Statement of Marybeth Peters
The Register of Copyrights
before the
Subcommittee on Courts and Intellectual Property
Committee on the Judiciary

United States House of Representatives
105th Congress, 1st Session

September 16, 1997

WIPO Copyright Treaties Implementation Act (H.R. 2281) and On-Line Copyright Liability Limitation Act (H.R. 2180)

Mr. Chairman, members of the Subcommittee, I appreciate the opportunity to testify today on H.R. 2281, the “WIPO Copyright Treaties Implementation Act” and H.R. 2180, the “On-Line Copyright Liability Limitation Act.” H.R. 2281 would make the changes to U.S. law that are necessary to allow the United States to join the two World Intellectual Property Organization treaties concluded in Geneva in December of 1996. H.R. 2180 would add a new section 512 to the Copyright Act, creating an exemption from infringement liability for certain acts of transmitting or providing access to material on-line, that are typically engaged in by providers of on-line services and Internet access.

H.R. 2281 — The WIPO Copyright Treaties Implementation Act

The changes that would be made by H.R. 2281 are significant but few in number. The nature and scope of copyright rights and exceptions would not be affected, continuing the substantive balance of interests embodied in today's Copyright Act. The bill's primary effect would be to add to the law two technological adjuncts to copyright, intended to ensure that rights can be meaningfully enforced and licensed in the digital environment. In addition, several minor technical changes would be made to provisions of the Copyright Act to provide the protection required by the treaties to works from other countries that join the treaties.

The Copyright Office supports the bill generally. In our view, it fully and adequately implements the obligations of the new WIPO treaties, without amending the law in areas where a change is not required for implementation. While other issues relating to how copyright law applies to the use of copyrighted works in digital form, such as the liability issues addressed by H.R. 2180, are important and should be fully debated and carefully considered by Congress, they do not need to be dealt with in order to make U.S. law compatible with the treaty obligations.

The treaties are extremely valuable for the United States, as they will require other countries to adopt a copyright system that comports with the balance already struck in U.S. law, and ensure that U.S. works are adequately protected abroad in the digital age. They have been widely hailed as fair and balanced by copyright owner and user groups alike. The sooner the treaties become effective, and the more countries that join them, the less piracy there will be of U.S. works around the world. This process may take some time, however, since the treaties will not take effect until thirty countries have joined. The United States' approach will be influential, and our prompt ratification is likely to encourage others to do the same.

In addition to satisfying our treaty obligations, the Copyright Office believes that the proposed additions to U.S. law further valuable goals domestically in and of themselves. Prior versions of the technological adjuncts were proposed in the 104th Congress as part of the National Information Infrastructure Copyright Protection Act. At that time, the Copyright Office expressed support for the goals of these provisions, but raised certain concerns about their formulation. The versions contained in H.R. 2281 represent a refinement of those prior proposals, which we view as substantially improved.

This does not mean that we see the language of these provisions as perfect. Rather, it represents a reasonable effort to achieve compromise on several difficult issues. The anti- circumvention provision in particular has raised concerns as to its scope and impact, and may need further refinement. On this and other issues, the Copyright Office has some questions and suggestions, which are described below. We look forward to working with the Subcommittee in the weeks ahead.

A. Technical Amendments

The two WIPO treaties obligate each member country to protect works from other member countries, including works in existence on the date each treaty becomes effective for that country, without imposing any formalities as conditions for the enjoyment or enforcement of rights. In order to implement these obligations, the bill would make several technical amendments to three sections of the Copyright Act: section 104, which specifies the conditions on which works from other countries are protected in the United States; section 104A, which provides protection to preexisting works from other countries; and section 411(a), which makes copyright registration a precondition to bringing suit for infringement for some works. These amendments in turn require some additions and changes in the definitional section of the Copyright Act, section 101.

The Copyright Office prepared the initial drafts of these sections of the bill, and fully supports them in their current form. These sections make those changes that are necessary to fulfill future U.S. obligations to other WIPO treaty members, and do so in a simple and efficient way.

1. Section 104: Subject matter of copyright: National origin.

Section 104 of the Copyright Act sets out the criteria making foreign works eligible for U.S. copyright protection. In its current form, it contains separate but overlapping sections relating to particular treaties. The bill would amend section 104 to add the new WIPO treaties, and re-organize its structure by listing all of the relevant factual “points of attachment,” and applying them to all countries with which the United States has an appropriate treaty relationship. Thus, all countries that have copyright relations with the United States would be referred to collectively by a new defined term in section 101: “treaty party.” The amended section 104 would then extend protection to foreign works from any treaty party based on the following four “points of attachment”: nationality of the author, place of first publication of the work, place of fixation of the sounds embodied in a sound recording, and the situs of a constructed architectural work. The amendment implements the treaty obligation in a manner that simplifies and clarifies section 104, as well as making it more easily adaptable to future changes in U.S. treaty membership. If we join any future treaties, they can simply be added to the list of “international agreements” without detailed amendments repeating the criteria for eligibility for purposes of each treaty.

2. Section 104A. Copyright in restored works.

As to retroactive protection for existing works from treaty parties, the approach is straight-forward. The amendment adds to section 104A's definition of “eligible countries” whose works are subject to restoration those countries that are parties to treaties that require such retroactivity, including the new WIPO treaties.

3. Section 411(a). Registration and infringement actions.

The WIPO treaties prohibit formalities from being imposed on the enjoyment or exercise of rights. Under current law, all works other than Berne Convention works whose country of origin is not the United States must be registered with the Copyright Office before suit can be brought for their infringement. 17 U.S.C. § 411(a). The bill would amend this provision to exempt works from members of the two WIPO treaties.

It does so in the simplest way possible, by reframing the registration requirement in the affirmative, as the converse of the current statute. In other words, the provision states affirmatively that “United States works” must be registered before suit, with “United States works” defined as the converse of the current definition of works whose country of origin is not the United States. This approach avoids the need to change several complex technical provisions of the Copyright Act each time the United States joins another treaty.

B. Technological Adjuncts to Copyright

Each of the WIPO treaties includes two provisions that require member countries to provide technological adjuncts to copyright protection. These technological adjuncts are intended to further the development of digital networks by making them a safe environment for copyrighted works to be disseminated and exploited. One provision protects against circumvention of the technology that copyright owners may use to protect their works against infringement. It is phrased in very general terms, leaving up to each country precisely how to define the prohibited conduct. The other provision prohibits the deliberate alteration or deletion of information that copyright owners may choose to provide over the Internet to identify their works and the terms and conditions of their use.

The bill would create a new Chapter 12 in Title 17 to implement these obligations. The prohibitions themselves are contained in new sections 1201 and 1202; sections 1203 and 1204 set out civil remedies and criminal penalties, respectively.

1. Anti-circumvention

a. Background and purpose

New section 1201 would implement Article 11 of the WIPO Copyright Treaty and Article 18 of the WIPO Performances and Phonograms Treaty, which require treaty members to "provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights . . . and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law."

This language was deliberately written to be broad and general, and to leave to individual countries considerable flexibility in determining precisely how to formulate the prohibition. There are likely to be different methods adopted in different countries to satisfy this obligation. The ultimate test of treaty compliance for any of them will be whether the language chosen "provide[s] adequate legal protection and effective legal remedies."

After an extensive analysis, the Copyright Office has concluded that existing protections under U.S. law are insufficient to satisfy the treaty obligation. In making this determination, the Copyright Office examined a number of existing bodies of law. These include the doctrine of contributory infringement under copyright law, and a variety of federal statutes including the Audio Home Recording Act, 17 U.S.C. § 1002, the Communications Act, 47 U.S.C. §§ 553 and 605, the National Stolen Property Act, 18 U.S.C. § 2314, the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510 et seq., and the Computer Fraud and Abuse Act, 18 U.S.C. § 1030.

We do not believe that the doctrine of contributory infringement provides sufficient protection to fulfill the treaty obligation to provide “adequate legal protection and effective legal remedies” against circumvention. As the Supreme Court interpreted that doctrine inSony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), the manufacturer or distributor of a copying device is not liable if the device is “merely capable of substantial noninfringing uses.” Id. at 442. Most devices for circumventing technological measures, even those designed or entirely used for infringing purposes, will be capable of substantial noninfringing uses since they could potentially be employed in the course of a fair use, or in the use of a public domain work. It is therefore not surprising that the Sony standard, in practice, has been ineffective in addressing the circumvention problem. See Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1983). Copyright, moreover, may not afford any recourse against those who engage in acts of circumvention alone.

Some of the other laws we considered address particular aspects of circumvention of particular types of technological protection measures such as the scrambling of broadcast signals. In the aggregate, however, they fail to provide the general coverage required by the treaties.

The anti-circumvention issue is without doubt the most difficult of the issues presented in treaty implementation. The challenge is how to formulate a prohibition that provides meaningful protection to copyright owners, while avoiding chilling the development of legitimate consumer technology and lawful uses of copyrighted works and public domain materials. While a perfect solution may not be possible, we believe that an appropriate compromise can be found. Section 1201 of H.R. 2281 represents a reasonable attempt to reach such a compromise. It reflects the lengthy debate that took place in the United States and Geneva over the course of the past two years, and is narrower and more carefully tailored than prior proposals.

In the Copyright Office's November 1995 testimony on the NII Copyright Protection Act, we noted the importance of providing legal protection for technological measures used by copyright owners to protect their works against unauthorized use on the Internet. Unless copyright owners have confidence that their works can be secured against loss, they will not be willing to utilize this promising new means of exploitation to its full potential. As I stated then,

One of the most serious challenges to effective enforcement of copyright in the digital environment is the ease, speed and accuracy of copying at multiple, anonymous locations. In order to meet this challenge, copyright owners must rely on technology to protect their works against widespread infringement. But every technological device that can be devised for this purpose can in turn be defeated by someone else's ingenuity. Meaningful protection for copyrighted works must therefore proceed on two fronts: the property rights themselves, supplemented by legal assurances that those rights can be technologically safeguarded.

It was for these reasons that the countries meeting in Geneva to negotiate the WIPO treaties agreed unanimously on the need for such a legal prohibition.

At the same time, the Copyright Office expressed concern about the breadth of the language used in the NII bill. Our chief concern related to various problems we saw with the “primary purpose or effect” test used to determine the legality of a device or service used to circumvent technological protection. We noted that “primary purpose” could be difficult to prove, and that a device intended for entirely legitimate purposes might be put to use primarily to circumvent.

The language of H.R. 2281 addresses these concerns, and a number of concerns that were expressed by others, in a manner which represents a substantial improvement over the prior bill. It aims more precisely at culpable conduct, and more clearly excludes circumvention engaged in to access or use material that is not protected by copyright. The bill also adopts a new two-tier approach, separating out technological measures that control access to copyrighted material and technological measures that prevent infringing uses of that material, and providing stronger protection for the former. Finally, it contains for the first time a savings clause stating explicitly that the substance and scope of copyright rights and exceptions, including fair use, are not affected.

b. The coverage of the bill

The substance of section 1201's prohibition is set out in paragraphs (1) and (2). Paragraph (1) deals with the circumvention of technological measures that control access to a copyrighted work, for example through encryption. This provision is similar to existing legislation prohibiting the decryption or descrambling of cable programming signals transmitted by satellite, which protects the ability of broadcasters to secure a market for pay cable by scrambling signals and allowing only paying subscribers to view them.

Not every technological measure that controls access would be covered by this language. The prohibition would apply only to those measures that operate by requiring the application of information, or a process or a treatment, that is authorized by the copyright owner. Moreover, the measure must do so "in the ordinary course of its operation." This would exclude technologies that may have the incidental or unintended effect of controlling access, or do so only when used in an unusual way.

Subparagraph (a) prohibits the act itself of circumventing a technological measure that effectively controls access to a copyrighted work. Subparagraph (b) relates to the means or technologies that may be used in order to circumvent. It prohibits the manufacture or sale of products or services that meet three criteria meant to distinguish legitimate business activities from the illegitimate. Thus, the provision covers circumstances where the products or services are primarily designed or produced to perform the prohibited acts, or are marketed by advertising their capability of doing so. It also covers those products or services that have only limited commercially significant purpose or use other than to perform the prohibited acts.

Paragraph (2) of section 1201 deals with measures that prevent acts of infringement, rather than access. Such measures might include a technology that blocks users from downloading copies. The treatment of these infringement prevention measures differs from the treatment of access prevention measures in paragraph (1) in that it does not include a prohibition on the act of circumvention itself. It covers only the manufacture or sale of products or services, utilizing the same approach of focusing on how the product or service is marketed, designed or produced, and the nature and extent of its commercially significant purposes or uses.

Paragraph (2) is limited to measures that protect rights of a copyright owner under Title 17.

Paragraph (4) specifies that section 1201 cannot be read to alter existing rights, defenses, limitations or remedies under Title 17.

c. Issues and concerns

Two main areas of concern have been identified with respect to section 1201: its coverage of products used to circumvent, such as consumer electronics and software, and its potential impact on fair use interests.1

1 These concerns relate not only to fair use, but to all permitted uses under the Copyright Act, including those made possible by the idea-expression dichotomy and the first sale doctrine. For purposes of our discussion here, we will refer to all of these user privileges collectively as fair use interests.

Some have urged that the legislation not address the provision of products or services, but focus solely on acts of circumvention. They state that the treaties do not require such coverage, and argue that devices themselves are neutral, and can be used for either legitimate or illegitimate purposes.

It is true that the treaties do not specifically refer to the provision of products or services, but merely require adequate protection and effective remedies against circumvention. As discussed above, however, the treaty language gives leeway to member countries to determine what protection is appropriate, with the question being whether it is adequate and effective. Because of the difficulty involved in discovering and obtaining meaningful relief from individuals who engage in acts of circumvention, a broader prohibition extending to those in the business of providing the means for circumvention appears to be necessary to make the protection adequate and effective. It is the conduct of commercial suppliers that will enable and result in large-scale circumvention.

The bill’s approach to manufacturing, importing and selling is essentially an application of the familiar concept that those who participate in or assist in a prohibited act may themselves be culpable. There is ample precedent for the approach. So-called “black boxes” for descrambling cable and satellite signals are banned under federal law, as are devices for thwarting serial copy management systems in digital audio recording devices. See 47 U.S.C. §§ 553(a)(2) and 605(c)(4); 17 U.S.C. § 1002(c).

The challenge is how to limit the coverage of such activities sufficiently, so as not to chill legitimate development activities. There appears to be general agreement on two basic propositions: (1) People should not be able to engage in profit-making activities intentionally aimed at circumventing protection for copyrighted material; (2) the development and sale of multi-purpose products with substantial lawful uses should not be prevented. The difficulty lies in the grey area in between.

The NII Copyright Protection Act sought to draw the line between permissible and impermissible products and services by looking to their "primary purpose or effect." The Copyright Office and others raised concerns about the potential overbreadth of this standard. H.R. 2281 is significantly more restrictive in its coverage; it imposes three limitations on circumstances where liability may be found. The provider would have to deliberately design the product to circumvent or advertise it as doing so, or the product would have to be essentially a circumvention device with only limited use for other purposes. In contrast, those items that have significant legitimate purposes or functions, such as general purpose computers, would not be covered despite the fact that they may also be used on occasion to circumvent.

The "only limited commercially significant purpose or use" test appears to build on, but tighten, the Sony standard. It makes the standard more meaningful by referring to the extent to which the product is actually used for legitimate purposes, rather than its capability to be used for such purposes. At the same time, it is consistent with Sony in that it does not prohibit products with a substantial non-circumventing use, only those with merely limited commercially significant non-circumventing use.

These limitations improve on prior versions of anti-circumvention legislation, and aim more precisely at bad actors—those who deliberately facilitate unlawful activity. The limitations would rule out, for example, devices produced for a legitimate purpose that unexpectedly turn out to be used by consumers primarily to circumvent (as long as they were also used for their intended purpose to a commercially significant extent). It might be possible, however, to refine the approach even further, and we would be happy to work with any who have such suggestions.

The other major area of controversy relates to the impact of section 1201 on fair use and other user privileges under the Copyright Act. The Copyright Office firmly believes that the fair use doctrine is a fundamental element of the copyright law, and that its continued role in striking an appropriate balance of rights and exceptions should not be diminished. We also believe that it is possible to provide effective protection against circumvention without undermining this goal.

Section 1201 seeks to accomplish this result in several ways. First, it treats access- prevention technology separately from infringement-prevention technology, and does not contain a prohibition against individual acts of circumvention of the latter. As a result, an individual would not be able to circumvent in order to gain unauthorized access to a work, but would be able to do so in order to make fair use of a work which she has lawfully acquired. Second, it contains a savings clause that explicitly preserves fair use and other exceptions to rights in the Copyright Act.

Some argue, however, that these attempts do not go far enough and will not avoid damage to fair use interests. As a practical matter, they are concerned that access will not be made available for fair use purposes, and that there may be technological control over each occasion of use. They are also concerned that section 1201 will prevent the development of products that enable individuals to bypass such continued access controls, or infringement- prevention technology under paragraph (2), in order to make fair use. These are important issues that deserve careful consideration.

Some background may be helpful in considering the topic of access controls. It has long been accepted in U.S. law that the copyright owner has the right to control access to his work, and may choose not to make it available to others or to do so only on set terms. This means not only that a copyright owner may keep a work forever unpublished, but also that he can publish it while controlling the conditions under which others are allowed to see it—such as charging a fee or imposing restrictions on how the work may be used.2 Users generally pay for access and then, depending on the form in which the work is embodied, may accept the copyright owner's terms or negotiate for other terms. Libraries, for example, typically purchase a physical copy such as a book to make available on-site, or in obtaining access to works in electronic form, accept the terms presented or negotiate terms for use by their patrons.

2 The extent to which restrictions can be imposed by contract on uses that would otherwise be permissible under copyright law has also become a controversial issue. See, e.g., ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (holding that the Copyright Act does not generally preempt contract rights).

The bill would continue this basic premise, allowing the copyright owner to keep a work under lock and key and to show it to others selectively. Section 1201 has therefore been analogized to the equivalent of a law against breaking and entering. Under existing law, it is not permissible to break into a locked room in order to make fair use of a manuscript kept inside.

In this area too, the treaties do not specifically require protection for access controls in themselves. Again, the determination to be made by Congress is how best to ensure adequate and effective protection for technological measures used by copyright owners to prevent infringement. It is our understanding that access controls such as encryption will be the primary and most effective measures that copyright owners are likely to use in the on-line environment.

One key issue is the type of access involved. Once a person has lawfully acquired access to a work, will he or she be able to make fair use? Or will such strong technological controls be imposed that each use will require additional authorization? If the former, users could be required to pay for access as they are today, and then subsequent uses might be permissible under Copyright Act exemptions. (Some have noted, however, that the existence of legal protection itself may change bargaining power in negotiating terms of use.) If the latter, it might not be possible ever to engage in such exempted conduct without payment of a new access fee.

Other critical questions are whether, as a practical matter, copyright owners will adopt reasonable terms for granting lawful access, including recognition of fair use interests; whether copyrighted works will remain available in formats other than electronic, encrypted form to be used for fair use purposes; and whether any technological means will be developed to allow individuals to circumvent for lawful purposes. The Copyright Office agrees that it would be extremely undesirable to end up with a world where fair use interests were not accommodated in an optimal manner. We share the concerns as to how these questions will be answered. If the fair use community’s fears were realized, the risk would be high. If access for such purposes becomes unduly restricted, with fees charged for each use, unreasonable costs imposed, and copies not available in non-electronic form, a legislative solution would be called for.

Finally, questions have been raised about the meaning and effect of the savings clause. In the view of the Copyright Office, this clause serves two functions: (1) It constitutes a recognition of the importance of the existing balance built into the Copyright Act, including the fair use doctrine; (2) it may eliminate the possibility of an unclean hands-type argument in an infringement case. In other words, a copyright owner would not be able to defeat a fair use claim by pointing to the fact that the defendant had circumvented a technological protection measure. Cf. Harper & Row, Publishers v. Nation Enters., 471 U.S. 539, 563 (1985) (weighing in the fair use balance the bad faith of the defendant in gaining unauthorized access to the plaintiff’s work); Atari Games Corp. v. Nintendo, 975 F.2d 832, 843 (Fed. Cir. 1992).

As drafted, however, the clause does not establish fair use as a defense to the violation of section 1201 in itself. It refers only to "rights, remedies, limitations, or defenses to copyright infringement, including fair use," and the fair use provision in section 107 by its terms applies only to infringement of copyright rights. While the clause might be read by a court as a signal to extend the concept of fair use as a judge-made defense, it does not provide clear legislative authority to do so.

2. Copyright management information

a. Background and purpose

New section 1202 would ensure the accuracy and reliability of copyright management information provided to users of copyrighted works.

The Internet offers tremendous potential to develop as a marketplace for copyrighted works. Electronic licensing should prove to be easier and less expensive than traditional methods of obtaining permissions. Users could agree with a keystroke to a particular price for a particular type of use, with transaction costs minimized.

If the system is to work, however, users need to be able to trust its integrity. Information must be easily available that identifies works, their owners, and their licensing terms--and the information must be reliable. If authorizations can turn out to be defective because someone changed the name of the copyright owner or misrepresented the material as available for free, consumers will not be willing to rely on the system. It is therefore critical to protect the integrity of the electronic marketplace.

In order to do so, the treaties oblige countries to make it unlawful to knowingly remove or alter such information when provided by the copyright owner in connection with a copy or communication of the work in electronic form, or to distribute, import, broadcast or communicate to the public works or copies of works knowing that such information has been removed or altered. Article 12 of WIPO Copyright Treaty; Article 19 of WIPO Performances and Phonograms Treaty. The treaties define the relevant information as "information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public."

Again, the Copyright Office has examined a number of bodies of law to determine whether implementating legislation is necessary. We considered trademark law, the National Stolen Property Act, 18 U.S.C. § 2318, the prohibitions concerning copyright notice in the Copyright Act, 17 U.S.C. § 506, federal and state laws regarding unfair competition, false advertising and consumer protection, state law regarding rights of publicity, and common law fraud. We have concluded that these laws in the aggregate provide less coverage than is required by the treaty. In particular, with the exception of 17 U.S.C. § 506(d) with respect to the fraudulent removal of a copyright notice, they address the alteration, but not the removal, of only a small subset of rights management information.

Apart from the treaty requirements, we believe that such a law is good domestic policy. In the Copyright Office's testimony on the NII Copyright Protection Act, we supported the adoption of similar protection into U.S. law. We pointed out that "[i]t is in everyone's interest, both owners and users of copyrighted material, to be able to rely on the information provided to facilitate identification and licensing." Again, however, we raised a few questions about the relevant provision as drafted, with regard to both the scope of its coverage and its interaction with provisions of existing law. We believe that the proposed section 1202 in this bill adequately and appropriately implements the treaty obligation, and does so in a manner that resolves many of the questions we had raised about the prior version. It goes beyond the bare minimum obligation in several respects, mainly in covering the provision of false information and information not in electronic form. In our view, these extensions are useful and appropriate.

b. The coverage of the bill

Section 1202 contains three paragraphs. The third paragraph defines "copyright management information"; the first two deal with, respectively, the provision of such information that is false, and the deletion or alteration of such information. Paragraph (a) prohibits the knowing provision, public distribution, or importation for public distribution, of false copyright management information. Paragraph (b) prohibits the following acts when done without the authority of the copyright owner or the law: the knowing removal or alteration of copyright management information, or the distribution or importation for distribution of copyright management information that has been altered without the authority of the copyright owner or the law, or copies or phonorecords from which copyright management information has been removed without the authority of the copyright owner or the law.

Paragraph (c) defines "copyright management information" as the following items, when conveyed in connection with copies, phonorecords, performances or displays of a work: identifying information about the work, its author,3 or the copyright owner (including title and names); terms and conditions for use of the work; identifying numbers or symbols referring to such information or links to such information; or such other information as the Register of Copyrights may prescribe by regulation.

3Section 1202 implements the relevant obligation under both WIPO treaties. Since performers whose performances are fixed in sound recordings may qualify as authors under U.S. copyright law, the reference in the definition of "copyright management information" to identifying information about the "author of a work" covers such performers as well as other categories of authors.

c. Issues and concerns

The issue has been rasied as to this provision’s impact on the privacy interests of consumers. Because section 1202 does not require the provision of any information over the Internet or elsewhere, it will not lead to the collection or dissemination of information about users and therefore should not affect their privacy. The provision simply makes it unlawful for someone to provide false information with bad intent, or deliberately to delete or alter such information, once it has already been provided. Nor could it be used to prevent consumers from taking steps to remove private information from the Internet, since the definition of "copyright management information" does not include information about users, and since the prohibited acts require an element of knowledge or intent tied to infringement.

While the clause explicitly stating that "the Register of Copyrights may not require the provision of any information concerning the user of a copyrighted work" therefore does not appear to be necessary, if such language will assuage any lingering concerns, the Copyright Office certainly has no objections to its inclusion. We recommend, however, that the wording be changed to eliminate the implication that the Office does have authority to require the provision of any other information. As noted above, section 1202 does not mandate that any particular information be provided, but simply protects whatever information is in fact provided.

The provisions in section 1202 do not apply to those who act innocently. The acts covered all must have been performed knowingly. In addition, the provision of false information is only unlawful where it is done "with the intent to induce, enable, facilitate, or conceal infringement." Liability for the removal or alteration of information requires the actor to know or have reason to know that his acts "will induce, enable, facilitate or conceal" infringement.

Some copyright owners have expressed concern that this standard will be too difficult to meet, requiring proof of an ultimate infringement in order to find a violation. The Copyright Office believes that it is important to make clear, possibly in legislative history, that the reference to infringement does not mean that the actor must have intended to further any particular act of infringement--just to make infringement generally possible or easier to accomplish.

We believe that the knowledge and intent standards resolve the concerns we expressed in 1995 about the prohibition's scope of coverage. They ensure that no one will be liable who deletes, alters or provides inaccurate information for legitimate reasons, such as technological constraints or a good faith belief that he or she has the right to do so. For example, a broadcaster who interrupts a broadcast of a motion picture for a news bulletin, thereby deleting part of the motion picture's credits, would not fall within the prohibition. Nor would the provision apply to an individual who believed she was entitled to claim authorship in a work, based on a dispute over the work's status as a joint work or work made for hire. Similarly, de minimis alteration, or clarification or supplementation of information, would be ruled out. As to the provision of false information, the provision as drafted would ensure that a film distributor who distributes an old copy of a motion picture containing outdated information about the ownership of rights in the motion picture would not be liable simply because it knew the information was false. Nor could it be argued that the use of a pseudonym constituted a violation.

The bill also improves on the prior versions in other respects. It limits the context in which information is protected to information "conveyed in connection with" copies, performances or displays of a work. This provides a link between the information and a particular manifestation of the copyrighted work, and avoids any application of the provision to such information that may happen to be contained on a piece of paper in a file somewhere. In addition, the coverage of "identifying number or symbols" will allow the development of voluntary coding systems which can refer users to a complete and up-to-date database of licensing information.

We do note a few remaining concerns about the provision's interaction with other provisions of existing law, and a few minor drafting issues. In its current form, section 1202 still overlaps with and renders redundant at least some of the provisions of section 506(c)-(d). These sections require careful analysis to determine whether they should be deleted or amended to accommodate the new prohibitions. In paragraph (b)(3), we would propose adding a reference to "public display" of works or phonorecords, in addition to the coverage of distribution, importation and public performance. Finally, we suggest making parallel the acts covered by paragraphs (a) and (b), adding an equivalent to subparagraph (3) to paragraph (a) to cover the distribution, importation, public performance or public display of copies of works knowing that they contain false information.


The Copyright Office urges prompt ratification of the WIPO treaties, and supports H.R. 2281 as a reasonable implementation of the treaties' obligations. To that end, we would be pleased to assist Congress to resolve the questions raised in this statement as well as any other concerns.

H.R. 2180 — The “On-Line Copyright Liability Limitation Act

H.R. 2180, the “On-Line Copyright Liability Limitation Act,” would add a new section 512 to the Copyright Act, creating a new exemption from infringement liability for certain acts of transmitting or providing access to material on-line that are typically engaged in by providers of on-line services and internet access.

As the Copyright Office has stated, existing doctrines of copyright law have so far been applied by the courts to such acts in a generally appropriate way. If a statutory structure is established to provide greater certainty for service providers, we view H.R. 2180 as a useful starting point for a fresh beginning in achieving a resolution to this important and controversial issue. This bill builds on the concepts that were developed in last year’s negotiations chaired by Congressman Goodlatte. However, the bill is simpler in its approach in various respects. Notably, it provides a single exemption that is available to any person engaging in certain acts, which were dealt with in several separate exemptions in prior proposals. In determining eligibility for the exemption, the bill avoids terms that are specific to particular business models or technologies, and focuses instead on general concepts of a person’s level of control, participation, and knowledge of the infringement. It also omits detailed notification procedures and industry-specific codes of conduct, leaving such matters to resolution by the affected parties. This approach offers the benefit of flexibility, allowing adaptation to the inevitable rapid changes in technology and business practices.


In addressing the responsibility of those who participate in bringing infringing works to the public, the courts have over the years developed doctrines of contributory infringement and vicarious liability to supplement the potential direct infringement that may occur through acts of distribution and public performance or display. Under current law, a person is liable for direct infringement who engages in an act within section 106 without authorization, regardless of his knowledge or intent. 17 U.S.C. § 501. A person is vicariously liable for the infringement of another if he has the right and ability to control the infringement, and receives a direct financial benefit, with or without knowledge of infringement. RCA/Ariola Int’l v. Thomas & Grayston Co., 845 F.2d 773, 781 (8th Cir. 1988). A person is liable for contributory infringement who induces, causes or materially contributes to another's infringement, knowing or having reason to know of the infringement. Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 435 (1984).

A number of courts have applied these doctrines to on-line activities in recent years. The Copyright Office has prepared a summary of the case law, which is attached to our testimony. While the legal analysis has not always been consistent, the outcomes have been appropriate, imposing liability only on parties who clearly should have been held responsible.

The most extensive judicial analysis of the issues to date can be found in Religious Technology Center v. Netcom On-Line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995). The Netcom case is in many respects quite favorable to the interests of on-line service providers. The court found that none of the acts committed by the defendant on-line service provider were direct infringements, and that the provider was not vicariously liable for the infringing acts of its subscriber. Although the court did not dispose of the plaintiff’s claim of contributory infringement on summary judgment, it declined to grant a preliminary injunction in part because it viewed the plaintiff as unlikely to succeed on the merits of the claim, because of a lack of evidence that the provider should have known of the infringement or substantially contributed to it.

Other courts have imposed liability on the party placing the work on-line, or on an electronic bulletin board (BBS) operator. In those cases that have held BBS operators liable, the facts have generally supported the conclusion that the defendant knew that the infringement was taking place and either actively encouraged the infringing activity or failed to take steps to prevent it. No case has yet held a service provider liable.

Nonetheless, providers of on-line and internet access services remain concerned about the lack of certainty in how courts will develop the application of these doctrines, and their exosure to lawsuits in the interim. H.R. 2180 seeks to provide greater certainty while safeguarding the ability of copyright owners to protect their exclusive rights in an on-line environment.


The issue of service provider liability is of great concern to all of the interests involved, and has received tremendous attention both in the United States and at an international level. It is critical to ensure that any new exemption not undermine the ability of copyright owners to enforce their rights and have meaningful recourse to prevent on-line infringement. At the same time, of course, liability should not be imposed inappropriately. The goal is a system where copyright owners and service providers work together to minimize infringement and expand the Internet as a medium for exploiting copyrighted works.

In the past, the Copyright Office has cautioned that any legislation shielding service providers from liability (1) should be calibrated to particular degrees of involvement and responsibility; (2) should not contain mandatory extra-judicial procedural requirements for copyright owners to be able to enforce their rights; and (3) should not create incentives to avoid knowledge of infringement. While we recognize that the particular calibration of the elements in the bill will be subject to negotiation, we believe that the approach of H.R. 2180 essentially meets these criteria.

H.R. 2180 would amend the Copyright Act to create a new section 512. This section exempts any person who transmits or otherwise provides access to material on-line from liability for direct infringement, as well as vicarious liability for the infringing acts of another, if six criteria are met. Anyone who qualifies under these criteria would also be exempt from monetary damages for contributory infringement. The exemption applies only to liability that is based solely on transmitting or otherwise providing access to material on-line; other acts, such as retention and further use of copies of material, are not covered. The exemption would encompass within its scope the specific circumstances covered by separate exemptions in prior proposals: “mere conduit” transmissions, material residing on a server, and electronic communications.

The six criteria relate to levels of active involvement and knowledge. They are drawn from discussions during last year’s negotiations, and from existing case law, with various modifications to take into account issues raised in those discussions.

The first three criteria — that the person seeking the exemption (A) does not initially place the material on-line; (B) does not generate, select, or alter the content of the material; and (C) does not determine the recipients of the material — establish a passive, intermediary role. The remaining criteria relate to the degree of the person’s participation, benefit and knowledge. All are phrased in simple language as basic concepts, leaving room for further discussion of their meaning as well as flexibility for application in a wide array of changing circumstances.

We note that the result of the exemption would be to codify some aspects of existing doctrines of contributory infringement and vicarious liability, but to narrow them in certain respects. Some activities that could result in liability under the existing doctrines would qualify for the exemption. Conversely, however, some activities that would not qualify for the exemption, may not be infringing under current liability doctrines.

It is important to understand that failure to qualify for the new exemption would not necessarily lead to liability. The doctrines of existing law would apply, and determine whether liability was appropriate.

Other provisions are helpful in removing possible disincentives to a provider’s taking prompt action to limit the effects of an infringement. These include a “good Samaritan” defense ensuring that a provider cannot be liable for taking down material in response to a notice alleging infringement. Another subsection provides that neither a provider’s action in taking down allegedly infringing material, nor its failure to act, will be held against it in considering a defense to a claim of infringement. This eliminates, among other things, a potential Hobson’s choice between increasing potential exposure to liability by allowing continued access to infringing material after receiving notice, and prejudicing a defense such as fair use by removing material.

Finally, some deterrence is provided against those who falsely claim infringement. Subsection (d) would make anyone who materially misrepresents that material on-line is infringing liable for damages incurred by those relying on the misrepresentation by taking down the material.

H.R. 2180 contains no formalized notice and takedown procedure or prescription of responsible operating practices for the on-line services industry, as was proposed last year. Such provisions could be negotiated privately by the affected parties. This approach has the benefit of avoiding the codification of industry-specific rules in inflexible statutory language.


In summary, if legislation is enacted to deal with this issue, the Copyright Office favors a simplified approach such as that taken in H.R. 2180. We view the bill as a constructive starting point for further discussion. While we recognize that many of the specifics of the legislation are subject to negotiation, we believe the bill identifies the key concepts of levels of participation and knowledge in a useful way. We believe that progress has been made in clarifying the issues, and would be pleased to work with Congress and the affected parties to assist in finding an acceptable solution.

United States Copyright Office
June 1997

The following is a brief summary of reported U.S. cases as of June 1997 challenging unauthorized online transmissions of copyrighted works. All courts addressing a copyright claim either found infringement or sufficient evidence to support such a finding. The nature of the analysis, however, differed from case to case. Most courts relied on the reproduction right; some found that other rights, such as the rights of distribution and public display, had been implicated. Those courts that discussed the issue of RAM copies took it as settled that a reproduction of a work in a computer’s RAM is sufficiently fixed to constitute a copy under the copyright law.

In a number of these cases, the question of which rights were infringed is less than clear. The courts often fail to differentiate among the rights, or to conduct a thorough analysis of each separately. Thus, they may simply find “copying” in its plain English meaning, or use words like “transmitted,” “posted,” “distributed,” “uploaded,” or “downloaded” without clearly indicating what actions were sufficient to constitute aprima facie infringement, and of which right.

Despite the consistent determinations on infringement, the courts have not subjected everyone in the chain of distribution to liability. In general, liability was imposed on individuals who placed unauthorized copies of works on the Internet or on operators of bulletin board services (BBSs) dedicated to encouraging piracy, based either on direct infringement or on contributory infringement. In a few cases, a court’s imprecise language suggested the possibility of direct infringement by a BBS operator which had not itself engaged in acts within the scope of the copyright owner’s rights. In each of these cases, however, the facts appeared sufficient to support a finding of contributory infringement based on knowledge and participation.

Plaintiffs generally did not name Internet access providers or online service providers (together, “IAP”s) as defendants. The sole case indicating potential liability for an IAP was Religious Technology Center v. Netcom, where the court held that an IAP would be liable for contributory infringement if it had allowed distribution of infringing material with knowledge of the infringement.

I. Cases holding reproduction right and other rights implicated

Sega Enters. Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996)

Action against operator of BBS, whose subscribers uploaded or downloaded unauthorized copies of plaintiff’s works.

Citing MAI v. Peak, 991 F. 2d 511 (9th Cir. 1993), court found copies were made when works were uploaded to or downloaded from the BBS. Citing Netcom, court held defendant was not directly liable for the reproduction since the subscribers, not defendant, copied the works by uploading or downloading them. Court held defendant liable for contributory infringement, where defendant knew of the infringing activity and contributed to this activity by, among other things, providing the BBS as a central depository site for the unauthorized copies of the game, furnishing facilities for the copying of the game by providing, monitoring, and operating the BBS software, hardware, and phone lines necessary for the users to upload and download games, and allowing the subsequent distribution of the copies by subscriber downloads.

This decision explicitly clarifies and supersedes an earlier decision on a motion for a preliminary injunction, which suggested the possibility of the BBS operator being liable for direct infringement, not just contributory infringement. Sega Enterprises Ltd. v. MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994).

Religious Technology Ctr. v. Netcom On-Line Communication Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995)

Action against operator of BBS and Internet access provider (IAP) for copyright infringement where BBS subscriber posted plaintiff’s works on BBS.

Court stated that when subscriber posts work on Usenet, it is transmitted and automatically copied from BBS operator’s computer onto IAP’s computer and other computers on Usenet. Court stated that “there is no question after MAI that ‘copies’ were created,” as the subscriber’s act of posting messages caused reproduction of plaintiff’s works on both defendants’ storage devices.

As to defendants’ liability, court held that their storage and re-transmission of infringing copies did not constitute direct infringements of the rights of reproduction, distribution, or public display due to the absence of the necessary “volitional or causal elements,” where the defendants did not initiate such acts themselves, or take any affirmative action that resulted in such acts. In contrast to the holding of Playboy v. Frena (described below) on this point, court stated that only the subscriber should be directly liable for the infringement of these rights, because he uploaded copies onto the computer and caused their distribution.

Defendants were, however, potentially liable for contributory infringement of the distribution right. Court held that defendants would be liable for contributory infringement, if plaintiffs could prove that defendants, with knowledge of the infringing postings, continued to allow the distribution of the works on their systems. Preliminary injunction denied, however, because there was little evidence that defendants knew or should have known of the infringement, and their participation was not substantial. Court found no vicarious liability because though there was an issue of fact as to defendants’ right and ability to control, there was no direct financial benefit to them.

Central Point Software, Inc. v. Nugent, 903 F. Supp. 1057 (E.D. Tex. 1995)

Action against operator of BBS, who allowed and encouraged subscribers to upload and download unauthorized copies of plaintiffs’ works.

Citing Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1989), court stated that copying of plaintiff’s software could be established if it was reproduced in a computer’s memory without permission. Court found defendant liable, apparently for direct infringement, based on evidence that plaintiff’s works were copied to defendant’s hard drive when posted on the BBS, and available for downloading, stating, “It is uncontroverted that Defendant reproduced these later versions of the copyrighted works.” Opinion unclear as to whether BBS operator did anything other than allow and encourage subscribers to upload and download the software. In its discussion of statutory damages, the court indicated that the distribution right was an additional basis for its finding of infringement, stating that “[d]efendant chose to violate the copyright laws by reproducing and providing distribution of the plaintiffs’ copyrighted software.”

Playboy Enters. Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993).

Action against operator of a BBS whose subscribers uploaded and downloaded unauthorized copies of plaintiff’s works.

Without any further analysis, court found direct infringement of (1) the right of distribution, stating: “There is no dispute that Defendant Frena supplied a product containing unauthorized copies of a copyrighted work. It does not matter that Defendant Frena claims he did not make the copies himself.” and (2) the right of public display because defendant displayed copyrighted works on the BBS to subscribers.

Brode v. Tax Management, Inc., 1990 U.S. Dist. LEXIS 998 (N.D. Ill. 1990)

Action by author of copyrighted work against its publishers and Mead Data, provider of LEXIS computer assisted research service, alleging infringement based on continued availability of the work on LEXIS after the license to publish it electronically had expired.

Defendant argued that the work's "mere availability on LEXIS failed to abridge plaintiff's copyright,” and that there was no act of reproduction or distribution since plaintiff had presented no evidence that the work was ever "called up" or “printed out.” Court did not address this argument as to the distribution right, but as to the reproduction right, it held that sufficient evidence had been adduced that the database containing plaintiff’s work was “called up” to survive a motion of summary judgment.

II. Cases holding the reproduction right alone implicated

Sega Enterprises v. Sabella, 1996 U.S. Dist. LEXIS 20470 (N.D. Cal. 1996)

Action against operator of BBS, whose subscribers uploaded and downloaded unauthorized copies of plaintiff’s works.

Citing MAI, court found copying of works established by the fact that they were uploaded or downloaded from the BBS. Following Netcom, court held that defendant was not directly liable for infringement since she did not herself upload or download the works. The court found that Sabella engaged in acts including providing the BBS as a central depository site for the copies of the works, allowing their subsequent distribution by user downloads, and providing, monitoring, and operating the BBS software, hardware, and phone lines necessary for the users to upload and download the works. Court therefore held defendant liable for contributory infringement where she knew of her subscribers’ infringing activity and contributed to this activity by providing facilities, direction, and encouragement for the unauthorized copying. While the court explained that through the operation of a BBS “video game programs can be distributed,” it focused on the acts of reproduction, rather than distribution.

Religious Technology Ctr. v. Lerma, 1996 U.S. Dist. LEXIS 15454 (E.D.Va. 1996)

Action against defendant who copied plaintiff’s works onto his computer and posted them onto the Internet. Initially action included claims against defendant’s IAP, but these claims were voluntarily dismissed by plaintiffs.

Defendant admitted copying works by posting segments on the Internet. Rejecting fair use defense, court held that defendant infringed plaintiff’s copyrights by “posting” the material.

Scientist, Inc. v. Lindsey, 1996 U.S. Dist. LEXIS 7099 (E.D. Pa. 1996), summ. j. denied, 1996 U.S. Dist. LEXIS 11372 (E.D. Pa. 1996)

Action against publisher of Internet newsletter which contained unauthorized copies of plaintiff’s works. IAP not named as a defendant.

Copying of plaintiff’s works in defendant’s online newsletter not denied; opinion turned on issue of originality of material copied. Court denied summary judgment, finding material issues of fact as to the issue of originality.

III. Other online transmission cases

The following cases do not directly address claims of copyright infringement, but contain relevant assumptions, analogies or dicta.

United States v. Stowe, 1996 U.S. Dist. LEXIS 11911 (N.D. Ill. 1996)

Motion by operator of BBS for the return of computer hardware and software seized by the government in criminal copyright infringement case.

The warrant that authorized the seizure was based on allegations of copyright infringement by a BBS operator, where the BBS had been designed so that users could download copyrighted software only if they had previously uploaded other copyrighted software. Citing the government’s continuing criminal investigation, court denied defendant’s motion.

ProCD Inc. v. Zeidenberg, 86 F. 3d 1447 (7th Cir. 1996)

Action by producer of computer program and database against purchaser who made the database available on the Internet, and sold access to users. Defendant’s actions violated the terms of the shrinkwrap license, which prohibited use of the product for commercial purposes.

Court held that shrinkwrap licenses are binding contracts, and that enforcement under state law did not create rights equivalent to exclusive rights within the scope of copyright, and so was not preempted by the Copyright Act. In dicta, the court stated that copyright law would prohibit an unauthorized individual from “transmit[ting]” or copying the work.

Playboy Enters v. Chuckleberry Publ., Inc., 939 F. Supp. 1032 (S.D.N.Y 1996), recons. denied, 1996 U.S. Dist. LEXIS 9865 (S.D.N.Y. 1996)

Trademark infringement case bearing on the meaning of “distribution” on the Internet. Defendant had established in Italy an Internet site containing pictorial images under the “Playmen” name, which were available for downloading by subscribers. IAP not named as a defendant.

Motion for contempt; issue was whether defendant’s activities on the Internet violated a 1981 injunction barring it from distributing or selling in the United States a magazine bearing the name “Playmen.” Relying on the copyright cases Playboy v. Frena and Religious Technology Center v. Netcom (discussed above) in its analysis, court concluded that a prohibited distribution occurred when defendants set up an Internet site containing images under the “Playmen” name that could be downloaded by subscribers. Defendant argued that it had not distributed its magazine in the United States, but merely “posted” images on a computer in Italy, which was outside of the scope of the injunction. Court held that defendant had distributed its product in the United States, when it solicited United States subscribers to its Internet site and provided them with passwords. In its later opinion denying a motion for reconsideration, the court clarified that its finding that distribution occurred in the United States was based not only on the exchange between defendants and users concerning passwords, but on the fact that by inviting users to download images, defendant “caused[ed] and contribut[ed] to their distribution within the United States.”

Comedy III Prods. v. Class Publ., Inc. 1996 U.S. Dist. LEXIS 5710 (S.D.N.Y. 1996)

Action under the Lanham Act and related state law causes of action. IAP not named as a defendant.

Defendants had continued to advertise merchandise bearing the names, likenesses, and trademarks of the Three Stooges on its web site after its license to do so had expired. Court held that defendants violated plaintiff’s rights to “the titles, symbols, trademarks, copyrights, designs, advertising, artwork, likenesses and logo of the Three Stooges,” and that their conduct violated Section 43(a) of the Lanham Act.

(1) These concerns relate not only to fair use, but to all permitted uses under the Copyright Act, including those made possible by the idea-expression dichotomy and the first sale doctrine. For purposes of our discussion here, we will refer to all of these user privileges collectively as fair use interests.

(2) The extent to which restrictions can be imposed by contract on uses that would otherwise be permissible under copyright law has also become a controversial issue. See, e.g., ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (holding that the Copyright Act does not generally preempt contract rights).

(3) Section 1202 implements the relevant obligation under both WIPO treaties. Since performers whose performances are fixed in sound recordings may qualify as authors under U.S. copyright law, the reference in the definition of “copyright management information” to identifying information about the “author of a work” covers such performers as well as other categories of authors.