Jean Monnet Center at NYU School of Law

The Software Copyright Directive and the Internet


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[1] The Internet is the largest and most well known of many computer networks currently in existence. In this paper, the term ÒInternetÓ will be used interchangeably with Òinformation superhighwayÓ, Ònetworked environment", "cyberspace", and "information society" to refer to, generally, the domain one of these large networks. The characteristics of these networks are described further infra, at page 40.

[2] A Lexis/Nexis search for 1993 news stories focused on the ÒInternetÓ turned up 837 articles. The same search generated 20,210 stories printed in 1995.

[3] Paul Mallam, Copyright and the Information Superhighway: Some Future Challenges, 6 Entertainment L. Rev. 234, 235 (1995).

[4] John Angel, Legal Risks of Providing Services on the Internet, 11 Computer Law & Practice at 150 (1995).

[5] See, e.g., John Auerbach, Premium Fees the Next Wave for ÒNet Surfers, The Boston Globe at 1 (April 18, 1996).

[6] Commission of the European Communities, Communication: EuropeÓs Way to the Information Society: An Action Plan 1 COM 94, 347 final (19 July, 1994).

[7] Id. at 4-6.

[8] Andrew Christie, Reconceptualising Copyright in the Digital Era, 1995 Eur. Intell. Prop. Rev. at 522.

[9] Raymond T. Nimmer & Patricia Ann Krauthaus, Copyright on the Information Superhighway: Requiem for a Middleweight, 6 Stan. L. & Pol'y Rev. at 25 (1994).

[10] John Perry Barlow, The Economy of Ideas: A Framework for Rethinking Patents and Copyrights in the Digital Age (Everything You Know Abtou Intellectual Property Is Wrong), Wired 84 (March 1994).

[11] See, e.g., Henry H. Perritt, Jr., Law and the Information Superhighway 30-31 (1996) (ÒDespite the phenomena that make the NII interesting, it is not revolutionary. It is not necessary to scrap legal doctrines or institutions worked out in the context of other information technologies.")

[12] The Treaty of Maastricht brought European closer together in a European Union. This Union is made up of three pillars, the central one of which is the European Communities. See Josephine Shaw, E.C. Law 5-6 (1993). This paper will speak primarily in terms of the ÒE.C.Ó

[13] Commission of the European Communities. Green Paper: Copyright and Related Rights in the Information Society. COM 95, 382 final (July 17, 1995) [hereinafter EC Green Paper]. A copy is reproduced in Appendix II.

[14] Bruce A. Lehman, Intellectual Property and the National Information Infrastructure: The Report of the Working Group on Intellectual Property Rights (Sept. 1996) [hereinafter NII White Paper].

[15] EC Green Paper, supra note 13 at 3, 41. NII White Paper, supra note 14 at 10-11.

[16] To the extent that for-profit enterprises are on the web, it is largely in an advertising or marketing posture where dissemination of their materials would actually be seen positively.

[17] Council Directive of 14 may 1991 on the Legal Protection of Computer Programs, Directive 91/250/EEC, OJ no L 122/42 [hereinafter Software Directive]. Reproduced in Appendix I.

[18] Stephen M. Stewart, International Copyright and Neighbouring Rights ß 1.11 at 5 (2ed. 1989).

[19] In addition to the continental authorÓs rights system and the common law copyright system, there are distinct socialist and developing country copyright models. These systems, however, do not feed into the legal framework for the E.C. For a discussion of the early evolution of the families of European copyright doctrine, tracing the divergence of the droit d'auteur from the common law copyright, see Paul E. Geller, International Copyright: An Introduction, in 1 International Copyright Law and Practice INT-15-25 (Meville B. Nimmer & Paul Edward Geller, eds., 1995).

[20] Stewart, supra note 18, ßß 4.39-42 at 72-74.

[21] Id. at §1.14 at 6-7.

[22] Id. at ßß7.07-09 at 188-90.

[23] The concept explicitly underlying common law copyright is the simple idea of ensuring the author an economic return on their work. An author incurs substantial development costs in creating a literary or other work. Without a copyright, there is no impediment to other producers copying the work and selling it. Because these infringers would have no development costs from simply appropriating the original authorÓs creativity, they would be able to produce and sell the work more profitably than the original author who had provided society with the advancement. Therefore, the system has created a limited monopoly so to incentivize progress and creation through profit.

[24] Id. at ß1.15 at 7-8.

[25] U.S. Const. art I, ß8, cl. 8.

[26] Stewart, supra note 18, ß1.15 at 7-8.

[27] 17 U.S.C. ß 102(a) (1988).

[28] 17 U.S.C. ß 102(b) (1988).

[29] Originality does not mean that the work is entirely novel, as in patent law, but rather that it originated with the author himself. Two works which were the same, but created independently, would both be eligible for copyright protection assuming they met the other criteria.

[30] See generally Geller, supra note 19 at INT 32-33.

[31] This difference feeds in from the underlying philosophical difference. To receive a type of natural law right for your creation, one would expect a requirement of creating something special. However, from a utilitarian view, even the most mundane work, if useful, should deserve some type of protection in order to create incentives for the production of these works.

[32] Geller, supra note 19 at INT-30.

[33] As opposed to a purely expressive work, such as literature, where much of the value is in the choice of expression.

[34] See Jane C. Ginsburg, Putting Cars on the ÒInformation SuperhighwayÓ: Authors, Exploiters, and Copyright in Cyberspace, 95 Colum L. Rev. 1466, 1495 (1995). See also NII White Paper, supra note 14 at 130-155.

[35] Paul Geller supra note 19 at INT 49-50.

[36] Id. at INT-47.

[37] Cf. Treaty Establishing the European Economic Community [EEC Treaty], Mar. 25, 1957, art. 3(a), 298 U.N.T.S. 11 [hereinafter Treaty of Rome], setting out as a purpose of the Community Òthe elimination, as between Member States, of customs duties and of quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect.Ó

[38] Robert Rosenbloum has asserted that "[u]ntil the mid-1980's, the language of the prevailing European Court of Justice decisions, as well as the communiques of the Commission and the Council, suggested that copyright protection was altogether subservient to Community trade and competitions law. Recently, however, a growing respect for copyright has evolved." Robert A. Rosenbloum, The Rental Rights Directive: A Step in the Right and Wrong Directions, 15 Loyola Entertainment Law Review 547, 549(1995). See also Peter Stone, Copyright Law in the United Kingdom and the Euopean Community ix (1990) (noting that as E.C. activities have increasingly affected copyright, there has been a shift from concern strictly about impeding trade between member states to recognizing copyright's value).

[39] Commission of the European Communities. White Paper: Completing the Internal Market. COM 85, 310 final, at 149.

[40] Commission of the European Communities. Green Paper: Copyright and the Challenge of Technology--Copyright Issues Requiring Immediate Action. COM 88, 172 final (August 23, 1988).

[41] Id. at 174.

[42.] Jean-Francois Verstrynge, Protecting Intellectual Property Rights within the new Pan-European Framework: Computer Software, in A Handbook of European Software Law, at 1 (M. Lehmann & C.F. Tapper, eds., 1993)

[43] The other countries included Denmark (in the process of enacting legislation) and Italy, the Netherlands, Ireland, and Portugal (all considering draft legislatioin based on copyright). In fact, Verstrynge suggests that this recent consideration of copyright by a number of Member States, as well as the U.S. and Japanese use of copyright as a method to protect software, created a conservative mood toward considering alternative frameworks, such as sui generis protection, for handling software.

[44] The two articles centrally at issue in copyright read as follows: Article 30 ÒQuantitative restrictions on imports and all measures having equivalent effect shall, whthout prejudice to the following provisions, be prohibited between Member States.Ó, Article 36 ÒThe provisions of Arts. 30 to 34 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protections of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.Ó,Treaty of Rome, Arts. 30, 36.

[45] The Court of Justice implicitly considered Òintellectual propertyÓ to be Òindustrial and commercial propertyÓ in its Coditel v. CinÈ Vog Films S.A. decision. Case 62/79, Coditel v. CinÈ Vog Films S.A., 1980 E.C.R. 881. The Court of Justice more explicitly determined that there was no reason for a distrinction between intellectual property and industrial and commercial property in a later copyright decision. See Joined Cases 55 and 57/80, Musik-Vertrieb Membran GmbH and K-tel International v. GEMA, 1981 E.C.R. 147.

[46] See supra note 34 and accompanying text.

[47] Case 24/67, Parke, Davis & Co. v. Probel, Reese, Beintema-Interpharm and Centrafarm, 1968 E.C.R. 55 at ¶ 13.

[48] Case 78/71, Deutsche Grammophon GmbH v. Metro-SB-Groþmärkte Gmbh, 1971 E.C.R. 487 at ¶ 11. Note that the court also similarly discussed the Òsubject matterÓ of the right, to the same effect.

[49] Id. at ¶ 13.

[50] Case 58/80, Dansk Supermarked A/S/ v. A/S/ Imerco, 1981 E.C.R. 181 at ¶ 12.

[51] Case 341/87, EMI Electrola GmbH v. Patricia Im- un Export and Others, 1989 E.C.R. 79.

[52] Id. at ¶¶ 10,14.

[53] Id. at ¶ 11.

[54] This problem also complicates the efforts of the major industrialized countries to achieve global harmonization on copyright issues. While the U.S., often wih a strong market position in the goods to which harmonization is intended to apply, takes a common law copyright approach, most of its trading partners take an author's rights approach to protecting software. If the Software Copyright Directive and the Database Directive can be taken as an indication of a stronger utilitarian position on behalf of the European countries, these difficulties may be lessened in upcoming efforts.

[55] Cf. Arthur R. Miller, Copyright Protection for Computer Programs, Databases, and Computer-Generated Works: Is Anything New Since CONTU?, 106 Harv. L. Rev. 978, 981 n.9 (1993) (Òthe E.C. arrived at essentially the same conclusions [about creating a system to protect software] as did the American Commission). See, generally, Final Report of the national Commission on New Technological Uses of Copyrighted Works (July 31, 1978), reprinted in 3 Comp. L. J. 33-104 (1981-82).

[56] In the U.S., the doctrine of Òfair useÓ governs exceptions to copyright. Rather than providing for specifics, such as the E.C. decompilation exception, the U.S. statute includes a general test, considering the purpose and character of the use, the nature of the copyrighted work, the proportion that was "taken", and the economic impact of the taking. 17 U.S.C. § 107.

[57] Software Directive, Art. 1(1).

[58] Software Directive, Art. 2(2). Further clarifying the idea-expression dichotomy, this article is also very clear that the ideas underlying interfaces are also not to be protected by the Directive.

[59] Software Directive, Art. 1(3)

[60] Software Directive, 8th Recital.

[61] Inkassoprogramm, Decision of 9 May 1985, GRUR 1985, at 1041.

[62] Betriebsystem, Decision of 4 October 1990, CR 1990/2 at 80.

[63] Bridget Czarnota and Robert J. Hart, Legal Protection of Computer Programs in Europe--A Guide to the EC Directive 9 (1991).

[64] Id.

[65] Commission of the European Communities, Proposal for a Council Directive on the Legal Protection of Computer Programs, Comm 88, 816 final (Jan. 5, 1989).

[66] This should not be confused with the doctrine of merger, which suggests if there are so few ways to express an idea that copyrighting the expression excludes others from using the idea, this expression will not be copyrightable.

[67] Czarnota and Hart, supra note 63 at 36.

[68] See Pamela Samuelson, Consequences of Differences in the Scope of Copyright Protection on an International Scale, Unpublished Paper delivered at Symposium on ÒInformation, National Policies, and Internal Infrastructure, Harvard law School (January 29-30, 1996) (copy on file with author). Samuelson recognizes a difference in opinion between those who believe the E.U. will follow the three-step abstraction, filtration, comparison test outlined in Computer Associates v. Altai, 982 F.2d 693 (2d Cir. 1992) and those who think that Europe will adopt its own test. She suggests that European courts will be likely to adopt a substantially different test or standard because, despite the lack of a current standard articulated from European caselaw, the low level of protection likely to follow from applying Altai will provide the internal design elements of software with less protection than was intended by the Commission. I am not sure that the E.C. will adopt this course. The basis for her argument is that the Altai test, after abstraction--breaking down the programs elements into various elements--requires filtering out unprotectable elements from the work. In the Directive, unprotectable elements are defined as ideas and principles, whereas 17 U.S.C. § 102(b) excludes from protection "any idea, procedure, process, system, method of operation, concept, principle or discovery...." Samuelson argues that, beyond possible rejection of the Altai test because it may mean "thin" protection, application of the Altai test in Europe would filter out fewer things because the Directive excludes fewer things than § 102(b). Czarnota and Hart imply, however, that the more exhaustive list in the U.S. statute is consistent with the concept of ideas and principles, and may be covered by the Directive's use of "in accordance with this principle of copyright" in Recital 15, which establishes the non-protection of ideas and principles, including logic, algorithms, and programming language. Czarnota and Hart, supra note 63 at 124. If these two approaches are, in fact, the same idea expressed in different terms, filtration will remove the same things. In the context of this paper, the more important issue is not whether U.S. and European courts will differ, but whether, absent Community guidance, national courts will achieve a similar resolution of this conceptually dificult problem.

[69] See Lotus Development Corporation v. Borland International, Inc., 49 F.3d 807 (1st Cir. 1995), affirmed per curiam, 116 S. Ct. 804 (1996). In Lotus, the courts considered a complex question of whether internal menu hierarchies and macros should be covered by the Lotus copyright or whether they should be considered unprotected process and methods of operation. Unfortunately, the Supreme Court failed to provide clear resolution to the question. With one Justice abstaining, the Supreme Court split evenly and affirmed the First Circuit's decision to overrule the district court and not to grant protection per curiam, thus leaving rules for permissible business practice unclear.

[70] Software Directive, Art. 2(1).

[71] Software Directive, Art. 2(2).

[72] Software Directive, Art. 2(3).

[73] The prohibition with respect to rental is carried forward by the subsequently passed Directive On Rental Rights and Lending Right and on Certain Rights Related to Copyright in the Field of Intellectual Property, OJ 1992 L346.

[74] Software Directive, Art. 4.

[75] Software Directive, Art 5(1), 17th & 18th Recitals.

[76] Software Directive, Art. 5(2).

[77] Computer software is typically written in a high level language such as C++ or Pascal. The programs in these languages make up the source code and can be read and understood by programmers. The actual code contained in a marketed product is in machine readable object code, which was compiled from the source code. Object code contains strains of bianary numbers which not even a talented programmer can decipher. Decompilation involves taking a product back into source code to so that a programmer can read and understand what it does. Although generally prohibited, as this is when programmers can steal expression, the Directive permits decompiling to find necessary interface information. Understanding a programs interface permits other programs to be designed to interoperate with it.

[78] Software Directive, Art. 7. Note that the standard for liability on possessing or circulating an infringing copy is knowing, or having reason to believe, that it is an infringing copy.

[79] NII White Paper, supra note 14 at 230-234.

[80] For an outstanding introduction to more technical elements of information infrastructures, see Perritt, supra note 11 at Chapter 1.

[81] For a more detailed explanation of the protocols, set-ups, and search engines involved in using the Internet, see NII White Paper, supra note 14 at 179-182.

[82] For example, when searching for information and comment on the NII White Paper one evening, I accessed the World Wide Web through the Harvard Law School server. After clicking a jump from a bulletin board in California, I found some interesting comments at another site and downloaded them. Only after I was done and decided to explore that site further did I realize I was connected with a computer in Scandinavia.

[83] Bandwidth of phone lines regulating data across phone lines can be thought of in the same way as a pipe's size regulates the volume of water that can flow through it. Compression increases the amount of data that can flow across any given bandwidth line.

[84] Mallam, supra note 3 at 235.

[85] Id. at 234.

[86] Angel, supra note 4 at 150.

[87] Mallam, supra note 3 at 235.

[88] Id.

[89] One author has illustrated this vividly, stating that Ò[s]elling computer programs (or for that matter, other works in digital form) has become comparable to selling a customer the Ford automotive plant at the same time as selling him or her a Ford automobile. Each copy of the program has the potential to become its own factory." Pamela Samuelson, Digital Media and the Law, Communications of the Association for Computing Machinery, Oct. 1991 at 24.

[90] See Perritt, supra note 11 at 627-8. Shutting off traffic because of a narrow problem also affects greater amounts of legitimate traffic, as demonstrated by the German government's recent attempts address obscene material available via Compuserve from Canada.

[91] Czarnota and Hart, supra note 63.

[92] This focus of this paper is primarily on what the Software Directive can achieve within the E.C. to protect software. A complementary, and fascinating, issue is how international law of jurisdiction might apply to activities on the Internet which take place outside a countryÓs territory, but Òhas or is intended to have substantial effect within its territory." Restatement (Third) § 402. The reasonableness and intrusiveness on sovereignty of such an exercise of jurisdiction is controversial. The Internet's nature of functioning makes these questions particularly interesting because, once an individual has placed materials on a server, there is almost no control over the situs from where those materials are received. This differs from the case of a foreign user intentionally sending a copy of software directly into a Member State which can be more easily analogized to current Member State treatment of regular mail or from intentional broadcasting with the knowledge your transmission will be received in an adjoining state. For a further discussion of international jurisdiction, see Louis Henkin, Richard Crawford Pugh, Oscar Schachter, & Hans Smit, International Law: Cases and Materials, 1046 et. seq. (3rd ed. 1993); For a more specific discussion of the particular jurisdictional questions raised by cyberspace, see Anne Wells Branscomb, Jurisdictional Quandaries for Global Computer Networks, in Global Networks: Computers and International Communication 84 (Linda M. Harasim ed., 1993).

[93] The Directive specifies what may not be forbidden by contract, what should require the authorization of the rightholder, and what should not require the authorization of the rightholder. Software Directive, Recitals 18, 19, 22, Arts. 4,5,6.

[94] See EC Green Paper, supra note 13 at 47 (ÒArticle 4(c) of the Computer Programs Directive...exclude[s] international exhaustion in [its] relevant [field]."). See also Czarnota and Hart, supra note 63 at 60 (explaining that first sale in the USA, for example, does not exhaust rights to control resale within the Community).

[95] Such a distortion might arise if, for instance, Germany considered a rightholderÓs rights exhausted with respect to sale in Germany of programs originally sold with the rightholderÓs consent in Russia, while Denmark retained the rightholder's distribution right with respect to those copies in Denmark, thus forbidding their sale.

[96] See discussion, supra at 31.

[97] Menu hierarchies refer to the wording and ordering of menu commands used in a program. For example, in a word processor, a typical menu hierarchy is the ordering of elements such as Cut, Copy, Paste, Paste Special, and so on, under the Edit command.

[98] For instance, a U.S. consumer software product developed in part by my wife contains code developed individually or jointly by other developers collaborating via a network in three separate state jurisdictions. The same development possibilities would be possible for developers in, for instance, Italy, Spain, and the U.K.

[99] Alfred P. Meijboom, The EC Directive on Software Copyright Protection, in Copyright Software Protection in the EC 1, 10 (Herald D.J. Jongen and Alfred P. Meijboom, eds., 1993).

[100] Despite recognizing the conflict, Meijboom concludes that Ò[e]mployee-autors should not, however, expect much practical effect from the retaining of their moral rights." Id.

[101] EC Green Paper, supra note 13 at 67. Despite the lack of interference with exploitation, however, the Commission did find that the ease with which digital works can be modified raises a question of Òwhether the present lack of harmonization [of moral rights] will continue to be acceptable....Ó

[102] Of course, language may still provide a barrier here, but once developed, it is as just easy for the Irish firm to distribute a German language version to the German market, as it is for the company in Munich.

[103] It would seem that databases and software are unique in this regard. They share characteristic that contrast with many manufactured products. For example, both are in digital format and can be transferred and accessed faciley across computer networks. On the other hand, they contrast with many other digitizable products, such as sound recordings or publications, in that they are the subjects of harmonization efforts within the community.

[104] See Anne Wilkinson, Software Protection, Trade, and Industrial Policies in the E.C., in A Handbook of European Software Law, 26, 29 (M. Lehmann & C.F. Tapper, eds., 1993)(ÒThere are said to be three major threats to copyright in computer software in practice: private (non-competitive) copying, ÒcloningÓ, and counterfeiting.Ó).

[105] Czarnota and Hart, supra note 63 at v.

[106] Id.

[107] See E.C. Green Paper supra note 6 at 3 ([T]he creation of new works and services requires substantial investment, without which the scope of the new services being offered will remain very limited. This very range and variety of services will encourage the development of infrastructures. Without that contribution there would be little point in investing in infrastructures....Ó).

[108] Michael Sucker, The Software Directive--Between Combat against Piracy and the Preservation of Undistorted Competition, in A Handbook of European Software Law, 11,16 (M. Lehmann & C.F. Tapper, eds., 1993).

[109] This should not be confused with the very relevant question of whether copyright is viable in a networked world because of enforcement difficulties. This is the major focus of the latter portion of this paper, infra at page 73 et seq.

[110] Although this question continues to be a subject of academic debate, the fact that many countries had started down the copyright road kept it from being a matter of much contention in creating a proposal for a system to protect software. See Verstrynge, supra note 42 at 1.

[111] See Software Directive, Art. 1(1). Other possibilities would be patent protection or sui generis protection.

[112] See, e.g., Pamela Samuelson, Randall Davis, Mitchell Kapor & Jerome H. Reichman, A Brief Manifesto on the Legal Protection of Computer Programs, 94 Colum. L. Rev. 2307 (1994) (arguing for a regime that protects functionality). See, also Michael Lehmann, TRIPS, the Berne Convention, and Legal Hybrids, 94 Colum. L. Rev. 2621 (1994) (arguing the copyright provides sufficient protection for software).

[113] It also seems unlikely at this point that this topic could be reopened. Now that Europe has settled on copyright for software and the international community has established software copyright as part of TRIPS, any movement away from copyright treatment would appear doubtful. See Czarnota and Hart, supra note 63 at 30. (ÒMuch has been said and written in the past about the choice to be made between copyright protection for computer programs and a sui generis form of protection. The Directive puts an end to that debate within the Community."). But see Andrew Christie, Designing Appropriate Protection for Computer Programs, 1995 Eur. Intell. Prop. Rev. 486. (Suggesting that, although many view the question of the appropriate form of software protection dead after the Software Directive and TRIPS, "the issue is in fact far from dead. At the very time when there is an international consensus for the protection of computer programs under copyright, the case law of those demonstrating just how inappropriate is this approach.")

[114] Allen N. Dixon and Laurie C. Self, Copyright Protection for the Information Superhighway, 466 Eur. Intell. Prop. Rev. 465 (1994). Dixon and Self take a helpful look at the issue and suggest that, much like with todayÓs phone call, the human activity at each critical juncture of the infrastructure will be regulated by the Directive. I agree directionally with the conclusion that the Directive is workable in the new environment, but, as is developed below, I feel that their analysis overlooks certain technical and jurisdictional issues which the new environment raises. Moreover, I would advocate changes in the system beyond mere reliance on technical evolution to account for enforcement difficulties.

[115] Dixon and SelfÓs critical junctions for copyright protection on the infrastructure include creation, upload, transmission, access, and use of content. Dixon and Self, supra note 114 at 466-467. The internet has the potential to change how upload, transmission, and access occur.

[116] Software Directive, Art. 4 (a).

[117] Id.

[118] Software Directive, Art. 5(2). The question arises whether, by providing a back-up copy, the rightholder can cause the making of a back-up copy no longer to be necessary.

[119] Software Directive, Art. 5(1). Note, however, that while the necessary making of a back-up program may not be prevented by contract, in so far as it is necessary for use, the acts of loading, displaying, running, transmission, storage from Article 4(a) and translation, adaptation, arrangement, alteration, and reproduction of these results from Article 4(b) may be regulated by contract.

[120] Software Directive, Art. 5(1).

[121] In this regard, it is similar to the situation envisioned in the Satellite and Cable DirectiveÓs provision that the applicable law for regulating copyright be the law of the state where the service originates. EC Green Paper, supra note 13 at 40-41. See, also Thomas Hoeren, The Green Paper on Copyright and Related Rights in the Information Society, 1995 Eur. Intell. Prop. Rev. 511, 513. Although Hoeren disagrees with the CommissionÓs proposals to substitute the country of origin principle for lex loci protectionis, he recognizes that Ò[t]o the extent that the national copyright acts in the EU Mmber States have been harmonized, the rightholders enjoy the same rights in every Member State. Therefore, it does not matter in practice that the applicable copyright system depends on the national law."

[122] Pamela Samuelson, Digital Media and the Law, 39 Communications of the Association for Computing Machinery 23 (October, 1991).

[123] For a technical description of caching as it takes place in various network configurations, see Perritt, supra note 11 at 434-35.

[124] Crafting this privilege is a difficult task because some system configurations may be set up to save items after a session is terminated, while others are not. System differences defy simple categorization of caching into "ephemeral" and "non-ephemeral." At the same time, permitting caching to allow performance enhancement may permit the type of third party access contemplated above. Id.

[125] Dan L. Burke, Transborder Intellectual Property Issues on the Electronic Frontier, 6 Stan. L. & PolÓy Rev. 9, 10 (1994).

[126] The recent case of United States v. Thomas,74 F.3d 701 (6th Cir.1996), illustrates the nature of the issues which might arise. Despite the fact that this case arose entirely within the United States and concerned the application of Constitutional free speech protections with regard to free speech, it is instructive on the jurisdictional issues the Internet can create. The Defendant, in California, loaded pornographic images onto a computer bulletin board. Patrons could pay for access to his bulletin board and, via telephone dial-up links, access, view, and download these images on their own computers. Although his computer was based in California, those accessing the service could have dialed in from anywhere.In the specific case, a postal inspector from Memphis, Tennessee downloaded the images to a computer in Tennessee. Importantly, in the United States, whether or not pornography may be guarded by free speech protections is a question of community standards. Miller v. California, 413 U.S. 15 (1973). What is permissible in California, therefore, may be illegal in Tennessee. The appellate court in Thomas upheld the conviction based on the fact that the defendant had approved the application of a user from Tennessee, and therefore knowingly used the facilities of interstate commerce to conduct business in Tenessee. The court did not, therefore, have to reach the more difficult questions very slight alterations of the facts might pose. For instance, what if a user approved in California accessed the bulletin board from his laptop while travelling in Tennessee? What if a user from Singapore gained approval from Thomas to access the bulletin board?

[127] There is, of course, the problem that the third party government may not actually enforce the rights which it in theory gives. This paper will not address the private and public international law questions non-enforcement raises, nor does it review the trade policies which have been applied in simiar situations. Rather, the focus is to determine whether a copyright regime may be established within Europe which can ensure the rightholder's rights.

[128] See Czarnota and Hart, supra note 63 at 60.

[129] RAM stands for ÒRandom Access Memory.Ó The RAM loads code which a user is currently utilizing, enabling the computer to work with the program. Once the computer is shut off, any unsaved material in the RAM is lost.

[130] Sucker, supra note 108 at 15 (ÒThe controversial question of whether the mere ÒrunningÓ of a program, i.e. its use on a computer, which necessarily includes a reproduction in a strict technical sense, constitutes a reproduction in the copyright sense, is not clearly answered by the Directive due to the absence of any definition of the term 'reproduction'.").

[131] The NII White Paper, which is the U.S. ExecutiveÓs official stance on the law of copyright in the networked world, maintains that current judge-made law and legislative history in the U.S. establishes that loading a program into RAM is an act of copying. The report also states that viewing a file on oneÓs screen when using a computer as a dumb terminal is an act of copying. NII White Paper, supra note 14 at 65-66. This view has, however, been questioned by some commentators as a broad, if not questionable, reading of the law based on one appellate court case, MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir.1993), cert. denied, 114 S.Ct 671 (1994). See Pamela Samuelson, The Copyright Grab, Wired 4 (Jan. 1996) (criticizing reliance on one appellate case and ommission of contrary legislative history). See also Vorhees, The Wired Triology: The White Paper Ain't Perfect, but it's not the Disaster Naysayers Make it out to Be, 3 Information Law Alert (December 20, 1995) ("To be sure, the report makes the most out of the 1993 9th Circuit MAI case, which found infringement when an unauthorized repair person booted a customer's computer, thus loading an operating system into RAM.").

[132] Commission of the European Communities, Amended Proposal for Council Directive on the Legal Protection of Computer Programs, O.J. no C 320/22, (18 October, 1990) at Art. 4.

[133] Id. (emphasis added).

[134] Id. at Commentary on the Articles, Article 4.

[135] See Czarnota and Hart, supra note 63 at 57.

[136] Michael Lehmann, The European Directive on the Protection of Computer Programs, in A Handbook of European Software Law 163, note 2 at 170 (M. Lehmann & C.F. Tapper, eds., 1993). But see Hoeren, supra note 121 at 514 (arguing that Ò[s]torage in a RAM cannot be regarded as equivalent ot storage on a CD-ROM or a hard disk...the user is not able regularly to take advantage of this aditional 'copy'...It would change the whole copyright world if the mere storage in RAM has to be regarded as reproduction.") What Hoeren misses is that the user could regularly take advantage of the original copy. For example, a company could load all of its computers from one copy of a program each morning. Furthermore, regarding RAM storage as reproduction would not work a large change on the copyright world because of the Art. 5(1) exceptions for use by the lawful acquiror in accordance with intended purpose.

[137] Edward Samuels, Copyright Concerns on the Information Superhighway, in 1994 Annual Survey of American Law 383, 386.

[138] Id.

[139] Dixon & Self, supra note 114 at 469 (Increased access and copy quality Òdoes not mean, however, that unauthorised copying and distribution of protected works will necessarily mushroom in the networked age.Ó)

[140] Burke, supra note 125 at 11.

[141] Id. at 9.

[142] See discussion supra at 65.

[143] For the supplier, the question is no longer one of complying with software regulation per se as the conduct may be considered legitimate in the jurisdiction from which he or she is acting.

[144] NII White Paper, supra note 14 at 10.

[145] See, e.g., Barlow, supra note 10 (ÒTo the extent that law and established social practice exists in this area, they are already in dangerous disagreement. The laws regarding unlicensed reproduction of commercial software are clear and stern...and rarely observed. Software piracy laws are so practically unenforceable and breaking them has become so socially acceptable that only a thin minority appears compelled, either by fear or conscience, to obey them.")

[146] Reuters, Software Piracy in Europe: the Cost in Jobs, Taxes, Reuters European Community Report (Sept. 28, 1995). Reuters cits a study done by Price Waterhouse for the Business Software Alliance, a trade group of the software industry. The study estimated that lowering the level of software piracy in Europe to the current U.S. level could create 87,000 new jobs and generate $2.3BB in new tax revenues by 2000. Further statistics and reports on software piracy are available at the Business Software Alliance homepage on the Internet at

[147] See Richard Raysman and Peter Brown, Liability on the Internet, New York Law Journal at Computer Law 3 (November 8, 1994).

[148] U.S. v. LaMacchia, 871 F.Supp 535 (D. Mass 1994) (failed convinction of an MIT student under U.S. wire fraud statutes for creating a bulletin board for the uploading and copying of commercial software programs).

[149] See, e.g., Barlow, supra note 10 (ÒWhile there is a certain grim fun to be had in it, dancing on the grave of copyright and patent will solve little, especially when so few are willing to admit that the occupant of this grave is even deceased, and so many are trying to uphold by force what can no longer be upheld by popular consent.")

[150] See Reuters, supra note 146 (The Price Waterhouse study showed that through stepped up policing, software piracy in Italy was reduced from 83% to 50% between 1992 and 1993.)

[151] EC Green Paper, supra note 13 at 79.

[152] For further discussion of technological solutions, see NII White Paper, supra note 14 at 183-194. See also Mallam, supra note 3 at 236.

[153] Encryption may control the transmission to an initial user, but once that user has decrypted a program it can be uploaded or passed along to other users. Some current methods of copy protection, as discussed below, have met with market disapproval by legitimate users. Others, such as causing programs to seek out other copies of themselves on their network, can be circumvented by detaching a computer from the network during use. One of the major questions raised with respect to digital tattooing is its privacy implications. Such a discussion could be the topic of a completely separate paper.

[154] See Diane Leenheer Zimmerman, Copyright in Cyberspace: DonÓt Throw out the Public Interest with the Bath Water, in 1994 Annual Survey of American Law 403, 412 (1995).

[155] Cf. Mallam, supra note 3 at 237.

[156] It is impossible to say exactly how effective future technologies can be at controlling software piracy. There may be reason for optimism. While sophisticated piracy certainly is a challenge, most infringement is estimated to be in-house copying by companies and organizations. Reuters, supra note 146. While these users may have few qualms loading a copy of software onto multiple harddrives, engaging in sophisticated technical alteration of copy management information is likely to be seen as a whole other matter. On the other hand, the increased access the Internet may give individuls to pirated software could increase the non-business portion of copying substantially.

[157] Software Directive, Art. 7(c).

[158] NII White Paper, supra note 14 at 235.

[159] Software Directive, Art. 7(c) (emphasis added).

[160] Two legitimate uses which should immediately come to mind are loading a software copy onto a harddrive or external disk and facilitating making a copy where permitted for decompilation per Article 6.

[161] For example, outlawing all means of circumventing copy protection would leave other software firms unable to possess the means to decompile software. The result of such a step could be to force advanced warning to competitors about product development plans in the course of coming up with a legal way to copy the program.

[162] Recall that Articles 7 (a) and (b) require Member States to create appropriate remedies against persons who circulate, or who possess for commercial purposes, software they know, or have reason to believe, is infringing.

[163] LaMacchia, supra note 148.

[164] Software Directive, Art. 7 (a).

[165] Software Directive, Art. 7 (b).

[166] Unless the software was mailed in, at which point it would have been subject to control and seizure at customs.

[167] Cf. Czarnota and Hart, supra note 63 at 88 (noting that mere control of the restricted acts in Article 4, without the ability to address the trade in restricted copies, will create slim chances of enforcing Article 4 rights).

[168] When I asked Bruce Lehman about the problems with foreign bulletin boards and infringing use, he stated that the administration has articulated its view on copying from RAM and hopes the courts will accept it, but that the real solution to the problem would come with international harmonization. These efforts were seen as very important within the Administration. Bruce A. Lehman, The NII White Paper, Lecture and Discussion at Harvard Law School (April 15, 1996) (Digital video on file with Prof. Charles Nesson, Harvard Law School).

[169] For a more complete discussion of harmonizing international copyright norms in the global information environment, see Robert A. Cinq, Note: Making Cyberspace Safe for Copyright: The Protection of Electronic Works in a Protocol to the Berne Convention, 18 Fordham Int'l L.J. 1258 (1995).

[170] Paul Goldstein, The EC Software Directive: A View from the United States of America, in A Handbook of European Software Law, 203, 206-13 (M. Lehmann & C.F. Tapper, eds., 1993).

[171] Id.

[172] A different approach to trying to address the scope of finding infringement is attempting to make infringement moot. One example of this is the blank tape levy on recording audiotapes. Given the ability to save infringing software on harddrives or reuse programs from the Internet without saving them, it is difficult to find an appropriate product on which to place this type of hidden tax.

[173] Ginsburg, supra note 34 at 1489. Collective licensing societies such as GEMA or ASCAP have worked since the mid-nineteenth century to solve the problem that single authors would face if trying to track down every infringing performance of their work. Tracking down infringing use of software in cyberspace presents companies with a similar challenge.

[174] More information on these activities is available on the Business Software Alliance web page, located at

[175] Cf. EC Green Paper, supra note 6at 74 (ÒAll companies which write computer programs administer their products themselves. Collecting societies are unknown.").

[176] Playboy Enterprises, Inc. v. Frena, 839 F.Supp. 1552 (M.D.Fla 1993).

[177] Sega Enterprises Ltd. v. MAPHIA, 857 F.Supp. 679 (N.D.Ca 1994).

[178] Id. at 686.

[179] Religious Technology Center v. Netcom On-line Communication Services, Inc., 907 F.Supp. 1361, 1995 U.S.Dist. LEXIS 18173, *15,27 (N.D.Ca 1995).

[180] Id. at *33.

[181] See Trotter Hardy, The Proper Legal Regime for ÒCyberspaceÓ, 55 U. Pitt. L. Rev. 993, 1042 (1994).

[182] NII White Paper, supra note 14 at 122.

[183] See Netcom, supra note 179 at footnote 12.

[184] NII White Paper, supra note 14 at 123.

[185] See, generally, Samuelson, supra note 131(biting critique of the NII White PaperÓs impact on userÓs rights).

[186] Id. at 4.

[187] Zimmerman, supra note 154 at 405-6.

[188] Although one would think that, just as Lexis and Westlaw create free access for students and academics, Internet information providers would develop subscription policies for terminals in libraries.

[189] At some points, the E.C. Green paper does break software or other products out, but this is primarily with respect to matters on which software has been harmonized whereas other products have not.

[190] See Commission of the European Communities, Green Paper on Copyrigt and the Chllenge of Technology, supra note 40 at 197 (Ò[G]iven their inalieable character, serios doubt exists as to the suitability of [moral rights'] application to works frequently produced collectively, having a technical, indutrial or commercial character and subject to successive modifications.")

[191] This is not to suggest that there is no connection between the different areas, but rather that, when it comes to determining whether it is socially desireable to recalibrate enforcement mechanisms and privileges to shift a changing balance between rightholders and other groups, the policy makers should strive to reach different balances depending on whether a product is software, news, cultural entertainment, or other works to be offered on the Internet.



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