Alternatives to Intellectual Property

Table of Contents

Case Study
 Required Readings
Questions for Discussion
 Further Resources
 Special Event

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Last updated: February 28, 2000

As we enter the "Information Economy", intellectual property is fast becoming one of the most important exchangeable commodities of our society.  Accordingly, as the Internet is considered to be the most efficient means for facilitating the use, storage, transfer and exchange of intellectual property seen to date, there has been a flurry of activity - a virtual "gold rush" - as many businesses have sought to establish an online presence.  Moreover, as more and more people have started to go online, more and more valuable content is being made accessible to people via the Internet and the World Wide Web, a fact most dramatically illustrated by the recent AOL, Time-Warner merger.

Accordingly, those who are Net-savvy are able to obtain vast amounts of material on the Internet.  As we saw last week for instance, the development of MP3 technology has enabled people to listen to, download, transfer and exchange audio files whilst online.  Similarly, a broad range of cultural and educational materials can be found on the Internet ranging from television shows and news items through to esoteric academic and professional journals.  Nevertheless, despite these developments, a number of content providers have shown a certain apprehension or reluctance to using the Internet as a means for distributing their works.  Primarily, this nervousness stems from the uncertainty that traditional intellectual property doctrines offer them as a means of protecting their investments online.

In the first place, as Andy Johnson-Laird has argued, the technical nature of the Internet has essentially transformed it into a global copying machine.  Indeed, with the advent of digital technology people are readily able to make copies of works and disseminate them not to one, but many other persons, at virtually no cost.  Significantly though, these copies are perfect copies of the original and, in some cases, may be even better than the original.  Furthermore, there is the fact that Cyberspace makes it increasingly difficult to monitor and enforce compliance with the intellectual property laws.   As Lawrence Lessig has asserted then: 'The threat posed by technology is maximal, while the protection promised by law is minimal.'

Resulting in what some commentators have dubbed as an "Era of Promiscuous Publication", a number of publishers have started to become concerned at the loss of control over their online works, and hence loss of income.  Accordingly, due to its seeming ineffectiveness in preventing this, these publishers have started to question the utility of the current intellectual property regime, at least in so far as it applies to Cyberspace.  Moreover, they have also begun to explore several alternatives to the traditional intellectual property laws as a means of protecting their online works.  At the heart of these alternatives lie contractual and technological solutions which seek to place limits on the permissable uses of online material.  Closely related to this in practice, although ideologically distinct, is the Open Source Movement which seeks to capture the value of intellectual property by freely distributing it and then relying on network effects and ethics to support their position.  Finally, there have also been some attempts to create entirely new forms of intellectual property protection to deal with the unique problems raised by the Internet.  It is these alternatives that we shall be examining in some detail in this week's module.

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Case Study

The  Martindale-Hubbell® Law Directory is the flagship product of Martindale-Hubbell, a member of the Reed Elsevier Publishing Group.  Starting as a one volume publication in 1868, the Martindale-Hubbell® Law Directory has evolved into a 26 volume publication profiling approximately 900,000 lawyers internationally.  Considered as 'the primary research source for information about attorneys and law firms around the world', each entry in the Directory typically consists of short biographical information about the lawyer (e.g. law school attended, areas of specialization) and their contact details.  Considering its size and popularity, therefore, the compilation and maintenance of the Directory is not only costly and time-consuming but also extremely valuable to Martindale-Hubbell.

In addition to making its directory available in print format, the Martindale-Hubbell® Law Directory is also available on CD-ROM, from LEXIS-NEXIS and most recently on the Internet via the Martindale-Hubbell Lawyer Locator™.  Users of the Internet version of the Directory are able to access the site and search the database for lawyers by name, firm, location, practice and a number of other different criteria.

At the bottom of each search page is a copyright notice.  After the copyright notice, the following statement appears:

Clause 1.2 of these terms and conditions provides as follows:
'You are hereby granted a nonexclusive, nontransferable, limited license to view, reproduce, print, and distribute insignificant portions of materials retrieved from this Site provided (a) it is used only for informational, non-commercial purposes, (b) you do not remove or obscure the copyright notice or other notices. Except as expressly provided above, no part of this Site, including but not limited to materials retrieved therefrom and the underlying code, may be reproduced, republished, copied, transmitted, or distributed in any form or by any means. In no event shall materials from this Site be stored in any information storage and retrieval system without prior written permission from Martindale-Hubbell.'
If you use the Martindale-Hubbell Lawyer Locator™, do you think that you are legally bound by the above terms and conditions?

One of your friends has decided that they want to set up an Internet company which provides a database of photographs of famous people which can be accessed and downloaded for free.  She intends to generate revenue through selling advertising space on her site, and her costs are low as she obtains the photographs from other Internet sites or scans them into her computer from various magazines.  She is concerned about the copyright implications of this, and asks you if you know of any good Internet and intellectual property lawyers in her local area.  Using the Martindale-Hubbell Lawyer Locator™ you put together a list of a dozen lawyers for her which, cutting and pasting from the Internet, you email to her without the relevant copyright notice.  What are the implications of this?  Have you breached the terms and conditions by your actions?  Would it make any difference if you were a professional "person locator" and charged a fee for your activities?

Assume that you are a budding entrepreneur and sense that the market is ripe for a comprehensive list of specialist Internet/IP lawyers.  Using the Martindale-Hubbell Lawyer Locator™ you write down the names and contact details of all such lawyers that you can find on a piece of paper.  You then enter these into your own computer database and start selling it on the Internet.  Have you breached the terms and conditions of usage by doing this?  What would the result be if, along with the Martindale-Hubbell Lawyer Locator™, you use several other lawyer databases such that it is impossible to determine which database you obtained each entry from?  If, instead of this, you used your contacts in the legal profession and personally verified the accuracy of each entry yourself by calling the relevant lawyers, would there be a breach?

In order to protect its investment from the activities described above, Martindale-Hubbell decides to limit access to its Lawyer Locator to registered users only.  Access to the database is still free, but before you can access it you have to download certain browsing software onto your computer and agree to a license which contains a clause identical to clause 1.2 of the terms and conditions of usage.  Unknown to you, this browsing software keeps a constant record of the searches that you make and puts an electronic "tag" on any material that you cut and paste from the directory into other documents.  If you fail to include the relevant copyright notices or distribute more than an “insignificant portion” of the Directory (which it is programmed to understand as 50 words or less), it automatically deletes the browsing software from your computer (including some systems files that are shared with other applications) and any tagged records that you may have stored.  Provision for this is provided for in the license agreement.  Is such a program lawful?  Are you bound by the terms of the contract?

Assume that rather than providing the Directory for free, Martindale-Hubbell decides to charge for access.  It develops some software which requires you to pay a fee every time that you access the database.  Furthermore, it charges additional fees for every entry that you copy from the Directory, and for every person that you send that entry to. A poor Harvard law student (who happens to be a computer whiz) who is trying to find the name of a partner to send their resume to, but can’t afford the access charges, manages to hack into the Directory and search it for free.  Do you think that this student should be punished in some way (e.g. damages, criminal liability) for their actions?

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Required Reading Materials

(There are many links in this week's readings.  You are only required to read those links which are expressly marked as a "required reading" in order to fully comprehend the issues raised this week.  All of the other links are optional.  Please feel free to read these links if you are interested or have the time)

1.  Contract

As the deficiencies of traditional intellectual property protection are becoming perceived in the online environment, contract is becoming an increasingly pervasive means of protecting intellectual works.  Indeed, anyone who has spent some time surfing the Net will inevitably have come across web pages which look suspiciously like a contract.  Frequently, these pages will require the user to agree to the terms of an online license by clicking on an "ACCEPT" icon before they can proceed any further.  Known as "clickwrap" licenses, these agreements are thought to be highly useful in mass-market industries such as the software industry, and hence justifiable on utilitarian grounds.  This extract from    Robert W. Gomulkiewicz, “The License Is The Product: Comments on the Promise of Article 2B for Software and Information Licensing" 13 Berkeley Technology Law Journal, 891 (1999) (extract only - required reading) seeks to make such an argument.  Please read this extract or click here (optional) to read the full version if you have time.

The legal position as to the enforceability of such licenses is, however, uncertain at the present.  Early case law (optional) in the analogous field of "shrinkwrap" licenses generally suggested that such agreements were unenforceable.  In ProCD v. Zeidenberg 86 F.3d 1447 (7th Cir. 1996) (optional), however, the Court of Appeals for the 7th Circuit upheld the validity of a shrinkwrap license.  Importantly, the court enforced a license agreement which granted protections analogous to copyright on a CD-ROM database that was otherwise non-copyrightable (optional).  Accordingly, no clear approach as to the enforceability of shrinkwrap licenses has emerged from the courts as yet, with some courts enforcing them and others not.  Despite this uncertainty however, in Hotmail Corporation v. Van$ Money Pie, Inc. 1998 WL 388389, 1 (N.D. Cal.) (optional), the first case to consider clickwrap agreements, the District Court granted a preliminary injunction against a "spammer", noting that the plaintiff’s contractual claim based on a clickwrap license was likely to succeed.

Most recently, there has been an attempt to clarify the position regarding clickwrap licenses through the proposed Article 2B (optional) of the Uniform Commercial Code (a version of which was recently passed by the Virginia legislature).  In its present form, Article 2B would make clickwrap licenses binding and enforceable against those who "agree" to them.  This has prompted some strong criticism from legal scholars who point out, amongst other things, the lack of any semblance of a bargain and hence the unilateral nature of the terms in clickwrap licenses.  In Niva Elkin-Koren,"Copyright Policy and the Limits of Freedom of Contract" 12 Berkeley Technology Law Journal, 111 (1997) (extract only - required reading), the arguments against the unchecked application of freedom of contract as a de facto means of obtaining copyright protection are rehearsed.  Please read this extract or click here (optional) to read the full version if you have time.

2. Technological Protections

Cyberspace is fundamentally different from real space in one crucial respect: Cyberspace is an entirely artificial construction.  Accordingly, the manner in which we exist in Cyberspace, both as to our capacities and the limits on those capacities, are man-made.  As Lawrence Lessig (optional) has argued, therefore, 'the code is the law' and we, or more accurately the computer programmers, are God.  Perhaps most importantly though is the fact that the artificiality of Cyberspace vests it with the latent potential, through the code, to be made the subject of perfect regulation.  That is, it is possible to code Cyberspace in such a manner that everything that we do in the online world is carefully circumscribed and limited to what the "owners" of Cyberspace permit us to do.

This fact is of great significance for the distribution of intellectual property in Cyberspace, as demonstrated by the discussion in Mark Stefik, "Trusted Systems" Sceintific America, March (1997) (required reading).  Please read this article.  According to Stefik, we are fast approaching a world in which online publishers will be able to distribute their works in an encrypted format such that they can only be displayed or printed by trusted systems.  These are systems which, through their particular hardware and software configurations, can be relied upon to follow certain pre-determined rules.  In this way, it is anticipated that publishers will be able to specify the precise terms and conditions for the usage of digital works and, most importantly, ensure perfect compliance with this through the computer code.  Moreover as Jane C. Ginsburg, "Copyright Legislation for the Digital Millennium" 23 Columbia-VLA Journal of Law and the Arts, 137 (1999) (extract only - required reading) discusses, the recent enactment of the Digital Millennium Copyright Act (optional) has made it an offense to attempt to circumvent such technological controls.  Please read this extract or click here (optional) to read the full version if you have time.  A recent prominant example of the development of such trusted systems, which has arisen in response to the perceived threats of MP3 technology, is the Secure Digital Music Initiative (optional).

As with the use of contractual terms outlined above, therefore, trusted systems have the potential to enable intellectual property owners to gain greater protection than that which has traditionally been afforded to them under the law.  This raises serious issues which need to be addressed, for according to Lawrence Lessig:
'We have never had to choose whether authors should be permitted perfectly to control the use of their intellectual property independent of the law, for such control could only be achieved through law.  The balance struck by the law was the best that authors could get.  But now the code gives authors a better deal.  And thus we must now decide whether this better deal makes public sense.'
In Lawrence Lessig,"Commons and Code" Keynote Given at a Conference on Media Convergence at Fordham Law School, New York, February 9, 1999 (required reading), Harvard Law School Professor and Berkmen Centre Fellow Lawrence Lessig paints a dark picture for the future of Cyberspace.  In particular, he argues that if we don't start paying attention to how the code is used, Cyberspace is in danger of becoming impoverished as all of its current "commons" threaten to disappear behind the fences of technological protection.  Please read this article (this article requires a copy of Adobe Acrobat Reader.  Click here to download a copy).

Faced with the possibility of such a world, a number of authors have started to question our uncritical acceptance of such technological measures.  Julie Cohen (optional), for instance, has argued that there should be a right to "hack" trusted systems to the extent that they infringe upon traditional intellectual property rights such as fair use.  Other commentators such as Esther C. Roditti (optional), have suggested that the use of trusted systems, particularly when they interfere with the contents of your hard drive (e.g. deleting certain system files upon a failure to pay a registration fee after a trial period), may themselves be unlawful.  At the very least, therefore, the introduction of technological protection measures can hardly be described as a non-controversial step,a fact which is well illustrated by the recent debates over DVD encryption (optional).

3.  Open Source and Ethics

Whilst the majority of online content providers have increasingly sought to rely on contractual and technological means to protect their works, a smaller although increasingly growing number have openly eschewed such methods.  Collectively known as the Open Source Movement (optional) and heralded as the "next great thing" in the ever-evolving computer and Internet industries,these people believe that the underlying source code of computer software, which is fundamental to the furthering of computer science, should be both freely available and freely modifiable (optional).  Note though, that the use of the word "free" in this context refers to non-proprietary as opposed to non-commercial, for as Richard Stallman (optional) puts it: 'Think "free speech", not "free beer"'.  Paul Wallich in "The Best Things in Cyberspace Are Free" Scientific America, March (1999) (required reading) provides a good overview and introduction to the Open Source Movement and some of its implications.  Please read this article.

In distributing its software freely, the Open Source Movement believes that it has at least two major advantages (optional) over traditional commercially developed software.  Firstly, it is claimed that open-sourced software is both of a higher quality than commercially developed software and that any program bugs will be discovered and fixed at a much faster rate.  Secondly, it is thought that products based on open-sourced software will be relatively inexpensive compared to traditional commercial software.  Bruce Perens, one of the founders of puts forward the case for the Open Source Movement in "The Open Source Definition" in Chris DiBona, Sam Ockman and Mark Stone (eds)Open Sources: Voices From the Open Source Revolution, Sebastopol (CA): O'Reilly and Associates, Inc. (1999) (extract only - required reading), outlining its justifications and rationale.  He also provides a detailed analysis of the Open Source Definition.  Please read this extract or click here (optional) to read the full version if you have the time.

The rationale behind the proprietary method of software development is to keep source code confidential so that only the owner can realize its value.  By releasing its source code, the Open Source Movement is thus rejecting this economic model in favour of an alternative one.  Perhaps the most famous advocate of this new model is Esther Dyson (optional) who has argued that the Information Age has ushered in a new economic order in which content will essentially be free, serving as advertising for services and relationships from which income will ultimately be derived.  Whilst the viability of this alternative economic model has yet to be seriously tested, the recent success of Linux (optional) based companies such as Red Hat (optional), and the decision by Netscape Communications (optional) to release the source code of its Internet browser may suggest that it is a workeable model.

It is worth noting that, contrary to initial impressions, the Open Source Movement does not represent an abandonment of intellectual property or contractual protections.  Rather, as the article "What Does Free Mean? or What Do You Mean By Open Software"(optional) points out, intellectual property and contract are central to the movement for in 'order to stay free, software must be copyrighted and licensed.'  Robert W. Gomulkiewicz, a senior corporate attorney for Microsoft Corporation, has provided a detailed analysis of this in “How Copyleft Uses License Rights to Succeed in the Open Source Software Revolution and the Implications for Article 2B” 36 Houston Law Review, 179 (1999) (optional).  You are not required to read either of these articles.

In addition to the Open Source Movement, ethics might also provide an alternative means of protecting intellectual property in Cyberspace.  Netiquette  (optional), for instance, which proscribes the rules of accetable conduct is taken very seriously on the Internet.  Accordingly, certain organizations such as eBay (optional) have sought to rely on self-policing and "neighborhood watch" groups to prevent abuses of its facilities.  Nevertheless, the fundamental problem remains as John Perry Barlow has argued in his article "The Economy of Ideas" (optional), that piracy has become so socially acceptable that only a thin minority appear to be compelled to obey the intellectual property laws.  In this regard then, certain groups such as the Software and Information Industry Association (optional) have sought to establish educational campaigns (optional) to teach people about the responsible and legal use of intellecutual property products.

4.  New Forms of Intellectual Property Protection

An alternative approach to the methods discussed so far is simply to abandon the existing intellectual property laws in favor of new forms of intellectual property protection.  John Perry Barlow (optional), for instance, in arguing for the need to develop an entirely new set of methods for dealing with the problems posed by digital technology and the Internet, has described the existing canon of intellectual property law as a "sinking ship" that is 'leaking as much from within as from without.'  Numerous other commentators (optional) have similarly criticized the adequacy of the current intellectual property laws, calling for a wholesale revision and replacement of entire doctrinal areas such as copyright.

One area in which this has occurred, which is particularly relevant for our purposes, is in the development of a sui generis right with respect to databases for as Jerome H. Reichman and Paul F. Uhlir point out: 'everything on the Internet is potentially a "database"or a "collection of information" [and] in our increasingly information-based economy, the law that protects collected information will determine the level of competition and prices in that economy.'  Currently only in force in the European Union (optional), although actively being considered in the United States (optional), the sui generis right essentially grants a potentially perpetual property right over the contents of any non-copyrightable database that is the product of substantial investment.  Once conferred, this property right protects the database against any extraction or re-utilization of the whole or of any substantial part of it, with such part to be evaluated either quantitatively or qualitatively.  Significantly, there are no exceptions to this right which are analogous to the fair use provisions under copyright law.

Jerome H. Reichman and Paul F. Uhlir, "Database Protection at the Crossroads: Recent Developments and Their Impact on Science and Technology" 14 Berkeley Technology Law Journal, 793 (1999) (extract only - required reading) provides an a good general overview of the European Union’s Database Directive and the current legislative proposals before the United States Congress for a sui generis database right.  The authors then go on to criticize these rights, arguing that they provide over-extensive and unnecessary protection which may ultimate stifle scientific research, development and innovation.  Please read this extract or click here (optional) to read the full version if you have time.

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This week's assignment relates to the case study described above.  Please review the case study and then choose one of the options below and write a short response as to the legal liability of the person's actions and whether you think such liability is appropriate.

(a)  You are approached by the person who cut and paste the relevant extracts from the Martindale-Hubbell Lawyer Locator and emailed them to their friend.  They have been served by a writ from Martindale-Hubbell alleging breach of contract and want your advice as to their potential liability.  Please advise them in relation to the scenario where:
(i) they simply cut and paste the extracts without including the relevant notices; and
(ii) the person is a professional "person locator" who charged a fee for their activities.
Assume that before the person could use the Martindale-Hubbell Lawyer Locator™ they had to download some software and agree to the license that came with it.  Since sending the email, this software has been disabled and a substantial research document which contained some material from the Directory has also been deleted from their hard drive.  This document had taken months to compile and was part of a commission (worth $5000) which they had been working on.  There is no way that this person can finish their work on time now and they fear that they will lost all or a substantial part of their commission as a result.  They want to know if they have any liability to Martindale-Hubbell and, if so, whether they could recover any of their lost commission.

(b)  You are approached by the person who compiled the list of specialist Internet/IP lawyers and sold it over the Internet.  They have been served by a writ from Martindale-Hubbell alleging breach of contract and claiming damages.  Please advice them as to their liability where:

(i)  They simply cut and paste the information from the Martindale-Hubbell Lawyer Locator™ onto their own computer;
(ii)  They actually wrote down the information on a piece of paper and then physically entered it onto their computer;
(iii)  They used several different databases to compile the information such that it is impossible to determine exactly which database an individual entry was taken from;
(iv)  They independently verified the accuracy of each entry by firstly consulting their lawyer friends and, secondly, directly contacting the individual lawyers concerned; and
(v)  The whole scenario occured in a member state of the European Union.
For your responses, critically evaluate the arguments raised in the initial assignment providing reasons as to why you do or do not agree with the position advocated for.

If you are a member of group A, you should submit your assignment answer at the time and in the manner specified on the home page for your section.          CLE  | Section A1  |  Section A2  |  Section A3  |  Section A4  |  Section A5  |  Section A6  |  Section A7  | Section A8

If you are a member of group B, you are not required to submit an answer to the assignment but should feel free to discuss the issue in the Plenary Conference.

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Topics for Discussion
  1. What is the validity of "clickwrap" agreements?  What are the arguments for and against such agreements being legally binding?
  2. Should the providers of online content be entitled to use contract as a means of gaining protection over and above that provided by traditional intellectual property doctrines?
  3. Do you think that trusted systems represent a threat to the existing balance struck by the intellectual property laws?
  4. In you opinion, do you think that trusted systems are a good or a bad development?
  5. How should the legal system respond to the widespread introduction of trusted systems?  Should it remain passive, and allow market forces to determine the optimal allocation of usage rights?  Or should it intervene and place limits on the types of code that intellectual property holders are entitled to write in order to protect their works?
  6. Do you agree with the claims made by the Open Source Movement that its software is superior, it discovers and fixes bugs quicker, and that it is cheaper than traditionally developed software?
  7. Do you think that the economic model which the Open Source Movement is based on is a viable one?
  8. How are contract and intellectual property central to the success of the Open Source Movement?
  9. Are ethics a realistic alternative to intellectual property laws as a means of protecting works in Cyberspace?
  10. In the case study described above, how would your answer differ if the European Database Directive was in force in your country?
  11. What do you think about the sui generis right in the European Database Directive and currently proposed before the United States Congress?  Does such a right strike you as over or under protective?
  12. What competing interests appear to be at odds with one another in the European Union’s Database Directive?
  13. Should the United States adopt a similar law?
  14. Do you agree with Reichman and Uhlir's account of the sui generis database right as being too extensive, potentially stifling scientific research and development thereby threatening innovation.
  15. What are the various considerations which need to be balanced against one another in determining the appropriate level of intellectual property protection?  Should any of these considerations be given greater weight than any other?
  16. Who should determine the extent of permissible intellectual property protection?  Should it be left to the market through such things as online contracts or technological protection, or does the government have a role here?
  17. Is the Internet sufficiently different from real space to justify the creation of new intellectual property laws?
  18. What is your reaction to the possibility of paying for everything that you do online, including paying for activities that you previously didn’t have to pay for (e.g. lending your book to a friend)?
  19. What is your preferred vision for intellectual property protection in cyberspace?
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Additional Resources
(These are optional readings. They are not required.)

1.  Materials on Contract

    (i)  General Information on Contract

  • Contract Basics (from the Cyberspace Law Institute's Cyberspace for Non-Lawyers)
  •     (ii)  Articles on Contract Law and Cyberspace     (ii)  Uniform Commercial Code, Article 2B  and Related Articles     (iii)  Case Law     (iv)  Further Examples of Online Contracts

    2.  Materials on Technological Protection

        (i)  Articles

        (ii)  Legislation     (iii)  Sites Offering Technological Protection Systems     (iv)  Sites Related to Electronic Book Technology

    3.  Materials on Open Source and Ethics

        (i)  Articles on Open Source

        (ii)  Open Source Sites (iii)  Sites Promoting Net Ethics

    4.  Materials on New Forms of Intellectual Property Protection

        (i)  Articles

        (ii)  Actual and Proposed Legislation
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    Special Event

    There is no special even this week.

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    Copyright Policy
    Module assembled by Oliver Bennett.  Developed from a module by Jack Lerner.
    Last updated: February 28, 2000