businesses, professionals, researchers, and consumers 
worldwide. But several recent legal and technological developments 
threaten to cast a pall over this progress, by eroding the incentives 
for the continued investment needed to maintain and build upon the U.S. 
lead in world markets for electronic information resources.
  Here in the United States, the 1991 Supreme Court decision in Fiest 
Publications v. Rural Telephone Service Co. marked a tougher attitude 
toward claims of copyright in databases. While reaffirming that most--
although not all--commercially significant databases satisfy the 
``originality'' requirement for protection under copyright, the Court 
emphasized that this protection is ``necessarily thin.'' Several 
subsequent lower court decisions have underscored that copyright cannot 
stop a competitor from lifting massive amounts of factual material from 
a copyrighted database to use as the basis for its own competing 
product. Database producers are concerned that some of these cases may 
also cast doubt on the ability of a database proprietor to use 
contractual provisions to protect against unfair competition from such 
``free riders.''
  In Europe, a 6-year legislative process culminated earlier this year 
in the issuance of a European Union Directive on Legal Protection of 
Databases. Among other things, the Directive creates a new, non-
copyright form of legal protection for databases, to supplement 
copyright. But it denies this new protection to U.S.-originated 
databases unless the United States is found to offer ``comparable'' 
protection to European databases. When fully implemented in 1998, the 
European Directive could place U.S. firms at an enormous competitive 
disadvantage throughout the entire European market.
  At the World Intellectual Property Organization, a growing 
international consensus supports development of a new international 
treaty on noncopyright protection for databases, with the possibility 
of action as early as December 1996. Indeed, this week in Geneva, U.S. 
negotiators are putting forward a draft for such an international 
instrument.
  In cyberspace, technological developments represent a threat as well 
as an opportunity

[[Page E891]]

for databases, just as for other kinds of works. Copying factual 
material from a database, and rearranging it to form a competing 
information product--just the kind of behavior that copyright 
protection may not effectively prevent--is cheaper and easier than 
ever, through digital technology that is now in widespread use.
  When all these factors are added together, the bottom line is clear: 
it is time to consider new federal legislation to protect database 
developers against piracy and unfair competition, and thus encourage 
continued investment in the production and distribution of valuable 
commercial databases. Such legislation could improve the market climate 
for databases in the United States; ensure protection for U.S. 
databases abroad on an equitable basis; place the United States on the 
leading edge of an emerging international consensus; and provide a 
balanced and measured response to the new challenges of cyberspace. The 
bill I introduce today aims to advance these goals.
  While copyright, on the Federal level, and the State contract law 
underlying licensing agreements, remain essential tools for protecting 
the enormous investment in databases from the threat of unfair 
competition, there are gaps in the protection that can best be filled 
by a new Federal statute. The Database Investment and Intellectual 
Property Antipiracy Act would prohibit the misappropriation of valuable 
commercial databases by unscrupulous competitors who grab data 
collected by others, repackage it, and market a product that threatens 
competitive injury to the original database. This new Federal 
protection is modeled in part on the Lanham Act, which already makes 
similar kinds of unfair competition a civil wrong under Federal law. It 
also draws on some of the positive elements of the European directive, 
and is intended to be fully consistent with the draft international 
treaty language being put forward by our negotiators in Geneva. 
Importantly, this bill maintains existing protections for databases 
afforded by copyright and contract rights. It is intended to supplement 
these legal rights, not replace them.
  The Database Investment and Intellectual Property Antipiracy Act is a 
balanced proposal. It is aimed at actual or threatened competitive 
injury from misappropriation of databases or their contents, not at 
non-competitive uses. The bill contains specific exemptions for use of 
insubstantial portions of databases for any purpose. The bill 
specifically allows innovators to create their own databases 
independently, as a result of their own work and investment, as opposed 
to ``free riding'' on the work and investment of others. Our goal is to 
stimulate the creation of even more databases, and to encourage even 
more competition among them. The bill avoids conferring any monopoly on 
facts, or taking any other steps that might be inconsistent with these 
goals.
  Some sections of this bill are modeled closely on the non-copyright 
provisions of H.R. 2441, the NII Copyright Protection Act of 1995, as 
introduced last fall. As these provisions in the NII legislation are 
refined and improved in the legislative process, I anticipate that 
conforming changes would be made to the corresponding provisions of the 
Database Investment and Intellectual Property Antipiracy Act as well.
  This legislation provides the starting point for legislative activity 
on an important and complex subject. I look forward to hearing the 
suggestions and reactions for interested parties, and of my colleagues, 
in the near future, and to working with the Administration to 
strengthen protections for U.S. databases both at home and around the 
world.

                          ____________________