[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
FAIR USE: ITS EFFECTS ON CONSUMERS AND INDUSTRY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
COMMERCE, TRADE, AND CONSUMER PROTECTION
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
NOVEMBER 16, 2005
__________
Serial No. 109-78
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON: 2005
27-003PDF
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida Ranking Member
Vice Chairman HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia BART GORDON, Tennessee
BARBARA CUBIN, Wyoming BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES W. ``CHIP'' PICKERING, ALBERT R. WYNN, Maryland
Mississippi, Vice Chairman GENE GREEN, Texas
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
STEVE BUYER, Indiana LOIS CAPPS, California
GEORGE RADANOVICH, California MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania JIM DAVIS, Florida
MARY BONO, California JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon HILDA L. SOLIS, California
LEE TERRY, Nebraska CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey JAY INSLEE, Washington
MIKE ROGERS, Michigan TAMMY BALDWIN, Wisconsin
C.L. ``BUTCH'' OTTER, Idaho MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
Bud Albright, Staff Director
David Cavicke, Deputy Staff Director and General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Commerce, Trade, and Consumer Protection
CLIFF STEARNS, Florida, Chairman
FRED UPTON, Michigan JAN SCHAKOWSKY, Illinois
NATHAN DEAL, Georgia Ranking Member
BARBARA CUBIN, Wyoming MIKE ROSS, Arkansas
GEORGE RADANOVICH, California EDWARD J. MARKEY, Massachusetts
CHARLES F. BASS, New Hampshire EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania SHERROD BROWN, Ohio
MARY BONO, California BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska GENE GREEN, Texas
MIKE FERGUSON, New Jersey TED STRICKLAND, Ohio
MIKE ROGERS, Michigan DIANA DeGETTE, Colorado
C.L. ``BUTCH'' OTTER, Idaho JIM DAVIS, Florida
SUE MYRICK, North Carolina CHARLES A. GONZALEZ, Texas
TIM MURPHY, Pennsylvania TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee JOHN D. DINGELL, Michigan,
JOE BARTON, Texas, (Ex Officio)
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Adler, Prudence S., Associate Executive Director, Federal
Relations and Information Policy, Association of Research
Libraries.................................................. 29
Aiken, Paul, Executive Director, Authors Guild, Incorporated. 62
Band, Jonathan, Netcoalition................................. 32
DeLong, James, Senior Fellow and Director, Ipcentral
Information, Progress and Freedom Foundation............... 43
Hirsch, Frederick, Senior Vice President, Intellectual
Property Enforcement, Entertainment Software Association... 56
Jaszi, Peter, Washington College of Law, American University. 16
Shapiro, Gary J., President and Chief Executive Officer,
Consumer Electronics Association........................... 22
Sohn, Gigi B., President and Founder, Public Knowledge....... 36
Additional Material Submitted for the Record:
Black, Edward J., President and CEO, Computer & Communications
Industry Association and the Open Source & Industry Alliance,
prepared statement of.......................................... 88
Jaszi, Peter, Washington College of Law, American University,
letter dated November 22, 2005, to Hon. Cliff Stearns.......... 97
Sun Microsystems, Inc., prepared statement of.................... 98
(iii)
FAIR USE: ITS EFFECTS ON CONSUMERS AND INDUSTRY
----------
WEDNESDAY, NOVEMBER 16, 2005
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Commerce, Trade,
and Consumer Protection,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Cliff
Stearns (chairman) presiding.
Members present: Representatives Stearns, Bono, Ferguson,
Murphy, Blackburn, Barton (ex officio), Schakowsky, Ross,
Towns, Green, DeGette, and Gonzalez.
Also present: Representative Boucher.
Staff present: Bud Albright, staff director; David Cavicke,
general counsel; Andy Black, deputy staff director, policy;
Chris Leahy, policy coordinator; Will Carty, professional
staff; Julie Fields, special assistant to the deputy staff
directory, policy; Terry Lane, press secretary; Larry Neal,
deputy staff director, communications; Billy Harvard, clerk;
Jonathan Cordone, minority counsel; and Jonathan Brater,
minority staff assistant.
Mr. Stearns. Good morning. I am pleased to welcome all of
you to the Commerce, Trade, and Consumer Protection
Subcommittee hearing on ``fair use.'' The principle of fair use
is an important if not well defined component of copyright law.
Simply stated, the fair use doctrine allows free use of
copyrighted material for purposes such as comment and
criticism, news, reporting, teaching, scholarship, and
research. To determine whether a particular use is fair, four
factors must be applied to the facts of the case. As with most
simplifications, the devil is in the details and fair use is
not short on details. The fair use doctrine is a list of
factors applied after the fact and subject to broad
interpretations by the courts, all copying is subject to
challenge by the copyright holder. Fair use is a defense. The
only way for someone to know whether a use is in fact a fair
use is to finally resolve it through litigation. This can be
costly and time consuming.
Further, my colleagues, complicating the inherent tension
surrounding fair use is a rapid advancement of digital media
and the internet to allow flawless reproduction of creative
material and light speed dissemination of that material across
the globe almost instantaneously. Technologies such as
browsing, linking, and streaming were not even imagined during
the formative years of the fair use doctrine but now are at the
heart of a debate involving fair use and the implications of
rapidly involving technologies. I doubt we are going to solve
all of these issues this morning. What I would hope is that we
can have a reasoned and thoughtful examination of the law of
copyright and fair use, how technology is making traditional
fair use analysis and distinctions more nuanced, and how
consumers are fairing in the middle of all of this.
With today's hearing, I also would like to lay the
groundwork for further examination of H.R. 1201, my colleague,
Mr. Boucher's bill. H.R. 1201 would allow the circumvention of
anti-piracy, encryption technology in cases when a user intends
to make a fair use of the underlying work. The Digital
Millennium Copyright Act passed in 1998 (DMCA) created civil
and criminal penalties for circumventing encryption in other
technology designed to prevent tampering or hacking into
copyright material. But it also can prevent fair use. I believe
the effects of the DMCA to lock out consumers from the proper
and fair use of material is a perverse result of the law.
Also known as digital rights management or DRM, the DMCA
also extends its prohibitions to those who sell or trade in
technology design to break encryption technology or circumvent
it. My colleagues, Mr. Boucher's bill would allow for the
development of technologies that assist consumers in fair use
of copyrighted material. This is a noble pursuit but when we
consider the real and growing threat of piracy and hacking, it
becomes very obvious that such a policy could be easily
exploited by criminals and hackers looking to make a fast buck
on someone else's creative genius.
While I would like to explore the issues of H.R. 1201 that
seeks to remedy, I think the cleaner solution to this lies in
technology and not necessarily legislation. On that note, I
have a number of issues that I would like to discuss here
today. The first question I have is whether we have gotten any
closer to that technology that would allow a limited number of
protective copies to be made of copyrighted protected works.
According to Mr. Valenti, who represents the Motion Picture
Association before the subcommittee last year, he said, ``Keep
in mind that, once copy protection is circumvented, there is no
known technology that can limit the number of copies that can
be produced from the original.'' So I would like to know about
the state of the technology in this area today. I cannot think
that this is not a solvable problem even though it is a
challenge. Why don't we make it the copyright equivalent to the
race to the moon so to speak? We went to the moon 40 years ago.
It seems to me technology should afford a means of limiting the
number of copies we can make of a protected work. Absent
promising news on the technology front, I assume we will have
to allow the legislative process to work and see if that will
yield a solution, although perhaps not the best one.
In closing, as I said last year, I support fair and
balanced intellectual property laws but I also understand that
the rest of the world sometimes does not play by the rules. We
have seen that in our hearings here many times. I believe there
is a balance to be achieved here but I think technology is the
best way to manage that balance and protect the rights of both
the creators of works and the consumers who purchase, use, and
improve upon them for the benefit of all.
And so I welcome the witnesses today and I welcome the
ranking member, Ms. Schakowsky.
Ms. Schakowsky. Thank you, Mr. Stearns, for holding today's
hearing on the fair use of copyrighted material in the digital
age.
Technological innovations have once again opened the door
of our subcommittee to legislative arenas that would not have
been imagined just a few years ago. The internet digitization
of information and E-commerce have necessitated the updating of
laws that have been rendered ineffective or perhaps become too
stifling because of technological advances. Today's hearing
focuses our attention on how the availability of copyrighted
materials in digital format effects artists, consumers,
researchers, librarians, and hosts of industries.
Because of the unpredictability of where technology
developments will take us tomorrow, we have to be careful on
proposing to update laws. As we have seen in the past and as we
will hear today about what has happened with the Digital
Millennium Copyright Act or DMCA, closing loopholes could end
up shutting doors to a range of innocent bystanders. With the
passage of the DMCA in 1998 which was before I came to
Congress, my colleagues made a significant attempt to contend
with the new challenges that digital capabilities introduced to
copyright law. The DMCA was meant to stop copyright
infringement on new digital mediums. Unfortunately, by trying
to predict where the ever-evasive nature of technology would
take us, the DMCA was drafted with such broad strokes that it
swept away the fair use provisions of the copyright law and has
been abused by those who want to squelch competition in areas
totally unrelated to copyrights. For example, manufacturers of
garage door openers and toner cartridges have used the DMCA to
try to prevent their competitors from developing alternative
and cheaper models. Remember, they are not infringing on
copyrights or violating any patents.
Make no mistake about it, copyrights need to be protected
and artists need to be compensated for the work. However, when
a law pits artists against consumers, when millions of fans are
called criminals, when companies can use the DMCA to prevent
new products from coming to the market, when libraries may have
to limit or charge for services they traditionally have
provided for free, then in my view, the law needs to be fixed.
I believe that Mr. Boucher's and Chairman Barton's bill,
H.R. 1201, the Digital Media Consumer Rights Act has opened the
door to meaningful discussions about the overreaching
applications of the DMCA even with the new questions and
concerns it raises. I have met with artist groups, consumer
groups, technology developers and believe that we can work
together to craft a remedy to the DMCA that would protect
artist copyrights, consumer rights, competition, and
technological innovation. This is an exciting time. We are at a
technological crossroads that is changing how we think about
commerce, art distribution, and traditional consumer
protection. It is our responsibility as lawmakers to make sure
all voices are heard in this debate.
I am glad that we are here today with so many people who
are affected by the DMCA and its effect on fair use. I look
forward to your testimony.
Thank you.
Mr. Stearns. Ms. Blackburn?
Ms. Blackburn. Thank you, Mr. Chairman.
I had read through some of the testimony and just want to
make just a couple of comments even though I basically have no
voice today. It does not seem to shut me up much.
I want to welcome our guests and thank you all for being
with us and we are looking forward to hearing from you. I want
to thank the chairman for the hearing today. I think it is a
very important hearing. I think this is a critical, critical
issue for our country.
As I read your testimony, I find it is like when you say
you cannot be a little bit pregnant so how do you go snip just
a little bit of what somebody has created and where do you draw
that line? It is like when my children were little, I would
say, they would say something and it would be just a little
white lie but little white lies lead to great big lies. And I
think we have to begin to look at this issue not as just
piracy, not as just snippets but we have to look at it as
theft.
And there is an underlying reason I think we have to do
that. It is because you may call it fair use. One of my country
music constituents in Tennessee looks at what you want to do
and says this is fair use for technology to steal my work. And
many in our creative community do that, look at it that way. I
think that is dangerous. I think we have to be very careful in
codifying something that would allow theft and it concerns me
tremendously. It concerns me for the economic renaissance that
I would love to see happen in this great Nation. And I see some
of you laughing and shaking your head and that concerns me that
you would make light of what is of great concern. The greatest
asset this Nation has had is our constitution. The greatest
asset this economy has ever had, ever had is the fact that
private property ownership has been revered and has literally
been held sacred.
So I thank the chairman for holding the hearing. I thank
each of you for being here. I look forward to talking with you,
to questioning you, and to visiting you about this issue.
Brother, I yield back.
Mr. Stearns. I thank the gentlelady.
Mr. Gonzalez?
Mr. Gonzalez. Waive opening.
Mr. Stearns. The gentleman waives opening.
Mr. Ferguson?
Mr. Ferguson. Thank you, Mr. Chairman. Thank you for
holding this hearing. It is one that I hope will clarify what
constitutes fair use in the consumer marketplace.
This issue of fair use is commonly misunderstood, it is
often misinterpreted, and most disturbingly from my point of
view, it is easily distorted. As someone who represents a
district of industries that are leaders in research and
development whether that is in healthcare or telecommunications
or communications or high tech, I am acutely aware of the
importance of an intellectual property protection and the
responsibility that we have to protect intellectual property
rights ensuring productivity and innovation and the deployment
of the most advanced technologies and medical solutions for
people all around this country and around the world.
My wife and I have four young children and we frequently
find ourselves as the role of the judge among them in deciding
what is fair and what is not fair. Needless to say, our
interpretation ends up being a bit different from our four
young kids' interpretation of what is fair. That being said,
the notion of what is indeed fair can take on a life of its
own, particularly in a court of public opinion. And as one of
our witnesses today, Mr. DeLong wrote a few years back ``A
party who successfully grabs the label of fairness is on the
way to victory.''
Unfortunately when debating the issue of fair use, the
fairness label has been used inaccurately to the advantage of
those who perpetuate piracy and to the detriment of the
copyright owners and ultimately the American consumer. As
Members of Congress, we have to discard the labels and the easy
to digest talking points and focus on what is actually
permissible under the law. First and foremost, what is the fair
use principle mean and what is it intended to cover? Some have
contended that each and every person who buys a copy of a
copyrighted work, a DVD or a CD for instance has full license
under the fair use doctrine to make as many copies as they want
without regard to the nature of the copying or the ultimate
exploitation of the work. This is simply untrue.
The determination of fair use is always, always based on an
examination of facts ``any particular case'' including
consideration of the four factors in Section 107 of the
Copyright Act. Even a fair use determination in the Sony
Betamax case which many here claim is the touchstone of fair
use was based on a careful balancing of the four factors and
limited in its outcome to one specific act, time shifting.
Another argument we will hear is that under the principle
of fair use, the public should have the ability to circumvent
copy protection measures on DVD's and CD's so long as it is for
a ``non-copyright infringing use.'' This subjective narrow
view, frankly an optimistic view not only makes a substantial
leap of faith that those who are using hacking tools are doing
do for personal use without intention to steal, but worse, it
undercuts the goal of the DMCA which was to promote
experimentation and development of technologies, a goal more
important now than ever in the digital age which is in full
bloom. Intellectual property is our country's greatest economic
contributor. We should not devalue it by statutorily
instituting a buy one get as many as you like free rule.
At the end of the day, this hearing represents the
beginning of what I hope will be a robust and healthy debate on
the principle of fair use and intellectual property rights
grounded in facts and not grounded in distortions.
Thank you, Mr. Chairman, I yield back.
Mr. Stearns. I thank the gentleman.
Mr. Ross?
Mr. Ross. Thank you, Mr. Chairman and Ranking Member
Schakowsky for having this hearing here today.
As a relatively new member of this committee, this is my
first hearing on fair use and I am looking forward to the
testimony of the witnesses and the dialog that follows.
The copyright clause of the constitution authorized
Congress to ``promote the progress of science and the useful
arts by securing for limited times to authors and inventors the
exclusive right to their writings and discoveries.'' The
copyright law is ultimately commercial law. It protects the
creator's right to financially exercise his or her intellectual
property. The fair use doctrine was codified in the Copyright
Act of 1976 where four criteria were established to determine
whether unauthorized use of a work is fair use or whether it is
an infringing use. The history of copyright law is a history of
law adjusting to new technology. Often these laws cannot keep
up with the state of technological advances. As we know, the
internet and digital technology have created new possibilities
for methods of distribution, of popular entertainment such as
music and film in addition to enhancing academic studies.
Determining how fair use is applied in this digital
environment in the concept of appropriate fair use is something
we as policymakers must carefully consider as we contemplate
new laws to protect the interest of creators while maintaining
access for consumers. In the past, traditional methods of
copyright enforcement often involve the holder against a
middleman. Illegal replication and distribution were more
centralized in the activities of a bootlegger or an innocent
infringer. Today, digital technology has cut out the middleman
which makes copyright enforcement more challenging. In
addition, as the public's consumption of digital products
grows, the law and technology increasingly focus on digital
means to protect copyright interest because of the great risk
of piracy inherent in digital media exchanged over the
internet. Thomas Freedman in his book, The World is Flat, talks
in great depth about this very issue and the pros and cons
involved in what the technology today is allowing us to do.
Today, the House is scheduled to consider H. Con.
Resolution 230, the resolution expressing the sense of Congress
that Russia provide adequate and effective protection of
intellectual property rights. The U.S. Trade Representative
estimates that U.S. businesses lost $1.7 billion in copyright
and other intellectual property theft in the Russian Federation
in 2004, $1.7 billion lost in Russia alone in 2004, that's
money that cannot be spent to further develop and enhance
products and new innovation.
The bill expresses concern about the failure of Russia to
uphold international standards in the protection of
intellectual property rights, a core American asset. This asset
is not limited to the compensation received by those who create
or publish material but also impacts the numerous jobs created
throughout this country and the economic revenue communities
depend on for further growth.
Copyright itself is an engine of free expression because it
supplies the economic incentive to create and disseminate
ideas. I believe it is imperative that as more information and
products become available in this digital environment, we do
not weaken our laws which could result in making piracy easier
and more prevalent.
Again, thank you for having this hearing today and I look
forward to hearing from those who have joined us.
And with that, Mr. Chairman, I yield back my remaining 45
seconds.
[The prepared statement of Hon. Mike Ross follows:]
Prepared Statement of Hon. Mike Ross, a Representative in Congress from
the State of Arkansas
Thank you Chairman Stearns and Ranking Member Schakowsky for having
this hearing today.
As a relatively new member of this Committee, this is my first
hearing on Fair Use and I am looking forward to the testimony of the
witnesses and the dialogue that follows.
The Copyright Clause of the Constitution authorized Congress ``To
promote the Progress of Science and the useful Arts by securing for
limited Times to Authors and Inventors the exclusive Right to their
Writings and Discoveries.''
Copyright law is ultimately commercial law; it protects the
creator's right to financially exercise his or her intellectual
property.
The fair use doctrine was codified in the Copyright Act of 1976
where four criteria were established to determine whether unauthorized
use of a work is ``fair'' use, or whether it is an infringing use.
The history of copyright law is the history of law adjusting to new
technology. Often, these laws cannot keep up with the speed of
technological advances.
As we know, the Internet and digital technology have created new
possibilities for methods of distribution of popular entertainment such
as music and film in addition to enhancing academic studies.
Determining how fair use is applied in this digital environment and
the concept of appropriate fair use is something we, as policy makers,
must carefully consider as we contemplate new laws to protect the
interest of creators while maintaining access for consumers.
In the past, traditional methods of copyright enforcement often
involved the holder against a ``middleman.'' Illegal replication and
distribution were more centralized in the activities of a
``bootlegger'' or an innocent infringer.
Today, digital technology has cut out the middleman, which makes
copyright enforcement more challenging.
In addition, as the public's consumption of digital products grows,
the law and technology increasingly focus on digital means to protect
copyright interests because of the great risk of piracy inherent in
digital media exchanged over the Internet.
Today, the House is scheduled to consider H. Con. Res. 230, a
resolution expressing the Sense of Congress that Russia provides
adequate and effective protection of intellectual property rights.
The U.S. Trade Representative estimates that U.S. businesses lost
$1.7 billion in copyright and other intellectual property theft in the
Russian Federation in 2004.
The bill expresses concern about the failure of Russia to uphold
international standards in the protection of intellectual property
rights, a core American asset.
This ``asset'' is not limited to the compensation received by those
who create or publish material, but also impacts the numerous jobs
created throughout this country and the economic revenue communities
depend upon for growth.
Copyright itself is ``an engine of free expression'' because it
supplies the economic incentive to create and disseminate ideas.
It is imperative that as more information and products become
available in this digital environment, we do not weaken our laws which
could result in making piracy easier and more prevalent.
Again, thank you for having this hearing today, and I look forward
to hearing from those who have joined us.
Mr. Stearns. I thank the gentleman.
The chairman of the full committee, the distinguished
gentleman from Texas, Mr. Barton.
Chairman Barton. Thank you, Chairman Stearns for holding
the hearing today.
The doctrine of fair use has a long history in our country.
I am glad that we have such a distinguished panel today to talk
about it. It is extremely important to protect people's
intellectual property and our copyright protections stem
directly from our Nation's founding document, the Constitution.
If you think back at the time the formers and framers of the
Constitution were meeting, piracy involved sailors with
cutlasses and cannons and a taste for gold. Their only worry
with the law was that if it caught them they would hang them.
With some notable exceptions, today's pirates are more likely
to come armed with computers and pocket protectors. They still
do not have much concern for legalities, however, and they
still retain a taste for unarmed wealth. The framers did not
anticipate the digital age but they did anticipate theft. It
seems to me that they would have no problem identifying the
modern pirates who steal other people's creative ideas and sell
it.
As this subcommittee has explored with hearings in the
past, international and domestic intellectual property
infringement is a real problem and we must vigorously prosecute
those who break the laws that deal with those types of
situations. I think, however, that the people who wrote the
Constitution would recognize the difference between a pirate
and a consumer. Copyright owners for example do not have
eternal and complete control over their works. Over the years
and with the Constitution as their guides, the courts have
determined and Congress had codified certain restrictions
including the fair use doctrine. Simply put, consumers are
allowed to use copyrighted works without permission of the
owner under certain limited circumstances. These limited
circumstances have been a strength of our system, not a
weakness. They allow consumers who pay for works appropriate
access to and use of and I want to accentuate appropriate
copyrighted works. At the same time, ownership rights have been
secured in order to encourage creativity and innovation.
America is a Nation that values ideas and the freedom of
Americans to innovate and to invent is another of our great
strengths and fair use is a fundamental part of that.
I am concerned that some attempts to protect content may
overstep reasonable boundaries and limit the consumer's legal
options particularly in light of the emerging technologies that
we are beginning to see in the marketplace. It boils down to
this. I believe that when I buy a music album or a movie DVD,
it should be mine once I leave the store. Who does not believe
that? Does that mean that I have unlimited rights to use that
DVD or that album? No, of course not, but the law should not
restrict my fair use right to use my own property. Current law
provides that I am liable for anything I do that amounts to
infringement but current law also prevents me from making legal
use of the content that is technologically locked even if I
have the key. That just does not make sense to me. In defending
this conflict, some say that fair use leads to piracy. Some
even say that fair use is piracy. I do not believe that. I do
not think it is. By definition, fair use is the use that does
not infringe upon the owner's rights.
I am very interested in the state of content technology,
content protection technology. Is it effective? Has it limited
consumer's fair use rights? How might these developments hurt
consumers in the future? How is the consumer electronics
industry been affected? How would it affect the research and
scientific community? I look forward to finding some of the
answers to these questions from our distinguished panelists
today. I also look forward to a comprehensive discussion about
the doctrine of fair use, its historic origins, its future, and
the real world effects in the marketplace of today.
Finally, I want to thank Mr. Boucher for his work on this
issue and for helping to prepare us today in providing or at
least recommend some of the witnesses that we're going to hear
from. He is not on the subcommittee but has done important work
in trying to protect consumers fair use rights.
Thank you, Mr. Chairman for holding this hearing. I look
forward to participating in it.
[The prepared statement of Hon. Joe Barton follows:]
Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy
and Commerce
Good morning. Thank you, Chairman Stearns, for holding this
important hearing. The doctrine of ``fair use'' has a long history in
our country, and I'm glad that we have such a distinguished panel to
talk about the issue.
It is extremely important to protect people's intellectual
property, and our copyright protections stem directly from our nation's
founding document. At the time that the Framers were meeting, piracy
involved rogue sailors with cutlasses and cannon and a taste for gold.
Their only worry with the law was that if it caught them, it would hang
them. With some notable exceptions, today's pirates are more likely to
come armed with computers and pocket protectors. They still don't have
much concern for legalities, however, and they retain a taste for
unearned wealth. The Framers didn't anticipate the digital age, but
they did anticipate theft. It seems to me that they would have no
problem identifying the modern pirates who steal other people's
creative work and sell it. As this subcommittee has explored with
hearings in the past, international and domestic intellectual property
infringement is a real problem, and we must vigorously prosecute those
who break the law.
I think that the people who wrote the Constitution also would
recognize the difference between a pirate and a consumer. Copyright
owners, for example, do not have eternal and complete control over
their works. Over the years and with the Constitution as their guide,
the courts have determined--and Congress has codified--certain
restrictions, including the ``fair-use'' doctrine. Simply put,
consumers are allowed to use copyrighted works without permission of
the owner under certain limited circumstances. These limited
circumstances have been a strength of our system, not a weakness. They
allow paying consumers appropriate access to, and use of, copyrighted
works. At the same time, ownership rights have been secured in order to
encourage creativity and innovation. America is a nation that values
ideas, and the freedom of Americans to innovate and invent is another
of our great strengths. Fair use is a fundamental part of that.
I am concerned that some attempts to protect content may overstep
reasonable boundaries and limit consumers' legal options, particularly
in the light of the emerging technologies that we are beginning to see
in the marketplace.
It boils down to this: I believe that when I buy a music album or
movie, it should be mine once I leave the store. Who doesn't believe
that? Does it mean I have unlimited rights? Of course not. But the law
should not restrict my fair-use right to use my own property.
Current law provides that I am liable for anything I do that
amounts to infringement, but current law also prevents me from making
legal use of content that is technologically ``locked,'' even if I have
the key. This doesn't seem to make sense. In defending this conflict,
some say that fair use leads to piracy, or that it is piracy. No, it
isn't. By definition, ``fair-use'' is a use that DOES NOT infringe on
owners' rights.
I am very interested in the state of content-protection technology.
Is it effective? Has it limited consumers' fair use rights? How might
these developments hurt consumers in the future? How has the consumer
electronics industry been affected? How will it affect the research and
scientific communities?
I look forward to finding some answers to these difficult questions
and to a comprehensive discussion about the doctrine of ``fair use,''
its historic origins, its future, and the real world effects in the
marketplace.
Finally, I want to thank Mr. Boucher for attending this hearing
today to hear from our witnesses and discuss the topic. He is not on
the subcommittee, but has done important work trying to protect
consumers' fair use rights. I want to welcome him, and commend him for
his leadership on the issue.
Thank you, Mr. Chairman, and I yield back the balance of my time.
Mr. Stearns. I thank the gentleman.
Ms. DeGette?
Ms. DeGette. Thank you, Mr. Chairman.
I will not make a long opening statement. I would like to
associate myself with a lot of the comments people have made. I
was reading recently about Google is going to scan full text of
books and put it on the internet. That really raises an issue
about how far we go with the fair use doctrine and that is why
I am so delighted that you have decided to schedule a serious
of hearings on this issue. And I look forward not just to this
hearing but also future hearings to see where we put the
balance between fair use and copyright protection because
really copyright protection is the bow work of the
intellectual, artistic, and commercial flourishing in the last
few centuries in this country.
And I yield back.
Mr. Stearns. The gentlelady yields back.
Mr. Murphy?
Mr. Murphy. I thank you, Mr. Chairman. I also thank you for
holding this hearing.
As an author myself and when I have the concerns about what
is happening with text of books it--I know how much time it
takes to put into a manuscript, sometimes hundreds of hours
including research goes into preparing a book. And certainly in
any case whether it is text books or whatever that book may be,
to use them for the standard issues of reviews, critiques, and
scholarship all within the bailiwick of what copyrights should
allows. But as we look at the ease by which other people may
copy material as the gentlelady was just saying whether it is
making it available on line or whatever the case may be, it is
a concern that those people who are out there trying to make a
living by writing in essence we are taking away their ability
to make a living when it is distributed whether they are
singers or songwriters, recording artists, authors. I wonder
what would happen if similar things were done to just tell
other professions that we could simply take their services and
access it for free and provide that free on line and no on
could charge for it anymore. What good is it to have a
specialty? What good is it to even work if we open that up to
the marketplace?
So I am pleased we are having this hearing. I look forward
to getting some answer to this and how in this new world of
technology we can indeed protect the efforts and the work of so
many who put in so much time and research into their creative
endeavors and we need to make sure that we protect their part
of the economy as well.
And I yield back the balance of my time.
Mr. Stearns. The gentleman yields back.
Mr. Green?
Mr. Green. Mr. Chairman, I will waive opening statements
and submit a statement to the record.
Mr. Stearns. The gentleman waives.
Ms. Bono?
Ms. Bono. Thank you, Mr. Chairman. I would like to begin by
thanking you so much for holding this hearing and the chairman
of the full committee also for being so willing to hear me out
all the time with my thoughts on this. I would like to thank
our panelists for what is going to be a lively and spirited
debate about something that is extremely important to us all.
I just want to start by saying if we are going to talk
about H.R. 1201, I am a staunch opponent and I hope we can
certainly slow down this movement of this bill if not stop it
all together. I speaking for myself as a consumer, I am also a
copyright holder. I have personally three iPods. I have gone
through 5 or 6 for whatever reason. My children each have gone
through two iPods. Now when I put my iPod when I connect it to
my computer, the same list of songs is downloaded from iPod to
iPod to iPod. Now is that technology mutual? I do not think so.
I think technology is benefiting. I am paying the songwriter.
I'm paying the royalty once 99 cents to iTunes.
So I think it is important to realize fair use is alive and
well with these issues. What scares me the most is that the
revolution that we are witnessing that my colleague talked
about is a very, very exciting one for technology and for
content providers. I have always said the inner key is the
creator's greatest tool. I can, you know, we can talk about
some song, we can hear it on the radio, we go home, we look it
up on iTunes or either Yahoo, whatever we want, we find it and
we hit enter and we have that song. But if we go forward with
something like 1201 which basically guts DRM, Digital Rights
Management, no longer allows this to work for us, it is going
to stifle both technologies and the sale of intellectual
property.
So I have great concerns. And I often think about this
fact. We have not talked about this with books. We do not say,
okay, I just bought a new book, the great book on Lincoln's
political leadership and if I ruin it, if I drop it in a puddle
of water going to Dulles Airport, do I call the publisher and
say I bought that book once, I want another one for free, that
is fair use? This is something we should talk about. Why can't
we? I have already paid for the intellectual property. I paid
that writer for her work, why am I not entitled to a whole new
book for free? But we do not think like that. I have already
paid you once for property but the publisher and I do not want
to send shutter through the publishing community right now. I
know, you know, I am really speaking metaphorically here. But
we are not talking about that. We pay the provider, we pay the
content creator once, and we share that amongst multiple
platforms.
I think it is important when I talk to my colleagues about
MP4 files, movie files, we as consumers have gone, all of us in
this room have probably, every Super Bowl we go out and buy the
latest, greatest biggest screen we can find and we brag about
it to our friends, I have got a 60'' HDTV, you know, LCD screen
whatever it is and this is what I have. But we're also now
going to iPod style 1'' screens that we are all going to buying
for Christmas for ourselves so we are going to be staring at
these little teeny tiny screens. Thanks to digital rights
management, we can download different movies, we can download
different television programs. But if we make it legal to
circumvent encryption technologies that allow us to have that
on our personal player, we are going to stifle this whole
globe.
So I have great concerns. I think that there have been
mistakes made, there are no questions. I think people have made
mistakes in being way too proprietary with their technology and
protecting their content. But I think we need to partner with
industry, Mr. Chairman and work with them and shape with them
policies that say you own this, you have got this once, you can
move it to multiple platforms. But I think to say remove
encryption technology, let people ahead and make--and if it
happens to be pirated, if it happens to end up on the internet,
oh, well it was not my fault. I think that is reckless and I
think it is dangerous to this country.
As my colleague said too, I believe our country is the
greatest Nation on this earth because of intellectual property
whether it is writing song, whether it is writing a book,
whether it is creating a patent, whatever it is, I think we
need to hold those things near and dear. And I think this is a
very important issue and I am hoping again we look at 1201 and
we do not undo something that is very important to our country.
So I look forward to hearing all of you in the question and
answer.
And again, thank you, Mr. Chairman, I yield back my time.
[The prepared statement of Hon. Mary Bono follows:]
Prepared Statement of Hon. Mary Bono, a Representative in Congress from
the State of California
Mr. Chairman, thank you for holding this hearing today.
We are all very fortunate to live in a world where music, movies
and other forms of entertainment are just a mouse click away. I've
always maintained that the ``enter'' key is the entertainment
industry's best friend if they manage to tap into this digital
revolution.
And yes, the onus is on this industry to adapt to the changing
environment. But, they cannot make this successful transition if the
federal government decides their intellectual property is free for the
taking under the ``fair use'' doctrine.
Mr. Chairman, there are some who suggest that technology will be
stifled if Congress insists on protecting IP rights. I would assert
just the opposite. Why would a company put financial resources behind a
product that can be taken for free?
Furthermore, under current law, technology and innovation are
blossoming at the same time copyrights are protected. It seems as if
there is a smaller, sleeker MP3 player or gaming device coming out
every week! Even founders of the illegal Grokster see a successful
business model predicated on copyright protection.
Our country has a long tradition of protecting property rights and
copyright. We have frowned upon ``takings'' without permission or due
compensation. However, if Congress amends the DMCA, ``fair use'' will
resemble ``unfair takings.''
During recent debate, Congress rejected ``unfair takings.'' In a
vote of 376-38, the House passed a bill to address the Supreme Court's
flawed decision in the Kelo case. Both Republicans and Democrats from
across the political spectrum agreed that the federal government could
not use ``eminent domain'' for economic development purposes.
It is my hope that in relation to the new digital era, Congress
does not allow ``fair use'' to embody the haunting specter of Kelo's
``eminent domain.'' If we are to allow ``fair use'' to run this course,
we will not only undermine one of this nation's most important
industries, but will also weaken our position in protecting
intellectual property rights internationally.
I am glad we have an opportunity to explore this issue today.
Believe me, I want the Internet to serve as the portal to
entertainment. There are many exciting advances on the horizon. But, I
hope Members keep one thing in mind: Property is property, whether we
are talking about private property or intellectual property or whether
we are seeking to protect ranchers or rockers. That is the history of
our great nation and we must continue in this tradition.
Thank you and I yield back.
Mr. Stearns. I thank the gentlelady.
Mr. Towns?
Mr. Towns. Thank you very much, Mr. Chairman and also thank
you Member Schakowsky for arranging the hearing today.
We will be addressing a very delicate topic this morning
and I look forward to hearing from all of the witnesses. I am
pleased to see the videogame industry represented here today.
Any discussion of the impact of the fair use doctrine on
consumers should include this important segment of the
entertainment industry.
The videogame industry has experienced significant growth
in recent years and one reason for such growth is due to its
meeting and often exceeding consumer expectations with regard
to accessing and playing content. In 2004, the sale of computer
and videogames in the United States topped $7 billion. And the
global entertainment software market reached $25 billion. I
look forward to this exciting vibrant industry to continue to
flourish and to continue to meet the demands of its consumers.
It must continue to be able to reasonably protect intellectual
property. Further, it must have the confidence that Congress is
not going to upset the balance that has resulted in a win-win
situation for the videogame industry and its consumers.
Today's hearing is also about how to best balance consumer
demand for content with the copyright holders ability to
protect that content. These are both important goals. But as I
see it, the marketplace is working fairly well. Content
companies are using technology to develop innovative ways to
protect their intellectual property while allowing consumers to
make their personal uses that they want to make. Sometimes the
technologies are not perfect as we saw recently with some
content protection technology. But we--but as we saw in that
case and as we see it all the time, when new software is
developed and released, the marketplace responds very quickly
to consumer concern. So I firmly believe this is how the
industry should be allowed to grow and we must allow it to be
involved innovation.
On that note, Mr. Chairman, I yield back the balance of my
time and I am anxious and eager to be hearing from all of the
witnesses. Thank you very much.
Mr. Stearns. I thank the gentleman.
Anyone else seek opening speech?
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress
from the State of Wyoming
Thank you, Mr. Chairman, for holding this timely hearing on the
fair use of copyrighted works. Copyright litigation has focused
increasingly on digital media exchange and its inherent piracy risks.
How these disputes are settled stands to impact in a very profound way
the level and nature of consumer access to digital entertainment.
Historically, copyright law has adapted in the face of new
technologies, as have consumer expectations as to what constitutes fair
use. When Congress passed the Digital Millennium Copyright Act (DMCA)
in 1998, we could not possibly have foreseen the rapid advances in
technology that would ensue in just a few short years.
The public audience for digital entertainment has grown, along with
technological restraints on the use of that entertainment. In
particular, the ``anti-circumvention'' clause of the DMCA has allowed
the content community to successfully limit the circumvention of
digital copyright protections.
Members of the content industry insist on the value of the DMCA for
their continued ability to market and distribute their products.
Consumer advocates, however, believe this protection regime jeopardizes
their right to fair, noninfringing use of copyrighted works. This is
one of many fair use issues likely to be brought up by today's
panelists, who represent both the content community and consumer rights
advocates.
I hope today's hearing will help our committee better understand
the growing tension between consumers, who desire to exercise the fair
use of legitimately purchased products, and the rights of the content
industry to restrain the reproduction and distribution of their
copyright protected material.
Thank you Mr. Chairman. I yield back the balance of my time.
Prepared Statement of Hon. Gene Green, a Representative in Congress
from the State of Texas
I'd like to thank the Chairman and Ranking Member for holding this
hearing today. This is an important and complicated issue. I'm glad
we'll be adding to the knowledge we gained from the hearings we held
last year through the members on the panel we'll hear from today.
This bill does strike to the heart of one of the most significant
debates for the future of the digital economy--the regulation of
intellectual property.
With all of its promise, the digital age has also brought a
tremendous amount of intellectual property piracy--the software
industry reports losing $11 billion a year to software piracy, the
motion picture industry another $3-4 billion, and the recording
industry $4.2 billion.
What is scary to people who make software, movies, and music is
that those are the figures only the ones they can calculate. Even more
losses from online piracy exist, but are very difficult to calculate.
Numerous studies support the theory that many producers have been
severely hurt by online piracy. And this is one of the few industries
that has a positive balance of trade, reducing our trade deficit.
The question before us today is: how can rampant piracy crimes be
stopped or contained while society's beneficial fair use rights are
preserved?
All the witnesses on the panel we're going to hear from today were
watching the Supreme Court closely when they ruled in MGM V. Grokster.
In this particular ruling, the Court emphasized that the intent with
which Grokster created and marketed Peer to Peer file sharing software
was what made them liable for copyright infringement. Not the
technology itself.
This committee does not have the luxury of such specific examples
of the creation, use and intent of using such technology in front of
us. Should we pass legislation on this issue, it will have a broad
impact on these industries regardless of what the circumstances may be.
I supported the Digital Millennium Copyright Act when Congress
approved it, so I do get concerned when I hear reports of the DMCA
being used to eliminate after-markets for a variety of replacement
parts.
What is the point of having digital rights management at all, if
someone can create software to hack it, post his hacking software on
the Internet, and software pirates in China download it and start
cranking out bootleg copies of the latest feature films all in one day?
Consumers may be right to complain that they cannot fast forward
through previews on their DVDs. But if the software that allows them to
fast forward could also allow piracy, I do not think that is the proper
balance.
As a final note, I would like to mention one section of HR 1201
which falls directly under our jurisdiction--FTC labels for copy-
protected compact discs.
I think the recording industry knows that sufficiently informing
the public of any changes to the CD format is the right thing to do in
the first place.
The recording industry certainly has a right to copy-protect their
products, but Americans have been buying CDs for well over a decade now
and have come to expect their CDs will work in all CD drives and
players.
If new copy-protected compact discs do not work in consumers' CD
players, the consumer reaction is likely to be very negative.
I hope the parties involved can work together to avoid such
situations.
Mr. Chairman, thank you for holding this important hearing on the
future of digital intellectual property protection.
Prepared Statement of Hon. C.L. ``Butch'' Otter, a Representative in
Congress from the State of Idaho
Thank you for holding this hearing today, Mr. Chairman. In one
respect, the issues of fair use and copyright protection are always
changing, adapting to an ever-rapidly transforming technology market.
Yet they always remain at the heart of the laws of this land.
Less than a month ago, we met here to express our concern,
frustration, and fear following the Supreme Court's decision in Kelo
vs. City of New London. Our outrage was universal and our alarm
widespread at the implications of the Court's ruling. And just two
weeks ago we spoke loudly in favor of protecting private property,
willing to fight tooth and nail if necessary, on the floor of the House
when we passed the Private Property Rights Protection Act.
To me this debate is no different, Mr. Chairman. And yet here we
sit, no longer united in defense of the Fifth Amendment but in many
ways trying to find a convenient exception to our laws which are laid
so firmly on a foundation of private property rights. ``Fair use'' is
often craftily disguised as a right and an entitlement, and we discuss
it as though we are obligated to protect it. But deep down ``fair use''
is just another argument for taking someone else's property to use for
our own convenience. This argument and the one we found so repulsive in
Kelo are one and the same.
Some are tempted to separate ``intellectual property'' from our
general idea of private property, but intellectual property is no
different than the dirt on my ranch in Idaho. Our entire concept of
democracy is based on our right to own, to innovate, and to benefit
from our work. Without protecting those rights and making it worthwhile
to turn an idea into something more tangible, we would not be the
nation we are today.
As a believer in the free market system, this debate about ``fair
use'' concerns me on another level. About twenty years ago, we had a
similar debate when a new technology called the VCR hit the market. The
implications of this new technology seemed devastating for the
industry. But a marvelous thing happened: rather than allow government
regulation to harm both industry and consumer, the industry responded
to consumers' desire to see films at home and became innovative,
building an economic empire in the video rental and retail industry as
a result. Everybody won.
While there are certainly differences in today's debate over fair
use, I believe one principle is the same: Consumer demand, not
government regulation should lead industry response.
It seems to me that the entertainment industries again have an
opportunity to work with the software and device manufacturers to
develop and sell products that meet consumer demand. Protecting
intellectual property investments is the key element in achieving
cooperation. Without these protections, all of these industries will
ultimately suffer.
I believe consumers have a voice and should be heard. That does
not, however, obligate the government to mandate the industry response,
especially since we are discussing a luxury product--not a right or a
basic necessity to life, but a luxury.
In closing, I do not believe Congress should promote policies that
stifle investment, nor do I believe that this debate on ``fair use''
should be allowed to carve out an industry in which the rights of
property holders do not apply. We are obligated to protect private
property, discourage theft, and encourage investment into intellectual
properties, not the other way around.
I look forward to the witnesses' testimony and thank the Chairman
again for the opportunity to discuss this issue.
Prepared Statement of Hon. George Radanovich, a Representative in
Congress from the State of California
I thank Mr. Chairman for holding this hearing today on Fair Use and
its effects on consumers and the industry.
Rapid advances in technology have increased tensions between the
content community and consumers.
At the heart of the issue is the tension between attempts by
content owners to protect and control the use of their works by means
of technology and the consumer's use of technology to make use of
content under fair use.
Private property and intellectual property rights have been an
important part of this country's existence since the inception of the
Constitution.
Protecting the intellectual property of our artists, writers and
inventors from illegal reproduction and distribution should important
to all of us, because without protection of these works, we may not be
blessed books, music, movies, and art that is made available to us year
after year.
I am interested to hear from our witnesses today on their views of
fair use and whether they believe there is a technological solution
instead of a legislative one?
Thank you again Mr. Chairman for holding this hearing. In closing
I would like to say that I'm sorry that the Recording Industry, Motion
Picture Association and the National Association of Broadcasters could
not be here to discuss their views on this matter with us.
Mr. Stearns. If not, we will move to our witness and I want
to welcome all of them this morning. We have Mr. Professor
Peter Jaszi from the University, excuse me, Washington College
of Law, the American University; Mr. Gary Shapiro, President
and Chief Executive Officer Consumer Electronics Association;
Ms. Prudence S. Adler, Associate Executive Director of the
Federal Relations Information Policy Association of Research
Libraries; Mr. Jonathan Band who is here on behalf of
NetCoalition; Ms. Gigi B. Sohn, President and Founder of Public
Knowledge; Mr. James DeLong, Senior Fellow and Director,
IPCentral Information of Progress and Freedom Foundation; Mr.
Frederick Hirsch, Senior Vice President, Intellectual Property
Enforcement, Entertainment Software Association; and Mr. Paul
Aiken, Executive Director of Authors Guild, Incorporated.
So I wish to welcome all of you and we'll start out with
you, Professor, your opening statement. Just turn the mike on
and move the mike a little closer to you if you would be so
kind.
STATEMENTS OF PETER JASZI, WASHINGTON COLLEGE OF LAW, AMERICAN
UNIVERSITY; GARY J. SHAPIRO, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, CONSUMER ELECTRONICS ASSOCIATION; PRUDENCE S. ADLER,
ASSOCIATE EXECUTIVE DIRECTOR, FEDERAL RELATIONS AND INFORMATION
POLICY, ASSOCIATION OF RESEARCH LIBRARIES; JONATHAN BAND,
NETCOALITION; GIGI B. SOHN, PRESIDENT AND FOUNDER, PUBLIC
KNOWLEDGE; JAMES DELONG, SENIOR FELLOW AND DIRECTOR, IPCENTRAL
INFORMATION, PROGRESS AND FREEDOM FOUNDATION; FREDERICK HIRSCH,
SENIOR VICE PRESIDENT, INTELLECTUAL PROPERTY ENFORCEMENT,
ENTERTAINMENT SOFTWARE ASSOCIATION; AND PAUL AIKEN, EXECUTIVE
DIRECTOR, AUTHORS GUILD, INCORPORATED
Mr. Jaszi. Thank you. Mr. Chairman, Ranking Member
Schakowsky, and members of the subcommittee, my name is Peter
Jaszi and for the last 25 years, I have been teaching copyright
here in Washington.
So I am going to start by invoking academic privilege in
trying to give a description of the fair use doctrine even more
succinct than the chairman's elegant summary of a few moments
ago. In essence, the doctrine provides that when the cultural
or economic benefits that will flow to the public from an
unauthorized use of copyrighted material outweigh the costs it
will impose on the copyright owner, that use should be
permitted. Fair use is not piracy. Fair uses are non-infringing
uses, not merely tolerated infringements. The law does not just
accept fair use but actively encourages it. Although fair use
is sometimes described technically in terms of legal procedure
as a mere affirmative defense, it functions in the real world
analogue and digital as an important entitlement for students,
artists, teachers, librarians, writers, entrepreneurs,
musicians, programmers, and ordinary consumers.
As Mr. Ross noted, fair use was first codified as part of
the general revision of the Copyright Act in 1976 but it has
been a part of U.S. copyright laws since the decision of Folsom
against March in 1841. Thus for more than 150 years, the
success, the unparalleled success of our copyright system has
stemmed from the fact that strong protection for owners
consistently has been balanced by use rights that to paraphrase
the Supreme Court, encourage others to build freely upon
preexisting works and make their own contributions to cultural
progress. Moreover, as the court recently reaffirmed in Eldred
against Ashcroft, the fair use doctrine is a mechanism, a
crucial mechanism by which copyright law recognizes and
implements the free speech values of the First Amendment.
Major industries such as motion pictures, poplar music, and
computer software have prospered in part because innovators
have been free to copy important elements of their
predecessor's work. Moreover it is because of fair use that we
all can make many personal uses of the information products we
purchase. Students can copy text or image from published
sources to enhance a term paper or homework assignment. Music
fans can combine selections from their record collections to
make mixes for a family member's birthday. And it is the
freedom to read, view, and listen to information products
assured by fair use that enables many consumers to move from
absorbing the words, images, and notes of others to making
their own creations.
The reach of copyright law is constantly expanding to
provide longer terms of stronger protection against more kinds
of unauthorized uses than at any point in history. More than
ever than fair use matters now. In the courts, the doctrine is
being creatively and robustly applied to guarantee fundamental
fairness and balance and providing useful guiding precedence.
In other quarters, however, fair use is threatened. Some
academics complain that fair use is too vague or uncertain to
be of real value to users. It would, however, be a serious
mistake for Congress to codify the doctrine in greater detail,
precisely because the enduring strength of fair use lies in its
dynamism and adaptability to change circumstances. Instead, I
believe the best answer to this objection is for various user
communities to articulate clearly their own shared vision of
best practices in fair use, a process that I am happy to say is
beginning to get under way.
Self help cannot address other threats to fair use such as
those posed by anti-circumvention laws. Thus for example, a
teacher who copies short film segments to show in class. This
is a classic core example of fair use can still be liable under
Section 1201 of the Digital Millennium Copyright Act if he or
she bypassed the so called CSS Code with which commercial DVD's
are sold. Such anomalies cry out for legislative regress. I
would note that H.R. 1201, the Digital Media Consumer Rights
Act of 2005 introduced by Representatives Boucher, Doolittle,
and Barton illustrates the kind of legislation that would be
well calculated to provide that regress.
Thank you for your attention. I look forward to trying to
answer whatever questions you may have about this vital aspect
of American copyright.
[The prepared statement of Peter Jaszi follows:]
Prepared Statement of Peter Jaszi, Washington College of Law, American
University
My name is Peter Jaszi. For the last 25 years, I have taught
copyright at the Washington College of Law of American University, here
in the District of Columbia. In recent years, I also have represented
the Digital Future Coalition on various copyright policy
issues.1 Today, however, I am testifying in my personal
capacity about the critical importance of the ``fair use'' doctrine in
American copyright law.
---------------------------------------------------------------------------
\1\ The DFC is a coalition of more than 30 trade associations, non-
governmental organizations and learned societies representing a broad
cross-section of the educational, high-tech, consumer and creative
communities in the United States; it was organized during the run-up to
the Digital Millennium Copyright Act of 1998, and has continued to be
active on current copyright policy questions.
---------------------------------------------------------------------------
Summary
In the two centuries following the enactment of the first Copyright
Act in 1790, the United States enjoyed an unequaled and unbroken record
of progress that gave us, on the one hand, educational institutions and
research facilities that are preeminent in the modern world, and on the
other, entertainment and information industries that dominate the
global marketplace. Schools, libraries and archives benefited from the
operation of our copyright system, and the public reaped the reward;
likewise, expanding American publishing, motion picture, music and
software businesses generated not only wealth but also less tangible
forms of public good. And this was as it should be. From its inception,
the copyright system has operated both as a strong force for cultural
development and as a powerful engine of economic growth.
The success of traditional U.S. copyright law was not due only to
the unprecedentedly high levels of protection it has afforded to works
falling within its coverage. That success also stemmed from the fact
that strong protection consistently has been balanced against use
privileges operating in favor of teachers, students, consumers,
creators and innovators who need access to copyrighted material in
order to make--or prepare to make--their own contributions to cultural
and economic progress. To put the point more simply, the various
limitations and exceptions on rights that traditionally have been a
part of the fabric of copyright are not results of legislative or
judicial inattention; rather, these apparent ``gaps'' in protection
actually are essential features of the overall design. As the Supreme
Court observed more than a decade ago, in its Feist decision, the
limiting doctrines of copyright law are not ``unforeseen byproduct[s]
of a statutory scheme . . .;'' in fulfilling its constitutional
objective, copyright ``assures authors the right to their original
expression but encourages others to build freely upon'' preexisting
works. And, as the Court recently has reaffirmed in Eldred v. Ashcroft,
these limiting doctrines are the mechanism by which copyright law
recognizes and implements the values of free expression codified in the
First Amendment.
Today, more than ever, fair use matters. In the courts, the
doctrine is being creatively applied to guarantee fundamental fairness
and balance. In other quarters, however, fair use is under threat. But
the doctrine (like the vision of balanced copyright law that it
represents) deserves to be defended and supported. Some of that support
can come from the Congress of the United States, but much of it must
derive from the various user communities that depend on the doctrine
for the opportunity to make their cultural and economic contributions
to our society.
Some issues of terminology
The term ``fair use'' can be used in two different ways--one loose
and one more precise. Often, it is employed as shorthand to reference
all the vital limitations and exceptions on the rights of copyright
owners that are built into our system and have done so much to help
fulfill the Constitutional objective of intellectual property:
promoting the ``progress'' in ``Science and useful Arts.'' Over the
years, U.S. copyright law has built up a catalogue of limitations and
exceptions to copyright protection, including:
The ``idea/expression'' distinction, which assures (among other
things) that copyright protection does not attach to the
factual contents of protected works;
The ``first sale'' principle, codified in 17 U.S.C. Sec. 109(a),
which assures that (as a general matter) purchasers of
information products from books to musical recordings can sell
or lend their copies to others;
A variety of specific exemptions for educational, charitable and
other positive public uses; and, most importantly,
The doctrine codified in Sec. 107 of the Copyright Act, which
provides--in essence--that some other unauthorized uses of
copyrighted works, not specifically covered by any of the other
limitations just summarized, should be permitted rather than
punished because their general cultural and economic benefits
outweigh the costs they might impose on copyright owners.
``Fair Use'' under Sec. 107
It is to this last doctrine to which the term ``fair use'' refers
in its more precise sense, and it is to this doctrine and its
importance that my remarks today will primarily be addressed. That is
because fair use (in this sense) has a special place in the array of
limitations and exceptions to copyright. Of all the doctrines noted
above, it has the greatest potential to grow and change with new
technological, economic and cultural circumstances. Whereas many of the
statutory exceptions to copyright are static, fair use under Sec. 107
is, by its very nature, adaptable and dynamic. For this reason, it
operates as a kind of keystone in the edifice of our copyright system.
It absorbs pressure from different sides (i.e., from copyright owners
and copyright consumers), and in so doing it allows the structure to
stand. Our fair use doctrine is unique--no other country has anything
quite like it. Indeed, it functions as a kind of secret weapon in
support of U.S. competitiveness in the international competitive
marketplace. Fair use helps account for the innovative dynamism that
has made our information industries the envy of the world.
This particular concept of fair use has been a central and
unquestioned feature of U.S. copyright law since 1841, when Joseph
Story announced the doctrine in the case of Folsom v. Marsh. It was
refined the courts in the century and a quarter that followed, and
codified in 1976, as part of the general revision of the Copyright
Act.2 That codification, however, had some unusual features.
Rather than attempting to specify the contents of the doctrine, or to
shape and regulate its future growth, the Congress merely provided a
non-exhaustive list of four factors that (along with other
unremunerated considerations) should be taken into account when a
federal court is called upon to determine whether a particular
challenged use of copyrighted material should be considered fair. When
Sec. 107 was amended in 1992, to clarify that fair use applies to both
unpublished and published works, its provisions retained this
remarkable open texture. Thus, the dynamism of the doctrine has been
preserved in the course of its codification. Today, in weighing the
balance at the heart of fair use analysis, courts return again and
again to two key questions:
---------------------------------------------------------------------------
\2\ 107. Limitations on exclusive rights: Fair use
Notwithstanding the provisions of sections 106 and 106A, the fair
use of a copyrighted work, including such use by reproduction in copies
or phonorecords or by any other means specified by that section, for
purposes such as criticism, comment, news reporting, teaching
(including multiple copies for classroom use), scholarship, or
research, is not an infringement of copyright. In determining whether
the use made of a work in any particular case is a fair use the factors
to be considered shall include--
(1) the purpose and character of the use, including whether such
use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of
the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding
of fair use if such finding is made upon consideration of all the above
factors.
Did the unlicensed use ``transform'' the material taken from the
copyrighted work by using it for a different purpose than the
original, or did it just repeat the work for the same intent
and value as the original?
Was the amount and nature of material taken appropriate in light of
the nature of the copyrighted work and of the use?
Among other things, both questions address whether the use will
cause excessive economic harm to the copyright owner.
In this connection, there also are some misconceptions about the
reach of the fair use doctrine that should be noted and corrected:
Fair use need not be exclusively high-minded or ``educational'' in
nature. Although nonprofit or academic uses often have good
claims to be considered ``fair,'' they are not the only ones. A
new work can be ``commercial''--even highly commercial--in
intent and effect and still invoke fair use for its use of
preexisting material. Most of the cases in which courts have
found unlicensed uses of copyrighted works to be fair have
involved projects designed to make money, including some that
actually have.
Fair use doesn't have to be boring. A use is no less likely to
qualify as a fair one because the new work in connection with
which it occurs is effective in attracting and holding an
audience. If a use otherwise satisfies the criteria of the law,
the fact that it is entertaining or emotionally engaging should
be irrelevant to the analysis.
A failed effort to clear rights doesn't inhibit a users' ability to
claim fair use. Everyone likes to avoid conflict and reduce
uncertainty. Often, there will be good reasons to seek
permissions in situations where they may not literally be
required. When a would-be user's good faith effort to do so
fails, he or she loses nothing in terms of fair use rights.
It also is important to note that fair use is not, as sometimes has
been suggested, a mere negative byproduct of the economics of rights
clearance in the analog information marketplace, which can be expected
to whither away with the transition to digital. Rather, it is a
provision of copyright law that serves an affirmative cultural and
economic mission. It is likely to be more important than ever in the
new information era. Nor does it detract from the importance of fair
use to assert, as its detractors sometimes do, that it is not a
``right'' but merely an ``affirmative defense.'' This, I would suggest,
is a legal quibble rather than a serious argument. The availability of
an affirmative defense in a proceeding of certain factual circumstances
is tantamount to a right to engage in the privileged conduct when those
circumstances actually are present. In criminal law, ``self defense''
is classified as a defense for purposes of courtroom procedure.
However, its recognition also functions as an affirmative authorization
for some kinds of self-protective conduct the real world. The same
analysis applies to fair use in copyright.
Fair use today
Although fair use has been a prominent feature of U.S. copyright
since the inception of the doctrine, it truly has come into its own in
the last several decades. In this period that, copyright law has become
dramatically more restrictive in other respects. The last twenty years
have seen extensions of copyright term, an expansion in copyright
scope, a dramatic development in secondary liability for copyright
infringement, and dramatic increases in civil and criminal penalties.
All these developments have contributed to the importance of
maintaining a legal space in which socially and economically productive
uses of protected material can occur without risk of liability. The
courts have responded both by reaffirming the applicability of fair use
in a number of traditional contexts (such as critical quotation and
educational practice), and by adapting the flexible doctrine for a
range of new purposes (including copying that promotes healthy market
competition).
The benefits of a balance mediated by fair use
It may be useful to provide some general illustrations of how the
balance that is assured in our copyright law by the operation of fair
use has served the twin goals of cultural and economic progress. It is
common to note the self-evident proposition that the non-profit
educational and library sector depends on limiting doctrines for many
essential functions. Although schools and libraries are among the
largest purchasers of copyrighted materials in the United States, their
most typical and beneficial activities--from classroom teaching to
scholarly research--would not be possible without the built-in fairness
safeguard that fair use provides.
It is less frequently noted that such major information industries
as motion pictures and computer software came into being not despite
the fact that filmmakers and programmers were free to copy important
elements of their predecessors' work, but because of it. They have
continued to prosper under these conditions; likewise, fair use also is
critical to a wide range of practices within the book publishing and
music industries. It would not be going too far to say that the
creativity and innovation that copyright exists to promote are fueled
as much by this strategic ``gap'' in the law as they are by its strong
protections. Individual creative artists understand this point well
from direct personal experience, even though large copyright-owning
media companies sometimes lose sight of it. Although the entertainment
industries are legitimately concerned about ``piracy'' of copyright
works, it is important not to confuse the activities they rightly
condemn with the ordinary, lawful exercise of the various use
privileges, including fair use, that are conferred by the Copyright Act
itself.
Equally important, fair use operates to the direct and immediate
benefit of ultimate information consumers. It is because of fair use
(and other limiting doctrines) that we all can make a broad range of
personal uses of the content of information products we purchase,
without fear of legal liability. Because of fair use, students can copy
texts or images from published sources to enhance a term paper or
homework assignment and music fans can combine selections from their
personal record collections to make ``mixes'' for a family member's
birthday or anniversary celebration, all without any concern that by
doing so they will violate traditional copyright principles. Nor is
this all. Ultimately, it is the freedom to read, listen and view
information products assured by fair use that enables many consumers of
copyrighted content to become producers--to move from absorbing and
repeating the words, images and notes of others to making their own
creative contributions to the general store of cultural resources.
Some examples: fair use in filmmaking and film teaching
For the last 18 months, my colleague Professor Pat Aufderheide (of
the American University School of Communication) and I have been
directing a project designed to investigate the ways in which
documentary filmmakers interact with copyright law in the United
States. Early on, we discovered how extensively and pervasively
producer-directors in this increasingly popular medium must rely on the
fair use doctrine if they are to fulfill their mission. Documentarians
need fair use in order to quote limited amounts from copyrighted works
(TV programs, literary texts, musical recordings, and other films). In
turn, they need the right to quote to make critical comments about
contemporary media, in order to illustrate the social and cultural
phenomena they address in their films, to depict truthfully the often
media-saturated environments in which their human subjects are found,
and (sometimes) to illustrate important historical events through
archival footage.3 When filmmakers' ability to employ fair
use is frustrated (as is too often the case), their work suffers and
their audiences are the ultimate losers.
---------------------------------------------------------------------------
\3\ The ``Untold Stories'' project is described at
www.centerforsocialmedia.org/rock/index.htm
---------------------------------------------------------------------------
Another example of the importance of fair use comes from the
educational context--specifically, the domain of media education. In
our time, teaching media literacy is more important than ever, and
various kinds of film and television studies courses are increasingly
popular in institutions of higher and even secondary education.
Effective teaching in this field, however, involves the use of visual
illustrations to demonstrate an instructor's points about the content
and style of audiovisual works under consideration. The most effective
teaching often occurs in the classroom where a lesson juxtaposes
numerous short clips from various media sources for purposes of visual
comparison and contrast. In short, one can no more teach media studies
course effectively without media clips than a literature course without
selections from literary texts. Effective media studies teachers take
advantage of fair use in order to assemble ``clip reels'' of examples
to accompany their lectures and classroom discussions. When they are
unable to do so, their students pay a price in terms of forgone
learning opportunities.
The internal critique of fair use
One potential threat to the survival of fair use as a useful tool
for consumers and creators comes from an unexpected source--progressive
commentators on copyright who argue that the doctrine simply does not
go far enough, or fails to provide a level of clarity that would permit
users to proceed with reasonable certainty. This argument overlooks, of
course, the advantages (already noted) associated with a dynamic,
flexible fair use doctrine. Unfortunately, however, this potentially
self-fulfilling message has achieved considerable currency. Among the
filmmakers with whom I have been working in recent months, for example,
some individuals are reluctant to invoke fair use because either they
themselves, or the ``gatekeepers'' (distributors, broadcasters, etc.)
on whom they rely for access to audiences, cannot understand or will
not place trust the doctrine. This is so, incidentally, despite the
fact that in almost every court case where a documentary filmmaker has
relied on fair use, the court has accepted this defense to a claim of
infringement, thus shielding the defendant from liability.
Even though it sometimes may be overstated, this friendly critique
of fair use has a real foundation. Because of its situational nature,
the applications of fair use to particular sets of circumstances are
sometimes difficult to predict. The solution to this dilemma lies not
with the Congress or the courts, but with disciplinary communities
(filmmakers, historians, musicians, teachers, etc.) who rely on fair
use. Each such community has the opportunity to articulate their shared
understanding of what constitutes a reasonable level of unlicensed
quotation from copyrighted works in particular contexts. Were they to
do so in a balanced manner, after a full process of consultation, their
conclusions would have great persuasive force. In this connection, I am
pleased to say that this coming Friday, November 18, a group of
national organizations representing independent documentary filmmakers
will announce a ``Statement of Best Practices on Fair Use of
Copyrighted Materials.'' 4
---------------------------------------------------------------------------
\4\ The organizations are the Association of Independent Video and
Filmmakers, Independent Feature Project, International Documentary
Association, National Alliance for Media Arts and Culture, and Women in
Film and Video (Washington, D.C., chapter). I will supply the
Subcommittee with copies of the Statement upon its release.
---------------------------------------------------------------------------
The external threat to fair use
In the last decade, one of copyright owners' most significant
responses to the uncertainty of the new communications environment has
been to develop digital rights management (``DRM'') tools (sometimes
referred to as ``technological protection measures'' or ``TPMs'') to
control access and use of texts, images and sounds in electronic
formats, with the aim of preventing ``piracy'' and enabling new, and
newly secure, forms of electronic information commerce on a ``pay-per-
use'' model. Inevitably, however, the risk that such DRM's may be
hacked has loomed large in the concerns of copyright owners. From this
concern has grown domestic and international political pressure for the
creation of a new species of intellectual property protection: the so-
called anti-circumvention provisions that are the centerpiece of the
1998 ``Digital Millennium Copyright Act'' (DMCA) in the United State,
and of similar legislation elsewhere in the world. This new family of
legal norms is not a development of copyright law, although it is
superimposed on copyright; rather, it is a kind of ``paracopyright''
that provides for new rights, new remedies and--crucially--a new and
exclusive set of exceptions. Thus, copyright's traditional limiting
doctrines, including fair use, do not apply as such in this new and
evolving legal space.
The U.S. legislation makes relatively few concessions to the access
interests of follow-on creators and innovators. This problem already is
acute in fields (such as encryption research) where essential
information is incorporated into copyright works that are made
available only in digital formats. It will become increasingly
significant in other fields (including scholarship, criticism and
education) as literary texts and (especially) audiovisual works migrate
to exclusive digital formats.5 Thus, for example, the
ability of media teachers to assemble clip reels of short excerpts from
commercially available copy-protected DVD's--a clear instance of fair
use under copyright law--is threatened by the paracopyright regime of
17 U.S.C. Sec. 1201. The narrow specific exceptions provided in the
DMCA do not apply to this instance,6 nor is it clear that
the special rulemaking procedure for devising a limited range of
additional exceptions, specified in Sec. 1201(a)(1), could be
successfully invoked by media teachers.
---------------------------------------------------------------------------
\5\ The problem is exacerbated by the fact that, by design, anti-
circumvention laws are insensitive to the distinction between the
protected and unprotected elements of copyright works.
\6\ In particular, the ``savings'' language of Sec. 1201 (c), as it
is generally interpreted, does not give a film teacher the
authorization to engage in circumvention for purposes of fair use. See
Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001).
---------------------------------------------------------------------------
Unlike the problem of uncertainty in fair use referred to in the
preceding section of my testimony, the threat to fair use posed by
anti-circumvention laws will require Congressional intervention if it
is to be dispelled. H.R. 1201, the ``Digital Media Consumers Rights Act
of 2005,'' as introduced by Representatives Boucher, Doolittle and
Barton last March, is an example of legislation that would be well
calculated to fulfill that important goal.
Thank you for your attention to my views on this important
doctrine, its place in U.S. copyright law, and the challenges that it
currently faces.
Mr. Stearns. I thank you, Professor.
Mr. Shapiro, welcome.
STATEMENT OF GARY J. SHAPIRO
Mr. Shapiro. Thank you for holding this incredibly
important hearing and thank you all for listening, those of you
who already expressed strong views actually on both sides.
To us fair use remains a very thin line protecting
consumers and innovators. Of course commercial piracy is
harmful. And as Chairman Barton indicated, intellectual
property protection is incredibly important. But in our rush to
crack down on pirates, we risk gutting a critical consumer
right, fair right, fair use. Fair use is the right freely,
freely to use copyrighted material without the permission of
the copyright owner. Fair use ensures innovation because it
allows us to invent new products for the benefit of the public
even though they do disrupt existing business models. Fair use
protected the Betamax VCR when MPA members tried to ban its
sale to consumers. Without fair use, we would have no VCR's no
tape recorders, no DVR's, no iPods, no TiVo's, and no
Slingboxes. You would not be able to find information on Google
or forward an email. Each of these products and applications
allows you to enjoy copyrighted works in ways that no one had
anticipated and in ways which copyright holders at least
initially did not like and they certainly did not authorize.
American technological leadership in the age of the
internet relies on the protection that fair use gives to
innovators and to venture capitalists. But this protection is
eroding. Until the Supreme Court's Grokster decision this year,
technology innovators were playing under the Betamax decisions
bright line rule. A product is legal if it is capable of
substantial non-infringing uses including fair uses. The
Grokster opinion added a new layer, a new inducement test which
leads innovators unsure of the legal status of their products.
The content industry's entire history is to challenge new
technologies even after the Betamax decision MPA members
successfully sued a competitor to TiVo into bankruptcy. Their
complaint, that product allowed Americans to record, index and
playback video content in their private homes. Similarly, the
record companies sued and won against an internet site who
helped consumers manage the music on the CD's that they already
legitimately bought and owned. And today, record labels have
threatened suit against new portable XM and Sirius radios
already for sale, despite the fact that the music industry is
paid with each one of these sales. The RIA also wants to lock
down new digital radios and control consumer's ability to
record free over the air radio programs in the privacy of their
homes. Just 2 weeks ago in a hearing room down the hall, the
head of the RIA said that Americans who record a song off a
digital radio are guilty are piracy and should be subject to
prosecution.
The dark shadow of litigation hanging over the introduction
of virtually any new product that manipulates content
especially harms smaller entrepreneurs. Many are forced to
change products or simply not offer them at all because they
cannot afford the immense costs of copyright litigation even
though they believe they could be vindicated in court.
Now copyright law has repeatedly been strengthened by
Congress and has never been so protective of the copyright
monopoly. Our copyright term is not more than five times the
length of the patent term and the penalties for infringement
have been repeatedly and radically increased. Also what is
considered infringing has also been expanded, so fair use is
now all that protects inventors, investors, and consumers from
an overregulated world, a world in which every use of every
product must be authorized in advance by any copyright holder.
And as the copyright monopoly expands, fair use needs to be
strengthened not weakened. But instead, laws like the DMCA have
reduced fair use as a defense for consumers and as a safe
harbor for manufacturers.
In response, Chairman Barton and Representatives Boucher
and Doolittle have introduced H.R. 1201 to clarify the impact
of the DMCA on fair use, ensure that consumer's cannot be
liable for otherwise legal conduct, and codify the Betamax case
as preserved by the Supreme Court in Grokster. Another
provision of H.R. 1201, which is especially important after
last week's news about copy protected CD's hiding a window for
viruses, requires simply that record labels post warnings on
copy protected CD's. This bill is more necessary than ever. We
endorse H.R. 1201 as a sensible way to preserve consumer's
autonomy and protect innovators in the 21st Century.
By preserving fair use, we will ensure that piracy is not
confused with the right of families to enjoy lawfully acquired
content when and where they choose. You also ensure American's
their fair use right to use the capabilities of new digital
technologies to inform, communicate, and entertain. You will
also ensure that any one copyright holder cannot dictate and
control future innovations and you will increase the odds that
the next iPod or TiVo will be invented in America.
Americans should be able to use their property as they
choose as long as they do not harm others. We tinker with our
cars, we make music mix CD's from our collections, we look for
new ways to experience the content we buy, the products we use
and the new versions we create. Freedom to use our property is
something we take for granted. With digital products like
music, movies, and software, only fair use can give us that
freedom autonomy because every use of a digital product creates
a copy. Limiting fair use allows copyright owners to enter our
private space and dictate how we can use our property within
our own homes and vehicles. Fair use is at risk and remains the
only line protecting consumers and allowing innovation. At the
upcoming international CES in Las Vegas, the world will see
2,500 companies----
Mr. Stearns. I just need you to sum up.
Mr. Shapiro. [continuing] unveil their most innovative
products. These products shift content and time and space and
allow you to manage it and they do disrupt existing business
models.
Thank you for holding this hearing on fair use. It is
absolutely critical. And on behalf of the CEA and Home
Recording Rights Coalition, I would be happy to work with you
further.
[The prepared statement of Gary J. Shapiro follows:]
Prepared Statement of Gary J. Shapiro on behalf of the Consumer
Electronics Association and the Home Recording Rights Coalition
In Robert Bolt's extraordinary 1960 play, A Man for All Seasons,
Sir Thomas More, Chancellor of England, is challenged by his son-in-
law, Roper, for adhering to the law, rather than exercising his own
authority:
Roper: So, now you give the Devil the benefit of law!
More: Yes! What would you do? Cut a great road through the law to get
after the Devil?
Roper: I'd cut down every law in England to do that!
More: Oh? And when the last law was down, and the Devil turned 'round
on you, where would you hide, Roper, the laws all being flat?
For consumers and for technologists, Mr. Chairman, fair use is one
of the last laws standing today. Most of the rest have been flattened
by congressional enactments, mandatory licenses, and court decisions
that threaten to concentrate all copyright authority in the hands of a
few large companies, in a few large industries. On behalf of the
Consumer Electronics Association 1 and its more than 2,000
members, and the Home Recording Rights Coalition,2 of which
I am the chairman, I thank you, Chairman Stearns, Ranking Member
Schakowsky, and the Subcommittee for holding this hearing on the
importance of fair use to consumers and industry.
---------------------------------------------------------------------------
\1\ CEA is the principal trade association of the consumer
electronics and information technology industries and the sponsor of
the International Consumer Electronics Show. CEA represents more than
2,000 corporate members involved in the design, development,
manufacturing, distribution and integration of audio, video, mobile
electronics, wireless and landline communications, information
technology, home networking, multimedia and accessory products, as well
as related services that are sold through consumer channels. Combined,
CEA's members account for more than $121 billion in annual sales. CEA's
resources are available online at www.CE.org,
\2\ The Home Recording Rights Coalition was founded in 1981 in
response to legal and legislative threats to consumer enjoyment of new
technologies. See www.HRRC.org.
---------------------------------------------------------------------------
Consumer fair use was the key to allowing consumer video recorders
onto the U.S. market in the 1970s and 1980s--when members of the Motion
Picture Association of America sought a court injunction against their
sale to consumers. By a single vote, the Supreme Court held in 1984
that ``time-shifting'' of complete works, by consumers for private
noncommercial purposes, was fair use, even though it occurred without
the authorization, or even over the objection, of the copyright owner.
The Supreme Court's decision in this year's Grokster case makes this
holding all the more important, because the Court has now said that
inventors and distributors of new technology can be found liable for
copyright infringement based on ``intent'' to induce infringing uses.
Sony, the Court says now, escaped liability for marketing the first VCR
only because it was not clear at the time that it was unlawful for a
consumer to make and keep a home recording, as Sony's advertising
encouraged them to do. In other words: without fair use, we would have
no VCRs and no audio tape recorders, and today, we would have no TiVos,
no DVD recorders, no iPods, and no Slingboxes.
But the importance of fair use does not end with new products.
Without it, I could not have shared with you the quotation with which I
began my testimony--despite the fact that Mr. Bolt's play is now 45
years old and that he himself died in England 10 years ago. Without
fair use I could not have quickly found this information in the on-line
Wikipedia, or retrieved it via Google. Without fair use I could not
have quoted the lines of the play to CEA and HRRC members. Indeed,
without fair use there would be very few web sites I could usefully
visit, very few informative emails that I could send, and far fewer
hardware and software products with which to learn and communicate.
The Nature of Fair Use
Unlike the judge-created legal theories of secondary copyright
liability, under which inventors and manufacturers can be held liable
for the actions of others, fair use protection is statutory. It resides
in Section 107 of the Copyright Act, and represents the consolidation
of hundreds of years of common law precedent in which courts protected
against the abuse of copyright owners' monopoly power. It has origins
in our First Amendment, because free expression includes the right to
build on the ideas and accomplishments of others. More generally, it
represents the balance between protection and innovation that can be
traced back to the granting clauses of our Constitution itself, in
which the rights to patent and copyright protection are created for a
limited time, to promote the progress of science and the useful arts.
Fair use is a vital part of the bargain that our founders
envisioned between artists and the public: artists get certain rights
in the work they create; the public gets to use those works in fair and
reasonable ways. Three years ago in Eldred v. Ashcroft, the Supreme
Court said that fair use is not a triviality--it is one of the key
provisions that keeps copyright law in harmony with the First
Amendment. Fair use, the Court said, was a major reason why Congress
had the discretion to extend the term of copyrights--because users'
rights and autonomy were preserved by fair use.3
---------------------------------------------------------------------------
\3\ CEA and HRRC believe nevertheless that this discretion was
exercised unwisely in this instance.
---------------------------------------------------------------------------
The concept of fair use is almost uniquely American. In most other
societies, unauthorized uses must be the subject of enumerated
exceptions to the copyright laws. In a rapidly changing technological
and consumer environment, this is far from ideal. The truly innovative,
popular new products, things like digital video recorders and iPods,
allow consumers to enjoy copyrighted works in ways that no one had
anticipated. No legislature could hope to lay out specific copyright
exemptions for products like those before they are invented, and
without an exemption, even investing in the development of a new
product becomes far too risky. I think it is fair to say that American
technological leadership--particularly in the age of the Internet--has
relied largely on the assurance that our fair use doctrine has given to
innovators and venture capitalists. But this may be changing.
The Importance of Fair Use
Until the Supreme Court's Grokster decision this year, most
innovators and venture capitalists had a concise view of the law as a
``bright line'' test, based on language in the 1984 Betamax decision:
If a new product has or is capable of substantial non-infringing uses,
it is lawful to put it on the market. In this construct, a product
designer or manufacturer understood that any product that had or was
likely to have substantial fair uses was lawful. The Grokster opinion,
however, seems to have turned this formulation on its head: Whether an
intention to ``induce'' a copyright violation is found may now depend
on whether any uses of the product, if they are urged and enabled by
the manufacturer, investor, or distributor, are deemed unlawful as a
matter of copyright law.
The idea that product innovators, investors, and consumers should
have to live in a world of only those uses authorized, in advance, by
copyright proprietors, was exactly what the Supreme Court in the
Betamax case said it wished to avoid. Such a regime would subjugate the
intellectual property rights of patent owners, granted in recognition
of their promotion of new technology, to the more easily obtained
rights of copyright proprietors. The Betamax Court said that such a
result would ``choke the wheels of commerce.'' In Grokster, the Court
did not say that any such result would be preferable or justified. The
Court pointed out that even though Sony's advertising for the Betamax
VCR promoted uses such as the ``librarying'' of programs, such consumer
conduct was not ``necessarily unlawful.''
This is the essence of fair use--giving consumers, innovators, and
manufacturers the benefit of the doubt that the private, reasonable
activity of consumers, and the productive activity of those inspired by
copyrighted works is not ``necessarily unlawful.'' Now that the Supreme
Court, in order to get at some ``purposeful, culpable'' practices of
free file sharing services, has cut down the other legal protections
that technologists thought they enjoyed, fair use is all that stands
between inventors, investors, and consumers and a world in which all
new products must be fully authorized, in advance, by any owner or
distributor of any copyrighted material that a new device is able to
store, reproduce, communicate or perform.
The Threat To Fair Use
Even before the Grokster case, some major motion picture studios
were unwilling to accept the notion that the modern successors to the
VCR could be marketed on an unauthorized basis. A competitor to TiVo
was sued into bankruptcy in a case in which a complaint by three major
studios attacked the basic recording, indexing, and playback features
of a consumer home recorder. An entire chapter of the complaint brought
by MGM, Orion Pictures, Fox Film Corporation, Universal City Studios
Productions, and Fox Broadcasting specifically attacks standard
features, found on any PVR product, as ``inducements'' to copyright
violation:
``Defendants cause, accomplish, facilitate and induce the
unauthorized reproduction of Plaintiffs'' copyrighted works in
violation of law. *** The ReplayTV 4000 device provides
expanded storage, up to (currently) a massive 320 hour hard
drive, which allows the unlawful copying and storage of a vast
library of material. *** ReplayTV 4000's expanded storage and
sorting features organize disparate recordings into coherent
collections, and cause, facilitate, induce and encourage the
storage or ``librarying'' of digital copies of the copyrighted
material, which harms the sale of DVDs, videocassettes and
other copies, usurps Plaintiffs' right to determine the degree
of ``air time'' a particular program receives in various cycles
of the program's distribution....'' 4
---------------------------------------------------------------------------
\4\ Metro-Goldwyn-Mayer Studios, Inc. et al v. ReplayTV, Inc., U.S.
District Court, Central District of California, Case No. 01-09801,
Complaint of MGM, Orion Pictures, Twentieth Century Fox, Universal City
Studios, and Fox Broadcasting, 24-25, November 14, 2001 (emphasis in
original). Pleadings in this case can be found at http://www.eff.org/
IP/Video/Paramount_v_ReplayTV/.
---------------------------------------------------------------------------
This year, elements of the recording industry have threatened suit
against innovative new, portable products that have been announced for
the Sirius and XM satellite radio services--despite the fact that these
products fall squarely under the protection of the Audio Home Recording
Act, under which royalties are paid to the music industry and there is
an express immunity from copyright suit. The Recording Industry
Association also is seeking legislation to empower the Federal
Communications Commission to ``lock down'' the functions of consumer
radio receivers for the new Digital Audio Broadcasting service. Forty-
three years since the first audio cassette recorder came to the U.S.
market, the recording industry still wants to deny consumers the
ability to record radio programs in the privacy of their homes. In
fact, just two weeks ago during an appearance down the hall from this
hearing room, the head of the RIAA complained that ``the one-way method
of communication [enabled by HD radio] allows individuals to boldly
engage in piracy with little fear of prosecution.'' In other words, the
RIAA believes that when you, your staff, and your constituents tape a
song off the radio, you have engaged in piracy and ought to be
criminally prosecuted.
The campaign for copyright absolutism has not stopped with attacks
on consumer devices and long-standing consumer practices. Just this
year, major publishing groups filed suit against Google, which has been
working with major university libraries, and others, to digitize
libraries as a tool in aid of research and education. Google will not
make entire works available without authorization, and will withdraw
from the program any work as to which the copyright owner objects,
these publishers, apparently, pursue this case only in the name of
absolute control over use--a direct affront to the fair use doctrine.
The Encroachment Of Other Laws
In 1998 the Congress passed the Digital Millennium Copyright Act
(the ``DMCA''), which prohibits ``circumvention'' of technical measures
used in aid of copyright protection. While this legislation made a bow
toward the fair use doctrine, it did not clearly or explicitly provide
that legality of the intended use under copyright law was a defense to
violation of the DMCA.
So, for example, a use that courts and commentators universally
agree is fair--such as time-shifting a TV program to watch later--can
be effectively made illegal by adding a technical lock to prevent that
use. Time-shifting is legal, but if a consumer would have to violate
the DMCA in order to exercise his or her right to do it, then the right
becomes meaningless. As presently written, the DMCA therefore allows a
single company to violate the balance of fair and unfair uses that the
courts have developed over the past century. This consequence, perhaps
unintended, has caused concern and uncertainty among consumers, small
businesses, educators, librarians, and others. As you know, Chairman
Barton and Representatives--Boucher and Doolittle have introduced--H.R.
1201 to clarify the impact of the DMCA on the fair use doctrine, and to
codify the elements of the Betamax case that were preserved by the
Supreme Court in Grokster and--most presciently--to require that
consumers be warned against Compact Discs to which copy protection
technology has been applied. CEA and the HRRC have endorsed H.R. 1201
as a sensible way to preserve consumers' autonomy and protect
innovators in the 21st century.
Fair Use and Personal Autonomy
Americans believe they should be able to use the things they buy in
whatever way they choose, as long as their use doesn't injure others.
We tinker with our cars. We put radios in the shower. We look for new
ways to experience the content that we buy, the Internet that we use,
and the new versions that we can create. The autonomy and the freedom
to use what we buy is something we take for granted.
For digital products like music, movies, and software, fair use is
what gives us that freedom and autonomy, because every use of a digital
product creates an incidental copy. Limiting fair use opens the door to
copyright owners to enter our sphere of personal autonomy, and dictate
how we can use the products that we buy within our own homes and
vehicles.
Americans who believe in speed limits still won't buy a car that's
electronically blocked from going over 70 miles per hour. We trust
people to use their cars responsibly; legal enforcement kicks in only
when they don't. For music, movies, the Internet, and the digital
products we use every day, fair use is what gives us that trust and
autonomy, within our personal sphere, and saves legal enforcement for
those who, as the Supreme Court said in Grokster, engage in clearly
culpable conduct.
Fair Use And Creativity
The last few years have seen the rebirth of the feature-length
documentary as a popular and socially valuable art form. Yet, denying
that fair use applies, copyright owners have demanded stiff royalties
from documentary producers for every billboard, every whistled tune,
and every cellphone ring that appears in their portrayals of real
everyday life. Jonathan Caouette's acclaimed documentary Tarnation,
which showed at the Cannes and Sundance film festivals this year, cost
$218 to produce but required tens of thousands in licensing fees for
incidental appearances of copyrighted material. Fair use, as it exists
today, can and should help filmmakers like Jonathan Caouette get a fair
deal. All that's missing is that these filmmakers know their rights and
are not bullied into giving them up.
Even if one will never become a film producer or a songwriter, the
First Amendment protects our rights to receive expression, as well as
to send it. A fully informed citizenry is at the core of our democracy.
We cannot afford to have our information and, indeed, our own history,
managed by corporations on a 100 percent authorized basis any more than
we can afford to have our technology and innovation managed that way.
Fair Use Is A Check On Monopoly Power
Given the relatively small number of mass media companies, and
their size, it is daunting enough for a single corporation to control,
in seeming perpetuity, a large portion of our cultural and historical
heritage. It is even more daunting when these corporations band
together as industry groups, and insist on the right to prescribe how
their content will be enjoyed, and the technologies that can and cannot
be used whenever any of their collective content is involved. We do not
believe that either the Congress or the Supreme Court has envisioned
them enjoying such power, but already they do.
Already, content providers and distributors have been moving to
announce in advance that they will ``license'' only technologies and
techniques that are satisfactory to them, and will not license, or will
challenge, others. Already, the ability of competitive manufacturers to
benefit from a 1996 Telecommunications Act provision that Rep. Markey
and former Chairman Bliley introduced, to assure that competitive
products can work directly on digital cable and satellite systems, has
been slowed by the centralized control over product licensing by a
technology consortium owned by the cable industry, ``CableLabs.''
5
---------------------------------------------------------------------------
\5\ The legal rationale for such control is grounded in the
copyright concerns of content providers.
---------------------------------------------------------------------------
In September, the motion picture industry announced that is forming
a similar central laboratory, reporting directly to the CEOs of the
major motion picture companies: ``MovieLabs.'' The purpose of
MovieLabs, according to statements attributed to a senior studio
executive, is to fill ``gaps in research on content protection left by
consumer electronics companies and Silicon Valley.'' 6 In
reality, though, the market for such new ``DRM'' technologies has been
highly competitive and more than robust. Something more seems to be
going on.
---------------------------------------------------------------------------
\6\ See, http://www.nytimes.com/2005/09/19/busi
ness/19film.html?ex=1127793600&en=fb357f94a7634723&ei=5070&emc=eta1
---------------------------------------------------------------------------
Thus far, DRM technologies have been licensed by the technology
companies that develop them. Often, these companies are also developers
of consumer products, and are reluctant to impose limitations on the
usefulness of these products to consumers. Therefore they have
negotiated with content providers about the nature and level of
``protections'' to be applied. In resisting the power of movie and
cable monopolists who have complete control over product distribution,
their only argument has been based on fair use--not necessarily as a
consumer right to engage in specific practices, but as a public policy
expectation, deeply engrained in our law and jurisprudence, that
consumers and technologists must be afforded space and freedom
consonant with their roles in our society.
These negotiations have escalated to congressional and regulatory
proceedings. The only technology mandate in the DMCA, Section 1201(k),
requires that certain analog VCRs to respond to Macrovision copy
protection technology. It is, however, limited by ``encoding rules''
that strictly govern when this technology can and cannot be triggered.
Similarly, the FCC's ``Plug & Play'' regulations for ``Digital Cable
Ready'' devices acknowledge that an industry-wide license for products
to attach to digital cable systems requires the mandatory application
of certain copy protection technologies, but also strictly limits the
circumstances in which these technologies can be triggered.
These ``encoding rules'' do not state or approximate judicial
outcomes; they are, rather, a set of expectations based on public
policy. They are enormously difficult to negotiate and maintain in the
face of the demands of copyright proprietors to control and
specifically authorize every conceivable use of their products. In the
case of the FCC regulations, the outcomes are open to review by the
Commission whenever there is a new service, or a petition for a rule
change. And the music industry--which negotiated the very first set of
encoding rules with us and the Congress as part of the Audio Home
Recording Act of 1992--is now trying to ignore the very AHRA rules it
agreed to. It is asking the Congress for different and harsher
impositions in new legislation, governing satellite and terrestrial
broadcasts, that the industry has proposed to the House Judiciary
Committee.
It is only through the vitality of the fair use doctrine as a
political expression of public policy that the concerted might and
licensing pressure of the industries that sell and distribute content
can be brought into some balance. This involves, of course, maintaining
the vitality of Section 107 in the courts. It also requires, however,
that the Congress maintain a legislative and policy balance with fair
use in mind--
That the Congress not conflate instances of mass, indiscriminate and
anonymous redistribution of works over the Internet with the
right of individuals and family groups to enjoy content in a
modern and flexible home or family network that may embrace
households in different regions.
That the Congress should not allow the technical tools to create and
maintain such home networks to fall under the exclusive control
of those who sell or distribute content, solely by virtue of
their effective or concerted copyright monopolies.
This Committee has played a key role in preventing or limiting such
abuses. By holding today's hearing on the fair use doctrine, your
Committee and this Subcommittee continue their leadership in protecting
the American public, American innovation, and American culture. On
behalf of CEA and the Home Recording Rights Coalition, I again thank
you for holding this hearing, and pledge our continued cooperation with
you and your staffs.
Mr. Stearns. Ms. Adler?
STATEMENT OF PRUDENCE S. ADLER
Ms. Adler. Mr. Chairman, Ranking Member Schakowsky, and
members of the subcommittee, I am Prudence Adler and I am
speaking today on behalf of the Library Copyright Alliance or
LCA. The LCA consists of five major library associations that
represent over 139,000 libraries employing 350,000 librarians
and other personnel throughout the United States. Our Nation's
libraries spend over $2 billion each year on all forms of
information, thus we seek to ensure that our patrons have
effective and long term access to these information resources.
Thank you for including libraries in this hearing today on
fair use. Fair use is central to our ability to achieve many
facets of our library missions. Each day teachers, students
learn, researchers advance knowledge, and consumers access
copyrighted information due to exceptions in the Copyright Act
such as fair use. For libraries and for consumers the fair use
doctrine is the most important limitation on the rights of the
copyright owners. It is the safety valve if you will of the
U.S. Copyright Law for consumers.
Fair use balances the rights of authors, publishers, and
copyright owners with society's need for the free exchange of
ideas. Fair use provides the basis for our most important day
to day activities in scholarship and education and safeguards
our collective interest in the flow of information. Fair use
has served us well because there is no fair use checklist.
Importantly there is no bright line for fair use. Fair use is
accessible, fair use is dynamic, it is inherently ambiguous and
not easily defined but critically important in ensuring
legitimate access to copyrighted work.
In addition to fair use by library patrons on a daily
basis, libraries also reply upon fair use to support a number
of our activities such as print and electronic reserve and
increasingly and more recently the digitization of copyrighted
work.
Publishers more recently have relied upon the licensing of
copyrighted work in lieu of the acquisition of those works.
Licensing provides publishers with greater control in the use
of their work. How they are used, by whom, and at what cost.
Under license agreements, a library is bound by the terms of
that agreement and these agreements do not always reflect the
exception and privileges of the copyright act such as fair use.
As a result, we are witnessing an erosion of fair use and
related library exceptions as licensing and technological
controls built into licensed data bases can restrict the fair
use rights of library users and of libraries. For example,
technological controls can limit the numbers of copies of an
article or the amount of text reproduced. It is important to
note that once technological controls are built into a data
base with copyrighted materials, it is very difficult if not
impossible for libraries to negotiate exceptions in our license
agreement.
Moreover, if a license does not permit the preservation of
copyrighted work and a library cannot exercise fair use through
the license terms copyrighted works will be lost to future
generations. Publishers had not undertaken preservation of
copyrighted work. Instead it is libraries that preserve these
works for future users. That is why the library community is a
strong supporter of legislation to address these concerns, H.R.
1201.
In closing, fair use reflects copyrights laws first
amendment based principles of free speech and provides the
basis for our most important day-to-day activities. Fair use
safeguards our collected interest, our Nation's interest in the
flow of information which is in turn a source of cultural,
historical, and economically valuable matters.
Thank you.
[The prepared statement of Prudence S. Adler follows:]
Prepared Statement of Prudence S. Adler, Association of Research
Libraries on behalf of the Library Copyright Alliance
My name is Prudence Adler and I am speaking today on behalf of the
Library Copyright Alliance or LCA. The LCA consists of five major
library associations--the American Association of Law Libraries, the
American Library Association, the Association of Research Libraries,
the Medical Library Association, and the Special Libraries Association.
These five associations collectively represent over 139,000 libraries
employing over 350,000 librarians and other personnel throughout the
United States. These five associations cooperate in the LCA to address
copyright issues that affect libraries and their patrons. Our Nation's
libraries spend over two billion dollars each year on all forms of
information; thus we seek to ensure that our patrons have effective and
long-term access to these information resources.
Thank you for including libraries in this hearing today on fair
use. Fair use is central to our ability to achieve many facets of our
missions. Libraries are essential to the communities that they serve
and to our Nation. Libraries preserve and provide access to our
cultural, historical and scientific heritage; support and encourage
research, education and lifelong learning; and provide a venue for
community engagement on a host of issues.
Libraries, like many other sectors, are undergoing significant
transformation in this rapidly evolving digital environment. Today,
researchers, students and members of the public can engage in
sophisticated searching and manipulation of information including ready
access to data, sound and image files, and more. Increasingly, the data
and information available is both current and historical as many
libraries, and others such as Google, Yahoo, Microsoft, and the
Internet Archive, digitize special collections that richly reflect the
cultural and political history of our Nation.
In this time of transformation, intellectual property policies have
been and will continue to be central to the library community.
Historically, the library community has relied on copyright law as the
policy framework for balancing the competing interests of creators,
publishers, and users of copyrighted works. Copyright law balances the
rights of authors, publishers and copyright owners with society's need
for the free exchange of ideas. Provisions in the Copyright Act
including fair use and related exemptions for libraries and educational
institutions allow libraries to achieve our mission of providing
effective public access to and the preservation of information in all
formats.
Each day teachers teach, students learn, researchers advance
knowledge, and consumers access copyrighted information due to
exemptions in the Copyright Act such as fair use. Fair use permits the
use of copyrighted material without permission from the copyright
holder under certain circumstances. For libraries and indeed for
consumers, the Fair Use Doctrine is the most important limitation on
the rights of the copyright owner--the ``safety valve'' of U.S.
copyright law for consumers.
Fair use or Section 107 of the Copyright Act allows reproduction
and other uses of copyrighted works for purposes such as criticism,
comment, news reporting, teaching, scholarship and research. The
statute sets forth four factors to be considered in determining whether
a use is fair; including the character of the use, the nature of the
work, the amount used in proportion to the whole, and the impact on the
market for the work. Fair use has served us well because there is no
fair use checklist. The four factors provide libraries and users alike
with needed flexibility. And there is no need to import from other
sections of the law the detailed list of conditions, prohibitions, and
exclusions such as those found in the TEACH Act concerning distance
education. Importantly, there is no bright line for fair use. Thus,
fair use is dynamic, inherently ambiguous and not easily defined but
critically important in ensuring legitimate access to copyrighted
works.
Library patrons routinely rely on fair use. A teacher, for example,
might photocopy a few pages of a history text found in a library to
hand out to her class. A student may include in a term paper a
quotation from a novel checked out of a library while a researcher
might give a copy of a journal article describing a laboratory
technique to a technician who works for her. A small business owner may
print out accounting tips from a website he accesses from a library
computer. These are fair uses of copyrighted works.
In addition to fair uses by library patrons, libraries rely upon
fair use in support of a number of library activities. While U.S.
copyright law does contain explicit exceptions for libraries and
archives in Section 108, these exceptions do not cover every
circumstance under which a library might need to use a work. Section
108 specifically provides that ``[n]othing in this section . . . in any
way affects the right of fair use as provided by section 107 . . .''
For example, library practices for both print and electronic reserves
are based on fair use.
For decades, libraries have provided access to materials selected
by faculty as required or recommended course readings in a designated
area of the library, with materials available to students for a short
loan period and perhaps with additional restrictions to ensure that all
students have access to the material. These materials are important to
the course but do not warrant the purchase of an entire text by the
student. Libraries have based these reserve reading room operations on
the fair use provisions of the Copyright Act.
More recently, as with other services, many libraries have
introduced electronic reserves (e-reserves) systems that permit
material to be stored in electronic form and accessed in the library or
remotely by the student enrolled in the course. E-reserves systems are
a more effective means to provide student access to needed copyrighted
materials. E-reserves are an excellent example of the flexibility of
fair use and demonstrate that it is technologically neutral in its
application.
Within the past decade, there has been a notable shift by
publishers to license their works to libraries in lieu of the purchase
of these works by libraries. Licensing provides publishers with greater
control in the use of their works--how they are used, by whom and at
what cost. Licensing access to copyrighted works versus the acquisition
of the copyrighted work by libraries presents new challenges to both
libraries and their patrons. Under license agreements, a library is
bound by the terms of the agreement. These agreements do not
necessarily reflect the privileges and exceptions of the Copyright Act
such as fair use, preservation and interlibrary loan. For example, if
libraries are unable through negotiation to include in the license
terms the ability to perform preservation on copyrighted works,
libraries can no longer exercise the rights that are otherwise
available through the Copyright Act.
Licensing and technological controls built into a licensed database
can restrict the fair use rights of library users in a number of ways.
Technological controls can limit the number of copies of an article
copied or the amount of text reproduced. These amounts are controlled
by the printing and downloading commands of the licensed database. Once
technological controls are built into a database with copyrighted
materials, it becomes difficult if not impossible for libraries to
negotiate exceptions.
Although libraries may preserve copyrighted works under Section 108
of the Copyright Act, there may be times that libraries choose to
preserve copyrighted works under Section 107, Fair Use. If a license
does not permit the preservation of copyrighted works and a library
cannot exercise fair use due to the license terms and/or technological
controls, copyrighted works will be lost to future generations.
Publishers have not undertaken preservation of copyrighted works.
Instead, it is libraries that preserve these works for future users.
In closing, fair use serves a critically important role in the
library and educational arena and in all sectors, both public and
private. Fair use, in addition to reflecting in copyright law First
Amendment-based principles of free speech, provides the basis for our
most important day-to-day activities in scholarship and education. Fair
use safeguards our collective interest in the flow of information--
which is, in turn, a source of culturally and economically valuable
knowledge.
Mr. Stearns. Mr. Band?
STATEMENT OF JONATHAN BAND
Mr. Band. Chairman Stearns, Ranking Member Schakowsky, and
members of the subcommittee, NetCoalition appreciates this
opportunity to testify on the importance of fair use through
the internet.
NetCoalition members believe in strong intellectual
property protection. They own copyrights, patents, and
trademarks and enforce them vigorously. Indeed, their most
valuable assets are intellectual property. At the same time,
NetCoalition members believe that overprotection of
intellectual property is as harmful as under protection.
Congress and the courts have carefully structured the copyright
law to maintain the balance between the interest of authors and
the control of their writings and supplied its competing
interests in the free flow of ideas, information, and commerce.
Fair use is an important means by which the copyright law
maintains this balance. Fair use is particularly important in
the digital environment where even the most basic functions
require computers to make copies. Almost every activity on the
internet involves copying, viewing a website, printing out a
new article, responding to an email including an image from a
website in a book report. I will provide three instances where
fair use plays a critical role for internet companies, search
engines, software development, and on line creativity. I then
will discuss on threat to fair use.
Search engines depend on fair use in their daily
operations. A search engine firm sends out a software spider
that crawls to websites and copies vast quantities of data into
the search engine's data base. As a practical matter, each
major search engine copies a large percentage of the entire
worldwide web every few weeks to keep the data base current.
Significantly, the search engines conduct all this copying
without the permission of the website operators. The search
engines believe that fair use permits this copying. In other
words, the billions of dollars of market capital represented by
the search engine companies are based primarily on fair use.
The fair use status of search engines has been considered
in one case, Kelly v. Arriba Soft. There the Ninth Circuit
concluded that fair use allowed the copying performed by a
search engine. We will be hearing from the Authors Guild about
the Google print library project. At this point, I would like
to just say that Google will only be displaying short snippets
of copyright books to users. Also any copyright owner can opt
out of the project simply by asking Google not to scan his book
into its data base. Because of the snippets and the opt out
Google print will not harm any authors and should be considered
a fair use by the court.
Fair use is also critical to the inner workings of the
internet. The interoperability between the many components that
make up the internet can often be achieved only if developers
through reverse engine the different software components.
Software reverse engineering typically requires the making of
temporary copies. Several courts have found that fair use
permits this copying. Fair use facilitates political and
artistic discourse on the internet. Bloggers for example
frequently quote from articles or other bloggers. The internet
is also full of parody. NetCoalition members encourage and
benefit from this robust creative activity.
Entertainment companies understandably seek to prevent
infringement of their works through the use of Digital Right
Management Systems. But such DRM's typically preclude both fair
and unfair uses. As DRM's become more pervasive, Congress may
need to consider mechanisms for preserving fair use.
Additionally, Congress should exercise great care before
mandating DRM's. Such technological mandates will not only
limit fair use, they will also impede innovation.
In sum, as Congress fashions policies to protect the
entertainment industry from large scale infringement over
digital networks it must take care not to prevent lawful uses
that enrich our lives.
Thank you for your attention.
[The prepared statement of Jonathan Band follows:]
Prepared Statement of Jonathan Band on Behalf of NetCoalition
NetCoalition appreciates this opportunity to testify before the
subcommittee on the importance of fair use to the Internet.
NetCoalition represents some of the Internet's most innovative
companies, including Bloomberg, CNET Networks, Google, Interactive
Corp., and Yahoo!. NetCoalition members believe in strong intellectual
property protection. They own copyrights, patents, and trademarks, and
enforce them vigorously. Indeed, their most valuable assets are
intellectual property.
At the same time, NetCoalition members agree with Judge Alex
Kozinski that overprotection of intellectual property is as harmful as
underprotection. See White v. Samsung Electronics, 989 F.2d 1512 (9th
Cir.)(Kozinski, J., dissenting), cert. denied, 113 S.Ct. 2443 (1993).
The Supreme Court explains that the intellectual property system
requires a ``balance between the interests of authors and inventors in
the control and exploitation of their writings and discoveries on the
one hand, and society's competing interest in the free flow of ideas,
information, and commerce on the other.'' Sony Corp. v. Universal City
Studio, Inc., 464 U.S. 417, 429 (1984).
Congress and the courts have carefully structured the copyright law
to maintain this balance. Thus, while ``copyright protection subsists .
. . in original works of authorship fixed in any tangible medium of
expression,'' copyright does not ``extend to any idea, procedure,
process, system, method of operation, concept, principle, or discovery
. . .'' 17 U.S.C. 102. Similarly, the Supreme Court in Feist v. Rural
Telephone, 499 U.S. 340 (1991), stated that ``the most fundamental
axiom of copyright law'' is ``that no one may copyright facts . . .''
Id. at 353. Accordingly, ``raw facts may be copied at will.'' Id. at
349.
The fair use doctrine is another means by which the copyright law
balances ``the competing concerns of providing incentive to authors to
create and of fostering competition in such creativity.'' Kern River
Gas Transmission Co. v. Coastal Corp., 899 F,2d 1458, 1463 (5th Cir.),
cert. denied, 498 U.S. 952 (1990). The Supreme Court has described fair
use as an ``equitable rule of reason which permits courts to avoid
rigid application of the copyright statute when, on occasion, it would
stifle the very creativity which that law is designed to foster.''
Stewart v. Abend, 495 U.S. 207, 237 (1990). Just two years ago, Justice
Ginsburg termed fair use as one of copyright law's ``built-in First
Amendment accommodations . . .'' Eldred v. Ashcroft, 123 S.Ct. 769, 788
(2003).
Fair use is particularly important in the digital environment,
where even the most basic functions require computers to make copies.
For example, for a user to view a website, the user's computer must
make a temporary copy of the website in its random access memory.
Almost every other activity on the Internet also involves the making of
a copy: printing out an interesting article; responding to an email;
including an image downloaded from a website in an elementary school
book report.
The balance of my testimony will address three instances where fair
use plays a critical role for Internet companies: search engines,
software development, and online creativity. My testimony then will
discuss some of the threats to fair use.
fair use and search engines
Internet companies rely on fair use in their daily operations. This
reliance is most apparent with search engines, the basic tool that
allows users to find information on the Internet. A search engine firm
sends out software ``spiders'' that crawl publicly accessible websites
and copy vast quantities of data into the search engine's database. As
a practical matter, each of the major search engine companies copies a
large (and increasing) percentage of the entire World Wide Web every
few weeks to keep the database current and comprehensive. When a user
issues a query, the search engine searches the websites stored in its
database for relevant information. The response provided to the user
typically contains links both to the original site as well as to the
``cache'' copy of the website stored in the search engine's database.
Significantly, the search engines conduct this vast amount of
copying without the authority of the website operators. Although the
search engines will respect an exclusion header, a software ``Do Not
Enter Sign'' posted by a website operator, the search engines does not
ask for permission before they enter websites and copy their contents.
Rather, the search engine firms believe that the fair use doctrine
permits their activities. In other words, the billions of dollars of
market capital represented by the search engine companies are based
primarily on the fair use doctrine.
kelly v. arriba soft
The application of fair use to search engines has been considered
in one case--Kelly v. Arriba Soft, 336 F.3d 811 (9th Cir. 2003). There,
the Ninth Circuit concluded that the fair use doctrine permitted the
copying performed by search engines.
Arriba Soft operated a search engine for Internet images. Arriba
compiled a database of images by copying pictures from websites,
without the express authorization of the website operators. Arriba
reduced the full size images into thumbnails, which it stored in its
database. In response to a user query, the Arriba search engine
displayed responsive thumbnails. If a user clicked on one of the
thumbnails, she was linked to the full size image on the original
website from which the image had been copied. Kelly, a photographer,
discovered that some of the photographs from his website were in the
Arriba search database, and he sued for copyright infringement. The
lower court found that Arriba's reproduction of the photographs was a
fair use, and the Ninth Circuit affirmed.
With respect to the first of the four fair use factors, ``the
purpose and character of the use, including whether such use is of a
commercial nature,'' 17 U.S.C. 107(1), the Ninth Circuit acknowledged
that Arriba operated its site for commercial purposes. However,
Arriba's use of Kelly's images
was more incidental and less exploitative in nature than more
traditional types of commercial use. Arriba was neither using
Kelly's images to directly promote its web site nor trying to
profit by selling Kelly's images. Instead, Kelly's images were
among thousands of images in Arriba's search engine database.
Because the use of Kelly's images was not highly exploitative,
the commercial nature of the use weighs only slightly against a
finding of fair use.
Kelly at 818.
The court then considered the transformative nature of the use--
whether Arriba's use merely superseded the object of the originals or
instead added a further purpose or different character. The court
concluded that ``the thumbnails were much smaller, lower resolution
images that served an entirely different function than Kelly's original
images.'' Id. While Kelly's ``images are artistic works intended to
inform and engage the viewer in an aesthetic experience,'' Arriba's
search engine ``functions as a tool to help index and improve access to
images on the internet . . .'' Id. Further, users were unlikely to
enlarge the thumbnails to use them for aesthetic purposes because they
were of lower resolution and thus could not be enlarged without
significant loss of clarity. In distinguishing other judicial
decisions, the Ninth Circuit stressed that ``[t]his case involves more
than merely a transmission of Kelly's images in a different medium.
Arriba's use of the images serves a different function than Kelly's
use--improving access to information on the internet versus artistic
expression.'' Id. at 819. The court closed its discussion of the first
fair use factor by concluding that Arriba's ``use of Kelly's images
promotes the goals of the Copyright Act and the fair use exception''
because the thumbnails ``do not supplant the need for the originals''
and they ``benefit the public by enhancing information gathering
techniques on the internet.'' Id. at 820.
With respect to the second fair use factor, the nature of the
copyrighted work, the Ninth Circuit observed that ``[w]orks that are
creative in nature are closer to the core of intended copyright
protection than are more fact-based works.'' Kelly at 820. Moreover,
``[p]ublished works are more likely to qualify as fair use because the
first appearance of the artist's expression has already occurred.'' Id.
Kelly's works were creative, but published. Accordingly, the Ninth
Circuit concluded that the second factor weighed only slightly in favor
of Kelly.
The third fair use factor is ``the amount and substantiality of the
portion used in relation to the copyrighted work as a whole.'' 17
U.S.C. 107(3). The Ninth Circuit recognized that ``copying an entire
work militates against a finding of fair use.'' Kelly at 820.
Nonetheless, the court states that ``the extent of permissible copying
varies with the purpose and character of the use.'' Id. Thus, ``if the
secondary user only copies as much as is necessary for his or her
intended use, then this factor will not weigh against him or her.'' Id.
at 820-21. In Kelly, this factor weighed in favor of neither party:
although Arriba did copy each of Kelly's images as a whole, it
was reasonable to do so in light of Arriba's use of the images.
It was necessary for Arriba to copy the entire image to allow
users to recognize the image and decide whether to pursue more
information about the image or the originating web site. If
Arriba copied only part of the image, it would be more
difficult to identify it, thereby reducing the usefulness and
effectiveness of the visual search engine.
Kelly at 821.
The Ninth Circuit decided that the fourth factor, ``the effect of
the use upon the potential market for or value of the copyrighted
work,'' 17 U.S.C. 107(4), weighed in favor of Arriba. The court found
that the Arriba ``search engine would guide users to Kelly's web site
rather than away from it.'' Kelly at 821. Additionally, the thumbnail
images would not harm Kelly's ability to sell or license full size
images because the low resolution of the thumbnails effectively
prevented their enlargement.
Are other circuits likely to reach the same conclusion as the Ninth
Circuit when reviewing the copying performed by search engines? They
are, because the Ninth Circuit's fair use analysis relied heavily on
the Supreme Court's most recent fair use decision, Campbell v. Acuff-
Rose, Music, Inc., 510 U.S. 569 (1994). Thus, Kelly correctly noted
that Campbell held that ``[t]he more transformative the new work, the
less important the other factors, including commercialism, become.''
Kelly at 818, citing Campbell at 579. Likewise, Kelly cited Campbell
for the proposition that ``the extent of permissible copying varies
with the purpose and character of the use.'' Kelly at 820, citing
Campbell at 586-87. And Kelly followed Campbell's conclusion that ``[a]
transformative work is less likely to have an adverse impact on the
market for the original than a work that merely supersedes the
copyrighted work.'' Kelly at 821, citing Campbell at 591. Perhaps most
importantly, Kelly repeated the Supreme Court's articulation in
Campbell and Stewart v. Abend, 495 U.S. 207, 236 (1990), of the
objective of the fair use doctrine: ``This exception `permits courts to
avoid rigid application of the copyright statute when, on occasion, it
would stifle the very creativity which that law is designed to foster.'
'' Kelly at 817.
fair use and software development
Fair use is also critical to the inner workings of the Internet. A
user's computer can access information stored on a distant server only
because the software on the user's computer, on the server, and on all
the computers in between, can communicate with one another. This
interoperability often can be achieved only if the software developer
can reverse engineer the products with which it seek to communicate.
And because of the nature of software, this reverse engineering, this
studying of the operation of an existing product, can require the
making of temporary copies or translations of the existing program.
Several courts have concluded that fair use permits the copying that
occurs during the course of software reverse engineering. See Sega v.
Accolade, 977 F.2d 1510 (9th Cir. 1992); Atari v. Nintendo, 975 F.2d
832 (Fed. Cir. 1992); Sony v. Connectix, 203 F.3d 596 (9th Cir. 2000).
fair use and creativity on the internet
The Supreme Court has observed that the Internet is ``a unique and
wholly new medium of worldwide communication.'' Reno v. ACLU, 521 U.S.
844 (1997). It ``constitutes a vast platform from which to address and
hear from a worldwide audience of millions of readers, viewers,
researchers and buyers.'' Id. at 853. The Court marveled at the ``vast
democratic fora of the Internet,'' id. at 868, including thousands of
newsgroups, ``each serving to foster an exchange of information or
opinion on a particular topic running the gamut from, say, the music of
Wagner to Balkan politics to AIDS prevention to the Chicago Bulls.''
Id. at 851. Much of the commentary on newgroups and blogs involves
quotations from articles or other commentators. Or it may consist of
parodies of speeches or songs. Fair use makes this vital form of
political and artistic speech lawful. And hyperlinking technology
allows the commentator to link back to the original work. In this
manner, the transformative fair use provides wider distribution to the
original work. NetCoalition members encourage--and benefit from--this
robust creative activity.
threats to fair use
Entertainment companies understandably seek to prevent infringement
of their works through the use of digital rights management systems.
But such DRMs typically preclude fair uses as well as unlawful ones. As
DRMs become more pervasive, Congress may need to consider mechanisms
for preserving fair use. Additionally, Congress should exercise great
care before mandating DRMs. Such technological mandates will not only
limit fair use; they will also impede innovation. These activities
permitted by the fair use doctrine must be distinguished from the
unauthorized widespread distribution of entertainment content such as
sound recordings and motion pictures.
In sum, as Congress fashions policies to protect the entertainment
industry from large-scale infringement over digital networks, it must
take care not to prevent lawful uses that enrich our lives. The Supreme
Court in a related context cautioned that ``the interest in encouraging
freedom of expression in a democratic society outweighs any theoretical
but unproven benefit of censorship.'' Id.
Mr. Stearns. Ms. Sohn?
STATEMENT OF GIGI B. SOHN
Ms Sohn. Chairman Stearns, Ranking Member Schakowsky, and
members of the subcommittee, thank you for inviting me to
participate in this very important hearing.
For those of you who are unfamiliar with Public Knowledge,
we are a non-profit organization that is dedicated among other
things to ensuring that copyright laws are balanced. And
balanced is the hallmark of our copyright system and fair use
is a key component of that balance. The ability to access and
use copyrighted works for certain limited uses has been a
driver of creativity, technological innovation, and the broad
dissemination of knowledge. For consumers, fair use has
resulted in a greater choice of movies, music, videogames, and
computer software, a wider variety of useful and inexpensive
gadgets on which to play that content, and the ability to
quickly and cheaply create their own contents which is
happening more and more these days.
But fair use is in great peril. For the past decade, the
fair use rights of consumers, your constituents have been
chipped away little by little. While technology has advanced
and consumers have come to expect that they can enjoy the
content they buy when and where they want where at the same
time seeing a dedicated and forceful campaign to restrict what
consumers can lawfully do with that content.
The content industries have employed a variety of
strategies in the campaign against fair use. First, their
successfully championed Digital Millennium Copyright Act which
prohibits the circumvention of technological protection
measures even for lawful uses. Second, many content owners
employ restrictive and user license agreements which limit fair
use. Third, the industries are seeking Government mandated
technological protection measures like the broadcast flag and
digital radio content protection which would restrict a variety
of fair uses of digital, TV, and radio and would make once
interoperable devices incompatible. Finally the content
industries have promoted permissions culture in which even the
most incidental use of a copyrighted work requires a high
licensing fee or leads to a lawsuit.
What has the shrinking of fair use meant for consumers?
Here are just some of the lawful personal uses that prohibited
under the current regime, ripping songs from a copy protected
CD, their personal computers, or an mp3 player; making a
digital copy of a DVD for playback on a video iPod, cell phone,
or other portable device; making a backup copy of a copy
protected CD or DVD; playing legally download music on a
competing mp3 player or computer; and removing from a computer
malicious digital rights management tools like the now infamous
Sony-BMG rootkit DRM. And let me just say a word about the DRM
because I think there is a lesson here. My organization does
not oppose digital rights management as long as it is
marketplace driven as opposed to Government driven.
The lesson to be learned there is that consumers did not
like the restrictions and the spyware in that DRM and they were
outraged and it caused Sony to pull that DRM from the shelf.
This is in contrast to the iTunes fair play DRM which people
have accepted for limits in that DRM. If you have a Government
mandated digital rights management scheme like the broadcast
flag for radio content protection, consumers cannot protect
themselves in the marketplace or express themselves in the
marketplace.
So I urge you to reject all efforts in Government mandated
technological protection measures. This committee has a great
responsibility to make sure that innovation will not be stifled
and that consumers will have the broadest legal use of their
digital media and technology as is possible. I urge you to
reject the premise that your constituents are pirates and
thieves and that they will not buy digital content if it were
provided to them at a reasonable price and with the flexibility
they have come to expect. Indeed, they already do purchase such
content. For example, DVD sales and rentals last year totaled
$25 billion and in just a matter of weeks of its launch, iTunes
sold $1 million TV programs for use on the video iPod. An RIA
chief, Mitch Bainwol recently predicted that legitimate online
song purchases could surpass CD retail markets by 2007.
In my written testimony, I have supplied four suggestions
for actions you can take to reinvigorate fair use in the
digital age. The most important of these is to reform the DMCA
so that it permits circumvention solely for lawful purposes.
Congress can address this in two ways. It can pass legislation
like H.R. 1201 which specifically permits such legal activity
and it can clarify and strengthen the DMCA's triennial review
process. Congress intended, expressly intended that this
process be the fail safe mechanism that protected lawful uses
from the unintended consequences of the DMCA, some of which we
have heard about today. Instead, it has become a futile
exercise for merely everyone seeking an exemption no matter how
worthy.
I urge the subcommittee to hold hearings on the triennial
review process and a copyright office's standard for granting
exemption.
Thank you again for the opportunity to testify today. I
look forward to your questions.
[The prepared statement of Gigi B. Sohn follows:]
Prepared Statement of Gigi B. Sohn, President, Public Knowledge
Chairman Stearns, Ranking Member Schakowsky and other members of
the Subcommittee, my name is Gigi B. Sohn. I am the President of Public
Knowledge, a nonprofit public interest organization that addresses the
public's stake in the convergence of communications policy and
intellectual property law. I want to thank the Subcommittee for
inviting me to testify on the vitally important issue of fair use and
its impact on consumers and industry.
summary
The hallmark of our copyright system is balance--creators and
publishers receive a limited monopoly in their works in exchange for
providing the public rights of access to those works. Fair use is a key
component of that balance--permitting individuals to make limited, but
important uses of copyrighted works without having to ask permission of
the copyright holder.
For over two hundred years, this balance, aided by fair use, has
served creators, educators, libraries, consumers and the content and
technology industries very well. It has resulted in greater creativity,
greater innovation and greater consumer choice, and has invigorated the
U.S. economy both for creative goods and technology.
Over the past decade, however, a number of legal, technological and
marketplace efforts by the content industry have put fair use in great
peril. These efforts include laws like the Digital Millennium Copyright
Act, which prohibits circumvention of technological protection measures
even for lawful uses; end user license agreements (EULAs), that
restrict fair use; government-imposed technology mandates like the
broadcast flag, which put agencies like the Federal Communications
Commission in charge of determining what technologies consumers can use
to receive digital television and which also restrict fair uses of
digital TV; and the rise of business practices that shrink fair use by
requiring expensive licensing fees or denying permission for even the
most incidental uses of copyrighted works.
Congress can, and must, revitalize fair use for the digital age.
While my list is not comprehensive, I suggest four places where
Congress can start: 1) ensure that the DMCA protects fair use, whether
it be through legislation such as H.R. 1201 or by instructing the
Copyright Office to follow the express intent of Congress that the
triennial review be a ``fail-safe'' mechanism the purpose of which is
to protect non-infringing uses; 2) reject any and all efforts to impose
government-mandated copy protection; 3) pass legislation that protects
individuals who make a good faith effort to locate copyright holders
who cannot be found and 4) monitor the Google Print litigation and
other related matters to ensure that search engines can continue to do
what they do best--provide consumers with a comprehensive ``card
catalogue'' of all the world's information--whether the information is
online or offline.
consumers, creators and industry all benefit from a strong and vital
fair use doctrine.
Ever since the framers of the Constitution gave Congress the
ability ``to promote the progress of science and the useful arts by
securing for limited times to authors and inventors the exclusive right
to their respective writings and discoveries . . .'' the hallmark of
our copyright system has been balance. That balance ensures both strong
protection for copyrighted works and unauthorized access to those works
for certain limited uses. As the Supreme Court has stated ``[t]his
protection has never accorded the copyright owner complete control over
all possible uses of his work.'' 1 The idea behind this
balance was simple--the framers understood that giving individuals the
ability to access protected works would lead to even greater creativity
and innovation.
---------------------------------------------------------------------------
\1\ Sony v. Universal City Studios, 464 US 417, 463 (1984).
---------------------------------------------------------------------------
One of the key guardians of this balance is fair use. Fair use is a
doctrine developed in common law and codified at 17 USC 107 that
permits individuals to make certain limited uses of copyrighted works
without seeking permission from the copyright holder. The idea behind
fair use is that creativity, knowledge-building, public criticism and
innovation would be severely hampered, if not completely stifled, if
artists, librarians, scholars, inventors and consumers had to seek
permission from rights holders even for the most mundane use of a work.
For most of the last two hundred years, this balance worked well
for consumers, creators and both the content and technology industries.
Because of fair use and the other limitations on copyright, the United
States has been the unquestioned leader in the creation of artistic
works from artists big and small, and our educational and research
institutions are the envy of the world. Moreover, and particularly
since the Supreme Court's ruling in Sony v. Universal City Studios,
which ensured the growth of legal technologies, the U.S. has been the
world leader in technological innovation, particularly as new digital
technologies have taken the world by storm.
The benefit of this balance to consumers has also been enormous.
Consumers have greater choice of movies to watch, music to listen to,
video games to play and computer software to use. They have a wide
variety of useful and inexpensive gadgets on which to play those
movies, music, games and software where and when they want.
Importantly, those gadgets permit consumers to create their own movies,
music and games. Who could imagine, even three years ago, that people
would be viewing movies and television programs on their cell phones?
Or that AOL would be selling old sitcoms online? Or, that as a recent
Pew Internet and American Life poll showed, 57 percent of online teens
would create their own content for the Internet? 2
---------------------------------------------------------------------------
\2\ http://www.pewinternet.org/pdfs/PIP_Teens_Content_Creation.pdf
---------------------------------------------------------------------------
Fair use has benefited everyone largely because of its flexible
nature. Whereas 21 years ago the Sony Court talked about ``time
shifting'' as a fair use, it is now commonly understood that the
ability to play media on different machines in different places (space
shifting) is a fair use as well. We must ensure that fair use remains
flexible and vibrant in the digital age, so that new innovations will
develop that enable new fair uses that we cannot foresee.
Unfortunately, as I will discuss in the next section, the past
decade has seen a shrinking of fair use in a way that has tipped the
copyright balance not in favor of creators or consumers, but in favor
of large content companies. New laws, technological tools and
marketplace mechanisms are being used to limit legal uses of content
beyond what the copyright law traditionally allows and beyond what the
framers of the Constitution intended. If course corrections are not
made soon, we will reverse the vibrant market for content and
technology that has grown out of the traditional balance between
control and access.
fair use in the digital age is in peril
The Supreme Court's decision in Sony confirmed what had been a
common consumer expectation since the invention of audiotape--that it
is fair use for consumers to use the content and technology they buy
for personal uses. Despite the content industry's efforts to paint
consumers as copyright thieves, enormous DVD sales and the growth of
online music indicate that when good content is made available both
offline and online at a reasonable price and with flexibility of use,
consumers will buy it. Moreover, sales of personal video recorders
(PVR) (like TiVo), MP3 players (like the iPod), wireless routers,
portable DVD and video game players, and digital radios with playback
(like XM to-go) indicate that what consumers expect and want to do with
the content they buy is the ability to play it wherever and whenever
they want. They also expect that the devices they own will work with
one another--that a simple cable or port can, for example, connect a
television set to a VCR or PVR or a computer to an MP3 player.
Unfortunately, this expectation of flexibility, portability and
interoperability for personal use is increasingly at risk. Even though
our copyright law does not give copyright holders control over when,
where and how a consumer uses the content she lawfully purchases, the
content industry, in its zeal to control every use of its content, has
employed a variety of legal, technological and marketplace mechanisms
that limit consumers fair use of technology and content. They include:
Paracopyright: Laws that Enforce Technological Protection Measures
The speed, ubiquity and relatively low cost of digital networks
present greater opportunities for copyright holders to make their works
available to a wider audience. However, they also present copyright
holders with a tremendous challenge--how to protect those works from
massive indiscriminate redistribution over those digital networks while
at the same time giving the consumer flexibility to make lawful uses of
the technology and content they purchase.
The content industry has attempted to meet this challenge through
use of technological protection measures, otherwise referred to as
Digital Rights Management (DRM) tools. While Public Knowledge does not
necessarily oppose these efforts, so long as they are not government
mandated, to the extent that these tools eliminate certain fair uses,
the law should not prohibit their circumvention for that purpose. For
example, certain DRM-protected CDs prevent the ripping or copying
function of personal computer in the hopes of preventing unauthorized
file trading. In some instances, those CDs will fail to play entirely.
Similarly, many DVDs will not play on Linux-operated computers. The
DMCA prohibits a consumer from circumventing that DRM even to make an
otherwise lawful personal use of the content they purchased. The DMCA's
chilling effect on fair use and on free speech have been well
documented.3
---------------------------------------------------------------------------
\3\ See http://www.chillingeffects.org/anticircumvention/
---------------------------------------------------------------------------
Thus, as digital technologies and accompanying protection measures
become more pervasive, laws like the DMCA virtually eliminate consumer
fair use for certain content. The existence of the so-called ``analog
hole,'' which permits redigitizing of captured analog content, is cold
comfort to the ordinary consumer, who doesn't know the analog hole from
a hole in the wall. Although the content industry likes to tout the
analog hole as the solution for limits on fair use imposed by the DMCA,
it is now seeking a legislative vehicle to close the analog hole.
Moreover, traditional copyright law does not judge fair use based on
the technical methods by which it was made (using digital software or
analog outputs); rather it looks to whether the use was otherwise
lawful.
Licenses that seek to replace copyright law with contract law
Another way that large corporate copyright holders seek to protect
their works is through the use of so-called ``end user license
agreements'' or EULAs. These are the windows of legal jargon that you
see when trying to install or download software or other digital
content (click-through licenses), or the terms you agree to when
breaking the shrink-wrap on your newest piece of software (shrink-wrap
licenses). Without any negotiation, you are asked to waive fair use and
other rights reserved to you under the Copyright Act and agree to a
list of restrictions, some of which can include a limitation on
criticizing the work without the licensee's permission.
The EULA that accompanied the Sony-BMG CDs with the now-infamous
rootkit DRM (which left consumers vulnerable to viruses) provides a
chilling example of the kind of restrictions consumers are subject to
after, and without disclosure before, purchasing digital media. Some of
the restrictions include:
all rights terminate if a consumer fails to accept any update of the
protection software;
all rights terminate as soon as a consumer files for bankruptcy;
Sony-BMG reserves the right to exercise technological self-help
mechanisms against consumers, at any time, without notice;
consumers have no right to transfer any digital copies or software;
consumers are prohibited from reverse engineering, and changing,
altering, or creating derivative works; and
consumers are prohibited from circumventing any restrictions that may
be imposed by the software, regardless of whether or not they
are ``access'' controls under the DMCA.
Government Mandates Limiting Access to Content via ``Authorized
Devices''
A recent strategy of the copyright industries is attempting to
ensure that every technology that can receive and retransmit its
content is ``authorized'' to do so by the government. The idea works
like this: if a television, radio, computer, or other digital device is
not pre-approved to receive or record content, then the technology is
either illegal or will be otherwise rendered incapable of doing so.
These types of technological mandates impose serious limitations on the
ability of consumers to make fair uses of content.
The so-called digital television broadcast flag scheme, adopted in
November 2003 by the FCC and vacated by the United States Court of
Appeals for the District of Columbia last May, is a manifestation of
this strategy. The flag scheme requires every device that can receive a
digital television signal to read and obey a series of bits embedded in
the signal that tell the device whether the content can be transmitted
over the Internet. These devices, which include computers, cell phones
and personal video recorders, in addition to TV sets, must be pre-
approved by the FCC.
The broadcast flag scheme limits fair use in several important
ways. For example, if I have a non-flag compliant (and therefore
unauthorized) Personal Video Recorder (PVR) hooked up to my flag-
compliant (and authorized) digital television set, my PVR will not be
able to make a perfectly legal personal copy of a ``flagged'' digital
television program. The flag also prohibits excerpting of digital
television programming and redistribution of some or all such
programming over the Internet. Thus, if a congresswoman wants to send a
digital clip of her performance on Meet the Press to staff in her
district office, she cannot do so if the show's creator embeds a flag
in the signal. Or, if a media watchdog group like the Parents'
Television Council wants to post digital TV clips of its favorite and
least favorite programs to its website, the broadcast flag would
prohibit such activity.
Not surprisingly, the motion picture studios are seeking to have
the broadcast flag reinstated, and are also asking Congress to consider
a technology mandate to close the so-called analog hole. This latter
proposal would require every analog device to read and obey two copy
protection technologies, and would impose a series of encoding rules
that would prohibit certain fair uses of content.4 Moreover,
closing the analog hole would eliminate the one safety valve for making
fair use of digital content under the DMCA.
---------------------------------------------------------------------------
\4\ Draft legislation, entitled the ``Analog Content Protection Act
of 2005,'' was discussed at a November 3, 2005 oversight hearing
entitled ``Content Protection in the Digital Age: The Broadcast Flag,
High Definition Radio and the Analog Hole,'' before the House Judiciary
Committee, Subcommittee on Courts, the Internet and Intellectual
Property.
---------------------------------------------------------------------------
Not to be outdone, the recording industry is seeking its own
government-imposed technological mandate for new digital broadcast and
digital satellite radio. Like Hollywood, they are seeking to place the
FCC in charge of setting a standard for digital radio receivers that
would prevent consumers from making recordings of digital radio for
personal use.5 This would not only violate the Audio Home
Recording Act, which specifically allows for recording of radio
transmissions for personal use, but it would eliminate the decades-old
practice of recording songs off the radio.
---------------------------------------------------------------------------
\5\ Draft legislation, entitled the ``HD Radio Content Protection
Act of 2005,'' was discussed at a November 3, 2005 oversight hearing
entitled ``Content Protection in the Digital Age: The Broadcast Flag,
High Definition Radio and the Analog Hole,'' before the House Judiciary
Committee, Subcommittee on Courts, the Internet and Intellectual
Property.
---------------------------------------------------------------------------
D. Rise of the Permissions Culture
Perhaps the most radical change with respect to how fair use is
viewed and enforced involves neither law nor technology. Instead, it
involves the increasingly common business practice of requiring
permission for even the most incidental uses of copyrighted works.
Sometimes obtaining that permission will require an obscenely high
licensing fee. Other times, and particularly where the copyrighted work
is to be criticized, a copyright holder will simply deny permission to
use it. Often, and particularly if the subsequent work has a measure of
success, those who rely on fair use can expect a lawsuit. In this
``permissions culture'' the copyright balance is turned into one where
the copyright holder has complete control and fair use becomes, as some
have said, ``the right to hire a lawyer.'' As a result, creators are
often forced to change or stop their work.
A good example of the shrinking scope of fair use can be found in
Professor Lawrence Lessig's book Free Culture. The example involves Jon
Else, a documentary filmmaker who made a documentary about Wagner's
Ring Cycle. The scene at issue involved stagehands at the San Francisco
Opera who are playing checkers. In a corner of the room, the television
program The Simpsons is playing. When the film was completed, Else
sought to ``clear the rights'' to use the few seconds of The Simpsons.
It not only took a good deal of effort to find the copyright holder,
but when he did, Else was told that it would cost him $10,000 to
include the clip. Rather than risk a lawsuit, Else edited The Simpsons
out of that segment of the documentary, even though it set a particular
mood for that scene.
Many more examples of the chilling effect of the permissions
culture can be found in an excellent report from the American
University Center for Social Media and the Washington College of Law
entitled Untold Stories: Creative Consequences of the Rights Clearance
Culture for Documentary Filmmakers,6 and in the book Brand
Name Bullies: The Quest to Own and Control Culture, written by Public
Knowledge Board member and co-founder David Bollier.7
---------------------------------------------------------------------------
\6\ available at http://www.centerforsocialmedia.org/roc/index.htm
\7\ available at http://www.brandnamebullies.com.
---------------------------------------------------------------------------
four ways to strengthen fair use in the digital age
I agree with those who argue that our copyright law, which was last
completely revised nearly 30 years old, is inadequate to address
creativity in a world of ubiquitous digital networks. Thus, I would
urge this subcommittee to adopt Professor Lessig's recommendation to
this subcommittee in May 2004 that it ``recommend the establishment of
a serious and balanced study, . . . to consider fully how best to
adjust the protections of copyright to the digital age.'' 8
---------------------------------------------------------------------------
\8\ http://energycommerce.house.gov/108/Hearings/
05122004hearing1265/Lessig1985.htm
---------------------------------------------------------------------------
Regardless of the need to look at our copyright laws more
comprehensively, I would like to suggest a number of ways Congress can
help to revive fair use and bring back the balance to copyright the
founders of our country intended.
1. Ensure the DMCA permits lawful uses
As DRM tools become more pervasive and government imposed copy
protection mandates become a possibility, it becomes increasingly
important that those technological protection measures can be
circumvented for lawful uses.
This goal can be accomplished in two ways, neither of which is
mutually exclusive. One way is for Congress to pass legislation like
H.R. 1201, the Digital Media Consumers Right Act, which would permit
circumvention of technological protection measures for lawful uses.
A second way to accomplish this goal is for Congress to clarify and
strengthen the DMCA's triennial review process. As I explained in great
detail when I testified before this Subcommittee in May 2004, when
Congress passed the DMCA, it made clear both through the plain language
of the Act and the legislative history that it intended to preserve
fair use through the ``fail safe'' mechanism of the triennial
review.9 For the most part, however the Copyight Office,
which is tasked with conducting that review, has ignored the express
intent of Congress and has placed a higher burden on those seeking
exemptions. The Copyright has also construed the term ``class of
works'' too narrowly and favored particular business models over fair
use in denying exemption requests.
---------------------------------------------------------------------------
\9\ http://energycommerce.house.gov/108/Hearings/
05122004hearing1265/Sohn1995.htm
---------------------------------------------------------------------------
This crimped interpretation of the plain language of the DMCA has
twice caused the Assistant Secretary of Commerce, who is tasked with
consulting with the Register on the review, to send a letter of protest
to the Register. In 2003, the Assistant Secretary wrote:
the standard set forth in the Notice of Inquiry (the "NOI")
imposes a significantly heightened burden on proponents of an
exemption, and is therefore inconsistent with the opportunity
that Congress intended to afford the user
community.10
---------------------------------------------------------------------------
\10\ Letter from Nancy J. Victory, Assistant Secretary of Commerce
to Ms. Marybeth Peters Register of Copyrights, (Aug. 11, 2003),
available at www.ntia.doc.gov/ntiahome/occ/dmca/dmca2003/
dmcaletter_08112003.html (footnotes omitted).
---------------------------------------------------------------------------
The result has been that after two triennial reviews, the Copyright
Office has granted four extremely narrow exemptions. The Copyright
Office has just commenced its third triennial review, and there every
reason to expect that they will maintain their crimped view of the
exemptions process without Congressional action. Therefore, this
Subcommittee should take the opportunity to hold hearings on the
triennial review process and to clarify that the burden of proof that
should govern the process should be that embodied in the plain language
of the DMCA.
2. Reject Government-Mandated Technological Protection Measures
This Subcommittee should reject any and all efforts by the
copyright industries to have the government mandate copy protection
technologies and/or serve in the role of determining what technologies
will succeed and which will fail. Such one size fits all technology
mandates limit competition, consumer choice and consumers' fair use
rights.
First, I must distinguish government-imposed copy protection
mandates like the broadcast flag from marketplace copy protection
initiatives. The latter allows consumers to express themselves in the
marketplace with regard to the level of copy protection that they find
acceptable. This is what happened with computer software in the early
1980's. Consumers rejected software with very restrictive copy
protection, and the market adjusted.
Comparing iTunes Fairplay DRM with the Sony-BMG CD rootkit DRM
demonstrates why the market is the better determinant of the proper
level of copy protection. While like any DRM, Fairplay can be
circumvented by the most determined pirates, it provides a speed bump
that allows for legal uses while keeping honest people honest. As a
result, iTunes has been wildly popular with consumers. In contrast,
consumers nearly revolted over the Sony rootkit DRM, which left their
computers vulnerable to viruses. In a matter of days, Sony-BMG
responded by first attempting to provide a security patch, and have now
temporarily halted production of those affected CDs.
3. Fix the ``Orphan Works'' Problem
Changing the permissions culture will be a long process,
necessitating changes in business practice more than in the law.
Strengthening fair use will certainly help--the more creators,
educators and consumers feel comfortable relying upon fair use, the
more they will be willing to do so, and so far, at least, the courts
have largely ruled in favor of the user.
One way that Congress can limit the negative effects of the
permissions culture is to ensure that creators have access to so-called
Orphan Works--works under copyright for which the rights holder cannot
be found. Currently, the law does not protect an individual who
conducts a good faith search for a copyright holder, but cannot find
him. If the individual uses the work, and the copyright holder
resurfaces, the user is subject to the full panoply of penalties the
copyright law provides.
Earlier this year, the Copyright Office undertook a procedure for
collecting public comments on how to fix the orphan works problem, and
their recommendations are due at the end of the year. Remarkably, the
vast majority of commenters, representing large content companies,
college artists and public interest groups like Public Knowledge,
largely agreed that the copyright law should provide a defense for
those who engage in a ``reasonable effort'' or ``good faith'' search
for the owners of orphan works. While there was some disagreement
around the edges, for the most part, the participants agreed that
Congress should ensure that the inability to find a copyright holder
should not be a deterrent to creators seeking to use those works.
4. Clarify Fair Use with Respect to Search Engines
I trust that the members of the subcommittee are well aware of the
debate and lawsuits surrounding the Google Print program. To review:
Google is making digital copies of copyrighted and public domain works
housed in five major libraries so that those copies can be searched
using words and phrases from the books. When a search is requested for
a work under copyright, a brief excerpt from the book appears, which
includes the requested phrase surrounded by several lines of text. If
Google were to digitize anything less than the entire book, the program
would become useless --if you were the unlucky searcher who used a
phrase that was not in the included text, you would not get the result
you sought. The searcher is entitled only to a limited number of
searches in the same document, and links to purchase the book are on
each page of text.
In Public Knowledge's opinion, the prospect that millions of books
may soon be available to be indexed and searched is incredibly
exciting. It not only promotes the founders' intent by increasing
access to knowledge, but it also helps authors and publishers to
promote their works by exposing them to anyone with an Internet
connection. The Authors Guild and the American Association of
Publishers disagree, and have sued Google alleging copyright
infringement.
This is not an open and shut legal case for either side. While it
is generally understood and the courts have ruled that if a search
engine gathers and indexes information already on the World Wide Web,
that use is not infringing, the law is less clear with respect to
information that is not already online. But the consequences of a court
decision against Google could be staggering not only for that company
and other search engines, but also for the future of the Internet
itself. The Internet has become our virtual library--it is where we
come to expect to find information about anything and everything. It
has also become the great equalizer--bringing knowledge to rural and
urban, rich and poor areas alike. If we limited access over the
Internet only to that information that is only already available
online, it would be like going to the Library of Congress and only
being able access half of the books.
Thus, I would urge this subcommittee to keep a close eye on the
Google litigation to see if adjustments may need to be made in the
future to protect the future of Internet searching and indexing and as
a result, consumers ability to use the Internet to obtain the
information they need and desire.
conclusion
Fair use remains vital to maintaining the balance in copyright law
that has long benefited consumers, creators, innovators and the content
and technology industries. But fair use threatened with extinction
unless Congress acts to revive and strengthen it for a world of digital
technology and digital networks. I thank the Subcommittee for the
opportunity to testify, and I look forward to your questions.
Mr. Stearns. Thank you.
Mr. DeLong?
STATEMENT OF JAMES V. DELONG
Mr. DeLong. Thank you, Mr. Chairman, and members of the--is
that on now?
Mr. Stearns. Yes.
Mr. DeLong. It is an honor to be here today. My name is
James DeLong. I am a senior fellow with the Progress and
Freedom Foundation which is a free market oriented think tank
that studies the digital revolution and its implications for
public policy. Within that context, I am the director of a
project called the Center For the Study of Digital Property
which is devoted to analyzing policies devoted or concerning
intellectual property and we also go under the name
IPCentral.Info and as a commercial, I urge you all to visit our
website where we are engaged in spirited debates on many of
these issues.
My message here today is fairly simple and that is over the
past 200 years, the U.S. has developed a system for producing
creative works of all kinds that depends on institutions and
property rights and markets. And you may recall I was here
about 3 weeks ago discussing Kelo and in my mind, these are all
one big happy sort of continuum there.
In the legal literature, you have certainly heard it from
some of my legally oriented colleagues here today. There is a
lot of obsession about the need for balance between creators
and consumers of intellectual property. It is sort of as if the
two groups were engaged in a zero sum game and what one gained
the other must lose. I regard this focus is misleading and we
do not talk about the need for balance in most areas of
national or economic life. We do not talk about the need to
balance the interests of automobile manufacturers and drivers
or farmers and food consumers and such. We assume that we can
establish rules governing markets and promoting markets and
that within this structure producers and consumers can find
their own balance. And you know the balances differ from
individuals. You know, that is the great thing about a market.
The idea that you find very much in the academic literature
that a court is supposed to sit there sort of a super weigher
of costs and benefits and then allocate things according to the
social good is a nightmare.
Now this system has served us very well not just in
producing automobiles and food but in producing creative works,
an explosion of creativity in this country. And I might add
that in those areas in which we have departed from the market
system are those areas where we seem to be getting in the
biggest trouble. You know areas like healthcare and like
education and where you gentlemen and ladies are being held
most responsible by the public for the failures in. Now
obviously in the area of creative works technology is
presenting us with new challenges.
And creativity used to be protected by a combination of
technological impossibility and law. You know it was not
possible really to steal a book because it cost you more to
copy it on the copying machine than to get it via printout. You
know you could not copy music. Movies on film might as well
have been locked in a vault.
Technology has made perfect replication possible and very
cheap and a very important block of our protective system is
eroding. You know, it is simply an impossibility and we are
struggling to develop new forms of protection both
technological and legal.
Now in my view, fair use is best viewed within this context
of the market system in creative works. It is a doctrine
designed primarily to smooth out the workings in the market
where it really might now work. And this isn't a novel idea. I
have an article in my files by Wendy Gordon going back to 1982
suggesting market failure is an organizing principle here. So
it has some political content, you know, keeping authors from
suppressing bad reviews is an important component, encouraging
dissemination of news, encouraging political discussions. But I
think for the most part when you look back a the cases, you
find that fair uses usually exist when the transaction costs of
getting permission to use something are out of all proportion
to the economic value to the user or out of all proportion to
the harm of the producer. You know, occasionally you hear
sometimes uses where somebody doing a TV show accidentally
showed a snippet of a television program playing in the
background and then had to cut it out because they could not
get the licensing. Well that should be fair use. There is no
harm to the producer in all and the costs are just inordinate.
Now one of the main things going on in technology, the
internet is ringing transaction costs out of the system and so
to a great extent this leaves much of fair use of the doctrine
sort of in search of a rational. I mean the combination of
digital rights management and consumer pressure is providing
marketplace solutions to the problems that used to have to be
resolved by the courts. And, you know, as Gigi was mentioning,
one of things quite extraordinary is the speed of reaction on
this whole Sony business. You know a couple weeks and problem
seems to be--I only know what I read in the news but the
problem seems to be pretty well on the way to solution. You
know, that is good. It is called the market working.
But in this context, I think it is very important to
emphasize two points, one, free use is or fair use is not
necessarily free use. I was looking for the quote this morning,
I could not find it from a guy who is the Director of
University Press and thus is on the pro-author's side who was
saying all active colleagues seem to think we get everything
for free, that is called fair use. We you know that is not the
way it is supposed to work.
But it seems to me the most important thing in this is to
urge the committee not to try to freeze rules based on the old
technologies and the old ways of doing things. This will really
only cripple things. And now for several years we hear comments
about the content companies and their obsolete business models
and all that sort of thing but in the real world as opposed to
the world of academic extractions it seems to be the reverse of
the truth, you know. As Ms. Blackburn and Ms. Bono pointed out
the content field is electric with excitement and innovation
and people pulling out all sorts of new things and figuring new
things to sell you and all that. And, you know, people talk
about the need for snippets of film and all that sort of thing.
We are in a world where ring tones have suddenly become a
multi-billion dollar industry.
And believe me, you know, the happy thing about this is
producers want to sell just as much as consumers want to
consume and they will find a way. So in my mind, the people
defending the old doctrines are actually the ones mirrored in
old models and fearful of change. I think you should be very
careful about imposing any rules on this. You should let the
market work it out. And I think there need to be some rules on
letting it work it out better but I think we will succeed and
obviously I do not think you should codify existing doctrines
of fair use.
Thank you.
[The prepared statement of James V. DeLong follows:]
[GRAPHIC] [TIFF OMITTED] T7003.001
[GRAPHIC] [TIFF OMITTED] T7003.002
[GRAPHIC] [TIFF OMITTED] T7003.003
[GRAPHIC] [TIFF OMITTED] T7003.004
[GRAPHIC] [TIFF OMITTED] T7003.005
[GRAPHIC] [TIFF OMITTED] T7003.006
[GRAPHIC] [TIFF OMITTED] T7003.007
[GRAPHIC] [TIFF OMITTED] T7003.008
[GRAPHIC] [TIFF OMITTED] T7003.009
Mr. Stearns. Mr. Hirsch?
STATEMENT OF FREDERIC HIRSCH
Mr. Hirsch. Mr. Chairman, Ranking Member Schakowsky and
members of the subcommittee, thanks very much for holding this
hearing.
I appreciate the opportunity to testify on behalf of the
Entertainment Software Association regarding the fair use
doctrine and how it impacts our industry and its consumers. It
is the position of the ESA that current law properly balances
consumer interest in using copyrighted works with the
protections content owners needs to continue creating
innovative entertainment products to consumers.
The ESA members are the world's leading publishers of video
and computer games including games for videogame consoles,
personal computers, handheld devices, and the internet. ESA
members produce more than 90 percent of the $7.3 billion in
entertainment software sold in the United States in 2004. With
annual worldwide revenues now exceeding $28 billion, our
industry is one of the fastest growing entertainment sectors.
The industry has more than doubled in size since the mid 1990's
generating thousands of highly skilled jobs in the creative and
technology field. Our industry makes a tremendous investment in
its intellectual property, developing and launching a top game
often required to a team of more than 100 professionals working
for more than 3 years with development and marketing costs
often running $10 million or more and in the coming years they
foreseeably range as high as $25 to $40 million. Unfortunately,
many of these titles fail to achieve profitability.
Still the new generation of game consoles that will be
launched over the next several months will require
entertainment software publishers to risk even more significant
levels of investment in gain development as the processing
power of these new machines will permit more complex and
realistic game design for further enhancing consumer's game
playing experience.
Having now told you a little bit about our industry, the
real question I am here to answer is how the fair use doctrine
relates to the entertainment software industry and its
consumers. Fair use doctrine is a legal defense under copyright
law that allows for limited uses of copyrighted materials in
certain cases that would otherwise constitute infringement.
Fair use has always been determined on a case-by-case basis.
The fact of each case must be evaluated under the copyright
statutes four various factors to determine if a particular use
of copyrighting materials entitled to the fair use defense.
It is important to be clear about what the fair use
doctrine is not. Fair use is not a right. It is a defense. Fair
use provisions in the Copyright Act codify nearly 200 years of
judicial experience in balancing the rights of copyright owners
and social interests in areas such as research and scholarship.
And when Congress passed the Digital Millennium Copyright Act
or the DMCA in 1998, it provided a similar balancing mechanism
when it created a rulemaking process to issue exemptions when
it is determined that non-infringing uses of copyrighted
materials are being harmed or threatened by the DMCA's
circumvention prohibition.
Since the DMCA was enacted, two separate rulemakings have
been conducted resulting in the prime location of a number of
exemptions for certain uses and classes of work including two
specific to the entertainment software industry. Perhaps more
importantly since the DMCA's enactment, we have seen an
explosion in the number and variety of innovative entertainment
products and services that are available to consumers.
The entertainment software industry has been a leader in
using new technologies to develop creative business models to
provide consumers a wide array of options for accessing games.
Consumers can access and sample games through rental outlets,
game websites, demo disks in game magazines, or play games on a
variety of platforms and services such as online game
environments, pay to play sites, or an episodic game format,
and in many cases without even purchasing a full game.
Consumers can play games on their computers, their television
sets, dedicated handheld devices, their PDA's, and on their
cell phones.
Thus we think it is clear that the balancing mechanism by
Congress widely adopting the copyright statute's fair use
provisions and the DMCA are properly servicing the communities
of copyright holders and consumers. Critics to the DMCA argue
that its enforcement constrains the exercise of so called fair
use rights and that consumer expectations are not being met. In
the case of the entertainment software industry, this cannot be
further from the truth. The protections reported by the DMCA
are essential to the vitality and continued growth of our
industry. This industry has invested heavily in technologies
that both prevent or reduce game piracy and enable the industry
to place games in the hands of consumers through many different
platforms and modalities. Without the DMCA's protection for
such technological measures, game publishers multi-million
dollar investment in the development and marketing of new game
products would become an exceedingly daunting proposition as
our games would become immediately exposed to copying and
abuse. And as this increased risk would undoubtedly inhibit the
development of many new games, consumers would lose as well.
ESA believes that the marketplace is where industry
consumer expectations of our product use or access should be
resolved. The entertainment software industry is a prime
example of this marketplace principle, the fact that a product
includes protection measures to prevent unauthorized copy and
distribution has not affected its longstanding positive
relationship with its consumers who have made our industry the
fastest growing segment in the entertainment industry.
Thank you.
[The prepared statement of Frederic Hirsch follows:]
Prepared Statement of Frederic Hirsch, Senior Vice President,
Intellectual Property Enforcement, Entertainment Software Association
On behalf of the Entertainment Software Association (ESA) and our
member companies, I thank you, Mr. Chairman, for this opportunity to
discuss the Fair use doctrine and how it impacts the video game
industry and its consumers. It is the position of the Entertainment
Software Association that current law properly balances consumers'
diverse interests in using copyrighted works with the protections
content owners need to retain the incentive to continue creating and
producing innovative entertainment products for consumers to enjoy.
The ESA is the trade association serving the public affairs needs
of the world's leading publishers of video and computer games,
including games for video game consoles, personal computers, handheld
devices, and the Internet. ESA members produced more than 90 percent of
the $7.3 billion in entertainment software sold in the U.S. in 2004. In
addition, ESA's member companies produce billions more in exports of
American-made entertainment software, driving the $28 billion global
game video game market. Entertainment software is a vibrant and growing
segment of the American economy, providing highly skilled jobs and
ever-increasing exports.
Entertainment software companies invest significant amounts of
capital in each of their games and the intellectual property that these
represent. Developing and launching a top game often requires a team of
more than 100 professionals working for more than three years, with
development and marketing costs often running $10 million or more and
may foreseeably range as high as $25-40 million in coming years. As
with any hit-based industry, not all of these titles actually achieve
profitability. Nonetheless, the demands of the game-playing market
compel ESA members to continue to work even harder to develop faster
and more exciting software, requiring larger investments in the
programming and technology that will produce the effects and challenges
that consumers seek. The new generation of entertainment software
consoles that will be launched over the next several months will
require entertainment software publishers to make even more significant
levels of investment as the processing power of these new machines will
permit more complex and realistic game design, further enhancing the
game-playing experience for consumers.
i. what is the fair use doctrine?
``Fair Use'' is a legal defense under copyright law that allows for
limited uses of copyrighted materials in certain cases that would
otherwise constitute infringement of copyright. The fair use defense,
one of the few exceptions to rights holders' exclusive rights, balances
the public interest in scholarship, research, commentary and the like
with the artist's interest in having the exclusive right to reproduce
and distribute his or her work. When the use of a copyrighted work for
such a purpose has been judged a ``fair use,'' it is not an
infringement of the copyright, even if the use was made without
permission of the copyright owner. Originally created by the courts,
the fair use doctrine was codified in the 1976 Copyright Act.
Fair use has always been determined on a case-by-case basis. There
are no hard-and-fast rules that dictate that certain uses are always
fair (or never fair). The statute lists four factors (although others
can also be used) that must be considered in determining whether or not
the use is fair:
The purpose and character of the use. Title 17, Section 107 recites
examples such as copying for purposes of criticism, news
reporting, teaching, scholarship or research. But those
purposes do not automatically make a particular use a ``fair
use'' under the statute. Not every use by a library or
educational institution is necessarily a fair use under the
law;
The nature of the copyrighted work in question;
How much of the work is copied or otherwise used; and
The effect of the use on the potential market for the work. This
includes not only the impact on the current market, but also
whether allowing the use (and others like it) could prevent a
new commercial market from developing.
In examining particular circumstances of copying, courts consider
the statutory defense using the four factors listed above. It was on
this basis that the Supreme Court Betamax decision in 1984 ruled that
private copying of over-the-air TV broadcasts for the purpose of time-
shifting was fair use. However, even that case did not apply the same
rule to private taping of cable television or pay-TV broadcasts, nor
did it address the copyright status of ``librarying'' (the practice of
making a permanent copy of a television program), and no later court
has cited the Betamax case as a basis for permitting ``private
copying.'' Aside from a specific statutory provision that Congress
enacted in 1992 regarding non-commercial home recording of music on
cassette decks and the like, any other instance of personal copying
must be evaluated under the statute's four factors, in light of the
particular facts in the case at hand, to determine if it is entitled to
the fair use defense.
The same is true of so-called ``space shifting'' or ``platform
shifting''--for instance, copying a video game so that it can be played
on a different technological platform than originally intended by the
copyright owner. Here too, the fair use defense applies only after
consideration of all four statutory factors, in light of the particular
facts of the case.
ii. fair use is an exception, not a right
The fair use doctrine codifies nearly two hundred years of judicial
experience in balancing the rights of copyright owners with social
interests in research, scholarship and the like. The doctrine has
worked work well to accommodate these goals while retaining incentives
for creators to create and for publishers to invest in bringing new
copyrighted products to market. It was for this reason that Congress
adopted the principles of the fair use analysis into the copyright
statute.
In recent years, with the emergence of digital technologies and the
rapid deployment of the Internet, consumers have seen their ability to
access, use, copy and transmit digital material vastly expanded.
Consumers' use of these digital technologies has been a huge boon to
the entertainment software industry, which benefited from consumers'
increasing comfort with using computers and the Internet.
Unfortunately, it has also led many computer and Internet users to
abuse digital materials protected by copyright.
In 1998, Congress enacted the ``Digital Millennium Copyright Act''
(DMCA). The DMCA was the foundation of an effort by Congress to
implement United States treaty obligations and to move the nation's
copyright law into the digital age. The DMCA implements two 1996 World
Intellectual Property Organization (WIPO) treaties: the WIPO Copyright
Treaty and the WIPO Performances and Phonograms Treaty. The foundation
of this effort was to make digital networks safe places to disseminate
copyrighted works for the benefit of consumers and copyright owners.
Specifically, the treaties require legal prohibitions against
circumvention of technological measures employed by copyright owners to
protect their works. Congress determined that current law did not
adequately protect digital works and that to promote electronic
commerce and the distribution of digital works, it was necessary to
provide copyright owners with legal tools to prevent widespread piracy.
As a result, the DMCA implements the treaty obligations by creating new
prohibitions in title 17 on the circumvention of technological
protection measures that protect access to a copyrighted work and the
manufacture or sale of devices that permit such circumvention.
The most common critique of the DMCA has been that its enforcement
constrains the exercise of fair use ``rights.'' However, no such rights
are defined in the copyright statute, nor have any such rights been
identified in U.S. case law. What U.S. law does provide for, through
its codification of the fair use doctrine, is a certain degree of
flexibility with respect to certain uses of copyrighted works that,
although they may be infringing, may qualify for an exemption for the
people engaged in such uses. This is the balancing mechanism that
Congress wisely adopted and has served the communities of copyright
holders and consumers so well over many years.
Congress continued to retain the balancing of competing interests
when legislating in the area of copyright protection. When Congress
enacted the DMCA, it balanced the new provisions against circumvention
of copyright protection measures by ensuring that consumers would
continue to have the ability to make non-infringing uses of copyrighted
works in the digital environment. Congress created a tri-annual rule-
making process to be conducted by the Librarian of Congress in
conjunction with the Copyright Office to determine whether non-
infringing uses of copyrighted materials are being harmed or threatened
as a result of the circumvention prohibitions in the DMCA and to
formulate exemptions as necessary.
Since the DMCA was enacted, two rule-makings have been successfully
conducted. In each rulemaking, the Copyright Office held numerous
hearings around the country, reviewed evidence and testimony from
hundreds of interested parties and considered numerous proposals for
new exemptions. In both proceedings, it found evidence that certain
users were not able to make certain non-infringing uses of certain
classes of works that it deemed, on balance, likely to benefit certain
consumers and unlikely to impact copyright holders. As a result, the
Librarian issued exemptions for such uses of those classes of works
from the prohibition against circumvention of technological protection
measures. Specific to the entertainment software industry, exemptions
were granted for 1) malfunctioning or old computer programs failing to
permit access and 2) video games in obsolete formats to the extent
libraries and archives wish to make preservation copies.
Unfortunately, because of the use of the term fair use ``rights''
in attacks on the DMCA, fair use and the DMCA are often contrasted as
reflecting oppositional doctrines. Some point to recent cases, such as
efforts to break the encryption of DVD movies and the well-publicized
DMCA criminal case against a Russian programmer accused of
circumventing the copy protection for Adobe System's e-books, as
reasons to re-examine fair use. However, neither case has anything to
do with that doctrine. In both cases, the defendants were charged with
trafficking in tools that strip off encryption and leave formerly
protected material ``in the clear'' for any use, fair or piratical. In
fact, both fair use and the DMCA reflect Congressional efforts to adopt
a level of protection for copyright, balanced against certain uses by
consumers that may qualify either as exempt under fair use or non-
infringing under the DMCA.
iii. what effect does fair use have on the video game industry and its
consumers?
In our view, any debate in Congress over these issues should be
predicated on a complete understanding of the ways the entertainment
software industry has sought and succeeded in meeting the legitimate
needs of our consumers. The video game industry is a leader in
successfully meeting consumer expectations for access to, and use of,
video game content.
Our industry has always been digital and did not need to convert
from older formats to the digital environment. As a result,
entertainment software companies have, for years, been leaders in
developing creative business models that provide consumers a wide array
of options to sample and play games. Without built-in marketing
vehicles like radio, film trailers, and music television, the video
game industry has had to develop innovative marketing strategies to
generate excitement in new game products. As a result, the industry has
used a variety of approaches to allow consumers to sample and play
parts of games and, in some cases, entire games prior to purchasing:
Rental: Under federal law, console video games are the only form of
software that may be rented without the permission of the
copyright holder, and over the years video game rentals have
become a big business for retailers, allowing millions of
people to play games without purchasing them and generating
nearly $7 million dollars at retail in 2004.
Game Websites: Our companies routinely make ``levels'' of games
available for free download on their own company sites, or
through independent game websites. Through these sites,
consumers can enjoy free access to games for a period of time
to play and to sample prior to purchase.
Demo Disks: Game companies provide several levels of games to
publishers of gaming enthusiast magazines prior to or soon
after release in the form of CD-ROMs that are inserted into the
game magazines. From these demo disks, consumers can then
sample literally dozens of new and popular games for free on
their PCs.
The video game industry has developed additional means and
technologies to deliver game product to consumers for use in a variety
of formats to accommodate different consumer preferences:
Massive Multiplayer Online Games: An entire gaming culture has been
built around massive multiplayer games involving hundreds of
thousands of individuals. Consumers pay a monthly subscription
fee, usually between $10 and $15, to play with and against
players from all over the world.
Free Games: More than 30 million Americans now play board, card,
trivia, and other casual games online at least once a month,
typically for free.
Pay to Play: Other games are available online to play for an hourly
or daily fee.
Episodic Games: Some games are delivered to consumers in episodes,
with players paying a fee to receive each new level.
The entertainment software industry has a strong and proactive
track record in voluntarily providing information about our products to
customers. Consumers of video games have known and accepted for years
that video game hardware systems and computer and video game software
are copy-protected in various ways. For example, there is no legitimate
expectation on the part of consumers to copy a PlayStation game for use
on a GameCube or an Xbox, or to copy a PC game for use on a dedicated
game console. Our industry's consumers know that the games they
purchase are embedded with certain technological restrictions. The use
of technological protection measures has not interfered with the
entertainment software industry's ability to meet consumer expectations
with regard to access, play, portability, and ability to make full use
of a game title.
A key factor to bear in mind is that game publishers are able to
meet consumer demand for game products in these different forms and
modes of access through the use of technologies that permit qualified
or conditional access. Without such technologies, and most importantly,
the ability to protect the integrity and use of such technologies, game
publishers would be unable to respond to the increasing diverse
consumer demand for game software on these many different platforms and
modalities.
The protections afforded by the DMCA are essential to the vitality
and continued growth of the entertainment software industry. It
prohibits: 1) the circumvention, or ``hacking,'' of technological
measures that game publishers use to control access to and/or prevent
piracy of their products, and 2) the development and distribution of
tools to enable such hacking. Without this protection, the development
and digital distribution of new game products would become an
exceedingly daunting proposition because publishers would be placing at
considerable risk the tens of millions of dollars spent in developing
and marketing game products.
Because of the nature of the game software business, technological
protection measures are a critical element of game publishers' ability
to distribute and market their products. Unlike some of the other
content industries, where products either pass through a sequence of
media or enjoy prolonged life cycles, the active sales cycle of a new
game release is often only a few months long. It is therefore critical
that the game industry provide its products maximum protection from
piracy during the short window in which they have to sell copies of
their games after release and recoup the millions of dollars invested
in the development and marketing of these game products.
This is the reason that our industry has invested heavily in
technological protection measures, as these help to limit the damage
that game publishers suffer from pirate versions of their games. For
example, video game consoles have built-in access controls designed to
prevent the playing of counterfeit versions of the games. These self-
help protection methods act as ``digital locks'' that regulate
unauthorized access to the game content. The DMCA's legal protections
for these measures provide additional remedies for our industry to use
against those who would undermine the use of these measures by
promoting their circumvention.
Unfortunately, game publishers' technological protection measures
are often circumvented and an unprotected version of a game may become
available in the days following its release. The resulting copy is a
perfect copy that can be available for any purpose, not just non-
infringing uses. In the digital world of today, the ``single copy''
will quickly become thousands (and ultimately, millions) of equally
high-quality copies distributed instantly around the world. Billions of
dollars worth of pirated entertainment software products are present in
worldwide markets today and there are illegal devices such as ``mod
chips'' and ``game copiers'' which circumvent access controls and allow
for play of counterfeit games.
The entertainment software industry remains concerned about
attempts to chip away at the protections afforded by the DMCA and other
statutes in the name of fair use. As noted earlier, the DMCA provides
those interested in seeking exemptions to the application of its
circumvention provisions with a process for doing so. Many have taken
advantage of the last two rulemaking processes to proffer suggestions
for exempt uses and some have obtained the exemptions they were looking
for. Indeed, a new DMCA rulemaking process has recently begun and new
proposed exemptions will undoubtedly be considered. The process works;
there is no need to undermine the DMCA or other applicable statues at
this time.
Those who seek to weaken the DMCA's anti-circumvention provisions
in order to promote so-called fair use ``rights'' may not be aware of
the dangers that this poses to copyright holders, particularly the
entertainment software industry. No technology exists to ensure that
circumvention is done for only legitimate or non-infringing purposes.
Any technology or device capable of ``enabling significant non-
infringing use'' may also be capable of permitting rampant piracy. More
to the point, should Congress enact proposals to allow circumvention
for purposes of making fair use or the making and distributing of
circumvention devices for purposes of making fair use, ``mod chips''
and ``game copiers'' will be legal and this would be devastating to the
video game industry.
iv. conclusion
The ESA and its members strongly endorse the Congressional judgment
that led to the codification of the Fair Use doctrine in the U.S.
copyright statutes and the enactment of the DMCA. Each reasonably
accommodates the needs and interests of copyright holders and the
consumers of their products. We believe that the marketplace is where
legitimate industry and consumer expectations over product use or
access should be resolved. The entertainment software industry is a
strong example of this marketplace principle--an industry whose
products include protection measures to prevent unauthorized copying
and distribution and whose positive relationship with their consumers
since the inception of the industry has made us the fastest growing
segment of the entertainment industry.
As an industry that uses technology extensively to meets the
challenge of ever-changing consumer demands, our industry would be
unnecessarily and unfairly harmed by legislation aimed at altering the
delicate balances embodied in Fair Use and the DMCA. Accordingly, we
urge Congress to reject any efforts to erase the legal protections on
which our members rely to bring innovative new entertainment software
and technologies to the marketplace in forms and modalities designed to
produce the highest levels of consumer satisfaction.
Mr. Stearns. Thank the gentleman.
Mr. Aiken?
STATEMENT OF PAUL AIKEN
Mr. Aiken. Mr. Chairman, I am the Executive Director of the
Authors Guild, the largest society of published authors in the
country and we have a 90-year history of contributing to
debates before Congress on the proper scope and function and
copyright law. It is an honor and a privilege to be here today
for the Authors Guild to continue to serve that role before
this committee.
When people discuss policy issues about copyrights, they
often talk about balancing the public's interest against that
as a rights holder. The public's interest is frequently cast in
terms of the public domain. As is the overriding public benefit
of copyright is the creation of materials that can be used for
free. The public domain does provide a benefit to society but
that is not the primary means by which the public benefits from
copyrights, not by a long shot.
Copyright allows authors and other rights holders to work
in a free market economy. Copyright transforms author's
creative efforts, their investment of countless hours of work
on their manuscripts into marketable goods, licensable
products. A fortunate and talented minority of prospective
authors find publishers for their works. A published book of
course is no guarantee of success. The authors and publisher's
investments may be for naught but authors and publishers accept
those risks and with a good book, some luck and a bit of
marketing skill the authors and publishers investments will pay
off in the marketplace and readers will value the book. That
book and other books like it, the books that readers value, the
books that the public, academic, and corporate libraries choose
to acquire for their collection are the primary public benefit
of copyrighting. I am speaking now of the book publishing
industry but the same paragon applies to the newspaper,
magazine, music, movie, and software industries. It is the
products that result from the market created by copyrights that
are the fundamental and appropriate public benefit of the
copyright system that primarily and powerfully fulfills
copyright's constitutional purpose of promoting the progress of
science and the useful arts.
It seems so obvious but people seem to lose their bearings
when discussing copyrights. There is a market for food in this
country which functions pretty well. No one seriously doubts
that there is a public good in the existence of this system
that one has to pay for a sack of potatoes does not mean that
there is not a tremendous value to the public and the
investments and the efforts of the farmer, distributor, and
grocer in getting those potatoes to the store. We may wish
those potatoes were cheaper, we may even want them to be free
but none would argue the public benefit of a market for food is
dependent on the availability of free potatoes.
So it is with public domain. Public domain is a fine thing
but it is and always has been merely a nice byproduct of the
copyright system. The real public benefit of copyright easily
90 percent of the value is the creation of progress promoting
rights that the marketplace values.
What does all of this have to do with fair use? The same
sorts of arguments are brought to bear in fair use debates. We
are told essentially that in order for copyrights to fulfill
its constitutional purpose and provide a real public benefit,
we have to make sure that their use is adequately bought. This
misapprehends primary value of copyright and the role of fair
use in the copyright system. Fair use has traditionally helped
define the boundaries between commerce and free expression.
Between the commercial incentives secured by copyright and the
rights of free expression protected by the first amendment.
Section 107 mediates between protected expression and free
expression by setting forth four factors for the court to
consider whether use is fair. Factors intended to permit the
except, you know, copywriter rights needed for new creative
expression so long as the effect on the commercial market for
the work is minimal. And unfortunate use, result of the use of
four factors to determine the balance of fair use is that fair
use appears to be a bit mushy. Advocates of all stripes can and
do read into fair use what they care to read into it.
Search engine firms have discovered books. All the major
firms now have book digitalization's under way. Google is
looking at hooking with major American libraries and one
British library in its massive book scanning and storage
effort. Some of these libraries are offering Google only public
domain books but the University of Michigan and reportedly
Stanford are offering up works still protected by copyright.
Google seems to have figured something out. There is a demand
for searching these books, a demand that warrants the
investment of a reported $200 million, a demand that Google is
determined to satisfy because Google is a sensible profit
seeking enterprise believing its investment will pay off and
increase visitors to its sites and increased ad revenues.
Google senses a competitive advantage in making copyrighted
books searchable but Google says that is copying of these
books, that its scanning of countless copyrighted volumes, and
using optical character recognition technology to digitize the
text of those works to create files to assemble into a new
unimaginably vast data base that all that copying and use of
these works would be fair use so it does not need a license
from anyone for this copying. For good measure, it is handing
over a digital copy of its--to its partner libraries and
telling them it is okay to post the works on their website.
That too it appears is to be considered fair use. And since no
license is needed in Google's view, Google does not have to
give rights holder contractual assurances of the security of
the data base. Could a back up tape go straight from Google or
one of its partner libraries unleashing a couple hundred
thousand copyrighted works sent to the internet? It sure seems
possible. We will have to trust that that is under control. The
list of companies----
Mr. Stearns. I just need you to sum up.
Mr. Aiken. Sure. That lose critical data grows daily. We do
not believe the courts will share Google's radical expansive
and devastating view that the scope of fair--of the scope of
fair use. At some point, we believe that Google will do the
right thing and look to a licensing solution for the use it
wants to make of these millions of works. That would be good
news. A negotiated license could pave the way for a real online
library, something far beyond the excepts Google intends to
offer to its Google library program.
Thank you.
[The prepared statement of Paul Aiken follows:]
Prepared Statement of Paul Aiken on behalf of the Authors Guild
Mr. Chairman, I represent the Authors Guild, the largest society of
published authors in the country. The Guild and its predecessor
organization, the Authors League of America, have been leading
advocates for authors' copyright and contractual interests since the
League's founding in 1912. Among our more than 8,000 current members
are historians, biographers, poets, novelists and freelance journalists
of every political persuasion. Authors Guild members create the works
that fill our bookstores and libraries: literary landmarks, bestsellers
and countless valuable and culturally significant works with
unfortunately modest sales records. We have counted among our ranks
winners of every major literary award, including the Nobel Prize and
National Book Award, as well as United States Presidents, members of
the Senate and, no doubt, distinguished members of the House of
Representatives.
We have a 90-year history of contributing to debates before
Congress on the proper scope and function of copyright law. It's an
honor and a privilege to be here today, for the Authors Guild to
continue to serve that role before this committee.
Copyright and the Public Interest
When people discuss policy issues about copyright, they often talk
about balancing the public's interest against that of the rightsholder.
The public's interest is frequently cast in terms of the public domain,
as if the overriding public benefit of copyright is the creation of
material that can be used for free. The public domain does provide a
benefit to society, but that's not the primary means by which the
public benefits from copyright. Not by a long shot.
Copyright allows authors and other rightsholders to work in a free
market economy. Copyright transforms authors' creative efforts, their
investment of countless hours of work on their manuscripts, into
marketable goods, licensable products. A fortunate and talented
minority of prospective authors finds publishers for their works. These
authors enter into essentially joint venture agreements with their
publishers, licensing the right to print and sell their works in
exchange for an advance and the prospect of shared profits in the form
of royalties. (Contrary to widely held belief, the advance is generally
modest, merely defraying some of the author's investment of time and
money in creating the manuscript.)
A published book is no guarantee of success, of course, the
author's and publisher's investments may be for naught. That's how it
is in an entrepreneurial system, not all efforts pay off. But authors
and publishers accept those risks, and with a good book, some luck and
bit of marketing skill, the author's and publisher's investments will
pay off in the marketplace, and readers will value the book.
That book, and other books like it, the books that readers value,
the books that public, academic, and corporate libraries choose to
acquire for their collections, are the primary public benefit of
copyright. I'm speaking now of the book publishing industry, but the
same paradigm applies to the newspaper, magazine, music, movie and
software industries. It's the products that result from the market
created by copyright, the newspapers and movies and software programs
that are still under the protection of copyright, that are the
fundamental and appropriate public benefit of the copyright system,
that primarily and powerfully fulfill copyright's constitutional
purpose of ``promot[ing] the progress of science and [the] useful
arts.''
This seems so obvious, but otherwise clear-thinking people seem to
lose their bearings when discussing copyright. There's a market for
food in this country which functions pretty well. No one seriously
doubts that there's a public good in the existence of this system. That
one has to pay for a sack of potatoes doesn't mean there's not a
tremendous value to the public in the investments and efforts of the
farmer, distributor and grocer in getting those potatoes to the store.
We may wish the potatoes were cheaper, we may want them to be free, we
may even think that potatoes want to be free, but none would argue that
the public benefit is dependent on free potatoes.
Or take the Ford Foundation. It does, I'm sure, much good work.
Some might argue that this is the public good that resulted from Henry
Ford's company, that he and his family were able to endow this
charitable institution. But the Ford Foundation's good works,
significant as they are, pale in comparison to the public benefit of
the Ford Motor Company's products, automobiles. Ford revolutionized the
industry, bringing independent, speedy transportation within the reach
of working families, and the public valued this product tremendously,
responding by buying Ford's cars by the million. (Ford's other great
product, of course--it's other great benefit to our society--is good-
paying, benefit-rich jobs.) The real public benefit of Ford is a direct
result of the automobile market--cars that people value and the jobs to
build those cars--the charity is just gravy.
And so it is with the public domain. The public domain's a fine
thing, but it is, and always has been, merely a nice by-product of the
copyright system. The real public benefit of copyright, easily ninety
percent of the value, is the creation of progress-promoting works that
the marketplace values.
Fair Use & Authorship
What does all this have to do with fair use? The same sorts of
arguments are brought to bear on fair use debates. We're told,
essentially, that in order for copyright to fulfill its constitutional
purpose and provide a real public benefit, we have to make sure fair
use is adequately broad. This misapprehends the primary value of
copyright, as we've seen, and the role of fair use in the copyright
system.
Fair use, originally a judicial doctrine, now codified in Section
107 of the Copyright Act, has traditionally helped define the boundary
between commerce and free expression, between the commercial incentives
secured by copyright and the right to free expression protected by the
First Amendment.
Authors are big fans of copyright, of course, because authors like
to get paid, but they're also big fans of traditional, transformative
fair use.
Say an author is writing a history of The Great Depression and
finds a recent article in which some scholar says that the Depression
was caused by the stock market crash of 1929. This drives the author
nuts, because she believes it's well established that the stock market
crash was only one of several factors causing the Depression. She wants
to quote from this article to show just how wrong-headed it is, but the
article is protected by copyright and its author may not be inclined to
grant her permission to excerpt the work. What does our historian do?
She uses it anyway. She copies a reasonable amount of that article,
enough to make her point, and puts it into her own book, surrounding it
with her commentary and criticism. She demolishes that scholar's
thesis, using his own words against him, and there's nothing that
author can do about it.
That author can do nothing about it, at least in terms of her use
of his copyrighted work, because this is classical, transformative fair
use of the original author's work. She's taken part of his copyrighted
work and transformed it, including it in a new creative expression,
something completely unlike his work. As a society, we see real value
in this sort of transformative borrowing from another's work, it's a
vital part of the marketplace of ideas that free expression is meant to
encourage, and it's everywhere: book and movie reviews, of course;
biographical and historical works; novels and plays; poetry and songs.
Section 107 mediates between protected expression and free
expression by setting forth four factors for a court to weigh in
considering whether a use is fair, factors intended to permit the
excerpting of copyrighted works needed for new creative expression, so
long as the affect on the commercial market for the work is minimal. An
unfortunate result of the use of four factors to determine the bounds
of fair use is that fair use appears to be a bit ``mooshy.'' Advocates
of all stripes can and do read into fair use what they care to read
into it.
Fair use is now often seen as another flavor of public domain, and
that's perhaps one way to think of it, but it's of an entirely
different nature than copyright's real public domain. Fair use doesn't
mean free use of entire works--that's the realm of genuine public
domain. Fair use, in fact, has been transmuted by some into free use or
good use or any other use that some interest group, industry or
corporation wants to make of copyrighted works without paying for them.
This isn't, and shouldn't be, what fair use is about. If we keep our
eye on the true role of fair use--permitting the creation of new
creative expressions without harming the commercial market for the
work--we won't lose our way.
The Idea/Expression Dichotomy
I should mention one other important way in which copyright law
accommodates the First Amendment. Courts have interpreted copyright law
to protect creative expression in copyrighted works, but not the ideas
contained in those works. When people speak of copyright preventing the
free flow of ideas, they are wrong, flat out. Copyright encourages and
speeds the flow of ideas.
One prominent copyright scholar, Paul Goldstein of Stanford Law
School, describes the idea/expression dichotomy as creating a vast
commons coursing through every copyrighted work--the publicly held and
freely copyable ideas the work contains. If a particular author has
creatively expressed an idea so well that another feels compelled to
copy that particular expression, then one needs permission, that is, a
license. That's as it should be--well-crafted expression should be
compensated, or the borrower should simply limit the excerpt to the
bounds of fair use.
The Internet & Fair Use
The Internet is often described as a disruptive technology. There's
no doubt that that's true--just ask travel agents or those in the music
industry. Authors and publishers have had a taste of this disruption,
as used bookselling, a somewhat quaint enterprise before the Internet,
has seen explosive growth online, certainly displacing some royalty-
paying sales of new books. That displacement will only grow with time.
But the Internet also offers opportunities. Search engine firms
have discovered books: all of the major firms now have book
digitization efforts under way. Earlier this month, Microsoft announced
an agreement with the British Library to scan 25 million pages from the
library's collection. Those pages will be made available at MSN's Book
Search site next year. It's just the start for Microsoft and the
British Library, we're told, Microsoft is investing a reported $2
million, just to get the ball rolling. Yahoo is also in the game,
announcing last month that it's working with a group called the Open
Content Alliance, which includes Adobe Systems, Hewlett-Packard, and
the libraries of the University of California and the University of
Toronto, to scan books that will be made available through Yahoo's
search engine. Since that announcement, Microsoft has signed on, to
make the books accessible through its search engine as well. In
building their databases of books, the Microsoft and Yahoo efforts are
properly sticking to scanning works that are in the public domain or
those for which they receive permission.
Not so with the mother of all book scanning and storage
initiatives, Google Library. Google is working with four major American
libraries, the libraries of Harvard, Stanford and the University of
Michigan and the New York Public Library, and one British library,
Oxford University's Bodleian Library. Some of these libraries are
offering Google only public domain books, but Michigan and reportedly
Stanford are offering up works still protected by copyright.
Google seems to have figured something out: there's a demand for
searching those books, a demand that warrants the investment of a
reported $200 million. A demand that Google is determined to satisfy,
because Google, a sensible, profit-seeking enterprise, believes its
investment will pay off in increased visitors to its site, and
increased ad revenues. Google senses a competitive advantage in making
copyrighted books searchable.1We bet Google is right. If books were
digitized and searchable on the Internet, we bet Google could turn a
good profit by allowing its legions of users to search that database.
And what a mind-boggling database: an assemblage of the nation's
copyrighted books, the result of the efforts and investments of
hundreds of thousands of authors and thousands of publishers, served up
in handy excerpts by Google's computers.
But here's the bad part. Google says that its copying of these
books--that its scanning of countless copyrighted volumes, then using
optical character recognition technology to digitize the text of those
works to create files to assemble into a new, unimaginably vast
database, surely one of the largest databases ever assembled--that all
of that copying and use of these works, would be fair use, so it
doesn't need a license from anyone for this copying. For good measure,
it's handing over a digital copy to its partner libraries, and telling
them it's OK to post the works to their websites. That, too, it
appears, is to be considered fair use.
Since there's no license needed, in Google's view, Google doesn't
have to give rightsholders contractual assurances of the security of
their database. Could a backup tape go astray from Google or one of its
partner libraries, unleashing a couple hundred thousand copyrighted
works onto the Internet? Sure seems possible. We're asked to trust that
that's under control. The list of companies, meanwhile, that lose
critical data grows daily. What successes do hackers have at breaking
in to the sites of Google and its partner libraries? There'd be no
contractual need to report this, so it would likely go unreported.
Security experts tell us that most data losses to hackers go
unreported, and we don't doubt it. No contract, no reporting, no
control. ``Trust us'' security.
What about other companies that want to do the same thing? When we
first filed suit against Google, we mentioned to reporters our concern
that others would see the same business opportunity and join in.
Microsoft and Yahoo, as I've discussed, have since jumped in, but in a
manner that appears to respect copyright. But if Google gets away with
its vast database, Yahoo and Microsoft won't stand still. They'll make
their own databases of copyrighted works, just to keep pace. They
probably would be joined by Amazon, which has been investing heavily in
its search engine, and has a strong interest in protecting its position
in online bookselling.
So we might have four or more companies, each pursuing private
gain, digitizing the stacks of libraries. We'd have to trust each of
them, naturally, and no doubt their partner libraries, not to misplace
backup tapes or let down their guard against hackers.
Specialized databases wouldn't be far behind. WebMD might want to
digitize a couple medical libraries for excerpting by its users. Fair
use, naturally. Veterinarians, chemists and electrical engineers have
their needs and websites, too. Harry Potter readers, science fiction
fans and Civil War buffs wouldn't be far behind. All one needs is a
scanner and a few hundred dollars worth of software to get going with a
workable system. These digital databases would all be secure, not to
worry. Trust us, but don't audit us.
What remedy would authors and publishers have if these databases
are deemed to be fair use copies but one of them is hacked into or its
collection of digital books otherwise finds its way onto the Internet?
If we're fortunate, the negligent party would have substantial
resources, but stating a claim against that entity might well be
impossible. There's no license, so there's no breach of contract. We're
postulating that the copy is a non-infringing fair use copy, so there'd
be no remedy under copyright. And the defendant would have a strong
argument that copyright law pre-empts any state law cause of action.
Plaintiffs might well find themselves shut out.
What about uses by the partner libraries? The only contractual
obligation imposed on libraries--at least in the sample available to us
from the University of Michigan contract with Google--allows the
University of Michigan to use the works at its website. No mention in
the contract of limiting browsers to so-called fair use snippets. The
contract also contemplates sharing the works with other academic
libraries. The threat to the market for academic books couldn't be
clearer or more direct. If Google and the University of Michigan are
correct in their interpretation of fair use law, then profit-minded
publishers and royalty-seeking authors would be wise to abandon that
market.
What if the University of Michigan is wrong, and its uses overstep
the bounds of fair use? Authors and publishers could just sue for
damages, right? No, we'd probably be out of luck, as a state
institution protected by the 11th Amendment, the University of Michigan
is immune from damages claims under copyright law.
Fair Use & The Market for Online Delivery of Books
Recent developments make it appear likely that Google intends to
leverage its interpretation of fair use into more than just ad revenue
profits. In the past few weeks, there has been a spate of
announcements, from Amazon, Random House and Google, of various schemes
for selling and renting the right to view books online. Whether readers
will accept these business models is anyone's guess, but at some point,
someone will likely discover the equivalent of iTunes for books, and
online book sales or rentals will take hold.
If Google can scan all copyrighted books into its databases as a
fair use, then it may well establish its search engine as the dominant
and unassailable portal to online books, the portal that readers and
prospective buyers of online books would turn to first. It's not too
much of a stretch to imagine that Google might do as any right-thinking
corporation would, use that dominance to extract favorable terms, a
high percentage of all proceeds derived from the sale or rental of
books through its portal.
In this way, and the irony certainly won't be lost on the
publishing industry, Google could turn authors' and publishers' own
works, their own vast libraries of works, against them, securing the
upper hand for the indefinite digital future. All it takes is a couple
hundred million dollars, and an expansive view of fair use.
The Role of Licenses
Fortunately, it need not come to that. We don't believe the courts
will share Google's radical, expansive, and devastating view of the
scope of fair use. At some point, we believe that Google will do the
right thing, and look to a licensing solution for the use it wants to
make of these millions of works. It's too early to discuss what such a
license would look like, but its general outlines might be guessable.
Revenues, in the form of some reasonable split of advertising income,
could be paid to authors and publishers. Rightsholders would have the
right to review Google's security protocols, and Google would be
obliged to contractually guarantee the security of its database. And a
negotiated license could pave the way for a real online library--
something far beyond the excerpts Google intends to offer through its
Google Library program.
I would like to thank this Committee for holding this hearing and
inviting us to participate.
Mr. Stearns. I thank the gentleman.
I will start with the questioning here and Professor Jaszi,
let me start with you. I am in my home and I have got a CD or a
DVD, do I have the right to make a single copy in your opinion,
for my own personal use? It turns out that I have a--I live in
Washington, DC, and I have a home in Florida and occasionally I
want to listen to music in Washington and I find it is in--up
here and so I will make a copy. Can I make a copy either for a
DVD or a CD? Do you think that is a legitimate use that I
should have a right to do?
Mr. Jaszi. Insofar as copyright law which incorporates the
principle of fair use is concerned, I think the answer to that
question is unqualifiably yes.
Mr. Stearns. Okay. Do I have right to do more than one copy
because I also, perhaps let us say, I am just postulating, I
have another house, a beach house. Can I make a third copy, a
second copy? So then I would have the original plus a copy in
Washington and now I have a copy at my beach house.
Mr. Jaszi. Again, as long as you are working within the
zone of personal use, I think the answer is yes.
Mr. Stearns. Could I go so far to extend, extrapolate that
and say that I have a right depending upon my location, my car,
my iPod, my homes, can I continue to make copies for my
personal use forever for the different locations?
Mr. Jaszi. We are talking here about your own personal----
Mr. Stearns. Okay. What about my family, my sons, I have
three boys. Let us say, you know, I have got this neat song I
think you would like, can I make copies and give it to them?
Mr. Jaszi. I think that is a much more difficult case.
Mr. Stearns. Okay. And so you would not think that that is
not correct.
Mr. Jaszi. Not necessarily.
Mr. Stearns. Okay. Ms. Bono had mentioned all these iPods
that she and her daughters have. And my son, each of my sons
has an iPod and right now they cannot go from iPod to iPod with
their songs so Scott cannot give his collection to one son and
he cannot give to another but Sony as I understand it, the--
their MPT 3 you can do that. Is that acceptable for my sons to
trade songs between them? I do not mean one song to download
maybe 100 songs from one----
Ms. Bono. Would the chairman yield?
Mr. Stearns. Yes.
Ms. Bono. Excuse me, but you can go iPod to iPod absolutely
with the use of one PC.
Mr. Stearns. Okay.
Ms. Bono. So you connect both iPods to that same PC.
Mr. Stearns. Okay. So I stand corrected, you can go from
iPod to iPod. I mean is that acceptable in your opinion that
her daughters or my son can go from iPod to iPod?
Mr. Jaszi. Again, I think that as long as we are talking
now about copying for use outside the personal media space of
the original consumer, wholesale copying along those lines
cannot easily be justified under the doctrine of fair use. I
would make, I would reach a different conclusion if the
question were related to the sharing of a single song that was
of particular interest to one user who wanted----
Mr. Stearns. Okay.
Mr. Jaszi. [continuing] affirmatively to make----
Mr. Stearns. Jack Valente, he is head of the Motion Picture
Association at our last hearing said he says it is incorrect
and it is against the law. He wants to be sure that it is fully
understood that you cannot even make one copy and he mentioned
not even for one for personal use. So you seem to be
disagreeing. Does anybody disagree with the Professor here
strongly and would like to comment?
Mr. DeLong?
Mr. DeLong. Yes. It seems to me that this problem which is
obviously very difficult under fair use doctrine where you are
trying to assess the costs and benefits and everything is very
easily solvable in a market and that is that if you want one
copy, you are going to pay less than the person who wants 2, 3,
or 20. And, you know, problem solved. If your children each
want copies, you know, they will pay a little more than the
person who only wants one. It is simply trying to see that----
Mr. Stearns. Your solution is to say you cannot make any
copies unless you get reimbursed from--that there should be a
flag in the CD, a DVD that----
Mr. DeLong. Yes.
Mr. Stearns. [continuing] says bingo my son wants to make a
copy, he has got to get the password and pay, instead of 99
cents, he can pay 50 cents.
Mr. DeLong. Yes. Believe me they will event ways of doing
this. They will event two for one. There could be all sorts of
ways of doing this. But the fundamental question is well two,
one why should the person who needs very light use subsidize
the whole family of somebody else. And second, why get
embroiled in it as a legal doctrine? Why get the courts
embroiled in it when the market will solve it----
Mr. Stearns. Well, Mr. DeLong, your point is well taken
because my sons then go to their friends and they pretty soon
if they are visualizing themselves after the Thanksgiving
dinner downloading to their iPods or their MP3 iPod type Sony's
then they would probably do it with their friends.
You know I have said from the beginning, I said it in my
opening statement, there must be some technological way to
solve this problem with a flag so that maybe if we have the
final solution that you can do one copy, if you try to do more
than one copy, then you have to go ahead. Does anybody care
to--yes, Mr. Shapiro?
Mr. Shapiro. Yes, Chairman Stearns, the Audio Recording Act
actually it was a negotiated agreement if you will between the
music industry and the technology industry and they basically
agree that you can make an unlimited number of copies off an
original but no copies from that copy. Now this was done before
the internet and it was a reasonable compromise which everyone
agreed upon and Congress actually enacted and it kind of set
the standard. But I think moving to distinguish here, the law,
although I would like to agree with Professor Jaszi, the law is
basically unclear. We do not know. I was at--a reporter asked
me the question yesterday at a press conference, the exact same
question you asked, you know, can I tell my readers that they
can make copies? Well before the Supreme Court, the content
industry lawyer argued that you can of course you can make a
copy of your own CD. And indeed when Congress considered
earlier legislation, they talked about the right to record off
a radio. There was a four colloquy where it was absolutely
clear that you had the right to record off the radio. But some
in the content community have taken a legal position that is
absolutely unacceptable to make any authorized copies and there
is really no such thing as fair use in that area. I think there
is a better way. The law can resolve some things but I think
Congressman Bono said it well. I mean there are certain issues
in morality stealing is stealing is stealing. And morality
sometimes takes over here and is not--the law can only go so
far. Sharing some music with a friend to the extent that it
exposes that friend to a new artist is not a bad thing. They
may go out and buy that CD. It also may displace the sale. It
is a balancing test but you need the ability to do that and you
do have to have the constraint of morality.
Mr. DeLong. But sharing a new taste is a good thing too and
we don't say you should get the ingredients for free. I mean,
you know, fair use and free use are entirely different things
and the fact is, you know, when technology is ringing the
transaction costs out of these, we are far better off just to
rely on markets than to put courts in position as being central
planners as to what is fair.
Mr. Stearns. My time has expired.
Ms. Schakowsky?
Ms. Schakowsky. Although one can copy a Martha Stewart
recipe and pass it on to others freely.
Mr. DeLong. Well there are--I did not say we were going to
solve all the tough issues.
Ms. Schakowsky. Okay, all right. I wanted to ask Ms. Adler,
I am very concerned about lots of uses but primarily I am
concerned about libraries which I think are fundamental to our
democracy in so many important ways and to our history. And so
I wanted to follow up on some of the things you said.
You stated that libraries are being forced to shift from
purchasing work to getting access licenses from--for use from
publishers. Are publishers stopping libraries from buying
books? Are you being pushed into license agreements because of
fear of copyright infringement? So if you could explain that a
bit?
Ms. Adler. Certainly, I think it is a combination of
factors as we saw the rise in the availability of information
in electronic form particularly in the context of journals.
Publishers move from predominately print based offerings to
electronic particularly we also see the rise of E-books,
electronic books that are beginning to be introduced more and
more in libraries. That is not to say we still do not have
large number of volumes and tangible books in our libraries but
predominately the use is licensing and as I mentioned, it is
because it provides greater certainty to the publisher as to
how that information will be used and protected. Typically you
will see in our libraries that we will be negotiating licenses
on behalf of an individual institution or through Consortia and
it is in that context that we will try and imbed in our license
agreements as many exceptions that match or mirror what is in
the Copyright Act as possible but that is a very, very
difficult and uphill battle for us to achieve.
Ms. Schakowsky. And is it possible that these licenses may
end up requiring that you charge patients fees for services
that otherwise you provide for free? I mean do you foresee that
as a potential problem or not?
Ms. Adler. That is not--the way the library fortunately or
unfortunately, the library community seeks to make access to
information as transparent as possible to our users. Our goal
is for them to have the most effective and easy access as
possible. And so what we try and do through our license
agreements is to make sure that they do not have problems
accessing that information and that there would be additional
charges then for example. We will absorb those in the license
agreement on behalf of our user community so that we do
everything that we can to make sure that there are not
additional----
Ms. Schakowsky. Well let me ask you this. Would that put
additional financial burdens then on libraries?
Ms. Adler. Absolutely.
Ms. Schakowsky. Okay.
Ms. Alder. Without question.
Ms. Schakowsky. And you also raised the issue of
preservation of materials. Could you elaborate on that a bit? I
mean that ought to be a concern I think to all of us if that is
a major function of libraries and that we could potentially
lose that function.
Ms. Adler. It is an enormous concern for the library
community. The library community, that is our charge, that is
our mission to provide long-term effective access and
preservation of all information regardless of format from
cuneiforms on up to electronic resources and it has become such
an issue for us as we move to licensing these resources where
we do not have the tangible item per se to preserve. And if
there are conditions in a license that prohibit us from
preserving those electronic resources, there is nothing that we
can do about that. And most recently, the Mellon Foundation
came out with a call to the community that they see this as a
crisis and that they are hoping that all sectors both private
and public and foundation, the foundation community deal with
this crisis and preservation of our information resources.
Ms. Schakowsky. Thank you.
I wanted to ask Mr. Aiken or just have him comment on
something. My understanding is that in addition to consumers
that there actually are authors who seem to support the Google
print project. I just wanted to read you a quote from a Chicago
author. I represent a part of Chicago. It says ``Dear Google,
your search engine is the primary way that people find their
way to my website and consequently my book. I asked my
publisher for my book to be included in Google print. I was
told they did not do that. Lack of exposure is the primary
reason that at book like mine would fail in the marketplace.
Please let me know if I can do anything to help.'' And I
understand there are dozens of testimonials like this on
Google's website and on the bloggs and so I am wondering why we
cannot just deal with this opt out for authors and allow others
who would support this idea to go forward?
Mr. Aiken. There are of course tens of thousands of authors
out there. It is no surprise that Google has been able to find
a dozen or two that that----
Ms. Schakowsky. Well, first of all, let me say that some I
think have found Google. I mean you are making it sound like
they have scouted around to find those so----
Mr. Aiken. I do not know the circumstances under which
those----
Ms. Schakowsky. Okay.
Mr. Aiken. [continuing] appeared at Google's website.
Ms. Schakowsky. Right.
Mr. Aiken. There is nothing inconsistent with having works
be available on line and being licensed for that use. We are
not opposed to the idea of making books searchable online. We
are opposed to it being uncontrolled without a proper license.
Because a Google collection copyright is a search engine
exception to copyright and any search engine large and small
and there are dozens would be able to take advantage of it. And
the security concerns are real and on the internet we think it
could easily lead to widespread piracy.
Ms. Schakowsky. Thank you.
Mr. Stearns. The gentleman from Texas.
Chairman Barton. Thank you, Mr. Chairman.
I mean it is obvious I am a supporter of fair use and my
name is on the bill along with Congressman Boucher and
Congressman Doolittle so I am biased here.
But I have a question to those of you that oppose the bill.
If I go to Wal-Mart or Best Buy or Home Depot, almost anyplace
that sells video and audio equipment, I can get home recorders,
I can get CD burners, I can get blank tapes, I can get blank
CD's. Should we outlaw those devices? Anybody think we ought to
outlaw them? Let the record show nobody said we ought to outlaw
them.
Ms. Bono. Can I answer since I am opposed to the bill?
Chairman Barton. Well if we cannot outlaw those, those can
all be used. Those of you that oppose the concept of fair use
those can be used to make a copy of something. And according to
the most radical opponents of the bill, you cannot make a copy
of anything. There is no fair use. And that just flies in the
face of reality. It flies in the face of the marketplace. It--
you know, everybody in this country is a criminal and I just do
not believe that. So I do not know why we cannot agree to find
a compromise where--I do not want the folks that Ms. Blackburn
and Ms. Bono and others supports so strongly, the creative
people in this country, I want their copyrights protected. I
want their creativity protected but current law codifies that
you can make a limited number of copies of certain things for
your own personal use. I just do not see why we cannot somehow
find a meeting of the minds on this.
Let me ask my friend, Mr. Shapiro, is it technologically
possible for your industry to create and manufacture and sell
equipment and the materials that are used in that equipment
that would technologically allow a small number of copies but
it would be a small number. Is that technologically possible?
Mr. Shapiro. I will answer that of course, I just want to
answer your first question actually but I will answer both very
quickly.
Chairman Barton. Well I appreciate that. It is so kind of
you.
Mr. Shapiro. You know what has happened in the last couple
of weeks is emphasized the importance of 1201 because now the
fixes that are being put up by Microsoft and things like that,
they are actually, I believe they are violations of the Digital
Millennium Copyright Act because you have to circumvent the
copyright protection scheme just to basically save your
computer. So I think if 1201 was ever important, it is much
more important in these last 2 weeks because a lot of people's
computers are in jeopardy. And in a sense, some companies are
in a sense violating the law to protect people's computers. Now
that is not the observed result that Congress intended but it
does make 1201 more important.
In terms of the ability of any of our 2,000 member
companies of the Consumer Electronics Association to actually
come up with the types of products you are talking about, there
are technologies which I am sure can be--and products can be
built to limit the number of copies. There are challenges
though obviously because you could always somehow make an
analogue copy of something and pass it along and things like
that and there is always, you know, if you build a better
mousetrap you do get smarter mice. I think you really have to
rely upon the fact is distinguishing what is a commercial
purpose from a private purpose.
Chairman Barton. But even if it is a private purpose, I
agree you cannot make unlimited copies. If I have for Christmas
if I--it's not legal for me to go buy one CD and then burn it
for all 40 of my relatives. You know, that is a private use
but, you know, I think it is okay if I buy one and burn one for
my home and one for my car or one for my condo in Washington
and, you know, but I am not trying to let people under fair use
set up a commercial operation. That is not what this bill is
about.
Mr. Shapiro. Under the Audio and Recording Act, Congress
has decided that for digital audio copies at least you can make
an unlimited number of copies off of one CD but you may not
make any copies of those copies but actually the equipment is
now designed and set up that way. Plus when you buy a digital
audio home recording product, you are actually paying a royalty
that goes to the copyright owners. You are paying for the
hardware and that money is collected and divided among
copyright owners. So in a sense, Congress has actually
addressed the question about directly in the Digital Home
Recording Act. I think the questions are coming up now because
those that entered that deal want to look at it again and
obviously the internet has had an impact.
Chairman Barton. I want to ask Mr. Hirsch a question. First
it is just a personal question. Are you any relation to a Steve
Hirsch who went to Johns Hopkins and went to graduate school
with me at Perdue?
Mr. Hirsch. No, I do not believe so.
Chairman Barton. Okay, well, he is a good guy so. I am sure
you are good guy, too. That was not to imply that you were not.
My question to you is your trade association, the products
that the folks that are in your association manufacture and
sell who gets royalties from their sale? Royalties or residuals
or things like this?
Mr. Hirsch. It is the people who own, the creators of the
game, the people who own the copyright in the game.
Chairman Barton. But if their licensed in other countries,
the creator gets that, I mean does everybody who participates
in the creation get a royalty or just a very few of the people?
Mr. Hirsch. Well it is a--copyright is a collective
enterprise in the game development business and it is generally
the game developing company or the----
Chairman Barton. Well for example if you have the Madden
football game, does Mr. Madden get a royalty? Does every NFL
player who's represented in the videogame get a royalty or does
the creator of the software package get a royalty or do all of
those people?
Mr. Hirsch. Well, I mean the royalty schemes for various
games operated differently. Obviously to some extent, to the
extent that third party intellectual property, their
likenesses, the trademarks, et cetera that are being
incorporated into a game, there are royalties that are
generally paid out to the owners of this----
Chairman Barton. But the point I am driving at in the video
industry, if Tom Cruise does a movie or Lucille Ball did the I
Love Lucy Show, their contracts allow that if that is shown on
TV or repeated or shown in the movies again, they can get some
residual or some royalty. But in the music business if George
Strait records a song and it is played on the radio, the
songwriter and maybe the producer gets the royalty or the
residual but Mr. Straight does not. He only gets when they sell
his record or sell his CD or whatever it is he gets a one time
payment but he does not get, it does not keep coming over and
over again. And in your--so in your business, these fees that
are accrued, I am just trying to figure out who gets them? Is
it just the producer that gets them or does everybody in the
chain get them?
Mr. Hirsch. It is the company that created the game so that
the employees of that company would obviously benefit to the
extent that that company is able to recoup its investment.
Chairman Barton. Okay. My time has expired, Mr. Chairman,
thank you.
Mr. Stearns. Mr. Gonzalez?
Mr. Gonzalez. Thank you very much, Mr. Chairman.
And let me start off I guess with an observation. We are
talking about the anti-circumvention clause and the exception
carved out for fair use and I do not see why we have to do
violence to either and I know the chairman of the full
committee would like for some sort of technological fix or
compromise and hopefully we can do that. For you all, the
interested parties and with vested interests to rely on us to
come up with that, I think can be a little dangerous
experiment. But we did recognize one thing. I think we call
agree that when it comes to proprietary rights, it is going to
be very difficult for someone to go out there to protect them
by trying to sue them or enforce them, millions of times over
because that is what we are talking about now is that
technology has empowered individuals to collect, copy, and
disseminate information like never before. So it is real hard
legally to try to enforce that right in that type of
environment.
So my first question will go to the Professor and then the
second question everyone for their own opinion and read on the
thing. And I'm looking here at Mr. Band's written testimony.
The Supreme Court explains that intellectual property system
requires a ``balance between the interests of authors and
inventors and the control and exploitation of the writings and
discoveries on one hand and society's competing interests in
the free flow of ideas, information, and commerce on the other.
The question to the good professor is can technology by
empowering individuals, millions and millions with the ability
of course to copy, disseminate, store, reproduce, do all these
things, at some point, do you just reach this particular
juncture where fair use is rendered or let's say protecting or
proprietary rights is rendered meaningless by fair use. That is
going to be the question. I mean can technology move us forward
to where you have so many individuals that are capable of
compromising whatever this proprietary right was in the past
that the environment is totally changed. That the law and the
principles that underlie proprietary rights is actually going
to be changed fundamentally. Can technology do that in this
particular instance? I say no but I want to hear your opinion.
And then to the rest of you and quickly of course because--
but I was given the additional time because I had no opening
statement and I appreciate that, Mr. Chairman. What is the
objectionable behavior we are really trying to address? I heard
individuals today saying that you know this could impact
artists, teachers, students, librarians, documentary
filmmakers, but really is that the case? Now I have heard Mr.
Shapiro and I think he said well the distinction would be
between private and commercial use. And that sounds good and I
am not real sure where we would go with that but that does
sound pretty solid. But then I heard Ms. Adler say that the
technological or tech controls do impact the practical use and
application of fair use. So that is something else that we
never think about. Well and maybe this is a way that we can
protect it but by allowing that, then it does impact legitimate
fair use. So that question goes what is the objectionable
behavior we are really trying to address realistically and I do
not want you all to go and use Chairman Stearns' son and his
iPod and such. I really want to know what we are here all
about. But first, Professor, is it Jaszi or----
Mr. Jaszi. Jaszi, yes.
Mr. Gonzalez. Jaszi.
Mr. Jaszi. Thank you very much. It is a wonderful question
and I think the answer may put me a little bit at odds with
some of my colleagues at this table and perhaps with some of
the members here today as well because I do not believe, in
fact, that information environments or copyright law are
undergoing a fundamental cataclysmic change as a result of
changes in technology. There have, in fact, been changes in
technology including changes in technology which have put
greater and greater power to reproduce and to distribute into
the hands of individuals throughout the history of information
markets. And copyright law has not had to be remade in each of
those cases. In fact, I think, the enforcement problem that you
reference in your question is part of a much larger issue like
the income tax system. The copyright system works and functions
only on the basis of ultimate respect by consumers. No amount
of enforcement whether it is technological or legal will ever
make those who wish not to disobey or who choose to disregard
copyright into law-abiding citizens. That is, I think in the
end a hopeless project whether it is to be accomplished by
draconian technological or by draconian legal means. The
greatest risk as far as I can see in the current arms race that
is taking place between copyright owners and copyright users
around technologies and digital rights management is that
gradually the public is losing its respect for this critical
aspect of our legal system. And when that respect is gone, then
no amount of enforcement and no amount of technical ingenuity
will bring it back.
Can I take a crack at your other question, too, because I
think that the concern that I tried to articulate is precisely
the concern that resides with the practices of a wide range of
user groups who have always been able in the past to make use
of fair use, to add value to what has gone before and to
control new content to the commonwealth of available material.
And I gave the example of the teacher who wants to use film
clips in a classroom as an example of a situation in which
traditional copyright fair use would apply but no exception is
likely to be available under the Digital Millennium Copyright
Act. So one can multiply those examples in terms of students,
in terms of young musicians who are coming up and trying to
learn their trade by imitating and copying the styles of others
before they develop styles of their own. We can multiply those
examples.
I want if I can to take a certain amount of issue with Mr.
DeLong's earlier statements that this is really all about
markets and transaction costs. That vision of fair use really
approximates where the courts and the academic world were 20
years ago. And since then over the last two decades there has
been a consistent movement in the courts and in the academic
world toward a recognition that fair use is not simply about
greasing the wheels of the market but about promoting cultural
progress in all of its forms. And that is why the courts have
moved more and more to the formativeness standard in their
analysis of fair use issues. So I think it would be a mistake
to think of this only in terms of anti-piracy enforcement on
the one hand or the facilitation of markets on the other. Much
more is at stake here. What is at stake is literally the future
of our culture.
Ms. Bono. Would the gentleman yield for clarification?
Mr. Gonzalez. Sure. I have only 16 seconds but if the
others would still attempt to answer the underlying question of
the objectionable behavior, yes, Ms. Bono.
Ms. Bono. Yes or no, I'm sorry to--has there ever been a
case brought against a classroom for showing a snip of a film?
Mr. Jaszi. I am sorry I----
Ms. Bono. Has there ever been a case brought against a
teacher for showing a clip of a film in a classroom?
Mr. Jaszi. No, but there were many who bought----
Ms. Bono. Thank you.
Mr. Jaszi. Can I finish the answer, please? There were many
law-abiding features----
Ms. Bono. I'm sorry----
Mr. Jaszi. [continuing] forego the practice because of the
DMCA.
Mr. Stearns. The gentleman's time has expired.
Ms. Blackburn?
Ms. Blackburn. Thank you, Mr. Chairman.
I am going to see if the voice will hold out for this a
couple of points about Chairman Barton's questions on
equipment. No one is seeking to outlaw equipment that allows
creators and inventors to grow in craft and bring forward an
idea and craft a trade to create a product like a songwriter or
a musician to create something to get it ready to move to the
marketplace where it can be a commodity that does have an
economic value. We also want to be sure that those that create
that product such as individuals that Mr. Shapiro works with
have the ability to retain the right to be paid and compensated
for their ideas that do become tangibles and commodities and
deserve to be paid.
Professor Jaszi, I think if I had been one of your students
you and I would have feisty debates. I think that when I hear
someone use the word draconian and apply that in a
constitutional framework that it is of concern to me. I do not
think there is anything draconian about the constitution of
this Nation or about the Fifth Amendment and I would, a yes or
no will do on this, I would think that you probably agree with
the Kelo decision if I am understanding what you are saying
today.
Mr. Jaszi. I am sorry, what----
Ms. Blackburn. Do you agree with the Kelo decision from the
Supreme Court? Are you not familiar with that decision?
Mr. Jaszi. What? I am not hearing very well, I am afraid.
Ms. Blackburn. Kelo, K-e-l-o.
Mr. Jaszi. No, I am not familiar with that decision.
Ms. Blackburn. You are not familiar with that. I would
recommend to you and Mr. Chairman, I would like to submit for
the record, I do not think this has been submitted, an article
by Mr. DeLong that I actually read last night and I have got it
on my desk pertaining to the Kelo decision. I would like to
submit that article for the record.
[The article follows:]
[Release 1.7 August 2005]
One Degree of Separation: Kelo & H.R. 1201
By James V. DeLong
Everyone knows the game Degrees of Separation, where one finds the
connection between two seemingly distant people.
The same game works for seemingly unrelated policy issues. For
particular example: it takes only a single hop to get from the recent
eminent domain case Kelo v. New London to H.R. 1201, a bill on
intellectual property and technological protection measures (TPM) in
the U.S. House of Representatives.
The Fifth Amendment to the Constitution says that private property
may be taken for public use only if just compensation is paid. The
phrase ``public use'' has always been assumed to be a limitation,
meaning that a state cannot take for a strictly private use, simply
transferring property from A to B, even if it compensates A.
In Kelo, the Supreme Court addressed the issue whether this long-
standing assumption has any real content, and its answer was ``not
much.'' New London took Ms. Kelo's house because it wanted to transfer
the property to a redevelopment authority, which had some grandiose
plans for the area. This was good enough to meet the public use
requirement, said the Court, since: ``For more than a century, our
public use jurisprudence has wisely eschewed rigid formulas and
intrusive scrutiny in favor of affording legislatures broad latitude in
determining what public needs justify the use of the takings power.''
Of course, it would be pretty hard to fail a test that requires
nothing but some sanctimonious verbiage. As Justice Scalia said in an
earlier case: ``Since [a harm-preventing] justification can be
formulated in practically every case, this amounts to a test of whether
the legislature has a stupid staff.''
Kelo has been met by a rush of criticism from both left and right,
most of it refreshingly Adam Smithian. The gist is that it is simply
not a proper function of government to decide that B can make better
use of property than A. If this happens to be true, then the free
market provides the perfect remedy--let B buy it.
Perhaps there is also a growing sense that the government raven for
pork to distribute to favored constituencies is already out of control
in spending tax money, and that giving it carte blanche to redistribute
property in general is the road to perdition. (If this sense is not
growing, it certainly should be.)
But at least Ms. Kelo got paid for her property. Pending before the
U.S. Congress at this very moment is a bill designed to take property
from a bunch of As and give it to a bunch of Bs, only without paying a
cent to the As. And it, too, relies on a test composed of sanctimonious
verbiage that could be failed only by the deeply stupid.
The bill is H.R. 1201, the Digital Media Consumers' Rights Act of
2005, and the background is the Digital Millennium Copyright Act, which
is section 1201 of the Copyright Act (hence the H.R. number). The DMCA
makes it illegal to crack technological protection measures (TPM)--
commonly called encryption--used to protect copyrighted content. The
DMCA also makes illegal the distribution of code cracking tools.
H.R. 1201 would repeal this ban insofar as the code cracker or the
toolsmith wanted to obtain, or help others obtain, access for purposes
of making ``noninfringing use'' of a work.
There are indeed lots of noninfringing uses of copyrighted works,
most of them created by the courts under a doctrine called ``fair
use.'' The doctrine is a grabbag--it includes such uses as excerpts for
book reviews; some transformative uses, whereby a work forms a
foundation for broader efforts; political commentary. There is a dash
of transaction cost thinking--it can be fair to photocopy an article
for educational purposes if getting permission is a long and arduous
process.
Because of the variety of purposes crowded into the doctrine of
fair use, it would be is a dull code cracker indeed who could not
attach a plausible claim of fair use to almost any work. Want to write
a class essay on ``Images of the Mafia in American Art?'' Surely this
commentary entitles you to get The Sopranos by hacking into the
encryption that protects HBO. Want to compose ``Variations on a Theme
of the Grateful Dead"? Then hack your iPod to access the raw code of
their music.
Note that such arguments would justify not just hacking by the nerd
elite, but mass distribution of code-cracking tools. And, of course,
once the tools are available, or the decrypted copies are available,
then there is no way of controlling them. And the IP involved has then,
for all practical purposes, been seized from all the As who used to own
it and redistributed to all the Bs.
No one, including the backers of H.R. 1201, is so dumb as not to
know that this would be the effect. Their precise goal is to abolish IP
rights in favor of some mystical commune wherein all IP is free as the
air and creators are compensated by government. Like the New Haven
Redevelopment Authority, they have a grandiose plan.
Current fair use doctrines were invented in a different
technological age. They need to be rethought to fit contemporary
circumstances, and this is indeed happening in the marketplace.
Consumers are making known that they want some ability to copy CDs, for
example, and the TPM people are setting up systems that allow it, to a
limited extent.
Other new divisions of property rights between creators and
consumers are being negotiated out through marketplace experimentation.
The last thing needed is a heavy-handed legislature deciding that it
can decree how this complex territory should be redeveloped, and then
trampling over both property rights and market processes.
Ms. Kelo lost in the Supreme Court, but Congress need not replicate
the error.
Mr. Stearns. So ordered.
Ms. Blackburn. Thank you. And Mr. DeLong, I thank you for
that. I thought it was very insightful and I agree one degree
of separation between Kelo and the affront to private property
rights there and to intellectual property rights. I think we
have to be very, very careful how we approach this issue.
Mr. Shapiro, you can never play poker, my friend, your face
tells the whole story.
Mr. Shapiro. That is what my poker mates say.
Ms. Blackburn. Yes, I am sure. We have--your industry's
content and tech industries have been working together for a
long time to create products that meet consumer demand and
desires and I wish that we could see more participation between
you guys and some of the content producers. I would like to see
more participation. We would like for everybody to get along
and----
Mr. Shapiro. Can I respond?
Ms. Blackburn. No, you may not. But there is a lot of
discussion around to level one which would essentially allow
consumers to hack through the content protection in the name of
fair use. And sir, that is very--of great concern to me. So I
have got to question for you. As we are looking at this and
looking to address this issue because sure everybody is
concerned about what would be an allowed use and then what
oversteps and becomes theft. So do you think that the method
currently provides enough flexible options for individuals that
want to look at in home use and do you think that we need to
actually go in here and legalize hacking tools and theft tools?
Do you think we need to do that?
Mr. Shapiro. I am not sure I understand your question but I
will answer what I think I heard. I think you asked about the
marketplace providing solutions to some of these problems.
Ms. Blackburn. It seems to provide a lot of options right
now.
Mr. Shapiro. And I think the market--if you look at Apple
iTunes and some of the evolving--and I assume mostly you are
talking about the audio world, music services. I think the
marketplace is quickly----
Ms. Blackburn. Audio and video both.
Mr. Shapiro. I am sorry?
Ms. Blackburn. Go ahead, I am sorry.
Mr. Shapiro. I think the marketplace is quickly providing
solutions. I think the music industry made a very bad mistake
by just selling CD's and not giving consumers any options on
them and fighting the internet. Now they have turned around, it
is a little late but it is happening because most people want
to do the good thing. And we have worked with the content
community. Jack Flint and I set up the group that created the
DVD standard which is a basic standard that by all accounts has
worked very well. And you did say that no one is seeking to
block equipment. That is totally not true. Indeed the RIA is
pushing legislation which would make this Delphi-XM product
illegal. They are trying to say you can only record for 30
minutes continuously. That would deny me the opportunity to
listen to this hearing on XM radio played back later. So there
is a whole bunch of products that have been tried to make
illegal. I could talk about Clear Play, I could talk about
Replay. I could talk about the VCR itself. There are so many
products which would have been thrown off the market and some
of them were. Replay was in bankruptcy, its product does not
exist. Its competitor TiVo does simply due to litigation. So,
yes, the content community does want to make all these products
illegal.
Thank you.
Ms. Blackburn. Okay, thank you.
Mr. Band, if I can come to you for just a moment. In your
testimony, you have a sentence in there as the DRM's become
more pervasive, Congress may need to consider mechanisms for
preserving fair use. Does NetCoalition support or oppose H.R.
1201?
Mr. Band. Congresswoman, NetCoalition currently does not
have a position on that specific piece of legislation but we
are worried about the general phenomenon of DRM and the
possibility that it could have a chilling effect on fair use
and other lawful uses so, you know, as the legislative process
moves forward, you know, we may have to take a specific
position but currently we are more concerned about the general
pattern and we are also concerned about things like the
broadcast flag which would be again technological mandates. We
are concerned about the precedent that that sets for Congress
regulating technology. You know we heard a lot about the
marketplace but that would certainly be an instance of Congress
fiddling with the marketplace.
Ms. Blackburn. Okay, thank you.
I yield back.
Mr. Stearns. Ms. Bono--no, excuse me.
Ms. Bono. Thanks, Mr. Chairman.
Mr. Stearns. Mr. Ferguson, I beg your pardon, Mr. Ferguson.
Mr. Ferguson. Let me just give you my thanks. Some of you
are really lucky that Marsha Blackburn does not have her voice
today. We are not but some of you are.
Chairman Barton asked a question before about technology
and VCR's and CD burners and whatnot and asked if we should
make them illegal and I have not had a chance to ask him where
he was going with that. But clearly nobody thinks we should
make illegal devices or technologies that have a perfectly
lawful use. It is sort of like asking somebody the question
should we make cars illegal because they might be used as a
getaway vehicle in a bank robbery. Well of course not, they
have a perfectly legitimate use. We should not make them
illegal but that does not mean that those devices do not also
have an illegitimate use or perhaps a use which is not legal. I
just thought that would be worth sharing.
A couple of questions, one for Ms. Sohn, first, thank you
all for being here today and this is a really vigorous debate
and I am glad that we are having it. Ms. Sohn, you and perhaps
others have kind of described this balance between the rights
of copyright owners and the rights of consumers and how, I do
not know if you specifically have said this but some have said
you may subscribe to this that that balance has kind of been
thrown out of whack a little bit. And based on that claim,
those who are putting forth that claim have asked Congress to
kind of correct that imbalance in favor of consumers. I do not
see how consumers are being harmed by the current copyright
system, by the regime that is currently in place. I mean if
anything, current copyright regime seems to have provided
consumers with more copyrighted works available in more formats
at more varied price points offering greater flexibility than
at any time in history. I mean just several years ago you could
not go buy a $15 DVD much less get a song for 99 cents from
iTunes. You could not get last nights episodes of The Office on
demand for a buck. You could not download an audio book. All of
these new offerings for consumers depend on digital rights
management technology of one kind or another. In light of this,
I do not know how someone can contend that DRM's adversely
effect fair use. It seems to me that without DRM's a lot of
this content would not even be there. Consumers would not have
these products to make fair use of at all.
I just want to ask you if you could perhaps talk about how,
explain to me how gutting 1201 can possibly be to the advantage
of the consumer when frankly it will discourage industry from
placing a lot of these products in the stream of commerce to
begin with.
Ms. Sohn. Well I have to say I agreed with just about
everything you said.
Mr. Ferguson. Well we are making progress.
Ms. Sohn. And we are making progress absolutely but there
is one caveat to that. And that caveat is that the ability to
make fair use is limited by some of those digital rights
management tools. Now I will reiterate for about the hundredth
time is that my organization does not oppose digital rights
management. But the problem is to the extent that some of those
tools diminish or limit people's fair use ability, ability to
make fair use or products. There needs to be a very narrow
exception for lawful uses of the circumvention rule and that
I----
Mr. Ferguson. How is the bill that we are talking about a
narrow exception? I mean that is the most optimistic view of,
you know, we are talking about--some folks are saying well this
bill would just open the door a crack like this but it would do
nothing to prevent the next person from kicking that door wide
open.
Ms. Sohn. Look, pirates do not rely on fair use, okay. I
mean, you know, pirates will do what they do whether there is,
you know, fair use or not or whether there is DRM or not.
Mr. Ferguson. But that--now it seems to be----
Ms. Sohn. What this bill does--let me--if you would not
mind if I finished, what this bill does is allow people who
want to make legitimate uses of digital products to do so. And
the criminals will still be subject to all the strong
enforcement, all the strong penalties of copyright law.
Mr. Ferguson. I have limited time. I want to ask Mr. Band a
question. I am going to start a new website. I am going to call
it Snoogle. All right. And I am going to copy all of Google's
technology and their artwork and their search results verbatim.
I am going to make a perfect digital copy except I am going to
change the spelling. I am going to call my site something
completely different from Google, I am going to call it
Snoogle. It is an educational site. Is there a problem with
that?
Mr. Band. Yes, that would be a trademark violation.
Mr. Ferguson. Have you trademarked Snoogle?
Mr. Band. No, but I think it would be likely to confuse
consumers and then that is the touchtone issue with trademark
law is it likely to confuse consumers. Now it is conceivable
that you might be able to make a fair use because there is a
fair use defense in trademark and, you know, you would be able
to try to convince a court that that would be----
Mr. Ferguson. It is just for me but I mean obviously I
would not be able to keep somebody else from using it too. If
it is just for me that would be okay, right?
Mr. Band. No.
Mr. Ferguson. Why, if there is a fair use, if it is just
for my own personal use.
Mr. Band. Well personal use--there is no--fair use in
trademark is different from fair use in copyright.
Mr. Ferguson. Okay.
Mr. Band. And there again you are putting it on website.
Mr. Ferguson. I am not a lawyer as I appreciate your
enlightening me on it.
Mr. Band. In any event, you are making it, you are putting
it on a website and making it publicly available so there is a
possibility that it would be confusing to consumers and that
would be the issue that the court would have to look at.
Mr. Ferguson. So it is Google's intellectual property?
Mr. Band. That is right.
Mr. Ferguson. That they want protected and they do not want
to stolen.
Mr. Band. Under trademark law that is right.
Mr. Ferguson. Fair enough. I think my time is up.
Mr. Stearns. The gentleman's time has expired.
Ms. Bono?
Ms. Bono. Thank you, Mr. Chairman.
I have so many notes here, I appreciate it. Mr. Shapiro,
you talked about the Delphi little handset you have there which
I own a couple myself. But is there not in fact a paradigm of
business that allows for the broadcast of music and that is
different from the business model of buying music? Does the--
does it change? I am listening to broadcast satellite radio,
digital radio whatever it is going to be and suddenly now I own
this song. Is that perhaps a violation of two different
agreements though that I as a songwriter for one, publisher for
two, performer for three perhaps, are there not two different
sets of rules that adhere to in broadcast as to a purchase of
music?
Mr. Shapiro. My understanding the rules governing copyright
and broadcast are somewhat, in fact, very different than some
of the others and there is really two types of digital
broadcast. There is a national satellite footprint which is XM
and Sirius----
Ms. Bono. Right.
Mr. Shapiro. [continuing] in competition with each other
and then there is the local emerging one called HD Radio but
both are very, very threatened by the proposals before Congress
now.
Ms. Bono. Well they are threatened but there is also some
sort of confusion again as the copyright holder not a performer
but if I were--and something that Chairman Barton was talking
about was performance royalties and there is a difference
between performance mechanicals, songwriters. There is a whole
bunch of different sets. The music business is so very
complicated. But you are changing simply by recording that
music from a broadcast right to purchase rights. And there is
some sort of confusion with that No. 1. But also you are
concerned your sole concern when you just spoke was the sale of
these gizmos. It is not the sale of--you are not talking about
protecting the guy. You are upset because gee we might not be
able to market all of these great devices that are going to
come to market based upon exploiting intellectual property.
Mr. Shapiro. Well Congressman Ferguson talked about all
this tremendous growth of intellectual property and creativity.
I kept thinking it is all created by technology and that is
what allows it. And in a sense they are mutually dependent
industries they----
Mr. Ferguson. What----
Mr. Shapiro. Would the gentleman yield? All the creative
new intellectual property has been created by technology? It
has allowed it to occur. What I am saying is that they are
symbiotic industries. This great growth in technology has
allowed a renaissance in creativity which has gone a little bit
less corporate in more individuals so every American and
everyone in the world is a creator. It is phenomenal. And that
is what the----
Ms. Bono. That is the point. Reclaiming my time.
Mr. Shapiro. I am sorry.
Ms. Bono. It is--no, please do not apologize. It is great
ideas. I do not care whether you are creating technology or you
are creating music or movies or a book, it is great ideas that
we are all trying to protect. You are also trying to protect
the sale of hardware based upon the great ideas and that I
think is my colleague's point as well. Also the Chairman
mentioned earlier iPods and he was trying to explain to me or
staff was that technologically I was wrong about iPod to iPod.
I said iPod to iPod via a PC or some sort of central
dissemination point which is true. Not only that now you can go
into BMW, BMW is now marketing a spot for your iPod so nobody,
I do not know a single copyright holder, I do not know a single
songwriter, single author who is saying I do not want people to
enjoy my work. I do not want you to enjoy it in your house, in
your car, in your kitchen, on the airplane ride here. I do not
know a single person who has said that. And I a little bit take
offense to Ms. Sohn saying that we are calling our constituents
thieves and pirates because we are not saying that at all.
You know, but my biggest question and I would like to go
right down the row yes or no if we can. Is it imperative that
we pass this this year or can we give this a year or two to
work out and let the market work its place. I will preface that
by saying Mr. Shapiro said is it is imperative now because of 2
weeks in light of what Sony did. Sony has a patch out there.
They have done a mia copa, we all have it, we have all seen it.
There is a patch out there to put that genie back in the
bottle. So under you know, sort of removing that argument
because of Sony, do we have to do this now? Can the market
continue to evolve into answering some of these solutions for
us? So if we could start with the Professor and yes or no can
we give it a year or two to look at this and work at it a
little bit more?
Mr. Jaszi. My answer would be that if possible that
legislation should be enacted now.
Ms. Bono. Okay, thank you.
Mr. Jaszi. We have had 7 years----
Ms. Bono. Okay, if we can do it--I am sorry but a yes or no
down the row would be great.
Mr. Shapiro. It is never too early to do the right thing.
Ms. Adler. I would echo the previous two, the answer is
yes. Thank you.
Mr. Band. As I said before, NetCoalition does not have a
position on 1201 but if we are taking more time on 1201, we
definitely should take more time on the broadcast flag and
other digital rights mandates.
Ms. Sohn. Yes, we should pass 1201 and we should let the
market work.
Mr. DeLong. 1201 would not only legitimize the idea of fair
use it would----
Ms. Bono. Yes or no, I'm sorry. I made the guys I am
opposing say yes or no so I----
Mr. DeLong. You should give it another century.
Mr. Hirsch. We agree. We think that you should let the
marketplace work this out.
Mr. Aiken. The Authors Guild has no position on this.
Ms. Bono. All right, so obviously as one would expect with
a--yes, 5 to 2, well gee did it start out that way? We will not
mention that. But again, I--my last question is for Ms. Adler.
How do you preserve books? Why--I think that there is
really in your argument to me there is a huge underlying issue
of the tangible versus non-tangible. How do you--does a
publisher give you a second copy of a book or if somebody
destroys a book is the publisher--do they have to give you
another book for free?
Ms. Adler. No. The item that is in our collection is what
we work with. And we preserve tangible items under very
different circumstances. There is Section 108 of the copyright
allows us under certain circumstances to preserve books and
different formats under different circumstances. And sometimes
we look to fair use to preserve as well if there are
circumstances under 108 that do not help us preserve those
items. But in the case of books where the Copyright Act
explicitly gives us that privilege, if you are asking how do we
physically go about it, there are a number of techniques that
we undertake related to preservation. Many books printed early
in the century were printed on acidic paper and they are
deteriorating very quickly.
Ms. Bono. Okay. But that is also public domain anyway by
now. Correct?
Ms. Adler. Not necessarily, some are, some are not. And
what we are trying to do, there is in fact a program that the
National Endowment for the Humanity supports called the Brittle
Books Initiative which is now focused on both books microform
and digital as a way of preserving these cultural resources in
our libraries for future generations of users.
Ms. Bono. So does that--but does that involve the whole
copy of that copy where the artist----
Ms. Adler. Yes.
Ms. Bono. [continuing] does not receive anything?
Ms. Adler. Yes, because the library has purchased that
information resource previously. And we have legitimately
purchased it tangibly and have the rights to do that under the
Copyright Act.
Ms. Bono. But if you had to buy a new book, would you ask
the author to exempt that purchase from his right to earn money
off of that new book, if you were to buy a second copy?
Ms. Adler. We often do buy second copies in libraries.
Ms. Bono. And do you pay the author for that work, the
second copy?
Ms. Adler. Usually we are not buying through--from authors
directly in libraries, we are buying through large publishing
companies then those royalties will go through the publishing
companies back to the author.
Ms. Bono. So you do not ask for some sort of exemption
because you have already bought the intellectual property
portion of it once before. Correct?
Ms. Adler. We have not--we have bought the book, we have
not bought the intellectual property that the author may have.
We have certain exemptions to use it legitimately through the
Copyright Act.
Ms. Bono. Thank you. Mr. Chairman, I see that my times has
expired. Thank you.
Mr. Stearns. The gentlelady's time expired.
We have the author of the bill who is not a member of the
subcommittee but a member of the full committee and we are
going to allow Mr. Boucher to ask questions. Mr. Boucher?
Mr. Boucher. Well Mr. Chairman, thank you very much for
recognizing me even though not a member of the subcommittee and
I also want to thank you and Chairman Barton for scheduling
this hearing to examine the importance of fair use to all
people in our society. I want to say a particular word of
thanks to the witnesses for taking their time with us this
morning and particularly thank those who in the course of their
comments have mentioned the need to enact H.R. 1201.
H.R. 1201 really proceeds from a fairly straightforward
assumption and that is when people purchase digital media, they
should be able to use that media for lawful purposes and
technical protection measures should not be put in their way as
long as the purpose for which they intend to use the CD or the
DVD or other media they purchased is entirely lawful and would
not in any way violate the copyright law.
I was particularly taken by the comments of Ms. Sohn during
her testimony in which she outlined a number of instances in
which people who purchase media would need to be able to bypass
a technical protection measure to use that media fully and to
completely enjoy the rights that should go to the purchaser of
that product any time that media is bought. Do you happen to
have that list with you again? I would like for you just to
emphasize that both for the record and to the members of the
subcommittee if you happen to have it handy.
Ms. Sohn. Absolutely, and I would also include Professor
Jaszi's example that teachers try to use excerpts of DVD's and
cannot do that without violating the DMCA. But let me repeat
the list. A consumer cannot rip songs from copy protected CD's
to their personal computers or iPods. A consumer cannot make a
digital copy of a DVD for playing back on their video iPods,
cell phone, or other portable device. A consumer cannot make a
backup copy of a copy protected CD or DVD. A consumer cannot
play legally downloaded music on a competing mp3 player or
computer so if you, you know, buy iTunes, you cannot play it on
a Real Player and vice versa. And finally, a consumer cannot
remove from a computer malicious digital rights management
tools which may have spyware in them like the now infamous Sony
BMG root kit DRM. So that is just, I think that is just six or
seven but there are a lot more which I would be happy to
provide if the subcommittee would so want.
Mr. Boucher. Well thank you very much, Ms. Sohn. I think
those are good and graphic examples of why the technological
protection measure provisions of Section 1201 stand in the way
of the ability of digital media purchasers to use the media in
lawful forms in a manner that enhances their enjoyment in the
work and therefore the value in the work itself.
Let me get members of the panel to respond to what is
typically the argument raised in opposition to H.R. 1201 and
that is that somehow if 1201 is adopted and technical
protection measures can be bypassed for lawful purposes, that
this change in the law rebalancing as I think it is the rights
between the owner of the content and the user of the content
would somehow encourage piracy. I mean this is the argument
that we hear that allowing bypass for a lawful use would
therefore encourage people to bypass for unlawful uses. Who
would like to respond to that argument? Mr. Shapiro?
Mr. Shapiro. I can only respond by saying I have no clue
the connection with piracy, it just does not exist. But I do
want to add one to Gigi's list which is my personal favorite
and one of the reasons I do this with such passion is that when
you are watching a movie, a DVD, to fast forward through the
ads for the upcoming movies is something you should be able to
do. And that is something we hear from a lot of frustrated
consumers who buy DVD players and they want to know why they
cannot.
Mr. Boucher. All right, thank you.
Mr. Band?
Mr. Band. Even though NetCoalition does not have a specific
position on H.R. 1201, I just wanted to note that before we
heard about CSS which is the encryption system on DVD's and we
heard about the huge market for DVD's which I think someone
said was about a $25 billion market now, it turns out that
there is an easy way to get around CSS. It is called DECSS, and
it is widely available on the internet. If you were to do a
Google search, you would probably find, you know, 300,000 sites
on the internet where DECSS can be downloaded not withstanding
the fact that it is widely available, you still have this $25
billion market. So I think the point is is that most people
want to follow the law and even though there are--there is a
way to break the law using DECSS to circumvent the DVD's for
unlawful purposes, most people choose not to do that.
Mr. Boucher. Well let me simply underscore that H.R. 1201
clearly says that the only time a person may bypass technical
protection is if they are doing so for a lawful purpose, for
example exercising a lawfully protected fair use right. If a
person is bypassing for an unlawful purpose in order to commit
piracy of the work, that person is just as guilty under H.R.
1201 as he would be under current law. And that being the case,
I really do not see any validity at all to the argument that if
1201 is adopted it would encourage piracy. The act of piracy
would remain just as unlawful under this bill as it currently
is.
The gentleman who raised his hand, I am so far away I
cannot see your sign.
Mr. Hirsch. Rick Hirsch with the Entertainment Software
Association.
Mr. Boucher. Yes.
Mr. Hirsch. My job at ESA, among many things, is I am
responsible for our enforcement programs with respect to piracy
of game product. And, you know, one of the consequences of
permitting, I thought the exercise that Chairman Stearns
engaged in with the Professor at the beginning was very
interesting because we kept moving the line along in terms of
the many different copies that could be made. At what point
would something cross over the line from fair use into non-
authorized use that is not fair. Part of the problem here from
an enforcement standpoint is that permitting circumvention of
access controls for certain purposes albeit legitimate
threatens to open the flood gates to piracy and it is not that
every consumer is a pirate, it is just from an enforcement
standpoint we cannot be in everybody's homes to determine
whether--what purpose they are putting these uses to. And the
way we deal with that, and believe me we are--our industry is a
real confluence of technology companies and software and
content companies so we seek to address that through the use of
technology to promote the uses that the game community is
seeking.
Mr. Boucher. Well I appreciate your comment and my time has
expired.
Let me simply say that it is hard for me to imagine that if
the law is on the books in very clear form saying that to
bypass for an illegal purpose is illegal, that somehow adopting
that law allowing bypass for legal purposes would in any way
encourage the illegal use.
Mr. Chairman, I thank you again for having the hearing and
permitting me to ask questions. And I thank the witnesses for
their participation.
Mr. Stearns. I thank the gentleman.
We are now out of time with--there is no one else that
seeks any further recognitions or questioning. We want to thank
your forbearance in all the members. I would just note that a
parting comment that I have as chairman that if we had a
unified DRM system that was clear and conspicuous for
consumers, it is a possibility that some of this could be
resolved and in all deference to the chairman so I would say to
industry that sometimes if you do not want legislation, just
work together to get this unified DRM system that all consumers
can understand.
With that, the subcommittee is adjourned.
[Whereupon, at 12:20 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
[GRAPHIC] [TIFF OMITTED] T7003.010
[GRAPHIC] [TIFF OMITTED] T7003.011
[GRAPHIC] [TIFF OMITTED] T7003.012
[GRAPHIC] [TIFF OMITTED] T7003.013
[GRAPHIC] [TIFF OMITTED] T7003.014
[GRAPHIC] [TIFF OMITTED] T7003.015
[GRAPHIC] [TIFF OMITTED] T7003.016
[GRAPHIC] [TIFF OMITTED] T7003.017
[GRAPHIC] [TIFF OMITTED] T7003.018
November 22, 2005
The Honorable Cliff Stearns
Chairman
Subcommittee on Commerce, Trade and Consumer Protection
Committee on Energy and Commerce
United States House of Representatives
Washington, D.C. 20515-6115
Dear Mr. Chairman: Thank you for giving me the opportunity to
appear last week at the hearing on the effect of fair use on consumers
and industry. In my prepared testimony, I promised to transmit the
Documentary Filmmakers' Statement on Best Practices in Fair Use after
it was released on November 18. Please find copies attached to this
letter for the members of the Subcommittee. In addition, I have
transmitted an electronic copy to Mr. Billy Harvard.
Owing to the acoustics in the room, I did not hear the name of the
case when Representative Blackburn questioned me. Having reviewed the
webcast and of course recognized the Supreme Court precedent about
which she asked, I would like to take this opportunity to respond
substantively to her.As you know from my testimony, I favor the
preservation of copyright fair use through HR 1201, the Digital Media
Consumers' Rights Act. But it does not follow that I also endorse the
majority's position in Kelo v. City of New London, 125 S. Ct. 2655
(2005).
In my view, there is no simply reason to suppose that there should
be a correlation between advocacy for American citizen's fair use
rights and support for governmental takings of private land.The two
legal disciplines, throughout history, have been unrelated, and real
property jurisprudence has never been viewed as precedent for copyright
(or vice versa). Thus, it is no surprise that experts in the copyright
legal community have not given much consideration or credence to
suggestions of any impact of Kelo on copyright.
In any event, organizations such as the American Conservative
Union, which have been highly critical of Kelo as an invasion of
property rights, also have endorsed the approach of HR 1201 as one well
calculated to safeguard the person freedoms of American citizens.There
is no contradiction here. This is because real property and
``intellectual property'' are entirely distinct in their origins, their
goals, and their subject-matter. Contrary to the suggestions of Mr.
DeLong of PFF at the hearing, tangible property and intellectual
property are as fundamentally distinct not just as apples and oranges,
but as potatoes and poetry.
Copyright is a newcomer to the field of property rights, invented
by legislatures and courts over the last few centuries to serve the
goal of encouraging creativity in society.By striking contrast, the
ancient institutions of real property are grounded in the physical
reality of scarcity and the ethical concept of stewardship. Because
land is finite in amount and subject to overuse, Anglo-American law
always has assigned rights in particular parcels to individuals (the
King, a grantee or a purchaser of title) in order to assure that the
resource is maintained. Intangible words, music and images are neither
naturally scarce nor vulnerable to waste. In fact, the real value of
information actually grows when it is shared. As Jefferson put it,
mental productions are like a candle flame: ``He who receives an idea
from me, receives instruction himself without lessening mine; as he who
lites his taper at mine, receives light without darkening me.''
Thus, copyright assigns private property rights in only some
intangible mental productions, and then only to the limited extent
judged necessary to provide incentives for creators. This conservative
approach is made manifest in the U.S. Constitution, which, by its terms
authorizes Congress to provide intellectual protection only for a
``limited term". (Rights in real property, by contrast, last forever.)
Moreover, Congress is authorized to provide no more protection than is
necessary to fulfill the goal of ``promoting Science and the Useful
Arts."
The bundle of rights that Congress has given copyright owners, as
embodied in section 106 of the Copyright Act, is partial and incomplete
when compared with the authority enjoyed by landowners. Moreover, even
the finite rights that the Copyright Act gave content owners are
further limited by the affirmative rights that following sections give
to consumers and citizens. These include, of course, the right to make
``fair use'' of a copyrighted work that was the subject of last week's
hearing. Section 106 of the Copyright Act begins by noting that all of
the listed rights of a copyright owner are ``Subject to sections 107
through 122,'' i.e., the explicit limitations and exceptions to those
rights as enacted by Congress. Likewise, section 107, which codifies
fair use, is characterized as imposing ``Limitations on exclusive
rights'' of copyright owners. Thus, fair use is not a ``taking'' of
rights of a copyright owner. Rather, Section 107 clarifies that a
copyright owner does not have any right to preclude, control, or
license fair uses. To put it simply, if the right has not been granted
to the copyright owner, then fair use remains the right of our
citizens.
H.R. 1201 does not create a new fair use right and it doesn't put
Congress in the position of deciding now what constitutes fair use.
That has been and will remain a decision for judges to make.The bill
only assures that American citizens will be able to continue to make
the same kinds of educational, personal and artistic uses of existing
material that have been permitted for at least the last 165 years. H.R.
1201 preserves the freedom of ordinary consumers to use technology and
digital content they lawfully have acquired. It is only fair they enjoy
this freedom, especially because its exercise in no way diminishes the
commercial value of a Hollywood movie or an RIAA member's music on a
CD.
Finally, contrary to Mr. Aitken's assertion at last week's hearing,
the ``public domain'' is not a byproduct of copyright but the natural
state of affairs that copyright has partially displaced. If anyone has
standing to complain (metaphorically) about government ``takings'' of
rights to art, literature, and music, it is members of the public, who
have seen use rights such as ``fair use'' diminished by recent
legislation (including the anti-circumvention provisions of the Digital
Millennium Copyright Act).By introducing H.R. 1201, Representatives
Boucher, Doolittle and Barton have taken an important step to restore
these culturally vital public entitlements.
Thank you again for providing me with the opportunity to
participate in the hearing.
Sincerely yours,
Peter Jaszi, Professor of Law and Director,
Glushko-Samuelson Intellectual Property Law Clinic
cc: Ranking Member Schakowsky
Representative Blackburn
Prepared Statement of Sun Microsystems, Inc.
Thank you for the opportunity to submit our views for the record.
Sun Microsystems is an industry leader in the development of highly
scalable, highly reliable network systems and services. Our
technologies power the world's most important markets. Sun's philosophy
of sharing innovation and building communities is at the forefront of
the next wave of computing: the Participation Age.
Central to Sun's success has been our commitment to fostering the
Internet as a place of innovation, creation, and communication. It is
our belief that industry and government should each do their best to
keep it that way.
Twenty years ago the Court ruled in the Sony Betamax decision that
devices capable of substantial non-infringing uses were legal, even if
such devices could be used in copyright violations. As Justice Breyer
wrote in a concurring opinion in the Grokster case, ``There may be
other now unforeseen non-infringing uses that develop for peer-to-peer
software, just as the home-video rental industry (unmentioned in Sony)
developed for the VCR.'' His point--stopping technologies when they are
young and evolving could kill off great promise and benefits that lie
down the road. That is why the Court specifically focused on bad
behavior while leaving the old Sony standard alone. Exactly right--
don't constrain the technology; constrain bad actors.
Innovation has flourished, and this country has reaped the rewards,
because Internet technologies enable the rapid, widespread, and often
anonymous flow of information. Combine that free flow with advances in
digital media--photography, video, music--and you have an amazing
opportunity for wide-scale experimentation and creative expression.
Just think: Two decades ago, home computers brought us a revolution
called desktop publishing. Now home users have the tools to create
professional-quality movies and music--and a way to share them with
others. This has opened up new markets and new revenue streams for
content owners and software developers among others. It has also helped
us continue the march forward into new realms of expression--artistic,
political, academic, and personal. Much of this progress owes its
existence to fair use.
Lately, though, the Internet has become a place of conflict and
contention. Why? Because people are worried about what happens to
content that carries a copyright. If it is easy to copy and transmit,
how can we make sure artists are compensated, as they should be, for
their creative work?
Just as important, how can we do so without quashing
experimentation and innovation?
Artists should be compensated. There is no question about that. But
in our rush to defend their rights, we should not overrlook the second
question. We believe public policy should encourage innovation and
free-speech. It should, as always, seek to balance the rights of
individuals with the greatest public good. As Justice Breyer noted,
``copyright's basic objective is creation and its revenue objectives
but a means to that end.'' (That is why, for instance, copyright
protection does not last forever. More is gained in the long run from
sharing.)
One of the great values of the Internet is that it has become a
forum for borrowing, mixing, developing, and tinkering. After all, in
both science and art, innovators build on each other's work. In the
words of director Martin Scorsese, ``The greater truth is that
everything--every painting, every movie, every play, every song--comes
out of something that precedes it . . . It's endlessly old and
endlessly new at the same time.'' We must not make the mistake of
entrenching the endlessly old at the expense of the endlessly new.
So the developing discipline of digital rights management, or DRM,
needs to respect experimental, standing-on-the-shoulders-of-giants
aspects of the Internet. DRM technology should be designed to respect
legitimate needs and current rights of honest users (including backups,
format changes, excerpting, and so on).
While the Internet certainly makes managing the rights for movies
and music more complex, we believe that it is sounder economic and
social policy to foster the architectural, business, political, and
public freedoms that have enabled the Internet to be a place of
innovation than it is to overly restrict the flow of digital
information in an effort to meticulously account for every instance of
the use of content.
What's more, the free flow of information is fundamental to
democracy. In the shift to new forms of media and communication,
neither technology nor law should limit the public's rightful access to
information. Again, if we can go back to the intellectual well one more
time, Justice Breyer rightly acknowledged that ``the copyright laws are
not intended to discourage or to control the emergence of new
technologies, including (perhaps especially) those that help
disseminate information and ideas more broadly or more efficiently.''
Very true. So where do we go from here? We think there is a broad set
of solutions in which the rights of content creators can be balanced
with the common public interest in order to foster vibrant innovation.
To that end, we would like to propose the following principles of
digital rights management:
Innovation flourishes through openness--open standards, reference
architectures, and implementations.
All creators are users and many users are creators.
Content creators and holders of copyright should be compensated.
Respect for users' privacy is essential.
Code (both laws and technology) should encourage innovation.
Fair use is an important value in American jurisprudence. We want
to encourage such usage, for academic purposes, for criticism, for
parody --- and for uses we have not yet even considered. Yet in a
technical world that enables perfect digital copies, fair use can
terrify content owners. So there will need to be a balance struck: one
that enables fair use, but also enables ways of determining who has
abused the system.
Some content owners are pressing for DRM systems that would fully
control the users' access to content, systems with user tracking that
limit access to copyrighted material. We instead prefer an
``optimistic'' model whose fundamental credo is `trust the customer.'
Excessive limitation not only restricts consumer rights but also
potential, as such solutions strongly interfere with the creation of
future works and fair use of copyrighted content.
In an ideal world, solutions should encourage information flow,
including the capability for creating future works. Certainly there
will always be ``leakage'' and illegal behavior. Where that occurs
there should be diligent enforcement of owners' legitimate rights. BUT,
we think it is better that solutions provide auditing and accounting
paths that, while respecting privacy of honest users, also permit
copying, manipulation, and playback.
Systems that encourage the user to play with digital material, to
experiment, to build and create, will be a win for consumers, for
technology developers, and for content producers. The Supreme Court has
spoken to these issues on various occasions and it did so with
restraint most recently in the Grokster case. Now it is up to
technologists, artists, developers, users, and rightsholders to move
ahead in a balanced and forward-looking manner. If we do, it will be a
win for the Internet and for society.