Legislation to safeguard electronic database companies' future, potentially lucrative business ventures was passed by the House today.
Rep. Howard Coble's (R-North Carolina) Collections of Information Antipiracy Act would make it illegal to extract information from a database and make it available elsewhere--if such an act would "harm" the database company's current or potential business.
The bill would apply to information "that has been collected and has been organized for the purpose of bringing discrete items of information together in one place or through one source so that users may access them."
Reminiscent of a copyright case the National Basketball Association lost to prohibit the real-time broadcasting of its game statistics, the bill defines information as "facts, data, works of authorship, or any other intangible material."
Violators could be fined up to $250,000 or imprisoned for a maximum of five years if they are found to cause a database company "losses or damages aggregating $10,000 or more in any one-year period."
Amendments to the bill outline some exemptions for educational and scientific research, along with news gathering, and the bill does not apply to databases behind the Internet addressing system or telecommunications systems, for example. Still, some worry the legislation gives database owners indefinite control over the information they harness and how it can be packaged and sold.
Moreover, opponents argue the prices of such services could skyrocket because existing database companies could have a long-term hold on the market if the bill is passed by the Senate and signed into law.
"The bill is so sweeping, and goes so far, we haven't even begun imagining all the problems it could cause," said Jonathan Band, an attorney for Morrison & Foerster who represented the Online Banking Association during congressional hearings on the bill.
"This has a negative impact on all businesses because it really gives the big database companies a huge amount of control over downstream uses of their information," he added. "For example, if a bank gets its financial information from a certain database publisher and the bank wants to reconfigure the information for its own purposes, that kind of reconfiguring, which goes on every day now, would be prohibited under the bill."
Academics say the exceptions for research don't go far enough.
"The exemptions for educational, scientific, and research uses appear too narrow to support current university information-use practices," Debra Stewart, dean of the Graduate School at North Carolina State University and a spokesperson for the Association of American Colleges and Universities, testified before the House Judiciary Committee in February.
"I cannot state too strongly my concern with the potential of H.R. 2652 to interfere with the operation of current research and education programs and to stifle university development of expanded and enriched programs and applications in the networked environment," she added.
But database owners counter that the proliferation of CD-ROMs and the explosion in Net use make it easier for their products to be duplicated. Although these companies don't own the copyrights on the material they catalog, the success of their businesses relies on delivering the most current information in an easy-to-search format.
Earlier this year, the American Medical Association testified that U.S. databases needed increased protections due to a pending European Union privacy directive going into effect this fall that would give U.S. databases fewer protections than those created in Europe.
The AMA licenses and sells at least six databases that offer medical and scientific information to physicians and the public.
"The accuracy and up-to-date nature of these databases is extremely important to the public as well as the AMA," Richard Corlin of the AMA testified before the House committee. "The AMA needs to prevent unauthorized use and copying of these databases in order to preserve the uniformity and integrity of these databases as well as protect the revenue streams necessary to maintain the databases."
Congress is swiftly moving to update intellectual property laws to include new protection for digital works.
On Friday, the Senate unanimously approved legislation to expand copyright protections for online music, film, literature, and software, which outlaws technologies that can crack copyright-protection devices.