The ADA Monthly Intellectual Property Wrap-Up
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A monthly summary of recent legislation, cases, reports and other events
relating to intellectual property and the public interest, published by the
Australian Digital Alliance.
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Feb 2002
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[1] About this publication
[2] Copyright Tribunal hands down CAL/schools decision
[3] US Supreme Court to hear copyright extension case
[4] Data cable falls foul of US copyright law
[5] Mandatory copy protection in hardware: one step closer...
[6] I can copy, right?
>[1] About this publication
This summary of recent IP (but chiefly copyright) happenings of relevance to
Australia is published every month by email and on the Australian Digital
Alliance website at http://www.digital.org.au/issue/ipwfeb02.htm. If you
have any suggestions as to what should go in the next issue, please let the
Nick Smith know by email: (nsmith@nla.gov.au).
Nothing in this publication constitutes legal advice.
[2] Copyright Tribunal hands down CAL/schools decision
The Deputy President of the Copyright Tribunal handed down a decision in the
'schools' case on 8 February. The decision followed an application by the
Copyright Agency Limited (an Australian copyright collecting society which
administers rights on behalf of authors and publishers) to have the Tribunal
set copying rates for Government and independent schools.
Schools (along with other educational institutions) may copy material for
educational purposes under Part VB of the Copyright Act, provided that
certain conditions are followed and that remuneration is ultimately paid to
rights-holders. This remuneration can be set by agreement between the
parties or, more commonly, by application to the Tribunal.
The Tribunal set the following rates for school copying:
* A base rate of 4 cents a page;
* 8 cents a page for artistic works and poetry;
* 6 cents a page for plays and short stories;
* 40 cents per page for works copied onto slides, overhead
transparencies and display copies.
The new rates are retrospective to 1 January 1997 and are indexed by CPI.
The Tribunal declined to set a further rate for digital copying, saying that
there was insufficient evidence to allow it to do so.
In the second quarter of 2002, the Tribunal will hear a case between CAL and
the universities to set copying rates for that sector, including a new
digital rate.
More information about the schools case can be found at:
http://www.austlii.edu.au/au/cases/cth/ACopyT/2002/1.html
[3] US Supreme Court to hear copyright extension case
In a decision which surprised many and sent waves of something like
excitement through the copyright community, the US Supreme Court granted
certiorari in the case of Eldred v Ashcroft. This means it will hear the
plaintiffs appeal that the Sonny Bono Copyright Term Extension Act (CTEA)of
1998 is unconstitutional because it violates the copyright clause of the US
Constitution. This clause is as follows:
"[The Congress shall have power] To promote the progress of science and
useful arts, by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries".
When the Constitution of the United States was first adopted, Congress
clearly took the phrase 'limited times' seriously. Copyright was available
for just 14 years in the first instance with a second 14 available upon
renewal. Today, most countries allow for copyright to last for the life of
the author plus 50 years. The EU and the US (following the CTEA) extended
this duration again to the life of the author plus 70 years.
In the case of corporate works, the US extended their duration from 75 years
to 95 years. Hollywood, especially Disney, has strongly supported this
extension, fearing that some of its most popular intellectual property will
fall into the public domain. For example, Mickey Mouse was due to enter the
public domain in 2004; instead he remains the property of Disney until 2024.
(Of course, even if Mickey was in the public domain, use of his image would
still be subject to trademark law).
Eric Eldred and his fellow public-domain publishing plaintiffs challenged
the CTEA arguing that it was unconstitutional. They lost in the US District
Court and then lost again 2-1 in the District of Columbia Court of Appeals
(with a spirited judgement from the dissenting Judge David Sentelle).
If the Supreme Court had not accepted their appeal, it would have been the
end of the road. The Bush Administration opposed the appeal, claiming that
there is no limit on Congressional power to extended copyright. (Lawyer and
commentator Lawrence Lessig claims that copyright has been extended 11 times
in the last 40 years). Furthermore the Administration claimed that there was
no need to reconcile copyright with the First Amendment guarantee of freedom
of expression.
It is hard to guess how the Court will rule. The US Supreme Court is famous
for its 5-4 conservative-liberal divide (with Reagan appointee Sandra Day
O'Connor as the swinging voter). However, the case of Eldred will likely not
fall along 'party' lines. On the liberal side, Judge Breyer wrote an article
in 1976 entitled 'The Uneasy Case for Copyright: A Study of Copyright in
Books, Photocopies, and Computer Programs." (Harvard Law Review, 284:281,
1976.) He argued that it may not be necessary to offer any copyright
protection to these works.
On the conservative side of the fence, Judge Scalia, is a 'strict
constructionist'. With any luck, he will rule that when the Framers of the
Constitution wrote 'limited times', they did indeed mean limited times.
Whatever the decision, intense scrutiny of the rationales and consequences
of copyright by what is arguably the most important court in the world
should have a strong impact on world copyright jurisprudence.
No hearing has presently been scheduled.
[4] Data cable falls foul of US copyright law
Many commentators have asserted that the new anti-circumvention provisions
contained in the US Digital Millennium Copyright Act (DMCA) of the
Australian Copyright Amendment (Digital Agenda) Act 2000 will have a harmful
impact on the development of new technologies. Specifically, it was feared
that useful hardware or software might be unintentionally outlawed. A recent
situation in the US illustrates what damage such laws may cause.
(The anti-circumvention laws make it an offence to manufacture, import or
supply (or use in the US) devices which get around technological protection
measures such as software locks or password screens).
Here is the background to the situation in the words of University of
Minnesota student, Colin McMillen:
"I'm currently enrolled in a Real-Time Systems lab here at my university
(the University of Minnesota). As part of the lab, we are intending on using
the Sega Dreamcast console as a real-time system; we'll be writing a
scheduler for it and some simple games."
"I recently ordered a Dreamcast Coders' Cable from Lik-sang.com, a dealer
based in Hong Kong. The coders' cable is simply a serial cable with a
special end to fit into the Dreamcast's serial port. It allows you to upload
your code from your PC at 115200 bps to the Dreamcast. This is a necessary
item for amateur Dreamcast coding (unless you want to fork out the money for
the Dreamcast Broadband Adapter, an expensive, no-longer-manufactured piece
of hardware that does the same thing, but with a higher transfer rate.) The
package was supposedly shipped UPS express, to arrive here in 3-5 days."
But the cable, a simple piece of computer hardware, never arrived. After
waiting 2 weeks, McMillen emailed UPS customer service only to be told:
"Thank you for your inquiry. We sincerely apologize for any inconvenience
caused by this matter. Our system indicates this package has been denied
entry into the US by US customs authorities due to the DIGITAL MILLENNIUM
COPYRIGHT ACT. The shipper of record has been notified and the package will
be returned to the shipper."
McMillen was unable to effectively protest the decision to US Customs. He
also did not receive any statement from Customs about which exact provision
of the DMCA his data cable was actually in violation of.
It seems that US Customs took the action it did because it was blocking all
imports from Lik-sang.com. Lik-sang makes the NEO4 chip, a Playstation Chip
which allows Playstation owners to play games and even DVDs regardless of
region coding. Rights holders allege that this modified chip is used to
allow Playstation owners to play pirate games. (A similar modified
Playstation chip is currently facing court action in Australia).
So in order to block the entry of piece of hardware of questionable legal
status (the NEO4), US Customs blocked a much wider range of hardware (it is
seemingly difficult to confuse a chip with a data cable). And those who had
their technology blocked were not informed that it had had happened or why
or given any avenue of redress. This tends to confirm the view of many
commentators that the anti-circumvention laws can have a chilling effect on
the development of new hardware and software.
[5] Mandatory copy protection in hardware: one step closer...
The Next Big Thing (tm) in the protection of intellectual property in
digital form is the mandatory inclusion of copyright protection measures in
all hardware and software. This will mean that it will be impossible for
consumers (or anyone) to make unauthorised copies because the technology
that they use, from their PCs to their hard drives to their Operating
Systems to their applications, will simply not permit such copying.
This had been the goal of many in the entertainment industry for some time.
In the now infamous words of Sony Pictures VP Steve Heckler when Napster was
in its heyday:
"Sony is going to take aggressive steps to stop this. We will develop
technology that transcends the individual user. We will firewall Napster at
source - we will block it at your cable company, we will block it at your
phone company, we will block it at your [ISP]. We will firewall it at your
PC."
The process of 'firewalling' unauthorised copying 'at your PC' is going
forward nicely. In a previous issue, I reported on a proposed piece of
American legislation, the Security Systems Standards and Certification Act
(SSSCA).
(see http://www.digital.org.au/issue/ipwsep01.htm) The SSSCA was proposed by
Senator Fritz Hollings of South Carolina (see here for a break down of
campaign contribution received by Senator Hollings:
http://www.opensecrets.org/politicians/summary.asp?CID=N00002423&cycle=2002)
Senator Hollings has now convened hearings of the Senate Commerce Committee
(which he chairs) to discuss the delicate issue of Federal Government
mandated copyright protection in all digital devices.
The hearings included such regulars on Capitol Hill as Michael Eisner of
Disney and Jack Valenti of the Motion Picture Association of America.
Opposing them were representatives of hardware companies which strongly
oppose such copy protection schemes as unworkable and anti-innovative.
Senator Hollings opened the hearings with a prepared statement: "Those
Americans who do access top notch content online are often stealing it.
Every week a major magazine or newspaper reports on the thousands of illegal
pirated works that are available for copying and redistribution online.
Academy award winning motion pictures, platinum records, and emmy award
winning television shows - all for free, all illegal."
"When Congress sits idly by in the face of these activities, we essentially
sanction the Internet as a haven for thievery. This problem cannot be
minimized. Piracy is growing exponentially on college campuses and among
tech savvy consumers. Over ten million people use file sharing sites on the
Internet to download movies, songs, and tv shows, with no penalty."
His solution to the Internet as a haven for thievery:
"Senator Stevens and I are planning legislation that would place a deadline
on affected industries to come together to solve these problems in private
sector talks. If they do, we will empower government enforcement so that all
consumer devices comply with the private sector's solution. If they don't,
the Government's technologists and engineers, in consultation with the
private sector will step in."
Senator Hollings' solution was readily supported by Disney's Eisner. He is
also confident that any copy protection mechanisms would not erode fair use:
"Disney and other content owners are not seeking to stop home taping or
eliminate "fair use." We are not here because we want to hinder libraries
and college professors in using portions of creative works for scholarly
research. Nor are we here because we want to interfere with consumers who
wish to make a home copy of Broadcast and basic cable TV programs for their
own personal time-shifted viewing. We are confident that the government can
act to facilitate the needed technology standards without endangering home
taping or fair use."
Quite how a copy protection device built into a PC will determine what is an
unlawful pirate copy and what is a legally allowed 'fair use' copy when this
is a determination that many lawyers cannot agree on is an interesting
question...
Senator Hollings' proposal was vigorously opposed by Leslie Vadasz of Intel.
He led off with a timely call for some perspective on the issue: "The IT
industry is all about innovation; we embrace and champion technological
progress. The content community, by contrast, has historically feared
technology - from the advent of sound recording, to the development of the
VCR, the DVD, the PC and other digital devices. Yet every advancement in
technology has proven to be a major growth catalyst for the studios.
Videocassette rental and sales totaled about 11 billion dollars last year,
exceeding box office receipts by some 2+ billion dollars. This is the device
once referred to by Jack Valenti as the "Boston Strangler" of the film
industry. Other "attackers" of the film industry include the DVD, which
added another 5.9 billion to studio receipts in the last year. It is
important to keep these facts in perspective when reviewing claims of
imminent threats to the health of the film industry."
He went on to say that: "This dynamic of innovation would be choked by any
attempt to regulate the design of products solely for the benefit of one
industry. Designing products through a regulatory process, as some studios
have advocated, would inject political influences into technology
development in very destructive ways. Investment and innovation will both
suffer, as a fear of entanglement with government processes will have a
chilling effect on investors and subject new ideas to "reg review"."
He also spoke of the capabilities that consumers have come to expect from
the technological products that they own: "Consumer rights to enjoy powerful
technology products, with the robustness they have come to expect, and their
right to fully enjoy content in accordance with what the law permits, would
both be greatly diminished if the studios' "wish list" of content protection
objectives were fully implemented".
It's lucky that an Intel executive was there to put this point of view
across because you certainly couldn't expect to see a genuine consumer
representative invited to this hearing as a witness...
Needless to say, Mr Valasz received a rough time before the Committee
according to various sources, so much so that he felt the need to supply the
Committee with a clarifying statement soon afterwards. There is little doubt
that Senator Hollings will be pressing forward with his legislation.
Further information on the hearings can be found here:
http://commerce.senate.gov/hearings/hearings.htm .
>[6] I can copy, right?
Yes, you can copy this publication. Feel free to send it to friends or
colleagues, print it off or even archive it on your website provided that
all text is included or, in the case of an excerpt, appropriate credit is
given.
-- ========================================================= Nick Smith Executive Officer :: Australian Digital Alliance Copyright Advisor :: Australian Libraries Copyright Committee PO Box E202 \\ Kingston ACT 2604 Ph: 02 6262 1273 \\ Fax: 02 6273 2545 Email: nsmith@nla.gov.au \\ Web: www.digital.org.au =========================================================
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