October 1, 1998 12:55 PM PDT

Committee to debate copyright bill

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Congress today is fine-tuning controversial legislation that would strengthen protections for intellectual property on the Net, but also could help copyright and database owners put a digital barricade around their material--even if it's in the public domain.

The House and Senate have passed different versions of the Digital Millennium Copyright Act, and today congressional staff members are preparing for a joint-house conference committee that will meet tomorrow to begin hammering out the final details of the bill.

Powerful industries See related story: Congress hashes Net copyrights support the bill, since although they see the Net as key to new business ventures, they worry that it also makes it easier for people to illegally copy and distribute their products.

On the other hand, opponents say the bill could let information providers charge people every time they access material that is now free in a library or purchased for indefinite use such as the films in a home video collection.

Under the conference committee's report--which both chambers of Congress have to approve--the rules for tapping into digital database services, purchasing software or music over the Net, conducting research, and testing technology could be dramatically changed.

Two provisions in the legislation, as follows, are the cornerstone of debate:

  • The House version of the bill would let database owners--such as Lexis-Nexis, a sports-score aggregator, or a service that publishes court decisions--safeguard their entire data collections, prohibiting others from extracting a "substantial" portion of the public facts in databases to develop other businesses.

  • Another section makes it a crime in the United States to create or sell any technology that could be used to break copyright protection devices, such as encryption or digital watermarks. Violators could be charged up to $2,500 per act of circumvention. Although the House bill permits these devices to conduct encryption research or for the purpose of testing product interoperability, the Senate version doesn't allow this activity.

    In addition, a little-known provision in the House bill, which was created jointly by the Recording Industry Association of America, the Digital Media Association, and members of Congress, could stifle the nascent Webcasting business. Under the section, Webcasters--such as the budding group of Net radio stations--would owe additional licensing fees to record companies, which could take a large chunk out of their gross revenues.

    The copyright legislation was drafted to implement treaties signed at the World Intellectual Property Organization's Geneva conference on digital information and copyrights in December 1996--but the U.S. bills go much farther than the treaties.

    On Monday, the Federal Trade Commission sent a letter to conferee Rep. Tom Bliley (R-Virginia) warning that the database protections could be unconstitutional and anticompetitive.

    Several senators also have sent letters to the conference committee discouraging passage of the database portion of the bill because the Senate did not consider those issues in its version of the bill.

    The FTC, however, directly warns about the potential dangers contained in that portion.

    "Policies that further entrench the market power of single-source data providers could have an unintended, undesirable impact on competition and innovation because of the significant potential for anticompetitive conduct in single-source database markets," the FTC wrote in its letter. "

    The FTC said any database protections should last no longer than 15 years; that the term "substantial" be better defined to determine exactly how much someone could take from a database without violating the proposed law; and that so-called fair use rights be protected. Under the current copyright law, once a book or musical work is purchased, for instance, a consumer has limited rights to reproduce, share, or resell the material.

    Fair use protection also sparks concerns over the copyright protection device section of the bill. Critics say if that provision is passed it also could hinder college students and programmers from decoding encryption algorithms to test the strength of the data protection technology or to conduct reverse engineering.

    "Fair use permits individuals, teachers, scholars, and business entrepreneurs to excerpt copyrighted information without getting the advance permission from the copyright owner--this is useful for anyone writing a book report or business plan, for example," said Adam Eisgrau, legislative counsel for the American Library Association.

    "If new technologies can be applied by copyright owners to protect information from being accessed without permission--and it also becomes illegal to penetrate that digital wrapper for what are now lawful purposes--we will throw an enormous wrench into every sector of society and commerce," he said.

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