TUTORIAL ON INTELLECTUAL PROPERTY LAW Pamela Samuelson David

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

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

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 3

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 4

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 5

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 6

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) 7

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. , cablenetwork TV) – Other (e. g. , playing radio in fast food joint) 8

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 9

“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) 10

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 11

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 12

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) 13

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 14

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 15

DIGITAL COPYRIGHT CONTROVERSIES • • Linking, framing, & filtering i. Crave. TV case Cyberpatrol case RIAA v. Diamond (Rio player case) UMG Recordings v. MP 3. com Napster case De. CSS cases 16

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 17

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 18

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 19

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 20

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 21

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 22

DMCA ANTICIRCUMVENTION 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 23

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” 24

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 25

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 1 st civil case 26

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 27

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 28

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 29

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 30

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) 31

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 32

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 33

MPAA v. REIMERDES • Injunction vs. posting of De. CSS on websites or otherwise making it available • CSS is effective access control for DVDs • De. CSS 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 34

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 35

DVD-CCA v. Mc. LAUGHLIN • 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 De. CSS on web for 4 months, not to enjoin would encourage posting TS on Web • Judge upset by “boasting” about disrespect for law 36

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) 37

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 38