Clinton Stumbles With Intellectual Property Guidelines

The Clinton administration has kindled a firestorm of controversy after issuing a draft document it calls "Intellectual Property and the National Information Infrastructure" -- a blueprint for dealing with the many thorny intellectual property issues raised in the digital age.

By self-proclamation it is billed as a merely modest amendment to the existing body of law governing intellectual property. But judging by the voluminous responses -- nearly 150 organizations officially filed comments on the draft -- the document has touched a nerve across a broad range of organizations. "[The report] is incredibly wrong-headed," said Mike Godwin, online counsel at the Electronic Frontier Foundation.

Libraries say the document endangers sacred principles of public access to information; online services such as America Online and Prodigy fear certain provisions could very well put them out of business; and many lawyers argue the document treats everyone as a potential information pirate, thus tossing aside the principle that a person is innocent until proven guilty.

Essentially, the document's many proposals appear to add up to much-enhanced enforcement rights for copyright, with a major emphasis on sticks rather than carrots to deter would-be pirates. Online services, for instance, would be held responsible for illegal downloading of software by their members -- even if they don't know it is occurring.

If there are clear winners, they are the world's largest holders of copyrights: Hollywood movie studios, large publishing houses, Microsoft Corp. One provision would outlaw devices built to circumvent anti-copying mechanisms such as those that prevent audio digital tapes from being recorded.

Conversely, the document appears to make a frontal assault on the budding culture of the Internet and hackers, which argue for the widest and cheapest possible distribution of information.

The report focuses mostly on copyright, rather than the three other pillars of intellectual property: trademarks, patents and trade secrets. Copyright, as opposed to patents, is concerned with the expression of an idea rather than the idea itself.

So did the Clinton administration sell out to established financial interests in updating copyright law for cyberspace? The oft-quoted Godwin argues it has. But that answer may be too pat -- and it could trivialize the huge interests at stake.

Copyright industries account for more than 5 percent of the nation's GDP and nearly five percent of total employment. And those industries created jobs at a faster rate than any other similar-sized area of the economy.

So though money may have spoken in the document's creation, so too did one of the nation's most important sources of jobs and national wealth.

Then there is the technological challenge to more than two centuries of jurisprudential tradition. The copyright law, beginning in 1790, has gradually been modified to cover maps, charts, engravings, etchings, musical compositions, paintings, photographs, motion pictures, audio recordings and, most recently, computer programs. For copyright holders, and their lawyers, the key challenge today is this: Every computer is a copying machine, and the copies it makes of a digitized book, song or movie are completely identical to the original. So whereas only the richest and biggest organizations could afford printing presses in the past -- at least ones capable of quality reproduction -- one can now be had for a couple thousand dollars.

This is a tectonic shift. Previously, the expense of producing, compiling and distributing information served as a de facto copyright enforcement mechanism. So as a practical matter, most people couldn't steal copyrighted information in ways capable of really affecting profits and revenues of major publishers, movie studios, etc. And those that did -- by making analog tape recordings from analog records, for instance -- ended up with copies inferior to the "master" recording.

Now everyone has their own copying machine, a kind of universal replicator capable of turning identical copies of any information into the ones and zeros of computer language. Civil libertarians, hackers and anarchists have touted this development as the dawning of a new age of empowerment. In publications such as Wired and in news groups splayed across the Internet, the digerati have proclaimed the emergence of information as a true commodity -- even something free.

One of the problems is that copyright attempts to balance often incompatible interests, those of intellectual property holders and the general public. The latter's rights are embodied in the presumption of free information dissemination in the First Amendment and the intellectual property clause of the Constitution -- Article I, Section 8. Depending on whose lawyer you talk to, copyright either comes down on the side of owners or users -- but rarely does it strike a perfect balance.

It is within this context the Clinton administration issued its draft in defense of copyright, traditionally defined but outfitted with some new clothing to weather the oncoming digital storm. Among the more controversial points:

- The document restricts the "fair use" doctrine, which allowed limited copying of copyrighted materials for research and education.

-It also proposes to do away with the idea of "first sale" for electronic information. This concept allows a purchaser of a record or book, for instance, to resell that product, in effect, eliminating a copyright owner's control over secondary markets. But in cyberspace copyright owners would have a monopoly over primary and secondary sales; a copy of a digital work is as good as owning unlimited number of copies because a computer is, in essence, a universal printing press.

-The draft would also ban all devices that defeat copy protection. Some have pointed out that manufacturers of scanners would be in violation of this provision.

- Any act of transmission is defined as a publication of a work. Among other things, copyright law requires mandatory deposit of published information in the Library of Congress. The new definition of publication would create mountains of unmanageable filings, not to mention unwieldy and expensive burdens on electronic publishers and online services.

"The minor changes...would amount to a radical recalibration of the intellectual property balance," claims Jessica Litman, professor of communications at Wayne State University, in comments to the administration.

Still, as many have pointed out, copyright may be unenforceable -- a floating stick in a whirling, digital vortex. Traditionally, copyright goes to something in a tangible, fixed medium -- a vinyl disc, a bound collection of papers, a photographic negative. This allowed copyright owners to track the fate of their copyrighted material. But now the information-housing medium can be variable and ethereal -- floppy disk, an Internet server, an online bulletin board service. And new technology allows users to shift information from one medium to another, in effect, freeing information from the shackles of its physical cell. That begs the conclusion : If there is no medium to protect, there is no copyright. "New information technology will destroy copyright as we know it," argues Victor Rosenberg, an associate professor in library science at the University of Michigan, in comments on the document. "It is imperative for publishers to begin to explore alternative sources of revenue and alternative means of protecting their resources."

This is particularly true given the increasingly global and non-territorial nature of commerce. Information highways don't respect national boundaries, and the information exchange that occurs on them will often be subject to non-American views of copyright. In this climate, a Chinese or Russian view of copyright -- which is essentially nonexistent -- may prevail. After all, the United States has the most potential revenue to lose, as it is the center of the three owners of the most valuable copyright industries on earth: the software, entertainment and publishing industries. So these countries have little incentive -- and few practical barriers -- to ripping off anything they please. And the U.S. has everything to lose. "Just as there are numbered bank accounts in financial havens like the Cayman Islands, there will be data havens where unscrupulous entrepreneurs will steal data and repackage it for commercial distribution," writes the University of Michigan's Rosenberg.

Still, there may be at least a partial technological fix for copyright protection -- encryption technology, for instance. And there have been precedents for effectively preventing manufacturers from introducing threatening new technology to the marketplace. Digital audio tape recorders, at the behest of the music industry, have been effectively neutered through mandatory inclusion of anti-copying protections in machines.

But in the final analysis, no one is quite sure what lies in store for the copyright system -- or for the public and private interests that benefit from it. There is an old saw that it's alright to rob Peter to pay Paul -- if you're Paul. In the gathering storm of debate over Clinton's proposed revamp to the nation's intellectual property system, many are unsure who gets to be Paul.