The 1996 Conference of
American University's
Global Intellectual Property Project
(GLIPP)
Ownership On-Line: Intellectual Property Implications of the Global Information Infrastructure
Sponsored by: American University 
& Atlantic Mutual Companies 
Wednesday, Oct. 16, 1996
Carole Ganz-Brown is the author of this report.
Welcome: On an unseasonably balmy October afternoon, Patricia Wand, University Librarian of American University, welcomed an audience of more than sixty practitioners, scholars, and public policy makers. Appropriately, for the forum for public discussion of the intellectual property implications of the Global Information Infrastructure (GII), Wand began by emphasizing the internationalism and absence of political boundaries on the Internet. She asked speakers to bring disciplinary lenses to Internet global issues, and especially, the delicate balance between intellectual property rights (IPRs) ownership and fair use. Wand said neither "words in the wind" beyond the control of everyone nor strict control was the answer to ownership.
Opening Comments: Mike Nelson, Special Assistant for Information Technology in the White House Office of Science and Technology Policy, further set the tone and pace of the afternoon's discussion. Nelson, a geologist by training, said he brought a sense of geological time to data and intellectual property issues. He fully appreciated the importance of sharing data nationally and globally.
Nelson said he functioned as a human network of agency involvement in information technology. He put the White House on line, and did numerous other things related to privacy, security, and intellectual property protection. "We need to do lots of work in these areas," he said. "We need to take traditional ideas of copyright and bring it into the digital environment."
The Internet is a plagiarist's dream, Nelson said. Download! Press one button and send copies around the world! However, the person who created the information needs to be rewarded. One Administration goal, he said, was to make the information highway safe for those who wish to create and share information. Nelson emphasized the U.S. Constitutional base for copyright -- an incentive system for creators of information. He said the objective is to maximize social utility -- NOT revenues for distributors.
To produce the White Paper -- subsequently sent to the Hill for legislative action -- the White House Office of Science and Technology Policy facilitated meetings with book publishers, Internet service providers (ISPs), film makers, scientists, and so on. We didn't know what fair use meant in cyberspace -- we had a new media and we needed new approaches. Another issue, Nelson said, was liability for Internet Service Providers. Clearly, he continued, if told they were distributing pirated information, ISPs had responsibility. On the other hand, with encryption, they might not know.
Nelson also emphasized that the United States needs to work with other nations and bring a harmonized approach to protecting copyright in cyberspace. "Bits do not stop at borders," he said. Problems and differences abound. The French observed strong moral rights of authorship. In China, Nelson said, there were no rights. In the United States, the Congress had not found solutions earlier this year.
Globally, the World Intellectual Property Organization (WIPO) was trying to develop a global framework, and the United States had been a leader pushing WIPO to harmonize. Nelson enumerated three new international agreements pushed by the United States -- a new Protocol to the Berne Convention, a new agreement on sound recordings, and another new convention on protection of data bases.
Nelson saw the United States as "facilitating development and sharing of information in cyberspace." Among other developments required -- new law; new technology, for example, micropayment systems -- to pay people, to allow them to contract to pay,to exchange money online; new business models -- to recover the value of information developed. We don't want rigid new structure, Nelson said.
To begin to facilitate development and sharing of information in cyberspace, Nelson emphasized a fourfold approach. First, the system needs intellectual property protection for rewarding people who create. Second, the system needs privacy. The issue is how to protect and yet to keep privacy of people who download and use. How can we avoid digital libraries tracking everyone? Third, we want to avoid cumbersome structures to inhibit free flow of information. Fourth, we want to minimize costs of the system
Mike looked forward to what panelists had to say, and working with them to go to solutions. Session 1: Moderator -- Ted Henke Ted Henke, Atlantic Mutual, began the Session by emphasizing the interest of his company in providing insurance for online service providers against liability. He expressed his expectation that speakers would provide guidance on the scope of protection needed, and potential impact on Internet services.
Adam Eisgrau, American Library Association opened with the question: What do we want out of the digital environment? The Clinton Administration, he said, deserves great credit for opening up discussion of questions.
Eisgrau said aspects of one traditional model must go forward: First, the Founding Fathers' fundamental principle -- Art. I, Sec. 8 -- promote science in the broadest sense. Second, as the law evolved -- on the British model -- encourage balance between incentives to create and free flow of information. "Balance" is key, Eisgrau emphasized. "We don't think you have to junk copyright," he said. Where do we want to go as a society and how do we get there? We have been there before and have come out with a balanced copyright system, Eisgrau continued.
Eisgrau said we should balance, that is, not junk incentives AND encourage progress in science. How? Use spigots in the pipeline, he recommended. For one, provide public access through libraries - -- these were spigots in the pipeline. Also, provide fair use to accommodate education, and also small business. NOT every unauthorized use should be illegal, Eisgrau suggested. Some unauthorized use should be permitted? When there are substantial benefits to public goals, say, ability of entrepreneurs to stand on shoulders of giants and promote progress.
How do we strike the balance? Encourage forums for discussions, he said. Eisgrau promotes the Digital Future Coalition -- ALA and other such nonprofit and educational institutions are members, he said. On the other hand, the Creative Incentive Coalition, including Viacom, Time Warner, and so on -- owners of content on the Internet. Chris Meyer, on the Panel, speaks for some of those companies. Globally, how does the world begin to adjust international agreements and norms for the digital age? How can the United State retain flexibility, while participating in the world system. The United States, Eisgrau said, needs to keep a system which has genius at its core to promote innovation. Again, Eisgrau emphasized balance as the way to promote commercial exploitation. We don't want to make protection so broad as to cut off the spigots. WIPO is convening in December 1996 before there is consensus in the United States. Eisgrau with the question: Where should the policy balance begin to be struck internationally?
Christopher Meyer, Meyer and Clipper (formerly PTO), represents copyright providers -- owners of content on the Internet. History, Meyer said, was a useful teacher. The United States helped create international norms, even if the United States did not always adopt them timely.
Copyright, Meyer said, was created historically because of technological shifts. It became insufficient for the King to support authorship with the invention of the printing press. Copyright was a way to "property-ize." Without it, you would have anarchy, Meyer continued.
Traditionally, copyright gave creators ways to go into the marketplace. Now, encryption might assist copyright law and make arrangements to pay for the information. Still, Meyer emphasized, there is the question of transactions costs when you need to strike the balance between free flow of information and ownership online. We will see new law in a few years, he concluded. William Burington, America Online (AOL), began his presentation by raising additional aspects of issues. The copyright in cyberspace issue, he said, meant, first, educating about the reality of the technology. We started, Burington continued, with the content providers wanting AOL to police infringement. Only through the education process did content providers learn about the complexities of the medium itself.
Is there protection for copyright in cyberspace? Absolutely, Burington said. Content providers had concerns they would lose global markets for their products when distributed worldwide. However, Burington said, it was inappropriate for online providers to be the deep pockets -- liable for infringement. If one of our 6.5 million users infringe, online providers should not be directly or indirectly responsible for the infringement.
Burington said the other issue was how online providers get notice of the infringement. Online providers need to get basic pieces of information from Disney or Time-Warner in order to see what infringement looks like. We need the information because we could not be in the business of judge and jury of infringers, Burington continued. We don't want to be the deep pockets either. The online Internet providers should not be the deep pockets, he said. Rather it should be the real infringers. Who are they? College students? High school students? To take care of infringement, we need rules of the road. Also, he said we need to better understand the technology. He need to educate, Burington concluded.
Peter Jaszi, American University, said he had written and thought about the history of the subject -- as had Chris Meyer. Let's revisit the relation between print and the first copyright law, Jaszi suggested. There was 200 year lag between printing and copyright law, he told the audience. Why? Intervening variables - - - social and economic patterns. It probably won't take us 200 years today, Jaszi said. But, he continued, it takes more than months to recraft the intellectual property rules to take account of network technology. Jaszi agreed with Meyer that the United States was on its way -- 2 or 3 years --to recraft intellectual property law. Meanwhile, he said we should not preempt changes in the law. Jaszi said he would talk about one aspect of the change. These were the proposals internationally and domestically, for data base protection. The U.S. Supreme Court, he pointed out, ruled on copyright author creativity several years ago in FEIST. The U.S. Supreme Court said copyright authorship protection would not extend to rearrangement of databases of telephone addresses -- no matter how much investment made in the rearrangement of data. The Supreme Court said copyright authorship in the traditional sense would not extend to data bases. Jaszi emphasized the lack of attention in the discussion of data base protection to interest balancing in the copyright environment.
NOW, internationally, Jaszi continued, the WIPO proposal would compel countries who signed the treaty to enact domestic regimes which would allow IPR protection to apply to compilations of what are public domain facts. Also, he said, the WIPO proposal would breach the model of moving from technological change to legal change. We will breach, Jaszi continued, because there was no consensus building before legislative activity. There was also no consensus building internationally. We should not commit the country to an addition to copyright before we gained consensus. An important problem with the international project was that the project gets ahead of the domestic front. John Perry Barlow, Electronic Frontier Foundation, said he was a creator, not a purveyor of information. He may be the only creator here! Barlow denied charges that he was an "old hippy" who was not concerned with getting paid. He was "greedy."
Barlow emphasized that the economic model was not the right one for creating a robust digital economy. Barlow said the digital economy won't be killed by the flawed economic model because the digital environment was too robust. But it would be the Viet Nam of cyberspace. He also warned that we shouldn't create laws that would breed disregard of laws.
Barlow asked the audience: "How many of you had illegal software?" Few raised their hands. Barlow was surprised at the lack of illegal software. "We are in Washington," one audience member volunteered. Barlow commented: What was going on here was the imposition of laws appropriate to the industrial age to the digital age. It was a land grant on the powers who were. It was increasing the power of institutions --taking the contents of one people's brain to other people.
The copyright law protects publishers and their return on investment, Barlow said. They needed to provide the capital base to provide a distribution system. The distribution system was not needed on the Internet, Barlow said. You cannot go towards copyright in an environment in which copies are not made.
Barlow posed the question: "What is the new environment?" It was
based on relationship, not on property, he said. The relationship
was one similar to the relationship which poets have to their
audience -- disintermediation. The Grateful Dead stopped kicking
out the people who were taping, he told the audience. Stop
bothering with copyright! Rather, create an audience! We need to
take a look at what will serve the Constitutional purpose of
achieving the advance of useful arts, Barlow concluded.
First Session Audience Questions
1. In the international discussions of the reward systems for the networked environment, were technologists left out?
Barlow: Probably. However, technologists usually ignored the model of ownership of intellectual property characterized by "free flow of information" reward systems.
Jaszi: -- There are important issues of whether the status of all individual creators are taken advantage of in the networked environment.
2. What was going the future, and development, of democracy in the international environment, considering copyright changes. Let's pay attention to the fundamental relation between communication and democracy, which does not exist, for example, between manufacturing advance and democracy. We are only in an early stage of democracy, and so we should question the model of copyright. We need to open up the debate and strengthen the democratic revolution.
Barlow -- Copyright is no longer the ideal way to protect because there are no copies to get around.
Eisgrau -- The copyright scheme in the U.S. is most welcoming and respectful of democracy. The "alligators in the swamp" are the proposals on the table in Geneva -- which would circumscribe what is in the U.S. We should really be concerned --especially about the timetable. How fast do we attempt to do this? At what risk?
3. How will the patent system be jeopardized by the Internet's free flow of information? Where can the patent and copyright law work together to further the advance of technology? Let's consider new forms of protection more similar to patents to protect information.
Barlow -- We have gone over the line already in trying to patent ideas or algorithms. 4. I am an author and want to publish novels in cyberspace. How do I get paid?
Barlow: First, there won't be traditional novels; cyberspace is a new dimension -- operating differently. Second, there is morality and ethics in cyberspace,not law; cyberspace achieves social order and equity. Also, there is nothing broken in cyberspace; there is no ripping off online. We should not fix it with copyright if it is not broken.
Chris Meyer: Every time a server transmits a message, there is a "copy." Cyberspace exists in a world with laws, which need to be applied to the new environment.
Eisgrau: Scenarios should emphasize not only the risk side of the technology to owners of content, but also the opportunities to police users of the content. He emphasized that what we have now is a "rush to judgement." The law of the U.S. is unsettled.
Burrington: There will be a "rush to judgment" in Geneva in
December. Then, there will be the policy debate in the Senate to
ratify agreements. We need to work with Administration to do
something.
Session 2
Moderator: Renee Marlin Bennett
Renee Marlin Bennett, American University, began Session 2 by
stating the vital issuea which we are face in the Internet and
intellectual property rights for the future: the role of nations
and their rights and responsibilities in the global information
infrastructure.
Carsten Fink, World Bank, works on economics of telecommunications and information infrastructure policies for the World Bank. Fink pointed out that economists more and more were considering knowledge production for economic development as compared with more traditional inputs into development of capital, land, and labor. In knowledge production, what was striking about the Internet environment, Fink said, was that the marginal cost of providing information -- one extra copy -- was zero. Possibly, Fink suggested, digitized information could be seen as a public good.
Fink said, concerning public goods, what you learned from economic theory was that there was market failure. With public goods, a competitive market failed to optimally allocate resources towards the creation of information.
Fink asked, "Was there an economic paradox because private suppliers were involved in the Internet? Why should private sector companies participate in the Internet?" Fink said that for companies such as the Washington Post, revenues came from secondary participation. People bought hard copy newspapers, after reading portions on the Internet.
What was the overall solution? Fink said, the copyright or legal approach was to treat information as an excludable good. Another approach, Fink continued, was through advertising. Advertising was effective for some sectors (sports pages) but not for others, he said. A third was through charging for digital access. Fink made the point that it doesn't make sense to have a national approach for charging for digital access because you can move services abroad.
Fink also said that developing countries could participate in this global market for information once they were plugged in. How would the Internet look in the future? Fink said several approaches would play a role. Internet hosts would continue to create revenue through sale of related goods and services. Also, advertising scheme would continue to stimulate information of higher values. Intellectual property and digital rights management technologies would continue to be complementary, he concluded.
Edward Malloy, U.S. State Department, saw the future as a digital world. How did you develop IPRs in that world? Malloy said the technology would develop the intellectual property regime, not the other way around.
How did other countries see us, he also asked. For one, Malloy told us that today, and increasingly, large companies were moving into Internet commerce -- IBM, Microsoft, AT&T. Consequently, other countries saw the United States as exerting economic protectionism. Also, the Internet, Malloy said, had an unregulated image. Other countries were not unregulated in telecommunications. The Internet empowered people. It was a free good on campuses.
Malloy said that the United States was asking other countries to develop IPRs regimes. These countries -- France, Japan, others -- did not incorporate American values,in many cases. Some of these values were English language, people power,and so on. He said transposing American legal values to other systems would prove difficult -- Internet service provider liability issues, for example.
Also, Malloy continued, the United States lacked consensus itself about how far to go to develop a global intellectual property regime. New rule might not survive the Senate. Malloy said that other treaty negotiations gave us hints that it may take a lot longer to reach consensus than three weeks in December at Geneva. Why are we doing this, when we have not agreed on our own Internet regime, other countries may ask.
Malloy concluded that especially getting developing countries on board will take time.
Jeffrey Crigler, IBM InfoMarket, said his focus was on technology. There was a large $16 billion business in information technology that allows other people to use information and pay. He termed the Internet problem -- THE DISINTERMEDIATION WAR.
Crigler said this meant asking how we develop the technology, standards, and interoperability to deliver the information. You take the information, he said, and put it in the container. Add some rights to view it for 5 cents, use it for 10 cents, and sharing it with other users for 15 cents. Crigler wants a payment assurance system. The author gets his $12 when you open it.
What were the problems? Crigler said the first problem was the behavior which needs to be changed so that users pay. The second was technology. The third was to get the government out of the encryption issue, he concluded. Over the next year, this technology will get itself into the market and IPR problems will begin to sort themselves out, Crigler concluded.
Manuel Gameras, Mexican Ministry of Finance, said the coin in which we should measure IPR problems is "supernationalization" of society -- what was the role of the nation state. What was the future role of the civil society? From that view, access to technology and IPRs became relevant. How could we adapt international law to different circumstances? How will the technological change drive us to change the old paradigms. How can we have produce more public goods?
Cameros revisited the "balance" question. Whose balance, he asks? The publishers? The authors? Cameros agreed with other speakers that policy making required more time, especially, to integrate the views of many countries.
Gameros said we must consider the question of how states could encourage more information. Government should consider the production of more public domain information -- allocate 1% to public domain information, for example.
The role of professional organizations, especially those networked internationally, should be looked at, Gameras said. We all agree that knowledge producers should be compensated. The issue is how?
Edward Comer, American University, said that we needed to recognize that the marketplace is not neutral. The shape of the market determined which goods would come out of the system. Public to private sector involvement partially determined the shape of the market. The marketplace was also dynamic, Comer said. Also, the market was biased towards rewarding those who have knowledge and information already.
Comer said that we should think about the effects on liberal democracies of the marketplace structure. "Won't it reward those who have the knowledge already?" Also, Comer said this would not produce the required perfect information flow relevant to liberal democracies. Libraries, other institutions, he concluded, allow us the escapes to balance the market system for knowledge.
Libraries acted as an intermediaries which redistributed knowledge, Comer suggested. Libraries were a buffer zone for market place information. Also, Comer said, faculty at academic institutions were a buffer. Faculty were paid in other ways than simply by the information they produce. Faculty and libraries were examples, Comer suggested, of the models of institutions which acted as buffers.
The model of the Internet as a capitalist market system did not promote democracy, he said . Political intervention and cultural considerations should be taken into account directly, he said. Comer recommended development of institutions and organizations which promoted public goods. We needed to think, he said, of organizing markets in different ways than we had in the past.
Second Session Questions
1.What are the effects of information distribution on the Internet of increasing economies in returns to scale in applications?
Fink: Education, knowledge, and information may have increasing returns to scale, which could be important.
Boyle: Once you get to a certain size then market distribution and market domination problems may surface. How do we resolve the problems between IPR and increasing economies to scale in production? Also, IPR may prevent users from adopting new systems.
Crigler: Adopt fundamentally new business models which take advantage of superdistribution.
Closing Comments
Declan McCullagh
Declan McCullagh, Wired Magazine, began by saying that Clinton Administration intellectual property rights (IPR) policy towards cyberspace was consciously designed to prevent robust encryption. McCullagh said , in his opinion, encryption is tied to resolution of IPR problems. Lift the export control regulations on encryption, for example, he advised. What about free speech? Strong IPR will drive out free speech and drive out the truth in political discussions, McCullagh said. The more monitoring duties the online services have --the more control -- the more liability.
McCullagh advised the audience to pay close attention to international controls on encryption at the Organization for Economic Cooperation and Development (OECD) and G-7 sessions, in addition to WIPO talks on copyright.
He talked about the Software Publishers Association (SPA)'s suit on violation of copyright on the Internet. The suit goes beyond Microsoft type of copyright infringement, McCullagh said. Rather, the SPA claims, if you "link to copyrighted information," then you are liable for contributory infringement. The SPA is trying to do what U.S. copyright policy could not do -- make people liable for links. They are having a "chilling effect," McCullagh said. The effect is on freedom of speech, also. The effect may spill over into defamation and fraud issues
There is also the issue of anonymity online, McCullagh concluded. If you do not sue Internet software providers, whom do you sue, he asked.
Wrap-Up: Renee Marlin Bennett wrapped up the afternoon by thanking panelists for their remarks on ownership issues affecting the Internet domestically and internationally.
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