Intellectual Property Rights (IPR)
Wednesday,
15 December 2004
Overview
The increasingly fast
evolution of information and communications technologies has placed enormous
pressure on the Intellectual Property legal regime throughout the world. Infringement
of intellectual property rights over the Internet has grown to unprecedented
levels. The traditional schemes of protection of copyrights, trademarks,
patents, software, databases, and so forth seem less well-suited to solve many
of the problems faced today by governments, businesses and citizens throughout
the world – especially when virtually every act makes a copy, where innovation
is happening at a rapid pace, and in an environment where sharing of
information is nearly instantaneous and costless. Virtually every country is
faced with tricky issues related to whether and how to implement international,
regional, or national reforms to its intellectual property laws. In the
context of developing countries, these issues frequently raise fears of a new form
of structurally-enforced imperialism, grounded in property rights and enforced
by the most powerful, intellectual property-exporting countries.
The Digital Media Crisis
The Digital Media Crisis demonstrates the pressures
upon the traditional system of copyright in Europe, Asia, and elsewhere in the
world. A simple shift of format – the transition from hard-copy objects
like vinyl records to digitized bits of information like MP3s – has prompted an
upheaval of business models, legal principles, and social practices associated
with the use, distribution, and control of media. This upheaval has
created a void in the digital media world, a void that policymakers, industry
representatives, and consumers are scrambling to fill with new laws and technological
solutions. While the transition to digitization has raised plenty of
questions about what is legal, lucrative, and beneficial for advancing the arts
and production of creative works, the answers are far from clear. And the
implications of the outcome of this crisis range far beyond the entertainment
goods at issue today.
A series of essentially peer-to-peer technologies –
first Napster (not truly peer-to-peer), Grokster, KaZaA, Morpheus, eDonkey, and
others – have brought with them extraodinary promise for creative, lawful acts.
But these technologies also present unprecedented challenges to the music and
movie distribution businesses, which in turn has applied pressure to
policy-makers. Many countries are
considering ways that new equilibrium between the divergent interests of
artists, performers, producers, and consumers can be achieved. Research
reveals that there are at least five plausible future scenarios for resolving
this crisis. Four of the five possible scenarios would require substantial changes
to national and international intellectual property law, business models, and
social norms.[1]
In
response to this crisis, some advocate expanding the scope of intellectual
property law in order to provide additional protection of digital assets, such
as music, movies, and text. This goal can be accomplished through the
enactment of new legislation and the expansion of "conventional"
doctrines to digital rights disputes. Others endeavor to use new legislation
to shore up technological shields developed by private industry. This approach
might involve mandating, or simply supporting, the deployment of protective
technologies and criminalize efforts to circumvent them. Last, some observers
think that intellectual property law as applied to the Internet is already
overprotective and ought to be substantially reformed. The legal and
technology environments should be adjusted in such a manner as to take
advantage of the opportunities presented by digital technologies and the
internet in particular. Legal reform ought to focus, in this line of
reasoning, on the development of a robust public domain, particularly with
respect to digital materials, to encourage new forms of creativity and reuse of
ideas and expression.
One of the key issues in Europe related to digital media, and copyright in general, is the
implementation of the European Union’s Directive 2001/29/EC, better known as
the EU Copyright Directive (EUCD), which seeks to harmonize the divergent
European copyright regimes and to transpose the WIPO-treaties. During the
intellectual property day in Tallinn, we will consider the variety of ways in
which EU member states have transposed the EUCD’s provisions on the protection
of technological measures (such as encryption, digital watermarking, copy-control
technologies, etc.) into national law, and takes a closer look at the relevant
definitions, exemptions, sanctions and remedies. EU member states continue to struggle with some of the
thorniest problems already identified at the level of the EUCD, and leave it to
the national courts and, ultimately, to the European Court of Justice not only
to fine-tune the new legislation, but also to address and resolve rather
fundamental issues related to the legal protection of technological measures. The
EUCD has led to a certain level of harmonization of member states’ laws, but
significant differences among member states in the field of anti-circumvention
laws.
Trademark and Domain Names
Just
as in the case of copyrights, the Internet provides ample opportunity for new
means of trademark infringement. Trademarks can now be infringed in ways that
reach markets through the world in seconds. At the same time, the Internet has
created enormous potential to build international brands online and for new
forms of non-commercial communication. One of the solutions proposed by the
international community includes the application of ICANN's Uniform Dispute
Resolution Policy to solve conflicts between trademark rights and domain names
in the Internet context. The UDRP and associated national laws raise issues as
to fairness, enforceability of decisions, and interaction with traditional
domestic trademark law and civil procedure. (While we will not cover these
issues in depth during the formal presentations in Tallinn, we would be happy
to discuss them and to point the way toward useful resources.)
IP Protections for Software
Like
those who distribute digital content, the software industry faces new
challenges. Lawmakers have similarly passed a series of reforms that provide
for greater protections for software, especially through the patent regime and
through database protection legislation. The scope of these protections is an
important driver in decision-making about how to develop, distribute and use
software in the digital era. Successful software development projects have
adopted a broad range of approaches to intellectual property, from the most
locked-down, proprietary model to the most determinedly “open” or "free
software" models. Key issues at present, in Europe and elsewhere, include
the controversial move to extend subject matter coverage to allow the patenting
of software, the patenting of business models, and protections extended to
databases (discussed briefly below). These protections afford software
developers the ability to profit more handsomely from their work in the
near-term, but may act to restrict innovation in the process. These patents
likewise pose problems for the extension of the open source software movement,
which offers a vibrant alternative to the dominant proprietary software
development model.
Database Protection and Recent Caselaw
In
November 2004, the European Court of Justice (ECJ) has handed down judgments in
four cases[2]
concerning the interpretation of the EU Directive on the Legal Protection of
Databases, which provides a "sui generis database right" (to
be distinguished from copyright) to the maker of a database if there has been a
substantial investment in either the obtaining, verification or presentation of
the contents of the database. The cases relate to similar factual
circumstances and concern databases of sporting information (horse racing
information and football fixture lists.) Certain pieces of information from
these databases were used by third parties for commercial gambling operations.
In proceedings before the relevant national courts, the claimants alleged that
these uses by the gambling operators were an infringement of the claimants' sui
generis rights under the Directive. In each case, the national courts referred
a set of questions to the ECJ.
In
these cases, the ECJ, inter alia, now has clarified the definition of
the term "database" as used in the Directive; determined the scope of
protection (especially with regard to the "substantial investment" requirement);
and, specified the infringement of the sui generis right through
extraction or re-utilization.
Taken together, these several
doctrinal areas – copyright, trademark, patent, database protections and so
forth – present extremely important issues, especially for developing
countries, related to the control of knowledge necessary to compete in the
global economy.
CASE
STUDIES
Case
#1: Free/Open Source Software Development
The
open source movement, like digital technologies generally, presents both
opportunities and challenges within the intellectual property context. Over
the past decade or so, a large, global community of software developers has
turned itself into a major economic and political force by developing new
software on a collaborative model, known variously as “open source”, “libre”,
and “free” software. While open source technologies have not yet become a
major player in the desktop computing space, the majority of web pages, for
instance, are served using open source technologies. Chief Information
Officers of corporations, government agencies, and other large institutions
around the world routinely run flavors of LINUX, a major open source platform,
as either the predominant or at least a substantial part of their IT systems.
International technology firms, most prominently IBM and Sun Microsystems, have
championed the use of open source technologies. Even Microsoft, ordinary
perceived as the world’s proprietary software leader, has begun to offer major
segments of its software to users under its growing “shared source” program.
Open
source presents opportunities to countries that are growing their ICT
infrastructure because it is often a low-cost software choice (and free, at
least in its simple form), more secure than some proprietary technology choices
(according to many technologists, though this assertion is controversial), and
can foster a local technology development community rather than sending license
streams to large technology companies in other countries, frequently the United
States. Countries and municipalities frequently consider policies to favor
open source technologies over proprietary choices. Consider also the case of
the city of Munich’s high-profile decision to procure open source solutions
instead of Microsoft products in 2003 (see
http://europa.eu.int/ida/en/document/2000). The debate over such choices rages
in capitals around the world.
The
intellectual property regime related to open source software, however, is not
altogether clear. Most open source technologies are, in the first instance,
protected by copyright, and then distributed by their authors to others subject
to one of about 50 open source or free software licenses, such as the GPL or
BSD. These licenses frequently require those who would re-use open source
technologies to do certain things, such as re-releasing any derivative works in
a certain format and subject to similar forward-looking restrictions. Doubts
have cropped up about the legality of such licenses, which have only rarely been
tested in court. Likewise, some purported rights-holders in the chain of title
to important open source code have challenged end uses of the technologies on
intellectual property grounds, most prominently in the case SCO v. IBM,
pending in the United States court system and which could have implications for
open source software development projects around the world.
Activists
and policy-makers are presented with a series of problems related to open
source. Is promotion of open source technologies, rather than proprietary
choices, sound public policy? Does the intellectual property regime, whether
in individual countries or in a global sense, need to be adjusted to support
open source technology development? What do local software developers have to gain
from a legal and policy regime supportive of open source technologies?
Case
#2: Dmitry Sklyarov and the International Reach of Intellectual Property Laws
One
of the most pressing issues related to the development of intellectual property
laws and the internet is the management of conflicting legal regimes over
international borders. On the one hand, harmonization and cooperation across
national borders would no doubt help the flow of commerce, as supporters of the
TRIPS and WIPO regimes argue; on the other, such harmonization and enforcement
would likely export and re-inforce the existing United States-based view of
intellectual property law, which is a relatively strong strand of protection
for copyright holders and those who make copy-protective technologies. The
Dmitry Sklyarov case presents a variant of this problem: how United States law and technologies itself can affect the actions of those based in the Eurasia region.
With
annual revenues of more than $1 billion, Adobe is the second largest PC
software company in the U.S. In an effort to lead the market for software that
enables the digital distribution of books, Adobe developed the Adobe Acrobat eBook Reader (now integrated into Adobe Acrobat Reader). Development
of the market for digital book distribution software also requires adoption of
the technology by book publishers. Adobe's eBook Reader is designed as a
‘trusted system’, offering publishers a spectrum of copyright protection
options when encoding their content.
Founded
in 1990 and headquartered in Moscow, ElcomSoft is a software company that
"specializes in producing Windows productivity and utility applications
for businesses and individuals." Among the many software products
developed by ElcomSoft is the "Advanced eBook Processor (AEBPR)", which used to be available for download from
their site (but seems to have been removed). The program enables users to: i)
disable the copyright protection controls deployed by book publishers using
Adobe's software and ii) repackage their digital books in a variety of common
formats without copyright controls.
Dmitry
Sklyarov is a young programmer and cryptographer formerly employed by ElcomSoft
who has been researching cryptanalysis in furtherance of a Ph.D. he hopes to
earn from a Moscow University. He is allegedly responsible for much of
ElcomSoft's AEBPR, most notably, the decryption algorithms it employs to
circumvent Adobe's copyright protection controls.
In
its first criminal prosecution under the Digital Millenium Copyright Act
(DMCA), the U.S. Department of Justice ("D.O.J.") indicted both
ElcomSoft and Sklyarov for violations stemming from the development and
marketing of ElcomSoft's AEBPR. (Adobe officers brought ElcomSoft's AEBPR to
the attention of the FBI on June 26, 2001.) Sklyarov was most likely targeted
largely because of his plans to enter the United States for a conference in Las Vegas (making it easier for the D.O.J. to persuade a U.S. court to exert jurisdiction
over him). The Electronic Frontier Foundation (EFF) tells the dramatic story as
follows:
[Sklyarov] was invited to
give a presentation at the DEF CON conference in Las Vegas about the electronic
security research work he has performed as part of his PhD research. His
presentation concerned the weaknesses in Adobe's eBook technology software.
Dmitry was arrested at his hotel in Las Vegas, on 16 July, [2001,] as he was
leaving to return to Russia.
In its August 28, 2001 press release, the D.O.J. reported:
The United States
Attorney's Office for the Northern District of California announced that Elcom
Ltd. (also known as Elcomsoft Co. Ltd.) and Dmitry Sklyarov, 27, both of Moscow, Russia, were indicted today by a federal grand jury in San Jose, California on
five counts of copyright violations.
The defendants were each indicted on one count of
conspiracy to traffic in technology primarily designed to circumvent, and
marketed for use in circumventing, technology that protects a right of a
copyright owner, in violation of Title 18, United States Code, Section 371; two
counts of trafficking in technology primarily designed to circumvent technology
that protects a right of a copyright owner, in violation of Title 17, United
States Code, Section 1201(b)(1)(A); and two counts of trafficking in technology
marketed for use in circumventing technology that protects a right of a
copyright owner, in violation of Title 17, United States Code, Section
1201(b)(1)(C).
Sklyarov's
arrest prompted outcries of outrage from software developers, civil
libertarians and all who generally oppose the DMCA (for ideological or
"practical" reasons). He faced a maximum fine of $2.25 million and
up to 25 years imprisonment. Not surprisingly, the D.O.J. promptly reached an
agreement with Sklyarov, under the terms of which they have agreed not to
prosecute him personally if he assists in their (criminal) prosecution of
ElcomSoft.
On
December 17, 2002, a federal jury acquitted ElcomSoft of all criminal charges against it and
Sklyarov was released subject to a plea agreement. This case is highly
fact-specific and unlikely to be repeated. But it demonstrates the power and
reach of copyright-related laws – such as the US’s DMCA – outside the
geographic boundaries of a given jurisdiction. It also raises issues that a
country debating adoption of similar anti-circumvention provisions (as
prompted, for instance, by the EUCD) might be well-advised to bear in mind.
Background Materials
A Comprehensive Guide to European Law – Summaries of Legislation
– Intellectual Property, at http://www.europa.eu.int/scadplus/leg/en/s06020.htm.
WIPO Treaty at http://cyber.law.harvard.edu/globaleconomy/3.3_WIPO.doc.
Implementation of the EU Directive at http://www.patent.gov.uk/about/consultations/eccopyright/annexb.htm.
William W. Fisher, III, Promises to Keep, Chapter 6
(Stanford University Press, 2004), at http://cyber.law.harvard.edu/people/tfisher/PTKChapter6.pdf.
Foundational Whitepaper Five Scenarios for Digital Media in
a Post-Napster World, released by the Berkman Center in November 2003, at http://cyber.law.harvard.edu/home/uploads/286/2003-07.pdf.
John Palfrey, Boston Globe Op-ed, The Digital Copyright
Crisis, at http://www.boston.com/news/globe/editorial_opinion/oped/articles/2004/09/07/the_digital_copyright_crisis/.
WIPO Guide to the Uniform Domain Name Dispute Resolution
Policy (UDRP), at http://arbiter.wipo.int/domains/guide/index.html.
ECLIP: Domain Names: Trademark Conflicts and Related Issues,
at http://europa.eu.int/ISPO/legal/en/lab/991216/recomm_domain_names.pdf.
Readings for the module “Alternatives to Intellectual
Property”, at http://cyber.law.harvard.edu/ilaw/harvard_2004_alternativestoip_content#readings.
iTunes Europe: A Preliminary Analysis, at http://cyber.law.harvard.edu/media/itunes_europe.
EUCD Implementation study and interactive chart, at http://cyber.law.harvard.edu/media/eucd.
[1] See http://cyber.law.harvard.edu/media
for more on these five scenarios and a variety of other research reports
related to the Digital Media crisis. See also William W. Fisher III, Promises
to Keep: Technology, Law and the Future of Entertainment (Stanford, 2004).
[2] Judgments of the Court in the cases: Fixtures Marketing Ltd v.
Oy Veikkaus Ab; The British Horseracing Board Ltd and Others v. William Hill Organisation
Ltd; Fixtures Marketing Ltd v. Svenska Spel AB; and Fixtures Marketing Ltd v.
Organismos prognostikon agonon podosfairou (OPAP).