TUTORIAL ON INTELLECTUAL PROPERTY LAW

1. TUTORIAL ON INTELLECTUAL PROPERTY LAW Pamela Samuelson & David Post Computers Freedom & Privacy April 4, 2000

2. OVERVIEW • Samuelson will do: • Overview on intellectual property & its purposes • Basics of copyright, emphasizing digital copyright issues • Basics of trade secrecy and DeCSS case • Post will do: • Trademark & domain name disputes • Patents for software & business methods

3. WHAT IS “IP”? • Intangible rights in commercially valuable information permitting owner to control market for products embodying the information • Copyrights for artistic & literary works • Patents for technological inventions • Trade secrets for commercially valuable secrets (e.g., source code, Coke formula) • Trademarks (e.g., Coke) to protect consumers against confusion

4. ELEMENTS OF IP LAW • Subject matter to be protected • Qualifications for protection • Who can claim • Procedure for claiming • Substantive criteria • Set of exclusive rights • Limitations on exclusive rights • Infringement standard • Set of remedies

5. DIFFERENT THEORIES • Utilitarian: grant rights to create incentives for beneficial investments • Natural rights: persons have natural rights in their creations if valuable • Personality-based: my creation is an extension of myself • Unjust enrichment: appropriating someone else’s work may be unfair

6. ELEMENTS OF COPYRIGHT • Subject matter: works of authorship (e.g., literary works, musical works, pictorial works; NB: software is a “literary work”) • Qualifications: • Who: the author (but in US, work for hire rule) • Procedure: rights attach automatically (but US authors must register to sue; remedies depend on regis.) • Criteria: “originality” (some creativity); in US, works must also be “fixed” in some tangible medium

7. COPYRIGHT ELEMENTS (2) • Set of exclusive rights (right to exclude others) • to reproduce work in copies, • to prepare derivative works, • to distribute copies to the public, • to publicly perform or display the work, or communicate it to the public • “moral rights” of integrity & attribution (US visual art) • some rights to control acts of those who facilitate or contribute to others’ infringement (e.g., ISPs, agents)

8. COPYRIGHT ELEMENTS (3) • Limitations on exclusive rights: • Fair use (e.g., Sony Betamax, Acuff-Rose) in US • Fair dealing in UK and Canada • First sale (e.g., libraries, bookstores) • Library-archival copying (e.g., ILL, course reserves) • Classroom performances • Special inter-industry compulsory licenses (e.g., cable-network TV) • Other (e.g., playing radio in fast food joint)

9. COPYRIGHT ELEMENTS (4) • Limitations on exclusive rights: duration • Berne standard: life + 50 years • EU & US: life + 70 years; 95 yrs from publication • Infringement standard: violating exclusive right (often copying of “expression” from protected work based on substantial similarity) • Remedies: injunctions, lost profits, infringers’ profits, “statutory damages,” costs, & sometimes attorney fees

10. “UNCOPYRIGHTABLE” STUFF • Ledger sheets and blank forms • Rules and recipes (“merger”) • White pages listings of telephone directories • Facts and theories • Ideas and principles • Methods of operation/processes • Bicycles and bicycle racks (too functional)

11. COMPILATIONS AND DERIVATIVE WORKS • Creativity in selection and arrangement of data or other elements = protectable compilation • Original expression added to preexisting work = protectable d/w (e.g., novel based on movie) • Compilation or derivative work copyright doesn’t extend to preexisting material (e.g., data or public domain play) • Use of infringing materials may invalidate copyright in compilation or derivative work

12. INTERNATIONAL TREATIES • Berne Convention for Protection of Literary & Artistic Works • Basic rule: “national treatment” (treat foreign nationals no worse than do own) • Berne has some minimum standards (duration, exclusive rights, no formalities) • WIPO administers treaties, hosts meetings to update, revise, or adopt new treaties

13. INTERNATIONAL TREATIES (2) • TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement • Sets minimum standards for seven classes of IPR, including copyright, that binds WTO members • Must have substantively adequate laws, as well as adequate remedies and procedures and must enforce effectively • Dispute resolution process now available (e.g., EU challenge to US music licensing exception)

14. DIGITAL COMPLICATIONS • Digitized photographs of public domain works (e.g., Microsoft claims ownership in some) • Very easy to reselect and rearrange the data in databases; uncreative databases may be very valuable; EU has created a new form of IP right in contents of databases to deal with this • New ways to appropriate information (e.g., NBA sued Motorola for “stealing” data from NBA games for sports pager device) • Digital environment lacks geographic boundaries

15. DIGITAL COMPLICATIONS (2) • Can’t access or use digital information without making copies • Very cheap and easy to make multiple copies and disseminate via networks • Very easy to digitally manipulate w/o detection • People expect digital information to be free or nearly so • Many people think that private copying doesn’t infringe copyright; much of industry disagrees

16. DIGITAL COPYRIGHT CONTROVERSIES • Linking, framing, & filtering • iCraveTV case • Cyberpatrol case • RIAA v. Diamond (Rio player case) • UMG Recordings v. MP3.com • Napster case • DeCSS cases

17. US WHITE PAPER ON IP & THE NII (1995) • Full potential of NII won’t be realized unless IP/copyright owners are adequately protected • Many are withholding works from the ‘net because of threat of piracy • Copyright can be adapted to digital environment, need a few changes

18. WHITE PAPER POSITIONS • Authors have right to control temporary copies in RAM (reading or browsing as infringement?) • Fair use should recede (if work can be licensed, it must be licensed) • No more first sale/sharing rights (first sale only permits redistributing same copy, not making new ones) • ISPs should be held strictly liable for user infringements

19. WHITE PAPER POSITIONS • Need for new rules to make it illegal to remove or alter copyright management information (CMI) • Need to outlaw technologies useful for bypassing technical protection systems • Get international treaty to universalize these new norms

20. WIPO COPYRIGHT TREATY (1996) • Reproduction right applies to digital works (but no agreement on temporary copies) • Exclusive right to communicate digital works to the public by interactive service • Fair use and other exceptions can apply as appropriate; new exceptions OK • Merely providing facilities for communication not basis for liability

21. WIPO TREATY (2) • Tampering with copyright management information to enable or conceal infringement should be illegal • Need for “adequate protection” and “effective remedies” for circumvention of technical protection systems • Treaty not yet in effect, but US has ratified; EU in process of implementing; Canada has signed

22. DMCA • Digital Millennium Copyright Act (1998) • “Safe harbor” provisions for ISPs • Transitory network communication • System caching • User-stored information • Information location tools • Section 1201: anti-circumvention rules • Section 1202: false CMI/removal of CMI

23. DMCA ANTI-CIRCUMVENTION RULES • Treaty very vague; unclear what’s required • Campbell-Boucher bill in US: proposed to outlaw circumvention of TPS to enable copyright infringement • MPAA: wanted all circumvention outlawed • Compromise in DMCA: illegal to circumvent an access control, 17 U.S.C. s. 1201(a)(1) • But 2 year moratorium; LOC study; 7 exceptions

24. EXCEPTIONS TO CIRCUMVENTION RULE • Legitimate law enforcement & national security purposes • Reverse engineering for interoperability • Encryption research and computer security testing • Privacy protection & parental control • Nonprofit “shopping privilege”

25. ANTI-DEVICE PROVISIONS • Illegal to “manufacture, import, offer to public, provide or otherwise traffic” in • Any “technology, product, service, device, [or] component” • If primarily designed or produced to circumvent TPS, if only limited commercial purpose other than to circumvent TPS, or if marketed for circumvention uses

26. MORE ON DEVICE RULES • 1201(a)(2)--devices to circumvent effective access controls • 1201(b)(1)--devices to circumvent effective controls protecting right of cop. owners • Actual & statutory damages + injunctions • Felony provisions if willful & for profit • MPAA v. Reimerdes 1st civil case

27. CURIOUS THINGS ABOUT 1201 • Only 3 exceptions to 1201(a)(1) explicitly allow building tools • Only interoperability exception limits both anti-device rules • Did Congress mean to allow circumvention to make fair use, yet make it illegal to make tools needed to accomplish? (Ha! Ha!) • LOC to study only act, not device rules

28. PROBLEMS WITH A/C REGS • Legitimate purpose circumventions • existing exceptions overly narrow • need for general purpose exception • clarify that fair use circumvention is OK • “Dual use” technologies • tools to enable legitimate uses • how device rules could be narrowed • Copyright-centric regulations

29. EXCEPTIONS TOO NARROW • Interoperability: not just programs; other reverse engineering may be legitimate • Encryption and computer security research: • no authorization and expert requirements • OK to make tools • less onerous rules on disseminating results • Privacy exception: Windows 2000 hypothetical

30. A GENERAL PURPOSE EXCEPTION? • Need for “or other legitimate purpose” exception to access control rule • Examples of other legitimate acts: • if reasonable grounds to believe infringing copy or computer virus inside TPS • illegitimate invocation of “technical self-help” • Courts able to tell difference between legitimate & illegitimate acts

31. DUAL USE TECHNOLOGIES • Circumvention tools are not burglars’ tools • Ways to narrow rules: • substantial noninfringing use standard • intent/knowledge/injury/infringement requirement • commercially significant cf. apparent legitimate purpose (freeware should not be vulnerable) • technology-specific (e.g., circumvention of SCMS) • Think through relation between range of legitimate circumventions and availability of tools (if X is lawful, tool to do X should be OK)

32. COPYRIGHT-CENTRICITY • Encryption protects more than commercial copyrighted products (e.g., private personal communications, trade secret/confidential business information, e-cash) • Circumvention of encrypted information is a more general problem (sometimes legitimate, sometimes not) • So is the availability of circumvention technology • Would suggest the need for a general law

33. UNINTENDED CONSEQUENCES? • X makes software that circumvents Y’s encryption system • Z is a copyright owner who decides to use Y’s encryption system to protect digital pictures • Does X’s tool then become illegal? • Can Y sue X? Can Z sue X? What harm has X’s software done to Y or Z? • 1201 (a)(2) and (b)(1) does not require any underlying infringement; mere potential is enough

34. MPAA v. REIMERDES • Injunction vs. posting of DeCSS on websites or otherwise making it available • CSS is effective access control for DVDs • DeCSS circumvents it & has no other commercially significant purpose • Lack of evidence for Linux compatibility argument • Besides, 1201(f) only protects interoperation with “programs,” not “data” on DVD

35. ELEMENTS OF TRADE SECRECY • Information that can be used in business that is sufficiently valuable & secret as to afford an economic advantage to the holder • Outgrowth of unfair competition law • No “exclusive rights” as such, but protected vs. use of improper means & breach of confidence • Independent development & reverse engineering are legitimate ways to acquire a trade secret • Relief generally limited to period in which independent development would have occurred

36. DVD-CCA v. McLAUGHLIN • Trade secret misappropriation case • CSS = proprietary information; DVD-CCA took reasonable steps to maintain secret • Inference: someone must have violated clickwrap license forbidding reverse engineering • Breach of agreement was improper means • Even though DeCSS on web for 4 months, not to enjoin would encourage posting TS on Web • Judge upset by “boasting” about disrespect for law

37. IMPLICATIONS OF DVD-CCA • Anti-reverse engineering clauses are common in software licenses; enforceability much debated • Judge’s willingness to enforce and treat information obtained through reverse engineering as trade secret worrisome • Judge’s willingness to enjoin information that had been public for several months may be error • “Fruit of poisonous tree” rationale (judge knows Johansen didn’t reverse engineer, nor did many posters, yet held as trade secret misappropriators)

38. CONCLUSION TO PART I • Digital technology has posed many difficult questions and problems for copyright law • Much remains in controversy; how current cases are resolved matters a lot • Possible to build balance into law, but US “selling” broad anti-circumvention rules • Gap in perception about law as between copyright industry and the public; enforceability & respect for law contribute to difficulties • Easier to see the risks than the opportunities