Copyright © Vanderbilt University 1997.

                                        Vanderbilt Law Review

                                           January, 1997

                                         50 Vand. L. Rev. 51

   LENGTH: 36072 words

   ARTICLE: Intellectual Property Rights in Data?

   J.H. Reichman* and Pamela Samuelson**
 
 

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   * Copyright Copyright 1997 by J.H. Reichman, Professor of Law, Vanderbilt University, and Pamela Samuelson.
 

   ** Professor of Law and of Information Management, University of California at Berkeley.

   The Authors wish to thank Rochelle C. Dreyfuss, Rebecca Eisenberg, Paul Edward Geller, Wendy Gordon, Marci
   Hamilton, Peter Jaszi, Jessica Litman, Charles McMannis, Charles Nelson, and many others who commented on
   earlier drafts or otherwise provided helpful suggestions. Thanks also go to Paul Uhlir, Stephen Berry, and
   members of the United States National CODATA Committee and members of the National Research Council's
   "Bits of Power" study committee.

   We are also grateful to Harlan Onsrud and Dennis Karjala for organizing the Specialist Meeting on Law,
   Information Policy and Spatial Databases at Arizona State University on October 28-30, 1994 and to Brian
   Kahin and Charles Neeson for organizing the Conference on Information, National Policies and International
   Infrastructure at Harvard Law School on January 28-30, 1996, at which the Authors made presentations
   covering the implications of proposals that led to the development of this Article.

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   SUMMARY:
     ... The international intellectual property system founded on the Paris and Berne Conventions in the late
   nineteenth century has been dominated by the patent and copyright paradigms, which articulate the legal
   protection of technological inventions and of literary and artistic works, respectively. ... Data compilers in the
   United States and the United Kingdom had, in the past, experienced some success in protecting their
   investments in publicly distributed compilations by means of copyright law. ... The copyright laws of most
   developed countries exclude functionally determined databases and do not protect disparate data even when
   a given compilation as a whole happens to satisfy the eligibility requirements of those laws. ... To be sure,
   data providers, including members of the scientific community, could decide not to exercise proprietary rights
   in certain databases, for example, those funded by government agencies. ... For example, if the data
   extracted by the user are the data responsive to his or her online query, one can always argue that the
   extraction was qualitatively substantial. ... The possibility therefore exists that publishers may assert the right
   to control uses of noncopyrightable components of databases that would otherwise have been subsumed
   within the general right to use the same database had it qualified for copyright protection. ... As applied to
   traditional scientific works covered by copyright law, such an exception made sense because only the author's
   individual style was protected, and not his or her data, findings, or ideas. ...

  TEXT:
 
   I. Introduction

   The international intellectual property system founded on the Paris and Berne Conventions in the late
   nineteenth century n1 has been dominated by the patent and copyright paradigms, which articulate the legal
   protection of technological inventions and of literary and artistic works, respectively. Although this
   patent-copyright dichotomy was never as strictly observed abroad as in the United States, n2 it
   nonetheless charted a relatively clear theoretical line of demarcation between legal incentives to create and
   the public interest in free competition. n3 Any publicly disclosed technologies or information products that
   failed to meet the eligibility requirements of the domestic patent and copyright laws became public domain
   matter that anyone could freely appropriate. n4

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   n1 See Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as last revised at Stockholm
   on July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 ("Paris Convention"); Berne Convention for the Protection
   of Literary and Artistic Works, Sept. 9, 1886, as last revised at Paris, July 24, 1971, 828 U.N.T.S. 221 ("Berne
   Convention"). The international intellectual property system was recently strengthened and broadened by the
   Uruguay Round of multilateral trade negotiations whose intellectual property component, known as the "TRIPS
   Agreement," builds on the Paris and Berne Conventions. See Final Act Embodying the Results of the Uruguay
   Round of the Multilateral Negotiations, Marrakesh Agreement Establishing the World Trade Organization, signed
   at Marrakesh, Morocco, Apr. 15, 1994, Annex 1C, Agreement on Trade-Related Aspects of Intellectual
   Property Rights ("TRIPS Agreement"), in Results of the Uruguay Round 6-19, 365-403 (GATT Secretariat ed.,
   1994).

   n2 J.H. Reichman, Legal Hybrids Between the Patent and Copyright Paradigms, 94 Colum. L. Rev. 2432,
   2455-65 (1994) (discussing hybrid intellectual property regimes adopted outside the United States).

   n3 See J.H. Reichman, Charting the Collapse of the Patent-Copyright Dichotomy: Premises for a Restructured
   International Intellectual Property System, 13 Cardozo Arts & Enter. L. J. 475, 480-96 (1995) (explaining how
   the patent and copyright paradigms have historically balanced competition and innovation policies). For a
   different and more restrictive view of the economic function of copyright, see generally Glynn S. Lunney, Jr.,
   Reexamining Copyright's Incentives-Access Paradigm, 49 Vand. L. Rev. 483 (1996).

   n4 Copyright law protects only original works of authorship that manifest some creative expression. See 17
   U.S.C. <sect> 102(a) (1994 ed.); Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340,
   363-64 (1991) (holding that white-page listings of a telephone directory lacked sufficient creativity to qualify
   for copyright protection as an original work of authorship). Patent law requires that a technical device or
   process be novel and nonobvious. See 35 U.S.C. <sect><sect> 102-03 (1994 ed.) (discussing conditions for
   patentability). Devices or designs not meeting copyright or patent law standards that are disclosed in publicly
   distributed products are generally considered freely appropriable. See Bonito Boats, Inc. v. Thunder Craft
   Boats, Inc., 489 U.S. 141, 167-68 (1989) (striking down Florida statute forbidding use of "plug molds" in the
   manufacture of boat parts as disruption of federal patent policy concerning subject matter Congress left in the
   public domain); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 231-32 (1964) (preventing use of Illinois
   unfair competition law to block the free copying of an unpatentable "pole lamp"); Compco Corp. v. Day-Brite
   Lighting Inc., 376 U.S. 234, 237-38 (1964) (indicating that state unfair competition laws may not protect
   unpatented designs embodied in publicly available products in the absence of confusion about the source of
   origin). See also Reichman, 94 Colum. L. Rev. at 2448-53 (cited in note 2) (discussing positive and negative
   economic premises of the dominant paradigms).

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   By the end of the twentieth century, in contrast, this line of demarcation had empirically broken down. The
   developed market economies, including the United States, enacted numerous special purpose intellectual
   property laws to protect industrial designs, plant varieties, integrated circuit designs, and other matter that
   typically failed to meet the eligibility requirements of either the patent or copyright models. n5 The latest, and
   arguably most deviant, examples of this trend toward "sui generis" intellectual property rights n6 are
   the European- and United States-sponsored initiatives in both national and international forums calling for
   creation of a new form of legal protection for the contents of databases. n7

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   n5 See, for example, Semiconductor Chip Protection Act of 1984, Pub. L. No. 98-620, 98 Stat. 3347 (1984),
   codified at 17 U.S.C. <sect> 901 et seq. (1994 ed.); Plant Variety Protection Act, Pub. L. No. 91-577, 84
   Stat. 1542 (1970), amended by Pub. L. No. 96-574, 94 Stat. 3350 (1980) and by Pub. L. No. 103-349, 1087
   Stat. 3136 (1994), codified as amended at 7 U.S.C. <sect><sect> 2321 et seq. (1994 ed.). See also Rochelle
   Cooper Dreyfuss, Information Products: A Challenge to Intellectual Property Theory, 20 N.Y.U. J. Int'l L. & Pol.
   897, 899 (1988). The United States is the only developed country that has never enacted special laws to
   protect either industrial designs appealing to the eye or functionally determined industrial designs known as
   "utility models." See, for example, J.H. Reichman, Industrial Designs and Utility Models Under the European
   Communities' Proposed Initiatives: A Critical Appraisal, paper presented to the Third Annual Conference on
   International Intellectual Property Law and Policy, Fordham University School of Law (Apr. 20-21, 1995) (on
   file with Vanderbilt Law Review). See generally Reichman, 94 Colum. L. Rev. at 2453-500 (cited in note 2).

   n6 Sui generis means "of its own kind or class." Black's Law Dictionary 1434 (West, 6th ed. 1990). The
   literature refers to special purpose intellectual property laws deviating from the patent and copyright
   paradigms as "sui generis" regimes. See, for example, Pamela Samuelson, Creating a New Kind of Intellectual
   Property Law: Applying the Lessons of the Chip Law to Computer Programs, 70 Minn. L. Rev. 471 (1985)
   (discussing the sui generis character of the Semiconductor Chip Protection Act).

   n7 See Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the Legal
   Protection of Databases, 1996 O.J. (L 77) 20 ("E.C. Directive on Databases" or "Final E.C. Directive"). Even
   before the E.C. Directive on Databases was finalized, the European Commission submitted a proposal based on
   the then-pending draft to the World Intellectual Property Organization ("WIPO") Committee of Experts for
   International Treaty Provisions on the Legal Protection of the Contents of Databases. See Proposal Submitted
   by the European Community and its Member States to the World Intellectual Property Organization Committee
   of Experts on a Possible Protocol to the Berne Convention, Sixth Session, Geneva, WIPO Doc. BCP/CE/VI/13,
   February 1-9, 1996 ("European Proposal on Databases"). The United States submitted a similar proposal to the
   WIPO Committee of Experts in May, 1996. See Committee of Experts on a Possible Protocol to the Berne
   Convention, Proposal of the United States of America on Sui Generis Protection of Databases, Geneva, May
   22-24, 1996, WIPO Doc. BCP/CE/VII/2-INR/CE/VI/2, May 20, 1996 ("U.S. Proposal on Databases"). The U.S.
   proposal was submitted to WIPO even before Congressman Carlos Moorhead introduced legislation in Congress
   for a new form of legal protection for the contents of databases on May 23, 1996. See Database Investment
   and Intellectual Property Antipiracy Act of 1996, H.R. Rep. No. 3531, 104th Cong., 2d Sess. (1996). A draft
   treaty on the legal protection of databases was made public on August 30, 1996. See Basic Proposal for the
   Substantative Provisions of the Treaty on Intellectual Property in Respect of Databases, Memorandum
   Prepared by the Chairman of the Committee of Experts, August 30, 1996 ("WIPO Draft Database Treaty"), to
   be considered by the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions, Geneva,
   Switzerland, December 2-20, 1996. The Conference postponed action on the Draft Database Treaty. See
   WIPO Doc. CRNR/DC/88, Dec. 20, 1996.

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   These initiatives aim to rescue database producers from the threat of market-destructive appropriations by
   free-riding competitors who contributed nothing to the costs of collecting or distributing the relevant data. n8
   Unlike the classical intellectual property models, which seek "to promote the Progress of Science and
   the useful Arts," n9 the database laws do not condition protection on a showing of some creative or technical
   achievement. Rather, these laws would protect anyone who makes a substantial investment in the
   development of a database against unauthorized extractions, uses, and reuses of the whole or substantial
   parts of its contents. n10

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   n8 See, for example, E.C. Directive on Databases, 1996 O.J. (L 77) at 20 (cited in note 7) (noting, in Recital 7,
   the high cost of database development and the low cost of appropriating content as an important factor
   favoring sui generis protection). In the absence of special legislation, courts will sometimes stretch existing
   legal regimes to avoid such appropriations. Prior to the Supreme Court's decision in Feist Publications, Inc. v.
   Rural Telephone Service Co., 499 U.S. 340 (1991), some federal courts had extended copyright protection to
   unoriginal data compilations on a "sweat of the brow" theory. See Jane C. Ginsburg, Creation and Commercial
   Value: Copyright Protection of Works of Information, 90 Colum. L. Rev. 1865, 1868-69 nn.13-14, 18951900
   (1990) (citing cases where courts found works copyrightable due to the amount of labor expended by the
   plaintiff and discussing the history of "sweat work" as the basis for copyrightability). For the tensions in foreign
   law, see, for example, Alain Strowel, Droit d'auteur et copyright: divergences et convergence--etude de droit
   compare, 29-30, 264-66, 391-474 (E. Bruylant, 1993); M. Frank Gotzen, Grand orientations du droit d'auteur
   dans les Etats membres de la C.E.E. en matiere de banques de donnees, in Banques de Donne Droit et d'Auteur
   85-98 (IRPI ed., 1987).

   n9 U.S. Const., Art. I, <sect> 8, cl. 8.

   n10 See, for example, E.C. Directive on Databases, 1996 O.J. (L 77) at 20-21 (cited in note 7) (Recitals 7-12).
   See also Charles Clark, General Counsel of the International Publishing Copyright Council, The Copyright
   Environment for the Publisher in the Digital World 7 (1996) (stressing present "legal vacuum" facing publishers
   and the importance of E.U. database protection laws for future investments).

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   The Authors of this Article are not unsympathetic to many of the goals that the sui generis database regimes
   are meant to achieve. We have elsewhere argued that the traditional intellectual property models, as
   supplemented by classical trade secret laws, often fail to afford those who produce today's most commercially
   valuable information goods enough lead time to recoup their investments. The risk of market failure inherent in
   this state of chronic under-protection tends to keep the production of information goods at suboptimal levels.
   n11

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   n11 See, for example, Reichman, 94 Colum. L. Rev. at 2525-27 (cited in note 2) (discussing this phenomenon
   generally); Pamela Samuelson, Randall Davis, Mitchell D. Kapor, and J.H. Reichman, A Manifesto Concerning
   the Legal Protection of Computer Programs, 94 Colum. L. Rev. 2308, 2337-41 (1994) (discussing this
   phenomenon in relation to computer programs).

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   While this Article accordingly agrees that database makers need a new form of legal protection, it contends
   that the current European and United States initiatives n12 are seriously flawed. Implementing these initiatives
   would confer a far broader and stronger monopoly on database developers than is needed to avert market
   failure. It would create an exclusive property rights regime of virtually unlimited duration n13 that would be
   subject to few, if any, public policy limitations. n14 It would jeopardize basic scientific research, n15 eliminate
   competition in the markets for value-added products and services, n16 and convert existing barriers to entry
   into insuperable legal barriers to entry. n17 The pending European and United States initiatives could
   thus lead to relatively high prices for the use of public goods. Economic efficiency, however, calls for very low
   prices for such use and favors minimum incentives to provide the needed investment and services. n18 Serious
   questions also exist about the constitutionality of the pending U.S. legislation. By investing compilers of
   databases with absolute and virtually perpetual protection, this legislation would violate both the limited times
   proviso of the Enabling Clause of the Constitution n19 and its express justification for grants of intellectual
   property rights in terms of the advancement of scientific and technical progress. n20 The pending U.S.
   legislation also undermines principles embodied in the First Amendment that courts applying copyright law have
   long sought to accomodate. n21

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   n12 See E.C. Directive on Databases, 1996 O.J. (L 77) at 20-28 (cited in note 7); H.R. Rep. No. 3531 (cited in
   note 7).

   n13 See notes 143-66, 225-35 and accompanying text.

   n14 See notes 169-90, 248-65 and accompanying text.

   n15 See notes 282-329, 451-88 and accompanying text.

   n16 See notes 330-63 and accompanying text.

   n17 See notes 293-97, 364-99 and accompanying text.

   n18 See, for example, Robert Cooter and Thomas Ulen, Law and Economics, 108-18 (Scott Foresman, 1988)
   (recognizing alternative theories based on nonintervention or restricting competition to single producers). See
   also Jeffrey K. Mackie-Mason and Hal R. Varian, Economic FAQS About the Internet, J. Econ. Perspective 75,
   85-89 (1994).

   n19 U.S. Const., Art. I, <sect> 8, cl. 8.

   n20 The authors generally favor a flexible interpretation of the Enabling Clause of the Constitution, such as
   that put forward in Rochelle Cooper Dreyfus, A Wiseguy's Approach to Information Products: Muscling
   Copyright and Patent Into a Unitary Theory of Intellectual Property, 1992 S. Ct. Rev. 195 (1993). The claim
   advanced in this Article is that the database proposals conflict with even this flexible approach.

   n21 See notes 50-55 and accompanying text.

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   This Article proposes either the use of unfair competition principles to protect database contents, or the
   adoption of an intellectual property regime based on more refined liability principles, rather than on exclusive
   property rights, n22 that would reconcile the need for legal incentives to invest with a calculus of net social
   benefits. Either approach would provide those who develop commercial databases with enough lead time to
   recoup their investments and make sufficient profits to enable further investments. At the same time, these
   alternatives would not retard scientific research or educational activities, impede the development of
   follow-on products and services, or otherwise create legal barriers to entry.

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   n22 See notes 410-50 and accompanying text. A property entitlement or right precludes third parties from
   appropriating the object of protection, whereas a liability rule regulates the means by which they can engage
   in certain potentially harmful acts on certain conditions. See generally Guido Calabresi and A. Douglas
   Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089
   (1972) (discussing the differences between property entitlements, liability rules, and inalienability rules). If one
   has "rightful possession of some thing--such as an automobile or a home under an exclusive property right
   another person ordinarily cannot take it without permission;" but under a liability rule, others may engage in
   acts that "create risks of harm and thus constitute probabilistic invasions of property interests"--for
   example--nuisances, while obligating them to pay damages for harm under specified circumstances. Louis
   Kaplow and Steven Shavell, Property Rules Versus Liability Rules: An Economic Analysis, 109 Harv. L. Rev. 713,
   716 (1996).

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   To understand why some form of legislative action is necessary, Part II of this Article will discuss the limited
   proprietary rights available to database compilers under existing legal regimes, whose rules were formulated in
   the pre-digital era. This Part will show how digital technologies have destabilized the status quo and why this
   threatens investments in compilations of data. n23 Part III will report on current initiatives to adopt a sui
   generis intellectual property regime covering noncopyrightable database contents. n24 This Part traces the
   evolution of the pending legislative initiatives from a modest set of early proposals sounding in unfair
   competition law to an absolute monopoly reinforced by ancillary technological means of enforcement. n25 It
   also shows that current proposals for international treaty provisions to protect database contents are
   consistent with other U.S. and E.U. initiatives that would confer ever broader and stronger protection on
   digital information products. n26

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   n23 See notes 30-94 and accompanying text.

   n24 See 95-281 and accompanying text.

   n25 See notes 108-90, 222-65 and accompanying text (stressing intensive lobbying efforts by U.S. and U.K.
   database producers to this end).

   n26 See notes 191-265 and accompanying text.

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   Part IV will analyze the adverse implications of current database protection proposals for science and
   education, for competition in the market for value-added information products and services, and for other
   socially desirable reuses of information. n27 It emphasizes the ways in which the current initiatives undervalue
   the abiding importance in the information age of a relatively free flow of information as a precondition for
   technological progress and democratic social discourse. n28

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   n27 See notes 281-83 and accompanying text.

   n28 See also James Boyle, Shamans, Software and Spleens: Law and the Construction of the Information
   Society i-iv (Harvard U. Press, 1996).

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   Part V will explain why the exclusive property rights approach embodied in current proposals should be
   abandoned in favor of either an appropriate unfair competition law or, preferably, the pro-competitive,
   market-enhancing principles of a more refined liability regime. n29 This Part will discuss the principal elements
   of such an alternative framework for protecting the contents of databases from market-destructive
   appropriations without creating legal barriers to entry or unduly interfering with the open exchange of data
   among scientists. It will also show that a sound legal framework for protecting the contents of
   databases cannot be formulated without solid and continuing inputs from the scientific and educational
   communities.

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   n29 See text accompanying notes 400-88.

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   II. Historical Context of the Current Initiatives

   The success of private-sector technological development in the United States has stemmed in good measure
   from massive public investments in basic research and development that were made after the late 1950s in
   response to cold war pressures and national security interests. n30 This strategy provided funding for
   academic institutions and specialized laboratories whose research products often paved the way for private
   industrial applications. n31 That federal funding largely defrayed the costs of collecting and disseminating raw
   scientific data merits particular attention in this context. n32 To the extent that this country became the
   world's leading producer of technological goods, the government's role in ensuring the free and open supply of
   data to the scientific community on favorable economic conditions was a constant, but seldom articulated,
   stabilizing factor.

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   n30 See generally Carnegie Commission on Science, Technology and Government, Technology and Economic
   Performance: Organizing the Executive Branch for a Stronger National Technology Base (1991).

   n31 See, for example, Rebecca S. Eisenberg, Patents and the Progress of Science: Exclusive Rights and
   Experimental Use, 56 U. Chi. L. Rev. 1017, 1018 (1989) (recognizing that academic research has attracted and
   accelerated the commercial development of biomedical discoveries which could be marketed commercially).

   n32 See, for example, Committee on Issues in the Transborder Flow of Scientific Data, U.S. National
   Committee for CODATA, and National Research Council, Bits of Power: Issues in Global Access to Scientific
   Data 1-24 (National Academy Press) (forthcoming 1997) ("Bits of Power") (discussing technical, economic, and
   legal impediments to the free flow of scientific and technical data in electronic environments). Some
   government data compilations, of course, serve as "raw material" for valueadding providers who claim
   proprietary rights in the end products. See note 289 and accompanying text (discussing protection strategies
   of such firms).

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   A. Information Goods in the Pre-Digital Era

   The government generates data in two ways: directly, as when agencies compile information in the course of
   their missions, and indirectly, through grants or other subsidies to researchers, particularly for scientific
   endeavors. n33 The resulting compilations have generally not been regulated by intellectual property norms.
   This observation follows in part because copyright rules forbid the U.S. government from copyrighting
   works generated by its employees, n34 and in part because norms widely shared by members of the scientific
   and educational communities favor relatively unfettered extractions and reuses of data. n35 Only in cases
   where members of these communities authored discursive scientific works or otherwise participated in applied
   technological innovation were they likely to encounter legal rules governing commercial applications of data.
   n36 In such cases, existing legal institutions proved relatively stable in the pre-digital epoch, and the scientific
   community, among others, has taken this stability largely for granted.

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   n33 See, for example, Bits of Power at ch. 4 (cited in note 32).

   n34 See 17 U.S.C. <sect> 105 (1994 ed.) ("Copyright protection under [Title 17] is not available for any work
   of the United States Government, but the United States Government is not precluded from receiving and
   holding copyrights transferred to it by assignment, bequest, or otherwise.").

   n35 See, for example, Anne W. Branscomb, Who Owns Information? From Privacy to Public Access 159-73
   (Basic Books, 1994). See also Dorothy Nelkin, Science as Intellectual Property: Who Controls Research? 5-6
   (Macmillan, 1983); Harvey Brooks, The Research University: Doing Good, and Doing It Better, Issues in Sci. &
   Tech. 49, 50-51 (Winter, 1988); J.H. Reichman, Computer Programs as Applied Scientific Know-How:
   Implications of Copyright Protection for Commercialized University Research, 42 Vand. L. Rev. 639, 641-48,
   710-23 (1989).

   Most compilers of scientific data have been more concerned about obtaining credit or recognition for their
   contributions than about securing the economic fruits of their efforts. Both international copyright law under
   the Berne Convention and the domestic laws of most developed countries require that authors of literary works
   obtain a "moral right" to proper attribution for their published creations. See, for example, Berne Convention,
   Art. 6bis (cited in note 1). Congress has so far declined to comply with this obligation except with regard to
   visual or graphic artists. See 17 U.S.C. <sect> 106A (1994 ed.) (creating protection for the authors of visual
   art). This leaves the question of attribution largely to the vagaries of unfair competition law.

   n36 Until the 1980s, there was a fairly clear-cut distinction between theoretical and applied science in the
   universities, and the inclination to patent or otherwise commercialize research results was less pronounced
   than at present. Even where patenting had taken root, a well-established judicial tradition denied patent
   protection to mathematical formulas, mental steps, and data as such, including mathematical algorithms. See,
   for example, Robert P. Merges, Property Rights Theory and the Commons: The Case of Scientific Research, 13
   Social Phil. and Pol. Found. 145 (1996); Pamela Samuelson, Benson Revisited: The Case Against Patent
   Protection for Algorithms and Other Computer Program-Related Inventions, 39 Emory L. J. 1025, 1028-29
   (1990) (considering the patentability of mathematical algorithims).

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   In the private sector, by contrast, commercial compilers of data have long suffered from a risk of market
   failure owing to the intangible, ubiquitous and, above all, indivisible nature of information goods. n37 Compilers
   could, of course, secure the commercial value of some data sets by keeping them secret or by only
   revealing them in the course of a confidential relationship, as routinely occurs with regard to firms engaged in
   industrial applications of scientific discoveries. In such cases, trade secret laws or equivalent laws of
   confidential information provide innovators and investors with no exclusive property rights. n38 Rather, they
   permit third parties to reverse-engineer any unpatented industrial product by proper means in order to reveal
   the process by which it was obtained, and to use that process to manufacture equivalent goods. n39

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   n37 Information goods have the properties of so-called public goods: they are ubiquitous, inexhaustible, and
   indivisible or nondepletable. A second comer's use of a new information good does not diminish or exhaust it.
   Once disclosed to the world, anyone can use an information good without the originator's permission and
   without reimbursing him or her for the costs of research and production. See, for example, Cooter and Ulen,
   Law and Economics at 108-18 (cited in note 18). Unless the state limits the ability of third parties to copy a
   given literary production and sell the copied good for less than the originator, neither the author nor the
   publisher may have sufficient incentives to create or invest in the dissemination of cultural and information
   goods. See, for example, Paul Goldstein, 1 Copyright: Principles, Law and Practice <sect> 1.2 (Little, Brown,
   2d ed. 1996); William Kingston, Innovation, Creativity and Law 83-85 (Kluwer Academic Publishers/Dordrecht,
   1990). See also Ejan MacKaan, Economics of Information and Law 115-17 (Kluwer-Nijhoff, 1982) (noting
   market distortions ensuing from public good problems and uncertainties that would require a higher expected
   return).

   n38 See, for example, Restatement (Third) of Unfair Competition <sect><sect> 39-45 (1993) (restating the
   norms of trade secrecy law). Some countries that lacked trade secret laws as such would protect information
   disclosed in confidence against abuses of that confidence. See, for example, Allison Coleman, The Legal
   Protection of Trade Secrets 5-28 (Sweet & Maxwell, 1992); Eric Golaz, L'imitation servile des produits et de
   leur presentation: etude comparee des droits francais, allemand, belge et suisse 267-79 (Librairie Droz, 1992).

   n39 See, for example, Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974); Uniform Trade Secrets Act, 14
   ULA <sect> 1(4) (1985) ("U.T.S.A."). See generally J.H. Reichman, Overlapping Proprietary Rights in
   University-Generated Research Products: The Case of Computer Programs, 17 Columbia-VLA J. L. & Arts 51,
   93-98 (1992).

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   To the extent that an innovative product derived from commercial applications of scientific data kept that
   were under actual or legal secrecy, a competitor always remained free to generate the same data and to
   apply them to similar products or uses. Legal liability attached only to third parties who engaged in improper
   means of reverse engineering, such as bribing employees or resorting to industrial espionage. n40 In such
   cases, the free-riding offender had to compensate the innovator only for lost profits likely to accrue during the
   hypothetical period that would have been required to reverse engineer the product in question by honest
   means. n41

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   n40 See, for example, Restatement (Third) of Unfair Competition <sect> 43 (cited in note 38).

   n41 See, for example, id. <sect> 45.

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   Trade secret law thus provides qualifying originators with no legal immunity from direct competition. It merely
   confers a "head start," that is, an uncertain period of natural lead time during which originators seek to recoup
   their investment in research and development while establishing their trademarks as symbols of quality that
   consumers recognize. In this and other respects, trade secret law operates as a liability regime that
   discourages certain types of conduct rather than as an exclusive property right that may create a
   legal barrier to entry. n42

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   n42 See note 22. For an analysis of trade secret law as a default liability regime governing relations between
   originators and borrowers of subpatentable innovations, see Reichman, 94 Colum. L. Rev. at 2334, 2335-44,
   2519-29 (cited in note 2). The injunction available under trade secret law applies only to the party who
   improperly obtained the undisclosed know-how, but it never impedes other parties from reverse engineering
   that know-how by proper means. An injunction valid against the world would presumably be held
   unconstitutional in the absence of a patent. See, for example, Rockwell Graphics Systems, Inc. v. D.E.V.
   Industries, 925 F.2d 174 (7th Cir. 1991). See also David D. Friedman, William M. Landes, and Richard Posner,
   Some Economics of Trade Secret Law, 5 J. Econ. Persp. 61-62 (Winter 1991) (discussing the difference
   between patent and trade secret protection).

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   Once data are disseminated to the public in print media, however, they normally forfeit even the limited
   protection of trade secret laws and related laws of confidentiality, except insofar as two-party contracts may
   otherwise provide. n43 Not surprisingly, commercial compilers in such cases have found it difficult to
   appropriate the fruits of their investment unless either copyright laws or unfair competition laws afford them a
   limited shelter against wholesale duplication. n44

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   n43 See notes 86-94 and accompanying text for further discussion of two-party contracts.

   n44 The classic American decision on unfair competition protection for compilations of information was
   International News Service v. Associated Press, 248 U.S. 215, 237-42 (1918) (enjoining news service from
   appropriating hot news from competing newspapers under certain circumstances). The extent to which state
   or federal unfair competition laws can still provide some supplementary relief against the unauthorized copying
   of commercially valuable data that are not protected by trade secret or copyright laws remains an unsettled
   question. See, for example, Jane C. Ginsburg, No "Sweat"? Copyright and Other Protection of Works of
   Information After Feist v. Rural Telephone, 92 Colum. L. Rev. 338, 367-74 (1992) (questioning Congress's
   constitutional authority to protect compiled data outside the limits of the Patent-Copyright Clause); Wendy J.
   Gordon, On Owning Information: Intellectual Property and the Restitutionary Impulse, 78 Va. L. Rev. 149, 165
   (1992) (proposing the creation of a misappropriation tort for malcompetitive copying that would provide
   supplemental protection); Dennis S. Karjala, Misappropriation as a Third Intellectual Property Paradigm, 94
   Colum. L. Rev. 2594, 2601-08 (1994) (focusing on misappropriation to fill the gap of protection between
   patent and copyright law). But see Leo J. Raskind, The Misappropriation Doctrine as a Competitive Norm of
   Intellectual Property Law, 75 U. Minn. L. Rev. 875 (1991) (identifying gaps in the analytical framework of the
   misappropriation doctrine). Unfair competition law has sometimes been available in Europe to protect data
   compilations. See, for example, J.H. Reichman, Electronic Information Tools--The Outer Edge of World
   Intellectual Property Law, 25 Int'l Rev. Indus. Prop. & Copyright L. 446, 450 nn. 2, 11-16 (1993). See also
   Golaz, L'imitation Servile at 239-55 (cited in note 38).

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   Data compilers in the United States and the United Kingdom had, in the past, experienced some success in
   protecting their investments in publicly distributed compilations by means of copyright law. n45 One line of
   decisions expressed concern that without copyright protection there would be inadequate incentives to invest
   in socially  desirable compilations of data that require industrious effort to produce. n46 The decisions
   protecting compilations on a "sweat of the brow" rationale, however, n47 violate a basic premise of the mature
   copyright paradigm, which claims to protect only the original expression that authors embody in information
   products. n48 The U.S. Supreme Court recognized this principle in its 1991 decision in Feist Publications, Inc.
   v. Rural Telephone Service Co., which repudiated the "sweat of the brow" rationale for protecting compilations
   of data. n49

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   n45 See Ginsburg, 90 Colum. L. Rev. at 1873-93 (cited in note 8) (discussing the historical protection of "low
   authorship" of works in the United Kingdom and the United States).

   n46 See, for example, Leon v. Pacific Telephone & Telegraph Co., 91 F.2d 484 (9th Cir. 1937) (protecting
   telephone listings). See also Robert C. Denicola, Copyright in Collections of Facts: A Theory for the Protection
   of Nonfiction Literary Works, 81 Colum. L. Rev. 516, 528, 539-40 (1981) (commenting on the need to
   encourage production of these works and to minimize unjust enrichment).

   n47 This rationale provides copyright protection based upon the labor expended by the compiler. See note 8.

   n48 See, for example, Paul Edward Geller, Copyright in Factual Compilations: U.S. Supreme Court Decides Feist
   Case, 22 Int'l Rev. Indus. Prop. & Copyright L. 802, (1991) (noting that the United Kingdom remains "the most
   significant exception to this consensus").

   n49 499 U.S. at 359-60. The implications of Feist are explained generally in Dreyfuss, 20 N.Y.U. J. Int'l L. &
   Pol. 897 (cited in note 5), Ginsburg, 92 Colum. L. Rev. at 338 (cited in note 44), and Pamela Samuelson, The
   Originality Standard for Literary Works Under U.S. Copyright Law, 42 Am. J. Comp. L. 393 (Supp. 1994).

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   Functionally dictated collections of data or other compilations that do not manifest a creative selection or
   arrangement are, therefore, at least in principle, ineligible for copyright protection. n50 Even when compilers of
   data satisfy the originality requirement, moreover, copyright law affords them only weak protection because
   ancillary rules exclude their ideas and factual discoveries n51 from the scope of the copyright monopoly. In
   addition, numerous exceptions to and limitations on the copyright owner's exclusive rights also favor certain
   uses of protected works, such as those for face-to-face teaching activities, library and archival uses, and
   other public interest pursuits. n52 In U.S. copyright law, there is also a general "fair use" exception
   "for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research." n53

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   n50 See 17 U.S.C. <sect> 102(a), (b); Feist, 499 U.S. at 359-60 (finding that copyright protection extends
   only to those portions of a data compilation that are original to the author and not to the facts themselves);
   Guy Tritton, Intellectual Property in Europe 213-14 (Sweet & Maxwell, 1996) (noting the robust standard of
   originality in some E.U. countries, especially Germany). The E.C. Directive on Databases recognizes this same
   principle, and uses it as a point of departure for its sui generis regime. See E.C. Directive on Databases, 1996
   O.J. (L 77) at 20, 25 (cited in note 7) (Recitals 4-12 and art. 3(1)).

   n51 See 17 U.S.C. <sect> 102(b); Feist, 499 U.S. at 361-64 (allowing a second comer to use disparate data
   in value-adding directory of its own making).

   n52 See, for example, 17 U.S.C. <sect><sect> 108 (reproduction by libraries and archives), 109(a) (first-sale
   doctrine), 110(a) (face-to-face teaching activities), 110(b) (broadcasts of nondramatic literary or musical
   works for certain educational purposes), 114 (limiting rights and scope of protection in sound recordings), 115
   (compulsory license for musical works recorded on sound recordings), 117 (archival uses of computer
   programs), 118 (exemptions for use by noncommercial broadcasters), 120 (right to photograph architectural
   works).

   n53 17 U.S.C. <sect> 107 (1994 ed.). While the availability of other statutory exceptions usually varies with
   the nature of the subject matter at issue, the fair use exception applies to all subject matter categories. Even
   so, overriding the copyright owner's exclusive rights in the name of fair use remains an atypical result
   contingent on a judicial evaluation of the special "purpose and character of the use," the "nature of the
   copyrighted work," the "amount and substantiality of the portion used" and the "effect of the use upon the
   potential market for or value of the copyrighted work." See, for example, 17 U.S.C. <sect> 107 (listing factors
   to be considered); Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164, 1169-79, 127 L. Ed. 2d 500, 525
   (1994) (finding a commercial parody a fair use within the meaning of the <sect> 107); Harper & Row
   Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 569 (1985) (finding the use in question not fair under
   <sect> 107).

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   Taken together, these and other features of the mature copyright paradigm usually afford protection only
   against wholesale copying of the original selection and arrangement underlying any eligible compilation of data.
   This, in turn, greatly diminishes the value of copyright protection even to database publishers who satisfy the
   eligibility criteria. The exclusive reproduction and derivative work rights, as construed by the Supreme Court,
   will not normally prevent unauthorized extractions of disparate data for either competing or value-adding uses.
   n54 In the United States, this doctrine of weak or "thin" protection for factual works has been reinforced by
   first amendment concerns, which some courts and commentators view as further mandating broad access to
   the disparate facts that result from a compiler's efforts. n55

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   n54 See 17 U.S.C. <sect><sect> 106(1), (2) (1994 ed.); Feist, 499 U.S. at 349-51 (discussing the limitation
   of copyright of factual compilations); Key Publications, Inc. v. Chinatown Today Publishing Enterprises, Inc.,
   945 F.2d 509, 514 (2d Cir. 1991) (noting that copyright protection with respect to factual compilations after
   Feist appears "thin"); Kregos v. Associated Press, 937 F.2d 700, 707 (2d Cir. 1991) (holding that a variant
   format for baseball game data did not infringe copyright in original format); Victor Lalli Enterprises, Inc. v. Big
   Red Apple, Inc., 936 F.2d 671, 674 (2d Cir. 1991) (holding that charts of winning numbers from gambling
   activities did not meet standards for copyright protection); Bellsouth Advertising & Publishing Corp. v.
   Donnelley Information Publishing, Inc., 999 F.2d 1436, 1446 (11th Cir., 1993) (holding that the use of a
   telephone directory as a guide for business solicitation did not violate copyright standards). If courts strictly
   apply Feist at both the eligibility and scope of protection phases, and thus continue to reject stronger
   protection based on "sweat-of-the-brow" investment theories, the effect is to "strip[ ] . . . away or sharply
   reduce[ ] . . . the copyright protection afforded a variety of 'information products,' from directories and mailing
   lists to computerized databases." Ginsburg, 92 Colum. L. Rev. at 339 (cited in note 44). See also Denicola, 81
   Colum. L. Rev. at 516 (cited in note 46) (advocating compiler's copyright to overcome lack of incentives);
   Ginsburg, 90 Colum. L. Rev. at 1907, 1924 (cited in note 8) (advocating copyright protection of low-authorship
   factual works, including databases, but proposing compulsory license for derivative users of data).

   n55 See, for example, Feist, 499 U.S. at 354 (stressing adverse effects on free flow of information by
   "creating . . . monopolies in public domain materials"); Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985)
   (stressing first amendment interest in unrestricted availability of facts); Financial Information, Inc. v. Moody's
   Investors Service, Inc., 808 F.2d 204, 207 (2d Cir. 1986) (stressing "risk of putting large areas of factual
   research material off limits and threatening the public's unrestrained access to information"). See also Philip H.
   Miller, Note, Life After Feist: Facts, the First Amendment, and the Copyright Status of Automated Databases,
   60 Fordham L. Rev. 507, 509 (1991) (discussing the relationship between the freedom guaranteed by the First
   Amendment and the author's right to copyright); Michael J. Haungs, Copyright of Factual Compilations: Public
   Policy and the First Amendment, 23 Colum. J. Law & Soc. Probs. 347, 364 (1990) (discussing "the tension
   between copyright law and the First Amendment's protection of free exchange of ideas . . ."); Denicola, 81
   Colum. L. Rev. at 540 (cited in note 46) ("Copyright does not significantly interfere with first amendment
   values . . . ."). For the view that legal protection of facts and data as such is consistent with the First
   Amendment on certain conditions, such as the availability of noncommercial fair use and compulsory licenses,
   see Ginsburg, 92 Colum. L. Rev. at 384-87 (cited in note 44).

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   Lately, however, some federal appellate courts have begun to rebel against Feist and to reinstate stronger
   copyright protection for factual compilations and databases by subtle doctrinal manipulation. n56 As our
   previous work has shown, these cyclical fluctuations between states of under- and overprotection are a
   characteristic response to borderline subject matters that fit imperfectly within the classical patent and
   copyright paradigms. n57

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   n56 See, for example, CCC Information Services, Inc. v. Maclean Hunter Market Reports, Inc., 44 F.3d 61, 65
   (2d Cir. 1994) (noting the low threshold of originality required for copyright protection); Warren Publishing, Inc.
   v. Microdos Data Corp., 52 F.3d 950, 956 (11th Cir. 1995) (holding that the high degree of correlation between
   compilations violated copyright law). See also Samuelson, 42 Am. J. Comp. L. at 397-413 (cited in note 49).

   n57 See, for example, Reichman, 13 Cardozo Arts & Enter. L. J. at 512-17, 513 n.176 (cited in note 3).

   Factors pulling for over- or underprotection already exist on both sides of the classical line of demarcation
   [between the patent and copyright subsystems]. On the copyright side . . . for example, a broad derivative
   work right sometimes overprotects by favoring overlapping claims to incremental innovation while restricting
   access to ideas, methods and processes by indirect means and for a very long duration. . . . Yet,
   underprotection can result from the inability of copyright-like models to protect the internal dynamic features
   of technological innovation, in which idea and expression merge, and also from the lack of any exclusive right
   to control end use . . . . Similarly, on the industrial property side . . . , "overprotection results from the
   progressive monopolization of ever smaller aggregates of inventive activity, which elevate social costs in
   return for no clearly equilibrated social benefits. Yet, the nonobviousness standard and its variants can also
   induce states of chronic underprotection by excluding the bulk of the incremental innovations that underlie
   today's most promising technologies."

   Id. (quoting Reichman, 94 Colum. L. Rev. at 2504 n.401 (cited in note 2)).

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   B. Destabilizing Trends in the Information Age

   By the late 1980s, digital technologies and new telecommunications networks had combined to produce "the
   greatest changes in the way information is distributed since the invention of printing by movable type in the
   fifteenth century." n58 The use of computers made it economically feasible to collect, store, manage, and
   deliver huge amounts of data at a time when continuously expanding databases have become the building
   blocks of knowledge, especially in the observational sciences. n59 Electronic databases further blur
   the line between the collection and application functions by allowing users to make their own tailor-made
   extractions from the mass of data available in the collection as a whole. In other words, digital technologies
   break through the functional rigidities of print media by providing users with "extraction tools that enable them
   to sort and arrange data in ways meaningful to them." n60 By thus extending "the manipulative abilities of the
   information user's mind," these tools allow users to "add . . . immense value to what would otherwise be
   masses of incoherent, disparate data." n61

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   n58 Leslie A. Kurtz, Copyright and the National Information Infrastructure in the United States, 18 Eur. Intell.
   Prop. Rev. 120 (1996).

   n59 See, for example, Bits of Power at ch. 4 (cited in note 32).

   n60 Gregory M. Hunsuker, Raising a Toll Fence to Protect the "Noncreative" Labors of Database Makers: The
   European Database Directive, Fordham Intell. Prop., Media & Enter. L. J. (forthcoming, 1997).

   n61 Id. See also text accompanying notes 328-54 (discussing these issues).

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   Moreover, the latest value-adding data products, once disseminated worldwide via the Internet and other
   media, frequently lead to the rapid production of new technical innovations, which result in the generation of
   more data. Electronic publishing thus broadly advances the revolutionary process that computerization began,
   and it makes both data and research results potentially available at very low cost all over the world. n62

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   n62 See, for example, Paul A. David and Dominique Foray, Accessing and Expanding the Science and
   Technology Knowledge Base, 16 Sci., Tech. & Ind. Rev. 3, 38-59 (OECD ed., 1995); Paul Ginsparg, Winners
   and Losers in the Global Research Village, paper presented to Conference held at UNESCO headquarters, Paris,
   Feb. 19-23, 1996 (1995) ("UNESCO Paper") (on file with the Authors). See also Cristiano Antonelli, The
   Economic Theory of Information Networks, in Cristano Antonelli, ed., The Economics of Information Networks
   5-28 (Elsevier Science Publishing Co., 1992).

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   As this digital and telecommunications revolution created vast new markets for electronic information goods
   and tools, n63 it outpaced the legal infrastructure, which remains geared to the slower-moving print media.
   n64 This strain manifests itself in two contradictory ways.  Sometimes digital technology aggravates
   the basic market failure characteristic of information goods and thus deepens a chronic state of
   underprotection. This occurs, for example, when second comers download the originator's data and enter the
   market with a competing product that free-rides on the originator's investment. n65 At other times, however,
   digital technology so thoroughly overcomes the threat of market failure that it endows the initial investor with
   abnormal market power that can result in a chronic state of overprotection. This occurs, for example, when
   sole-source data providers charge monopolistic prices or oblige libraries and research institutions to accept
   terms and conditions that effectively waive both the special privileges and the fair use exceptions set out in
   the Copyright Act of 1976. n66

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   n63 See, for example, Hunsuker, European Database Directive (cited in note 60) (quoting sources that
   estimate the value of the global information industry will reach $ 3 trillion by early in the next century); W.
   Joseph Melnick, A Comparative Analysis of Proposals for the Legal Protection of Computerized Databases:
   NAFTA vs. the European Communities, 26 Case W. Res. J. Int'l L. 57, 59 n.14 (1994) (quoting sources that
   estimate the E.C. database market at $ 10.2 billion, which represented about 30% of the world market in
   1994).

   n64 See, for example, Intellectual Property and the National Information Infrastructure: The Report of the
   Working Group on Intellectual Property Rights 211 (Sept. 1995) ("U.S. White Paper") (noting the difficulty in
   keeping intellectual property laws up-to-date with technology); Commission of the European Communities,
   Green Paper on Copyright and the Challenge of Technology: Copyright Issues Requiring Immediate Action COM
   (88) 172 Final (June 7, 1988).

   The Authors have elsewhere argued that the legal problems presented by electronic databases are assimilable
   to those of industrial designs, computer programs, plant varieties, biogenetically engineered products, and
   numerous other forms of designdependent, subpatentable innovations that fall into a widening penumbra
   between the increasingly obsolete patent and copyright paradigms. See Reichman, 94 Colum. L. Rev. at
   2504-58 (cited in note 2) (proposing a third intellectual property paradigm based on liability principles);
   Samuelson, Davis, Kapor, and Reichman, 94 Colum. L. Rev. at 2365-2420, 2429-31 (cited in note 11)
   (proposing such a regime for computer programs).

   n65 See, for example, CCC Information Services Inc., 44 F.3d at 72 (stating that CCC took "virtually the entire
   compendium" of Maclean's used car valuations and "effectively offered to sell its customers Maclean's Red
   Book through CCC's database"); Warren Publishing, Inc., 52 F.3d at 955 (indicating that statistically,
   Microdos's work contained from 96 to 99% of Warren's data on nationwide cable television services), vacated
   on other grounds, 67 F.3d 276 (11th Cir. 1995).

   n66 See, for example, U.S. Congress, Office of Technology Assessment, Finding a Balance: Computer
   Software, Intellectual Property, and the Challenge of Technological Change 166-79 (U.S. G.P.O., 1992)
   (describing controversy surrounding the conduct of software licensors in obliging libraries to abrogate "rights
   described in the copyright law"); U.S. Congress, Office of Technology Assessment, Intellectual Property Rights
   in an Age of Electonics and Information 163 (U.S. G.P.O., 1986) ("OTA Report"); William R. Cornish, Copyright
   in Scientific Works (Scientific Communications, Computer Software, Data Banks): An Introduction, in Max
   Planck Gesellschaft, ed., European Research Structures--Changes and Challenges: The Role and Function of
   Intellectual Property Rights 50 (1994) (despite case for a measure of free reprography for purposes of
   academic research, "academic institutions are regarded as relatively soft targets by publishing interests [in
   U.K.], which have looked at them as suitable points for inserting initial wedges"). See generally Reichman, 25
   Int'l Rev. Indus. Prop. & Copyright L. at 461-68 (cited in note 44); Marshall Leaffer, Engineering Competitive
   Policy and Copyright Misuse, 19 U. Dayton L. Rev. 1087, 1094 (1994) (noting the judicial criticism of some
   software copyright plaintiffs for engaging in monopolistic practices).

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   1. The Vulnerability of Publicly Distributed Electronic Databases

   Only modest familiarity with the capabilities of digital technologies is required to understand the vulnerabilities
   of publicly distributed electronic databases to market-destructive appropriations. n67 Once compilations of
   data are electronically disseminated in databases that are made available to the public, second comers
   can easily and cheaply copy or manipulate the contents of such databases and disseminate the resulting
   products to large numbers of people. n68 With access to global information networks becoming ubiquitous in
   developed nations, compilers of publicly disseminated databases face diminishing prospects for commercial
   success unless they obtain the legal or technical means to thwart egregious forms of free-riding. n69

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   n67 See, for example, Final E.C. Directive, 1996 O.J. (L 77) at 20 (cited in note 7) (describing the need for
   granting legal protection to the makers of databases in Recitals 7-12); Information Industry Association,
   Database Protection: An Industry Perspective on the Issues (Aug. 1995) ("IIA Report").

   n68 IIA Report at 3 (cited in note 67).

   n69 See, for example, id. at 32. See also U.S. White Paper at 130-54, 177-90 (cited in note 64); Paul Heald,
   The Vices of Originality, 1991 Sup. Ct. Rev. 31 (1992).

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   When, moreover, second comers employ existing technology to make different selections from, and
   arrangements of, the data n70 contained in electronically published databases, they may avoid infringing the
   originator's own copyrights, if any, and in some jurisdictions, even qualify for copyrights of their own in the
   resulting products. Second comers can then exploit their versions in competition with the database provider
   from whom they appropriated the data. n71 Because of the widespread availability of scanning and other
   conversion equipment, even print compilations can readily be converted to electronic form and manipulated
   with the same electronic information tools. n72

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   n70 See, for example, Samuelson, Davis, Kapor, and Reichman, 94 Colum. L. Rev. at 2414 (cited in note 11).

   n71 See, for example, Jessica Litman, After Feist, 17 U. Dayton L. Rev. 607, 609 (1992) ("Under the Supreme
   Court's analysis [in Feist], a competitor would be infringing no copyright if it simply stole the data and left the
   base."); Pamela Samuelson, Legal Protection for Database Contents, 39 Communications of the ACM
   (forthcoming Dec. 1996).

   n72 At first, the European Commission proposed a sui generis right only for electronic databases. See
   Commission of the European Communities, Proposal for a Council Directive on the Legal Protection of
   Databases, COM (92) 24 final--SYN 393, art. 1 (1992) ("First E.C. Proposal on Databases"). The Commission
   did not explain why later drafts of the database directive broadened the term "database" so that the sui
   generis right would apply to print data compilations as well as electronic databases. See E.C. Directive on
   Databases, art. 1(2), 1996 O.J. (L 77) at 24 (cited in note 7). It is reasonable to assume, however, that the
   publishing industries must have brought scanning technologies and the like to the Commission's attention.

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   To the extent that government-generated or university-generated data remain noncommercialized, their
   vulnerability to technically refined means of accessing, downloading, or duplication may be of relatively little
   importance. Presumably, the originators want the broadest possible distribution of their data sets. Even here,
   however, there are some concerns that are likely to grow over time. For example, governments may impose
   cost recovery conditions on the use  of data that third parties who obtain unauthorized access could
   avoid. n73 Additionally, unauthorized users who introduce errors into a new product could also inadvertently
   corrupt the original database, perhaps leading to liability. n74

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   n73 See, for example, Executive Office of the President, Office of Management and Budget Memorandum by
   Alice M. Rivlin, Implementing the Information Dissemination Provisions of the Paperwork Reduction Act of 1995
   (Sept. 29, 1995) ("OMB Implementing Memo"); notes 307-09 and accompanying text.

   n74 See, for example, Bits of Power at ch. 3 (cited in note 32).

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   Over time, moreover, the distinction between "pure" or noncommercialized data and data applied to industrial
   pursuits seems likely to break down, as has routinely occurred in other disciplines, notably computer science
   and biotechnology. n75 Universities and other research institutions may view data compilations generated in
   the course of research as potential revenue sources, especially in an era of declining government support for
   research endeavors, just as they have done with regard to patentable inventions. n76 As more scientific data
   are commodified, the data collectors must necessarily distinguish between sources that are made publicly
   available without charge and those that are not. n77 Otherwise, even the providers that do not charge for
   data could disrupt contractually controlled applications of their own data downstream, not to mention the risk
   that the non-charging government or academic generator might inadvertently infringe on third parties'
   proprietary domains.

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   n75 See, for example, Allen Newell, Response: The Models Are Broken! The Models Are Broken!, 47 U. Pitt. L.
   Rev. 1023, 1026 (1986) (discussing the lack of a gap between basic and applied science as regards computer
   program algorithms and noting that the patent system has traditionally rewarded only industrial applications of
   scientific discoveries). See also Joseph Straus and Rainier Moufang, Deposit and Release of Biotechnological
   Material for the Purpose of Patent Procedure 95 (Nomos Verlagsgesellschaft, 1990) (discussing
   biotechnological research and development); Dan L. Burk, Biotechnology and Patent Law: Fitting Innovation to
   the Procrustean Bed, 17 Rutgers Comp. & Tech. L. J. 1, 33-34 (1991) (noting the difficulty in distiguishing
   products from processes for patentable biotechnological inventions).

   n76 See notes 283-97 and accompanying text (discussing hypothetical benefits to science from commodifying
   data collections).

   n77 See, for example, John Browning, Cyber View: Playing Facts and Loose, Sci. American 30, 32 (June 1996)
   (warning about unintended effects of legal restrictions on searching and gathering data).

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   A related trend is for some governments around the world to commercialize their data, regardless of whether
   other governments follow suit. n78 As this occurs, the former will become concerned about the vulnerability of
   their data even if the latter are not. By the same token, the providers that still choose not to charge for their
   services will increasingly come into contact with--and, perhaps, conflict with--the legal and technical
   fences that states bent on commercializing data may erect. As one observer put it, "the division between the
   two regimes" could become "a dam over which information will not easily flow," whereas worldwide economic
   growth seems to require that "more than perhaps any other commodity, data must be allowed to move without
   barriers." n79

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   n78 See Bits of Power at ch. 4 (cited in note 32) ("The Trend Toward Markets: Good or Bad for Science").

   n79 Charles von Simson, Feist or Famine: American Database Copyright as an Economic Model for the
   European Union, 20 Brooklyn J. Int'l L. 729, 768 (1994). In this context, governments that have not
   commercialized data in the past may decide to do so in order to have rights to trade when seeking access to
   data collections that are commodified elsewhere. The asymmetry likely to occur if one government can take all
   of another's data while restricting the appropriation of its own data may give rise to data trade wars.

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   To the extent that databases are commercialized, whatever their origin, the refined digital technologies that
   enhance the compiler's power to collect and disseminate the data contained in the database have equally
   enhanced the free-riding competitor's power to appropriate the fruits of the compiler's investment. n80 The
   second comer who purchases the originator's product, say, in the form of a CD-ROM, may electronically
   extract and recompile the data in question at a fraction of the originator's collection and distribution costs.
   The second product may then be sold for less than the first, because its publisher has contributed nothing
   directly or indirectly to the costs of research and production. Digital technology also enables second comers to
   extract and recombine the originator's data into value-adding products that improve on the original or that
   compete in different and sometimes distant market segments. n81 In some cases, third parties may simply
   extract the compiler's data in order to make them available over telecommunications networks, a gesture that
   can destroy any residual incentives to invest. n82

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   n80 If the second comer independently generates its own data, or combines its inputs with the first comer's
   data to produce value-adding applications, the former contributes knowledge, capital, and skilled efforts to the
   data-generating communities' overall endeavor. These second comers who do not merely duplicate or "clone"
   the first comer's product are hardly free-riders even when they do not contribute directly to the first comer's
   production costs under a licensed royalty transaction. See generally Reichman, 94 Colum. L. Rev. at 2521-23,
   2535-39 (cited in note 2).

   n81 See generally Samuelson, Davis, Kapor, and Reichman, 94 Colum. L. Rev. at 2417-20 (cited in note 11)
   (proposing a market-oriented legal regime for protection of industrial designs of software).

   n82 In one recent case, for example, a database maker spent about $ 10 million to compile some ninety-five
   million residential and commercial listings from some 3,000 telephone directories. A purchaser who paid a
   minimal amount for compact discs of these listings electronically extracted the data and then made their listing
   available over the Internet. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996). See also Hunsucker,
   European Database Directive (cited in note 60).
 

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   2. Relative Invulnerability of Many Privately Controlled Electronic Databases

   While none of the legislative initiatives under review have spawned an empirical study of the economics of the
   database industry, all the anecdotal evidence--including evidence recently collected by the National Research
   Council--suggests that the market for commercially distributed databases is almost universally characterized
   by a distinct absence of competition. n83 The reasons for this phenomenon have yet to be clarified. Perhaps
   the most plausible explanation is that startup and servicing costs have typically proved so high in relation to
   the relatively small size of specialized user markets that it has discouraged second comers from hazarding the
   risks of entry. n84 Whatever the truth of this hypothesis, once the threshold level of investment has been
   crossed, the first comer tends to take the relevant market segment as a whole. The private database industry
   is thus largely characterized by niche marketers who supply and dominate specific market segments. n85

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   n83 See National Research Council, Bits of Power at ch. 4 (cited in note 32).

   n84 See id.

   n85 See id.

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   When a database maker is the sole source for the data in question, and substitute databases cannot readily
   be compiled from public domain sources, digital technology can greatly strengthen a supplier's already
   formidable market power. By restricting access to identifiable online subscribers, for example, and by "placing
   conditions on access and [using technology] to monitor . . . customer usage," the publisher can largely restore
   the power of the two-party contractual deal that the advent of the printing press had appeared to destroy.
   n86 In effect, publishers in this position may not need copyright law at all, even if they qualify for protection.
   They may prefer contractually to reject the state-imposed cultural bargain n87 and override both its fair
   use provisions and its specific exemptions favoring the public interest in teaching and research. n88

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   n86 Litman, 17 U. Dayton L. Rev. at 611 (cited in note 71) ("Indeed, a large number of on-line database . . .
   publishers availed themselves of those strategies well before the Feist decision.").

   n87 See, for example, Peter A. Jaszi, Goodbye to All That--A Reluctant (and Perhaps Premature) Adieu to a
   ConstitutionallyGrounded Discourse of Public Interest in Copyright Law, 29 Vand. J. Transnat'l L. 595, 599-600
   (1996) (stressing the "economic and cultural bargain between authors and users . . . at the heart of U.S.
   copyright law, as reflected in the Patent and Copyright Clause [of the Constitution], and a parade of Supreme
   Court precedents . . . "). See also Robert A. Kreiss, Accessibility and Commercialization in Copyright Theory, 43
   UCLA L. Rev. 1, 6-22 (1995) (discussing the incentive structure of copyright law).

   n88 See notes 52-53 and accompanying text; Reichman, 25 Intl. Rev. Ind., Prop. & Copyright. L. at 461-67
   (cited in note 44) ("Public Interest at Odds" with the "Two-Party Deal"); Jane C. Ginsburg, Copyright Without
   Walls?: Speculations on Literary Property in the Library of the Future, 42 Representations 53, 60-63 (Spring
   1993). The resulting social harm is magnified by the absence of competition.

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   Moreover, electronic publishers may have virtually no transaction cost problems to overcome because digital
   technology enables them to track and charge for every instance of electronic access, even for browsing and
   scientific uses that were previously exempt. n89 The resulting market power then allows the publisher to
   impose monopoly prices and potentially oppressive terms on users, including libraries, academies, institutes,
   and research centers, and to ignore the social consequences that ensue from the inability of research
   organizations to pay for such access. n90

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   n89 Paul Goldstein, Copyright's Highway--From Gutenberg to the Celestial Jukebox 223-24 (Hill & Wang, 1994);
   Jessica Litman, The Exclusive Right to Read, 13 Cardozo Arts & Enter. L. J. 29, 31-32 (1994) (reviewing the
   National Information Infrastructure Task Force Draft Report and arguing that its recommendations would
   enhance copyright owners' control over uses of digitalized works).

   n90 See OTA Report (cited in note 66) (stressing similar concerns); Kurtz, 18 Eur. Intell. Prop. Rev. at 124
   (cited in note 58). See also notes 298-319 and accompanying text.

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   Whether contractual attempts to reduce users' access to scientific and cultural products that copyright laws
   had promoted in the past will survive legal challenges on such grounds as federal pre-emption of state law or
   misuses of copyright (allied to antitrust law) remains to be seen. n91 Equally unclear is the role that libraries
   will play once information providers "can connect directly to the user" via digital transmission over
   telecommunications networks. n92 Some observers see the changing role of libraries as grounds for allowing
   publishers virtually unfettered discretion to impose contractual conditions on libraries' access to networked
   transmissions. n93 Others see the dependence of users on digital transmissions for the future
   acquisition of scientific knowledge as grounds for generalizing some of today's library and fair use privileges to
   online users everywhere. n94 In any event, the foregoing analysis shows that digitalized transmission of data
   over telecommunications networks may do more than expose originators to free-riding duplication. In many
   other cases, it may foster the potential abuse of market power or the misuse of an intellectual property right.

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   n91 See, for example, Kreiss, 43 UCLA L. Rev. at 32-34 (cited in note 87) (discussing the argument that all
   copyrighted works should be accessible); Leaffer, 19 U. Dayton L. Rev. at 1106-07 (cited in note 66) (arguing
   antitrust law is properly the "sole regulator" of anti-competitive conduct in copyright cases); David A Rice,
   Public Goods, Private Contract and Public Policy: Federal Preemption of Software License Prohibitions Against
   Reverse Engineering, 53 U. Pitt. L. Rev. 543, 622-28 (1992) (considering whether preemption analysis is
   affected by contract context or relationship). See also Tritton, Intellectual Property in Europe at 411-35,
   635-63 (cited in note 50). But see 17 U.S.C. <sect> 108(f)(4) (allowing contractual obligations to override
   specified library privileges).

   n92 Ginsburg, 42 Representations at 60 (cited in note 88).

   n93 See, for example, id. at 60-63 (suggesting that publishers may condition libraries' access to digitally
   delivered information on compliance with a variety of restrictions, regardless of principles such as fair use, and
   that information providers need not resort to libraries as conduits for digital information in the future except,
   perhaps, as a "full-service 'help-line' "). But see Jane C. Ginsburg, Surveying the Borders of Copyright, 41 J.
   Copyright Soc'y, 322, 325-26 (arguing for some legal restraints on such contractual conditions).

   n94 See, for example, Goldstein, Celestial Jukebox at 230 (cited in note 89) ("Exemptions and compulsory
   licenses for research and educational uses recognize the transcendent claim these uses have on a copyright
   system whose founding premise is that a culture can be built only if toilers in the vineyard are free to draw on
   the works of their predecessors."); Marci A. Hamilton, The TRIPS Agreement: Imperialistic, Outdated, and
   Overprotective, 27 Vand. J. Transnat'l L. 613, 623-33 (1996) (emphasizing the need to construct a "free-use
   zone . . . in the on-line era"). For the view that developing countries should formulate tailormade doctrines of
   misuse to govern information providers' contracts, see J.H. Reichman, From Free Riders to Fair Followers:
   Global Competition Under the TRIPS Agreement, N.Y.U. J. Int'l L. & Pol. (forthcoming 1997).

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   III. The Drive for Legal Protection of Databases

   The copyright laws of most developed countries exclude functionally determined databases and do not protect
   disparate data even when a given compilation as a whole happens to satisfy the eligibility requirements of
   those laws. n95 This leaves a perceived gap in the worldwide intellectual property system, at least to the
   extent that commercial data providers cannot rely on contracts and encryption devices to prevent the
   technically refined forms of free-riding discussed above. n96 Proposals are, therefore, being put forward to
   protect noncopyrightable databases under ad hoc or sui generis intellectual property regimes that
   deviate from the classical patent and copyright models underlying the Paris and Berne Conventions. n97 These
   proposals are, in turn, logical constituents of a larger project to create a national and global information
   infrastructure that is pending at both the domestic and international levels. n98

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   n95 See notes 50-57 and accompanying text. This principle was incorporated into the TRIPS Agreement of
   1994, art. 10, in Results of the Uruguay Round at 370-71 (cited in note 1), which requires copyright protection
   when "the selection or arrangement of . . . contents constitute intellectual creations," but stipulates that such
   protection "shall not extend to the data or material itself." Id.

   n96 The extent of the "gap" is controversial, in part because the U.S. dominates the world market, despite its
   lack of legal protection for the contents of databases. The U.K., which is the only country in Europe that
   confers full copyright protection on virtually all databases, dominates the market in the European Union. See,
   for example, Debra B. Rosler, The European Union's Proposed Directive for the Legal Protection of Databases: A
   New Threat to the Free Flow of Information, 10 High Tech. L. J. 105, 139 (1995) (identifying the growing
   regional disparity within the European information industry). Increasingly, moreover, "a vigorous contract
   regime may afford the information provider the incentive to seek, develop, and commercialize information that,
   under a copyright regime might not have been worth pursuing." Ginsburg, 41 J. Copyright Soc'y at 325-26
   (cited in note 93). In the absence of empirical data to clarify the underlying economic realities the need for
   database protection remains speculative. Compare Laurence M. Kaye, The Proposed E.U. Directive for the
   Legal Protection of Databases: A Cornerstone of the Information Society?, 12 Eur. Intell. Prop. Rev. 583
   (1985) (viewing legal protection as economically indispensible) with von Simson, 20 Brooklyn J. Int'l L. at
   767-68 (cited in note 79) (predicting that protected database producers will lose ground on the world market
   to producers operating under more competitive conditions).

   n97 See notes 5-11 and accompanying text. For the official line of demarcation between "writings" and
   "products" that underlies the Paris and Berne Conventions, see note 1, and its gradual disintegration under
   pressure from a proliferating set of hybrid (i.e, sui generis) regimes that deviate from the patent and copyright
   models, see Reichman, 13 Cardozo Arts & Ent. L. J. at 480-551 (cited in note 3). See also Reichman, 94
   Colum. L. Rev. at 2448-2519 (cited in note 2).

   n98 See notes 202-21 and accompanying text.

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   The impetus for the database initiative came from the Commission of the European Communities, whose
   member states have embraced a policy of commercializing government-generated data. n99 This policy is
   diametrically opposed to the traditional policy of the United States, which has favored free and open access
   to scientific data. n100

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   n99 While the Commission claims that a key motive is the need to harmonize E.U. law, critics debunk this claim
   because Article 10 of the TRIPS Agreement partly performed this function, and because the E.C.'s database
   regime, as finally adopted, actually discourages harmonization on the crucial issue of fair use. See, for
   example, Charles R. McManis, International Intellectual Property Protection and Emerging Computer
   Technology: Taking TRIPS on the Information Superhighway, Vill. L. Rev. (forthcoming 1996). The predominant
   objective, among those stated, is to increase the share of European database producers in the world market.
   See, for example, First E.C. Proposal on Databases at 2-14 (cited in note 72) (Explanatory Memorandum
   emphasizing goal of promoting E.C. database industries). See also E.C. Directive on Databases, 1996 O.J. (L
   77) at 20 (cited in note 7) (noting in Recital 11 that "there is at present a very great imbalance in the level of
   investment in the database sector").

   n100 See, for example, Bits of Power at 1 (cited in note 32). See also notes 33-36 and accompanying text.

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   Starting in the 1990s, the Commission of the European Communities began to reevaluate the legal status of
   databases, especially electronic databases, in the process of formulating an overall strategy for information
   technologies known as the Information Market Policy Action Program (IMPACT). n101 The Commission found
    that European database producers had to overcome several comparative disadvantages in order to
   expand their share of the world market and to catch up with the U.S. industry, which dominated the market
   and was growing at a faster rate than its European counterpart. To overcome these disadvantages, the
   Commission stressed the need for a single, integrated market, undistorted by differing regulatory approaches,
   and for higher levels of intellectual property protection, tailored to the needs of potential investors in database
   production, which might stimulate additional investment in this sector. n102 Another unstated premise in the
   Commission's thinking was, perhaps, that privatizing the government's role in the collection and distribution of
   data might also generate income streams that could help to offset the shrinking availability of public funds for
   research and development.

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   n101 See, for example, Commission of the European Communities, 1991 Report on the IMPACT Program: Main
   Events and Developments in the Electronic Information Services Market, COM (93) 156 final (1991);
   Commission of the European Communities, Working Program of the Commission in the Field of Copyright and
   Neighboring Rights, COM (90) 584 final (1990); Rosler, 10 High Tech. L. J. at 105, 107, 110-13 (cited in note
   96). The IMPACT program specifically addressed the goal of improving the position of the European Union's
   member countries in the emerging global market for information goods. Among the strategies it endorsed were
   proposals to strengthen intellectual property rights, to protect new technologies, and to stimulate both
   international trade and European economic development.

   n102 See, for example, First E.C. Proposal on Databases at 2-4 (cited in note 72); Rosler, 10 High Tech. L. J.
   at 109-10, 13339 (cited in note 96) (citing authorities). The Commission stressed the vulnerability of database
   publishers to market failure, but devoted little or no published attention to the countervailing risk of
   technologically induced overprotection. The Commission did nonetheless attempt to avert overprotection of
   database contents by a requirement that sole-source database providers license their data on fair and
   non-discriminatory terms. See First E.C. Proposal on Databases at art. 8(1) (cited in note 72). But, this plan
   was foiled by the Council of Ministers at the last moment. See notes 133, 187-88 and accompanying text.

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   The Commission decided both to harmonize the domestic copyright laws insofar as they applied to compilations
   of data and to require that the member states also adopt sui generis intellectual property laws to protect the
   contents of noncopyrightable electronic databases. n103 In this regard, the Nordic countries had already
   experimented with short-term, copyright-like protection of noncopyrightable compilations--known as the
   Nordic "catalogue rule"--with a view to curbing commercial piracy without extending full copyright protection
   to borderline literary productions that lacked creative authorship. n104  Accordingly, in 1992, the
   Commission proposed an innovative directive to protect such databases that was "loosely modelled on the
   Nordic catalogue rule, and more directly and strongly protects electronic information tools." n105 A greatly
   amended version of this proposal was adopted by the Council of Ministers and the European Parliament in July
   1995 n106 which, with only modest, technical changes, took effect on March 11, 1996. n107

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   n103 See E.C. Directive on Databases, 1996 O.J. (L 77) at 25-27 (cited in note 7) (arts 3-6 (copyright), 7-11
   (sui generis right)). For earlier versions, see First E.C. Proposal on Databases (cited in note 72); Commission of
   the European Communities, Amended Proposal for a Council Directive on the Legal Protection of Databases,
   COM (93) 464 final--SYN 393 (1993) ("Amended E.C. Proposal on Databases"); Common Position (E.C.) No.
   20/95, adopted 10 July 1995, with a view to adopting Directive 95/ /E.C. of the European Parliament and of
   the Council of the European Union on the Legal Protection of Databases (95/C/288/02), 1995 O.J. (C 288) 14,
   14-21 ("E.C. Common Position").

   n104 See, for example, Gunnar Karnell, The Nordic Catalogue Rule, in E.J. Dommering and P.B. Hugenholtz,
   eds., Protecting Works of Fact 67-72 (Kluwer Law & Taxation, 1991) (analyzing the history and scope of
   protections of the Nordic Catalogue Rule). Laws implementing this regime "prohibit slavish reproduction, in
   whole or in part, of 'catalogues, tables, and similar compilations in which a large number of particulars have
   been summarized,' including databases, for ten years after first publication. . . . Industrious effort and
   investment rather than creativity are the prerequisites . . . ." Reichman, 94 Colum. L. Rev. at 2492-93 (cited
   in note 2) (quoting Karnell, The Nordic Catalogue Rule in Dommering & Hugenholtz eds., Protecting Works of
   Fact at 67-72 and noting pre-digital ambiguities of this law).

   n105 Reichman, 94 Colum. L. Rev. at 2493 (cited in note 2). See also Jean Hughes and Elizabeth Weightman,
   E.C. Database Protection: Fine Tuning the Commission's Proposal, 14 Eur. Intell. Prop. Rev. 147, 148 (1992)
   (indicating that the Directive goes beyond the Nordic rule and protects against re-use of the data compiled).

   n106 See generally E.C. Common Position, 1995 O.J. (C 288) at 14-29 (cited in note 103).

   n107 See E.C. Directive on Databases, 1996 O.J. (L77) at 25 (cited in note 7). The Directive as finally adopted
   may be subdivided into five parts: (1) a list of sixty "Recitals" or premises that underlie this legislation; (2) a
   small group of definitional articles that apply across the board (arts. 1-2); (3) a set of provisions regulating
   the treatment of databases under the member states' domestic copyright laws (arts. 3-6); (4) a set of
   provisions requiring these same states to provide the new, sui generis intellectual property right for
   noncopyrightable databases (arts. 7-11); and (5) a final group of "common provisions" that apply to both
   copyright and the sui generis laws (arts. 12-16). The copyright provisions in the E.C. Directive on Databases
   reserve full copyright protection only for those databases in which "the selection or arrangement of . . .
   contents . . . constitutes the author's own intellectual creation," and they forbid states to apply other
   eligibility criteria, such as the "industrious effort" (or "sweat-ofthe-brow") criterion heretofore recognized by
   courts in the United Kingdom. See E.C. Directive on Databases, art 3(1), 1996 O.J. (L 77) at 25 (cited in note
   7). The drafters also specify that copyright protection extends only to the author's creative selection and
   arrangement, and not to the contents of the database as such. Id. art. 3(2). These eligibility and scope of
   protection clauses thus restate familiar doctrines recognized in most domestic copyright systems (except for
   that of the United Kingdom, where broad copyright protection of electronic databases will be cut back) and
   pose fewer new questions than the sui generis regime.

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   In the following Sections, we track the evolution of the European Database Directive ("E.C. Directive" or "Final
   E.C. Directive") in considerable detail, for two principal reasons. First, this legislative history illustrates how a
   modest, pro-competitive initial proposal for sui generis protection has been transformed into a virtually
   absolute monopoly by the backdoor lobbying efforts of publishers and by the coordinated efforts of U.S. and
   E.U. officials to propogate a protectionist strategy for the global information infrastructure. As will become
   apparent in Part IV, there was wisdom in earlier drafts of the E.C. Directive upon which we think a better sui
   generis law could be built. Second, this legislative history also reveals how radically the world intellectual
   property policymaking arena has changed in the last several years. In this climate, it is literally possible
   for an as yet unimplemented legislative initiative of one government to become an international minimum
   standard for other governments before most people affected by it, including the scientific and educational
   communities, even know that proposals for new intellectual property rights have been put on the table.

   A. The European Union's Initial Project

   Collections of data, including those relatively unstructured collections of primary interest to science, have
   never fit comfortably within the romantic notion of authorship that once dominated European copyright law or
   even within the more pragmatic conceptions of "originality" that pervade modern copyright laws, such as that
   of the United States. Behind this conceptual resistance there lies a profound concern that facts and ideas
   constitute building blocks of intellectual discourse that should not (and some contend cannot constitutionally)
   be removed from the public domain. n108 In this context, the scientific community's own commitment to the
   free and unrestricted flow of data n109 represents an important subchapter in a larger discourse that, in this
   country, at least, is rooted in the First Amendment. n110

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   n108 See, for example, Bits of Power at ch. 3 (cited in note 32) ("Data in science are like bricks, and the
   theoretical concepts are the mortar that connects them to give the subject its structure."). See also notes
   50-55 and accompanying text.

   n109 See Bits of Power at ch. 4 (cited in note 32).

   n110 See notes 50-55 and accompanying text. See also Ginsburg, 92 Colum. L. Rev. at 338 (cited in note 44);
   Litman, 17 U. Dayton L. Rev. at 607 (cited in note 71); Melvin B. Nimmer and David Nimmer, 1 Nimmer on
   Copyright <sect><sect> 1.10C[2] and 1.10 D (Matthew Bender, 1996).

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   With these constraints in mind, the Commission of the European Communities pursued two objectives. One was
   to harmonize the rules of the member states with regard to copyrightable databases. The other was to fill a
   perceived gap in existing intellectual property regimes with regard to electronic compilations of data, which
   appeared particularly vulnerable to market-destructive appropriations.

   1. The Copyright Provisions

   The copyright provisions in the E.C. Directive are, at first glance, less remarkable than the sui generis regime
   that it attempts to introduce for the first time. The most obvious change was the adoption of an "intellectual
   creation" standard for copyrightable databases marketed anywhere within the European Union, and
   rejection of the United Kingdom's "sweat of the brow" standard of eligibility for future databases. n111 But the
   E.C. Directive's copyright component also extended database authors' exclusive rights to encompass
   temporary reproductions, online transmissions, and certain other uses, while later drafts authorized member
   states to adopt some restrictions on the scope of these exclusive rights. n112 A closer look at this last
   provision suggests that its real intent was to limit the power of member states to apply, let alone extend,
   traditional copyright exceptions, including exceptions for private or research uses, n113 on which the scientific
   and educational communities have long relied. n114

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   n111 See E.C. Directive on Databases, art. 3(1), 1996 O.J. (L77) at 25 (cited in note 7). See note 48 above
   concerning the U.K. standard. In the final E.C. Directive on Databases, the copyright owner's exclusive rights
   are broadened to include "temporary or permanent reproduction by any means and in any form, in whole or in
   part" as well as "any communication, display or performance to the public" either of the original database or of
   "the results of . . . any translation, adaption, arrangement and any other alteration." See E.C. Directive on
   Databases, art. 5(a), (b), (d), (e), 1996 O.J. (L 77) at 25 (cited in note 7).

   n112 For restrictions on the scope of protection, see id. art. 6(2).

   n113 The Directive, authorizes member states to exempt "reproduction for private purposes of a
   non-electronic database." Id. art. 6(2)(a). This would seem to mean that this same exemption does not apply
   to electronic databases, even though academic institutions and research organizations have long taken it for
   granted with respect to print media. To be sure, a "lawful user of a database" (i.e., a subscriber, licensee or
   purchaser of a CD-ROM) will "not require the authorization of the author" for acts inherently "necessary for the
   purposes of access to the contents of the database and normal use of the contents." Id. art. 6(1). Moreover,
   private use via networked transmissions constitutes the primary market for any electronic databases, whether
   or not copyrightable. Yet, the absence of any "private use" exception for electronic databases covered by
   copyright laws, however logical, makes other exceptions for teaching and research activities correspondingly
   more important. The Directive expressly confines these to "use for the sole purpose of illustration for teaching
   or scientific research . . . to the extent justified by the noncommercial purpose to be achieved." Id. art. 6(3).
   Lest there be any doubts about the drafters' true intentions, the Directive expressly denies states the right to
   derogate from this provision when implementing "other exceptions to copyright which are traditionally
   authorized under national laws." Id. art. 6(2)(d). It then ups the ante by paraphrasing the Berne Convention's
   own strictures against so-called public-interest exceptions that unreasonably prejudice the rightholder's
   legitimate interests or that conflict with a normal exploitation of the database. Id. art. 6(3).

   n114 The advent of a number of new technologies, including photocopying machines, computer programs, and
   optical scanners, have unsettled the public policy limitations on copyrights, such as the fair use doctrine, in
   recent years. See generally American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1995) (holding
   that systematic photocopying of articles for commercial research purposes infringed copyright); Sega
   Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992); Pamela Samuelson, Fair Use for Computer
   Programs and Other Copyrightable Works in Digital Form: The Implications of Sony, Galoob, and Sega, 1 J.
   Intell. Prop. L. 49 (1993). These technologies enable copies for private research uses to displace commercial
   markets. See, for example, Goldstein, Celestial Jukebox at 129-30 (cited in note 89) ("The risk has grown that
   'private' copies will displace the retail sales and rentals of the authorized originals from which publishers, record
   companies, and motion picture producers earn their revenues."). The extent to which private photocopying of
   journals for research purposes without compensation remains a fair use, however, is controversial from a global
   perspective. See, for example, Cornish, Copyright in Scientific Works, in Gesellschaft, ed., European Research
   Structures at 47-50 (cited in note 66) (stressing that academics "who are also authors, find their interests . .
   . and . . . judgment . . . pulled in two directions on these issues" and no settled solution has emerged); Jane
   C. Ginsburg, Reproductions of Protected Works for University Research or Teaching, 39 J. Copyright Soc'y 181,
   188-89, 192-211 (1992) (discussing legal license regimes and collection societies). But see L. Ray Patterson &
   Stanley W. Lindberg, The Nature of Copyright: A Law of User's Rights 191-96 (U. Georgia, 1991) (arguing that
   private use for nonprofit purposes is always allowed).

   Digital technologies may make it possible to overcome most of the transaction cost problems that have lately
   been used to justify application of the fair use exception in practice. See, for example, Wendy J. Gordon, Fair
   Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82
   Colum. L. Rev. 1600 (1982); Goldstein, Celestial Jukebox at 16 (cited in note 89) (evaluating public and private
   benefits test of fair use in terms of transaction costs). See also id. at 223-24, 230 (while "celestial jukebox
   may reduce transaction costs" and lessen "perceived need for a safety valve such as fair use," the enduring
   importance of "exemptions or compulsory licenses for educational and research uses" remains clear).
 

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   While the precise mesh of these provisions in administrative and judicial practice remains to be seen, the
   drafter's protectionist thrust is unmistakable. Prior to the E.C. Directive, the broad exemptions and immunities
   afforded copies made for teaching and research activities under most domestic copyright laws were engrafted
   onto the Berne Convention's exclusive reproduction right and, within limits, appeared to lie outside the normal
   range of exploitative activities reserved to authors. n115 A separate provision in Article 10(2) of the Berne
   Convention then authorized certain other uses of works "by way of illustration for teaching," such as
   face-to-face teaching activities and educational broadcasts, which did not apply to "mere scientific research."
   n116 These uses were roughly analogous to "annotations," which are permitted by article 10(1) of the Berne
   Convention. n117

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   n115 Under the relevant provisions of the Berne Convention, an author's exclusive reproduction right (as set
   out in Article 9(1)) is subordinated to domestic legislation "permitting the reproduction of such works in certain
   special cases" (by dint of Article 9(2)). The Article 9(2) exceptions should not, in principle, conflict with
   "normal exploitation" or "unreasonably prejudice the legitimate interests of the author" (as also required by
   Article 9(2)). See Berne Convention, arts. 9(1), (2) (cited in note 1). See also World Intellectual Property
   Organization Guide to the Berne Convention 56-57 (1978) ("WIPO Guide") (suggesting a system of compulsory
   licensing with equitable remuneration when "fair uses" unduly harm the copyright owner; and stressing freedom
   of each country to provide for educational, cultural, social, and economic needs.)

   n116 See Berne Convention, art. 10(2) (cited in note 1); WIPO Guide at 60 (cited in note 115).

   n117 See Berne Convention, art. 10(1) (cited in note 1).

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   In contrast, the copyright provisions of the E.C. Directive seem to recognize "illustration for teaching or
   scientific research" as the "sole purpose" for which the educational and scientific communities may invoke "fair
   use." n118 In other words, the E.C. Directive expands the limited exception for annotations and
   educational performances, drawn from Article 10(2) of the Berne Convention, to scientific research. n119 It
   then avoids any general fair use provision, analogous to Article 9(2), which applied to copies "for personal or
   scientific use," n120 and which, in the context of databases, should permit scientific use of the content,
   without permission and on favorable terms. n121 On the contrary, the Directive also implies that any other
   claim of fair use by these communities would inherently "prejudice . . . the rightholder's legitimate interests or
   conflict with normal exploitation of the database." n122

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   n118 See E.C. Directive on Databases, arts. 6(2)(b), (d), 6(3), 1996 O.J. (L 77) at 25 (cited in note 7). Article
   6(2)(d) allows states to make "other exceptions to copyright which are traditionally authorized under national
   law . . . without prejudice to points (a), (b), and (c)." Id.

   n119 Berne Convention, art. 10(2) (cited in note 1) (permitting "quotations" and other uses of literary and
   artistic works "by way of illustration in publications, broadcasts or sound or visual recordings for teaching,
   provided such utilization is compatible with fair practice.")

   n120 WIPO Guide at 56 (cited in note 115).

   n121 The drafters of the Directive have thus singled out one of the numerous exceptions recognized by the
   Berne Convention (whose language was narrowly drawn lest it overshadow the others) and converted it into
   the sole exception allowed for science and education under the Directive's copyright provisions. The same
   procedure will then be caried over to the sui generis regime. See notes 170-179 and accompanying text.

   n122 See note 118.

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   The inescapable conclusion is that, in the drafters' minds, these provisions should narrow the educational and
   scientific communities' ability to invoke "fair use" with respect to copyrightable databases under prior law. In
   this and other respects, the E.C. Directive's copyright provisions are thus the first concrete measures in a
   larger project for the recasting of copyright law as applied to transmissions over networked systems of
   telecommunications n123 that would greatly reduce the pre-existing public interest exceptions of particular
   interest to the educational and scientific communities. n124

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   n123 In effect, these provisions implement, with respect to eligible databases, the Commission's pending and
   highly protectionist approach to online transmissions of copyrightable works in general, which are on the
   agenda for a diplomatic conference, hosted by the World Intellectual Property Organization (WIPO), scheduled
   for December 1996. See text accompanying notes 209-14. With due regard for differences in legal technique,
   they also reflect the goals expressed in the Information Infrastructure Task Force's White Paper on the
   National Information Infrastructure and in the pending amendments to United States copyright law that it has
   inspired. See note 64.

   n124 The appropriateness of the copyright law's traditional "economic and cultural bargain," see notes 50-55
   and accompanying text, for the digital environment has been called into question, given that publishers in this
   medium can electronically monitor and track most uses without high transaction costs. See, for example, U.S.
   White Paper at 82 (cited in note 64). See also American Geophysical Union v. Texaco, Inc., 37 F.3d 92 (2d Cir.
   1994) (finding that the availability of a licensing scheme affected the fair use determination). Trade-driven
   economic policies have further weakened the consensus on which that cultural bargain previously depended.
   See Jaszi, 29 Vand. J. Transnat'l L. at 599 (cited in note 87) (criticizing replacements of "cultural bargain"
   theory of copyright law with new, trade-driven goal, which seeks to "enhance . . . the wealth and overall
   financial well-being of companies which invest in the production of and distribution of copyrighted works"). See
   also David Nimmer, The End of Copyright, 49 Vand. L. Rev. 1385 (1995).

   The U.S. Register of Copyright may be right in observing that "license or access fee structures may be
   developed that will take into account the proportion of total uses that qualify as fair use . . . and certain acts
   of decryption may be excused if the ultimate purpose is to make fair use of the work." Marybeth Peters, The
   National Information Infrastructure: A Copyright Office Perspective, 20 Colum.-VLA J. L. & Arts 341, 354
   (1996). But the impetus to enter voluntary agreements that provide preferential treatment to certain users
   depends in part on the legal constraints otherwise applicable as baseline rules. If these rules tend to create or
   reinforce powerful monopolies, there is little reason to expect that "consumers will be charged lower prices in
   exchange for giving up fair use, first sale, and other rights" or that the grant of strong copyright protection for
   digital works will ensure that the scientific and educational communities can access digital works at affordable
   rates. See, for example, Hamilton, 27 Vand. J. Transnat'l. L. at 628-29 (cited in note 94) (stressing need to
   recreate cyberspace parallels to fair use lest "the limited monopoly currently afforded copyright owners . . .
   become an 'absolute monopoly' over the distribution of and access to copyrighted information once such
   information is routinely transmitted online") (quoting Association of Research Libraries, Intellectual Property: An
   Association of Research Libraries Statement of Principles 1 (May 1994)); Pamela Samuelson, Copyright Grab,
   Wired 4.01 at 134, 191 (Jan. 1996). See also Kurtz, 18 Eur. Intell. Prop. Rev. at 134 (cited in note 58). From
   this perspective, the single most troubling aspect of the White Paper (and the legislative proposals it has
   spawned) is that so many qualified observers reach the conclusion that it favors "reducing the application and
   scope of the fair use doctrine in cyberspace." McManis, International Intellectual Property Protection (cited in
   note 99) (citing authorities).
 

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   2. The Sui Generis Provisions

   Having resolved these copyright issues more or less to their satisfaction, the Commission initially approached
   the database industry's demands for sui generis legal incentives with commendable caution. It did not, for
   example, uncritically propose yet another hybrid exclusive property right based on modified patent and
   copyright principles, like those that have increasingly challenged both classical intellectual property theory and
   the competitive ethos from which it arose. n125 Rather, the Commission affirmed its preference for a regime
   based on modified liability principles--one that would deter certain types of socially undesirable conduct
   without vesting exclusive property rights in data as such. n126 Unfortunately, even the  Commission's
   earliest proposals along these lines were flawed by contradictory elements drawn from the exclusive rights
   model, n127 while overwhelming lobbying pressures converted the final version into one of the least balanced
   and most potentially anti-competitive intellectual property rights ever created.

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   n125 See generally Reichman, 13 Cardozo Arts & Enter. L. J. at 512-17 (cited in note 3). See also John H.
   Barton, Adapting the Intellectual Property System to New Technologies, in Mitchel B. Wallerstein, Mary Ellen
   Mogee, and Robert A. Schoen, eds., The Global Dimensions of Intellectual Property Rights in Science and
   Technology 249 (National Academy Press, 1993) (evaluating more positively the emergence of hybrid
   intellectual property rights).

   n126 See First E.C. Proposal on Databases at arts. 1(1), 2(5) (cited in note 72); Commission of the European
   Communities, Explanatory Memorandum to the Proposal for a Council Directive on the Legal Protection of
   Databases, COM (92) 24 final--SYN 393 21-22, 25, 35, 41 (1992); Amended E.C. Directive on Databases at
   arts. 2.2, 6 (cited in note 103) (all stressing the goal of protecting the compiler's industrious effort and
   investment against parasitic appropriation by competitors). A true liability regime aims primarily to restore and
   preserve the bases for healthy competition by discouraging certain market-distorting forms of conduct that
   prevent innovators from appropriating the fruits of their investment. See, for example, Reichman, 94 Colum.
   L. Rev. at 2434-42, 2495-96, 2504-558 (cited in note 2); text accompanying notes 431-50.

   n127 For example, the definition of "in substantial part" in early drafts of the E.C. Directive on Databases was
   heavily reliant on the exclusive rights concepts of copyright law. See First E.C. Proposal on Databases at art.
   1(3) (cited in note 72); Amended Proposal on Databases at art. 11(8) (cited in note 103). See also note 130.

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   The Commission's initial approach was premised on the absence of a harmonized system of unfair competition
   legislation to safeguard "the investment of considerable human, technical and financial resources" in the
   making of databases that "can be copied or accessed at a fraction of the cost needed to design them
   independently." n128 The logical solution was, therefore, to codify a new type of unfair competition law. Such
   a law, loosely modelled on existing laws that protected trade secrets or confidential information, would repress
   conduct amounting to the "misappropriation" of an electronic database producer's investment without imposing
   either legal barriers to entry or the social costs of actual or legal secrecy. n129 To this end, the Commission
   proposed simply to forbid the "unfair extraction" of data from an electronic database for commercial purposes
   without the second comer's having expended independent effort to collect and verify similar information. The
   first proposed draft E.C. Directive accordingly provided a ten-year period of lead time in which the database
   maker could recoup his or her investment in a noncopyrightable electronic database while preventing copiers
   from engaging in for-profit extraction or reutilization of the factual contents, in whole or in substantial part.
   n130

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   n128 First E.C. Proposal on Databases (recitals 5-6) (cited in note 72).

   n129 Compare Restatement (Third) of Unfair Competition at <sect><sect> 39-45 (cited in note 38) (restating
   the norms of trade secrecy law); Gordon, 78 Va. L. Rev. at 221-24 (cited in note 44) (proposing the tort of
   "malcompetitive copying").

   n130 See First E.C. Proposal on Databases at arts. 1(1), 2(5), 9(3) (cited in note 72). Technically, the right
   arose with the creation of the database and lapsed ten (now fifteen) years from the date it was first lawfully
   made available to the public. The provision forbidding unauthorized reuse of the compiler's factual contents
   closed a gap in the Nordic catalogue rules, which case law had not yet resolved. See notes 104-105 and text
   accompanying. Already at this first draft stage, however, the language chosen to implement the Commission's
   "unfair competition" approach was contradicted by other language describing the database maker's "exclusive
   right to prevent unauthorized extraction and reutilization" of contents.
 

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   The Commission's "unfair extraction" criterion seemed to invite case-by-case judicial distinctions between
   pro-competitive activities, especially independent investment in the generation of a competing electronic
   database (which was roughly analogous to reverse engineering by honest means), and market distorting forms
   of electronic copying (which were roughly comparable to industrial espionage, commercial bribery, and other
   types of "parasitical" or free-riding behavior that unfair competition laws interdict). It may also have opened
   the door to case-by-case judicial evaluation of unauthorized extractions deemed "fair" because they advanced
   non-commercial educational and scientific pursuits, although neither the draft E.C. Directive nor the
   Commission's Explanatory Memorandum about it specifically endorsed this proposition. In any event, the
   drafters further diluted the database maker's new right against "unfair extraction" by engrafting some express
   user's rights upon it and by adopting explicit measures to safeguard the public interest in free competition.

   For example, the drafters apparently envisioned that lawful users of an electronic database could make a
   limited reuse of its contents even for some commercial purposes, as might occur in value-adding uses. n131
   There was also no clear means for database creators to extend control over the initial compilation by making
   subsequent changes to it, although the extent to which this omission resulted from a drafting oversight
   remains unclear. n132 Above all, price competition was directly encouraged. Second comers could choose
   between independently compiling their own databases from scratch or invoking a statutory compulsory license
   against any sole-source provider of data in electronic databases, with a view to competing against that
   provider while paying reasonable royalties for the use of the extracted data. n133

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   n131 See First E.C. Proposal on Databases at art. <sect> 8(4) (cited in note 72).

   n132 For the possibility of perpetual protection introduced in later versions, see notes 147-48 and
   accompanying text.

   n133 See First E.C. Proposal on Databases at art. 8(1), (2) (cited in note 72). See also Amended E.C. Proposal
   on Databases at art. 11(1), (2) (cited in note 103).

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   Of course, if multiple data providers serviced a given market segment, the draft E.C. Directive's
   pro-competitive thrust was satisfied without recourse to a compulsory license. The opportunity to choose
   among providers, however, seems rarely to occur in practice because the bulk of all electronic compilations of
   data reportedly emanates from sole-source providers, and this "niche" marketing appears characteristic of both
   the private and public sectors. n134 In all such cases, the compulsory license would lie, and
   originators, including public bodies benefitting from a natural monopoly, would be obliged to grant licenses for
   commercial reexploitation of the data in question on fair and nondiscriminatory terms. n135 The liability
   principles loosely embodied in the first draft of the E.C. Directive thus created no legal barriers to entry.
   Arguably these principles may even have lessened existing economic barriers to entry by empowering would-be
   competitors to borrow data at reasonable rates when the cost of independently regenerating them appeared
   too costly or otherwise inefficient as a business strategy. n136

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   n134 See notes 83-94 and accompanying text.

   n135 First E.C. Proposal on Databases at art. 8(1), 8(2) (cited in note 72).

   n136 In this respect, the early draft seems to have anticipated some of the findings concerning the
   pro-competitive characteristics of liability-based intellectual property regimes that legal theory was
   investigating at about the same period of time. See, for example, Samuelson, Davis, Kapor, and Reichman, 94
   Colum. L. Rev. at 2308 (cited in note 11) (proposing a market-oriented approach); Reichman, 94 Colum. L.
   Rev. at 2432 (cited in note 2) (discussing pro-competitive characteristics of liability based regimes).

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   Absent from this framework, however, were any explicit exceptions favoring educational and scientific users,
   assuming these were not implicitly "fair" uses under the basic "unfair extraction" criterion of the draft E.C.
   Directive, an omission that the European Parliament singled out for criticism. Although the legislative history
   does not explain why the drafters ultimately rejected this criticism, n137 a reasonable inference from all the
   evidence is that the Commission believed further exceptions and immunities would unduly weaken database
   publishers' incentives to invest under a regime that already implemented a procompetitive strategy. If so, the
   Commission erred in at least two respects.

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   n137 See Commission of the European Communities, Amended Proposal for a Council Directive on the Legal
   Protection of Databases, COM (93) 464 final--SYN 393 4 (1993) ("Second Explanatory Memorandum")
   (declining to accept parliamentary request for special exemptions in favor of education and research).

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   First, the Commission seems to have assumed that a more competitive market would intrinsically satisfy the
   needs of the scientific and educational communities. A National Research Council Report shows, however, that
   basic science has organizational and operational needs that often differ from those a competitive market is
   geared to meet. n138 Experience demonstrates, indeed, that basic science may not be able to pay the market
   rate for data even when it is competitively determined. Important research projects may consequently
   languish for lack of affordable data unless non-market mechanisms (such as subsidies) or legal
   constraints on publishers (such as fair use exceptions) close the gap. n139

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   n138 See Bits of Power at ch. 4 (cited in note 32).

   n139 Id. See notes 301-15 and accompanying text.

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   Second, the drafters optimistically assumed that their concern for the public interest in free competition was
   still a paramount legislative value in developed market economies. They thus underestimated the ability of
   powerful lobbies, working largely behind closed doors, to convert their rudimentary liability framework into a
   potent exclusive property right from which their preferred public interest safeguards would be totally excised.

   B. The European Union's Final Product

   The European Commission's ingenious project had already suffered considerable erosion by the time the
   Amended Proposals were put forward in 1993. n140 The project's conversion from a relatively weak liability
   regime to a strong exclusive property right, however, occurred during the closed proceedings of the European
   Council of Ministers, which produced the Common Position of July 10, 1995. n141 This version, with minor
   technical alterations, became the final E.C. Directive on Databases, adopted on March 11, 1996, which the
   European Union member states must promptly convert into domestic intellectual property laws and regulations.
   n142

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   n140 For example, the Amended Proposal seemed to grant the same exclusive rights to makers of
   noncopyrightable databases as those granted to copyrightable databases. See Amended E.C. Proposal on
   Databases (cited in note 103); Reichman, 94 Colum. L. Rev. at 2494-98 (cited in note 2) (analyzing and
   criticizing these proposals).

   n141 See E.C. Common Position, 1995 O.J. (C 288) (cited in note 103). See also Kaye, 12 Eur. Intell. Prop.
   Rev. at 583 (cited in note 96) (approving this version); Hunsuker, European Database Directive (cited in note
   60) (approving this version).

   n142 See E.C. Directive on Databases, arts. 7(1), 1996 O.J. (L 77) at 25 (cited in note 7) ("Member States
   shall provide for a right for the maker of a database . . ."); id. art. 16(1), 1996 O.J. (L 77) at 27 (requiring
   Member States "to comply with this Directive before 1 January 1998").

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   1. Abolishing the Public Domain

   As finally enacted, the sui generis right conferred on qualifying database makers is no longer couched in terms
   of "unfair" or even "unauthorized" acts or uses. n143 Rather, the database maker obtains an exclusive "right to
   prevent extraction and/or reutilization of the whole or of a substantial part, evaluated qualitatively and/or
   quantitatively, of the contents of that database." n144 This two-pronged exclusive right, which now
   applies to both electronic and nonelectronic databases, n145 lasts for an initial period of at least fifteen years.
   Any compiler who makes a database available to the public, however, may continually renew that right for
   additional fifteen-year terms if the compiler has made additional investments in the database. n146

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   n143 See notes 129-30 and accompanying text.

   n144 E.C. Directive on Databases, art. 7(1), 1996 O.J. (L 77) at 25 (cited in note 7). As compared to earlier
   drafts, the Final E.C. Directive seems to strengthen publisher rights by omitting two provisions that were
   present in earlier drafts: one that would have permitted brief quotations from database contents, and another
   that would have allowed database makers to include in their databases biographical references, abstracts, or
   brief quotations from another database without permission. See First E.C. Proposal on Databases at art. 4(1),
   7(1), 1996 O.J. (L 77) at 25-26 (cited in note 72); Amended E.C. Proposal on Databases at art. 4(2), 7(1)
   (cited in note 103). Also seeming to strengthen publisher rights in databases is a recital in the Final E.C.
   Directive indicating that users who obtain database contents by online transmission will not have acquired a
   copy in which rights of the database owner would be exhausted. Final E.C. Directive on Databases, 1996 O.J.
   (L 77) at 23 (cited in note 7) (Recital 43).

   n145 See E.C. Directive on Databases at art. 1(1), 1996 O.J. (L77) at 24 (cited in note 7) ("This Directive
   concerns the legal protection of databases in any form."). Both the First E.C. Proposal on Databases, art. 1(1)
   (cited in note 72) and Amended E.C. Proposal on Databases at art. 1(1) (cited in note 103) covered only
   electronic databases. The Common Position found this distinction unworkable, and could not justify differing
   levels of protection on this basis. See, for example, Hunsuker, European Database Directive (cited in note 60)
   (citing authorities and adding that "today's high speed scanners and optical character recognition software
   make electronic conversion of non-electronic databases almost as easy as electronic conversion of electronic
   databases").

   n146 See E.C. Directive on Databases, art. 7(1), 1996 O.J. (L 77) at 25 (cited in note 7) (providing initial
   fifteen-year term from date of completion), art. 7(2), 1996 O.J. (L 77) at 26 (extending protection for an
   additional fifteen years if the database "is made available to the public in whatever manner" before expiration
   of the initial term), and art. 7(3), 1996 O.J. (L 77) at 26 (allowing fifteen-year renewals for "any substantial
   change, evaluated qualitatively or quantitatively, to the contents of a database . . . from the accumulation of
   successive additions, deletions or alterations, which . . . result in . . . a substantial new investment").

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   The Final E.C. Directive does not condition sui generis protection on any showing of a creative achievement or
   of a novel contribution to the prior art, the classical bases for justifying legal derogation from free competition.
   Rather, it merely requires the database maker to prove that "there has been qualitatively and/or quantitatively
   a substantial investment in either the obtaining, verification or presentation of the contents" or in "any
   substantial change resulting from the accumulation of successive additions, deletions or alterations." n147
   Because the E.C. Directive itself provides no further guidelines for evaluating the requisite level of investment
   in either case, this threshold will remain uncertain, pending decisions by European courts applying the still to
   be drafted domestic database laws. Nevertheless, there are no limits to the number of quantitative or
   qualitative changes that will qualify for such extensions, and any publisher who continues to make a
   substantial investment in updating, improving, or expanding an existing database can look forward to perpetual
   protection. n148

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   n147 See id. at art. 7.

   n148 The current quest for perpetual protection has an historical antecedent in the crown privileges and guild
   monopolies of the medieval period. Prior to enactment of the first modern copyright statute in the United
   Kingdom, members of the Stationers' Company recognized copyrights in publishers, not in authors. These rights
   were said to be necessary to protect publisher investments. See, for example, Mark Rose, Authors and
   Owners: The Invention of Copyright 12 (Harvard U., 1993). During this period, publishers also claimed perpetual
   exclusive copyrights in works printed by them. Id. at 4. The E.C. Directive, like the Stationers' copyright,
   recognizes rights in publishers, and its broadened renewal-of-term provisions in the final version of the
   European Directive may have the effect of providing database owners with virtually perpetual rights to the
   data in their databases. See also Clark, The Copyright Environment for the Publisher in the Digital World at 5
   (cited in note 10) (stressing importance of a publishers' right as such).

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   Although the sui generis right depends on mere investment rather than on some palpable creative contribution,
   the scope of protection that the Final E.C. Directive affords investors in noncopyrightable databases now
   appears roughly equivalent to that afforded authors of copyrightable compilations. n149 This conclusion
   follows from both the definitions of the exclusive rights set out in the E.C. Directive itself and from the Council
   of Ministers' closed-door decision to delete the initial proposal's compulsory license requirement for sole-source
   providers from the Common Position formulated in 1995. n150

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   n149 See E.C. Directive on Databases, arts. 3 and 5, 1996 O.J. (L 77) at 25 (cited in note 7). See also notes
   118-24 and accompanying text (noting that such protection is greater than that traditionally afforded to
   authors.)

   n150 See E.C. Common Position, arts. 8-9, 16(3), 1995 O.J. (C 288) at 20, 22 (cited in note 103).

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   As defined in Article 7(2) of the Final E.C. Directive, the investor's sui generis "extraction right" covers even
   temporary transfers to online receivers, much like the author's broadened reproduction rights in copyright law
   under Article 5(a). n151 The investor's "reutilization right" covers online use or transmissions of data, including
   those in value-adding or derivative formats, much like the author's broadened "communications" rights under
   article 5 (b), (d), and (e). n152 In this and other respects, including the omission of any requirement
   for compulsory licenses against sole source providers, n153 the drafters of the Final E.C. Directive have
   integrated its sui generis regime into the broader regulatory framework for national and international
   information infrastructures that the E.U. and U.S. intellectual property authorities are now jointly promoting.
   n154

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   n151 Compare E.C. Directive on Databases at art. 7(2)(a), 1996 O.J. (L 77) at 26 (cited in note 7) (defining
   "extraction" to mean "the permanent or temporary transfer of all or a substantial part of the contents of a
   database to another medium by any means or in any form") with id. art. 5(a) (discussed in note 111 and
   accompanying text).

   n152 Compare id. art. 7(2)(b) at 26 (defining "re-utilization" as "any form of making available to the public all
   or a substantial part of the contents of a database by the distribution of copies, by renting, by online or other
   forms of transmission") with id. arts. 5(b), (d), (e) at 25 (discussed in notes 111-12 and accompanying text)
   (discussing author's right to alter or display to the public a copyrightable database). A database embodied in a
   hard copy and sold as such remains subject to the first-sale doctrine even under the sui generis right. This
   means that the database maker cannot "control resale of that copy [by the vendee] within the Community."
   Id., art. 7(2)(b) at 26. Moreover, public lending of such a copy, say, by a library, "is not an act of extraction
   or re-utilization." Id.

   n153 A two-pronged strategy by lobbyists opposed to the compulsory license provisions of the first two drafts
   of the Directive may have succeeded in wooing the Commission away from the automatic license provision.
   One prong relied on the European Court of Justice's recent decision in Radio Telefis Eireann v. Commission of
   the European Communities, 1 C.E.C. 400 (1995) (widely known as the Magill decision), which illustrated the
   use of competition law to deal with the abuse of a dominant position when a sole source provider of
   information refused to license a competitor. In Magill, the Court affirmed the Commission's finding of abuse
   because the owner of a U.K. copyright in television program listings refused to license the listings to a firm
   that wished to publish a weekly guide for television viewers. See, for example, Tritton, Intellectual Property in
   Europe at 638-48 (cited in note 50) (stressing that refusal to permit independent compilations by willing third
   parties transformed qualified monopoly of copyright law to abusive, absolute monopoly). See also Sasha
   Haines, Copyright Takes a Dominant Position, 16 Eur. Intell. Prop. Rev. 401, 401 (1994) (noting that publishers
   who claimed that the refusal to license in Magill was not abusive ironically used Magill to argue no compulsory
   license was needed even in the case of sole-source providers). The other prong was to argue for a
   several-year test period during which compulsory licenses would not be available so that the Commission could
   gather evidence about licensing practices to determine if there were sufficient abuses to warrant reintroducing
   compulsory license provisions. See E.C. Directive on Databases, art. 16 (3), 1996 O.J. (L 77) at 27 (cited in
   note 7).

   n154 See note 7 and accompanying text (citing 1996 WIPO documents favoring both an international database
   regime similar to that proposed by the U.S. and international copyright reforms concerning online transmissions
   similar to that proposed by the E.U.).

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   On closer inspection, indeed, the investor's scope of protection under the hybrid extraction right appears
   paradoxically to exceed even that afforded authors of traditional literary and artistic works under the classical
   copyright paradigm of the Berne Convention n155 in at least three important respects. First, it ignores the
   important distinction that copyright law makes between "ideas" (a legal metaphor for the noncopyrightable
   components of protected works, including among other things, the facts or data they contain) and the
   author's "expression" (a legal metaphor for the protectable elements of style in an otherwise eligible work).
   n156 The TRIPS Agreement makes this distinction universally applicable to all copyrightable works,    including such borderline works as computer programs and factual compilations. n157 Yet, the database law contains no such distinction. This means that, in the universe of data generators, there is no evolving public domain substratum from which either research workers or second comers are progressively entitled to withdraw previously generated data n158 without seeking licenses that may or may not be granted.

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   n155 See, for example, Reichman, 13 Cardozo Arts & Ent. L. J. at 485-86, 492-96 (cited in note 3)
   (summarizing the changes in copyright protection of literary and artistic works since the 19th century with an
   emphasis on the economic effects). See also Sam Ricketson, The Berne Convention for the Protection of
   Literary and Artistic Works 1886-1986 at 231-32 (Queen Mary College, 1987).

   n156 See 17 U.S.C. <sect> 102(b). See also note 51 and accompanying text.

   n157 See TRIPS Agreement, arts. 9(2), 10(1), in Results of the Uruguay Round at 370 (cited in note 1); J.H.
   Reichman, The Know-How Gap in the TRIPS Agreement: Why Software Fared Badly, and What Are the
   Solutions?, 17 Hastings Comm. & Enter. L. J. 763, 773-84 (1995) (discussing the effects of the Berne
   Convention and the TRIPS agreement on the copyright protection of computer software).

   n158 See Jaszi, 29 Vand. J. Transnat'l L. at 596 (cited in note 87) (expressing concern about lack of attention
   to the public domain in current copyright policy intiatives); Jessica Litman, The Public Domain, 39 Emory L. J.
   965, 967 (1990) (arguing that the public domain has been undervalued in recent copyright case law); David L.
   Lange, Recognizing the Public Domain, 44 Law & Contemp. Probs. 147, 171-73 (1981) (arguing that the public
   domain has been undervalued in recent trademark and unfair competition case law).

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   On the contrary, every independent generation of data, however mundane or commonplace, will obtain
   protection if it costs money, and every regeneration or reutilization of the same data in updates, additions,
   and extensions that cost money will extend that protection without limit as to time. n159 As a consequence,
   third parties can rarely avoid the expense of regenerating preexisting data--in the way that they could always
   use previously generated ideas, however much it cost to develop them--unless the originator of the relevant
   database has abandoned it or declined to exercise his or her proprietary rights, much as occurs under
   trademark laws. n160 To be sure, data providers, including members of the scientific community, could decide
   not to exercise proprietary rights in certain databases, for example, those funded by government agencies.
   This would not, however, change the legal situation with respect to scientifically important data located in
   privately owned databases or in those funded by public agencies, especially foreign agencies, that had opted
   to commercialize their data. n161

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   n159 See notes 147-48 and accompanying text.

   n160 See Lanham Trademark Act, 15 U.S.C. <sect><sect> 1052, 1059 (1994 ed.) (setting forth requirements
   for registration of trademarks and renewal of registration). However, there is an infinite array of trademarks,
   and the use of marks to distinguish quality producers inherently promotes competition without creating legal
   barriers to entry. See generally William M. Landes and Richard A. Posner, Trademark Law: An Economic
   Perspective, 30 J. L. & Econ. 265 (1987). See also Paul J. Heald, Trademarks and Geographical Indications:
   Exploring the Contours of the TRIPS Agreement, 29 Vand. J. Transnat'l L. 635 (1996) (focusing on the
   trademark provisions of TRIPS).

   n161 OMB Implementing Memo at 95-22 (cited in note 73).
 

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   The absence of any equivalent to the idea-expression doctrine under the new sui generis regime means that
   investors, in effect, obtain proprietary rights in data as such, a type of ownership that the copyright paradigm
   expressly precludes. Proponents of the sui generis right downplay this finding by insisting that third parties
   always remain free to generate their own databases. n162 But this opportunity exists only for data that are
   legally available from public sources and whose cost of independent regeneration is not prohibitively high in
   relation to the gains expected from the exercise. As for proprietary data not legally available for second
   comers to exploit, there is no opportunity to avoid the originator's exclusive rights to prevent extraction or
   re-use of existing data. Even the most avid apologists for the E.C. Directive concede that in such cases the
   investor's exclusive rights necessarily vest in the data as such. n163

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   n162 See, for example, IIA Report at 29 (cited in note 67). See also Hunsuker, European Database Directive
   (cited in note 60).

   n163 See, for example, IIA Report at 29 (cited in note 67) ("Admittedly, there may be situations in which it
   could be claimed that granting non-copyright protection to compilations amounts to a monopoly on the facts
   contained therein."). See also Hunsucker, European Database Directive (cited in note 60).

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   A deeper point is that, regardless of whether it is theoretically possible to regenerate the data from publicly
   available sources, investors in database production can always deny third parties the right to use pre-existing
   data in value-adding applications, n164 even when the latter are willing to pay royalty-bearing licenses; and
   there is no escaping such licenses unless the database publisher either declines to exercise his or her rights or
   engages in an abusive exercise of market power. n165 In other words, except when the new proprietary rights
   are abandoned or misused, the concept of incremental or "cumulative and sequential innovation," which is
   central to the development of modern technological paradigms, n166 has been banished from the universe of
    database production, despite the economic waste and inefficiency inherent in such policies.

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   n164 See notes 159-61 and accompanying text.

   n165 A refusal to license, however, coupled with a dominant position in the marketplace, could trigger an
   antitrust violation or a related charge of abuse of intellectual property rights. See, for example, E.C. Directive
   on Databases, art. 16(3), 1996 O.J. (L 77) at 27 (cited in note 7). See also note 153 (discussing the Magill
   decision).

   n166 See, for example, Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory of Economic Change
   255-62 (Harvard U., 1982) (discussing the cumulative nature of technological advancements); Richard R.
   Nelson, Intellectual Property Protection for Cumulative Systems Technology, 94 Colum. L. Rev. 2674, 2676
   (1994) (discussing the central concerns surrounding the copying of computer software). See also Robert P.
   Merges and Richard R. Nelson, On the Complex Economics of Patent Scope, 90 Colum. L. Rev. 839, 881 (1990)
   (discussing how the "scope doctrine can be used to approximate the 'tailoring' function proposed by
   economists.").

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   2. Establishing Legal Barriers to Entry

   A second, and closely related, way in which the database investor's scope of protection under the E.C.
   Directive exceeds that of authors under the classical copyright paradigm is seen in the treatment of derivative
   works. Under copyright laws, the scope of an author's exclusive right to create a derivative work extends only
   to the original, expressive matter added to the underlying work. One does not infringe an author's derivative
   work right by copying ideas or information that it (or the underlying work) contains or by appropriating from
   the derivative work any pre-existing expressive matter that has entered the public domain owing to the
   expiration of the terms of protection. n167

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   n167 See, for example, 17 U.S.C. <sect><sect> 101, 102, 103, 106, 501 (setting forth the subject matter
   requirements and scope of copyright protection for derivative works).

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   The E.C. Directive recognizes no such legal distinctions. As previously explained, it harbors no working
   conception of a public domain whatsoever. Unless local European courts, applying the domestic laws that
   implement the E.C. Directive, take pains to limit this omission, the upshot will be that each new extension of
   the database maker's exclusive rights by dint of his or her "substantial investment" in updates, additions, and
   revisions n168 will, in effect, requalify that investor for protection of the database as a whole for additional
   fifteen year periods. In other words, this extended protection is not limited to the revised or added
   matter--the "derivative work"--as would occur under the copyright laws. This, in turn, reinforces the
   monopolistic effects inherent in the originator's ability to deny third parties the right to build incrementally and
   sequentially upon preexisting scientific and technical knowledge, and it creates a further barrier to entry.

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   n168 See notes 147-48 and accompanying text.

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   A third way in which the scope of protection for investors in database production exceeds that afforded
   authors of copyrightable literary and artistic works results from the much narrower range of applicable public
   interest exceptions. n169 In effect, the sole important exception available to all users of noncopyrightable
   electronic databases under the E.C. Directive is the right to extract or reutilize "insubstantial parts of
   the database." n170 Reinforcing this privilege is a provision nullifying any contractual override of it. n171

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   n169 For the general range of public-interest exceptions under copyright laws, see notes 52-53 and
   accompanying text.

   n170 See E.C. Directive on Databases, art. 8(1), 1996 O.J. (L 77) at 26 (cited in note 7). Member states,
   however, may allow "extraction for private purposes of the contents of a non-electronic database." Id. art.
   9(a) (emphasis added).

   n171 Id. art. 15 at 27.

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   Yet, given that courts must judge the substantiality of any extraction or reuse in qualitative as well as
   quantitative terms, it remains to be seen whether the formal right to take insubstantial parts will actually
   benefit users. n172 For example, if the data extracted by the user are the data responsive to his or her online
   query, one can always argue that the extraction was qualitatively substantial. n173 Because this exception
   applies only to "lawful users" of the database (presumably subscribers to an online service or purchasers of a
   CD-ROM), in most cases it may merely validate acts incidental to the uses for which one has paid. Although
   the E.C. Directive's copyright provisions spell out an elementary proposition of this sort, there is no parallel to
   it in the sui generis provisions. n174 The possibility therefore exists that publishers may assert the right to
   control uses of noncopyrightable components of databases that would otherwise have been subsumed within
   the general right to use the same database had it qualified for copyright protection.

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   n172 Id. art. 8(1) at 26.

   n173 Another factor affecting a determination as to whether an appropriation is substantial is whether it
   impedes normal exploitation of the database. Id. art. 8(2). If database owners are prepared to charge for
   every unit that a user might want, is there any taking so insubstantial that a database owner could not argue
   that it unreasonably interfered with its normal exploitation of the market?

   n174 See id. art. 6(1) at 25 (incidental to lawful use provisions).

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   The final version of the E.C. Directive also provides that a lawful user of a noncopyrightable database cannot
   extract or re-use even insubstantial parts of its contents in "repeated and systematic" ways that "conflict
   with a normal exploitation of that database or . . . unreasonably prejudice the legitimate interests of the
   maker." n175 Arguably, this too could preclude most value-adding uses of an insubstantial part of the
   database, regardless of their commercial or noncommercial purpose.

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   n175 Id. art. 7(5). See also id. art. 8(2) at 26 (forbidding any acts by lawful users that "conflict with normal
   exploitation" or "unreasonably prejudice the legitimate interests" of its maker).

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   Unlike previous versions of the E.C. Directive, the final version also gives E.U. member states the option of
   allowing certain limitations on the sui generis right. n176 In particular, member states may authorize
   extraction of a substantial part of a noncopyrightable database "for the purposes of illustration for teaching or
   scientific research, as long as the source is indicated and to the extent justified by the non-commercial
   purpose to be achieved." n177 This exception is available only to "lawful users" and it only applies to
   "extractions" for such purposes, not to reutilizations. Thin as it is, this exemption will become available only in
   those member states that opt to enact it. n178

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   n176 Id., art. 9 at 26. The first two drafts of the E.C. Directive on Databases contained no authorization for
   the granting of any public policy exceptions to the sui generis right. First E.C. Proposal on Databases at art. 6
   (cited in note 72); Amended E.C. Proposal on Databases at art. 7 (cited in note 103). Although the European
   Commission's Explanatory Memorandum on the Amended Directive indicates that the European Parliament had
   pressed for exemptions for educational, scientific, and other nonprofit users, see Second Explanatory
   Memorandum (cited in note 137), it was not until the Common Position that member states were authorized to
   enact any limitations on the sui generis right. Even so, there is evidence of residual concern within the Council
   about the potential negative impact of the sui generis right on information flows. The Italian delegation, which
   decided to vote in favor of the Common Position version of the Directive, drew attention to

   the importance of the problems--which are already in existence and will probably increase in the future as a
   result of technological developments--surrounding the issue of compulsory licenses as the only mechanism able
   to contain the possibility of abuse of dominant positions, not only between competitive undertakings, but also,
   in particular, in respect of science, education and the freedom of information, which could be subjected to
   undue restrictions.

   Memorandum from the Council Secretariat to the Permanent Representatives Committee/Council, Brussels, 16
   June 1995, Annex 1.

   There are two other features to be noted about the restriction of rights provision of the E.C. Directive on
   Databases. One is that member states were given at least nominal authority to apply some limited but
   traditional copyright exceptions to protected databases, see text accompanying notes 118-24, yet they were
   not given any authority to extend traditional exceptions of this sort to noncopyrightable databases. See E.C.
   Directive on Databases, art. 6(2)(d), 9, 1996 O.J. (L 77) at 25 (cited in note 7). The other is that, although
   the Directive was intended to harmonize the laws of member states concerning database protection, id. at 20
   (Recitals (1) and (3)), it leaves to the discretion of member states whether to adopt one or more of the three
   exceptions to the sui generis right, id. art. 9 at 26, thus seeming to promote disharmony in national laws.

   n177 Id. art. 9(b).

   n178 See id. arts. 9, 9(b).

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   This limited exception, drawn from Article 10(2) of the Berne Convention concerning "quotations" and "use of
   works by way of illustration for teaching," n179 yields a perverse effect in the realm of sui generis database
   laws where data, facts, and other noncopyrightable contents are the real objects of protection. As applied to
   traditional scientific works covered by copyright law, such an exception made sense because only the author's
   individual style was protected, and not his or her data, findings, or ideas. Hence, teachers who made
   excessive use of the first author's stylistic features clearly infringed because they could extract the data and
   other noncopyrightable components at will. As applied to the contents of databases, in contrast, the
   exception permits a limited use of "quotations" by both teachers and scientific researchers for purposes of
   illustration. n180 But it excludes any broader "fair use" right to extract or reutilize the data or facts for
   nonprofit scientific or educational pursuits, as would have been possible in appropriate cases under Article 9(2)
   of the Berne Convention. n181 In this respect, the Final E.C. Directive aligns both its copyright and sui generis
   provisions in cutting back on the fair use doctrine under prior law. n182

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   n179 See notes 115-17 and accompanying text.

   n180 E.C. Directive on Databases art. 9. See also notes 118-19 and accompanying text.

   n181 E.C. Directive on Databases, arts. 8(2), 9(2); Berne Convention, art. 9(2). See note 114 and
   accompanying text.

   n182 See notes 115-24 and accompanying text.

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   Even if a member state enacts this provision, a scientific or educational user's exempted extraction must
   satisfy the non-commercial purpose test, and it must not exceed the quantum necessary to accomplish that
   purpose lest it violate the general obligation "not to perform acts which conflict with normal exploitation or
   that unreasonably prejudice [the maker's] legitimate interests." n183 Because normal uses of educational or
   scientific databases in academic and research institutions may not meet these tests, the optional exemption
   for scientific and educational purposes looks like a kind of fool's gold that merely permits illustration of
   conclusions reached. On this reading, the exemption would not extend to uses for other scientific or
   educational purposes, such as browsing, extraction, or use of the data for the purpose of reaching the
   conclusions that one may then freely "illustrate." n184

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   n183 See E.C. Directive on Databases at arts. 8(2), 9(b) (cited in note 7).

   n184 See, for example, McManis, International Intellectual Property Protection (cited in note 99) (stating that
   "any other substantial extraction from an electronic database [besides illustration for teaching or scientific
   research] will be infringing, irrespective of whether the extraction is for a commercial purpose, such as market
   research or private investment decisions, or for a wholly non-commercial purpose, such as religious
   canvassing, political polling, geneological research, or pursuit of any . . . hobby or avocation."). Professor
   McManis contrasts this provision unfavorably with "the exceptions and limitations that safeguard the public
   interest in copyright law." Id.

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   Of course, local legislatures could manufacture loopholes through which to widen this exception, n185 and
   database publishers  might refrain from imposing harsh or oppressive terms and conditions that unduly
   impinge upon scientific and educational uses. The fact remains, however, that nothing in the E.C. Directive as
   finally enacted requires such accommodations. Its sui generis provisions contain no real equivalents of the
   private use, fair use, and related exceptions that traditional copyright laws afford scientific and educational
   users of core literary and artistic works. This is despite the fact that database publishers who acquire market
   power through restricted online transmissions have reportedly imposed questionable contractual conditions on
   libraries and academic subscribers in the past. n186

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   n185 See, for example, Hunsuker, European Database Directive (cited in note 60) (stressing fact that article
   9(b) speaks of extraction for the purposes of illustration for teaching or scientific research, whereas article 6,
   concerning copyrightable databases, speaks of "the sole purpose of illustration for teaching or scientific
   research").

   n186 See note 90 and accompanying text.

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   It follows that, under the E.C. Directive, the most borderline and suspect of all the objects of protection ever
   to enter the universe of intellectual property discourse--raw data, scientific or otherwise--paradoxically
   obtains the strongest scope of protection available from any intellectual property regime except, perhaps, for
   the classical patent paradigm itself. n187 Nor are the breadth of protection, and the monopolistic power it
   tends to breed, likely to be offset by greater competition in the market for electronic databases, especially
   now that the E.C. Directive as finally adopted no longer contains the compulsory license requirement that had
   initially been devised for this purpose.

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   n187 See generally Reichman, 13 Cardozo Arts & Enter. L. J. at 488-89 (cited in note 3) (discussing economic
   implications and contradictions of such paradoxes).

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   Formally, of course, third parties still remain free to compile a database exactly like one already in commerce,
   because independent generation of the relevant data at one's own time and expense is always permitted. In
   practice, this option ignores the economic realities of the database industry. Startup costs are relatively high,
   the prospects for market-sharing have seldom been realized, much valuable data is unavailable from public
   sources, and the existence of one complex database seems empirically to constitute a de facto barrier to
   entry that is seldom overcome. This lack of effective competition, with its inherent possibilities for
   discouraging add-on products and for encouraging abuses of market power, was downplayed by the Council of
   Ministers, even though it had been uppermost in the minds of the European Commission's own drafters a short
   while earlier. Article 16 of the Final E.C. Directive thus merely calls for three-year reviews to determine
   whether existing antitrust laws prove inadequate to deal with the "abuse of a dominant position or other
   interference with free competition," in which case proposals for "nonvoluntary licensing" may once
   again be considered. n188

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   n188 See E.C. Directive on Databases, art. 16(3), 1996 O.J. (L 77) at 27 (cited in note 7).

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   The fear of market failure and of chronic underprotection that initially motivated the quest for a sui generis
   regime to protect electronic databases has thus given way to the creation of "mini-monopolies over
   information." n189 This fear has also given rise to a rent-seeking logic impervious to the public interest in the
   full and unrestricted flow of scientific data. The original goal of providing some incentives to augment the
   publishers' investment in compiling electronic databases has generated a set of norms that could render many
   scientific and technological undertakings prohibitively expensive. As explained below, the short-term social
   benefits of the E.C. Directive's "extraction right" may thus conceal the long-term social costs of diminished
   research and development capabilities at scientific and educational institutions, including public and
   semi-public institutions that are already indirectly subsidizing private research and development. n190

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   n189 Rosler, 10 High Tech. L. J. at 138, 140 (cited in note 96) (stressing tendencies of "monopolists typically
   to charge large premiums for their goods").

   n190 See, for example, id. at 141-43; Reichman, 94 Colum. L. Rev. at 2496-98 (cited in note 2).

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   C. The United States and International Models

   When the European Commission began its deliberations concerning database protection in the early 1990s, the
   climate in which intellectual property policy discussions at both the national and international levels took place
   differed from that prevailing today. The fate of the Uruguay Round of Multilateral Trade Negotiations and its
   intellectual property component, the TRIPS Agreement, remained uncertain. The U.S. intellectual property
   authorities had not yet begun to survey the issues posed by widespread transmission of digitized information
   over telecommunications networks. n191 The Supreme Court had just denied copyright protection to telephone
   directories in Feist, n192 and had recently invalidated state protection of subpatentable industrial designs.
   n193 These decisions proclaimed renewed faith in a nineteenth century vision of the competitive
   ethos without recognizing, let alone addressing, the unresolved problems of appropriating returns from
   investments in subpatentable information goods under twenty-first century conditions. n194 Indeed, only a
   few years earlier, the chairman of the House Subcommittee on Intellectual Property had set very high
   standards that would have to be met before Congress would consider special interest pleas for additional forms
   of sui generis intellectual property protection that deviated from the classical patent and copyright paradigms.
   n195

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   n191 The United States did not begin to study, in any systematic fashion, the impact of digital technologies
   on copyright law until mid-1993 when the Clinton Administration formed the National Information Infrastructure
   Task Force which established a Working Group on Intellectual Property Rights. The Working Group's report was
   not finalized until September, 1995. See U.S. White Paper at 1 (cited in note 64).

   n192 See Feist Publications, 499 U.S. at 363.

   n193 See Bonito Boats, 489 U.S. at 168.

   n194 See, for example, Reichman, 25 Int'l Rev. Indus., Prop. & Copyright L. at 466-67, 472-75 (cited in note
   44) (suggesting that Feist raises legitimate fears that those who disseminate information in hard copies may
   suffer from a chronic state of underprotection that discourages investment).

   n195 See Robert W. Kastenmeier and Michael J. Remington, The Semiconductor Chip Protection Act of 1984: A
   Swamp or Firm Ground?, 70 Minn. L. Rev. 417, 438-42 (1985) (stating that proponents of new intellectual
   property laws have the burden to "show . . . that a meritorious public purpose is served by . . . proposed
   congressional action," and setting forth a four-pronged test of public interest that should be met in each
   case).

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   Against this background, the European Commission's early drafts of a Directive concerning the legal protection
   of databases adopted a defensive posture with respect to foreign publishers whose principle base of
   operations was outside the European Union. In lieu of the national treatment clause that had become the
   international standard prior to the 1980s, n196 the Commission proposed a strict criterion of material
   reciprocity. n197 Member states of the European Union would, accordingly, extend the sui generis right to
   databases owned by foreign nationals only if the nations from which they hailed adopted equivalent laws.
   Databases made in countries having no similar legislation would remain vulnerable to wholesale copying within
   the European Union itself. n198 The decision to discriminate against foreign nationals operating in
   non-harmonizing states was modelled on the earlier and equally controversial decision by the United States to
   impose a material reciprocity clause under the Semiconductor Chip Protection Act of 1984. n199 Although both
   decisions rested on dubious  legal grounds even before the TRIPS Agreement was adopted, and even
   though the Agreement rejects this approach at least in spirit, n200 a version of the reciprocity provision
   nonetheless entered the Final E.C. Directive. n201

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   n196 See, for example, Berne Convention at art. 5(1) (cited in note 1); Paris Convention at art. 2(1) (cited in
   note 1).

   n197 See First E.C. Proposal on Databases at art. 11(1) (cited in note 72) (making protection available to E.U.
   nationals and nationals of countries with equivalent laws); E.C. Directive on Databases, art. 11, 1996 O.J. (L
   77) at 26-27 (cited in note 7).

   n198 See Simon Chalton, The Amended Database Directive Proposal: A Commentary and Synopsis, 16 Eur.
   Intell. Prop. Rev. 94, 99 (1994) (stressing that national treatment would apply to copyrightable databases, but
   not to the extraction right). U.S. commentators on the E.C. Directive on Databases have almost uniformly
   condemned its reciprocity provision. See, for example, IIA Report at 2, 25 (cited in note 67).

   n199 See 17 U.S.C. <sect><sect> 902(a)(1)(A)-(C), 913, 914; Jay A. Erstling, The Semiconductor Chip
   Protection Act and Its Impact on the International Protection of Chip Designs, 15 Rutgers Comp. & Tech. L. J.
   303, 310 (1989) (discussing section 902(a) of the Act which provides two means by which a foreign nation
   may qualify for reciprocal treatment); Charles R. McManis, International Protection for Semiconductor Chip
   Designs and the Standard of Judicial Review of Presidential Proclamations Issued Pursuant to the
   Semiconductor Chip Protection Act of 1984, 22 Geo. Wash. J. Int'l L. & Econ. 331, 347-52 (1988) (describing
   different interpretations of the Act's requirement that a foreign nation provide non-discriminatory treatment for
   works of U.S. citizens or domiciliaries).

   n200 See TRIPS Agreement, arts. 1(2), (3), 2(1), 3(1), 4, 9(1), 39, in Results of the Uruguay Round at
   367-70, 385 (cited in note 1); McManis, International Intellectual Property Protection (cited in note 99); Paul
   Edward Geller, Intellectual Property in the Global Marketplace: Impact of TRIPS Dispute Settlement?, 29 Int'l.
   Law. 99, 109-10 (1995).

   n201 See E.C. Directive on Databases, art. 11, 1996 O.J. (L 77) at 26-27 (cited in note 7). See also id. at 24
   (Recital 56). At public meetings, officials of the European Commission have stated that they retained the
   reciprocity provision so that it would prod other countries to adopt equivalent laws. Statement of Jens Gaster,
   Knowright '95, Vienna, Austria (Aug. 26, 1996).

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     1. A Coordinated High-Protectionist Strategy

   By 1995, however, when the European Union's Council of Ministers met to adopt its Common Position on the
   pending E.C. Directive, the climate surrounding worldwide intellectual property policymaking had profoundly
   changed. Universal intellectual property standards embodied in the TRIPS Agreement had become enforceable
   within the framework of a World Trade Organization, n202 largely as the result of sustained pressures by a
   coalition of powerful manufacturing associations in Europe, the United States, and Japan. n203 The success of
   this venture presages further alignments of interests by U.S. and E.U. officials with a view to forging a
   common, high-protectionist strategy for intellectual goods in the post-TRIPS environment. n204

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   n202 See, for example, Adrian Otten and Hannu Wager, Compliance with TRIPS: The Emerging World View, 29
   Vand. J. Transnat'l L. 391, 393 (1996) ("As a result of the TRIPS Agreement . . . the protection of intellectual
   property has become an integral part of the multilateral trading system, as embodied in the World Trade
   Organization . . . ."); J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under
   the TRIPS Component of the WTO Agreement, 29 Int'l Law. 345, 347-51 (1995) ("Beyond these
   equal-treatment obligations, states must accord to the nationals of other member states those international
   minimum standards of intellectual property protection that are comprised within the treatment provided for in
   this TRIPS agreement.").

   n203 See, for example, Intellectual Property Committee (USA), Keidanren (Japan), and UNICE (Western
   Europe), Basic Framework on Intellectual Property: Statement of the Views of the European, Japanese and
   United States Business Communities (1988). See also R. Michael Gadbaw, Intellectual Property and
   International Trade: Merger or Marriage of Convenience?, 22 Vand. J. Transnat'l L. 223, 235-37 (1989)
   (discussing efforts to protect the intellectual property rights of semiconductor producers).

   n204 See, for example, Hanns Ullrich, TRIPS: Adequate Protection, Inadequate Trade, Adequate Competition
   Policy, in John O. Haley and Hiroshi Iyori, eds., Antitrust: A New International Trade Remedy? 153, 184-207
   (Pacific Rim Law & Policy Assoc., 1995); Ralph Oman, Intellectual Property After the Uruguay Round, 42 J.
   Copyright Soc'y 18 (1994) (approving this trend). See generally Reichman, From Free Riders to Fair Followers
   (cited in note 94) ("Competitive Role of the Developing Countries in an Integrated World Market").

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   Besides coordinating their efforts in support of treaties that would expand or supplement the 1971 Revision of
   the Berne Convention, the United States and European Union both submitted proposals for worldwide
   protection of the contents of databases under sui generis intellectual property regimes akin to that embodied
   in the E.C. Directive. n205 They have also proposed treaty language n206 to conform international copyright
   law to the regulatory framework for a global information infrastructure that was set forth in a controversial
   White Paper recently prepared for the U.S. administration, n207 and a  version of these proposals was
   embodied in a Draft Copyright Treaty. n208

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   n205 See U.S. Proposal on Databases (cited in note 7); European Proposal on Databases (cited in note 7). See
   also Mark Powell, The European Union's Database Directive: An International Antidote to the Side-Effects of
   Feist (paper presented to the Fourth Annual Conference on International Intellectual Property Law & Policy,
   Fordham University School of Law, Apr. 11-12, 1996) ("Fourth Fordham Conference") (on file with the
   Authors). Powell notes that the E.C. Directive will be incorporated into the laws of Norway, Iceland, and
   Liechtenstein under existing trade agreements with the European Union; that "the Commission will encourage
   Central and Eastern European countries to adopt similar legislation" in their Association Agreements; that the
   E.U.-Turkey Customs Union Decision explicitly obliged Turkey to align its legislation on databases with the
   Directive; and that its reciprocity clause "will be used by the Commission as a bargaining chip" in dealing with
   third world countries. See id. at 5253.

   n206 See Proposals of the European Community and Its Member States to the Committee of Experts on a
   Possible Protocol to the Berne Convention, Geneva, May 22-24, 1996, WIPO Doc. BCP/CE/VII/1-INR/CE/VI/1,
   May 20, 1996 ("E.U. Proposals for GII"); Proposals of the United States on a Possible Protocol to the Berne
   Convention, Geneva, May 22-24, 1996, WIPO Doc. BCP/CE/VII/ -- ("U.S. Proposal to WIPO").

   n207 In its White Paper on Intellectual Property and the NII, the Clinton Administration sought a number of
   amendments to the Copyright Act of 1976 that would strengthen the rights of copyright owners. See U.S.
   White Paper, Appendix 1 (cited in note 64); National Information Infrastructure Copyright Protection Act of
   1995, S. Rep. No. 1284, 104th Cong., 1st Sess. (1995); H.R. Rep. No. 2441, 10th Cong., 1st Sess (1995).
   These would grant to copyright owners a new "exclusive right of transmission," see U.S. White Paper at 212
   (cited in note 64); a provision to prohibit the development of technologies or services useful for decoding
   encrypted transmissions (or the tampering with other electronic safeguards) as a kind of copyright
   infringement; and a provision outlawing any alterations to "copyright management information, including the
   terms and conditions for access to online transmissions." See, for example, White Paper at 230-34. Very similar
   provisions are part of the Administration's proposal for international treaty language to WIPO. See U.S.
   Proposal to WIPO (cited in note 206).

   Despite the innocuous appearance of these and related proposals, they are very broadly drafted, perhaps with
   a view to indirectly overruling numerous judicial precedents, including some that permit reverse-engineering of
   the noncopyrightable components of computer programs. See, for example, Samuelson, Wired 4.01 at 190
   (cited in note 124); McManis, International Intellectual Property Protection (cited in note 99).

   Adoption of these proposals might also help to immunize copyright owners from claims of misuse for imposing
   harsh or oppressive conditions on users in the form of non-negotiable electronic contracts. See, for example,
   McManis, International Intellectual Property Protection (cited in note 99) (stressing proposal to limit removal of
   electronic "shrink wrap licenses" as component of White Paper's overall efforts "to reduce . . . application and
   scope of fair use doctrine"). For judicial and scholarly opposition to such licenses, see Charles R. McManis,
   Intellectual Property Protection and Reverse Engineering of Computer Programs in the United States and
   European Community, 8 High Tech. L. J. 25, 88-96 (1993) (concluding that contracts, or at least shrink-wrap
   licenses, that prohibit reverse engineering are preempted by federal intellectual property law); Julie E. Cohen,
   Reverse Engineering and the Rise of Electronic Vigilantism: Intellectual Property Implications of "Lock-out"
   Programs, 68 S. Cal. L. Rev. 1091 (1995). But see Raymond T. Nimmer, Reporter for the Drafting Committee on
   Uniform Commercial Code, Article 2B (licenses)), U.C.C. Revision: Information A.S.E. in Contracts (April 15,
   1996) (arguing that proposed Art. 2B of U.C.C. should make such licenses presumptively valid); ProCD, Inc. v.
   Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (validating such licenses).

   n208 See WIPO, Basic Proposal on the Substantive Provisions of the Treaty on Certain Questions Concerning
   the Protection of Literary and Artistic Works to be Considered by the Diplomatic Conference, WIPO doc.
   CRNR/DC/4, August 30, 1996 ("WIPO Draft Copyright Treaty").

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   A diplomatic conference hosted by the World Intellectual Property Organization ("WIPO") convened to consider
   these proposals in December 1996. n209 The delegations to this conference were thus asked to convert the
   WIPO Draft Database Treaty, prepared by a Committee of Experts, n210 into a norm of international
   intellectual property law, even though the United States lacked any corresponding domestic regime as of the
   time of writing; n211 there has been no empirical test of the controversial E.C. Directive in actual practice;
   n212 and no preliminary reports or studies evaluating even the economic justification for such
   measures have been issued by WIPO or any other reputable international institution. n213 This same
   conference considered the adoption of a supplementary agreement to the Berne Convention that would
   convert the White Paper's vision of a global information infrastructure into binding international minimum
   standards, even though these controversial proposals have yet to be endorsed by the pertinent congressional
   committees. n214

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   n209 See note 7. For a discussion of the proposals, underlying these draft treaties, see, for example, Morton
   David Goldberg, The Digital Agenda in the U.S. and WIPO (paper presented to the Fourth Annual Conference
   on International Intellectual Property Law & Policy, Fordham University School of Law, Apr. 11-12, 1996)
   ("Fourth Fordham Conference")) (on file with the Authors); Paul Waterschoot (Director, DG XV/E, European
   Commission), Intellectual Property and the Global Information Infrastructure--The E.U. Perspective, paper
   presented to the Fourth Annual Conference on International Intellectual Property Law & Policy, Fordham
   University School of Law, Apr. 11-12, 1996) ("Fourth Fordham Conference"). See also Shira Perlmutter
   (Associate Register for Policy and International Affairs, U.S. Copyright Office), Developments in WIPO: A
   Status Report on the New Instrument and Protocol, paper presented to the Fourth Annual Conference on
   International Inellectual property Law & Policy, Fordham University School of Law (Apr. 11-12, 1996) ("Fourth
   Fordham Conference").

   n210 See WIPO Draft Database Treaty (cited in note 7).

   n211 See notes 222-23 and accompanying text.

   n212 See, for example, Powell, Fourth Fordham Conference at 2-3 (cited in note 196) (objecting that "it is
   questionable whether an international instrument should be founded on a legal measure with no proven track
   record and which contains such novel legal concepts . . . especially since . . . neither database makers nor
   users were satisfied with the compromise reached in the Directive"). See also Samuelson, The N.I.I.
   Intellectual Property Report, 37 Communications of the ACM at 17 (1994) (finding it "peculiar that the WIPO
   experts should even consider recommending a treaty on database protection when the idea for such a law is
   so new and untested").

   n213 See, for example, Powell, Fourth Fordham Conference at 196 (cited in note 205) (stating that the
   "economic case for the creation of a right to prevent extraction and/or re-utilization of non-original contents
   by users has never been satisfactorily explained").

   n214 See notes 270-81 and accompanying text. However, the delegations to the Geneva Diplomatic
   Conference in December, 1996, rejected or modified many of these proposals, and a more socially balanced
   treaty was actually adopted. See Draft WIPO Copyright Treaty, WIPO Doc. No. CRNR/DC/89, December 20,
   1996, adopted by the Geneva Diplomatic Conference on the same date.

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   Against this background, the changes to the E.C. Directive wrought in the Council of Ministers' Common
   Position of 1995, including deletion of the compulsory license provision (to which United States publishers had
   objected) and other measures that strengthened the exclusive rights apparatus, n215 evidence the
   coordinated strategies that the Commission and the United States intellectual property authorities are now
   jointly pursuing. n216 If successful, these strategies  would gradually extend international norms
   concerning the legal protection of databases from the Berne Convention (or related instruments) to the TRIPS
   Agreement itself, which could give them worldwide effect. n217 This is made expressly possible by Article
   71(1) of the Agreement, which empowers the Council for TRIPS to "undertake reviews in the light of any
   relevant new developments which might warrant modification or amendment of this Agreement." n218 If and
   when the Council decided that the proposals embodied in the WIPO Draft Database Treaty (if finally
   adopted) n219 had become norms of international intellectual property law, it would legitimize pressures on
   other WTO member states to recognize similar measures in their domestic laws and lead eventually to their
   formal incorporation into the TRIPS Agreement. n220 This, in turn, would obviate the longterm effects of the
   reciprocity clause in the E.C. Directive by replacing it with a set of harmonized norms binding on all WTO
   member states, like those already adopted for semiconductor chip designs in articles 35-38 of the TRIPS
   Agreement. n221

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   n215 See, for example, Jens L. Gaster (Principal Administrator, DG XV-E-4, European Commission), The New
   E.U. Directive Concerning the Legal Protection of Data Bases (paper presented to the Fourth Annual
   Conference on International Intellectual Property Law & Policy, Fordham University School of Law, Apr. 11-12,
   1996) ("Fourth Fordham Conference") (on file with the Authors) (conceding that "the sui generis right was
   considerably strengthened during the legislative process," and that attacks on the right to extract even
   insubstantial parts of a protected database were barely repelled).

   n216 Besides proposing statutory amendments to copyright law, the U.S. White Paper seeks to extend the
   rights of copyright owners by, among other things, interpreting the Copyright Act of 1976 as favoring strong
   protectionist positions, particularly with regard to the right to control unauthorized browsing of works in digital
   form (said to be temporary copying from a computer memory), to the inapplicability of the "first sale" doctrine
   in the digital environment, and to limitations on fair use in digital networked environments. See U.S. White
   Paper at 64-95 (cited in note 64); 17 U.S.C. <sect><sect> 101 (definition of "copies"), 107 (codification of
   fair use in terms of market interest), 109 (a) (first sale doctrine). Among the critics of the White Paper's
   interpretations of existing law are Litman, 13 Cardozo Arts & Enter. L. J. at 40-41 (cited in note 89); McManis,
   8 High Tech. L. J. at 63-73 (cited in note 207); Samuelson, 37 Communications of the A.C.M. at 23 (cited in
   note 212). The White Paper also takes the view that online providers are, or should be, strictly liable for digital
   transmissions of copyrighted works, even if this obliges providers to serve as "copyright police" without regard
   to their ability to perform such functions. See, for example, U.S. White Paper at 114-24 (cited in note 64);
   Samuelson, Wired 4.01 at 136, 190-91 (cited in note 124); McManis, 13 Cardozo Arts & Enter. L. J. at 68-70
   (criticizing the view of the U.S. White Paper).

   The important question for the future is not how to construe existing law so that it covers "electronic
   browsing," "electronic lending," or the right to make "copies for private use," a concept that is less established
   in U.S. copyright law than in some foreign laws. See, for example, Jane C. Ginsburg, Putting Cars on the
   "Information Superhighway:" Authors, Exploiters, and Copyright in Cyberspace, 95 Colum. L. Rev. 1466, 1477
   nn. 44-45 (1995). It may be that one cannot simply transfer these and other exceptions to the national
   information infrastructure without unintended and possibly harmful effects on copyright owners, including
   those scientists and academics whose own proprietary rights are at stake. See, for example, Peters, 20
   Colum.-VLA J. Law & Arts at 349-51 (cited in note 124). See also Ginsburg, 95 Colum. L. Rev. at 1468 (cited in
   this note) (stating that "the perspective of user rights . . . should remain secondary. Without authors, there
   are no works to use"); Hugh C. Hansen, International Copyright: An Unorthodox Analysis, 29 Vand. J.
   Transnat'l L. 579, 584 (1996) (criticizing those who would sacrifice the cause of author's rights to the generic
   category of "users," including "Internet users, developing nations, consumers, small competitors, and creators
   of derivative works"). Arguably, for example, "the entire concept of 'private copying' makes little sense in a
   world where the work is predominantly marketed directly to the end users[,] . . . and the market for, or 'normal
   exploitation of,' the work will by and large be the private copying market." Ginsburg, 95 Colum. L. Rev. at
   1477-78 (cited in this note).

   The important question is how to recreate a "fair use" zone in cyberspace that protects the strong public
   interest in ensuring that certain uses and certain users, notably the scientific and educational communities,
   are not priced out of the market or forced to cut back upon the kind of basic research that has heretofore
   played a crucial rule in U.S. economic and technological growth. See, for example, Goldstein, Celestial Jukebox
   at 230 (cited in note 89) (stressing need for exemptions and compulsory licenses favoring "research and
   educational uses" as transcendent claim rooted in cumulative progress of knowledge); Hamilton, 27 Vand. J.
   Transnat'l L. at 628-29 (cited in note 94).

   n217 In the meantime, the WIPO Draft Database Treaty proposes to implement, in one form or another, "the
   enforcement provisions of Part III, Articles 41-61, of the TRIPS Agreement." See WIPO Draft Database Treaty
   at 20-21 (cited in note 7) ("Notes on Article 13"); id. at 21-28 ("Annex" reproducing TRIPS Agreement rules).

   n218 TRIPS Agreement, art. 71, in Results of the Uruguay Round at 402 (cited in note 1). See also id. arts.
   68-69 at 400 (stating that the Council for TRIPS shall "afford Members the opportunity of consulting on
   matters relating to the trade-related aspects of intellectual property rights" and that "members agree to
   cooperate with each other with a view to eliminating international trade in goods infringing intellectual property
   rights"). While parties to the Berne Convention remain free to adopt higher copyright standards among
   themselves, see Berne Convention at art. 20 (cited in note 1) ("The Governments of the countries of the Union
   reserve the right to enter into special arrangements among themselves, in so far as such agreements grant to
   authors more extensive rights than those granted by the Convention, or certain other provisions not contrary
   to this Convention."), these arrangements would not become binding on other Berne Convention members in
   the absence of a unanimous decision. See id. at art. 27(3). Unless such standards were incorporated into the
   TRIPS Agreement, parties to a special arrangement under, or related to, the Berne Convention would run some
   risk of having to extend the higher standards to nonsignatory members of the WTO, under the most-favored-
   nation clause of the TRIPS Agreement. See TRIPS Agreement, art. 4, in Results of the Uruguay Round at 369
   (cited in note 1). While applications of Article 4 remain inherently uncertain, and this outcome would depend
   on the interpretation of various provisions in both the TRIPS Agreement and prior international agreements,
   see note 1 and accompanying text, the goal is clearly to develop "a model in the search for a global solution
   regarding the protection of databases which is presently discussed at WIPO." Gaster, Fourth Fordham
   Conference (cited in note 215).

   n219 See note 7.

   n220 See TRIPS Agreement, art. 71(1) (cited in note 1).

   n221 See id. arts. 1(3), 2(2), 3(1), 35-38, in Results of the Uruguay Round at 367-68, 384-85 (cited in note
   1); Reichman, 29 Int'l Law. at 374-75 (cited in note 202). See also WIPO Draft Copyright Treaty at 1-2
   (cited in note 208) (indicating that the Committee of Experts considering the various draft treaties anticipates
   such a result).

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   2. The Pending United States Bill

   The United States delegation submitted its proposed treaty language concerning sui generis protection of
   database contents to a duly constituted WIPO Committee of Experts before any legislation to create such a
   right had been placed before Congress. n222 By the time the WIPO experts met to consider the U.S. proposal,
   this embarrassing omission had been rectified. n223 The congressional bill ("H.R. 3531" or "the Bill") proposing a
   domestic regime for noncopyrightable databases articulates a far more protectionist strategy than that of the
   E.C. Directive, however. This protectionist bias then influenced the Draft Database Treaty that the WIPO
   Experts recommended for consideration at the Diplomatic Conference held December 1996. n224

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   n222 U.S. database legislation was introduced on May 23, 1996, see note 7, long after the U.S. had submitted
   its proposed treaty language for consideration at the WIPO Committee of Experts meeting, scheduled for May
   22-24, 1997. The head of this delegation also headed the NII Working Group, whose U.S. White Paper on
   Intellectual Property and the NII had anticipated the need for legislation to protect the contents of databases.
   See U.S. White Paper at 153 (cited in note 64). Was it merely a coincidence that the European Commission
   submitted draft treaty language for the proposed Berne Protocol mirroring the White Paper's recommendations
   on contentious digital copyright issues at the same time that the U.S. submitted draft treaty language on
   protecting the contents of databases? See U.S. Proposal on Databases (cited in note 7); Proposals of the the
   European Community and its Member States to the Committee of Experts on a Possible Protocol to the Berne
   Convention, Seventh Sess., May 22-24, 1996, WIPO Doc. BCP/CE/1-INR/CE/VI/1 (May 20, 1996) at 3-5 ("E.C.
   Protocol to the Berne Convention").

   n223 H.R. Rep. No. 3531 <sect> 1 (cited in note 7).

   n224 WIPO Draft Database Treaty (cited in note 7). However, the Conference postponed action on this Draft
   Treaty to a later date. See note 7.
 

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   a. Towards Broader and Stronger Exclusive Rights

   Under the Bill, as under the Final E.C. Directive, a compiler would qualify for exclusive rights to prevent
   extractions and reuses of the whole or substantial parts of a database by dint of his or her having made
   substantial investments in the collection, assembly, verification, organization, or presentation of its contents.
   n225 These exclusive rights would attach automatically upon the expenditure of resources, and if the owner
   continued to invest in updating or otherwise maintaining the database in question, its twenty-five year initial
   term of protection could be continually renewed without limit. n226 These provisions thus ignore the
   constitutional Enabling Clause, which requires intellectual property rights to be limited in time. n227

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   n225 See H.R. Rep. No. 3531 <sect><sect> 2, 3(a) (cited in note 7); U.S. Proposal on Databases at 1.3, 3.1
   (cited in note 7).

   n226 See H.R. Rep. No. 3531 <sect><sect> 2, 3(a), (b), 6 (cited in note 7).

   n227 U.S. Const., Art. I, <sect> 8, cl. 8.

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   When scrutinizing the details of the pending U.S. proposal, moreover, one first finds that its definition of
   "database" is much broader than that of the E.C. Directive. n228 It contemplates, for example, that
   noncopyrightable components of computer programs could qualify for protection as databases, n229 and it
   provides no apparent criteria for excluding even facts or data compiled for scientific and historical works. n230
   Furthermore, H.R. 3531, like the U.S. proposal to WIPO, would grant database makers a twenty-five year initial
   term, which reflects the dissatisfaction of U.S. industry groups with the shorter duration of the E.C. Directive.
   n231

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   n228 Compare, for example, H.R. Rep. No. 3531 <sect> 2 (cited in note 7) (defining "database" as "a
   collection, assembly, or compilation, in any form or medium now or later known or developed, of works, data or
   other materials, arranged in a systematic or methodical way") with E.C. Directive on Databases, art. 1(2),
   1996 O.J. (L 77) at 24 (cited in note 7).

   n229 Both the European Directive and H.R. Rep. No. 3531 appear to exclude computer programs from database
   rights. See E.C. Directive, art. 1(3), 1996 O.J. (L 77) at 24 (cited in note 7); H.R. Rep. No. 3531 <sect> 3(d)
   (cited in note 7). But the U.S. legislation indicates that insofar as the contents of a program include material
   that satisfies the definition of database, those contents can be protected by the database law. See notes
   370-85 and accompanying text for further discussion of this issue.

   n230 But see E.C. Directive on Databases, 1996 O.J. (L 77) at 23 (cited in note 7) (indicating, in Recital 45,
   that the sui generis right should not protect "mere facts or data"). For further discussion of the implications of
   the U.S. legislation for scientific and historical works, see notes 386-94 and accompanying text.

   n231 H.R. Rep. No. 3531 <sect> 6(a) (cited in note 7); U.S. Proposal on Databases at art. 6.1 (cited in note
   7). See IIA Report at 23 (cited in note 67).

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   The U.S. legislation also recognizes an exclusive right to control the uses of database contents, not just
   extractions and reuses of them. n232 In addition, it reinforces all these exclusive rights by allowing
   database makers further to control any use that "adversely affects the actual or potential market for that
   database" in addition to uses that otherwise "conflict with the database owner's normal exploitation." n233
   This specification, which is not found in the E.C. Directive, has the potential for impeding virtually any
   judge-made exceptions analogous to "fair use" under copyright laws, because any such exception would
   almost certainly affect the "potential market" for any given database. n234 At the same time, the database
   owner's potentially perpetual derivative work right flowing from continuous updates, which is subject to no
   public domain exceptions whatsoever, becomes even easier to obtain than under the E.C. Directive. This is
   because H.R. 3531 would condition the renewal right merely upon "any change of commercial significance" to
   the database contents and not solely on additional "substantial investments." n235

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   n232 See H.R. Rep. No. 3531 <sect> 4(a)(i) (cited in note 7); U.S. Proposal on Databases, art. 3.1, (cited in
   note 7).

   n233 H.R. Rep. No. 3531 <sect> 4(b) (cited in note 7).

   n234 This provision is thus consonant with several other key provisions that greatly strengthen the scope of
   protection in general. See notes 236-253 and accompanying text.

   n235 See H.R. Rep. No. 3531, <sect> 6(b) (cited in note 7); note 147 and accompanying text.

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   The pending bill subtly and powerfully expands the database owner's scope of protection well beyond that of
   the E.C. Directive's sui generis regime by introducing an array of measures that, when read together, produce
   formidable anticompetitive effects. For example, the E.C. Directive's principal concession to users--the
   exception for extractions of insubstantial parts n236 --is ostensibly broadened in H.R. 3531 to permit uses or
   reuses of insubstantial parts, n237 but it is then drastically narrowed in at least two ways. First, there is a
   new provision that not only forbids "repeated or systematic use or reuse of insubstantial parts" (like the
   comparable provision of the E.C. Directive), n238 but also expressly forbids extraction or uses even of
   insubstantial parts "that cumulatively conflict . . . with . . . normal exploitation . . . or adversely affect . . .
   the actual or potential market." n239 This latter clause acquires further teeth by means of still other provisions
   that seem to outlaw extraction or reuse of even in substantial parts of a protected database in any
   product or service that directly or indirectly competes with the database from which it was extracted in any
   market, however distant. n240 Also forbidden are extraction, use, or reuse of even insubstantial parts "by or
   for multiple persons within an organization or entity in lieu of . . . authorized additional use or reuse . . . by
   license, purchase, or otherwise." n241

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   n236 See E.C. Directive on Databases, art. 8(1), 1996 O.J. (L 77) at 26 (cited in note 7). Gaster, Fourth
   Fordham Conference (cited in note 215) (indicating that protection of the right to extract--but not to
   reuse--an insubstantial component was an integral part of the compromise that led to otherwise strengthened
   protection).

   n237 See H.R. Rep. No. 3531 <sect> 4(a)(ii) (cited in note 7).

   n238 Id.; E.C. Directive on Databases, art. 7(g), 1996 O.J. (L 77) at 25-26 (cited in note 7). See note 175
   and accompanying text.

   n239 See H.R. Rep. No. 3531 <sect><sect> 4(a)(i), (ii), 5(a) (cited in note 7).

   n240 See id. <sect><sect> 4(a)(ii), 4(b). This restriction covers markets in which the database owner has a
   demonstrable interest or expectation in licensing or otherwise reusing the database, as well as markets in
   which owners might reasonably expect to find customers for the database. Id.

   n241 Id. <sect> 4(b)(iv).

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   Given such restrictions, one is hard pressed to imagine unauthorized uses of an insubstantial component that
   the drafters of the United States model would deem legitimate. To forestall even this remote possibility, H.R.
   3531 allows publishers contractually to override even the formal right of lawful users to extract or use
   insubstantial parts in contrast with the express nullification of similar contractual provisions in the E.C.
   Directive. n242 One knowledgeable source reports that United States database publishers, angered by the
   presence of this constraint in the E.C. Directive, have every intention of exercising permissible contractual
   overrides in practice. n243 A similar intention seems manifest in the clause allowing publishers to impose
   separate licenses for networked use of a database within organizations, including nonprofit academic and
   scientific institutions, which can be construed as covering the extraction, use, or reuse even of insubstantial
   parts. n244

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   n242 See E.C. Directive on Databases, art. 15, 1996 O.J. (L 77) at 27 (cited in note 7) (expressly voiding
   contractual provisions to this effect). See also IIA Report at 19-20 (cited in note 67) (criticizing this provision
   from the U.S. perspective).

   n243 See Powell, Fourth Fordham Conference (cited in note 205). See also U.S. Proposal on Databases at art.
   7(2) (cited in note 7) ("No Contracting Party shall impair the ability to vary by contract the rights and
   exceptions to rights set forth herein.").

   n244 See H.R. Rep. No. 3531 <sect><sect> 4(a)(ii) (cited in note 7) (requiring authorization for repeated or
   systemmatic extraction, use, or reuse of insubstantial parts of a database in a way that conflicts with the
   owner's normal exploitation), 4(b)(iv) (prohibiting multiple persons within an organization from using a database
   in a way that conflicts with the owner's normal exploitation without authorization through liscense or
   otherwise).

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   Taken together, these and other provisions of H.R. 3531 reinforce the single most disturbing aspect of the E.C.
   Directive, namely, that it precludes formation of an evolving public domain from which third parties can freely
   draw. n245 To this end, the bill expressly confines permissible acts of "independent creation" to data or
   materials not found in a database subject to the proposed sui generis regime. n246 This restriction
   applies regardless of whether the unauthorized extraction or use is made for purposes of noncommercial
   scientific endeavor or for commercially important value-adding products that build incrementally on existing
   compilations of data. Every unauthorized use or reuse of existing data thus potentially violates the database
   owner's unbounded derivative work right. Furthermore, the existence of this potential violation is determined
   without regard to the substantiality of the second comer's own expenditure of effort or resources, to the
   similarity or differences of the latter's product or service, or to the public good aspects of the activities
   undertaken. n247

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   n245 See notes 155-66 and accompanying text.

   n246 See, for example, H.R. Rep. No. 3531 <sect> 5(b) (cited in note 7) ("Nothing in this Act shall in any way
   restrict any person from independently collecting, assembling or compiling works, data or materials from
   sources other than a database subject to this Act.").

   n247 Id. <sect><sect> 4 (outlining the prohibitions of the Act), 5 (carving out two exceptions without regard
   to the user's purpose, effort, or resulting product), and 6.

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   b. Perfecting an Absolute Monopoly

   The absolute monopoly conferred on database owners under the pending U.S. legislation is then perfected by
   recognizing no public interest exceptions whatsoever. Even the weak exception for extraction (but not reuse)
   of database contents "for the purposes of illustration for teaching or scientific research" that the E.C.
   Directive allows E.U. member states to enact n248 is omitted from both H.R. 3531 and from the U.S.
   submission to WIPO. n249

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   n248 See E.C. Directive on Databases, art. 9(b), 1996 O.J. (L 77) at 26 (cited in note 7). See also id. at arts.
   9(a) (allowing extraction for private purposes from non-electronic databases), 9(c) (allowing extraction and
   reuse for purposes of "public security or an administrative or judicial procedure").

   n249 See H.R. Rep. No. 3531 <sect> 5 (cited in note 7) (providing exceptions only for lawful users to extract,
   use, or reuse insubstantial parts of public or commercially-used databases and for use of data from sources
   not subject to the Act); U.S. Proposal on Databases at art. 5 (cited in note 7). The U.S. Proposal to WIPO
   appears less watertight, because it does permit contracting parties, "in their domestic legislation, to provide
   for exceptions to or limitations on the rights," so long as such exceptions or limitations "do not unreasonably
   conflict with a normal exploitation . . . and do not unreasonably prejudice the legitimate interests of the
   rightholder." U.S. Proposal to WIPO at art. 5.3 (cited in note 206). Because the U.S. Proposal links this
   exception to the notion of a "substantial" taking for purposes of infringement and also to the express notion
   that use of preexisting protected matter is not an independent creation, see id. at arts. 3.1, 3.2, the drafters
   clearly aim to forbid any exceptions that permit extraction or use of a substantial part of the database for any
   purpose.

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   The sole sop to science and education in H.R. 3531 is a provision not found in the E.C. Directive that expressly
   denies coverage to "a database made by a government entity." n250 Because most databases of
   primary importance to science are funded by government agencies, this provision appears to recognize that
   such databases merit different treatment from those normally covered by the proposed sui generis regime. The
   message is rendered ambiguous, however, by language in the same provision to the effect that "any database
   otherwise subject to this Act . . . is not excluded herefrom because its contents have been obtained from a
   governmental entity." n251 This provision seems to clarify that private firms that invest in data appropriated
   from government sources will still qualify for protection. It can also be read, however, as implicitly inviting
   governmental agencies to derogate from the traditional U.S. position, reiterated in a recent Office of
   Management and Budget Directive, which limits such agencies to the recovery of dissemination costs from
   commercial applications of government-funded data by the private sector. n252 If government entities moved
   beyond cost-recovery principles, the continued ability of scientists to access such data on favorable terms,
   which current policy seeks to guarantee, could then be called into question. n253

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   n250 See H.R. Rep. No. 3531 <sect> 3(c) (cited in note 7) ("Except for a database made by a governmental
   entity, any database otherwise subject to this Act, is not excluded herefrom because its contents have been
   obtained from a governmental entity."). This provision has no counterpart in the E.C. Directive on Databases
   because E.U. governments expect to commercialize their databases. See note 78 above. See also WIPO Draft
   Database Treaty at art. 5(2) (cited in note 7) (allowing national legislation to determine the level of protection
   for databases made by government entities).

   n251 H.R. Rep. No. 3531 <sect> 3(c) (cited in note 7).

   n252 See OMB Implementing Memo (cited in note 73) (cautioning agencies that use the services of private
   contractors not to impose, or permit the intermediary to impose, restrictions that interfere with the agencies'
   own dissemination responsibilities; and reiterating "the basic standard that agencies shall not charge use fees
   for government information which exceed the cost of dissemination").

   n253 See notes 293-94, 302-10 and accompanying text.

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   Disregarding the status of databases made by governmental entities, H.R. 3531 would render virtually any act
   of "collecting, assembling, or compiling . . . data . . . from . . . a database subject to this Act" a prohibited or
   infringing act. The perpetrator can never justify such acts as incidental to other acts of independent creation,
   or as incidental to recognized public interest exceptions, or even as legitimate means of building on preexisting
   data sets. n254 Nor does H.R. 3531 express any concern that application of its exclusive rights might lead to
   abuse of a dominant position or to other anticompetitive acts that might require "nonvoluntary licensing" at
   some point in the future. n255 On the contrary, the bill expressly empowers publishers contractually
   to override even the nominal right of subscribers to use or reuse insubstantial parts of the database and to
   require "multiple persons within an organization or entity"--presumably including scientific and educational
   entities--to acquire additional licenses or copies for authorized additional uses or reuses beyond their initial
   access rights. n256

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   n254 See H.R. Rep. No. 3531 <sect><sect> 4, 5(a)(b) (cited in note 7). See notes 237-44 and accompanying
   text (stressing built-in restrictions on claiming use of an insubstantial part in practice).

   n255 See E.C. Directive on Databases, art. 16(3), 1996 O.J. (L 77) at 27 (cited in note 7) (requiring E.C.
   Commission to report, at three-year intervals, concerning these issues and the need to establish
   "non-voluntary licensing arrangements").

   n256 See notes 242-44 and accompanying text. See also H.R. Rep. No. 3531 <sect> 4(b)(iv) (cited in note 7).
 

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   Ancillary provisions of H.R. 3531 also embody some of the present administration's most controversial proposals
   concerning the regulation of national and global information infrastructures. n257 For example, it includes a
   provision akin to that found in the White Paper that would outlaw making or distributing any technical device
   (or performing any technical service) the primary purpose or effect of which was to circumvent self-help
   technological security measures that publishers may rely on to protect the contents of their databases. n258
   Another provision inspired by the White Paper would forbid tampering with database management information
   attached to digital copies of the database contents or otherwise distributing contents in a form that bears
   false information about ownership or other aspects of managing the relevant proprietary rights. n259

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   n257 See note 207 and accompanying text.

   n258 See, for example, H.R. Rep. No. 3531 <sect> 10 (cited in note 7) ("Circumvention of Database Protection
   Systems"); U.S. Proposal on Databases at art. 8 (cited in note 7) (Prohibition of Protection--Defeating
   Devices). See also U.S. White Paper, Appendix 1 at 5 (cited in note 64); Pamela Samuelson, Technological
   Protection for Copyrighted Works, paper presented to the Thrower Symposium, Emory Law School (Feb. 22,
   1996) (on file with the Authors) (stating that, although digital technology "poses a serious challenge for
   copyright owners because works in digital form are vulnerable to uncontrolled replication and dissemination in
   networked environments," it is "not just part of the problem; it may also be part of the solution").

   n259 See, for example, H.R. Rep. No. 3531 <sect> 11 (cited in note 7) ("Integrity of Database Management
   Information"). See also U.S. White Paper, Appendix 2 at 5 (cited in note 64).

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   Self-help measures, such as encryption for networked transmissions, often serve valid commercial purposes,
   and they may become indispensable for the protection of privacy. n260 Such measures may also, however,
   unduly reinforce the publisher's power to impose harsh contractual terms in two-party deals, n261 a prospect
   that H.R. 3531 completely ignores. There is also reason to fear that publishers will use these
   measures to fend off legitimate public interest challenges to the scope of protection obtained under the
   proposed sui generis regime. If, for example, decrypting a coded transmission is necessary to extract part of a
   database for noncommercial scientific purposes, and the act of decryption itself constitutes a tort, n262
   researchers are unlikely to explore the possible availability of judge-made public interest exceptions to the
   exclusive rights conferred by the new regime. n263

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   n260 See, for example, Branscomb, Who Owns Information? at 175-77 (cited in note 35).

   n261 See notes 85-88 and accompanying text. A solid body of scholarly opinion holds that "a combination of
   technological restrictions (such as encryption), contractual arrangements and criminal sanctions (for
   unauthorized decryption)" raises a far greater risk of overprotection than that of underprotection. McManis,
   International Intellectual Property Protection (cited in note 99); Kurtz, 18 Eur. Intell. Prop. Rev. at 120, 121,
   124 (cited in note 58) (stressing risk that a chronic state of overprotection could "choke off opportunities for
   academic research and educational uses of intellectual property").

   n262 See H.R. Rep. No. 3531 <sect><sect> 10 (cited in note 7) (prohibiting circumvention of database
   protections without the database owner's authorization), 12 (presecribing remedies, including damage awards,
   for violation of <sect> 10).

   n263 See notes 234-35 and accompanying text.

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   In sum, by providing a longer period of protection, more powerful exclusive rights, no public interest exceptions
   or privileges, harsh criminal penalties (as well as treble damages for willful infringements), n264 and ancillary
   rules reinforcing self-help policing of online transmissions, the proposed U.S. law would grant database owners
   a more absolute monopoly than that emanating from the E.C. Directive. In so doing, the drafters of H.R. 3531
   take no notice of the role that affordable, unrestricted flows of data have traditionally played in U.S. science
   policy or in other domains. The proposed regime thus risks triggering a chain of unintended consequences that
   could ultimately compromise both the foundations of basic science and the technological superiority of the
   national innovation system. n265

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   n264 See H.R. Rep. No. 3531 <sect><sect> 7(1), 8 (cited in note 7) (prescribing fines of up to $ 250,000 and
   up to five years imprisonment for certain first offense willful violations of the prohibited acts under <sect> 4;
   id. <sect><sect> 12, 13 (prescribing fine of up to $ 500,000 and up to five years imprisonment for violations of
   <sect> 11 with intent to defraud).

   n265 David and Foray, 16 Sci. Tech. & Ind. Rev. at 38-59 (cited in note 62) (national systems of innovation
   studies).

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