chapter 4 impact of technology on enforcement of

Chapter 4

Impact of Technology onEnforcement of Intellectual

Property Rights

Contents

PageMajor Findings .....,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Trends in Storage Technologies: Impacts on the Right To Controlthe Reproduction of Copy righted Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Copyright Enforcement in the Early Print Environment . . . . . . . . . . . . . . . . . . . . . . . 99Impact of Reprography on Enforcement of Copyright . . . . . . . . . . . . . . . . . . . . . . . . . 99Impact of Audio and Video Taping on the Enforcement of Copyright . . . . . . . . . . . . 100Impact of Computers and Digital Information on the Enforcement of Copyright. . . 102

Trends in Communication Technology: Impacts on the Right To ControlPublication and Performance . .............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Print, Live Performance, and Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Impact of Radio and Television on the Enforcement of Copyright . . . . . . . . . . . . . . . 105Cable Television. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Subscription Television. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Impact of Communication Satellites on the Enforcement of Copyright . . . . . . . . . . . 106Impact of Facsimile on the Enforcement of Copyright . . . . . . . . . . . . . . . . . . . . . . . . . 107Data Communications and the Enforcement of Copyright . . . . . . . . . . . . . . . . . . . . . . 107Databases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Computer Bulletin Boards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Local Area Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Integrated Services Digital Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Trends in Processing Technology: Impacts on the Right To Controlthe Making of Derivative Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Impact of Processing Technology on the Derivation of Text . . . . . . . . . . . . . . . . . . . . 112Impact of Processing Technology on the Derivation of Music . . . . . . . . . . . . . . . . . . . 113Impact of Processing Technology on the Derivation of Video . . . . . . . . . . . . . . . . . . . 113Impact of Processing Technology on the Derivation of Computer Programs . . . . . . . 114

Adjuncts and Alternatives to Traditional Enforcement Mechanisms . . . . . . . . . . . . . . . 116

Technological Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117Broadcast Signals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118Audio and Video Recordings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119Advantages and Disadvantages of Technological Protection . . . . . . . . . . . . . . . . . . . . 119Public Relations Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120Public Attitudes and the Legitimacy of Intellectual Property Law . . . . . . . . . . . . . . . 121

TableTable No. Page4-1. Motion Picture Association of America Film Security Office

Recent Criminal and Civil Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

FiguresFigure No. Page4-1. Audio Recorder Sales, 1958-80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004-2. Factory Sales of Videocassette Recorders, 1977-86. . . . . . . . . . . . . . . . . . . . . . . . . . . 1014-3. The Sequence of Inventions in Telecommunications, 1840-2000 . . . . . . . . . . . . . . . . 1044-4. Trends From 1960 to 1980: Volume and Costs of Communication

by Media: USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................,....108

——

Chapter 4

Impact of Technology on Enforcement ofIntellectual Property Rights

MAJORTechnology is making it cheaper to copy,

transfer, and manipulate information and in-tellectual property. For example, devices suchas optical disk storage systems may allow theaverage person to collect entire libraries ofcopyrighted textual, musical, and visual worksin his home. Decreasing prices and increasingcapabilities of information systems will per-mit more people to make use of more works.Consequently, enforcement efforts will haveto reckon with a much larger volume of poten-tial infringements than exists today.

Technology is allowing the copy, transfer,and manipulation of information and intellec-tual property to occur more quickly. For ex-ample, fiber optic technology is currently ca-pable, under laboratory conditions, of trans-ferring 100 average-length novels over a dis-tance of 100 miles in 1 second. These capabil-ities may soon be available in offices andhomes. As a result of this and many similardevelopments, owners of rights may have lessmarketplace “cushion’ in which to realize areturn on their creative and financial invest-ments. Thus, they may have less incentive toproduce works.

Technology is making the copying, transfer,and manipulation of information and intellec-tual works more private. For example, personalcomputers can store, process, and communi-cate the contents of large commercial data-bases without the knowledge or consent of thecompilers of such works. As a result, ownersof rights face greater difficulty detecting, prov-ing, and stopping infringements. Thus, theymay have less incentive to make their worksgenerally available.

FINDINGSTogether, improvements in the cost, speed,

and capabilities of information technologies aremaking traditional proprietor-initiated (civil)enforcement largely ineffective in securing rea-sonable control over public distribution of in-tellectual works. The effect might be to makeinvestors reluctant to fund the creation of in-tellectual works. More likely, proprietors of in-tellectual property will be more hesitant to dis-tribute their works in forms over which theyhave little physical control.

The technology itself is providing proprie-tors with ways to more tightly control the dis-tribution of their works. Private, computerized,electronic systems can provide them with themeans to enforce control by limiting andmonitoring access. Policy makers may have toweigh the benefits of such control against thepotential social costs of restricting public ac-cess and monitoring private citizens informa-tion use.

As technology makes the enforcement of in-tellectual property rights more difficult, pub-lic support for these rights becomes all themore critical. At present, however, the publichas little knowledge of intellectual propertyrights as an issue. To the extent that citizensare aware of this issue, they draw clear distinc-tions between proprietors’ rights to operatein the marketplace and their own rights to useinformation as they please in their own homesand businesses. Therefore, so long as proprie-tors’ rights do not conflict with the public’ssense of privacy and fairness, the public islikely to lend support to the intellectual prop-erty system.

97

98 ● Intellectual Property Rights in an Age of Electronics and Information

INTRODUCTION

The granting of legal rights is based on theassumption that those rights can be enforced.Intellectual property law has been based onthe premise that, by and large, rightholderswill enforce their own rights by monitoring theuse of their works and suing infringers. To dothis, they must know of specific cases of in-fringement, and they must be able to collectenough evidence to prove in court that a par-ticular person or corporation violated theirrights.

Information technologies are impeding tradi-tional enforcement mechanisms. They makethe copy, transfer, and transformation of workscheaper, faster, and more private, and thusmore prevalent and harder to detect and prove.Without effective enforcement of their rights,intellectual property owners may have less in-centive to produce and disseminate intellec-tual works. This, in turn, could jeopardize thebenefits society gains from the open dissemi-nation of intellectual works. And, insofar asthere are widespread, unimpeded infringe-ments, the legitimacy of intellectual propertylaw might itself be undermined.

The enforcement problem raises fundamen-tal questions about the nature and efficacy ofthe intellectual property system as a whole.Many of these issues are covered elsewhere inthis

1.

2.

3.

report. This chapter focuses on:

how advances in technology are reducingthe effectiveness of the traditional meansof enforcement;some of the private initiatives that propri-etors are adopting to protect their inter-ests; andpublic attitudes that bear on the enforce-ment of intellectual property law.

To understand how technology affects theenforcement of intellectual property rights, onemust begin with a central problem: As the tech-nologies for creating, distributing, and usinginformation change, the very concepts and defi-nitions that have traditionally defined intel-

lectual property rights and their boundariesbecome ambiguous. This ambiguity makes itdifficult to apply the law in a consistent fash-ion and in a way that is consonant with thegoal of promoting “science and the usefularts. In particular, controversies arise aboutwhich particular uses of new technology causedamage to creators and copyright owners, andwhether such damage significantly reduces in-centives to produce and disseminate works.

This chapter divides intellectual propertyrights into three categories, which correspondto the kinds of rights that have traditionallyattached to intellectual works: the right tocopy, the right to publish and perform, and theright to make derivative works. These catego-ries are used only to describe the new technol-ogies in terms with which policy makers are fa-miliar. Their use should not imply that theserights should be extended or enforced. In fact,one of the challenges that policy makers faceis understanding whether traditional conceptscan be employed in new technological contexts.

The impact of technological change is differ-ent for different intellectual property rights.This chapter examines trends in three catego-ries of technology, each corresponding to a par-ticular kind of right traditionally granted bycopyright law. Changes in storage technol-ogies, for example, affect the right of proprie-tors to control the copying of their works. Ad-vances in communication technologies affecttheir right to control publication and perform-ance. And new information processing tech-nologies affect the proprietors’ right to con-trol the production of derivative works. More-over, to demonstrate the effect of advancingtechnology on enforcement, this chapter willalso look at how these technologies interactwith each other in integrated computer- andtelecommunications-based systems. In the longrun, it is the convergence and interaction ofthese technologies that may prompt the mostsignificant enforcement problems for the in-tellectual property system as a whole.

. .

Ch. 4–Impact of Technology on Enforcement of Intellectual Property Rights . 99

TRENDS IN STORAGE TECHNOLOGIES: IMPACTSON THE RIGHT TO CONTROL THE REPRODUCTION

OF COPYRIGHTED MATERIALInformation storage technologies are devices

and systems that fix and hold information ina reusable form. Storage technologies includepaper and ink, photographs, vinyl disks for mu-sical recordings, motion-picture film, audio andvideocassette tapes, semiconductor memorychips, and optical disks, among others.

Two recent trends in storage technology arelikely to affect the enforcement of intellectualproperty rights. First, as storage technologiesbecome cheaper and capable of holding moreinformation, it becomes harder to enforce pro-prietary rights; more people can use these tech-nologies to copy works privately. Secondly,storage technologies are becoming less special-ized to specific forms of information. They areoften part of computerized systems that han-dle many forms of information-e. g., text,graphics, music, and video. Information incomputerized, digital form is much harder tocontrol than information in traditional for-mats. Together, these two changes transformcopying into a problem of much greater scopefor proprietors than it has ever been before.

Copyright Enforcement in theEarly Print Environment

When first enacted, American copyright lawprotected expressions of information in theform of printed text and graphics: books, mapsand charts.1 Anyone seeking to fix or storethese expressions for dissemination had tomake a relatively large investment in capitalgoods: movable type, volumes of paper and ink,mechanical presses, and other equipment. Theyhad to obtain skilled labor: typesetters, print-ers, draftsmen, and others. These activitieswere difficult to conceal. They also had to of-fer copies in the open marketplace. The publicquality of these operations meant that copy-right owners could detect and stop large-scale,economically damaging infringements, thus

‘Chapter 1 15. Section 1, Statute 124, Act of 1790.

controlling the reproduction of their work withrelative ease. Copying by hand for personal useand scholarship was not a major problem. Itdid not threaten proprietors because it was nota viable means of competing with copyrightholders or of denying them sales revenues fromtheir work.

Although technology changed through the19th and early 20th centuries and provided newforms in which to fix expressions of informa-tion—photographs, lithographs, motion pic-ture films—the capital and labor required forreproduction remained fairly high, and com-petitive infringing activities were still hard toconceal. Thus, these technologies posed onlyminor problems in copyright enforcement.

Impact of Reprography onEnforcement of Copyright

In the mid-20th century, photocopying, mim-eograph, and xerography were developed,making it much cheaper and easier to repro-duce printed materials. More people began tocopy text and graphic images, making it harderfor copyright holders to monitor such activi-ties. As these technologies became more com-mon, it became too costly and impractical forproprietors to try to authorize copying, collectroyalties, and enforce their rights on a case-by-case basis, even if users were inclined toseek permission and pay for use.

It is difficult to estimate the economic im-pact of this unauthorized copying.2 In general,while we know that xerographic reproductioncauses some lost sales for copyright holders,it does not appear to be a serious threat to theeconomic viability of general-interest book,magazine, or newspaper publishing.3 Publish-

‘BJ- the term “unauthorized,” this chapter means thoseuses of cop.~’righted works that have not been specificall.v per-mitted b-}’ the cop~’right holder. It does not seek to imply thatthese uses are, or should be, illegal.

‘The number of titles published and the profits of publish-ers have remained high despite the introduction and spread of

(continued on next page)


ers of very specialized periodicals with smallcirculations, such as scientific and technicaljournals, contend that disastrous losses of salescould result if corporations and libraries re-place multiple subscriptions with photocopies.If such replacement were occurring on a largescale, one might expect a decline in subscrip-tions and an eventual reduction in the rangeof titles published. However, Copyright Officedata from publishers on trends in the numbersof titles and subscriptions in this category ofcopyrighted works are inconclusive. They donot show that specialized scientific and tech-nical publications are significantly more af-fected by photocopying than are general-inter-est periodicals.4

Impact of Audio and Video Tapingon the Enforcement of Copyright

Just as reprography has led to unauthorizedcopying of text and graphics, the recent wide-spread availability of audio and video tapingtechnologies has brought about more unauthorized reproduction of recorded music and mo-tion pictures. Here, too, copyright holders arefaced with the difficult problem of controllingcopying while millions of people own machinesthat can reproduce their works in private, atfairly low cost and with little effort.

The level of use of audio and videotape tech-nologies is high and rising. (See figures 4-1 and4-2.) By 1982, 52 percent of Americans overthe age of 13 had used audio tape machineswithin the previous 2 years to record phono-graph records and other materials.5 By the endof 1985, 37 percent of American homes had

——- . . —- . -( c o n t i n u e d f rom prev ious p a g e )

xerograpluc bchnology, which was first commercially availablein 1960. See Michael Rogers Rubin and Mary Taylor Huber,The Knowledge Industry in the ?Jrited Stated J960-1980(Princeton, NJ: Princeton University Press, 1986 (in press)). Be-tween 1960 and 1980, industry sales increased from $1 to $4billion. Paul M. Hirsch, “U.S. Cultural Productions: The Im-pact of Ownership, ” Journal of Commuru”cation, vol. 35, no. 3,Summer 1985, p. 117.

‘Dennis D. McDonald and Colleen G. Bush, Libraries, Pub-lishers and Photocopying: Final Report of Surveys Conductedfor the United States Cop~ight offi”ce, May 1982, table 4-6,p. 4-16.

‘Yankelovich, Skeily & White, Inc., Why Americans Tape:A Survey of Home Audio Taping in the Um”ted States, Septem-ber 1982, p. 28.

Figure 4-1.— Audio Recorder Sales, 1958-80

14

12

10

8

6

4

12

0 . 1 I 14 I t I a 1 s 1, I t I I I I1958 1960 1962 19641966 19681970 19721974 197619781980

YearSOURCE Data compiled from Merchandising Weekly by Michael Rogers Rubin

and Mary Taylor Huber, The Knowledge Industry in the United States,1950-1980 (Princeton, NJ Princeton University Press, 1986), in press

videocassette recorders, up from 28 percent atthe end of 1984.6

Consumers use video recording machines for‘‘time shifting" — that is, recording televisionbroadcasts to enjoy at a more convenient time.’They often use audio tape machines to recordmusic to play in more than one location, forinstance, in a car. Some tape machine ownersuse their machines to trade music or video pro-grams with friends, and to build personallibraries.

These machines are also used for less casualpurposes, such as the mass duplication of copy-righted works to sell in direct commercial com-petition with copyright holders. Many propri-etors contend that commercial piracy of audioand video materials is widespread.8

—-— — . . —6Electronics, Jan, 6, 1986, p. 50. Some industry analysts

predict that 70 percent of U.S. households will have VCR equip-ment by the early 1990s. See Alex Ben Block, “Hard Dollarsin Video Software, ” Forbes, June 17, 1985, pp. 128-131.

‘The recording of commercially broadcast television fortime-shift viewing was specifically found to be fair use by theSupreme Court. See Sony Corp. v. Universal City Studios, 464U.S. 417 (1984).

“The movie industry, through its trade association, the Mo-tion Picture Association of America (MPAA), established a FilmSecurity Office in 1975 to combat commercial piracy of filmsdistributed by the major Hollywood studios. See table 4-1 forsome of their recent enforcement statistics. The musical record-ing industry claims, on the basis of surveys conducted by theInternational Federation of Phonogram and Videogram Pro-ducers, that one out of four musical recordings sold worldwideis a pirate copy. In the United States, their data estimate 1 in10 copies sold is illegitimate. (Reported in Variety, July 31,1985,pp. 1, 92.)

Ch. 4—Impact of Technology on Enforcement of Intellectual Property Rights ● 101

Figure 4-2.— Factory Sales ofVideocassette Recorders, 1977-86

12

2

01977 1978 1979 1980 1981 1982 1983 1984 1985 1986 a

Year

SOURCES 1977.79: U S Department of Commerce Bureau of the CensusStatistical Abstracts 1980. 1980-83. Statistical Abstracts 1985 1984-85:Electronic Industry Association Electronic Market Trends March1986 1986: Electronic Industry AS S O C iation estimate.

Some owners of copyright in musical record-ings and motion pictures have presented fig-ures to support their claims of substantial eco-nomic losses from consumers use of audio andvideo taping technologies. In testimony beforethe Senate Judiciary Committee on October25, 1983, Alan Greenspan presented evidencecollected for the Recording Industry Associa-tion of America suggesting that in 1982 theindustry sustained sales losses of more than

$1.4 billion that were attributable to home tap-ing of borrowed recordings and radio broad-casts.9 Battelle Pacific Northwest Laboratories,in a study performed for the Motion PictureAssociation of America, estimated that, in1982, motion picture copyright owners had lostmore than $57 million in royalties becausevideocassette sales were displaced by hometape copying and off-air taping.10

These figures, however, are not definitive.As detailed in chapter 7, the question of whethera particular instance of copying actually dis-placed a sale of a copy is often impossible toanswer definitively. Moreover, to the extentthat the data are inadequate, or that the anal-yses are inappropriate, these studies may ei-ther grossly overestimate or underestimate theactual harm suffered by musical recording andmotion picture copyright proprietors.11 Someanalysts have suggested that there are bettermethodologies for determining the economiclosses from home taping. In deciding intellec-tual property policy, policy makers will most—————

‘%tatement of Alan Greenspan Re. S.31 Before the Subcom-mittee on Patents, Copyrights and Trademarks, Senate Com-mittee on the Judiciary, Oct. 25, 1983, p. 7.

“’F.J. Cronin, R.J. Ness, A.R. Wusterbarth, and J. I,. Eisen-hauer, An Analysis of the Economic Benefits and Harm FromVideocassette Recorders and Related Products, August 1983,as cited in Economic Issues Relating to New Technoio~”es andIntellectual Property, by Stanley M. Besen (contract preparedfor OTA, December 19841, p. 44,

“See Besen, op. cit., pp. 47-48.

Table 4-1. —Motion Picture Association of America Film Security OfficeRecent Criminal and Civil Cases

Pending casesa Cases where sentence passed.‘ T h r o u g h – Through

1984 June 1985 1984 June 1985— — . —Criminal actions: -

-—

Seizure incidents . . . . . . . . . . . . . . 28 39 24 1Videocassettes seized ., ... . . . . 1,990 24,591 6,286 647Films seized ., ... . . . . . . . . . . . 500 210 100 0Guilty pleas/convictions . . . . . . . . . . . 2 9 38 11indict merits/arrests/information . . 10 12 30 4

Civil actions:Cases recommended . . . . . . . . . . . . 34 24Seizures ... ... ... . . ... 7 9Videocassettes seized ., . . . . . . . . 534 2,601Films seized . . . . . . . . . . . . . . . . . . . . 0 0 —aCases pending at end of the indicated time

SOURCE: Motion Picture Association of America

102 . Intellectual Property Rights in an Age of Electronics and Information

likely want to take these alternative analyti-cal approaches into account.12

Impact of Computers and DigitalInformation on the Enforcement

of Copyright

The growing use of computers to handle andstore information could make it even harderfor copyright holders to enforce their rights.In the case of the right to control reproduc-tion, the computer poses three major problemsfor copyright proprietors that are distinct inkind as well as in degree from other technol-ogies used to store or copy information.

First, copying digital information can bedone at a fraction of the cost and in a fractionof the time that it takes with photocopying oranalog audio or video taping. Second, the dig-it al nature of computer-mediated informationmeans that an infinite number of perfect cop-ies of material can be made. Possession of anoriginal is not required to obtain subsequentcopies of original quality. Thus, the informa-tion content of a work can be completely sepa-rated (or unbundled) from the medium that car-ries it.13 Third, in the normal course of oper-ations, a computer makes many copies of partsof works. Some copies exist for only a few mil-lionths of a second. Other copies may be helduntil the machine is turned off or the materialis written over. Some copies may be held inpermanent form on magnetic disk or tape. 14

—“See Besen, op. cit., pp. 39-40. See also Stanley M. Besen,

Private Copying, Reproduction Costs, and the Suppl+y of Intel-lectual Propert-v (prepared for the NationaJ Science Foundation,December 1984); and I.E. Novos and M. Waldman, “The Effectsof I ncreaseci Copyright Protection: An Analytical Approach, ’92 Journal of Political Economy 236 ( 1984),

‘ ‘Users’ ability to unbundle information may have a signifi-cant impact on the alternatives that proprietors pursue to pro-tect their economic interests in intellectual property. See ch.6, for further discussion on this point.

“In the case of computer programs, “a user is at leastsomewhat negligent if he does not make copies of his programs.[There are] two reasons [for this]: 1) one cannot see by visualinspection if a program is intact; and 2) operator error or pro-gram “glitches” can quickly destroy a program. Thus good pro-gramming practice and copyright regulations [may be] mutual-ly exclusive. ” Personal communication from Edward Conklin,FORTH, Inc., July 23, 1985.

Because of these characteristics, computerspose novel questions for enforcement. For ex-ample, how, aside from appeals to ethics, canproprietors convince consumers to buy origi-nals when perfect copies are probably muchcheaper? How can consumers tell whether theyare purchasing originals or counterfeits? Atwhat point is the proprietor’s right to controlcopying violated within a user’s computer sys-tem?15 Similarly, how much of the material thatresides in a computer can or should be recog-nized as part of the copyrighted work?

These problems are emerging at a time whenmonitoring and stopping the copying of worksis becoming harder. The proprietors’ right tocontrol copying may thus be severely chal-lenged by the growing scale and private na-ture of infringement made possible by increas-ingly powerful and widely used personalcomputers. Also, as discussed below, comput-ers’ processing capabilities may pose specialproblems with respect to proving infringement.

Currently, users receive a relatively smallamount of copyrighted material in digital, com-puter-readable form–computer programs anda small but rapidly growing amount of mate-rial made available through on-line databases.But this is changing with other technologicaladvances that simplify the conversion of printedtext and graphics into machine-readable, dig-ital format. Optical character readers for textinput are growing in popularity in offices asprices fall and capabilities rise. Some analystsexpect that these machines will be widely usedby the end of the decade. And if price and ca-pability trends continue in their current direc-tion, the automatic conversion of printed orwritten text and graphics into computer-read-able form may become a routine practice bythe turn of the century.16

Once in a computer in digital form, text canbe reproduced with a growing array of com-puter-driven printers. These range in price and

. . —“section 117 of Title 17 addresses this problem, but the lan-

guage has yet to be widely tested by the courts.“Outlook for Office Automation Technologies 1985-2000,

report prepared for OTA by the Georgia Institute of Technol-ogy, J.D. Roessner, principal investigator, March 1985.

Ch. 4—Impact of Technology on Enforcement of Intellectual Property Rights • 103

capability from the cheap, fairly slow, and low-quality dot-matrix and thermal transfer de-vices, to very fast and high-quality laser andink-jet devices. As these technologies mature,as manufacturing techniques improve, and aseconomies of scale are realized, consumers willmost likely be able to get faster, better printersfor lower cost.17

Record companies are beginning to offer mu-sic to consumers in digital form by way of com-pact disk players and laser-scan disks. In theirpresent form, compact disks are read only,which means that users cannot record on them,although one can record analog tapes fromthem with cassette or reel-to-reel tape ma-chines. But manufacturers of laser disks aredeveloping erasable and rerecordable mediasimilar in storage capacity and durability tocompact disks. With these, consumers may beable to reproduce the full, master recordingquality of compact disks on home equipment.

Copying video in digital form is now limitedby the fact that current television transmit-ters, receivers, and video recorders supply thematerial in analog form. International stan-dards-making committees are discussing theestablishment of digital television and videotape standards, so this situation could changevery quickly.

The digital optical disk, a technology thatuses lasers to record and read information offa disk that rotates at a high rate of speed, offersgreat. potential for storing very large volumesof digitized information. A single read-only op-

————-—.Paper will continue to be an important temporary storage

medium because people tend to prefer the higher contrast, port-ability, and other characteristics of print that video screens lack,But electronic and optical media are becoming more attractivefor permanent storage of information in many applications be-cause storage volume is vastly reduced and cost and conven-ience of access can be superior to paper storage. Thus the trend,at least in repeated-use and interactive applications, is towardmass electronic and optical storage and on-demand printing.E.C. McIrvine at the OTA Workshop on Display, Printing, andReprography, Mar, 13, 1985,

tical disk, currently on the market, can easilystore several hundred thousand pages of printedtext, 6 hours of master recording quality mu-sic, or 2 hours of full-motion, television qual-ity video. In some applications, many disksare collected in an automatic playback machinemuch like a jukebox. This is being done for theoptical disk project at the Library of Congressin which old books, photographs, and etchingsare being digitized and stored on optical disks.Thus, a very large volume of information canbe made available on-line (by computer termi-nal) at very low cost for storage and access.

In their present form, optical disks can bewritten on only once, and then only using arelatively expensive high-power laser deviceto impress digital data on the disk. But sev-eral companies, both in the United States andabroad, are working intensively to develop op-tical media and supporting hardware that al-low a disk to be recorded, erased, and rerecordedmany times. 18 Their goal is to manufacture adevice that the average consumer can use withhis personal computer, stereo, and televisionequipment. This technical advance would makeit even cheaper and easier to copy information,while increasing the speed at which a computercould access the large volume of informationstorable on optical disks.

In summary, advances in information stor-age technology have made the process of copy-ing information cheaper, easier, and availableto more people. These trends show every indi-cation of continuing. The technologies are mak-ing the old definitions of “rights, ‘‘infringe-merits, ” and “fair use” ambiguous and largelyobsolete. Because of technical advances andthe blurring of definitions, the traditional copy-right enforcement mechanism, whereby propri-etors sue violators in civil proceedings, mayno longer be effective in protecting the crea-tive and economic interests of copyright owners,

‘“B, Dumaine, “Here Comes the Erasable I.aser Disk, ’ For-tune, Mar. 5, 1985, p. 100,


TRENDS IN COMMUNICATION TECHNOLOGY: IMPACTS ONTHE RIGHT TO CONTROL PUBLICATION AND PERFORMANCE

Communication technology is the term thatencompasses the many devices and systemsused to move information from place to place.These technologies evolved very slowly untilthe 1840s, when, after electronic telegraphywas developed, they rapidly grew in capabil-ity. Since then, innovations in telecommuni-cation technology have quickly advanced thespeed, distance covered, and scope of intercon-nection of people and places, all of which arestill growing exponentially (see figure 4-3).

These technologies are now part of the basicinfrastructure of society. We have come to rely,for example, on the telephone system, broad-cast radio, and television to supply us with vi-tal information about our family, friends, bus-inesses, and government.

Increasingly, we also receive informationproducts and services through telecommuni-cation links that entertain, educate, and helpus make decisions. Since many of these goodsand services are protected by intellectual prop-erty law, advances in communication technol-ogies will have a major impact on enforcementof intellectual property owners’ right to con-trol the publication and performance of theirworks over telecommunication facilities.

Print, Live Performance, andCopyright

Before the 1920s, communication technolo-gies had very little affect on the enforcementof copyright, simply because copyrighted

Figure 4-3.—The Sequence of Inventions in Telecommunications, 1840-2000

100 billion

10 billion

1 billion

100 million

10 million

1 million

100,000

10,000

1,000

100

10

1

Switched Satellites //

S a t e l l i t e s . 0 ’ T-4 fiber

L5 coaxial cable,....:, :,.,. ...::.., :’,....;.0

,,. , .’.,. , .,. ,: :,.:..,,:../ ... , ..: : Cable television. ./

Carrier telephone■ T-1 digital carrier

/ ‘ =Baudot multiplex telegraph 9 TWX

I 1 1 1 1 I 1 I 1 I I 1 1 1 1 1 I

1830 1860 1890 1920 1950 1980 2000

Year

SOURCE Richard J Solomon and John Ward, Massachusetts Institute of Technology Adapted from James Martin, Future Developments In Telecommunications, 19761980 Annenberg School of Communications Used with permission.

Ch. 4—Irnpact of Technology on Enforcement of Intellectual Property Rights “ 105

works were communicated by physically mov-ing printed copies or by expressing the worksin live stage performances. As the country ex-panded, there were undoubtedly many unau-thorized performances of copyrighted dramaticand musical works, but the important marketsfor such uses were in large cities, so composersand dramatists found it possible to monitorenough of the uses of their work to protect theireconomic rights.

Impact of Radio and Television onthe Enforcement of Copyright

Broadcasting changed this. Commercial ra-dio broadcasting, initiated at KDKA radio inPittsburgh in 1920, complicated copyright en-forcement by dispersing a “performance” overa wide area. When the networks such as NBCwere formed soon after, performances could beheard over virtually the entire nation. Thus,broadcast technology made “collecting at thedoor” from users of a performance of copy-righted music virtually impossible. To continueprofiting from the use of their work, the ownersof copyright in music and the broadcasters de-veloped the system of advertiser support forthe actual broadcast, and established contractswith collecting societies to monitor the use ofcopyrighted work and to pay composers’ royal-ties. (See ch. 9 for details on collecting societies. )

The advent of broadcast television presentedsimilar enforcement problems for copyrightholders. To solve them, networks made simi-lar arrangements to finance the cost of present-ing “free” television to the public. This sys-tem of advertiser support and contracting withcopyright proprietors for use of their work pro-vided a viable and lucrative means of present-ing and paying to broadcast musical enter-tainment.

Cable Television

Cable television originated as a means of pro-viding television to remote areas by the recep-tion of broadcasts with a tall antenna and re-transmission of them by wire to subscribers.

Subsequently, because of the way the courtsand Congress have intervened in the relation-ship between copyright holders and cable broad-casters, it has become a technology with sig-nificant implications for copyright enforcement.

Cable television itself does not present in-tractable problems of detecting or proving in-fringement because most existing cable sys-tems are public. ” But cable television systemshave had to contend with two other enforce-ment problems. One is theft of service, whichis the deliberate unauthorized connection toa cable service. The other is the high transac-tions costs that multiple-channel cable compa-nies face in identifying and negotiating royaltypayments with the many copyright holders intelevision. Congress acknowledged the mag-nitude of the second problem by establishingthe Copyright Royalty Tribunal to set cableretransmission royalty rates and to dispersefunds collected by the Copyright Office.20

Subscription Television21

Some over-the-air television stations scram-ble their signals to prevent access unless theconsumer has rented a décoder box and paida subscription. The direct enforcement prob-lem with subscription television (STV) is theftof service. Some users and commercial com-panies build illegal decoding equipment thatallows users to receive subscription televisionsignals without paying the station. In thisevent, the copyright holder may be undercom-pensated because his royalty payments arebased on the size of the paying audience fora subscription television broadcast.

Television is also relayed to paying sub-scribers by microwave radio. This is called Mul-

‘+ There are a growing number of private cable televisionoperations, generally called Sat-ellite Master .Antenna Tele\’ision(SMATV) that ma~’ present difficult enforcement problems.These systems will be discussed below,

“’U.S. House of Representatives, 94th (’ong., Report 94-1476, p. 88.

- Subscription television was originally ( 19641 a term ap-plied to cable television in California, Erik 13arnouw, Tube off)lent~’ (New York: Oxford University’ I]ress, 19821, p. 350. Nowit is usually applied to transmissions o\’er L’ 11 F and \J 11 F chan-nels that are scrambled.


tipoint Distribution Service (MDS). In someareas, companies have set up several micro-wave channels for television delivery; thesesystems are called Multichannel MultipointDistribution Service (MMDS). To receive thesesignals, consumers need a special device calleda down converter and also a special antenna.Together, the converter and the antenna makethe higher frequency microwave signal com-patible with a standard television set. MDScompanies rent these devices and charge amonthly fee for the program service. But thedevices are widely available from sources otherthan MDS companies. Thus, like STV, theMDS enforcement problem generally involvestheft of service. MDS is treated by the FCCas a common-carrier system; channel time isleased to program suppliers on a tariff basis.Copyright holders contract with MDS compa-nies for transmission services and revenues arebased on the size of the paying audience. Thus,program suppliers and transmitters are under-compensated to the extent that there are ‘freeriders.

Impact of Communication Satelliteson the Enforcement of Copyright

Geosynchronous communication relay sat-ellites affect the enforcement of copyright lawbecause an increasing amount of copyrightedmaterial is being transmitted by these sys-tems. Currently, anyone who has a proper an-tenna ‘dish’ and a down converter can receivethe material. Much of the copyrighted mate-rial transmitted by these satellites is intendedfor cable television “head-ends, or transmis-sion facilities, or for broadcast stations affili-ated with television networks. Many of the un-authorized users are home consumers who livefar from VHF and UHF stations, have poorreception, and no cable service. For these peo-ple, satellite signals offer a wide selection ofprogramming (more than 100 channels) withhigh signal quality for the one-time cost of thedish and the down converter. These systemsare currently priced as low as $1,000, depend-

ing on dish size and its ability to aim the re-ceiver at more than one satellite.22

Some hotels and other commercial establish-ments also use satellite-derived programming,capturing it with roof-top dish antennas andcabling it to their customers. Some apartmentcomplexes install satellite reception gear andsmall, private cable distribution systems thatcompete directly with municipal cable opera-tions. These are the SMATV systems men-tioned earlier. Many of these uses of copy-righted programs are authorized by contract,but others may not be.

Other unauthorized users are in foreign coun-tries that fortuitously fall within the “foot-print” of one or more satellite signals. Theseforeign users often retransmit satellite-derivedmaterial over government or privately ownedcable or over-the-air broadcast facilities with-out seeking the permission of, or making pay-ment to, the copyright holders. As with othertypes of subscription-based television (STV,MDS, MMDS), if copyright royalty contractsare based on the size of the paying audience,these unauthorized uses deprive copyrightholders of rightful compensation.

When revising the Communications Act in1984, Congress, recognizing the already wide-spread use of satellite signals by home consum-ers, put the onus of enforcing property rightsin these transmissions on the program provid-ers and the satellite system operators. The re-visions encouraged them to establish marketmechanisms for payment, and to encrypt theirsignals. Congress struck a compromise be-tween the interests of copyright holders andthose of owners of satellite dishes, making itillegal for unauthorized users to intercept cer-tain satellite signals. However, interception ofsatellite signals is not a violation if:

“’Michael Doan, “A Scramble To Break the Satellite Dish, ’U.S. News and World Report, Sept. 30, 1985, pp. 52-53. In 1985,over 1.4 million homes had satellite dishes, and some believethat this number could double in 1986. Sales are quite brisk,approaching 50,000 units per month. New York Times, July8, 1985, pp. 1,C16.

Ch. 4–Impact of Technology on Enforcement of Intellectual Property Rights ● 107

(1) the programming involved is not en-crypted: and

(2)(A) a marketing system is not established. . . 23

A t l e a s t o n e c o m p a n y , H o m e B o x O f f i c e ,Inc . , has begun to encrypt i ts sate l l i te trans-missions to some cable c o m p a n i e s .24 At pres -ent , such encrypt ion is expensive because a l lr e c e i v e r s m u s t b e p r o v i d e d w i t h d e c o d i n gequipment . I t i s not yet c lear to what extentother program providers will see an advantagei n e m p l o y i n g e n c r y p t i o n t o p r o t e c t s a t e l l i t e

t e l e v i s i o n t r a n s m i s s i o n s .

A new use of satellite transmission to delivercopyrighted works could further complicate en-forcement . A number o f companies are try ingto f ind a way to develop a prof i table marketto satisfy the growing demand for distributiono f t e l e v i s i o n p r o g r a m m i n g b y s a t e l l i t e . O n epossibility, direct broadcast satellite (DBS)technology, could provide consumers with aservice that offers as many channels as cabletelevision. The service would sell or rent sat-ellite dishes and down converters to home vid-eo consumers, and transmit television signalsdirectly to them.

DBS could complicate enforcement of cur-rent theft-of-service and illegal signal intercep-tion laws if some DBS program providers of-fer free services, or if program providers cannotagree to encrypt all satellite television signals.In either case, the mere possession of a back-yard dish and special microwave receptionequipment would not be sufficient evidence toprove unauthorized use. ” Indeed, unauthorizeduse could be very difficult to stop.

To demand payment from a user, programowners must prove that the user actuallysnatched and watched a program. Short ofstaking out the farmhouse with electroniceavesdropping equipment and then storming

“47 U, S,~.. Section 705, 318 ( 1984).L4LJ.S. News and M’orld Report, Sept. 30, 1985, p. 52.“ In the case of MDS receiving equipment, the courts have

found that the manufacture and sale of down converters andantennas without authorization from program providers is aviolation of the Communications Act and FCC regulations. SeeUnited States v. Stone, U. S. D, C., Southern District of Texas,IIouston Division, Aug. 11, 1982; and Movie Systems, Inc. v.Heller, U.S. Court of Appeals, Eight Circuit, decided June 30,1983.

.— .

it with a search warrant, how can programowners prove a farmer ripped them off?26

Impact of Facsimile on theEnforcement of Copyright

Facsimile is a communication technologywith potentially significant implications forcopyright enforcement. Facsimile machineswork by scanning a document and digitizingits image. This is distinct from optical charac-ter recognition (OCR), which scans a documentand digitizes the individual characters so thatthe text can be manipulated in a computer sys-tem. OCR can be thought of as a further proc-essing step beyond that employed in facsimile.

Because the present cost of facsimile is highcompared to mail delivery, for which it sub-stitutes, its current impact on copyright isprobably small. But as seen in figure 4-4, thevolume of information communicated by fac-simile has risen sharply over the past two dec-ades, and it is becoming more and more attrac-tive as a means of moving documents.

Normally, a facsimile document is trans-mitted over telephone lines to a facsimile de-coder and a xerographic copier. The documentis communicated in digital form. Therefore,copyright problems could arise if the cost oftransmitting information this way drops sig-nificantly for, as with data communications,the transmission of information by facsimiletechnology is highly covert.

Data Communications and theEnforcement of Copyright

Data communications is the term used to de-scribe computer-to-computer transfer of digi-tal information. The copyright enforcementproblems associated with data communica-tions result from their growing scope, scale,and speed combined with the covertness withwhich people can take advantage of these ad-vances. In practical terms, this means that,as more and more copyrighted material is avail-

“Alex Ben Block, “An Eye in the Sky, ” Forbes, November1984, p. 196,

708 ● Intellectual Property Rights in an Age of Electronics and /formation

able inbe able

Figure 4-4.–Trends From 1960 to 1980: Volume and Costs of Communication by Media: USA(plotted on log by log scales)

1000.000 I

10 -

1 .

01 -

.01 -

001 -

0001t

TV

Newspapers

CATVf l ; r ec t ma i l

Education~ B o o k s =

tPhone

Movies

Mail

Datacommunlcation

I 1 1 1 I 1 1 1 1

0 0.001¢ 0.01¢ 0.1¢ 1¢ 10¢ $1 $10 $100

Cost of transmitting 1,000 words (1972)

While the cost trends for print media remain steady, electronic media costs have dropped dramatically in the past two decades,

SOURCE Ithiel de Sola Pool, Hiroshi Inose, Nozomu Takasaki, and Roger Hurwitz, Communication Flows (Tokyo University of Tokyo Pressor New York: Elsevier, 1984) Reprinted with permission

computer-mediated form, people willto transfer it widely and quickly with-

out the knowledge or consent of copyrightholders.

Scope, in this context, refers to the numberof terminal points that are connected by com-munication networks. For instance, the scopeof mail delivery and telephone networks areboth very high. Data communication tech-niques use devices called modems, which con-vert digital computer information into analogform compatible with telephone voice trans-mission lines, to take advantage of the scopeof the telephone network for computer-to-com-puter transmissions. The development of anIntegrated Services Digital Network (see be-low) will eliminate the need for these devicesand will further increase the scope of data com-munications.

The use of data communications is expand-ing rapidly for several reasons. First, scientistsand engineers have made great technical ad-vances in moving information electronically.

Satellite communications and fiber optic tech-nology are both fruits of this progress. Sec-ond, costs of manufacturing, installing, oper-ating, and maintaining the transmitters,receivers, switching equipment, and other com-ponents are falling as economies of scale af-fect microelectronics technology. Third, the useof computers is increasing people’s ability toreceive and handle information automatically.For instance, on-line database systems canwatch for information that is of particular in-terest to an individual, and alert that personwhen new information pertaining to the sub-ject enters the database.

The scale of communications, the second fac-tor in enforcement problems, refers to the vol-ume of information that is moved. There is noprecise measure of information volume thatcan be applied across all forms of information.27

“The measure of information volume is complicated by themultiplicity of forms in which information exists (words, num-bers, mathematical formulae, graphics, moving pictures, etc.),as well as by the range of media that communicate information(e.g., printed pages, -television broadcasts, motion picture film).

( c o n t i n u e d o n n e x t p a g e )


Nevertheless, it is clear that electronic mediain general, and data communications in par-ticular, are fostering an enormous increase inthe volume of information transported. Thisincrease is due to the same factors that accountfor increasing scope. But the scale of data com-munications is also growing because informa-tion is a highly efficient means of affecting thecontrol of processes from a distance. Thus, datacommunications can substitute for human ob-servation and action.

The volume of information that passes throughdata communication networks is still smallcompared with the amount of printed materi-al distributed through traditional channels.But, as seen in figure 4-4, data communicationvolume increased approximately 1,000-fold be-tween 1960 and 1980. The personal computerand the modem will undoubtedly increase thisfurther, and technological advances such as op-tical character recognition, voice recognition,and optical disks will make data communica-tions an even more attractive way to transfermany kinds of information, some of it in copy-righted form.

The speed of electronic communications isthe third factor that affects copyright enforce-ment, and it too is increasing at a dizzying pace.(See figure 4-3.) Not only have new inventionsallowed faster communications, but R&D lab-oratories are continually advancing the speedof established communication devices and me-dia. For example, the achievable speed of datacommunications over standard copper wirepairs, such as the wires that run to home tele-phones, have increased 100-fold since 1970. Thechannel capacity of coaxial cable, the stand-

/ ( f )[1 / I II ( , f ,(1 / I f I 1)1 J){ ( \ II 1{1 . )I<t<t

This protean quality has so far defied the development of a uni-\’ersally applicable unit of measurement. As more and more in-formation is transmitted by data communications, the digitalbit–electronic ones and zeros–may become a gross measure.But the relationship between the number of bits in a communi-cation and the quantity of useful information or knowledge con-tained in them is very complex. “One longs, indeed, for a unitof knowledge, which perhaps might be called a ‘‘wit analogousto the ‘‘hit’ as used in information theory; but up to now nopractical unit has emerged. ” Kenneth 130ulding, ‘‘The Economicsof Knowledge and the Knowledge of Economics, Econom”csof Information and Knowledge, D.M. I.amberton (cd. ) (Balti-more: Penguin Woks, 1971 ).

ard cable television medium, has increasedfrom 12 to 54 channels since 1975, and thenewer systems have potential for transmitting72 simultaneous full-motion television chan-nels over one coaxial cable. Geosynchronouscommunication satellites have increased in ca-pacity since the 240 voice channel (or one TVchannel) “Early Bird” Intelsat I was launchedin 1965. The Intelsat V series, first launchedin 1980, averages 12,000 voice circuits and twoTV channels. The capacity of fiber optics tech-nology has improved more than 100-fold sinceits commercial introduction in 1977. Recentlaboratory tests of new fiber optic systemsdemonstrate the ability to transmit 300,000telephone conversations, or the contents of 100average-length novels, a distance of nearly 100miles in 1 second. 28

A characteristic of data communicationswith important implications for intellectualproperty enforcement is that digital transmis-sion can usually be conducted with a high de-gree of secrecy. Thus, unless significant changesare made in the operation of public telecom-munication networks, the increasing volumeof data communications will make it essentiallyimpossible for proprietors to trace the subse-quent movements of their works once they arecaptured by users’ computer and data commu-nication systems. This raises the issue ofwhether proprietors should, and in practicalterms can, control the transfer of their worksafter users first receive them,

Databases

Computer databases are collections of facts,statistics, bibliographic citations, and other in-formation, including complete texts of somecopyrighted works. Many of these collectionsare offered over telephone lines to users whohave data communication terminals or person-al computers. The user pays a fee to searchthrough the database for the particular infor-mation that he needs. The database proprie-tor can obtain a copyright on the database.Thus certain uses of the information that a userobtains will be illegal.

‘“Telephony, Oct. 21, 1985, p. 24.


One unauthorized use about which proprie-tors are particularly concerned is when com-petitors employ large storage capacity com-puters to download large portions of theirdatabases.” This permits unscrupulous infor-mation service entrepreneurs to avoid riskingmuch of the investment that is required to com-pile a database.

Advancing technology could make the prac-tice more common. The large-scale download-ing of database information is becoming cheap-er and easier with improvements in cost andcapacity of computer storage media, faster tele-communication networks, and wider access tocomputer power. Infringers may increasinglyuse computer power to reprocess informationand make it appear original. Thus, proprietorsmay find it increasingly difficult to know whena competitor is using their downloaded material.

Computer Bulletin Boards

A growing number of personal-computer en-thusiasts are keeping in touch with each otherand exchanging information using computerbulletin boards.30 As the name implies, a com-puter bulletin board is a computerized storagespace offered by a computer owner that servesas a place to post messages. There are two im-portant differences between a computer bulle-tin board and the more familiar variety. First,a computer can offer a very large space in whichto post messages. Thus, many computer userscan post copies of their favorite software pro-grams, such as computer games. Some of theseprograms are in the public domain; others arecopyrighted. Second, the telephone networkcan be employed by users of computer bulle-tin boards to build a community that is notconfined to a physical neighborhood. Thus,some computer enthusiasts use bulletin boardsto keep each other informed about the latestsoftware releases and maintain a sense of com-munity of interests among widely dispersedcolleagues and friends. Bulletin boards are also

—

used illegally to trade credit card numbers,long-distance access codes, and the instruc-tions to disable the copy protection of com-puter software packages. In this way, theunscrupulous help others steal goods andservices .31

Bulletin boards are an especially thorny in-tellectual property enforcement problem be-cause they can be used to very quickly spreadcopyrighted works throughout the communityof computer hobbyists. Bulletin boards are aninformal publication mechanism. Becauseaccess is generally not restricted, proprietorsmay monitor the contents of bulletin boardsto detect unauthorized trading of their works.But, as their numbers proliferate, these infor-mal community communications media maydefy systematic surveillance and control. More-over, it is not clear whether a bulletin boardoperator can be held liable for messages postedanonymously on his system.32

Local Area Networks

Local area networks (LANs) are data com-munication facilities that connect computersin a geographically restricted area, such as anoffice suite, a building, or an industrial park.These networks range in size from the verysmall to ones that have thousands of users.The expanding market for office automationtechnology, particularly personal computersand professional work stations for word proc-essing, document management, and data anal-ysis, is encouraging the development and de-ployment of network facilities that allowworkers to communicate with one another.LANs allow users to transfer large files of in-formation very quickly among personal com-puters, work stations, and large mainframecomputers that can store and process corporateor institutional databases. LANs can also givemany users access to computer software pro-grams from a central repository.

“Interview with Eugene Garfield, Institute for ScientificInformation, Mar. 11, 1985.

30There are thousands of computer bulletin boards now inuse, A. Pollack, “Free-Speech Issues Surround Computer Bulle-tin Board Use, ” New York Times, Nov. 12, 1984, p. 1,D4.

J1 Ric M arming, “Policing the Boards, ” Popular Computing,July 1985, pp. 37-39.

“New York Times, Nov. 12, 1984, op. cit.

Ch. 4 —Impact of Technology on Enforcement of Intellectual Property Rights ● 1 1 1

Copyright infringements can occur in thesec i r c u m s t a n c e s w h e n c o m p u t e r p r o g r a m s , i n -format ion downloaded from commerc ia l data-

bases, or other copyrighted materials are madeavai lable and shared in these systems. Manysoftware license agreements and database sub-scription contracts specifically prohibit the useo f l i c e n s e d m a t e r i a l i n m u l t i u s e r s e t t i n g s .Other contracts provide for “s i te l i censes” toal low mult ip le uses o f so f tware . Enforcementof such contract provisions can be difficult be-cause of the private nature of local area net-works . Of ten , ev idence o f contract abrogat ion

o r c o p y r i g h t i n f r i n g e m e n t m u s t b e o b t a i n e dfrom disgrunt led employees o f the infr inging

inst i tut ion or f rom paid inf i l trators .

Integrated Services Digital Network

In its present structure, much of the nationaland international telecommunication networkuses equipment that transmits analog signals.This is particularly true for local “final-mile”connections. Voice communication, still thelargest category of telephone usage, is efficient-ly handled by analog transmission. But the vol-ume of data transmitted by telephone is grow-ing. This growth is encouraging local andlong-distance companies to convert more andmore of the telephone network plant to digitaltransmission. If efforts to set standards aresuccessful, the end stage of this conversionprocess will bean Integrated Services DigitalNetwork or ISDN– "an integrated nationalnet work that can connect any information pro-vider with all its potential customers and anyuser with all the range of information resourcesavailable." 33 Planners envision that users willaccess such a network through a standard con-

‘I{ .M’. Nlc( ;raw, ,Jr,, ‘ ‘The I nforrnation 1ndustrJ: ‘1’he I’rin-ciples That f+; ndure, (’ompufer.s and }’eople, hla}-tJune 1983,p. 10

nection resembling an electric power plug-inreceptical, available in virtually every building.

As more and more of the telecommunicationsinfrastructure is converted to digital transmis-sion facilities, the issue of copyright enforce-ment will be contested on a much larger scale.On the one hand, digital transmission can bea significant threat to enforcement becausescope, scale, speed, and decentralization maymake it very difficult to detect transfers ofcopyrighted works among private users. Butbecause of the recordkeeping and processingpower of digital communications switchingtechnology, there may be opportunity for pro-prietors to monitor contact between data ter-minals. Telephone transaction records couldprovide evidence that a particular terminal ac-cessed a particular store of copyrighted mate-rial at a particular time, and so aid enforce-ment. Alternatively, proprietors might embeddigital “signatures” in their works to aid intheir monitoring efforts.

The development of an Integrated DigitalServices Network raises a basic question forintellectual property: To what extent will theenforcement of intellectual property law be afactor in the design, construction, and opera-tion of future telecommunication facilities?This raises several corollary questions: Who,in our newly deregulated telecommunicationenvironment, will decide to what extent andin what ways intellectual property enforcementwill be implemented in telecommunication sys-tems? What criteria will be used to decidewhich information will be collected about usersof networks and who and under what circum-stances access to that information can beobtained? 34

“The policy implications of new electronic sur~eillance tech-nologies ha~’e been re~’iewed in a recent OTA publication, Elec-tronic Sur~’eil]ance and Ci\ril Liberties, OTA-CIT-293 (Washi-ngton, DC: U.S. Government Printing office, october 1985).

TRENDS IN PROCESSING TECHNOLOGY: IMPACTS ON THERIGHT TO CONTROL THE MAKING OF DERIVATIVE WORKS

Information processing is the physical trans- computing machines. Information processingformation and logical manipulation of symbols. technology-computer hardware and software—It is an activity carried out by both people and has advanced rapidly since the initial devel-

112 ● lntellectual Property Rights in an Age of Electronics and Information

opment of electronic computers in the late1940s and early 1950s. It has been used to au-tomate many tasks, improving the efficiencyand speed of much of the information process-ing work that people formerly accomplishedmentally or with the aid of mechanical devicessuch as paper and pencil. In the last 10 years,computing resources have become increasinglyavailable to people in private homes and of-fices. They use this technology to transformand manipulate many kinds of information, in-cluding some types of copyrighted works.

Increasingly, people use information proc-essing technology to prepare derivatives of pro-tected works—to selectively modify them ortake them apart and to reassemble the piecesinto new, or apparently new, works. To a largeextent, the intellectual property enforcementproblems stemming from the use of process-ing technology are nascent, but current usesoffer clues to the potential impact of theseproblems. A discussion of the current and po-tential effects of this technology on severaldifferent types of intellectual property illus-trates the implications of information process-ing technology for enforcement. Integratedwith storage and communication technologiesinto computerized, digital information sys-tems, processing technologies promise sometruly formidable problems for the enforcementof intellectual property rights,

Impact of Processing Technologyon the Derivation of Text

Affecting the way that people prepare text,information processing technology is begin-ning to be used to make derivations of copy-righted textual works. Word-processing hard-ware and software are becoming commonplacetechnologies in offices. Integrated word-proc-essing, database-management, and on-line in-formation retrieval capabilities are also offeredin personal computer software packages. Thesecapabilities make it possible to build personaldatabases derived from the copyrighted worksof CompuServ, The Source, and other on-lineinformation retrieval companies. In fact, thesecompanies design their databases with the

intention of making it easy for users to makederivations. Users construct search statementsthat select a part of the database relevant totheir needs.

Some people use these processing capabili-ties to extract portions of commercial data-bases and resell access to the information. Inmany cases, it is unclear whether infringe-ments have occurred. Although containing theoriginal information in some form, the deriva-tion may look quite different, either becausethe format or other features have been changedto add value, or because of a deliberate attemptto disguise the source of the information. Inother cases it is obvious that the derivativedatabase stems from the original and may bein clear competition with it. The volume ofboth of these kinds of database derivation canbe expected to rise as the amount of textualmaterial available in computer-processibleform increases, and as processing capabilitybecomes better, cheaper, and more widespread.Hence, the enforcement of copyright in data-bases will become a larger problem, one de-scribed by some observers as insurmountable.

There are some text processing capabilitieson the technological horizon that may have im-portant, long-term impacts on the enforcementof copyright. Some of these are still experimen-tal and others are merely speculative. Auto-matic indexing, abstracting, and documentpreparation systems that combine optical diskstorage, high-speed digital communications,and perhaps novel computer architectures andintelligent text processing software may becommon by the end of the decade. Such sys-tems will be able to search a large body of ma-chine-readable text, including many articlesand books, select particular elements that arerelevant to a given research question (muchas current database systems do), prepare cus-tomized indexes and abstracts of relevant doc-uments, and, most speculatively, prepare a re-port in proper English of specified length thatsummarizes the findings of the query. Shouldthese capabilities be realized, they may requirepolicymakers to rethink the question of whatinformation processing activities are accept-able in relation to copyrighted materials. They

— — .——

Ch. 4–Impact of Technology on Enforcement of Intellectual Property Rights “ 113

may also demand new approaches to monitor-ing and enjoining infringements of copyrightin textual works.

Impact of Processing Technologyon the Derivation of Music

Information processing technology is affect-ing the way people create music, and it is be-ginning to affect the ways in which they canprepare derivatives of copyrighted musicalworks. In the last 15 years, the decreasing costof digital electronic processing technologies—logic and memory-have brought music syn-thesizing, audio editing, and dubbing technol-ogy out of the academic laboratories and so-phisticated professional studios where systemswere often custom designed and expensive tobuild and maintain. Now available off the shelf,these technologies are in the hands of diskjockeys, sound engineers in small studios, andaspiring professional and even amateur musi-cians. At the same time, the actual capabilitiesof these technologies have improved signifi-cantly. According to one OTA advisor, ‘‘Therehas been a quantum leap in terms of the so-phistication of the kinds of information thatyou can produce on an off-the-shelf synthe-sizer."35 Now, for the price of a grand piano,musicians can buy machines capable of analyz-ing and synthesizing sound wave forms andcustom-designing sounds that have never beenheard before.

Because these technologies are widely avail-able, people are becoming accustomed to thefreedom of using them to create, use, and re-use music. The groundwork is being laid fordigital sound editing capability in the home.As mentioned earlier, compact disks alreadysupply consumers with music in digital form.Within 3 years, digital audio tape may also beavailable. 36 A standard digital communicationconnection for music synthesizers and personal—. — —

“ Michael Kowalski at the OTA Workshop on Technologiesfor Information Creation, Dec. 6, 1984.

“Interview with Stan Cornyn, Apr. 4, 1985. For about$1,000, one can now buy an adapter device that allows a videocas-sette recorder to be used to record music digitally. Barry Fox,“optical Memories for Home Computers, ” New Scientist, Apr.11, 1985, pp. 17-20.

computers, the Musical Instrument Digital In-terface (MIDI), is growing in popularity. Andpersonal computers are now beginning to ap-pear that have digital sound recording capa-bility. 37

Copyright enforcement problems are arisingfrom digital music processing technologies be-cause people can “disassemble” music whenit is in digital form. This disassembly can oc-cur vertically-that is snippets’ of sound caneasily be cut from a copyrighted work and in-corporated in a derivation that may be noth-ing more than a collage of pieces of copyrightedworks. Although it is more expensive, difficultto accomplish, and limited in application, dis-assembly can also occur horizontally. For in-stance, the bass line of a song maybe strippedoff and used in a second work, creating whatis, to some extent, a derivative work.38

Another intellectual property problem mayarise from the use of sound emulators that canmimic complex sounds, including voices, withgreat precision. A question may arise aboutwhether a singer can claim property rights inthe sound of his voice.

These capabilities pose two questions rele-vant to intellectual property rights enforce-ment. First, how is a proprietor to recognizeand prove infringement in this very dynamicmusical environment? Second, what rightsdoes or should an artist/copyright holder haveto maintain the integrity of his work, and howcan he enforce those rights?

Impact of Processing Technologyon the Derivation of Video

Information processing technology is alsoaffecting how people create visual works, andhow they can use copyrighted visual works asraw material for other works. Digital, comput-er-assisted retouching of photographs has

. . . . . -.——.‘-Scott Mace, ‘ ‘Electronic Orchestras in Your Living

Room, ” Infoworld, Mar. 25, 1985, pp. 29-33.‘“Michael Kowalski, Dec. 6, 1985. Mr. Kowalski actually

played for the workshop two pieces of commercially recordedand released music that demonstrated the stripping and reuseof a bass line.


reached a level of sophistication where the im-ages of people can be added or subtracted frompictures leaving little or no trace of tamper-ing.” The pace of progress of video tape edit-ing technology is such that a new generationof equipment appears about every 4 years.40

The television technical community is study-ing the establishment of a worldwide digitalvideo tape standard. Such a standard wouldallow all studio-based production work, includ-ing editing, to be done in digital format.41 Thus,some early steps are being taken in the worldof video toward the kind of disassembling ca-pability now possible with music. Combinedwith communication technologies-UHF andVHF broadcasting, direct broadcast satellite,cable television—and storage technologies—video tape, optical disk—video processing isrevolutionizing the way visual works are made,disseminated, and reused. Thus, equally revo-lutionary questions may be posed regardingthe enforcement of intellectual property rightsin visual works.

Computer hardware and software are reach-ing a truly phenomenal level of sophisticationin the generation of graphics. Some expertssuggest that, within as few as 5 years, it willbe possible to use the filmed image of JohnWayne, for example, and produce a full-lengthmotion picture with a synthesized ‘‘Duke’ inthe starring role.42 Lucasfilm, Ltd., of SanRafael, California, has developed and is nowmarketing a machine, the EditDroid, that usesoptical disk storage and computer processingto automate virtually the entire process of filmediting, making the actual cutting of film un-necessary, except perhaps at the very last

‘“Some people believe that, upon challenge, photographsmay no longer be held as admissible evidence in court, S. Brand,K. Kelly, and J. Kenny, “Digital Retouching: The End of Pho-tography as l:vidence of Anything, ” 14’hole Earth Reviewq JUIV1985, pp. 42-49.

“’Interview with Humberto Rivera, Apr. 18, 1985.“Richard Green at the OTA Workshop on Display, Print-

ing, and Reprography, Mar. 13, 1985,“Several states, including California, have recently passed

laws that would require commercial users to obtain permissionfrom the heirs of a deceased celebrity before they can use a like-ness, thus treating the person’s name and likeness as the prop-erty of the heirs, D. B. Moskowitz, "Celebrities' Ghosts AreHanging Over Advertisers," Business Week, June 3, 1985, p.108.

stage of producing a master print.43 The mar-riage of optical disk storage and video proc-essing equipment suggests the possibility ofestablishing “image banks’ consisting of digi-tized images and standard algorithms to ma-nipulate, transform, and link together videoimage frames, or even parts of frames, into newvisual works derived from older, perhaps copy-righted, works.44 The ownership managementof such image banks could be complex.

Standards for digital television broadcast-ing and reception are being discussed in inter-national standards forums.45 Digital televisionpromises to lower the cost and improve thequality of pictures produced by home televisionreceivers, and could also make it possible forhome users to store and reprocess televisionprograms. Again, the enforcement of the in-tellectual property right to control the produc-tion of derivative works would be complicatedby the private and potentially widespread tech-nical capability to make new uses of copy-righted works.

Impact of Processing Technology onthe Derivation of Computer Programs

Part of the research and development effortin computer technology goes into the creationof hardware and software tools that can beused to help create other computer programs.46

These tools aid people in developing new andever more sophisticated programs. Some toolscan also be used to adapt existing software tonew uses. Thus, if they are employed in theunauthorized production of derivative works,their use may violate intellectual propertyrights.

4’S. Gannes, “Lights, Cameras . Computers, ” Discover,

August 1984, pp. 76-79.“Jim St. Lawrence at the OTA Workshop on Technologies

for Information Creation, Dec. 6, 1984,“Richard Green, Mar. 13, 1985.“’Examples of such tools include workstations, program edi-

tors, code debuggers, program generators, programming envi-ronments (integrated sets of tools), and, in the future, perhapslibraries of standard information processing modules that canbe assembled to perform more complex functions and tasks.For a discussion of these technologies-the potential future andthe current problems of software engineering-the reader is re-ferred to the OTA report, Information 7’echnology R&D: Criti-cal Trends and Issues, OTA-CIT-268 (Washington, DC: U.S.Government Printing Office, February 1985), pp. 75-87.


The adaptation of computer programs toserve new or custom uses is, in many contexts,a well-accepted and widespread activity. Somecomputer languages and soft ware tools aredesigned specifically to aid in modifying pro-grams that they help create. In particular,operating systems software is designed to helpusers tailor their programs and computing sys-tems to serve special needs. ” Some program-mers and computer scientists believe that, be-cause software is such a valuable resource,their creations should be in the public domainand under no circumstances restricted in theiruse as tools.48

The number of American homes with per-sonal computers rose from zero in 1975 to 8million by the end of 1983.49 This technologyhas spread even more rapidly into offices. Aspersonal computers become more widespreadand the demand for more specialized softwarerises, the opportunity and the desire to manipu-late copyrighted programs to serve particularpurposes may also increase.

An especially relevant example of such ma-nipulation is the use of programs designed todisable the copy-prevention schemes of manypersonal-computer programs, thereby allow-ing users to make multiple copies of thesecopyrighted works. Other currently availablesoftware tools— ‘interpreters ‘— are used totranslate a program from one computer lan-guage to another. Other tools aid in the “re-verse engineering’ of programs. Reverse engi-neering refers to the practice of analyzing aprogram to determine how it is arranged to ac-complish its functions. A major goal is under-standing the underlying algorithms used bythe program designers. A very fuzzy line sep-arates legitimate reverse engineering practicesand violation of the copyright owner’s rightto control the production of derivative works.

— ——.—- —‘ Interview with Edward Conklin, FORTH, Inc., Apr. 19,

1985.‘“Richard Stallman, “The GNU Manifesto,” Dr. Dobb's

Journal, March 1985, pp. 30-34.‘qWalter S. Baer, “Information Technologies in the Home, ”

Information Technologies and Social Transformation (Wash-ington: National Academy of Engineering, 1985), p. 124. In 1984,for the first time Americans spent more for machines in the“personal computer” category—i.e., those costing less than$10,000–than on mainframe computers or minicomputers,

Congress and the courts have not yet grap-pled with the question of what elements of com-puter programs copyright should protect. Thisissue is examined in detail in chapter 3 of thisreport. Here, it is important to note that muchof the derivative uses of computer programsand their underlying processes and algorithmsoccurs in private, and as such presents propri-etors with major obstacles in detecting andproving infringement of their rights, evengiven clear policy on what those rights include.

There is a widespread and growing researchand development effort aimed at making com-puter software production easier. One goal ofthis effort is to develop extensive libraries ofstandardized functional modules of computercode. Some software module libraries alreadyexist. These standard modules comprise com-puter program segments that represent themost efficient known formulation of how to ac-complish a particular task, such as sorting rec-ords alphabetically. Libraries of modules maysoon be organized so that they can be auto-matically selected and combined into programson the basis of functional specifications. Theuse of standardized modules would help ame-liorate the problem of low productivity in thecurrently labor-intensive software industry.

The establishment of large libraries of reus-able software modules raises questions aboutownership and the management of transac-tions in these resources. Difficulty is likely toarise in determining whether the copyrightownership of a module constitutes a restrainton the use of a function or an idea.

The nature of the computer is at the core ofmany copyright enforcement problems, includ-ing those that surround the unauthorized deri-vation of computer programs themselves. Atruly revolutionary machine, the computer wasrecognized as such when the ideas governingits operation were first conceived. In the 1930s,Alan Turing suggested, by way of a mathe-matical model, that any computer can simu-late the operation of any other computer, past,present, or future.’” The real limit on the use-

“’Alan Kay, “Computer Software, ” Scientific American, Sep-tember 1984, p. 53.


fulness of this simulation capability is thespeed at which a given computer operates; andthe speed of computers is widely projected tocontinue to rise at a breathtaking pace, at leastfor the remainder of the century.” Thus, “Itis clear that in shaping software [tool] kits thelimitations on design are those of the creatorand the user, not those of the medium."52 The

—52See OTA, Information Technology R&D: Critical 7’rends

and Issues, op. cit., pp. 324-331.‘Kay, “Computer Software, ’ p. 57

capabilities to manipulate and transform copy-righted computer programs into derivativeworks, to do so privately and without leavinga trace, are well within the limits of presentcomputer systems. These capabilities confrontlegislators, courts, law enforcement agencies,and intellectual property owners with the ques-tion of what should or can be done to controlthe use of rapidly proliferating computer powerin manipulating and transforming cop-y-rightedworks.

ADJUNCTS AND ALTERNATIVES TO TRADITIONALENFORCEMENT

Faced with mounting difficulty in identify-ing, detecting, and prosecuting infringementsof their traditional rights, intellectual propertyproprietors are pursuing three basic strategiesto protect their economic and artistic interests,They are: implementing technological protec-tions to prevent the unauthorized copy, publi-cation, and use of their works; initiating pub-lic relations campaigns that appeal for citizens’moral support and respect for property rights;and lobbying for legislation that strengthensgovernment enforcement efforts, or establishesalternative mechanisms for obtaining remun-eration.

These strategies are not mutually exclusive,and do not apply uniformly across all situa-tions. Proprietors see different enforcementproblems arising from different technologies,which affect particular types of works in differ-ent contexts of use. Thus, a mix of strategiesmay be most appropriate to meet these differ-

MECHANISMSent challenges. Although a given form of tech-nological protection, for example, may effec-tively reduce copying of personal-computersoftware distributed on floppy disks, it maybe totally ineffective if the software is distrib-uted over telephone lines. Appeals to peoplessense of “fair play’ may be quite useful ineducational or corporate environments, but in-effective, or even offensive and counterproduc-tive, when applied in the context of home use.The collection and distribution of royalties onthe sale of blank media may be a workable so-lution when applied to cassette tapes for mu-sic or movies; but such a solution may be anadministrative nightmare if applied to moreversatile media such as magnetic or opticaldisks, where many more kinds of informationproducts, and thus many more and varied in-terests, would have to be accommodated in dis-tributing royalties.

TECHNOLOGICAL PROTECTIONSeveral varieties of technological protection 1) security measures such as locks, scrambling,

are now used to prevent unauthorized use of and encryption; 2) technological methods tointellectual works in the forms of computer monitor information flow; and 3) proprietarysoftware, broadcast video signals, and audio channels for the distribution of information.and video recordings. These technological ap- Each of these methods has advantages and dis-proaches for securing intellectual property advantages that make it appropriate for vari-rights may be grouped into three categories: ous uses.

Ch. 4–Impacf of Technology on

Every technological approach to the protec-tion of intellectual property requires a trade-off between the security of the property andits accessibility, marketability, cost, and qual-ity. Furthermore, as was reiterated by everytechnical expert with whom OTA spoke, whileany technological barrier may work in somecases by acting as a‘ ‘stop sign warning againstunauthorized use, no form of technological pro-tection is 100 percent effective against deter-mined opponents.

Software

Many present and proposed methods of using

technology to protect intellectual property cen-ter on software, in part because it is the newestand most technologically sophisticated infor-mation-based product today. Further, softwarecopying has three distinctive qualities that setit apart from the copying of other expressionsof intellectual property, making protection aparticularly critical issue, First, it is easier tocopy software than other products, such as au-dio records or books, because the physical ef-fort is minimal—as simple as pressing a sin-gle key. Second, a computer can copy softwareextremely fast compared to the length of timerequired to copy other materials. Finally, un-like a taped copy of an audio recording, theduplicate is typically an exact, perfect copyof the original software with no distortion ofquality, Thus, the same technological qualitiesthat make software useful also make it vulner-able to copying.

Software protection for mass-market, per-sonal computer programs generally falls in thefirst category of technological approacheslisted above: locks and encryption. Another al-ternative is the use of proprietary channels forthe distribution of software.

Software embodied in disks maybe protectedfrom copying in two basic ways. Either the pro-tection mechanism can be built into the soft-ware, or it may be divided and coordinated be-tween software and hardware. The essentialdistinction between the two methods is thatthe hardware-plus-software protection mech-anisms are able to limit software to one com-

puter

Enforcement of

or one user.

Intellectual Property Rights ● 1 1 7

In contrast, the software-only protection mechanisms cannot control useof the software, only the number of copies thatexist. Software-only protection methods arecurrently in use, and implementation of moreadvanced and secure hardware-plus-softwaremethods is being discussed. Some chip manu-facturers are designing computer chips withmachine-readable serial numbers and decryp-tion circuits to help software makers more ef-fectively control their products.’) But, in gen-eral, hardware companies have little incentiveto help prevent copying because the availabil-ity of “free” software makes their productsmore attractive and less expensive for the in-dividual to use.

There are numerous other mechanisms thatcould prevent unauthorized copying, some re-quiring substantial changes in hardware, andothers based on modified systems of distribu-tion. One of the former involves providing soft-ware in read-only memory (ROM) and redesign-ing computers so they accept ROM modulesor cartridges.54 Taking the concept of softwarecartridges a step further, one can imagine com-puters being sold with many software pro-grams built into the machine, residing in in-ternal ROM chips. ” A developer of especiallyuseful software, fearing lost profits due to ille-gal copying, could market his software onlyin this form—inside a computer. Such a policyhas many drawbacks. It would severely limitusers of computers, who would be forced to buyan entire computer to get a useful piece of soft-ware. Even if computers were inexpensive, thewaste would be great and the computer’s util-

“For example, ‘i Software Protection Llevices, Inc., is at-tempting to incorporate its Copyrighta- software protection s~’s-tem into a microcomputer chip under joint development withThe Western Design Center, ” a Mesa, AR, microprocessor de-sign firm. Edward Warner, “Few Takers for Embedded Pro-tection, ” Computerworhi, Mar. 12, 1984, p. 109.

“Computers that accept software in ROM have thus farmet with mixed success. For example, the Texas Instruments99 and the IBM PCjr accept software in ROM cartridges.

“The trend toward building software into computers is, byand large, currently motivated by the desire for small, light-weight computers, not to prevent copying. For example, theHewlett Packard Portable computer has its operating systemsoftware and two applications programs, Lotus l-2-3Thf, anda text editor, provided by internal ROM to eliminate the sizeand weight of disk drives.


ity as a ‘‘universal machine, or a device thatcan imitate any other device, would be lost.Such computers would be special-purpose ma-chines only.

Another form of technological protectionpermits developers of programs (as distinctfrom suppliers of data) to keep their programsin their own computers, rather than distribut-ing their software on the market. People whowant to use the program are required to con-nect to the developer’s computer, upload thedata they want processed, and pay an on-lineuse fee. The disadvantages of this scheme arelosses in flexibility-users are not able to linktheir programs to remote, protected ones eas-ily—and communication costs for the on-linelink.

One still-theoretical solution would be to linksoftware access to a unique personal identifier.A computer terminal would be equipped witha hardware device that accepted sensory in-put, such as a person’s appearance, finger-prints, hand geometry, voiceprint, or retinalpattern. Software could be designed to permitonly the person whose appearance or printsmatched to log onto the computer or to usea piece of software.56

Broadcast Signals

Because broadcast signals-television andradio transmissions—are not contained in atangible medium or transmitted over wires,they cannot be locked like software or distrib-uted through proprietary channels. They maybe protected in only two ways: directly byscrambling or encryption, or indirectly by mon-itoring techniques.

Scrambling or encryption techniques alterthe signals so that they are unintelligible un-less the proper decoding device is used at thereception end of the transmission. Typically,the signal for a network television show hasa long route to the viewer—e.g., from the net-work to a satellite to the affiliate station andfinally to the home viewer—and so is vulner-

‘<John Koehring, “Automatic Identity Verification, ” Infor-mation Age, April 1984, pp. 103-110.

able to unauthorized pickup at many differentpoints, Broadcasters need to ensure that thesetransmissions are not accessed until the endof the process, after the local affiliate stationhas added local advertisements. Thus, the net-works may scramble the signals so that onlythe affiliate station, using a decoder, has ac-cess to the satellite transmissions.57

Monitoring techniques to verify unautho-rized viewing or listening have been appliedin some cases, particularly by some subscrip-tion television and MDS companies. So far, thecourts have upheld this form of electronic sur-veillance, but privacy concerns remain. In anycase, monitoring individual residences for theftof service is very expensive and therefore oflimited value to proprietors, except perhapsas a deterrent.

Audio and Video Recordings

In ways similar to those used for computersoftware, audio and video recordings may becopy protected by a mechanism built into therecording itself, or by a scheme coordinatedbetween the recording and the playback/copy-ing machine.

Musical recordings have traditionally in-cluded no mechanism to prevent copying. Allknown copy-preventer systems tend to degradethe quality of sound reproduction. Recently,there is renewed interest in protecting musi-cal recordings because digital CD/ROM rec-ords are potentially infinitely copyable in highquality. Manufacturers of compact disk record-ings are, therefore, embedding a unique “sig-nature’ in their products to serve as evidenceof unauthorized copying or manipulation.58

One company now offers protection for video-cassette tapes in a system that “confuses theautomatic gain control of VCRs, causing themto make copies that have dim, weak picturesthat are marred by video ‘noise.’ "59 This sys-

“’interview with David Poltrack, CBS, Inc., June 10, 1985.58Interview with Al McPherson, Warner Records, Inc.,

Apr. 19, 1985.59’’ Homevid ‘Club’ Has Surprise for Pirates, ” Variety, Apr.

24, 1985. Consumer electronics catalogs feature devices thatclaim to defeat these automatic-gain-control-based protectionschemes.

.—


tern could also be used for broadcast signals,so that a work taped from an on-air perform-ance and protected in this fashion would yielda very poor copy .

CBS Inc. recently announced a system toprevent copying of records, tapes, and c o m -pact disks that will be coordinated between ad e v i c e i n c o n s u m e r s ’ h o m e - r e c o r d i n g e q u i p -ment and a coded signal on the purchased re-cordings.” ’ Record distributors would likely of-

fer t w o vers ions o f recordings , o n e c o p yprotected and the other not, and charge differ-ent prices for them. Industry spokesmen a c -knowledge that it will probably take d e c a d e sfor this scheme to significantly affect consumercopying, because people will be able to copyprotected recordings with their existing equip-ment. Also, equipment manufacturers are like-ly to continue to offer equipment that does n o tinc lude the copy-protect ion device , unless thelaw requires such devices .

Effectiveness

The ability of technological protection to pre-vent illegal copying or access depends on themedium and the type of protection, but a fewabsolutes can be stated. Any form of techno-logical protection will prevent some u n a u t h o -

rized use; no form of technological protectionwill stop all unauthorized use. Some systemsare relatively easy to defeat, others more dif-ficult. And it is conceivable that new forms oftechnology will alter the effectiveness of thesed e v i c e s .

Another factor is the level of technologicalliteracy in society. Today, many children haveearly and frequent exposure to the new com-puter technologies, and so will be betterequipped to use—or misuse—technology. Thehigher the level of society’s computing skill,the more difficult the job of technological pro-tection becomes-at least for computer-basedintellectual property.

For technological protection to work on alarge scale, the challenge is to find a level high

“ Martha N1. Ilamilton, “Record Industry Un\eils L)e\’ice toBlock Copying,” The Washington Post, Mar. 26, 1986, p. G3.

enough to reduce unauthorized use to a man-ageable level, but low enough so that consum-ers would not find the protection mechanismso distasteful that they would refuse to pur-chase and use protected materials.61 The mar-ketplace will tend to set an equilibrium ofacceptable protection. But given the uncertain-ties of technological change and shifting con-sumer preferences, industry will have to mon-itor the market carefully to assess the effec-tiveness of protection and to gauge consumerreaction to protection mechanisms.

Advantages and Disadvantages ofTechnological Protection

Some analysts believe that proprietors’ reli-ance on technological protection is a naturaland reasonable process. They argue that usingsuch protection is like building fences to pro-tect real estate. Thus, improvements in tech-nologies for copying and manipulating intel-lectual property will probably result in bettertechnologies to prevent these activities, justas the opening of western lands was followedby the invention of barbed wire.62

However, from the point of view of publicpolicy, technological protection may be a poorway to protect intellectual property rights be-cause it ignores part of the constitutional com-promise between the public welfare and theprofit-making of intellectual creators. Techno-logical bars may block dissemination of andaccess to intellectual property.

One result of this loss of access could be re-dundancy in spending for research and devel-opment. Since technological protection by-passes intellectual property law, softwareproducers, for example, might decide not todisclose the contents of their software, depriv-ing competitors, experimenters, and research-ers of the benefits of their work. Thus, somesoftware research and development would re-peat previous, but undisclosed, work. Thisduplication and waste of resources is precisely

+ Christopher Weaver, OTA Workshop on Storage andDatabase Technologies, Jan. 11, 1985.

‘Personal communication from Fred Smith, (’competitiveEnterprise Institute, January 1986.

120 . Intellectual Property Rights in an Age of Electronics and Intormation-.

what patent law strives to avoid. Moreover,technological protection of software does notexpire after a set period of time, as other intel-lectual property rights do. The creator of soft-ware could, in effect, have a perpetual monop-oly on his work.

Technological protection in and of itself doesnot necessitate changes in intellectual prop-erty law, but it could precipitate changes byweakening the distinctions between differenttypes of intellectual property—patents, tradesecrets, trademarks, and copyrights. If tech-nological protection were effective, intellectualcreators would not have to observe the formal-ities required for legal protection, e.g., submit-ting to the lengthy and expensive patent proc-ess, or disclosing works to the Copyright Office.They might still choose to do so for additionalprotection if technological protection fails, butthere would be less reason. Technological pro-tection, if applied indiscriminately to any orall kinds of intellectual property, could blurthe legal distinctions among these forms of pro-tection. In reflecting what might become awidely accepted public practice, the law itselfcould likewise cloud the differences.63

Widespread technological protection couldmake intellectual property law more effectivein one important way: it would alert consumerswho attempt to copy that they are breakingthe law. This would not necessarily stop them,but by forcing them to take elaborate stepsto make copies, it would at least make the actless convenient and emphasize its illegality.

Widespread use of technological protectioncould generate a need for new, related laws orregulations. In addition to the potential needfor standards legislation, laws that proscribethe manufacture, sale, distribution, or use of

be necessary to ensure effectiveness. This typeof legislation has two drawbacks. The first isthat there are some legal uses of duplicatedmaterials, which would make it necessary tooutlaw devices with legitimate uses. The sec-ond drawback, closely related to the first, isthat it would be necessary to define and char-acterize devices and methods used for defeat-ing technological protection. Those definitionsand characterizations would cover specific ap-plications of technology, and would themselvesexist in a changing technological environment.The law would require making the precise tech-nological definitions necessary to prevent de-feat of protection mechanisms, while at thesame time allowing the use of related tech-nologies.

Another kind of legislation, similar to con-trol of copying methods, could be enacted thatwould outlaw the intentional defeat of, or tam-pering with, technological protection mecha-nisms, regardless of any violation of intellec-tual property rights. Or, perhaps, ordinaryviolations of intellectual property law mightstill be treated as they are now, but violationsthat involved the intentional defeat of tech-nological protection mechanisms could carryadditional penalties.

Public Relations Strategies

Even with safeguards against unauthorizeduse, today’s information technologies provideusers greater potential access to intellectualproperty, and the means to reproduce, store,transfer, and manipulate works. Respondingto this probable increase in uses of technology,many proprietors have tried to inform the pub-lic about intellectual property rights and per-suade them to respect those rights.

devices or program software intended to de- To influence public attitudes, business lead-feat technological protection mechanisms may ers have followed three basic strategies. First,

they have tried to alert the public to the idea63John Hersey, in the final report (1978) of the NationalCommission on New Technological Uses of Copyrighted Works that copying is illegal and will be prosecuted.(CONTU), worries about the “subtle dehumanizing danger” of Second, they have tried to convince users thatblurring the distinction between types of intellectual property. they have a stake in assuring the fair compen-He opposes extending copyright to computer programs at ‘the sation of artists, publishers, and distributors.moment at which the program ceases to communicate with hu-man beinm and is made caDable of communicating with ma- Third, they have sought to educate the publicchines.” CONTU, p. 33. ‘ about copyright, appealing to them as citizens

Ch. 4—Impact of Technology on Enforcement of Intellectual Property Riqhts ● 121

who will obey the law once they understandit. These strategies have met with varying lev-

e ls o f success .

When the law c lear ly def ines infr ingement ,it becomes easier to inform the public and buildawareness about the issue. For instance , theMotion Picture Association of America (MPAA)e m p h a s i z e s t h e p r o t e c t i o n s p r o v i d e d b y l a win its posters, brochures, articles, and manualsfor enforcement o f f i cers . They te l l the publ ic

that video piracy is a Federal crime, and thato f fenders wi l l be prosecuted . Newspapers andmagazines are sent press re leases about suc-cess ful prosecut ions to spread the word thatthe film industry is enforcing its rights. Simi-l a r l y , w h e n t h e r e c o r d i n g i n d u s t r y u n c o v e r slarge-scale piracy, the ensuing publicity alertsthe public to the problem. The industry hopesthat the public, aware of counterfeit tapes andrecords , wi l l be less l ike ly to buy them.

Book publishers, too, launched a major pub-

l ic awareness campaign after Congress passedthe 1976 Copyright Act , seeking support fornew provisions that defined fair use. The tar-g e t a u d i e n c e i n c l u d e d l i b r a r i a n s , e d u c a t o r s ,r e p r e s e n t a t i v e s o f i n d u s t r i e s t h a t u s e c o p y -r ighted works , and the general publ ic . Book

publ ishers distr ibuted printed materials andheld sessions at professional meetings and pub-lic forums. Many publishers believe that theseef forts produced only very l imited resul ts .

Book publishers point to the inherent limi-tations of the copyright notices on books, arti-cles, and copying machines.64

If the industryi s s e r i o u s a b o u t r e d u c i n g u n a u t h o r i z e d p h o -t o c o p y i n g , m a n y b e l i e v e t h a t t h i s i n t e n t i o nmust be made clear through well-publicized liti-gation. As the President of the Association ofAmerican Publ ishers , Townsend Hoopes , saidin announcing a lawsuit against Texaco for un-

a u t h o r i z e d p h o t o c o p y i n g :

Major businesses that either make no ef-fort to obtain clearance for their photocopy-

64The 1982 King Research report on photocopying in librar-ies found that 85 percent of photocopy machines in all libraries,93 percent of the coin-operated photocopy machines in alllibraries, and 100 percent of coin-operated photocopy machinesin academic libraries bear a copyright warning notice. I).McDonald, Libraries, Publishers and Photocopying, pp. 2-16

ing . . . or like Texaco. make only token pay-ments must under-stand that publishers willnot remain silent regarding violations of theircopyr ights . 6 5

S i m i l a r l y , t h e c o m p u t e r s o f t w a r e i n d u s t r yhas undertaken an aggress ive publ ic -re lat ionscampaign. Because so f tware copying is tech-nically so difficult to prevent, many in the soft-ware industry argue that publ ic re lat ions is

essent ia l to an overal l s trategy o f copyr ighte n f o r c e m e n t . T h r o u g h i t s t r a d e a s s o c i a t i o n ,ADAPSO, the so f tware industry has broughtsome major legal cases 66 and has developed andw i d e l y d i s t r i b u t e d a b r o c h u r e t h a t s t a t e s :

People who would never walk into a storeand shoplift a software product think noth-ing of making several copies of the same soft-ware. The results are the same. The act is justas wrong. 67

The industry has taken out advertisements incomputer magazines that make the same point.

Public Attitudes and the Legitimacyof Intellectual Property Law

Neither the threat of legal action, nor the ed-ucation of users about cop}’ right may be enoughto change public attitudes and behavior. Onlyif the public perceives copyright rules as fairand reasonable will they voluntarily respectthe law.

OTA commissioned a public opinion surveyto identify current public attitudes on intel-lectual property. The major findings were asfollows:68

• At the present time, ‘‘ Intellectual Prop-erty Rights’ is not an issue the public feels

—— -—65Press release from the Association of American Publish-

ers, Inc., Washington, DC, May 6, 1985,“(See, for example, “ADAPSO Suit Alleges Piracy, (’om-

puterworid, Jan. 21, 1985; ‘( Micropro and ADA 1’S() Sue Amer-ican Brands, Allege Software Piracy, I)owrnfmxf, Februar-}’1985,

‘-Thou SAdt ,N’ot Dupe (Washington, DC: AI) A1)S(), 198.1)This brochure was mailed to 5,000 colleges and universities,22,000 school districts, and 17,000 corporate counsels in theUnited States.

‘wFub)ic Perceptions of the Intellectual Propert~r Rights is-sue (prepared for OTA by The Policy Planning Cl roup, Yankel-ovich, Skelly & White, Inc., Februrary 1985).

122 - ● Intellectual Property Rights In an Age of Elcctronics and Information

it knows a great deal about. It is also notan issue they perceive effects them.The vast majority of the public finds ac-ceptable—such that they would be will-ing to do it—some form[s] of unauthorizedcopying of copyrighted material.Surprisingly, willingness on the part of thepublic to engage in behaviors that infringeon intellectual property rights is not af-fected by awareness of the issue or expe-rience, in general, with home technologies.Conversely, several specific attitude setsappear to be related to the acceptance ofcopying behaviors. Among them are:—a tolerance of ‘‘gray area’ behaviors,–belief in the benefits of sharing infor-

mation, and–pragmatic responses such as the accept-

ance of copying copyrighted materialwhile acknowledging that it is probablywrong,

The public draws the line at behaviors thatinfringe on intellectual property rightswhen they involve the obvious or activecircumvention of payment, when they aredone for sale or profit, or on behalf of busi-ness or in a corporate setting.At the moment, the public perceives theintellectual property-rights-issue to be amarketplace problem whose solution shouldcome from the industries and companiesaffected.

OTA also commissioned a survey of the atti-tudes of small business executives toward in-tellectual property. The major findings wereas follows:69

●

●

Small business executives appear to bemore sensitive to the problem of intellec-tual property rights than the generalpublic.They are more likely to agree with state-ments that emphasize the need to preservethe proprietary nature of information. Asproducers, many of their products are pro-tected by copyright, patent, or trademark

‘The Intellectual l+opert~ Rights Issue: The Small 13usi-nessman Perspecti}’e (prepared for OTA by The Policy Plan-ning Group, Yankelovich, Skelly & White, Inc., August 1985).

laws. Thus, these executives are support-ers of the law.Because of definitions used in the sampleselection, the small business executivesstudied are owners of, or have access to,computers. Their attitudes show that theyare technology oriented—believing thatmore technology is better. They are strongsupporters of actions that will promoteand ensure the availability of future tech-nologies.Small business executives appear lesslikely than the general public to find copy-ing behaviors acceptable.– While they find almost all copying be-

haviors unacceptable, they make an ex-ception for the one behavior they wouldbe most likely to engage in: the makingof copies of computer programs.

–As is the case with the general public,there is consensus that any sort of copy-ing for sale is totally unacceptable,whereas copying for personal use ismore acceptable.

Small business executives emphasize non-governmental solutions to intellectualproperty rights problems. When given achoice, they prefer solutions that involvetechnologies that physically prevent copy-ing. Further, they believe that the clarifi-cation of ambiguities about which copy-ing behaviors are or are not permissiblewould be helpful.–However, as is the case with the gen-

eral public, the intellectual property is-sue is of low salience among small busi-ness executives, and there is littledemand for solutions at present.

Small business executives see themselvesas potentially part of the process of find-ing solutions to intellectual property prob-lems. Within their own companies, theyare willing to set rules and guidelinesagainst conduct that violates intellectualproperty rights. However, they will onlygo as far as setting standards. They feelthat they cannot and will not accept re-sponsibility for actual enforcement ofrules or laws designed to prevent behav-iors such as copying.

—

Ch. 4–Impact of Technology on Enforcement of Intellectual Property Rights ● 123

From these surveys of the general public and the copyright holder and the users of the work.executives of small businesses, and discussions Messages about unauthorized copying may bewith students and educators , OTA found that more e f fec t ive i f they emphasize the va lue o fpublic relations strategies are likely to be most an ongoing partnership between creators andeffective if they focus not on the rights of copy- u s e r s .right holders, but on the relationship between

chapter 4 impact of technology on enforcement of

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