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4 September 2004
Jule L. Sigall
Associate Register for Policy and International Affairs
U.S. Copyright Office
Library of Congress
Washington, D.C. 20540-6009
Thank you for your e-mail yesterday, seeking written comments today
concerning the Copyright Office's discussion draft substitute for S. 2560
(the "CO Draft"). Because of the limited time-frame, we have only been able
to perform a quick review of the CO draft as it relates to the IEEE-USA
position and the stated goals of the legislation as set forth by its
sponsors.
Stated Goals Of Legislation
In his opening remarks at the hearing, Senator Hatch described the following
goals of S. 2560: (i) that it be technology-neutral, in particular, that it
not single out peer-to-peer technology as opposed to misuses of the
technology; (ii) that it use a proven model for structuring liability based
on conduct; and (iii) that it change the law only for a very narrow class of
defendants, such as those engaging in indiscriminate and mass infringing
distribution of a copyrighted work. Senator Leahy has stated his agreement
with IEEE-USA, that copyright owners must not be permitted to restrict the
sale of technology having non-infringing uses unless the seller has
independently and actively induced a copyright infringement.
IEEE-USA Position
As you know, U.S. IEEE members are content owners and technologists alike,
as well as members of the public. And so, IEEE-USA does not so much stand
for any particular stakeholder interests, as it does for all of them.
Because promotion of progress requires a delicate balancing among those
interests, IEEE-USA speaks, rather, for the balance itself, in the interest
of our content makers, technologists and society as a whole.
In our testimony, we noted our view that it is essential for copyright protection to have scope sufficient to realize its constitutional purpose. But we also testified that such scope must not be so
great, either in fact or because of uncertainty, as to grant authors control
over any technology that may incidentally be used to infringe upon it. Such
undue technology regulation would unnecessarily stifle innovation and
progress, and with it, the jobs and prosperity it would bring. For this
reason, IEEE-USA believes that copyright owners must not be permitted to
restrict the sale of technology having non-infringing uses unless the seller
has independently and actively induced a copyright infringement.
In view of this policy, IEEE-USA has reviewed the present scope of secondary
liability, and concluded that existing law provides both too much and not
enough protection. The present, and rapidly expanding scope of "mere
capacity to control" as a basis for finding liability is leading both to
greater uncertainty and technology regulation, on one hand, and the creation
of a peculiar safe harbor from liability, on the other. This safe harbor,
the distribution of control by technical means, becomes necessary for lawful
technologies regardless of the technical merits, and grants unlawful conduct
a safe harbor regardless of the policy merits.
IEEE-USA concluded that conduct, rather than control, should provide the
basis for liability, and drafted a proposed substitute for S. 2560, which
was submitted with our Senate testimony. The IEEE-USA substitute resolves
the imbalances discussed above, is fully neutral with respect to technology,
uses the long-standing and well-tested standards of inducement set forth in
the Patent Act adapted to copyright, and excludes most legitimate
technologists with bright-line standards. IEEE-USA commends to the Copyright
Office this approach to secondary liability, in lieu of the approach taken
with the current Office draft, for the reasons more completely set forth in
our written and oral testimony.
The Copyright Office
Working Draft
IEEE-USA respectfully
suggests that the IEEE-USA substitute more closely approaches the stated
goals for S. 2560, for the following reasons:
The CO Draft does
nothing to cabin the expansion of secondary liability based upon
control. Indeed, the CO Draft expressly retains the existing law of
vicarious and contributory liability. Accordingly, technologists will
remain subject to control-based claims sounding in vicarious liability
and contribution regardless of its commercial conduct, and must adopt
the distributed-control safe harbor regardless of the technological
merits of doing so. Further, the CO Draft does not codify the important
Betamax decision, a point important to each of the private sector
technology groups at the hearing.
We note that the CO Draft leaves an apparent conflict between existing
law and the new inducement provisions: (i) contribution and vicarious
liability provides a "safe harbor" for dual-use technologies upon
divesting control; (ii) inducement under the CO Draft provides a "safe
harbor" for dual-use technologies that undertake to control.
Technologists cannot do both, and hence will always be vulnerable to
secondary liability.
The CO Draft is not
technology neutral, distinguishing dissemination technologies from
non-dissemination technologies. This invites judicial gloss on the
concept of "dissemination technologies," and extensive litigation over
whether a particular device falls within its rubric. Further, we note
that many of the definitions of overt act do not really relate so much
to conduct as to the structure and nature of the technology as opposed
to its use. Under this standard, the CO Draft is not technology neutral,
for Courts will still be asked to engage in an unhealthy evaluation of
the design of technology, rather than more judicially cognizable notions
such as the conduct of its proprietors and their state of mind, or the
capacity for non-infringing use.
The CO Draft is
grounded in an entirely sui generis standard for inducement. The complex
web of "overt act" definitions and exclusions invite significant
litigation over the nuances of virtually every word. It may take years
before technologists can achieve any certainty as to its scope or
nature. In contrast, the IEEE-USA approach adopts not only the essence
of the standards used in the Patent Act, but with it, the decades of
judicial gloss thereupon. Many of the new terms used in the CO Draft
have no parallel in existing law, and may require further definition
before IEEE-USA can fully address their merits.
-
Narrow Scope of
Defendants
Because of the breadth of overt act definitions in Section 2, every
technologist with a "disseminating technology" must carefully take note
of where its technology (as opposed to its conduct) lies in the web of
definitions and exclusions of "overt act," and more particularly how it
is designed. This raises two significant issues: (i) it deters
technologists from bringing convergence technologies to market; and (ii)
it imposes upon technologists a duty to manage its engineering processes
to avoid liability.
The only certain
way to avoid liability under Section 2 is to avoid distribution of
disseminating technologies. Modern technologies are rapidly moving
toward interoperability and network communication, a movement known as
"convergence," and hence most modern devices will likely be accused of
having a "part" that is disseminating technology. Instead of narrowly
defining a potential class of defendants, the CO Draft definition merely
distinguishes existing and obsoleted technologies (the non-disseminating
technologies, perhaps such as the VCR) from new ones. This will not
foster innovation.
Moreover, by focusing on design decisions, the law is now concerning
itself with the engineering process, rather than the resulting product
and conduct in manufacturing it. IEEE-USA is deeply concerned with
regulation of engineering processes, per se, for micromanagement of
design processes is a dangerous threat to innovation. IEEE-USA
respectfully suggests that the far better way to evaluate the product is
to consider only whether it is capable of lawful use, and then to
consider only the actual conduct of the secondary defendant, vis-a-vis,
the customer who is allegedly induced to infringe. This is the
well-tested framework for analysis used in patent cases, and we commend
that to the office.
The CO Draft also
raises several new issues: (i) liability for non-cooperation with
enforcement; (ii) liability for failure to adopt "corrective measures";
and (iii) liability for failure to adopt "reasonable standards." These
new issues dramatically broaden the scope of the proposed legislation
beyond the stated purposes of this legislation, and raise significant
potential for costly and unintended consequences.
Conclusion
IEEE-USA commends the office on its efforts in circulating the CO Draft for
comment. For the reasons set forth above, we are concerned that the CO Draft
does not presently realize the stated goals for this legislation, and is
unlikely to obtain the consensus of the private sector stakeholders without
significant change. Accordingly, we would recommend that the Office adopt,
instead, the IEEE-USA proposal or one of the other private sector proposals
as a starting point for its presentation to the Committee.
We thank you for giving
us this opportunity to comment. We look forward to the opportunity to
provide further insight and analysis on this important issue. Please do not
hesitate to call or email with any questions you may have or if we can be of
any assistance in any way.
Thank you.
Glenn Tenney,
Chair, IEEE-USA Intellectual Property Committee
Andrew Greenberg
Vice-Chair, IEEE-USA Intellectual Property Committee
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