1. Copyright Law and Technology Developments.

{1} The Constitution empowers Congress to "promote the progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." [2] It is from this clause the federal power to enact both copyright and patent legislation is derived. [3] The exercise of this power requires "a difficult 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 hand." [4] Advances in technology have frequently tilted this balance and have required changes in legislation.

{2} Historically, copyright laws were created in response to technology advancements. For example, the development of English copyright law, which preceded our country's copyright law, was a reaction to the invention of the printing press, which made it feasible to distribute copies of writings in unprecedented numbers. [5] Early this century in our country, controversy arose over the development and marketing of player pianos and perforated rolls of music. [6] Motion pictures were expressly brought within the scope of federal copyright protection in 1912. [7] A need for a complete overhaul in copyright law due to "significant developments in technology and communications" was recognized in 1955. [8] The earnest overhaul began in 1964, but was delayed from 1967 to 1974 by disputes regarding cable television. [9] In the meantime, "sound recordings" were made protectible under federal copyright law in 1972, which was a response to "record piracy" concerns after the development of the audio tape recorder. [10] The efforts begun in 1955 ultimately led to the Copyright Act of 1976. [11] This 1976 Act extended copyright protection to many new types of works including radio and television broadcasts, so long as they have been "fixed" by a recording made simultaneously with their transmission. [12]

{3} Copyright protection was extended to computer programs, at least arguably in the 1976 Act, and expressly by new legislation in 1980. [13] However, the extent to which software is protected is still being actively litigated, [14] including the very recent U.S. Supreme Court ruling in Lotus Development Corp. v. Borland Int'l, Inc., [15] which left the menu command hierarchy of that program unprotected.

{4} In 1984, the sale of Betamax videocassette recorders, which enabled home copying of television programs, was challenged under the copyright statute as a "contributory infringement" of copyright, [16] but the Supreme Court found the recorders were capable of substantial non-infringing uses, including "time shifting" [17] and the sale of the recorders was not a contributory infringement of copyright. In the same year, Congress, by statutory amendment extended copyright-like protection to semiconductor chip "mask works," [18] and prohibited royalty-free rentals of record albums to consumers who were copying them onto audiotapes. [19]

{5} In 1988, the proliferation of television satellite dishes allowed satellite carriers to make money from "secondary transmissions" to home viewers without paying royalties to the copyright owners, and a law was passed which provided for compulsory license fees to be paid by these carriers. [20] In the same year, Congress enacted the Berne Convention Implementation Act of 1988. This Legislation was designed to bring U.S. copyright law closer to that of foreign member nations [21] of the Berne Convention, a treaty which has been in existence in various forms since 1886. [22] Although this legislation may not have been a direct reaction to technological innovation, it reflected the increasing importance of international commerce and markets for U.S. intellectual property, which is attributable to technology innovations. [23] One of the significant changes of the Berne implementation is the assurance of certain protections [24] of U.S. works abroad in member nations. It also provided that works published after March 1, 1989 do not require a copyright notice to be eligible for protection. [25]

{6} In 1990, as computer software became frequently used for personal computing and games by home consumers, software "rental" became common. As a result, a law was passed which imposed restrictions upon software rental by those "acting for purposes of direct or indirect commercial advantage." [26] However, this same law also enacted the "Red Baron" exemption to allow video arcade consoles to be used without paying a "performance" royalty to the copyright owner each time the game was used. [27] That same year, Congress accorded protection to a new category of "architectural works"  [28] in order to comply more fully with the Berne Convention.

{7} In 1992, the recording industry perceived a grave threat from the introduction of the digital audio tape (DAT), which allowed digital recordings to be made from audio compact discs. The DAT manufacturers and the recording industry decided it would be better to compromise than to roll the dice on another Betamax-type challenge. [29] The compromise was presented to Congress, and legislation was enacted which allows manufacturers to sell DAT tape machines to audiophiles, who may use them for home taping without commercial motivation. Each machine is outfitted with a serial copy management system (SCMS) which allows unlimited first generation digital copies, but prevents making copies of copies. The Act also establishes a royalty system through which manufacturers and importers of DAT machines and tapes make payments to the Copyright Office. These royalties are then distributed to record companies, performers, music publishers and songwriters. [30]

{8} On December 8, 1994, the Uruguay Round Agreements Act ("URAA") was enacted, implementing more Berne Convention norms. [31] It created civil and criminal remedies for "bootlegging" sound recordings of live musical performances and music videos, [32] and added a new provision for restoring copyright in certain foreign works which had lapsed into the public domain under previous law. [33] The Copyright Office position is that restoration of copyright in eligible works from eligible countries occurred automatically on January 1, 1996, but the URAA directs the owner of a restored work who plans to enforce those restored rights against a "reliance party" to notify the reliance party [34] by providing actual notice through service of a Notice of Intent To Enforce ("NIE") or by providing constructive notice through the filing of an NIE with the Copyright Office. The Office will publish the first listing of NIEs no later than May 1, 1996, and will publish lists at regular four-month intervals for a period of two years thereafter. [35]

{9} The most recent amendment to the U.S. copyright law was The Digital Performance Right in Sound Recordings Act of 1995. [36] The Digital Performance Act creates an exclusive right for copyright owners of sound recordings, subject to certain limitations, to perform publicly the sound recordings by means of certain digital audio transmissions. [37] These provisions will apply to, among others, an "interactive service" which transmits sound clips. Thus, copyright law has begun to deal with the Internet. As discussed below, there may be more Internet-related copyright legislation in the near future.

{10} In February 1993, President Clinton formed the Information Infrastructure Task Force ("IITF") to "articulate and implement the Administration's vision for the National Information Infrastructure ("NII")." [38] Shortly thereafter, a "Group on Intellectual Property Rights" (hereinafter the "Group") within the IITF, chaired by Bruce A. Lehman, the Commissioner of Patents and Trademarks, set out to perform "examination and analysis of each of the major areas of intellectual property law, focusing primarily on copyright law and its application and effectiveness in the context of the NII." [39] The Group released a preliminary draft report (the "NII Green Paper") on July 7, 1994, held hearings in September 1994, and after considering some 1500 pages of written comments by more than 150 individuals and organizations, [40] released its final Report (the "White Paper") on September 5, 1995. The Group admits the White Paper does not "provide all of the answers" and that it "may not even present all the questions." [41] However, it did make recommendations for changes in the copyright statutes it characterizes as "minor clarification and limited amendment." [42] Not everyone agrees this characterization is accurate. [43] In addition to recommending changes in the Copyright Act, the White Paper sets forth many opinions about how existing statutory and case law should apply to the NII without statutory changes. These opinions may influence courts in future cases.

{11} On September 28, 1995, only a few weeks after the release of the White Paper, Senator Orrin G. Hatch (R-Utah) [44] introduced the National Information Infrastructure Copyright Protection Act of 1995 (S. 1284) into the Senate, and Congressman Carlos J. Moorhead (R-Cal.) introduced identical legislation in the House of Representatives (H.R. 2441). These bills are virtually identical to the suggested legislation of the White Paper (the proposed Statutory Markup for each is the same and is attached as Exhibit 7 to this paper), but changes may be made during the legislative process. [45]

2. White Paper Analysis.

{12}This section follows the White Paper analysis of copyright law as it is and as it needs to be in the "NII environment" (i.e., in order to effectively work on the Internet). The White Paper is 269 pages long without the appendices.

a. "Big Picture" Issues About Copyright Law and the Internet.

{13} Of the White Paper, the Group addresses several "big picture issues." The Group discusses many of the potential benefits of a healthy NII. [46] The Group quotes the Copyright clause of the Constitution, as discussed in the first paragraph of this paper, and agrees it is not the primary purpose of copyright law to reward the labor of authors. [47] But the Group goes on to argue that it must offer authors some reward to provide incentive for authorship and publishing, and argues further that their rights will be balanced, and the free flow of information maintained, through the denial of copyright protection for facts and ideas. [48] Then, the Group considers and rejects arguments for the proposition that copyright protection should be reduced in the NII environment (e.g., free flow of information will be enhanced by rewarding authors and allowing others to use the ideas for free but not the expressions). [49] It also considers and rejects the opposing argument that copyright law should be expanded and the fair use doctrine (discussed below) eliminated on the NII because it will be technologically feasible to "meter" each use of a copyrighted work. [50] The Group concludes it will, through "minor clarification and limited amendment," neither weaken copyright owner's rights nor "dramatically increase" them. Thus, leaving one to conclude that they will recommend some level of increase, which is in effect what they do.

b. Copyrightable Subject Matter and Scope of Protection.

{14} Works eligible for copyright protection include "original works of authorship fixed in any tangible means of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." [51] The Group finds this definition is broad enough to encompass floppy disks, compact discs, CD-ROMs, optical disks, digital tape and other digital storage devices. [52] It considers the trickier issue of whether interactive works are "fixed" (given the user's ability to constantly alter the sequence of the action), but concludes that this issue has been resolved affirmatively by the courts in the context of video games. [53] It then decides, however, that a "live transmission" via the NII is not, in and of itself, a fixation, and that a transmission will not be protected by federal copyright law unless it is being fixed at the same time it is being transmitted. [54] The Group then considers what means of fixation are "sufficiently permanent or stable," and makes a thin distinction between a work which is "captured momentarily in the 'memory' of a computer," which would be too "purely evanescent or transient" in nature, and e-mail which resides in RAM (random access memory), which is considered has been found sufficient to be a "copy." [55]

{15} The White Paper does not address the issue of whether using a World Wide Web browser constitutes copying. However, if more than a few seconds storage in RAM is the White Paper standard, then it probably is considered copying. Therefore, there is potential infringement if the owner of the site or more precisely, the owner of the copyrights of the material on the site has not consented to the browsing "copy." The case for copying is even stronger for browsers that use a "cache" on the hard drive to store sites, as do several of the most popular browsers. The question is whether browsing is closer to reading a magazine at the magazine stand which is not a copyright infringement or copying the magazine on a photocopy machine which is possibly a copyright infringement. The result is counter-intuitive; it is more analogous to the former. Also, the norm on the Web is that owners of Web sites want people to browse their sites, and if they want you to pay for that privilege they normally password-protect the site. In these circumstances, there is an argument for an "implied license" or an "implied consent" to browse.

{16} The White Paper also does not address the issue of whether creating a link on your Web site to someone else's Web site constitutes an infringing display, compilation, derivative work, or perhaps reproduction. Have you now contributorily infringed because the visitor is actually being linked by you to make a "copy" of another Web site? Again, there is a colorable implied consent argument here given the promotional nature of much of the Web.

c. Copyright Publication Issues.

{17} The status of a work as published or unpublished became less important after the Copyright Act of 1976 became effective on January 1, 1978, and works no longer have to be published to be eligible for federal copyright protection. However, the status of a work as published or unpublished still has some significance even today for certain purposes. [56] The Group, concluding that the current definition of "publication" in 17 U.S.C. § 101 did not adequately cover "transmissions" over the NII, has recommended a change to the definition of "publication" to include transmission as a means of publication. See Exhibit 7.

d. The Idea/Expression Dichotomy and Unprotected Works.

{18} The White Paper discusses the fact that copyright protection does not extend to ideas or facts, but only to the form of expression of ideas and facts, and only to the extent that those ideas or facts can be reasonably expressed in more than a single way. [57] The Group also points out that there are certain types of works (titles, names, short phrases, slogans, etc.) which are not protected. No change is suggested to this scheme, and this part of the report may have been included as an attempt to mollify those who are nervous about the increased scope of copyright protection under the White Paper scheme.

e. Categories of Protectible Works.

{19} "Works of authorship" qualifying for protection under the Copyright Act include the following categories: [58] (1) literary works, [59] (2) musical works, including any accompanying words, (3) dramatic works, including any accompanying music, (4) pantomimes and choreographic works, (5) pictorial, graphic and sculptural works, [60] (6) motion pictures and other audiovisual works, [61] (7) sound recordings, [62] and (8) architectural works. [63]

{20} The Group notes that most of the works currently available on the NII are literary works, but that many other types are represented. [64] The White Paper also discusses "compilations," [65] such as directories, databases, and anthologies, and "derivative works," [66] such as translations, abridgments, and fictionalizations, which are subsets of the eight categories above and thus protected. However, this protection does not extend to the preexisting material. [67]

{21} These categories are important in the NII context because of the prevalence and popularity of "multimedia" works. "Multimedia" works are actually misnamed becuase these works don't comprise multiple media, like a book attached to a videotape, they combine multiple categories of copyrighted works into a single medium, such as CD-ROM. [68] Most multimedia works would be considered compilations for copyright law purposes, but they must also be classified for analysis under the eight categories in 17 U.S.C. § 102 described above. These classifications are important for several reasons: (1) two of the exclusive rights granted to copyright owners in 17 U.S.C. § 106 (discussed below) apply only to certain categories of works; (2) many of the copyright limitations in 17 U.S.C. § 108-120 do not apply to all types of works, and (3) classification of works for purposes of registration will effect deposit requirements and other particulars of that process. The Group stops short of recommending the consolidation or elimination of categories in § 102 or the harmonization of the differing applications of rights and limitations on those rights. The Group states it is likely that such harmonization will be appropriate in the future. [69] It notes that for now, most multimedia works probably fall into the classification of "audiovisual works."

f. The Copyright Owner Has a "Bundle of Rights."

{22} It would be a bit misleading to say that a copyright is simply a right to prevent others from copying. More precisely, the owner of the copyright has the exclusive right to engage in and license others to engage in each of the following five activities which applies to the category of his work: (1) to reproduce the work in copies or phonorecords, [70] (2) to prepare derivative works [71] based upon the work, (3) to distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease or lending, (4) to perform [72] the work publicly (this right is limited to literary, musical, dramatic and choreographic works, pantomimes and motion pictures, and other audiovisual works), (5) to display [73] the work publicly (this right is limited to literary, musical, dramatic and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work). [74] A sixth right (or actually, for owners of copyrights in sound recordings, a right similar to (4) above) was added on February 1, 1996: "to perform the copyrighted work publicly by means of a digital audio transmission." [75] A work created [76] on or after January 1, 1978, has a copyright term of 50 years after the last surviving author's death, except for works made for hire, [77] and for anonymous and pseudonymous works unless the author's identity is revealed in Copyright Office records, which have a copyright duration of 75 years from publication or 100 years from creation, whichever is shorter. Older works may have terms of other lengths.

{23} Exercise of the rights to reproduce, distribute and display or infringement of those rights by an unauthorized party require that there be a "copy" of the work. The definition of "copy" in 17 U.S.C. § 101 requires a "material object" in which a work is "fixed." The Group expresses a concern that "live" transmissions via the Internet will not meet the fixation requirement and will not be protected by copyright unless simultaneously fixed while transmitted. [78] However, the Group states a copy is made and the reproduction right has been infringed: (1) when a work is "placed into a computer" (whether on disk, ROM or in RAM "for more than a very brief period"; (2) when a printed work is scanned into a digital file; (3) when other works (e.g., photographs, motion pictures and sound recordings) are digitized; (4) when a digitized file is "uploaded" or "downloaded" from a BBS or server, and; (5) even when an end-user's computer is employed as a "dumb" terminal to access a file resident on another computer. When a file is transferred from one network user to another, the Group opines that several legally cognizable copies have been made. [79]

{24}The Group concludes: (1) that one has created a derivative work by transforming an audiovisual work into an interactive work; [80] (2) a BBS operator ("sysop") has distributed a work even if someone [81] other than the sysop uploaded it and downloaded it; (3) a performance has occurred when a video file is rendered (shown on the screen) but not when it is merely downloaded, [82] and; (4) the display has occurred when a user has "browsed through copies of works in any medium." [83]

g. Authors of Works of Visual Art Have Rights of Attribution and Integrity.

{25} Since June 1, 1991, authors of works of visual art, [84] as opposed to the copyright owner, who may be different person or entity, have had the "moral rights" of attribution and integrity. [85] Attribution includes the author's right, for the duration of his life, (1) to claim authorship of the work, and (2) to prevent the use of his or her name as the author of (a) other works of visual art which he or she did not create, and (b) his or her own works which have been subjected to "distortion, mutilation, or other modification of the work which would be prejudicial to his or her honor or reputation." [86] Integrity includes the right to prevent any intentional distortion, mutilation, or other modification of the work which would cause such prejudice to honor or reputation, and to prevent any destruction of a "work of recognized stature." [87] It has been argued that similar rights of attribution and integrity should apply to all works in the Internet, [88] but that is not in the current legislation proposed by the Group in the White Paper.

h. Ownership Issues.

{26} The White Paper makes the following statements, among others, about ownership, but does not identify any NII-specific issues. Copyright ownership in a work initially vests in the author. [89] If there are two or more authors, it is a "joint work" and results in co-ownership of the copyright. There are two types of "work made for hire": (1) those in which an employee has prepared a work within the scope of his employment and the employer is deemed the author and copyright owner, and (2) those in which an independent contractor has prepared the work by special order or commission in which the copyright vests in the person for whom the work was prepared if the work falls into one of nine specified categories [90] and if the parties expressly agree in writing that the work will be considered a work made for hire.

{27} Copyright ownership entitles one to do any of the following three things with respect to the exclusive rights granted under 17 U.S.C. § 106: (1) exercise them, (2) authorize others to exercise them, and (3) prevent others from exercising them. Ownership of the copyright in a work is distinct from ownership of any material object in which the work is embodied because transfer of ownership in the object does not alone transfer ownership in the copyright. The reverse is also true. The copyright owner may, however, transfer any of the exclusive rights in whole or in part to one or more persons, but the transfer must be in writing and must be signed by the transferor. [91]

{28} The signature and writing requirements raise a potential NII issue the White Paper does not discuss except in passing. [92] There is at this time no federal statute implementing digital signatures (signatures using public key encryption technology to authenticate an electronic transaction) but a few states have enacted them. Will a state law considering a digital signature on a digital message to be just as good as a signed writing or will it be preempted by the copyright statute? If the latter, will it be impossible to transfer copyrights in Internet works over the Internet?

i. Licensing Issues.

{29} Exclusive licenses [93] must be in writing. Non-exclusive licenses need not be. Limitations on exclusive rights, such as the first sale doctrine (discussed below), fair use or library exemptions, may be overridden by contract (to the extent of making the act or omission a contract breach but not to the extent of making it an infringement).

{30} The White Paper identifies "non-contemplated uses" as an NII issue. As new uses for copyrighted works increase, conflicts will arise between the owner and the licensee with respect to uses of the work that were not contemplated when entering into the license agreement. [94] The owner will argue all rights not expressly transferred are still his. The licensee will argue rights falling within the category of rights granted should automatically fall within the scope of the license. They will both find cases to cite in support.

{31} The Group expects that licenses will be transacted online and offline, and individually and collectively. [95] The Group recommends leaving the resolution of these issues to the marketplace, and does not recommend increasing the current level of "compulsory" licenses in the copyright statutes.

{32} One of the major statutory recommendations made by the Group relates to copyright management information. [96] The Group apparently views these provisions (along with civil damage remedies for providing false information or removing information, and even 5 year prison sentences for such acts taken with intent to defraud--see Exhibit 7) as merely "fine-tuning" the statute to facilitate licensing efforts. Other commentators view it as a "major change" aimed at "ensuring that publishers can track every use made of digital copies and trace where each copy resides on the network and what is being done with it at any time," thus chilling fair use of the works. [97]

j. Fair Use.

{33} Members of the public may make "fair use" of works even if they are copyrighted. [98] There are four statutory factors used to decide whether a particular use of a copyrighted work is a "fair use": (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. [99] Courts have felt free to apply other factors (and the statute seems to allow it). Fair use analysis is very fact specific to each case and few bright lines have separated what is and is not fair use.

{34} The White Paper contains a discussion of the fair use doctrine [100] which does not distinguish the NII context from any other context except for the arguments that: (1) if it is easier in the NII context than in other contexts to obtain a copyright license then it is less likely courts will find fair use in any alleged infringement on the NII; [101] and (2) the Group has attempted to produce fair use guidelines by convening a conference of over 60 people monthly since September 1994. If agreement can be reached by the members of such a conference on guidelines as to multimedia, browsing, distance learning, library preservation or other areas, then these guidelines may carry some weight in the court's fair use analysis. [102]

k. First Sale Doctrine.

{35} The "first sale" doctrine is limitation upon the copyright owner's exclusive right to distribute. Once the owner has sold a particular copy of the work the owner may no longer control its distribution and the purchaser is free to sell it to someone else. [103] The Group takes the somewhat restrictive view in the White Paper that the first sale doctrine does not allow the purchaser to transmit a copy of the work from storage on his computer to someone else and then delete it from his computer; even though only one copy ends up in the hands of a new owner. The Group deems this a violation of the copyright owner's reproduction right, which is not limited by the first sale doctrine. [104] The Group does allow that if some technology were available which "allows the transmission of a copy without making an unlawful reproduction--i.e., no copy remains with the original owner--the first sale doctrine would apply and the transmission would not be an infringement." [105] Arguably, a more reasonable position is that form should not be elevated over substance and that the copyright statute should be modified to allow a transaction in which only one copy remains at the end, regardless of how the parties achieved that end. The Group does charitably refrain from recommending a narrowing of the first sale doctrine to exclude from its coverage all products purchased online, although this was apparently suggested to them. [106]

l. Administration of Copyrights

{36} The Copyright Office of the Library of Congress is in charge of the administration of copyrights, and the Group has made no suggestion to change this. The Copyright Office registers copyrights and issues certificates of registration. Its regulations appear at Code of Federal Regulations, Volume 37, parts 201-259 (37 C.F.R. 201-259). The Copyright Office maintains a World Wide Web site at "http://lcweb.loc.gov/copyright" which has a wealth of information, including circulars on a variety of topics and the short but informative publication "Copyright Basics." The Copyright Office is testing a new system, the Copyright Office Electronic Registration, Recordation & Deposit System (CORDS). It is the hope of the Copyright Office that after a period of testing, authors will be able to register their works electronically, transmitting both the application and the works in digital form, and the works will be made available electronically for research, education and other purposes. [107]

{37} Note, however, registration in the Copyright Office is not necessary for copyright protection to arise (that happens as soon as an eligible person fixes an original work of authorship in a "tangible medium of expression" [108] --writing a poem on a piece of paper, for example, or saving a software program to a floppy disk--with or without a copyright notice and with or without a registration). The registration will be necessary before you can file suit for copyright infringement in a federal court. Early registration is desirable because if registration occurs before the act of infringement, the owner may be able to recover certain statutory damages and attorney fees which would otherwise not be available. The copyright notice, while optional, is also desirable because it will help to defeat an "innocent infringer" defense, and enhance damage recovery in the event of an infringement.

{38} The owner of copyright or the owner of the exclusive right of publication in the work has a legal obligation to deposit in the Copyright Office, within three months of publication in the United States, two copies (or in the case of sound recordings, two phonorecords) for the use of the Library of Congress. Failure to make the deposit can result in fines and other penalties but does not affect copyright protection.

3. Statutory Recommendations in the White Paper.

{39} In the White Paper, the Group makes the following recommendations as modifications to the existing copyright law so to "accommodate and adapt the law to technological change so that the intended balance [between copyright owners and users] is maintained and the Constitutional purpose [to promote the progress of science and the useful arts] is served" [109]:

{40} a. Distribution by transmission. Amendment making an "express recognition that, as a result of technological developments, the distribution right [set forth in 17 U.S.C. § 106(3)] can be exercised (or infringed) by means of transmission -- just as the reproduction, public performance, and public display rights [set forth in 17 U.S.C. § 106(1), (4) and (5)] may be." The Group argues this is not a new right but an express recognition of what the law already intends. [110] Professor Samuelson argues this is a deprivation of the "first sale" right that the public has long enjoyed in the print world. [111]

{41} b. Publication by transmission. Amendment of the definition of "publication" and the definition of "transmit" to "recognize that a work may be published through the distribution of copies of the work to the public by transmission." [112] The Group says private e-mail messages or transmission of copies within the company computer network (with restrictions on further distribution) would not be deemed "published," [113] but this leaves a lot of territory with so many people using Internet e-mail now. Professor Samuelson argues that this is an encroachment on "fair use" rights that the public currently enjoys. [114]

{42} c. Importation by transmission. Amend 17 U.S.C. § 601 (and any other restrictions on importation) to reflect that importation can occur by transmission as well as physical shipment. [115]

{43} d. Public performance right for sound recordings. Amend the copyright law to grant full public performance rights in sound recordings so that an "audio on demand" service must obtain a license from, and pay a royalty not only to the person or entity who own the rights in the notes and lyrics, but also to the performer or the copyright owner of the sound recording (the latter currently does not have such rights). [116]

{44} e. Exemptions for libraries. Expand the exemptions in 17 U.S.C. § 108 for reproduction by libraries and archives to include digital copying under certain circumstances (allowing preparation of three digital copies with no more than one in use at any time). [117]

{45} f. Exemptions for the visually impaired. Provide exemptions for non-profit organizations to reproduce and distribute (at cost) to the visually impaired Braille, large type, audio or other editions of previously published literary works in forms intended to be perceived by the visually impaired (provided that the owner of the exclusive U.S. distribution right has not entered the market for editions of this type within one year of first publication of the work). [118]

{46} g. New Criminal Offense. Provide that it will be a criminal offense to willfully infringe a copyright by reproducing or distributing copies with a retail value of $5,000 or more (regardless of whether it was done for commercial advantage or private financial gain). The Group hopes to dissuade with this provision "someone who believes that all works should be free in Cyberspace." [119] This provision would be in addition to certain other criminal and civil penalties that already exist in the Copyright Act. [120]

{47} h. Prohibition of circumventing devices. Addition of a new chapter 12 to the Copyright Act, including a provision to "prohibit the importation, manufacture, or distribution of any device, product or component incorporated into a device or product, or the provision of any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate or otherwise circumvent, without authority of the copyright owner or the law, any process, treatment, mechanism or system which prevents or inhibits the violation of any of the exclusive rights under Section 106." [121]

{48}The Group feels the clause "or the law" will be sufficient to preserve fair use of the work. [122] Professor Samuelson disagrees strenuously, arguing that there is no language in the bill to the effect that a manufacturer can make a product if it has a substantial non-infringing use.and that in effect the Group is trying to legislatively abrogate the ruling in Vault Corp. v. Quaid Software, Ltd. [123] and chill all production of technology which would promote fair use of copyrighted material and even public domain material which could be protected from use by the technology. [124] Moreover, she argues, the bill as currently drafted would allow publishers to use technology to remotely search your hard drive for unlicensed copies, and it would be illegal to make any effort to block these intrusions.

{49} i. Copyright Management Information. The proposed 17 U.S.C. § 1202 would define "copyright management information" and impose civil liability on anyone knowingly providing, distributing, or importing for public distribution copyright management information which is false, or removing, altering, any such information, or knowingly distributing or importing for distribution any copyright management information that has been altered or any copies or phonorecords from which copyright management information has been removed. Section 1204 would impose imprisonment of up to five years or a fine up to $500,000 if the violation of section 1202 was committed with intent to defraud.

4. Status and Progress of the NII Copyright Protection Act.

{50} Two identical bills (S. 1284 and H.R. 2441) were simultaneously introduced on September 28 , 1995. [125] On November 15, 1995, the Senate Judiciary Committee held a joint hearing with the House Judiciary Committee's Subcommittee on Courts and Intellectual Property. As a result of this hearing, issues were identified for further hearing, two of which were how the doctrine of fair use will function in Cyberspace, and the liability of online service providers for copyright infringement. [126]

{51} The House Judiciary Committee held public hearings on the White Paper's proposed NII Copyright Act on Feb. 7 and 8, 1996. [127] The Senate hearing was held in March 1996. However, since that time the progress of the bill has been slowed by debate over a number of issues, including a major concern by commercial online services and Internet Service Providers ("ISP's") that their liability be limited for copyright infringements which occur within their services. It appears there will be more debate and public hearings on the relevant issues, and that it is unlikely this new copyright legislation will pass during the current session of Congress. However, it appears very likely that the Copyright Act will be amended within the next year or two to deal with the increasing traffic over the Internet.