Answers Prepared by Marybeth Peters
The Register of Copyrights
submitted to the
Subcommittee on Courts and Intellectual Property
Committee on the Judiciary

United States House of Representatives
104^th Congress, 2^nd Session

February 15, 1996

February 15, 1996

The Honorable Carlos J. Moorhead
Chairman, Subcommittee on Courts
and Intellectual Property
B351A Rayburn House Office Building
Washington, DC 20515-0527

Dear Mr. Chairman:

I am pleased to provide the following answers to your written questions concerning your bill, H.R. 2441, and S. 1284, the National Information Infrastructure Copyright Protection Act. In my November 15th testimony, I indicated an intent to submit to the Subcommittee an additional statement covering issues not specifically addressed in the proposed legislation. Since your questions cover the issues we intended to address in that submission, we submit these answers in lieu of a second statement.

Question 1:

Broadcasters have contacted me requesting an exemption in these bills so that their broadcasts are not confused with the digital transmissions covered in the bill. What is your recommendation?

Answer: The Copyright Office does not believe that such an exemption is necessary at this time. The bills would amend the distribution right to clarify that the distribution of copies of a work to the public may be accomplished by means of transmission. Based on current technology, this would not cover broadcasts any more than present law does, since a broadcast does not result in copies being distributed to the public. If the technology were to change so that this is no longer the case, the appropriateness of an exemption for broadcasts might have to be examined,depending on the nature of the uses of works being made by the broadcasting industry at that time.

Question 2:

Could a "browser" be held statutorily liable without downloading a copyrighted work under these bills? What about a third party who does not decode copyright protection devices to access a work but accesses a work without knowledge that it has been decoded by another party?

Answer: These bills do not affect the liability of browsers. Under current copyright law,depending on the scope of his or her activities, a "browser" could in theory be held liable even if he or she did not download a copyrighted work. Courts have held that the copying of a work into a computer's random access memory ("RAM"), which occurs automatically when the work is transmitted from another computer, can in itself infringe the copyright owner's reproduction right. Accordingly, if the "browsing" involves the browser receiving a transmission of all or a substantial portion of a work in order to view it on his or her computer screen, without the consent of the copyright owner, the conduct is likely to constitute a prima facie case of infringement. The term "browsing," however, is an ambiguous term, and could involve various types of conduct. Depending on the circumstances, some types of "browsing" may qualify as fair use.

Some argue that the act of "browsing" should never constitute infringement. The issue of what types of browsing should lead to liability is a policy question that may deserve further attention. At present, however, there has been no indication of problems having arisen, and the bills do not contain any provisions that would alter current law. We note that the market place may satisfactorily resolve many of the issues involved without the need for government intervention; already services exist that make clips of copyrighted works available to consumers at no cost.

As to a third party who accesses a work without knowledge that it has been decoded by someone else, he or she may be liable for copyright infringement under current law if the work is protected by copyright and access is gained without permission. He or she would not be liable, however, for violation of section 1201 of the bills (the so-called "black box" provision). Only a person who engages in an act of importing, manufacturing or distributing one of the devices outlawed by that section, or who offers or performs a service outlawed by that section,could be held liable for its violation.

Question 3:

Some issues left unaddressed by this legislation may be equally important as the ones that are addressed. Which issues do you believe are ripe for consideration at this point in time and which do you feel should wait until a more in-depth study of the copyright system as a whole is conducted?

Answer: The bills in their current form address the most pressing issues raised by existing digital technology. They clarify the law so as to provide greater certainty, and they provide important safeguards for the technology and licensing information that copyright owners will need to rely on in making their works available on the NII.

At this point in time, the issue of on-line service provider liability may also be ripe for consideration. The Copyright Office's views on this issue are set forth in our answer to Question (8) below.

Those issues that can appropriately await a more in-depth study of the copyright system as a whole include: (1) whether the copyright owner's exclusive rights, and the exemptions available to users, should be formulated in a way that is less format- and technology-specific;(2) whether the existing categories of copyrightable works should be maintained; and (3) how to define the essential distinction between public and private uses.

Question 4:

What role do you envision the "fair use" doctrine playing as the NII develops? Are there any changes Congress should consider in Section 107? How can fair use be meaningfully implemented in the digital networked environment?

Answer: Today, the fair use doctrine plays a critical role in calibrating an appropriate balance between the rights of copyright owners and the interests of users of copyrighted works. It modifies the grant of private ownership rights by allowing certain beneficial and reasonable uses of works without the copyright owner's consent. Fair use should continue to play this critical role in the digital environment, both today and as technology evolves in the future.

The Copyright Office believes that Congress should not consider making any changes in section 107 at this time. Section 107, which represents a statutory formulation of the judicially developed doctrine of fair use, is the most flexible, forward-looking and technology-neutral provision of the Copyright Act. It articulates in statutory language broad and general principles of reasonableness, public benefit and potential harm, allowing them to be weighed in light of the circumstances of each case. Its language and concepts apply equally well to all types of uses of all types of works.

The questions posed for fair use in the digital environment are therefore not a problem of statutory language, but relate instead to judicial interpretation of the doctrine in the differing environment of digital communications, and to the ability to take advantage of the fair use privilege in an encrypted digital world. If courts prove unable to adapt prior case law inappropriate ways, or if as a practical matter fair use is substantially diminished in its application because licensing practices do not develop in a flexible enough direction, then Congress may need to respond in the future. At present, however, we do not see the existence of any problems that require a legislative solution.

Fair use may meaningfully be implemented in the digital environment in a number of ways. First, consensual guidelines may be adopted that will allow certain uses without payment. For the past year and a half, ongoing discussions have been held among interested parties to work toward this goal. Even without such guidelines, copyright owners may voluntarily allow access to their works on-line for fair use purposes. License or access fee structures may be developed that will take into account the proportion of total uses that qualify as fair use. Finally, as the White Paper suggests, certain acts of decryption may be excused if the ultimate purpose is to make fair use of the work.

Question 5:

Will the digital importation right be difficult to enforce as a practical matter due to the fact the Customs Service can not stop a digital transmission? Will the right have any value to the copyright owner? How will it add anything meaningful to existing rights?

Answer: The digital importation right probably will not be able to be enforced in the same way that the importation right is enforced today in the context of tangible copies. As practical matter, Customs cannot monitor digital transmissions as the electronic signals pass U.S. borders. But this does not mean that the right will have no value. First, it has an important theoretical justification, since the importation right is part of the distribution right and should therefore parallel its scope, covering all methods by which a work may be distributed to the public. In addition, there are circumstances where the copyright owner may be able to rely on the importation right in proceeding against an infringer. If, for example, someone engages in an ongoing business involving the unauthorized transmission of copyrighted works from abroad,the copyright owner could obtain an injunction against this continued conduct and/or damages for the past infringements. This would be an option even if the person engaging in the unauthorized importation was not violating the reproduction right by making unauthorized copies of the works within the United States.

Question 6:

An op-ed in the November 13 Washington Times stated that "the White Paper is an astoundingly radical measure which makes reading a document on the screen of your Web browser a copyright violation, cuts those you cannot afford to 'license' information off from the information highway and dramatically restricts the 'fair use' of copyrighted material." How do you respond to these arguments?

Answer: It is important to distinguish between the White Paper, produced by the Working Group on Intellectual Property Rights of the Administration's National Information Infrastructure TaskForce, and the bills that are pending before Congress. While the pending bills contain legislative proposals suggested in the White Paper, and supported by its legal analysis, the bills stand on their own and do not incorporate the White Paper's analysis as such. As discussed in our answers to questions (2) and (4) above, the proposed legislation does not affect in any way the legal status of "reading a document on the screen of [one's] Web browser," the availability of access to the information highway, or the scope of application of the fair use doctrine. These are important issues, and will doubtless be the subject of continuing debate over the coming months and years, but the bills are narrowly drafted to address only a few specific concerns. The Copyright Office assumes that this will be confirmed by the legislative history to the bills as eventually enacted.

As to the White Paper discussion, while there may be room for reasonable disagreement over particular characterizations or conclusions, it is difficult to see how it can be called "astoundingly radical." The report summarizes the current state of the law, and concludes that few changes are necessary to adapt copyright to current digital technology.

In particular, to address the points quoted from the Washington Times op-ed piece: The White Paper notes, accurately, that retrieving a copyrighted work over a digital network entails the creation of a copy of the work under current technology, and that the prevailing legal interpretation today holds that such a copy implicates the copyright owner's exclusive right to reproduce the work. (It does not suggest that the act of reading itself constitutes infringement.) Just as with a traditional use of a copyrighted work, the White Paper indicates that the copyright owner's consent will generally be required when a copy of the work is retrieved electronically,and may be conditioned upon payment of a license fee. The assertion that access to copyrighted works may require payment reflects fundamental principles of copyright law, and is hardly a radical position. Finally, the White Paper describes the existing parameters of the fair use doctrine as established by Congress and the courts, and concludes, "It is reasonable to expect that courts would approach claims of fair use in the context of the NII just as they do in 'traditional environments.'" White Paper at 80. It proposes no legislative change, let alone a"dramatic[] restrict[ion]," but notes that the Working Group had convened a conference of interested parties who have met on a regular basis in an attempt to negotiate consensual guidelines for fair use in the digital environment.

Question 7:

The Caucus on Intellectual Property of the Conference on College Composition and Communication states that if these bills are passed in their present form, it would destroy the gains teachers have made in using the Internet and the World Wide Web as education resources because it would discourage the common practice of "browsing" and would make universities liable for students' copyright infringement. How do you respond?

Answer: Again, as discussed in our answer to Question (2), the bills in their present form do not alter the current legal status of "browsing." Browsing on the Internet today may entail the making of copies of works without authorization. Accordingly, to the extent that such use of works by teachers and students has not been challenged by copyright owners, perhaps because it is not economically significant or because it may qualify as fair use, passage of the legislation should not lead to more challenges. Nor do the bills contain anything that would shift liability from students to universities. If the universities are not liable under current law, they will not be liable under the proposed amendments.

Question 8:

Some groups have reacted negatively to these bills due to a perceived chilling effect resulting from on-line service provider liability. Currently, there are no such provisions for such liability in the bill, but they are discussed in the White Paper. What is the current state of the law regarding on-line service provider liability? How do you think Congress should deal with the issue of on-line service provider liability?

Answer: Given the degree of concern that has been expressed about the potential liability of on-line service providers, this is an issue that should be considered seriously. At the same time, however, since the bills in their current form do not implicate this issue in any way and therefore would not prejudice its resolution, it would be possible to move ahead with the pending legislation and deal with on-line service provider liability separately.

The Copyright Office believes that the White Paper fairly and accurately sets forth the current state of the law in this area. In addressing the responsibility of businesses engaged in bringing infringing works to the public, the courts have 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. The White Paper describes the evolution and essential elements of these doctrines. While some argue that various lines of the case law are inapposite due to factual distinctions between the role of on-line service providers and other types of middlemen in the distribution chain, we agree with the Working Group that the concepts of existing law on their face apply to many of the activities of on-line service providers.

The White Paper concludes that a case has not yet been made for varying these rules and treating on-line service providers differently. Since the White Paper was issued, a number of arguments have been put forward in an attempt to make that case. In particular, it has been pointed out that the sheer volume and speed of transmissions made through on-line services differentiate those services from traditional publishing, and may make it impossible to monitor the content of the transmissions in a meaningful way (particularly where the transmissions have been encrypted). Further examination of the evidence in this respect may establish the need for some type of special legislative treatment.

We note, however, that any chilling effect that may result from existing doctrines of contributory and vicarious liability so far appears to be slight. On-line service providers entered the business with these doctrines already established in the law, and have been thriving under the current legal regime. There has not been an explosion of litigation, and the few cases that have been decided appear reasonable given their facts. In fact, the most recent case on the subject, containing the most thoughtful judicial analysis of the issues to date, is in many respects quite favorable to the interests of on-line service providers. Religious Technology Center v. Netcom On-Line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995). It therefore seems appropriate to place the burden on the providers to establish their need for special treatment, and to confine any such special treatment to those activities for which it is necessary.

Any legislation shielding on-line service providers from liability should not be absolute,but should be calibrated carefully. The question is, what protection is reasonable, given the range of activities being engaged in? At any given time, is the service provider performing a function more analogous to a traditional publisher, or more analogous to a common carrier? Inappropriate circumstances, it might be advisable to establish a safe harbor, allowing service providers to function efficiently without fear of liability if they observe certain precautions and follow prescribed procedures.

If Congress decides to adopt this approach, we suggest caution in two respects when formulating the terms of the safe harbor. First, it is critical that copyright owners not be required to take particular steps to notify service providers of their claims as a condition to being able to sue. Such requirements are likely to be considered formalities imposed on the enforcement of rights, which are prohibited under the Berne Convention for the Protection of Literary and Artistic Works, to which the United States is a signatory. Second, care should betaken not to create perverse incentives, by rewarding the deliberate avoidance of knowledge of claims.

In the event that on-line service providers are able to establish a need for special treatment, the Copyright Office believes that these concerns can be accommodated and a reasonable solution found. We would be pleased to work with Congress and the interested parties to assist in the process.

Question 9:

How will clarifying copyright protection in the digital networked environment help small business and start-up companies? Do you think there is a danger that these changes will mostly help big copyright industries? How will they affect individual authors, artists and other creators?

Answer: Copyright owners as a group will be helped across the board by the proposed legislation. This group includes individual authors, artists and other creators, as well as small businesses and start-up companies. Anyone who creates a work of any type or dimension, or pays for its creation, or purchases a copyright, can be a copyright owner, and therefore has a stake in ensuring that his or her rights can be adequately protected and enforced on the NII. To the extent that big copyright industries may be helped more than individual owners and small companies, the difference will be entirely proportional, based on the fact that they may own a larger number of works. As to each particular work, the benefit should be the same. Every copyright owner will benefit from the increased certainty from a clarification of rights in the digital environment, as well as from the provision of legal protection for technological device she or she may use to guard against unauthorized copying and for the integrity of the information he or she chooses to provide about terms and conditions of access to the work.

Question 10:

Does this legislation create any new exclusive rights for the benefit of copyright owners? Does it expand any of the exceptions to protection or create new ones to benefit users?

Answer: The Copyright Office does not interpret the legislation to create any new exclusive copyright rights for the benefit of copyright owners (as opposed to creating new enforcement mechanisms). Rather, in our view, it clarifies existing law in various respects in order to avoid ambiguity about the scope of the distribution right. The bills simply make clear that the copyright owner's right to control the distribution of copies of the work to the public extends to distribution by any means, including digital transmission. Whatever the means used, the end result is the same: members of the public receive copies of the work.

On the other side of the balance, the legislation expands one of the existing exceptions and also creates a new one. It expands the section 108 exception for libraries to allow the creation of copies in digital form for preservation purposes, and to increase the number of permissible copies from one to three. It creates a new section 108A for the benefit of the"visually impaired," allowing non-profit organizations to reproduce and distribute copies of literary works to them at cost, in a form that they can perceive.

In sum, the legislation maintains the fundamental balance struck by existing law, while adding to the privileges available to users for certain beneficial purposes.

Question 11:

Technology can be used to protect information and the same technology can be used to destroy these protections. The legislation addresses this by outlawing technologies which have as their primary purpose the picking of these electronic locks that copyright owners might use to protect their property. The Software Publishing Association put out a press release today stating that they feel that the "primary purpose test" is too burdensome and that the sanctions provided are not harsh enough. Others insist that the provisions are too harsh and violate privacy rights. How do you react to these arguments?

Answer: At the November 15 hearing, the Copyright Office supported the concept of outlawing devices or services that defeat copyright protection systems. However, we voiced some concerns about the breadth of proposed section 1201, in particular the "primary purpose or effect" test. As our testimony reflects, we agree that this standard may be too burdensome in some respects, but also believe it may be over broad in its coverage, potentially sweeping legitimate business behavior within its prohibition. With respect to the sanctions, we did note the inconsistency of omitting any criminal penalty, in light of the criminal penalties provided for violation of the copyright management information provision in section 1202.

Since our testimony was prepared, we have heard fears expressed that encryption systems will violate rights of privacy because they will require the development of a mechanism for the tracking of every use of a particular work, together with a system for charging individuals for each such use. There is concern that a database will be developed that tracks the reading habits of every American. These fears are legitimate, but misplaced. Section 1201 does not mandate or affect the development of such systems; their development will depend on the private marketplace. Already today, works are being encrypted; with or without these bills, copyright management systems will proliferate. The long-term challenge, apart from copyright considerations, will be to ensure that they do so in a way that is consistent with privacy concerns.

In conclusion, we believe that the language of the bill should be narrowed in certain respects in order better to define the prohibited conduct. Some of the concerns that have been expressed may appropriately be addressed by legislative history.

Question 12:

Why are the provisions in these bills on copyright management information so important? How do you envision these provisions working on the information superhighway?

Answer: The Copyright Office believes that the easy availability of information about the authorship, ownership and licensing terms of works will be critical to the success of the global information society. On July 14, 1993, the Library of Congress held a conference on the topic of "Delivering Electronic Information in a Knowledge-Based Democracy"; all who participated agreed that effective and efficient systems for copyright clearances and payments were necessary.

If obtaining accurate copyright management information is difficult, unauthorized uses may abound. The Copyright Office is therefore trying to assist in solving this problem by developing an electronic registration and recordation system with a rights management component that will allow such information to be collected and disseminated electronically. The Copyright Office is also sponsoring with the Interactive Multimedia Association an intersector/interindustry forum to identify requirements for technology-based intellectual property management in an advanced information infrastructure. The all-day conference, which will beheld on March 7th in Crystal City, Virginia, will look at the principal approaches to developing open and distributed management systems and services, and will survey practices and plans for identifying, labeling and registering works.

A critical aspect of any such system is ensuring that the system is accurate and secure. It 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. Therefore, the provisions of section 1202 are extremely important.

Question 13:

If the scope of copyright holders' rights is clarified, should we also clarify the scope of the exemptions from those rights to ensure that the balance between owners and user is maintained?

Answer: Congress should act to clarify only those aspects of the copyright law as to which there is a need for clarification. Since questions have been raised by some as to whether digital transmissions of works fall within the scope of the copyright owner's exclusive distribution right,we believe it is advisable to amend the portions of the Copyright Act that relate to this issue: the distribution right itself in section 106; the definitions of "publication" and "transmit" in section 101; and the importation right in section 602. This is what is proposed by the pending bills.

In the view of the Copyright Office, it is not automatically necessary to amend the exceptions every time an amendment is made to the copyright owner's rights. In each case, the question is whether the scope of the rights has been changed to such an extent that a corresponding change is needed in order to preserve the fundamental balance of interests reflected in the copyright law. The proposed clarification of the coverage of the distribution right will not in and of itself change that balance. Accordingly, unless a specific related ambiguity is identified in one or more of the exceptions contained in sections 107 through 120,no amendment to those exceptions appears to be necessary at the present time.

Question 14:

Should the one-year waiting period be eliminated for the exemption for the visually handicapped? Why or why not?

Answer: In our testimony on November 15, the Copyright Office opposed the one-year waiting period proposed in the exemption for the visually handicapped. We stated that the waiting period would significantly reduce the value of the exemption, noting that the blind and other persons with disabilities have a legitimate need for prompt and timely access as soon as possible after works become available to the general reading public. For many works, notably textbooks, access would be provided too late to be of real benefit to eligible readers.

Since the November 15th hearing, the Copyright Office has continued to work with the various interested parties. We are pleased that they have achieved consensus; a substitute proposal endorsed by all interested parties, which ensures that access is immediate rather than delayed, has been submitted to Congress.

Question 15:

If, as a result of section 1201, it becomes impossible to gain access to copyrighted works on the NII without the copyright owner's authorization, have we seriously shifted the balance of rights? Can we separate enforcement from the existence of rights in a digital environment?

Answer: In examining this question, it is important to recognize that copyright law has never provided any guarantee of access to protected works. In fact, one of the fundamental rights of a copyright owner is the right of first publication--the right to determine when, whether, and on what terms a work is to be made available to the public. See Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985).

By outlawing the circumvention of copy protection devices, section 1201 is the electronic equivalent of making it illegal to break into a locked room to gain access to a copyrighted work. Like laws aimed at breaking and entering, this section is an enforcement tool, rather than a shift in the underlying balance of rights in the work itself.

In addition, the intent behind the provision is to limit its prohibition to situations where the ultimate acts made possible by the circumvention are themselves unlawful. The language has been drafted so as to apply only where the system being circumvented prevents or inhibits the violation of copyright, and only where the act of circumvention is done "without the authority of the copyright owner or the law." In other words, the intent is to allow someone to"break and enter" if the result is primarily to make a fair use or an otherwise privileged use, or to gain access to works in the public domain.

It is true that section 1201 is a particularly strong and effective enforcement tool, which may prevent or inhibit the development and sale of devices that may be used for both legitimate and illegitimate means. The Copyright Office believes, however, that the general concept of the section is an important step toward ensuring that copyright rights remain meaningful despite the speed, ease and accuracy of multiple copying in the digital networked environment. Without such a provision, many copyright owners will be reluctant to take the risk of making their works available on the NII. The specific language of section 1201 as drafted is a reasonable first step in attempting to find a balance between this critical goal and the desire to maintain leeway for legitimate interests in access. As we indicated in our written submission of November 15, we have some concerns about the breadth of this language, and recommend that it be modified in various respects. Nevertheless, there is no perfect solution, and we believe that the general thrust of section 1201 represents an appropriate compromise of the interests involved.

Finally, we note that the NII is not likely to be the only source of access to works,whether they are protected by copyright or not; traditional sources such as retail stores, theaters and libraries will continue to co-exist with digital databases. For this reason too, the specter of an entirely encrypted world seems unrealistic.

Question 16:

Should section 1202, which protects the integrity of copyright management information, be harmonized with existing section 506, which does the same thing for copyright notices? If so, how would you propose to accomplish this?

Answer: As stated in our prior testimony, the Copyright Office agrees that the proposed section 1202, which safeguards the integrity of copyright management information, should be harmonized with provisions in section 506 of the Copyright Act applying to statements made in applications for copyright registration and to information provided in notices of copyright.

We suggest deleting these provisions in section 506 and adding their coverage to section 1202. Thus, the scope of the provisions in section 1202 would be expanded to include information in copyright notices and representations made in applications for registration. This solution has the advantages of including in one location in the statute all provisions dealing with the accuracy of copyright-related information, and ensuring consistency in definitions and penalties.

Question 17:

Applying the first sale doctrine in the NII and GII environment may be problematic. Proposals to amend the first sale doctrine in the digital context to allow the transmission of a reproduction so long as the transferor destroys the original may not be appropriate. The first sale doctrine does not allow a purchaser of a book to photocopy it, burn it and transfer the photocopy. Is it possible transfer an original in the digital environment without simultaneously making an infringing copy? If it is possible, do you believe that the first sale doctrine should be limited in the digital context for the same reasons that it was limited in 17 U.S.C Section 109(b)(1)(A)(Supp. 1995)?

Answer: The Copyright Office agrees that the first sale doctrine does not transfer easily to the digital environment. The doctrine is based on the premise that an existing copy is transferred from one person to another, with no additional copy of the work created. When a work is transmitted digitally from one computer to another, the original copy remains in the memory of the transmitter's computer, with another copy made in the memory of the recipient's. Thus, the first sale doctrine would not privilege the transmission.

We also agree that simply requiring the original to be destroyed does not result in an entirely equivalent situation. First, the destruction requires an affirmative act, which may not always take place, and will be hard to prove or disprove. Second, the potential to interfere with the copyright owner's market is much greater. In a transfer involving a tangible copy, there has been a single act of reproduction, for which the copyright owner has received recompense. The transfer requires a physical activity, entailing some inconvenience, similar to visiting the bookstore. In addition, the physical copy is no longer new, making it less valuable or appealing in certain respects. In the on-line world, in contrast, the transmission can take place instantaneously, there can be multiple transmissions from a single transferor, the quality of the copy remains equivalent, and the recipient need not leave home to obtain it.

The ultimate question is therefore not whether the first sale doctrine applies to digital transmissions, but whether an equivalent to the first sale doctrine should be crafted. The Copyright Office believes that the answer must turn on a determination that such a new exception is needed to further the policies behind the first sale doctrine, and that it can be implemented without substantial detriment to the copyright owner's market. Of course, even if no new exception is crafted, the first sale doctrine will continue to exist, applying to transfers of tangible copies as this form of exploitation continues simultaneously with the exploitation of works by digital transmission.

The first sale doctrine was developed to avoid restraints on the alienation of physical property, and to prevent publishers from controlling not only initial sales of physical copies of works, but the after-market for resales. See M. Nimmer & D. Nimmer, Nimmer on Copyright Section 8.12 [A] (1993). These concerns do not apply to transmissions of works on the NII and GII. Moreover, it is likely to be relatively simpler and less expensive for the second user to obtain an authorized copy over the NII than to purchase a new tangible copy.

In light of the facts that digital transmissions do not implicate the core policies behind the first sale doctrine, that no hardship to users has been demonstrated, and that it may not be possible to craft an equivalent exception for transmissions without significantly impairing the copyright owner's market for exploiting the work through digital networks, the Copyright Office recommends no change in the law at this time.

Sincerely,

Marybeth Peters
Register of Copyrights