Compromise on copyright bill

Federal lawmakers have reached a compromise on copyright legislation that would drastically alter consumers' rights when it comes to online research and e-commerce. However, broad powers for database owners to safeguard their entire collections have been scrapped, sources say.

The House and Senate have passed different versions of the Digital Millennium Copyright Act, and a joint-house conference committee has been hashing out the final details of the complex bill to strengthen the protections for music, software, and written works on the Net.

The final conference legislation is expected to surface late tonight or tomorrow, and has to be approved once more by the House and Senate before being sent to President Clinton.

At least one hotly debated section to lay out new protections for electronic databases was killed by the committee, according to sources. The provision was added to the House version of the bill late in the game to let database owners--such as Lexis-Nexis or sports-score aggregators--safeguard their entire data collections, prohibiting others from using the volumes of public facts in these databases to develop other businesses.

Sen. Orrin Hatch (R-Utah) is now expected to bring up the database legislation as a separate bill next session, as the database issue was not argued in the Senate this time around. In May, the House passed the Collections of Information Antipiracy Act to 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 very broad coalition of organizations that were opposed to premature action on database legislation are extremely pleased that sweeping changes in intellectual property law will not be made without the valuable input of the Senate," said Adam Eisgrau, legislative counsel for the American Library Association.

The Digital Millennium Copyright Act was drafted to implement treaties signed at the World Intellectual Property Organization's Geneva conference on digital information and copyrights in December 1996. But the U.S. bills go much farther than the treaties.

The recording, film, and software industries are staunch proponents of the legislation because they say that although the Net offers them new business opportunities, the medium also makes it easier for people to illegally copy and distribute their products.

These industries pushed a section--that the conference committee left in--to make it a crime in the United States to create or sell any technology that could be used to break copyright protection devices such as encryption or digital watermarks. Violators could be charged up to $2,500 per act of circumvention.

Academic and consumer groups say the so-called black box provision lets companies build a digital toll gate around their content, charging people every time they access material that is now free in a library or purchased for indefinite use such as films in a home video collection.

The conference committee bill permits cracking copyright protection devices to conduct encryption research or for the purpose of product interoperability, and requires the librarian of Congress to work with the Commerce Department to study whether the technological barriers stifle fair-use access to copyrighted materials after the bill is passed.

There also are exceptions to the copyright device rule for security firms under the joint-house bill.

"The [lawmakers] acknowledged that this could have threatened the livelihood of computer security firms that do the necessary testing, detection of flaws and potential leaks in firewalls, software, networks, and other systems because that work requires them to circumvent [copyright] protection systems or use tools are considered 'anticircumvention' products," said Marc Pearl, general counsel for the Information Technology Association of America.

"But we are very excited that we now have a model piece of legislation for what we need in the global environment," he added.

The bill passed by both chambers also carries a handful of safe harbors that limit Net access providers' liability for copyright infringements made by their customers.

Finally, the conference bill still contains a provision--created jointly by the Recording Industry Association of America, the Digital Media Association, and members of Congress--to require Webcasters--such as the budding group of Net radio stations--to pay licensing fees to record companies, which could take a large chunk out of their gross revenues.