Alternatives to Intellectual Property

By Oliver Bennett, William Fisher, Teddy Kalaw, and Jack Lerner

Last Updated: June 12, 2001


Table of Contents

Introduction
Readings
Case Study
Questions for Discussion
Bibliography & Further Resources
 


Introduction

Very few observers of the Internet believe that it can be regulated sensibly by traditional Intellectual Property law.  Some think that the current forms of intellectual-property protection are woefully inadequate.  The Internet, they point out, functions as an inexpensive global copying machine.  Although many uses of that machine are illegal, the current systems for detecting and punishing those uses are hopelessly out of date, and thus online "theft" of information is rampant.  What should be done?  Opinions vary.  Some members of this group advocate tightening intellectual-property laws.  Others advocate replacing (or supplementing) intellectual-property protections with alternative legal or technological shields for online information.

Other observers think that intellectual-property law as applied to the Internet is already too tight.  Instead of reinforcing impediments to the use and reproduction of information in cyberspace, they argue, we should be looking for ways to reduce those barriers.  More broadly, they claim, we must lower our expectations concerning the protections that the developers of ideas and information deserve.

This module examines these divergent reform proposals -- and the extent to which some are being implemented.  The spectrum of alternatives, as you will see is quite broad.  It may be helpful, while reviewing the array, to keep in mind the following general framework:

...[T]he question that law should ask is what means would bring about the most efficient set of protections for property interests in cyberspace. Two sorts of protections are possible. One is the traditional protection of law - the law defines a space where others should not enter and punishes people who nonetheless enter. The other protection is a fence, a technological device (a bit of code) that (among other things) blocks the unwanted from entering.  In real space, of course, we have both - laws and fences that supplement law. No doubt there is some optimal mix between fences and the law. Both cost money, and the return from each is not necessarily the same. From a social perspective, we would want the mix that provides optimal protection at the lowest cost...
[from Lawrence Lessig, "Code and Other Laws of Cyberspace."  A similar, though not identical, framework can be found in Margaret Jane Radin, "Humans, Computers, and Binding Commitment."]
 
 

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Bibliography & Further Resources

Readings

Set forth below are guides to the principal proposals for either supplementing, curtailing, or displacing traditional intellectual-property law as applied to the Internet.  Links to additional resources pertaining to each topic may be found at the end of this module.
 
 

1.  Database Protection

Should collections of data be shielded by law from nonpermissive copying?  Many observers -- including many, but not all, database developers -- believe that the answer is yes, and that the shields provided by copyright law are ineffectual.  This is especially true, they argue, in the United States, where the Supreme Court has ruled that copyright protection is available only for forms of expression that exhibit a minimal degree of creativity.  (A novel (even a bad, formulaic one) easily meets this requirement, but an alphabetical telephone directory does not.)  This principle means that, in the United States, many nonpermissive uses of databases, even if they could be detected, would not constitute copyright infringement.  Unless better legal shields can be devised, it has been argued, companies will hesitate to create online databases -- which will be unfortunate for everyone.

Moved by arguments of these sorts, the European Union recently adopted a Directive compelling all of its member countries to adopt legislation forbidding the extraction or reutilization of a substantial portion of a database.  Member countries are allowed some -- but not much -- latitude in establishing exceptions (analogous to the fair-use doctrine in copyright law) to this prohibition.  During each of the last few terms of Congress, two sharply different bills that would create an analogous legal regime in the United States have been introduced by rival groups of interested parties.  Neither of the bills has made it far in the legislative process, but efforts to create a database statute in the United States will likely continue for the foreseeable future.  For a survey and evaluation of these initiatives, read the attached excerpt from "Database Protection at the Crossroads: Recent Developments and Their Impact on Science and Technology" by Jerome H. Reichman and Paul F. Uhlir.  (The full article is also available here if you have time.)
 

2.  Tax and Royalty Systems

Another initiative that thus far has received most attention in Europe involves supplementing (or, perhaps, supplanting) traditional intellectual-property systems with taxation.  Musicians (as the previous module showed) fear that promiscuous Internet replication of their creations will undermine their ability to make money.  Some observers believe that the best way to address this concern is not by clamping down on Internet copying, but by providing musicians an alternative source of revenue.  Specifically, they propose imposing taxes on the objects (CD burners, blank CDs, computer "hard" drives, etc.) and services (especially Internet access) that are essential to engage in that copying.  The money collected from those taxes would then be distributed to musicians (both composers and recording artists) in proportion to the frequency with which their creations are copied.  The attached story from the New York Times examines the extent to which these ideas are beginnning to take root in Europe.
 

3. Online Contracts

A growing number of website developers are attempting to shield their creations, not through intellectual property law, but through contracts.  A good example is the online form of Martindale-Hubbell, the leading directory of lawyers.  A concise survey of other efforts to create "private laws" governing online transactions may be found in "Adapting Contract Law to Accommodate Electronic Contracts: Overview and Suggestions" by Donnie L. Kidd, Jr. and William H. Daughtrey, Jr. (The full article is available here.)

Are so-called "click-on licenses" of these sorts enforceable?  It's hard to say.  Many courts in the United States have considered the enforceability of closely analogous "shrink-wrap licenses," which have been used for years by software manufacturers to limit the ways in which customers may make use of their wares -- but the courts' answers have varied substantially.  A good review of this tangled body of case law may be found in the attached excerpt from Margaret Jane Radin's " Humans, Computers, and Binding Commitment".  The most famous of the shrink-wrap cases is the decision of Judge Easterbrook (writing for a panel of the Seventh Circuit Court of Appeals) in ProCD v. Zeidenberg 86 F.3d1447.  (The notoriety of that ruling -- and the crispness of Easterbrook's prose -- unfortunately has contributed to a widespread views that the enforceability of shrink-wrap agreements is clearer than it is in fact.)

With respect to the enforceability of the online versions of such contracts, the case law is very thin.  In Hotmail Corporation v. Van$ Money Pie, Inc. 1998 WL 388389, 1 (N.D. Cal.), a District Court granted an injunction against a "spammer" (a person who sends unsolicited commercial emails) -- largely on the theory that the plaintiff had a valid contract claim arising out of a click-on license.  But other decisions on the issue are, as yet, hard to find.

Reformers have been trying for years to secure the adoption of legislation that would establish, once and for all, the enforceability of these private agreements.  The most ambitious of those efforts was the attempt to add a new Article 2B to the Uniform Commercial Code.  Fierce opposition -- partly, though not exclusively from legal scholars -- ultimately blocked this initiative.  Unbowed, the reformers have been seeking analogous legislative changes from the legislatures of individual American states.  For a careful assessment of this subject, see the attached excerpt from Niva Elkin-Koren, " Copyright Policy and the Limits of Freedom of Contract ".  (Her full article is also available here.)
 

4.  Encryption

Yet another group of Internet participants are seeking protection, not through law (copyright, contractual or otherwise) but through technology.  Lawrence Lessig has characterized their attitude as a preference for "West-coast Code" (the sort produced by programmers in Silicon Valley) to "East-coast Code" (the sort produced by lobbyists and legislators in Washington, D.C.).  The former, they believe, offers a "faster, cheaper and more reliable" way of regulating access to online information.

An important example of this impulse is the development of so-called "trusted systems."  Such a system is essentially a software application configured to run only by following rules specified by the programmer. Through such rules, a content provider is empowered to determine the terms and conditions under which a user may -- and may not -- gain access to his or her digital work.  For a description of this technology, please read one of Mark Stefik's two articles on the subject -- the layman's version in Scientific American or the more detailed version in the Berkeley Journal of Law and Technology.

The most widely publicized effort to replace crumbling intellectual-property shields with newer, stronger technological shields, was the Secure Digital Music Initiative (SDMI).  Last year, after a development process that lasted much longer than expected, SDMI made available to the public prototypes of its new watermarking systems -- and invited hackers to try to break them.  To the consternation of the developers, the systems were broken promptly.  To hear all sides of this story, you should listen to the panel discussion on the topic at the recent Future of Music Policy Summit Conference.

Technological "solutions" of these sorts have been criticized harshly by many scholars.  For example, in the attached excerpt from "Hardware-Based ID, Rights Management, and Trusted Systems," Harvey Weinberg highlights the potential dangers to individual privacy and human ingenuity by the uncritical adoption of trusted systems. (The full article for your reference is available here.) Lawrence Lessig forecasts an even darker future for Cyberspace, where the free flow of content is hampered by the rise of numerous technological "fences". (Lessig's article can be viewed only with the assistance of Adobe Acrobat Reader.  Click here to download a copy).  Not everyone, however, agrees with Lessig.  In "What Larry Doesn't Get: Code, Law, and Liberty in Cyberspace", David Post argues that many of his conclusions do not follow from his central argument that "West Coast Code" dominates Cyberspace.
 

5.  Legal Prohibitions on Encryption Circumvention

As the fate of SDMI makes clear, technological fences can be torn down.  To reinforce them, some reformers have turned once again to law.  The most important manifestation of this strategy, to date, is the relevant portion of the Digital Millennium Copyright Act [DMCA], which establishes both civil and criminal penalties for circumventing technological controls.  A good review of the legislation may be found in the attached excerpt from Jane Ginsburg, " Copyright Legislation for the Digital Millennium."  (The full version of her article is available here.)  The administrative interpretation of the statute by the U.S. Copyright Office can be accessed here.  Larry Lessig's assessment follows:
"Now I've made something of a career telling the world that code is law. The rules built into software and hardware functions as a kind of law. That we should understand code as kind of law, because code can restrict or enable freedoms in just the way law should...  But in the anticircumvention of the DMCA [Digital Millenium Copyright Act], Congress has turned my metaphor into reality. For what the anticircumvention provision says is that building software tools to circumvent code that is designed to protect content is a felony. If you build code to crack code then you have violated the US code... Code is law."
To date, the most important and visible application of this portion of the DMCA has involved the effort to limit dissemination over the Internet of DeCSS, a software program that disables the technology that shields DVD discs from copying.  For a review of the struggle over DeCSS, see the Case Study, below.
 
 

6. The Open Source Movement

The sixth group of reformers argues that we should be moving in a completely different direction.  Proponents of the Open Source Movement argue that sharing and cooperation, not control and exclusivity, should be our goals.  One of its leading mouthpieces, Opensource.Org, describes the movement as follows:
The basic idea behind open source is very simple. When programmers on the Internet can read, redistribute, and modify the source for a piece of software, it evolves. People improve it, people adapt it, people fix bugs.  And this can happen at a speed that, if one is used to the slow pace of conventional software development, seems astonishing.

We in the open-source community have learned that this rapid evolutionary process produces better software than the traditional closed model, in which only a very few programmers can see source and everybody else must blindly use an opaque block of bits.

In "Whose Intellectual Property Is It Anyway? The Open Source War," Peter Wayner provides a nontechnical overview of the current conflict between advocates of the closed source and open source paradigms. For more detailed introductions to the movement, please read either "The Power of Openness"  by David Bollier or this Introduction by Chris DiBona, Sam Ockman, and Mark Stone. The former article is also available at the Berkman Center's Open Code site, a rich resource for information on the movement, while the latter article is the preamble to the book, "Open Sources: Voices from the Open Source Revolution."  A defense of the movement may be found in Lawrence Lessig's "Code and Other Laws of Cyberspace" (distilled in relevant part in "Open Code and Open Societies").  For constructive criticism of Lessig's position, see Steven Hetcher, "Climbing the Walls of Your Electronic Cage."

It should be emphasized that the Open Source Movement does not call for the total abandonment of "intellectual property." As Robert W. Gomulkiewicz explains:

The terms "free software" and "open source software" might lead observers of the open source revolution to conclude that hackers make software free or open by placing their code into the public domain; however, hackers employ a different approach. The proponents of open source software rely on owning the copyright in the code and then licensing it according to a very particular mass-market licensing model...
Open source licensing is based on several key principles. These principles are embodied in The Open Source Definition, published by the Open Source Initiative, and in sample licenses published by the Free Software Foundation and others, such as the GNU General Public License, the GNU Library General Public License, the Artistic License, and the Berkeley Software Design-style license.  If a license does not comply with these principles, the software cannot (at least according to the open source community) be labeled "opensource."
A current "definition" (Version 1.7) of what should constitute open-source software may be found here.  Hyperlinked to each rule is its rationale. For a glimpse of the typical development process for this type of software, you may want to peruse this excerpt from Marcus Maher's "Open Source Software: The Success of an Alternative Intellectual Property Incentive Paradigm".  (You can read the entire article here.)  For examples of software that are based on the open source model, see Opensource.org's representative list of products that meet its definition as well as the websites of the Linux Documentation Project and Netscape Communications  (which released its source code to the general public in 1998).
 

7.  Cyberspace Self-Governance

In the background of many of the proposals outlined above is a more fundamental debate over the extent to which Cyberspace can and should be "self-governing."  An early entry into this debate was John Perry Barlow's article " The Economy of Ideas," which argued that copyright and patent laws are founded on characterizations of the nature of human expression that are obsolete in the digital era.  (You may wish to also read his "second edition" of the piece, " The Next Economy of Ideas", which was published in October of 2000).  In "A Declaration of the Independence of Cyberspace," Barlow builds on this argument to claim that all expression and transactions on the Internet should be presumptively self-governing.  For an illustration of how this may work, check out Wendy Grossman's description of Stephen King's new cyberspace-exclusive offering in "Would You Pay $1 for this Article?".  If you wish to inspect a more conventional example of a self-policing online community that appears to work, surf through eBay, the popular online auction site.  Barlow's attitudes pop up in odd places.  For example, in a 1997 "Directive on Electronic Commerce," President Clinton instructed federal agencies to "recognize the unique qualities of the Internet, including its decentralized nature and its tradition of bottom-up governance".

Such a view of "bottom-up private ordering" is not without its critics.  For example, in "Cyberspace Self-Governance: A Skeptical View From Liberal Democratic Theory," Neil Netanel argues that it fails to promote the ideals of a liberal democracy.  (The full article is available here.)  We will return to this subject when we discuss ICANN and the domain-name controversy.
 
 

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Bibliography & Further Resources


Case Study: DVD Publishers vs. DeCSS Promoters


The Content Scrambling System [CSS] encodes DVDs so that they can only be played in the geographic region where they are purchased. The DVD Content Control Association [DVD CCA] explains the rationale for this system as follows:

Movies are often released at different times in different parts of the world. For example, a film that opens in December in the U.S. might not premier in Tokyo until several months later. By the time that Tokyo premier occurs, the film may be ready for DVD distribution in the U.S.
Regional DVD coding allows viewers to enjoy films on DVD at home shortly after their region's theatrical run is complete by enabling regions to operate on their own schedules. A film can be released on DVD in one region even though it is still being played in theaters in another region because regional coding ensures it will not interfere with the theatrical run in another region. Without regional coding, all home viewers would have to wait until a film completes its entire global theatrical run before a DVD could be released anywhere.
DeCSS is a software program developed by a Norwegian teenager that (as its name suggests) disables CSS.  One of the justifications for the program offered by its defenders is that, although "[a] legally purchased DVD can easily be played on a machine running Microsoft software or on a Macintosh computer, [i]t is currently very difficult to play a DVD on a Linux machine since there is no 'approved' player for Linux. Even if this changes and an approved Linux player equipped with proprietary CSS comes into existence, the same problem will continue to exist for other open-source operating systems and for Linux users who will decline to buy a closed-source application. In fact, this kind of thing will actively discourage new operating systems from being developed since they won't have the same capabilities as existing ones."  The DeCSS program is relatively simple and may be obtained from a wide variety of websites on the Internet.  (For reasons that will soon become apparent, we can't provide you links to those sites, but a search on Google.com should do the trick.)

2600 is a self-styled online "hacker magazine."  Roughly a year ago, 2600 posted links to other websites from which DeCSS could be downloaded.  Major stakeholders in the DVD industry, such as the members of the Motion Picture Association of America [MPAA], brought suit, alleging that the behavior of 2600 violated the anti-circumvention provisions of the DMCA (discussed above).   Good overviews of the background of the case may be found in Wendy Grossman, "DVDs: Cease and DeCSS?" and Jim Taylor's online DVD FAQ segment on DVD copy protection issues.

Last summer, in Universal City Studios, Inc. v. Reimerdes, the District Court for the Southern District Court of New York ruled  in favor of the DVD publishers.  (The opinion requires a copy of Adobe Acrobat Reader.  Click here to download a copy).  2600 has appealed this judgment to Court of Appeals for the Second Circuit.  Many groups and individuals --including the Electronic Frontier Foundation  and the Openlaw  project of The Berkman Center -- have lent support to the defendant. The considerations that underlie their position are outlined in an Amicus Curae ("friend of the court") brief filed with the Second Circuit last January 26 by a group of intellectual-property law professors.  A less dense treatment of the legal issues may be found in Bruce Bell's " The Coming Storm".

Using the resource materials and other sources in the additional resources section, please make an effort to answer the questions that follow.
 


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Bibliography & Further Resources


Questions for Discussion

1.    Is the Internet sufficiently different from "real space" to justify the creation of a separate body of intellectual property laws?

2.    Should databases (online or otherwise) be protected against unauthorized copying?  If so, how?

3.  Should the proposed draft of UCC2B have been adopted?  Should there be any limits to the enforcement of click-on licenses?
4.    Do you think the adoption of trusted systems by content providers is a legitimate initiative to enhance the protection of their intellectual property rights, or will that strategy eventually threaten the viability and growth of the Internet?  If the latter, how would you curtail the use of this approach?

5.    Who should prevail in the Reimerdes case?

6.    Is the Internet capable of self-governance?

7.    Do you agree with the claims made by the Open Source Movement that its software is superior, that it discovers and fixes bugs quicker, and that it is cheaper than traditionally developed software?
 

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Bibliography & Further Resources

Bibliography & Further Resources

 A.    Materials on New Statutory Rights

           1. Articles

           2. Actual and Proposed Legislation


B.    Materials on Contract

1.    General Introduction to Contracts: From the Cyberspace Law Institute's Cyberspace for Non-Lawyers
2.    Articles
           3.    Case Law
           4.    Statutes
5.    Sample Websites


C.    Materials on Technological Protection

      1.    Articles

2.    Case Law
3.    Statutes
4.    Sample Websites
D.     Materials on Cyberspace Self-Governance and the Open Source Movement

         1.    Articles

            2.    Sample Websites
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Bibliograhy & Further Resources