[Congressional Record Volume 144, Number 115 (Thursday, September 3, 1998)]
[Senate]
[Pages S9935-S9937]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     UPDATE ON THE WIPO LEGISLATION

  Mr. ASHCROFT. Mr. President, I wanted to take a few minutes to advise 
my colleagues that H.R. 2281, a bill to implement the World 
Intellectual Property Organization copyright treaties, has been adopted 
by the House, but in a substantially different form than the Senate 
bill to implement these treaties. The House version of the bill 
includes some improvements agreed to by representatives of the affected 
industries, but it also includes some extraneous provisions, which in 
some cases were negotiated without the full participation of important 
affected individuals. A number of my colleagues have expressed to my 
office their continuing interest in this legislation, and so I thought 
it would be helpful to provide an update on the legislative 
developments in the House, and to share with you some of my concerns 
about the many extraneous provisions added to the bill.
  On July 22, the Committee on Commerce filed its report on H.R. 2281, 
the Digital Millennium Copyright Act of 1998. In drafting the bill, the 
Committee used as the base text the bill approved by the Senate, and 
then made some substantive and clarifying changes. I understand that 
the Commerce Committee version of the legislation represents an agreed 
upon compromise by the content community and the fair use community. 
Moreover, I understand that these groups have agreed to support the 
agreement throughout the remaining process. Some aspects of this 
agreement concern important issues that I worked to have addressed in 
the Senate version of the bill. Let me describe a few of the most 
important aspects of the agreement.
  First, with respect to ``fair use,'' the Committee adopted an 
alternative to section 1201(a)(1) that would authorize the Secretary of 
Commerce to waive selectively the prohibition against the act of 
circumvention to prevent a diminution in the availability to individual 
users of a particular category of copyrighted materials. As adopted by 
the Senate, this section would have established a flat prohibition on 
the circumvention of technological protection measures to gain access 
to works for any purpose, and thus a system that some have described as 
the beginning of a ``pay-per-use'' society. Under the compromise 
embodied in the Commerce Committee's version of the bill, the Secretary 
of Commerce would have authority to address the concerns of libraries, 
educational institutions, and others potentially threatened with a 
denial of access to categories of works in circumstances that otherwise 
would be lawful today.
  Second, the Committee made an important contribution by eliminating 
the potential for misinterpretation of the ``no mandate'' provision of 
the bill. I had been very concerned that S. 2037 could be interpreted 
as a mandate on product manufacturers to design products so as to 
respond affirmatively to or to accommodate technological protection 
measures that copyright owners might use to deny access to or prevent 
the copying of their works. To address this potential problem, I 
offered an amendment providing that nothing in the bill required that 
the design of, or design and selection of parts and components for, a 
computing product, a consumer electronics, or a telecommunications 
product must provide

[[Page S9936]]

for a response to any particular technological protection measures. The 
amendment reflected my belief that product manufacturers should remain 
free to design and produce the best available products, without the 
threat of incurring liability for their design decisions. Technology 
and engineers--not lawyers--should dictate product design. This 
provision reflected the working assumption that this bill is aimed 
fundamentally at so-called ``black boxes'' and not at legitimate 
products that have substantial non-infringing uses. The Commerce 
Committee has tightened this language even further making it crystal 
clear that nothing in this legislation should be interpreted to limit 
manufacturers of legitimate products with substantial non-infringing 
uses--such as VCRs and personal computers--in making fundamental design 
decisions or revisions.

  Third, as an important related matter, the Committee on Commerce 
reaffirmed my view that technological protection measures that cause 
``playability'' problems may not be deemed to be ``effective'' under 
this legislation. As I pointed out in my floor speech just prior to 
final passage of S. 2037, ``playability'' problems may arise because 
technological protection measures may cause noticeable and recurring 
adverse effects on the normal operation of products. Adjustments may 
need to be made either in the factory or after sale to correct these 
playability problems. It was my view that the legislation did not make 
such adjustments illegal, and I was pleased to note that the Commerce 
Committee made this point explicit in its Committee Report. The 
Commerce Committee's report also included helpful language 
circumscribing the potential breadth of the bill by narrowly defining 
the types of technological protection measures that control access to, 
or the copying of, a work.
  In addition, the Committee of Commerce adopted specific provisions 
making it clear that the bill is not intended to prohibit legitimate 
encryption research. As my colleagues know, Senator Burns, Leahy and I 
have lead the effort in the Senate to ensure that U.S. business can 
develop, and export world-class encryption products. By explicitly 
fashioning an affirmative defense, the Committee has made an important 
contribution to our overall efforts to ensure that U.S. industry 
remains at the forefront in developing secure encryption methods.
  Finally, the Committee built on my efforts to ensure that this 
legislation would not harm the efforts of consumers to protect their 
personal privacy by adopting two important amendments. The first 
amendment would create incentives for website operators to disclose 
whenever they use technological protection measures that have the 
capability to gather personal data, and to give consumers a means of 
disabling them. The second amendment strengthened section 1202 of this 
legislation by making explicit that the term ``copyright management 
information'' does not include ``any personally identifying information 
about a user of a work or a copy, phonorecord, performance, or display 
of a work.'' In my view, these amendments help preserve the critical 
balance that we must maintain between the interests of copyright owners 
and the privacy interests of information users.
  In sum, the House version of the bill by and large reflects the 
substantial improvements proposed by the House Committee on Commerce. 
In his floor statement, Congressman Bliley of Virginia, made clear the 
importance the Committee attaches to the ``fair use'' and ``no 
mandate'' provisions included in the bill. He and others reaffirmed as 
well the Committee's report language with respect to the definition of 
technological measures and the inapplicability of the legislation to 
manufacturers, retailers, product servicers, and ordinary consumers 
when faced with playability problems caused by either protection 
measures or copyright management information systems. None of the 
Members of the Judiciary Committee present offered contrary views about 
these important provisions, which represent a delicate compromise 
agreement of the interested parties. I thus would hope we can assume 
that these matters have been definitively settled.

  Since the passage of the House language several issues have begun to 
arise that have either been caused by the drafting in the House, or as 
is more often the case, through the unintended consequences of 
outlawing technology. Perhaps the most troubling of these issues is 
making security system testing illegal and criminally punishable. 
Currently, the federal government agencies, companies, state 
governments, anyone with a computer system can hire professional 
consultants to survey and test their IT security systems for 
vulnerabilities.
  Two of the best known organizations that engage in this sort of 
consulting are Price Waterhouse Coopers and Ernst & Young, clearly two 
well-known and responsible corporate citizens. With the language 
currently in the WIPO legislation these critical services will no 
longer be legal. The impact will be destructive to existing businesses 
and to any future promise of electronic commerce. Moreover, without 
this type of beneficial testing, our country's critical infrastructure 
will be at risk from domestic and international hackers and cyber-
terrorists. This effect must surely be unintended, as even those who 
support the current language would be at grave risk if our 
communications, security, and Internet systems were left without 
adequate protection.
  On August 4, the House adopted H.R. 2281 by voice vote. For reasons 
not explained on the floor, the bill contains a series of extraneous 
measures that have little or nothing to do with the underlying WIPO 
copyright treaties. I would call to the attention of my colleagues in 
particular sections 414, 416, and 417, as well as titles V and VI, of 
the bill. Unfortunately, the floor debate in the House offered little 
insight into the anticipated effect or scope of these provisions. They 
appear to have been added by the House Committee on the Judiciary, but 
none of the Members of the Committee described in any way the substance 
of these measures on the floor.
  Section 414 makes what ostensibly is only a clarifying change to 
section 107 of the Copyright Act. No one from the House Committee on 
the Judiciary, however, said a word on the floor about why this change 
to the ``fair use'' provision is necessary.
  Section 415 inhibits the continued development and the further 
introduction of new digital subscription music services. Again, I am 
left to wonder why this provision is necessary, or even whether it has 
been carefully considered by anyone here in the Senate. Apparently, the 
1995 Act regarding digital performance rights in sound recordings was 
reopened to resolve ambiguous issues. What has resulted seems to be a 
two tiered approach to subscription service. One tier consisting of 
existing providers that may compete effectively and a second tier of 
providers without an up and running system who will be hobbled by many 
new restrictions and at a greater cost. Not surprisingly, this second 
group was not represented in the negotiations.

  The net result of this will be a significant advantage for incumbent 
providers that reflects a legislative advantage, not a competitive 
advantage. For those of us who believe that the market, not the 
government, should pick winners, this is a disturbing development. Even 
worse, there is a small group of companies who paid the government for 
spectrum based on the assumption that they could provide subscription 
service unencumbered, but because they have not yet provided service 
will now have to operate under these new, anti-competitive rules. The 
result is that the spectrum they purchased will have a vastly 
diminished value. This is precisely the type of regulatory taking that 
discourages and demoralizes the kind of investment and innovation the 
country needs to take full advantage of the promise of new 
technologies.
  Section 416 concerns the assumption of contractual obligations 
related to transfer of rights in motion pictures. No one from the House 
Committee on the Judiciary said a word on the floor about why this 
provision is necessary to WIPO implementing legislation.
  Section 417 makes what ostensibly is only a clarifying change to the 
first sale doctrine. No one from the House Committee on the Judiciary, 
however, said a word on the floor about why this change to the first 
sale doctrine is necessary, or what relation the provision has to a 
recent Supreme Court decision. Before the Senate is asked to act

[[Page S9937]]

on any of these extraneous matters, we need to be convinced that the 
measures belong in this bill.
  Title V apparently sets forth the views of the House Committee on the 
Judiciary on how best to provide legal protection against 
misappropriation of collections of information such as databases. I 
understand that the Administration has indicated that it has serious 
reservations about this approach, including a concern that it may be 
unconstitutional. This is a matter the Senate Judiciary Committee plans 
to address in scheduled hearings. Until those hearings take place, I 
see no reason to endanger the WIPO bill with a potentially 
controversial issue that the full Senate Judiciary Committee has not 
had an opportunity to examine.
  Title VI would provide protection for certain boat hull designs. As 
in the case of the other extraneous provisions added in the House, no 
one from the House Committee on the Judiciary said a word on the floor 
about why this change to current law is necessary. At worst, this 
provision represents fundamental shift in the tradition and breadth of 
copyright law. At best, it is a dubious idea that was attached without 
discussion or consideration. The Senate should not include this 
extraneous matter in the WIPO bill without deliberation.
  I would hope all parties to the debate would recognize that much has 
been done to calibrate the WIPO copyright treaties implementing 
legislation. Each of us, working alone, would undoubtedly have produced 
a different bill. In fact, last fall I introduced a bill that I believe 
did a far better job of implementing the treaties and did not need 
dozens of carve-outs to deal with the problems created by the approach 
recommended by the Administration. In any event, we are now late in the 
session. Much important work has been done in the Senate, and I want to 
thank the Chairman and Ranking Member of the Judiciary Committee for 
working with me this spring to address my concerns with this bill. I 
think the House Committee on Commerce has made additional important 
contributions. This bill is not a perfect bill, but it is an important 
bill. Before taking any final action, we should eliminate the 
extraneous provisions in this bill, while preserving the true heart of 
the legislation: the WIPO legislation. However, once that analysis has 
been completed, I would hope we could move this legislation forward.

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