----------------------------Original message----------------------------
Forwarded from the NINCH discussion list.


Judy

---------- Forwarded Message ----------

From:   David Green, INTERNET:[log in to unmask]
TO:     Multiple recipients of list, INTERNET:[log in to unmask]
DATE:   1/21/97 4:59 PM

RE:     White House & Internet


NINCH BULLETIN
January 21, 1997

LEGISLATIVE MOVEMENTS--Part Two

I am sending this memo on two related government-affairs issues to members
in two parts, and including a summary of both parts at the outset.  I
should like the ADVOCACY Working Group to particularly take note of these
issues insofar as they will bear on our discussions.

*****************************************************************

II IRA MAGAZINER & "A Framework for Global Electronic Commerce"

Part Two of this Report on Legislative Movements consists of

a) pointing out a space in which the cultural community may have an
opportunity to make a case for being included in Internet-related policy
deliberations;

b) introducing a response to a document from the Digital Future Coalition
asking for members' signatures; and

c) the DFC Response to the "Framework"


NINCH is a member of the Digital Future Coalition. I should like to sign
NINCH on to this document. Please alert me to any difficulties or problems.


                               *  *  *  *  *

A) A NEW SPACE?
An important new venue for representing the electronic interests of the
cultural community (perhaps not just limited to copyright concerns) may lie
in the office and function of Ira Magaziner, Senior Advisor to the
President for Policy Development.  In a meeting I attended of the
Telecommunications Policy Roundtable last week, Magaziner announced that
the White House was attempting to coordinate a more coherent approach to
the Internet. Despite the Information Infrastructure Task Force, there are
now 18 government agencies that have an interest in Internet policy and
until now, Magaziner said, the Administration had responded very much in an
ad hoc manner.

As a first step, an interagency task force has spent the last 8 months
preparing a Framework for Global Electronic Commerce. Admittedly this has
been organized for commercial interests. However, it also enunciates a
number of policy recommendations: I) that the Internet be fostered as a
non-regulatory, market-driven medium (in which government plays the role of
international facilitator, not regulator); ii) that a transparent and
harmonized global legal environment be created using a new uniform
commercial code for cyberspace; and iii) that it allow for competition and
consumer choice, but protect privacy.

At the TPR meeting, Magaziner admitted that he felt the Administration was
changing its position on copyright and adopting a more balanced viewpoint.
The Digital Future Coalition, in its response to the "Framework" makes the
general point that intellectual property law (and exemptions) is key to
electronic transactions and that the "framework should be explicit about
the importance of balance in intellectual property law.


                              *  *  *  *  *


B) The DFC RESPONSE

The Digital Future Coalition has presented a response to the Framework that
I am attaching below.

The "Framework for Global Electronic Commerce"  can be found at
<http://www.iitf.nist.gov/electronic_commerce.htm> (an executive summary is
also available).

The Framework opens with an introductory background on the Internet. After
enunciating five principles (the private sector should lead; government
should avoid restrictions and regulation; government should support and
enforce a simple legal environment for commerce; government should
recognize the Internet's unique qualities; electronic commerce should be
enabled on an international basis) it articulates nine areas for
international discussion and agreement under the rubrics of Financial,
Legal and Market Access Issues. These areas are:

FINANCIAL:
1. Customs & taxation
2. Electronic payment systems
LEGAL:
3. Uniform Commercial Code for Internet commerce
4. Intellectual property protection
5. Privacy
6. Security
MARKET ACCESS:
7. Telecommunications infrastructure and interoperability
8. Content
9. Technical Standards.


Some of the key points of the DFC response below can be summarized as follows:

1. BALANCE
Revise the opening set of five Principles to recognize the importance of
balance in intellectual property laws.

2. LAW v. CONTRACTS
Recognize the importance of settling the developing issue of whether
"shrink-wrap" or "point-and-click" electronic licenses can pre-empt rights
under copyright law, especially fair or other exempt uses of licensed
works. This is especially important as the Uniform Commercial Code is
currently being revised to deal with this issue.
NOTE: DFC adds some explanatory material here about revisions to the UCC.

3. CIRCUMVENTING COPYRIGHT PROTECTION DEVICES
Support the "Framework's" emphasis on the need to "discourage the
inappropriate use of devices and services to defeat anti-copying systems,"
but stress the WIPO emphasis on penalizing the act of illegal circumvention
rather than on prohibiting the manufacture of circumvention devices (which
can be used by libraries and others for specifically delineated legal and
appropriate circumvention).

4. PRIVACY
Privacy issues are closely linked with intellectual property issues and DFC
supports WIPO's narrow definition of "rights management information" such
as to protect unwarranted information on the users of any given body of
information.

Other points include:

* emphasizing that the U.S. should promote the free-flow not only of
commercial information products but also public domain and proprietary
material developed by schools and libraries;

* emphasizing that regulations affecting content on the Internet would have
an impact not just on businesses but on much of social and intellectual
life as represented by the, library, education, arts and nonprofit sector.


     *************************************************************

C) DFC  PROPOSED COMMENTS ON MAGAZINER "FRAMEWORK" (DFC MEMBERSHIP APPROVAL
REQUIRED)


        The thirty-six organizational members of the Digital Future
Coalition (DFC)  welcome this opportunity to respond to the draft of "A
Framework for Global Electronic Commerce," and to commend you and the
interagency taskforce for reaching out for comments to a wide range of
affected groups.  The issues addressed in the draft are important ones, and
a set of principles for the further development of policy relating to those
issues urgently required.  The draft represents an excellent start on this
crucial project, and we are pleased to be able to offer suggestions to
further strengthen it.


TRADE IN INFORMATION COMMODITIES AND THE PRINCIPLE OF BALANCE

        To a significant extent, the goods traded by means of electronic
commerce will be intangible  information commodities.   These are goods of
a peculiar kind, in which there are both public and private stakes, and
special considerations must be taken into account in determining how they
will be bought and sold. Traditionally, the characteristics of the
marketplace for such goods have been shaped by the laws of intellectual
property in general, and copyright in particular.  The DFC believes that,
by and large, the existing intellectual property system of the United
States has worked well to accommodate all stakeholders, and we would urge
that any new legal infrastructure developed to facilitate electronic
commerce must be equally well calibrated.

        The DFC was organized in 1995 as a response to the White Paper of
the IITF Working Group on Intellectual Property.  Since that time, we have
been active on domestic and international intellectual property issues
relating to the networked digital environment.  From its inception, the DFC
has stressed the importance of extending  into that new environment the
principle of balance which has characterized American copyright law from
its inception.    As we stated in the proposed list of  "Principles for
Intellectual Property Protection in the GII" which we submitted to your
office last September: "The guiding principle of United States copyright
law and policy is  to promote the Progress of Science and useful Arts...."
This goal will be achieved by a carefully balanced system that provides a
financial incentive to authors and inventors, while also promoting access
to copyrighted works."   Indeed, the failure of the NII Copyright
Protection Act of 1995 to achieve broad support in Congress or among
affected interests  reflected the widespread perception that the proposals
it embodied lacked balance. The maintenance of this balance remains the
primary concern of DFC today.


SUGGESTED REVISIONS TO THE SET OF "PRINCIPLES"

        Returning to the main theme of these comments, we would suggest
that the already impressive list of "Principles" that initiates the body of
the draft report should be revised to take specific account of the
importance of balance in intellectual property law.  In particular, we
would suggest that a new principle (5), stating that "Governments should
recognize the unique qualities of intellectual property."

Such a statement could be followed by exegesis of the philosophy of balance
outlined above, and concluding with a recognition that where intellectual
property is concerned, the strongest protection is not always to be
preferred from the standpoint of public policy.

Likewise, the discussion following existing principle (3) can and should be
expanded to acknowledge that in a "harmonized legal framework" the
important goal of "protecting intellectual property from piracy" must be
offset against that of  "assuring access to information," and that
maintaining the accommodation of diverse interests that has characterized
traditional intellectual property law is an important goal in itself.


INTELLECTUAL PROPERTY VALUES AND ELECTRONIC LICENSING -- A POTENTIAL COLLISION?

        In addition, we would urge that, in the section of the report
devoted to legal issues around creation of a " Uniform Commercial Code' for
commerce conducted over the Internet," explicit consideration should be
given to the potential impact of the enforcement of electronic licensing
agreements on traditional intellectual property values.  As the law of the
U.S. now stands, there is a significant risk that limitations on copyright
protection designed to promote balance may be preempted by terms and
conditions incorporated in non-negotiated, on-line "point and click"
license agreements.  Many are concerned, for example, that the recent
Seventh Circuit decision in ProCD v. Zeidenberg, 86 F.3d 1447 (enforcing
"shrink-wrap" license provisions barring redisclosure of public domain
information), suggests that provisions in electronic licensing agreements
could limit licensee's the opportunity to make "fair," or even exempt,
secondary uses, of licensed works.   Unfortunately, the ongoing effort by
the ALI and NCCUSL to draft "Article 2B" (relating to "Licenses") of a
revised U.C.C. has failed -- to date -- to take into account such concerns
about the maintenance of the balance struck in intellectual property law.
We believe that your report would play an especially salutary role were it
to identify this issue as one that requiring explicit treatment in any
effort to devise a uniform national or global law of electronic sales.


THE PRINCIPLE OF BALANCE IN INTERNATIONAL INTELLECTUAL PROPERTY LAW

        When the 160 nations of the World Intellectual Property
Organization met last month in Geneva, they affirmatively underscored the
importance of this approach in the preamble to the "New Copyright Treaty,"
which states that the parties have agreed to its substantive provisions
"[r]ecognizing the need to maintain a balance between the rights of authors
and the larger public interest, particularly education, research, and
access to information, as reflected in the Berne Convention."  Likewise, in
an "agreed statement" which the United States was instrumental in inserting
into the records of the Diplomatic Convention, the delegates stated that:
"It is understood that the provisions of the [new treaty] permit
Contracting Parties to carry forward and appropriately extend into the
digital environment limitations and exceptions [to proprietors' rights] in
their national laws which have been considered acceptable under the Berne
Convention. Similarly, these provisions should be understood to permit
Contracting Parties to devise new exceptions and limitations that are
appropriate to the digital network environment."

        The DFC applauds the draft framework's emphasis on the need to
"discourage the inappropriate use of devices and services to defeat
anti-copying systems."  We believe that the focus of  any new regulation
relating to technological safeguards should be on prohibiting and
penalizing the act of circumvention, rather than prohibiting socially and
economically valuable technologies which may be capable of misuse.  We note
that the language adopted by the W.I..P.O. Diplomatic Convention has such a
focus, and we urge that the United States should follow the same approach
in domestic legislation with respect to the inappropriate use of devices
and services to defeat anti-copying

        We assume that the discussion of "Copyright" in the final version
of the draft framework will reflect the outcome of the meetings in Geneva.
With respect to this section of the draft, we also note that the delegates
to the Diplomatic Convention agreed to defer for an indefinite period any
action on new regimes for the sui generis protection for "databases."  It
is the position of the DFC that any international or domestic action on
proposals for such protection must await a full airing of the difficult
issues they present -- a discussion which has not yet occurred in the
United States.   In addition, we note that the listing of outstanding
issues in the penultimate paragraph of the section may (inadvertently) be
too narrowly drawn in two important respects.  First, the scope of
permissible uses of copyrighted materials (including uses in education and
science) is determined not only by the doctrine "fair use," but also by
various specific exceptions and limitations written into the Copyright Act,
including those of Sections 108 and 110.  Second, the doctrine of "fair
use" itself is applicable to a broader range of uses than the draft
paragraph suggests, including certain important commercial activities.


PRIVACY CONCERNS AND COPYRIGHT MANAGEMENT INFORMATION

        In a related vein, we note that like issues relating to the law of
sales, those relating to the law of personal privacy are necessarily
intertwined with intellectual property considerations.  From its inception,
the DFC has stressed the various respects in which articulation of new
intellectual property regimes in cyberspace could threaten privacy values.
One good example arises where so-called "Copyright Management Information"
(CMI) is concerned.  At least as broadly defined, CMI could include not
only data about authorship, ownership or terms and conditions for use of a
work; in addition, it could extend to facts about the use history of that
work, including records relating to the preferences of particular
consumers.  If, as the draft suggests, the integrity of CMI is to be
afforded legal protection, it is important that the definition of protected
data be narrowly drawn so as to exclude such usage records.    In this
connection, we would point out that the definition of "rights management
information" incorporated in the two treaties concluded at the recent
W.I.P.O. Diplomatic Convention apparently is drafted to achieve this
result.  A similarly restriction definition should be incorporated into any
domestic legislation on the subject.  More broadly, that it is important
that the issue of what sort of CMI should be protected against modification
or deletion be explicitly raised in the section of the framework paper
devoted to "Privacy" concerns.


ADDITIONAL SUGGESTIONS

        Finally, we would like to indicate several other respects in which
this generally excellent draft could be further improved:

--      In the section on "Content," it would be desirable to recognize
explicitly that our aim should be promote the free flow not only of
commercial entertainment and information products, but also that of
proprietary  material generated by schools, libraries and others in the
not-for-profit sector, as well as  useful public domain information.
--      Likewise, the regulatory issues referred to in the "Content"
section,  impact more than just businesses, as demonstrated by the intense
involvement of the library and education community in the debates surround
the recent Communications Decency Act.

--      The "Technical Standards" section correctly points out the
potential downside of premature standardization and the potential misuse of
standards as non-tariff barriers.  Lack of  proper balance in the IP system
would enable firms to exert excessive control and create such negative
situations.

--      In addition, the section on "Technical Standards" should stress the
importance of interoperability to the development of the Internet and
Internet-related products.  It should also oppose interpretation of
intellectual property or contract law in a manner which inhibits
interoperability.

--      Any discussion of the problem of OSP liability should include a
reference to the fact that many non-commercial institutions, such as
libraries and schools, function as OSPs within the definition offered in
the first footnote to the draft report.

--      And we would suggest that as the framework paper is revised, other
agencies expert in issue areas identified in it,  beyond those already
included in the impressive list of participants in the interagency task
force, be consulted as well.  These might include the Department of
Education and the Bureau of Export Control.

        In closing, we would like to reiterate our gratitude for this
opportunity to comment on a document that represents an impressive
beginning for an urgently important project.  We look forward to working
with you and the task force in the months to come.