IP: Major developments re: Database Protection Bills

[Dave Farber <farber@cis.upenn.edu>]

Date: Fri, 14 Aug 1998 08:50:25 -0700 (PDT)
From: Declan McCullagh <declan@well.com>




---------- Forwarded message ----------
Date: Thu, 13 Aug 1998 18:02:24 -0400
From: Alexander Fowler <afowler@eff.org>
To: declan@well.com
Subject: Major Developments re: Database Protection Bills


Declan,


Please excuse the lengthy message, but I'd like to follow up on my July
15th message to you regarding H.R. 2652 / S. 2291, "The Collections of
Information Antipiracy Act."  I thought you might be interested to learn
that the Clinton Administration has recently announced its position on
these two bills, which are intended to create new legal protections for
databases.


The Administration's position was articulated in an August 4, 1998 letter
from the Department of Commerce to Senator Leahy.  The letter was based, in
part, on an analysis of the proposed legislation prepared as a memorandum
to the White House by the Department of Justice.  The Administration
adumbrates in both of these documents several serious concerns (see below),
including that the proposed legislation is possibly unconstitutional, that
it may increase the cost of using data, that it lacks a necessary balancing
mechanism like fair use, and that, without changes, the bill could
undermine the future digital environment and evolving markets for
information.


Hopefully, this will not bode well for either bill, even though H.R. 2652
passed the House again as Title V of the WIPO bill and S. 2291 is now
pending action in the Senate.  It is my understanding, however, that unless
the Senate agrees to move on the issue in the context of the WIPO bill,
there will be a hearing in the Senate in early September.


The two Administration documents have been rekeyed and uploaded on the Web.
I've included the URLs and excerpted the two Administration documents
below.  Lastly, last week's edition of _Science_ featured an article about
this issue from the scientific/research perspective, including a very
illustrative case study.  It is my understanding that _Science_ is making
the article available on its Web site free of charge.  See Science, Volume
281, Number 5378 Issue of 7 Aug 1998, pp. 786 - 787;
http://www.sciencemag.org/cgi/content/full/281/5378/786.


Let me know if you have any questions.


Sincerely,


Alex Fowler
EFF






http://www.itaa.org/dbadmin.htm


August 4, 1998


Honorable Patrick J. Leahy
Ranking Minority Member
Committee on the Judiciary
United States Senate
Washington, DC 20510-6275


Dear Senator Leahy:


In the coming weeks, the Senate may consider S. 2291, the Senate
counterpart to H.R. 2652, the "Collections of Information Antipiracy Act."


The Administration supports legal protection against commercial
misappropriation of collections of information. We believe that there
should be effective legal remedies against "free-riders" who take databases
gathered by others at considerable expenses and reintroduce them into
commerce as their own. This situation has arisen in recent case law and we
believe that digital technology may increase opportunities for such abuses.


At the same time, the Administration has a number of concerns with H.R.
2652, including the concern that the Constitution imposes significant
constraints upon Congress's power to enact legislation of this sort.


[...]


With these principles in mind, the Administration has several specific
concerns with the present provisions of S. 2291 and H.R. 2652, including
the following:


+ The Administration is concerned that aspects of H.R. 2652 may increase
transaction costs in data use, particularly in situations where larger
collections integrate datasets originating from different parties or where
different parties have added value to a collection through separate
contributions of gathering, refining, and/or maintaining the data. This is
especially important for large-scale data management activities, where
public investment has leveraged contributions from the private and
non-profit sectors.


+ The Administration agrees with section 1204(a)'s general intent that data
collected with taxpayer funds not be subject to any database protection
regime. However, we are concerned that H.R. 2652 does not fully take into
account the data policies set forth in relevant OMB circulars and the many
different arrangements under which government-funded data are gathered,
maintained, and/or organized or under which the data may be subsequently
redistributed. It is important that legislation not create inappropriate
opportunities of incentives to "capture" government information or
government-funded data with relatively small investments in maintenance,
organization, or supplemental data.


+ Given the difficulty of foreseeing how "substantiality," "extraction" and
other terms in H.R. 2652 will play out in a complex and rapidly changing
environment, we are concerned that H.R. 2652 lacks a balancing mechanism
analogous to the fair use doctrine in copyright sufficient to address the
wide range of circumstances in which information is aggregated, used, and
reused. We are especially concerned that the section 1203(d) exception for
non-commercial research and educational uses does not ensure that
legitimate non-commercial research and educational activities are not
disrupted by the prohibition against commercial misappropriation. Equitable
issues of access and use may be especially important in markets exclusively
served by a single data producer. Finally, we believe it is important to
make clear that the legitimate data-gathering activities of law enforcement
and intelligence agencies will not be affect by the bill.


+ While the Administration appreciates the efforts of the House Judiciary
Committee to define "potential" markets as used in section 1202, we remain
concerned that this definition may be broader than market definitions used
in other areas of the law, that the definition could be subject to
manipulation by private entities, and that potentially the definition too
easily exposes legitimate business practices to substantial liability,
especially given the provisions forcalculating damages. Congress should
carefully consider how encompassing "potential markets" may affect
entrepreneurs who develop new products and services that add significant
value and do not compete directly with the original.


+ While we agree with the House Judiciary Committee's decision to shield
non-profit researchers and educators from any criminal liability under
section 1207, we believe that the existing criminal provisions could be
further refined, particularly by drawing a distinction between misdemeanor
and felony conduct and requiring minimum amounts of damage under each.


+ The Administration believes that, given our limited understanding of the
future digital environment and the evolving markets for information, it
would be desirable for the bill to include a provision for an interagency
review of the law's impact at periodic intervals following implementation
of the law. This would be consistent with laws and proposed laws in other
emerging technologies where Congress has mandated examination of a new
law's economic impact. Such a study might be conducted under the auspices
of the Secretary of Commerce in consultation with the Office of Science and
Technology Policy and the Register of Copyrights.


+ The Department of Justice has serious constitutional concerns that the
First Amendment restricts Congress's ability to enact legislation such as
H.R. 2652, and that the Intellectual Property Clause also may impose some
constraints on legislation of this sort. We note that those constitutional
concerns are closely related, in many instances, to some of the points
described above, particularly fair use, the effects on potential markets
and transformative uses of data.


We would be happy to elaborate on these constitutional questions and policy
aspects of H.R. 2652 and S. 2291.


Thank you for your time and consideration.


Sincerely,
[signed]
Andrew J. Pincus




http://www.acm.org/usacm/copyright/doj-hr2652-memo.html


U.S. Department of Justice
Office of Legal Counsel
Washington, D.C. 20530


Office of the Deputy Assistant Attorney General


July 28, 1998


MEMORANDUM FOR WILLIAM P. MARSHALL ASSOCIATE WHITE HOUSE COUNSEL


From: William Michael Treanor
      Deputy Assistant Attorney
      Office of Legal Counsel


Re:   Constitutional Concerns Raised by the Collections of Information
      Antipiracy Act, H.R. 2652.


You have asked for our views on the constitutionality of the
Collections of Information Antipiracy Act, H.R. 2652, 105th Cong.
(1998), which passed the House on May 19, 1998. H.R. 2652 raises very
difficult, and quite novel constitutional questions which are the
subject of this memorandum. The following analysis is preliminary and
general. We would, of course, be pleased to provide views directed to
more specific questions that you might have.


The object of H.R. 2652 is, in effect, to provide a quasi-property
right in certain collections of information that required great effort
to compile H.R. 2652 would impose liability upon anyone who "extracts,
or uses in commerce, all or a substantial part, measured either
quantitatively or qualitatively, of a collection of information
gathered, organized, or maintained by another person through the
investment of substantial monetary or other resources so as to cause
harm to the actual or potential market of that other person, or a
successor in interest of that other person for a product or service
that incorporates that collection of information and is offered or
intended to be offered for sale or otherwise in commerce by that other
person, or a successor m interest of that person " Id. S. 2 (proposed
17 U.S.C. S. 1202),


In assessing the constitutional concerns raised by the bill, which
would provide what is known as "sweat of the brow" protection for
certain compilations of factual material, we address three related
questions:


        (i) whether the bill constitutes a valid exercise of
        Congress's power under the Intellectual Property Clause of the
        Constitution Art. I, S. 8, cl. 8, which provides that Congress
        shall have the power "to promote the Progress of Science and
        useful Arts, by securing for limited Times to Authors and
        Inventors the exclusive Right to their respective Writings and
        Discoveries";


        (ii) whether, if the bill does not constitute a valid exercise
        of Congress's power under the Intellectual Property Clause, it
        constitutes a valid exercise of Congress's power under the
        Commerce Clause, or whether the Intellectual Property Clause
        precludes such Commerce Clause legislation; and


        (iii) whether, if the Intellectual Property Clause does not
        preclude Congress from exercising its commerce power to enact
        such legislation the First Amendment restricts such an
        exercise of the commerce power.


As to the first question, the Supreme Court's decision in Feist
Publications. Inc., v Rural Tel. Serv. Co., 499 U.S. 340 (1991),
indicates that Congress may not, pursuant to the Intellectual Property
Clause of the Constitution create such "sweat of the brow" protection
for compiled facts, at least insofar as such protection would extend
to what the Court termed the nonoriginal portion of such a
compilation. As to the second and third questions, Supreme Court
precedents do not provide clear guidance; it is fair to say, however,
that either or both the Intellectual Property Clause and the First
Amendment may impose limitations on the exercise of congressional
power under the Commerce Clause that would raise serious
constitutional concerns regarding the constitutionality of H.R.
2652.[1]


[...]






~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
  Alexander Fowler
  Director of Public Affairs
  Electronic Frontier Foundation


  E-mail: afowler@eff.org


  Tel/Fax: 202 462 5826 (East Coast)
  Tel: 415 436 9333; Fax 415 436 9993 (West Coast)


  You can find EFF on the Web at <http://www.eff.org>


  EFF supports the Global Internet Liberty Campaign
  <http://www.gilc.org>


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