Bar Journal - March 1, 2001
Electronic Publishing and Trends in Copyright Law
By: Attorney Glen M. Secor
[The following article was excerpted from a presentation delivered at the International Copyright in Cultural Management and Electronic Publishing Conference in St. Petersburg, Russia, Feb. 5-9, 2001. Footnotes have been added for the purpose of publication here.]
Two of the most significant business trends in the U.S. regarding electronic publishing are: 1) increased reliance on technology to protect digital works, and 2) increased reliance on contracts and licenses to govern information transactions. These business trends are being supported by changes in the law, including via new legislation and legislative proposals. I will begin with these and then talk a bit about digital rights management technologies.
DIGITAL MILLENNIUM COPYRIGHT ACT
Probably the most significant piece of copyright legislation passed in the U.S. in recent years was the Digital Millennium Copyright Act,1 which I will refer to by its initials, DMCA. Signed into law by President Clinton on October 28, 1998, the DMCA was part of the WIPO Copyright Treaty Implementation Act and was passed in order to comply with the provisions of that treaty. One element of the DMCA, commonly referred to as the anti-circumvention rule, has particular relevance for electronic publishing and digital rights management. It prohibits "the circumvention of effective technical measures" to protect copyrighted works and is found in new Section 1201 of the U.S. Copyright Act.2
At the time of the DMCA's passage, technology existed to secure copyrighted works, or to control access and usage, through encryption and other means. More than two years later, comprehensive and integrated digital rights management systems have been introduced to the market and appear poised for widespread application. Some of those digital rights management systems will be discussed a bit later.
The anti-circumvention provisions essentially protect the technologies that protect copyrighted works by making it illegal to defeat or circumvent those protection technologies. Specifically, Section 1201 prohibits devices or services that:
- are primarily designed or produced to circumvent protection technologies;
- have only limited commercial use other than for circumvention; or
- are marketed as circumvention tools
As a general rule, equipment manufacturers and software companies are not required to design their products to accommodate or interoperate with protection technologies. Instead, they are simply prohibited from marketing and distributing technology that is designed primary to defeat rights protection technologies.
Section 1201 also provides exceptions to the anti-circumvention rules. In the following qualified cases, users are permitted to circumvent protection technologies:
- Nonprofit library, archive and educational institution access for the sole purpose of evaluating the work in order to decide whether to acquire the work;
- Access for the purpose of reverse engineering as allowed by copyright law.
- Access for qualified encryption research.
- Circumvention in order to further limit access by minors to inappropriate material.
- Circumvention to protect personal privacy by defeating technology that collects or disseminates personal information about online users.
- Circumvention for the purpose of testing computer security.
Under the DMCA, the Copyright Office was mandated to determine whether particular classes or categories of works should be exempted from the anti-circumvention laws. The Copyright Office issued its rules in October 2000,3 finding only two such classes of works:
- Compilations consisting of lists of websites blocked by filtering software applications; and
- Literary works, including computer programs and databases, protected by access control mechanisms that fail to permit access because of malfunction, damage, or obsolescence.
I mention this not because the rules themselves are of particular importance to our discussion today, but rather to demonstrate that the exceptions to the anti-circumvention provisions are very narrow. In most instances, it is illegal to defeat copyright protection technology.
Some constituencies, particularly the library and educational communities, are concerned that these exceptions do not go far enough and that the anti-circumvention provisions of the DMCA will hasten a slide into what they derisively call a "pay-per-use" world. With the library exception, for instance, circumvention is allowed in order to evaluate the work for acquisition purposes, but not for the purpose of using the work in a way that might qualify as fair use. Educators, researchers, and students worry that they could find themselves paying for access to works which they had previously perceived as being freely accessible and that they may be limited, by technology, in their use of the works.
The counter-argument here, of course, is that copying and sharing of digital works is just too easy and that widespread circumvention of protection technologies will lead to widespread copyright infringement. Experience has shown that every advance in protection technology has been matched by advances in hacker technology and that no technology is safe from hacking. Since we are unlikely to have hacker-proof technologies, we can at least make the act of hacking or circumvention illegal.
The fears of publishers on the one hand and academics on the other figure prominently in the copyright debate in the U.S. Within the legal community, there is a parallel debate between those who believe that a legal framework must be put in place now if electronic publishing and distribution is to flourish versus those who argue that we need to give more time for technologies and business practices to develop before we try to impose legal standards. These conflicting views of the world were on full display in another study performed by the Copyright Office pursuant to the DMCA, this one dealing with Distance Education.
As I mentioned before, there is a fair use provision in U.S. law which allows for the performance and display of copyrighted works in the course of face-to-face teaching activities. Distance education, of course, takes place over computer networks or through video conferencing, not face-to-face. Distance learning is being hailed in the U.S. as the next big trend in education. The demand for distance learning courses growing and there are many traditional and non-traditional education providers rushing to meet that demand. The economic stakes here are huge and the treatment of copyrighted works used in distance education is a major issue.
On one side, educators and others argue that distance education should be treated like traditional education in that instructors should be able to display or perform copyrighted works for teaching purposes, regardless of whether the performance or display takes place in a classroom or over a computer network. Further, they contend, probably quite rightly, that publisher permissions departments are slow and generally not prepared to deal with permissions requests for electronic uses of their material. To require instructors to obtain and probably pay for permission to use material in online courses will restrict the information that can be included in such courses and probably inhibit the growth of distance education.
Publishers contend that distance education is different from traditional education in the way that copyrighted works are used, with the core material of most traditional courses consisting of printed books and other purchased material, with display or performance of other works being quite secondary. Distance education, on the other hand, can more easily incorporate excerpts of various works and different types of material, with much of the material only being displayed on the computer screen. To allow a broad copyright exemption for distance education would effectively kill the market for electronic publishers and would provide a strong disincentive for educational publishers to make any of their titles available electronically. Publishers also cite a general fear here that digital works made available in online courses will ultimately be shared with people outside the course.
The Copyright Office issued its findings in May 1999 in its Report on Copyright and Digital Distance Education.4 The Report includes an explanation of the traditional face-to-face teaching exemption, as well as analyses of technology and licensing trends in publishing and education. The recommendations contained in the report represent a clear attempt to balance the concerns of educators and publishers, while also addressing the issue of whether the market should be allowed more time to develop before we make any changes to the copyright laws.
The Copyright Office recommendations can be summarized as follows:
- The face-to-face teaching exemption of section 110 of the U.S. Copyright Act should be expanded to include digital delivery to "remote locations, whether or not in a physical classroom."
- That the exemption should continue to apply only to non-profit educational institutions. For-profit distance education providers, who make up a significant part of the growing distance education industry in the U.S., could not claim the exemption.
3. That the distance learning provider (i.e. the educational institution) be required to implement "safeguards to control the risks of unauthorized dissemination." These safeguards should include "technological measures...[to] protect against both unauthorized access and unauthorized dissemination after access has been obtained."
These recommendations have not been enacted into law yet, but probably will be. They address publisher concerns about widespread unauthorized distribution of material by imposing a burden on the educational institution to prevent it. Some have argued, though, that the Report does not provide enough guidance as to when the educational institution should or must seek a license to use copyrighted material and when material can be used without permission or compensation.
It should be noted here that the technological protection measures which the Report says the distance learning provider should implement will in all likelihood have been applied by the publisher or by an authorized distributor before the digitized material even reaches the school. Who is to be given access to the material and the terms and conditions of use should be matters of negotiation and cooperation between the licensing publisher and the licensee institution, but the publisher's digital rights management system will probably have applied some sort of access- and usage-controlling technology prior to distribution.
I have alluded to two studies mandated by the DMCA, one having to do with the classes of works to be subject to exemption from the anti-circumvention rules and the other dealing with copyright and distance education. A third study, examining the first sale doctrine and digital works, is underway.5 The first sale doctrine, as embodied in section 109 of the Copyright Act, allows the owner of a copy of a copyrighted work to sell, transfer, or otherwise dispose of that copy without the authorization of the copyright owner. Digital copies are obviously different from physical copies, in that digital copies can be "shared" without necessarily giving up possession of the first copy. If I lend my copy of a printed book to you, in the end there is still only one copy between us. But how do I "lend" my copy of an electronic book to you?
Publishers and others argue that the first sale doctrine should not apply to digital works, since it is not realistic or even reasonable to expect me, as the lender in our example, to delete my copy of the file after having emailed a copy to you. Testimony submitted to the Copyright Office by publishing and media companies states unequivocally that the sharing of digital files is accomplished not by sharing one copy of the file, but rather by making and transmitting a second copy of the file.6
In reality, one cannot say at this point that the lending or sharing of a digital work necessarily involves the making of a second copy, at least not as we generally think about copying. Digital rights management technologies make it possible, through time-based access and other means, for a single copy of a digital work to be shared by multiple people, with only one having access at any given time. For example, let's say that I downloaded a copy of an electronic book ("e-book") and now want to lend the book to you. The digital rights management software applied to my e-book could allow me, and in the future probably will allow me by default, a Lending or Transfer right. What I would transfer to you would include not only a copy of the book, but also my viewing rights. A copy of the e-book might still exist on my computer, but I would not be able to access it during the lending period. At the end of the lending period, your ability to view the copy on your computer would expire automatically and my right to view the copy on my computer would automatically be revived. It is possible or even likely that the copy of the e-book that you had on your computer would actually uninstall itself, so that the file would not even exist on your computer anymore.
Testimony describing the relationships between various access-control technologies and the first sale doctrine was submitted to the Copyright Office, which has not yet issued its findings or recommendations. It is clear, though, that while the ease of copying digital works would seem to render the first sale doctrine irrelevant in cyberspace, rights protection technologies are advancing very rapidly and will allow for some sorts of lending transactions.
While we do not know what the Copyright Office will have to say on the first sale doctrine and digital works, the anti-circumvention provisions of the Digital Millennium Copyright Act and the recommendations of the Copyright Office on distance education indicate that the law does indeed recognize the trend towards increased reliance on technology to protect copyrighted works. Whether protection technology will be used simply to prevent widespread illegal copying or will instead be applied so as to require payment for access or usage that would in the past have been free remains to be seen.
LICENSING AND THE UNIFORM COMPUTER INFORMATION TRANSACTIONS ACT
As noted earlier, a second major business trend in electronic publishing in the U.S. is increased reliance on licensing transactions, rather than sale transactions, to distribute copyrighted works. We are all presumably familiar with the licenses that come with store-bought software, commonly referred to as "shrink-wrap licenses." They are called such because they become effective, or at least licensors hope they become effective, when the buyer/licensee indicates acceptance of the terms of the license by breaking the shrink-wrap in which the software disk is encased. Most of us have also by now seen the next generation of this type of license, the "click-through license." Click-through licenses are presented to us on our computer screens, usually upon installation or download of software or upon entrance to a website. As the name implies, we enter into the license by clicking on an on-screen button indicating our acceptance of its terms.
Shrink-wrap and click-through licenses are used extensively in the distribution of mass-marketed software and in the accessing and downloading of various forms of digital content on the web and on CD-ROMs. A major legal initiative has been underway in the U.S. for the past few years to articulate standard rules for the validation and interpretation of all forms of transactions involving digital information. This initiative has culminated in the Uniform Computer Information Transactions Act ("UCITA"),7 a proposal being considered by a number of state legislatures.
UCITA is intended to govern all transactions involving "computer information," which is defined as "information in electronic form which is obtained from or through the use of a computer or which is in a form capable of being processed by a computer." In other words, UCITA covers any transaction in software, digital text, digital images, digital audio, and digital video. Its most important and controversial provisions deal with "mass market licenses," which are consumer contracts and certain end user licenses which use a standard form. The shrink-wrap and click-through licenses described above would qualify as mass market licenses under UCITA.
The mass-market license provisions of UCITA are controversial in part because there has been considerable disagreement among U.S. legal experts and courts as to whether such licenses are even valid. UCITA expressly validates mass-market licenses, provided that the consumer is given adequate notice as to the provisions of the license and is required to demonstrate acceptance. Clicking an acceptance button on the screen would suffice for the latter requirement.
UCITA is also controversial because it raises questions about the relationship between copyright law and contract law. Under U.S. law, federal matters are governed by federal law and cannot be contravened or superceded by state law. In the case of copyright, which is a federal matter governed by the federal Copyright Act, this means that states cannot limit or expand copyright rights through state law, whether that state law be contract law, trade secret law, competition law, etc. The question is whether mass-market licenses tread into territory covered by copyright law.
On the face of it, copyright law and contract law should not conflict. Copyright law governs the rights of the copyright owner as against the rest of the world, whereas a contract involves private conduct between transacting parties. The dilemma comes when the contract is formed not as the result of negotiation between two parties, but rather in a mass market context in which the licensee can only gain access to the information by agreeing to the terms of a "one size fits all" mass market license. Here, the licensor is effectively using the contract, the license, to govern his rights as against the rest of the world. But the court in one noteworthy case, ProCD vs. Zeidenberg,8 did not find this type of arrangement to conflict with copyright law, so long as the terms of the agreement were conspicuous and the licensee had reasonable opportunity to accept or reject them. It is important to note that the contract in the Pro CD case concerned a CD-ROM database of telephone numbers and addresses which would not qualify for copyright protection. UCITA would essentially codify the Pro CD view of mass market licenses, including the ability to control by license content that cannot be protected under copyright.
The relationship between copyright law and contract law is not just a matter of academic debate. Information transactions are clearly moving toward the licensing model, rather than the purchase and sale model. Electronic reference titles and databases are already being licensed rather than sold. Subscription agreements for electronic journals are a form of license. Electronic books are being distributed via site licenses, as well. And there are disagreements between publishers and librarians, as licensors and licensees, respectively, over the terms of these licenses. In particular, librarians resist terms that are more restrictive than what would be allowed under copyright, such as when a license prohibits uses that might qualify as fair use under copyright law. Of course, some publishers argue that fair use does not or should not apply to digital works, so there is little agreement about how such terms should be handled in licenses.
However these contractual matters are resolved in the near-term or how the policy issues are resolved in the long-term, the shift to the licensing model is unmistakable. Accordingly, U.S. electronic publishers who want to license their products must be aware of contract and consumer protection law, along with copyright law.
DIGITAL RIGHTS MANAGEMENT SYSTEMS
Before moving on to some of the court cases involving electronic publishing, let me take a few minutes to discuss digital rights management systems. The WIPO Copyright Treaty and the Digital Millennium Copyright Act make it illegal to circumvent copyright protection technologies. What are these protection technologies? In this section, we will examine the technology platforms and rights data initiatives that are coming together to form the backbone of comprehensive digital rights management systems.
ContentGuard, Inc., which was spun out of Xerox last year and is now owned jointly by Xerox and Microsoft, is a leader in the emerging digital rights management industry. The company offers comprehensive digital rights management solutions, including secured content delivery and a variety of content- and rights-related services, including "business and technical consulting, classroom and web-based training, content conversion and distribution, web site construction, rights and royalty clearing, and customer support."9 Xerox, prior spinning out ContentGuard, developed XrML (eXtensible Rights Markup Language), "an XML-based language that assigns usage rights terms and conditions to content."10 ContentGuard "has licensed the XrML specifications to the industry royalty-free, in order to drive the adoption of eContent and DRM standards by ensuring interoperability of digital rights management (DRM) solutions."11 ContentGuard, in a white paper entitled "XrML - The Technology Standard for Trusted Systems in the eContent,"12 has also provided as elegant a description of digital rights management as I have seen, which is why I mention them here. That description reads as follows:
Digital Rights Management (DRM) permits the smooth, secure, trusted movement of digital works from creators and publishers to retailers and consumers. The author first creates a work. The eContent owner can then edit and finish the original work by aggregating it with other edited works. Utilizing DRM, publishers then assign rights to a digital work and stipulate fees and access conditions resulting in an XrML license governing the exercise of each specific right. DRM enables eTailers to establish prices associated with different business models and consumers. The consumer can then access digital content with a valid license, which will trigger an automated process for royalty payments.
Licenses created based on XrML can only be read, written, and modified by authorized agents, typically trusted software programs to prevent tampering and unauthorized access.
DRM makes possible diverse, information-based business models as well. These include aggregation (such as permitting consumers to select music from various artists represented by different music publishers), subscriptions (joining clubs offering lower prices for quantity purchases or proactive announcements of special interest to the consumer), and rentals, which benefit consumers who seek access to all or part of a digital work for a limited period of time. DRM can even allow a consumer to transfer the digital work to another party. The digital work itself will point the receiving party to the commerce site to acquire access rights. When digital work is transferred to analogue or portable media such as paper and CD, rights can be transformed and audited via watermarking technology. To print digital content on paper, rights can be enforced by a trusted printing system in which only authorized printing can be processed.
DRM benefits the entire eContent industry - even if the digital work is eventually produced in physical form - because it:
- Ensures security and protection of content by minimizing the risk of duplication and distribution without compensation. This is critical, because while mass copying of physical content can be expensive, a large volume of digital copies can be made and distributed in a moment.
- Protects the integrity of content for everyone in the value chain, ultimately assuring consumers that purchased or rented content is not abbreviated, altered or added to at any stage of transfer.
- Provides for unlimited combinations of rights, terms and conditions, all embedded into content.
- Enables content owners to enter the online world rapidly and with full confidence.
- Gives publishers and retailers the tools for tracking access to, and distribution of, content as well as valuable information for marketing existing works and developing new ones.
- Allows consumers to transfer content between their own digital platforms without physical copying involving discs or other storage devices.
The rights and protection stay with content throughout its life to create truly persistent protection.13
This is the type of "effective technical measure" that is protected by the anti-circumvention provisions of the Digital Millennium Copyright Act and this type of technology will facilitate the licensing of digital content. Digital rights management represents a convergence of technology, law, and business practices. It remains to be seen how this convergence will ultimately affect information policy and the flow of information in our society.
Attorney Glen M. Secor is CEO of LearningLaw LLC and is an Adjunct Professor of Law at Franklin Pierce Law Center, Concord, New Hampshire.
Pub. L. No. 105-304, 112 Stat. 2860 (Oct. 28, 1998), codified at 17 U.S.C. §1201, et. seq.
17 U.S.C. 1201
37 CFR Part 201 (2000), found at http://www.loc.gov/copyright/fedreg/65fr64555.html
See, e.g., comments submitted by Bernard Sworkin, Senior Counsel, Time Warner, Inc., http://www.loc.gov/copyright/reports/studies/dmca/comments/Init029.pdf
See generally Reinemann, E. Maria, The Uniform Computer Information Transactions Act at a Glance, NH Bar Journal Vol. 41 No. 4 (Dec. 2000), p. 64
ProCD, Inc. v. Zeidenberg, 86 F3d. 1447 (7th Cir. 1996)
Press release announcing the launch of ContentGuard's new RightsEdge service, found at http://www.contentguard.com/press_012401.htm
XrML FAQ document, found at http://www.xrml.org/faq.htm