[Congressional Record Volume 144, Number 83 (Tuesday, June 23, 1998)]
[Extensions of Remarks]
[Pages E1207-E1209]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             THE WIPO COPYRIGHT TREATIES IMPLEMENTATION ACT

                                 ______
                                 

                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                         Tuesday, June 23, 1998

  Mr. COBLE. Mr. Speaker, I submit for the Record a copy of 
correspondence between myself and Congressmen Boucher and Campbell on 
the WIPO Copyright Treaties Implementation Act.

                                         House of Representatives,


                                   Committee on the Judiciary,

                                    Washington, DC, June 16, 1998.
     Hon. Tom Campbell,
     U.S. Representative for the 15th District of California, 
         Washington, DC.
     Hon. Rick Boucher,
     U.S. Representative for the 9th District of Virginia, 
         Washington, DC.
       Dear Tom and Rick: Thank you for visiting with me in my 
     office recently regarding H.R. 2281, the ``WIPO Copyright 
     Treaties Implementation Act.'' I appreciate the concerns you 
     expressed with respect to H.R. 2281 as it was reported from 
     the House Committee on the Judiciary.
       I expressed to you that I would consider your thoughts and 
     respond to you in detail, and am pleased to do so in this 
     letter.
       I believe that many of your concerns, which are enumerated 
     in your substitute bill, H.R. 3048, have been addressed 
     already in a reasonable manner in amendments to the bill 
     adopted by the Subcommittee on Courts and Intellectual 
     Property and the Committee on the Judiciary in the House and 
     by the Committee on the Judiciary and on the floor in the 
     Senate (regarding the Senate companion bill, S. 2037). Others 
     have been addressed in legislative history in House Report 
     105-551 (Part I) which accompanies the bill, as well as in 
     Senate Report 105-190, which accompanies the Senate companion 
     bill. Still others may be addressed as the House Committee on 
     Commerce exercises its sequential jurisdiction over limited 
     portions of the bill and as I work with interested members on 
     developing a manager's amendment to be considered by the 
     whole House. I anticipate including many of the amendments 
     made by the Senate in the manager's amendment, along with 
     other provisions. I anticipate that a conference will be 
     necessary to reconcile the House and Senate versions of the 
     bills.
       While I am unable to support the specific provisions of 
     H.R. 3048, for reasons I will explain in this letter, I am 
     willing to work with you in the coming weeks to address 
     additional concerns regarding the impact of this legislation 
     on the application of the ``fair use'' doctrine in the 
     digital environment and on the consumer electronics industry. 
     I wish to stress, however, that I believe the bill, as 
     amended by the House and Senate thus far, and explained by 
     both the House and the Senate Judiciary Committee reports, 
     already addresses these issues in several constructive ways.
       I believe it is important, in order to recognize properly 
     the efforts undertaken by the Congress and the Administration 
     to address the concerns of the consumer electronics and fair 
     use communities, to review the history of H.R. 2281 and to 
     evaluate all of the provisions that have been either added to 
     or deleted from the bill since its development leading to 
     introduction in this Congress. As I am sure you will 
     appreciate, I am sensitive to your concerns and have worked 
     diligently with members and all parties involved to create a 
     balanced and fair proposal that will result in the enactment 
     of legislation this Congress.
       In February, 1993, the Administration formed the 
     Information Infrastructure Task Force to implement 
     Administration policies regarding the emergence of the 
     Internet and other digital technologies. This task force 
     formed a Working Group on Intellectual Property Rights to 
     investigate and report on the effect of this new technology 
     on copyright and other rights and to recommend any changes in 
     law or policy. The working group held a public hearing in 
     November, 1993, at which 30 witnesses testified. These 
     witnesses represented the views of copyright owners, 
     libraries and archives, educators, and other interested 
     parties. The working group also solicited written comments 
     and received over 70 statements during a public comment 
     period. Based on oral and written testimony, the working 
     group released a ``Green Paper'' on July 7, 1994. After 
     releasing the Green Paper, the working group again heard 
     testimony from the public through four days of hearings held 
     around the country. More than 1,500 pages of written 
     testimony were filed during a four-month comment period by 
     more than 150 individuals and organizations.
       In March, 1995, then-Chairman Carlos Moorhead solicited 
     informal comments from parties who had submitted testimony 
     regarding the Green Paper, including library and university 
     groups, and computer and electronics groups, in order to work 
     effectively with the Administration on jointly developing any 
     proposed updates to U.S. copyright law that might be 
     necessary in light of emerging technologies.
       In summer, 1995, the working group released a ``White 
     Paper'' based on the oral and written testimony it has 
     received after releasing the Green Paper. The White Paper 
     contained legislative recommendations which were developed 
     from public comment in conjunction with consultation between 
     the House and Senate Judiciary Committees, the Copyright 
     Office and the Administration.
       In September, 1995, Chairman Moorhead in the House and 
     Chairman Hatch in the Senate introduced legislation which 
     embodied the recommendations contained in the White Paper and 
     held a joint hearing on November 15, 1995. Testimony was 
     received from the Administration, the World Intellectual 
     Property Organization and the Copyright Office. The House 
     Subcommittee on Courts and Intellectual Property held two 
     days of further hearings in February, 1996. Testimony was 
     received from copyright owners, libraries and archives, 
     educators and other interested parties. In May, 1996, the 
     Senate Judiciary Committee held a further hearing. Testimony 
     was received from copyright owners, libraries and other 
     interested parties. These hearings were supplemented with 
     negotiations in both bodies led by Representative Goodlatte 
     (as authorized by Chairman Moorhead) in the House and by 
     Chairman Hatch in the Senate. Further negotiations were held 
     by the Administration in late summer and fall of 1996.
       During consideration of the ``NII Copyright Protection Act 
     of 1995,'' Chairman Moorhead requested that Mr. Boucher and 
     Mr. Berman of California lead negotiations between interested 
     parties regarding the issue of circumvention. While these 
     negotiations were helpful in streamlining and clarifying the 
     issues to be discussed, they ultimately did not result in an 
     agreement.
       It is important to note that shortly after its 
     establishment, the Administration task force's working group 
     convened, as part of its consideration, a Conference on Fair 
     Use (CONFU) to explore the effect of digital technologies on 
     the doctrine of fair use, and to develop guidelines for uses 
     of works by libraries and educators. Because of the 
     complexities involved in developing broad-based policies for 
     the adaptation of the fair use doctrine to the digital 
     environment, and due to much disagreement among the 
     participants (including within the library and educational 
     communities), CONFU did not issue its full report until 
     nearly two years after it was convened. An Interim Report was 
     released by CONFU in September 1997 on the first phase of its 
     work. No consensus was reached on how to apply the fair use 
     doctrine to the digital age. In fact, the CONFU working group 
     on interlibrary loan and document delivery concluded in a 
     report to its Chair that it is ``premature to draft 
     guidelines for digital transmission of digital documents.'' 
     The work of CONFU continues today and a final report should 
     be released soon with no agreed conclusions. As you can see, 
     developing sweeping legislation, rather than relying on 
     court-based ``case or controversy'' applications of the 
     doctrine, is exceedingly difficult to do.
       Since before the debate began with the establishment of a 
     task force in the United States in 1993, the international 
     community had also been considering what updates should be 
     made to the Berne Convention on Artistic and Literary Works 
     in order to provide adequate and balanced protection to 
     copyrighted works in the digital age. This culminated in a 
     Diplomatic Conference hosted by the World Intellectual 
     Property Organization at which over 150 countries agreed on 
     changes needed to accomplish this goal.
       This goal was not reached easily, however, and many of the 
     issues being debated by the Administration and the Congress 
     in the United States concerning fair use and circumvention 
     were aired at the Diplomatic Conference, with significant 
     changes made to accommodate fair use concerns and the effect 
     on the consumer electronic industries. Representatives of 
     both groups participated in the Conference and aggressively 
     sought to maintain proper limitations on copyright. They 
     succeeded. For example, language was added to ensure that 
     exceptions such as fair use could be extended into the 
     digital environment. The treaty also originally contained 
     very specific language regarding obligations to outlaw 
     circumvention. It was changed to state that all member 
     countries ``shall provide adequate legal protection and 
     effective legal remedies against the circumvention of 
     effective technological measures that are used by authors 
     in connection with the exercise of their rights under this 
     Treaty.'' This left to each country the development of 
     domestic legislation to accomplish this goal.
       After the United States signed the WIPO Treaties, the 
     Administration again began negotiations led by the Department 
     of Commerce and the Patent and Trademark Office, in 
     consultation with the Copyright Office and the Congress, to 
     develop domestic implementing legislation for the treaties. 
     It built upon the efforts already accomplished by the release 
     of the Green Paper and the White Paper and all of the 
     testimony and comments heard as part of that process, the 
     House and Senate bills introduced in the 104th Congress and 
     all of the hearing testimony and negotiations associated with 
     them, and the negotiations held by the Administration leading 
     up to and during the Diplomatic Conference. Again, comments 
     were solicited from fair use and consumer

[[Page E1208]]

     electronics groups. In the summer of 1997, the Administration 
     submitted to the Congress draft legislation to implement the 
     treaties. In July, 1997, Chairman Hatch and I introduced the 
     current pending legislation in each house. Importantly, the 
     legislation was tailored to match the treaty language by 
     establishing legal protection and remedies not against any 
     technological measures whatsoever, but only ``against the 
     circumvention of effective technological measures that are 
     used by authors in connection with the exercise of their 
     rights.''
       The fair use and consumer electronics groups succeeded, 
     just as they had at the Diplomatic Conference, in assuring in 
     the introduced version of the bills the maintenance of proper 
     limitations on copyright. The Administration had considered 
     originally banning both the manufacture and use of devices 
     which circumvent effective technological measures and had no 
     specific provision on fair use, since Section 107 of the 
     Copyright Act would, of course, continue to exist after 
     enactment of the legislation. The word ``use'' was eliminated 
     in the device provision and a specific provision relating to 
     the adoption of the fair use doctrine in the digital 
     environment was added.
       As it was introduced, H.R. 2281 contained two important 
     safeguards for fair use. First, the bill dealt separately 
     with technological measures that prevent access and 
     technological measures that prevent copying. As to the 
     latter, the bill contained no prohibition on the act of 
     circumvention itself, leaving users free to circumvent such 
     measures in order to make fair use copies. Second, the 
     savings clause in subsection 1201(d) ensures that defenses to 
     copyright protection, including fair use, are unaffected by 
     the prohibitions on circumvention. For example, circumvention 
     of an effective technological measure that controls access to 
     a work does not preclude, or affect in any way, a defense of 
     fair use for copying the work. Moreover, the bill as 
     introduced did not expand exclusive rights or diminish 
     exceptions and limitations on exclusive rights.
       Again, a series of legislative hearings were held by the 
     House and Senate Judiciary Committees at which testimony was 
     again heard from copyright owners, libraries and archives, 
     educators, consumer electronics groups and other interested 
     parties. In February, 1998, almost five years to the date of 
     the establishment of the Administration's working group, 
     taking into account all of the concessions and negotiations 
     leading up to it, the first markup was finally held in 
     Congress by the Subcommittee on Courts and Intellectual 
     Property on this important legislation. As is evident by the 
     timetable involved in the development of this legislation, 
     and considering the number of hearings, negotiations and 
     conferences dedicated to its contents, this bill certainly 
     has not been placed on any ``fast-track.''
       In the course of Subcommittee and Committee consideration 
     of the bill in the House, the gentleman from Massachusetts, 
     the Ranking Democratic Member of the Subcommittee, Mr. Frank, 
     and I, proposed a number of improvements to the bill, which 
     were adopted by the Committee, that benefit libraries and 
     nonprofit educational institutions. We introduced a special 
     ``shopping privilege`` exemption that permits nonprofit 
     libraries and archives to circumvent effective technological 
     measures in order to decide whether they wish to acquire 
     lawfully a copy of the work. We added a provision that 
     requires a court to remit monetary damages for innocent 
     violations of sections 1201 or 1202. And we eliminated any 
     possibility that nonprofit libraries and archives or 
     educational institutions can be held criminally liable for 
     any violation of sections 1201 or 1202, even when such 
     violations are willful.
       These changes add protection to language already included 
     in the bill which safeguard manufacturers of legitimate 
     consumer electronic devices. Unlike the ``NII Copyright 
     Protection Act of 1995,'' which would have prohibited devices 
     ``the primary purpose or effect of which is to circumvent,'' 
     H.R. 2281 sets out three narrow bases for prohibiting 
     devices. A device is prohibited under section 1201 only if it 
     is primarily designed or produced to circumvent, has limited 
     commercially significant use other than to circumvent, or is 
     marketed specifically for use in circumventing. This 
     formulation means that under H.R. 2281, it is not enough for 
     the primary effect of the device to be circumvention. It 
     therefore excludes legitimate multi-purpose devices from the 
     prohibition of section 1201. Devices such as VCRs and 
     personal computers do not fall within any of these three 
     categories (unless they are, in reality, black boxes 
     masquerading as VCRs or PCs).
       In addition, H.R. 2281 as introduced does not require any 
     manufacturer of a consumer electronic device to accommodate 
     existing or future technological protection measures. 
     ``Circumvention,'' as defined in the bill, requires an 
     affirmative step of ``avoiding, bypassing, removing, 
     deactivating, or otherwise impairing a technological 
     protection measure.'' Language added in the Senate, referred 
     to below, clarified this even further.
       In addition to all of the foregoing, there are a number of 
     amendments that were made in the Senate bill that will be 
     included in the manager's amendment to H.R. 2281. These 
     include: an expansion of the exemptions for nonprofit 
     libraries and archives in 17 U.S.C. Sec. 108 to cover the 
     making of digital copies without authorization, for purposes 
     of preservation, security or replacement of damaged, lost or 
     stolen copies; an expansion of section 108 to cover the 
     making of digital copies without authorization in order to 
     replace copies in the collection that are in an obsolete 
     format; a provision directing the Register of Copyrights to 
     make recommendations as to any statutory changes needed to 
     apply the limitations on liability of online service 
     providers to nonprofit educational institutions that act in 
     the capacity of service providers; a provision directing the 
     Register of Copyrights to consult with nonprofit libraries 
     and nonprofit educational institutions and submit 
     recommendations on how to promote distance education through 
     digital technologies, including any appropriate statutory 
     changes; a savings provision stating that nothing in section 
     1201 enlarges or diminishes vicarious or contributory 
     liability for copyright infringement in connection with any 
     technology, product, service, device, component or part 
     thereof; a provision that states explicitly that nothing in 
     section 1201 requires accommodation of present or future 
     technological protection measures; a provision to ensure that 
     the prohibition on circumvention does not limit the ability 
     to decompile computer programs to the extent permitted 
     currently under the doctrine of fair use; and a provision 
     ensuring that technology will be available to enable parents 
     to prevent children's access to indecent material on the 
     Internet.
       I believe that these are constructive provisions that 
     precisely and carefully address specific concerns you have 
     raised in H.R. 3048. In order to assure that fair use applies 
     in the digital environment, in addition to the above changes, 
     I have also agreed to include in the manager's amendment an 
     amendment to Section 107 of the Copyright Act to make it 
     continue to be technology-neutral with respect to means of 
     exploitation.
       It may be helpful, in addition to discussing what is 
     contained in H.R. 2281 and the Senate companion, and what 
     will be included in the manager's amendment, to raise 
     directly with you some of the identifiable problems I see 
     associated with H.R. 3048 as introduced.
       Section 2 of H.R. 3048 would make two changes to Section 
     107 of the Copyright Act. It would add a specific reference 
     to make explicit that fair use can apply to both analog and 
     digital transmissions and would direct courts, in weighing 
     fair use, to give no independent weight to either (1) the 
     means by which a work is exploited under the authority of the 
     copyright owner, or (2) the copyright owner's use of a copy 
     protection technology. By amending Section 107 in this 
     manner, H.R. 3048 implies that, currently, Section 107 does 
     not apply to digital transmissions, or at a minimum, suggests 
     that uses that are not mentioned specifically in the statute 
     are less favored than those that are. Given that courts have 
     been applying presently the fair use doctrine to digital 
     transmissions, the risks inherent in burdening Section 107 
     with technology-specific language must be weighed against any 
     benefit of added clarity the amendment would provide. Because 
     no clarity is needed, since courts routinely apply the 
     doctrine to digital transmissions, it is my opinion that the 
     detriments of such a change outweigh any perceived benefits. 
     As I mentioned, I would be pleased to clarify Section 107 by 
     deleting any references to enumerated rights in Section 106 
     to reaffirm the application of fair use on the digital 
     environment, rather than by placing technology-specific 
     language in the limitation itself.
       The other amendment to section 107 you propose would, for 
     the first time, direct courts to ignore possibly relevant 
     information in making a fair use determination. As it has 
     developed over time, courts have been allowed to look, 
     depending on the case or controversy in question, at the 
     totality of the facts and circumstances surrounding a given 
     use. This has enabled courts to reach a fair result. If, for 
     example, a user breaks a ``technological lock'' in order to 
     gain access to a work, the user has engaged in activity that 
     goes beyond the bounds of traditional fair use. Fair use has 
     never been interpreted to afford users a right of access. The 
     provision you propose would grant to users a right of free 
     access, rather than a right of fair use. H.R. 3048, 
     therefore, in my opinion, changes U.S. policy in an extreme 
     manner that undermines the free market principles protecting 
     a creator's right to control initial access, as opposed to 
     all uses, of his or her work.
       H.R. 3048 also would make the ``first sale doctrine,'' 
     codified in Section 109 of the Copyright Act, applicable to 
     digital transmissions of copies of works. The first sale 
     doctrine limits the exclusive rights granted a copyright 
     owner with respect to a particular copy of a work to the 
     first sale or transfer of that copy. Thereafter, the 
     purchaser or transferee of that particular copy may generally 
     sell, lend, rent or give it away without violating the 
     copyright owner's distribution right. This doctrine was 
     created by the courts to secure the alienability of tangible 
     property and to curb any effort by a copyright owner to 
     control the after-market for resales of the same copy of a 
     work.
       Section 4 of H.R. 3048 would exempt the performance, 
     distribution or display (and the reproduction, to the extent 
     necessary for the performance, display or distribution) of a 
     lawfully-acquired copy of a work (presumably including, under 
     the bill, one obtained for free through circumvention, as 
     long as such circumvention was done for obtaining a copy to 
     make a fair use of portions of it), by means of a 
     transmission to a single recipient, provided that the 
     ``original'' copy is destroyed.
       In my opinion, this extension of the first sale doctrine is 
     antithetical to the policies

[[Page E1209]]

     the doctrine was intended to further. The alienability of 
     tangible property is not at issue, since no tangible property 
     changes hands in a transmission. Further, it does not address 
     specifically the ability to control the after-market for 
     resales of the same copy of a work, wince in this case 
     distribution of a work by digital transmission necessarily 
     requires a reproduction--it is not the same copy. The bill's 
     answer to this quandary--that the original copy must be 
     destroyed--is unenforceable and certainly not a substitute 
     for disposition of a tangible copy. Destruction involves an 
     affirmative act, generally in the privacy of a home, that is 
     difficult to police and would involve significant invasions 
     of privacy if it were policed effectively.
       Further, regardless of whether the original copy is 
     destroyed, the new copy would be free of contractual or other 
     controls placed on the original copy by the copyright owner. 
     It is also likely that this provision would have a much 
     greater impact on an owner's primary market for new copies of 
     a work than the current first sale doctrine has on the 
     primary market for physical copies. Unlike used books, 
     digital information is not subject to wear and tear. The 
     ``used'' copy is just as desirable as the new one because 
     they are indistinguishable. For this reason, Congress has 
     curtailed the first sale doctrine as it applies to the rental 
     of sound recordings and software in the past, to prevent 
     posing so great a burden on a copyright owner so as to 
     undermine the incentive to create works which is the driving 
     force behind the Copyright Act.
       H.R. 3048 would also broaden Section 110(2) of the 
     Copyright Act so that the performance, display, or 
     distribution of any work (rather than just the performance of 
     a nondramatic literary or musical work and the display of any 
     work) through digital transmission (rather than just through 
     audio broadcasts) would be allowed without the permission of 
     the copyright holder, as long as it is received by students, 
     or by government employees as part of their duties. This 
     broad expansion of the distance learning provisions currently 
     codified in the Copyright Act would permit the transmission 
     of a wide variety of Internet-based or other remote-access 
     digital transmission formats for distance education and 
     raises serious questions about safeguards to prevent such 
     transmissions from unauthorized access. In other words, it 
     may facilitate piracy.
       Both CONFU and the Senate have discussed the intricacies 
     involved in safeguarding transmissions used for distance 
     learning purposes and have agreed that it is premature to 
     enact specific legislation at this time. As discussed 
     earlier, the Senate has included a provision in its companion 
     bill, which I plan to include in the House manager's 
     amendment, that will provide for a study with legislative 
     recommendations on this issue, within a six-month time frame. 
     This study will be better able to address the complex 
     problems I have identified.
       Section 7 of H.R. 3048 would amend Section 301(a) of the 
     Copyright Act to preempt enforcement of certain license terms 
     under state law. Specifically, it would preempt any state 
     statute or common law that would enforce a ``non-negotiable 
     license term'' governing a ``work distributed to the public'' 
     if such term limited a copying of material that is not 
     subject to copyright protection or if it restricted the 
     limitations to copyright contained in the Copyright Act. 
     In effect, it would prohibit standard form agreements, 
     used in the context of copies distributed to the public, 
     that purport to govern use of noncopyrightable subject 
     matter or limit certain exceptions and limitations, such 
     as fair use.
       The use of standard form licensing agreements has become 
     prevalent in the software and information industries, as 
     owners seek to protect their investment in these products 
     against the risk of unauthorized copying. Section 7 would 
     result in destroying the ability of the producer of a work to 
     create specific licenses tailored to the circumstances of the 
     marketplace, or, in the case of factual databases and other 
     valuable but noncopyrightable works, destroy the most 
     significant form of protection currently available. This 
     could result, for example, in the loss of crucial revenues to 
     stock and commodity exchanges who rely on such contracts to 
     disseminate information.
       Attempts to introduce language similar to Section 7 of H.R. 
     3048 into Article 2B of the Uniform Commercial Code (UCC) 
     have been rejected repeatedly by the UCC Article 2B Drafting 
     Committee on several occasions. The National Conference of 
     Commissioners on Uniform State Laws also rejected a proposal 
     similar to the one you propose as has the American Law 
     Institute. I agree with these bodies that restricting the 
     freedom to contract in the manner proposed in H.R. 3048 would 
     have a negative effect on the availability of information to 
     consumers.
       H.R. 3048 also proposes several changes to Section 108 of 
     the Copyright Act regarding archiving and library activities. 
     As you are aware, library groups and copyright owners have 
     come to an agreement regarding changes in this section to 
     update the Act for the digital environment and those changes 
     were incorporated by the Senate in the companion bill. I will 
     include those same provisions in the manager's amendment in 
     the House.
       Finally, the new Section 1201 contained in H.R. 3048 would 
     not prohibit manufacturing or trafficking in devices 
     purposely created to gain unauthorized access to copyrighted 
     works, and insofar as it prohibits conduct, would permit 
     circumvention in the first instance for purposes of fair use. 
     In other words, H.R. 3048, as I discussed earlier, would 
     grant to users a right never before allowed--free access to 
     copyrighted works in order to make a fair use. I believe that 
     is unwise policy and tilts the balance away from the 
     protection of works in a free market economy toward the free 
     provision of works to anyone claiming to make a fair use. 
     This would, I believe, ultimately lead to much more 
     litigation against libraries and others who lawfully engage 
     in fair use and ultimately would diminish the number of works 
     made available over new media.
       While it would be impossible to communicate to you all of 
     the problems contained in the exact language of H.R. 3048, I 
     wanted to, in truncated form, reveal my serious concerns with 
     the bill. In its current form, for the above reasons and 
     others, I would oppose it as a substitute to H.R. 2281, as 
     amended. I remain dedicated, however, to working with you, as 
     I have in the past, to address your concerns in a reasonable 
     manner that will result successfully in changes to our 
     nation's copyright law that will benefit both owners and 
     users of works.
       I truly believe that we are at the beginning of a long 
     process of addressing adaptation to the digital environment. 
     It is not possible at this point to enact legislation that 
     will contemplate all uses of a work and, as CONFU members 
     aptly point out, many will have to be addressed as we move 
     forward. I am committed, however, to preserving fair use in 
     the digital age and thank you for your valuable and 
     continuing insight and interest.
           Sincerely,

                                                 Howard Coble,

                                                         Chairman,
                 Subcommittee on Courts and Intellectual Property.