1                  LIBRARY OF CONGRESS
  3                       + + + + +
  7                       + + + + +
 13                       + + + + +
 15                   DOCKET NO. RM 9907
 17                       + + + + +
 19                 Tuesday, May 2, 2000
 21                       + + + + +
 23              The hearing in the above-entitled matter
 24  was held in Room 202, Adams Building, Library of
 25  Congress, 110 Second Street, S.E., Washington, D.C.,
 26  at 10:00 a.m.
 28  BEFORE:
 30       MARYBETH PETERS, Register of Copyrights
 32       DAVID CARSON, ESQ., General Counsel
 34       RACHEL GOSLINS, ESQ, Attorney Advisor
 36       CHARLOTTE DOUGLASS, ESQ., Principal Legal
 39       ROBERT KASUNIC, ESQ., Senior Attorney Advisor

                                                   PAGE 2
  1                       I-N-D-E-X
  5  Panel I:
  7  Peter Jaszi                                    8
  8       Digital Future Coalition
  9  Sarah Wiant                                   19
 10       American Association of Law Libraries
 11  Betty Landesman                               30
 12       D.C. Library Association
 18  Panel II:
 20  Christopher A. Mohr, Esquire                  89
 21       American Business Pres, et al.
 22  David Mirchin                                 98
 23       SilverPlatter
 24  Joseph Montoro                               110
 25       Spectrum Software
 26  Keith Kupferschmid                           134
 27       Software & Information Industry Assoc.

                                                   PAGE 3
  1                 P-R-O-C-E-E-D-I-N-G-S
  2                                           10:10 a.m.
  3              MS. PETERS:  Good morning.  My name is
  4  Marybeth Peters.  I am the Register of Copyrights,
  5  which means Director of the United States Copyright
  6  Office.  I welcome you to the first of three days of
  7  hearings here at the Library of Congress.  Today,
  8  tomorrow and Thursday we will hear testimony which
  9  generally we'll begin at 10:00 in the morning and
 10  generally will begin at 2:00 in the afternoon,
 11  although I have a crisis this afternoon, so this
 12  afternoon we're actually going to begin at 2:30.
 13              Two weeks from Thursday we will hold
 14  another day and a half of hearings at Stanford
 15  University in Palo Alto.  Those dates are May 18th
 16  and 19th.  A schedule for all five days of the
 17  hearings is available today and is also available on
 18  the Copyright Office web site.
 19              As I think all of you who are here know,
 20  these hearings are part of an ongoing rule making
 21  process mandated by Congress under Section
 22  1201(a)(1) of Title 17 of the United States Code.
 23  Section 1201 was enacted in 1998 as part of a
 24  Digital Millennium Copyright Act.  It provides that
 25  no person shall circumvent a technological measure
 26  that effectively controls access to a copyrighted

                                                   PAGE 4
  2  not go into effect until October 28, 2000, two years
  3  after the date of enactment of the DMCA.
  4              Section 1201(a)(1) provides that the
  5  Librarian of Congress may exempt certain classes of
  6  works from the prohibition against circumvention of
  7  technological measures that control access to
  8  copyrighted works through this rule making
  9  procedures.  The purpose of our proceeding is to
 10  determine whether there are particular classes of
 11  works as to which users are or likely to be
 12  adversely effected in their ability to make non-
 13  infringing uses.  They are prohibited from
 14  circumventing technological access control measures.
 15              Pursuant to the Copyright Offices'
 16  notice of inquiry published in the Federal Register
 17  on November 24, 1999 the Office has receive 235
 18  initial comments and 129 reply comments.  All of
 19  these are available on our web site for viewing and
 20  for downloading.
 21              After the hearings here and at Stanford
 22  we will accept a final round of post-hearing
 23  comments.  These post-hearing comments are due
 24  Friday, June 23rd. In order to allow interested
 25  parties adequate time to respond the hearing
 26  testimony the Copyright Office intends to post the

                                                   PAGE 5
  1  transcripts of all of the hearings on our web site
  2  as soon as they are available. We also intend to
  3  record the testimony for streaming and/or
  4  downloading from our web site and we expect that
  5  those recordings will be available before the
  6  transcript.  The transcripts will be posted on the
  7  web site as they are originally transcribed, but the
  8  office will give persons testifying an opportunity
  9  to correct any errors in the transcripts and when
 10  those corrections are received we will put the
 11  corrected transcripts on the web site.
 12              Those of you who are here to testify
 13  have already been advised what we intend to do.
 14  And, by you appearance we understand that we have
 15  your consent to do this.  The comments, reply
 16  comments, hearing testimony and post-hearing
 17  comments will form the basis of evidence for my
 18  recommendation to the Librarian of Congress.
 19              Before making that recommendation I am
 20  to consult with the Assistant Secretary for
 21  Communications and Information of the Department of
 22  Commerce's National Telecommunications and
 23  Information Administration.  We have already begun
 24  those consultations and expect to have more
 25  discussions with NTIA after the hearings.
 26              After receiving my recommendation the

                                                   PAGE 6
  1  Librarian will determine by the October 28th
  2  deadline whether or not there are any classes of
  3  works that shall be exempted from the prohibition
  4  against circumvention of the access control measures
  5  during the three years, beginning October 28, 2000
  6  to October 28, 2003.
  7              It is clear from the legislative history
  8  that this proceeding is to focus on distinct,
  9  verifiable and measurable impacts.  Isolated or de
 10  minimus effects, speculation or conjecture, and mere
 11  inconvenience do not rise to the requisite level of
 12  proof.  Any recommendations for exemptions must be
 13  based on specific impacts of particular classes of
 14  works.
 15              The panel will be asking some tough
 16  questions of the participants in an effort to define
 17  the issues.  I stress that both sides will receive
 18  difficult questions and none of the questions should
 19  be seen as expressing a particular view by the
 20  panel.  It's merely a way to elicit more
 21  information.  This is an ongoing proceeding and no
 22  decisions have been made yet as to any critical
 23  issues in this rule making.  The purpose of these
 24  hearings is to further refine the issues and to get
 25  as much evidence as possible from both sides.
 26              In an effort to obtain all the relevant

                                                   PAGE 7
  1  evidence the Copyright Office reserves the right to
  2  ask questions in writing of any participant in these
  3  proceedings after the close of the hearings.  Any
  4  such written questions that we ask and the answers
  5  that we receive will be posted on our web site.
  6              What I would now like to do is introduce
  7  our panel.  To my immediate left is Davis Carson,
  8  the general counsel of the Copyright Office.  To my
  9  immediate right is Charlotte Douglass who is a
 10  principal legal advisor to the general counsel.  To
 11  her right is Rob Kasunic, senior attorney in the
 12  office of the general counsel.  And, to my extreme
 13  left is Rachel Goslins, attorney advisor in our
 14  Office of Policy and International Affairs.
 15              Having begun the hearing with my
 16  introductory statement and our introduction of the
 17  panel, let me now turn to our first panel of
 18  witnesses and I'm very pleased that you are all in
 19  place and we have Peter Jaszi, who is representing
 20  the Digital Future Coalition.  We have Sarah Wiant,
 21  who is representing the American Association of Law
 22  Libraries and from the D.C. Library Association we
 23  have Betty Landesman.
 24              I assume that you have worked out an
 25  order amongst yourselves or if not, do you want to
 26  go in the order that I --

                                                   PAGE 8
  1              MR. JASZI:  We'll go with the order --
  2              MS. PETERS:  With the order I announced.
  3  Okay.  Peter, it's yours.  Thank you.
  4              MR. JASZI:  Thank you very much.
  5              The Digital Future Coalition consists of
  6  42 national organizations, including a wide range of
  7  for profit and non-profit entities.  Our members, a
  8  list of whom is attached to my written testimony,
  9  represent educators, computer and telecommunication
 10  industry companies, librarians, artists, software
 11  and hardware producers, and scientists, among
 12  others.
 13              Organized in the fall of 1995, the DFC
 14  took an active part in the discussions that led up
 15  to the conclusion of World Intellectual Property
 16  Organization Treaties in December 1996, and to the
 17  final passage of the Digital Millennium Copyright
 18  Act implementing those treaties in October 1998.
 19              I speak for the membership of DFC when I
 20  say that throughout the process our paramount
 21  concern was to assure that however the United States
 22  Copyright Law might be modified to suit the
 23  conditions of the new technological environment it
 24  would maintain its traditional balance between
 25  proprietors' control rights and consumers' use
 26  privileges, including, but not limited to, so-called

                                                   PAGE 9
  1  fair use.  Thus, we were gratified when the WIPO
  2  treaties, in language unprecedented in the annals of
  3  international intellectual property law,
  4  specifically recognized the need to maintain a
  5  balance between the rights of authors and the larger
  6  public interest, in addition to calling for party
  7  states to provide protection for and, remedies
  8  against the circumvention of, technological
  9  protection measures.
 10              At the same time we were concerned that
 11  so-called anti-circumvention legislation had the
 12  potential to disturb that balance significantly, as
 13  least at where the law of the United States was
 14  concerned.  Section 1201(a)(1) of the DMCA, if
 15  enforced as enacted, would do just that.  As it
 16  stands, Section 1201(a)(1), bolstered by the
 17  provisions of succeeding sections provides content
 18  owners with the legal infrastructure required to
 19  implement a ubiquitous system of pay-per-use
 20  electronic information commerce.
 21              The basis for this statement is simple
 22  and self-evident.  Technologies now exist that
 23  permit information proprietors to continue to
 24  regulate access to digitized copies of content after
 25  those copies have been lawfully acquired by others,
 26  whether on pre-recorded media or via an Internet

                                                   PAGE 10
  1  download.  In today's technological environment the
  2  fact that Section 1201(a)(1) prohibits circumvention
  3  of technological measures controlling access to
  4  information, rather than those protecting against
  5  its unauthorized use is of little real significance
  6  to consumers.
  7              Indeed, in this proceeding the joint
  8  reply comments of the American Film Marketing
  9  Association and 16 other content industry
 10  associations make it clear (at page 21) that their
 11  business plans go beyond implementation of access
 12  controls for initial binary permissions or denials
 13  of access.  In addition, they describe ``second
 14  level'' access controls that allow, and I quote,
 15  "management of who can have access, when, how much
 16  and from where."
 17              At the heart of this rule making is the
 18  inquiry into whether users of copyrighted works are
 19  likely to be adversely effected by the full
 20  implementation of Section 1201(a)(1).  Necessarily,
 21  such an inquiry must be speculative since it entails
 22  a prediction about the future. However, the stated
 23  commitment of the content industries to the
 24  technological implementation and legal defense of
 25  second level access controls is the best available
 26  evidence of the potential for adverse affectation.

                                                   PAGE 11
  1              This is because if circumvention of
  2  second level technological access controls were
  3  prohibited, the use of such controls would enable
  4  content owners to deny consumers the practical and
  5  legal ability to make the various kinds of uses now
  6  permitted under copyright law, including those
  7  authorized under the fair use doctrine of Section
  8  107 and the various exemptions provided in Section
  9  110.
 10              Indeed, the implications of full
 11  enforcement of Section 1201(a)(1) are potentially
 12  even more far reaching.  Access controls could be
 13  employed to prevent consumers from passively reading
 14  or viewing the content of digital information
 15  products they had purchased, unless, of course, they
 16  were willing to pay again and again for the
 17  privilege.
 18              Lest these concerns seem farfetched, I
 19  would point out that under current fair use
 20  precedents a purchaser of digitized entertainment
 21  context that has been packaged with technological
 22  access controls are permitted to copy, read and
 23  analyze the security software in order to achieve
 24  inter-operability by means of their circumvention.
 25  Notwithstanding this, in Universal Studios v.
 26  Reimerdes the member companies of the Motion Picture

                                                   PAGE 12
  1  Association currently are employing provisions of
  2  Section 1201 not involved in this rule making to
  3  frustrate what is asserted by the defendants to be
  4  just such a privileged practice.
  5              Whatever the merits of this particular
  6  case, it raises a number of issues concerning the
  7  interaction between Chapter 12 and traditional
  8  copyright doctrine.  Thus, for example, it has been
  9  the plaintiffs' argument that because Section 1201
 10  defines rights, wrongs and penalties that are
 11  independent from those provided for in the copyright
 12  law itself fair use is inapposite to the analysis of
 13  their claims.
 14              To date the judge has concurred.  Of
 15  course, because Section 1201(a)(1) is not in effect,
 16  individual limits users who have employed the DeCSS
 17  patch to play back DVDs on their computers have not
 18  been sued in the Reimerdes case had the provision
 19  been operative, there is no reason to believe that
 20  they would have been omitted from the complaint.
 21  Cases such as this one highlight the importance of
 22  Section 1201(a)(1)(B) through (E), pursuant to which
 23  this rule making is taking place.
 24              While there are other provisions of
 25  Chapter 12 intended to preserve aspects of the
 26  traditional balance between owners and users of

                                                   PAGE 13
  1  protected works, most are so drafted that they can
  2  be read not to reach many real world situations that
  3  are covered by the more flexible exceptions and
  4  exemptions of copyright law.  Thus, for example, in
  5  the Reimerdes case Judge Lewis Kaplan has ruled that
  6  the defendants' activities did not qualify under the
  7  Section 1201(f)(2) exception related to reverse
  8  engineering, because, among other things, the
  9  entertainment software products contained in DVDs
 10  are not ``computer programs.''
 11              More generally, with respect to the
 12  DMCA's specific exemptions as a whole, a recent NRC
 13  study concluded that more legitimate reasons to
 14  circumvent access control systems exist than are
 15  currently recognized in the Digital Millennium
 16  Copyright Act.
 17              For example, a copyright owner might
 18  need to circumvent an access control system to
 19  investigate whether someone else is hiding
 20  infringement by encrypting a copy of that owner's
 21  works, or a firm might need to circumvent an access
 22  control system to determine whether a software virus
 23  was about to infect its computer system.
 24              Now, by contrast with these specific
 25  exemptions, Section 1201(c)(1) is generously
 26  formulated: ``Nothing in this section shall effect

                                                   PAGE 14
  1  rights, remedies, limitations or defenses to
  2  copyright infringement, including fair use under
  3  this title.''  Given its plain meaning, this
  4  provision would require judges to interpret and
  5  apply Section 1201(a)(1) so as to preserve fair use
  6  and other traditional limits on copyright.  In the
  7  event of such an interpretation many of the concerns
  8  just expressed about the specific exemptions would
  9  become at least somewhat less urgent.
 10              However, this does not appear to be the
 11  interpretation of Section 1201(c)(1) preferred by
 12  the content industries.  Although courts ultimately
 13  may recognize the importance and appropriateness of
 14  preserving fair use and other traditional copyright
 15  defenses pursuant to Section 1201(c)(1), this is not
 16  a foregone conclusion, as David Nimmer has recently
 17  pointed out.
 18              At least until such time as this point
 19  is clarified, the Librarian of Congress' rule making
 20  function under the DMCA remains critical.  Its
 21  importance is reinforced by a consideration of the
 22  legislative history of the relevant provisions.
 23  Here, the House Commerce Committee's July 22nd
 24  report is of particular significance, since it
 25  accompanied the first version of the legislation to
 26  contain in substance the provisions which ultimately

                                                   PAGE 15
  1  became Section 1201(a)(1)(B) through (E).
  2              In my written testimony I quote at
  3  length from that report.  I will do so only briefly
  4  here.                                          0
  5  example, that the principle of fair use involves a
  6  balancing process ``whereby the exclusive interests
  7  of copyright owners are balanced against the
  8  competing needs of users....''  It dwells on the
  9  importance of fair use to scholarship, education,
 10  the interests of consumers and those of American
 11  business, and it concludes for the passage in
 12  question that the committee felt ``compelled to
 13  address'' risks that new legislation posed to fair
 14  use, including the ``risk that the enactment of the
 15  bill could establish the legal framework that would
 16  inexorably create a `pay-for-use' society.''
 17  The report continued by stating that ``the committee
 18  has struck a balance that is now embodied in Section
 19  1201(a)(1) of the bill.''  As the passage makes
 20  clear, it falls to this rule making to consider how
 21  fair use in particular and the principle of balance
 22  in the United States' copyright law in general, can
 23  best be preserved in the near term.
 24              If it is likely that implementation of
 25  technological measures backed by legal sanctions
 26  against circumvention will fundamentally alter and

                                                   PAGE 16
  1  thus adversely effect the information consumer's
  2  experience, and I believe it is, the remaining
  3  challenge is how to craft meaningful exceptions that
  4  are cast, as the statute specifies, in terms of
  5  classes of works.
  6              Some of the suggestions made by other
  7  participants in the comment phase of the rule
  8  making, for example, the American Association of
  9  Universities' proposals to exempt ``thin copyright''
 10  works have considerable merit.  Standing alone,
 11  however, these suggestions do not fully respond to
 12  the most likely adverse effect on consumers'
 13  welfare:  Their loss of the ability to make free
 14  choices about how, when and to what extent to use
 15  copyrighted works embodied in lawfully acquired
 16  copies (subject, of course, to the constraints
 17  imposed by traditional copyright law itself).
 18              And, that leads to the proposal with
 19  which I would like to close my statement:  a
 20  proposal, which I should make clear, represents my
 21  personal view and not necessarily that of all the
 22  DFC's member organizations, although I think that
 23  ultimately they will support it.  It is that the
 24  Librarian should exempt from the operation of
 25  Section 1201(a)(1) works embodied in copies which
 26  have been lawfully acquired by users who

                                                   PAGE 17
  1  subsequently seek to make non-infringing uses
  2  thereof.
  3              The proposed language focuses on a class
  4  of works that cuts across the various categories
  5  defined in Section 102(a). Significantly, it would
  6  exclude from its operation works the proprietors had
  7  chosen to make available by means other than the
  8  distribution of copies (as, for example, by
  9  providing limited electronic access only).  Indeed,
 10  as electronic information commerce evolves the
 11  proposed exemption might become less and less
 12  significant in practice, just as new business models
 13  might require other or additional exemptions in
 14  future triennial rule makings.
 15              For the moment, however, limited though
 16  the proposed class is, its exemption would provide a
 17  safeguard against the most imminent and easily
 18  foreseeable harms to otherwise law abiding
 19  information consumers that full implementation of
 20  Section 1201(a)(1) otherwise is likely to generate.
 21  At the same time, by emphasizing the purpose of the
 22  intended use, the proposal would provide no safe
 23  harbor to those who seek to override access controls
 24  for illegitimate purposes, even if they are the
 25  owners of the copies subject to such controls.
 26              The proposal has one further advantage.

                                                   PAGE 18
  1  Its adoption would bring the reach of Section
  2  1201(a)(1) into conformity with what the legislative
  3  history of the DMCA suggests was the original
  4  understanding of its Congressional sponsors as to
  5  the section's proper scope.  The record reflects
  6  that as conceived of by its proponents, the section
  7  was intended to apply to the activities of
  8  individuals who engaged in circumvention in order to
  9  acquire unauthorized initial access to copyrighted
 10  works, and not to fair and other non-infringing uses
 11  made by those already in possession of copies.
 12              Thus, for example, the House Manager's
 13  report, at page 5, explains Section 1201(a)(1) by
 14  stating that, and I quote, "the act of circumventing
 15  a technological protection measure put in place by a
 16  copyright owner to control access to a copyrighted
 17  work is the electronic equivalent of breaking into a
 18  lock room to steal a book."  And, in a letter dated
 19  June 16, 1998 the Judiciary Sub-Committee Chairman,
 20  Representative Howard Coble, stated that the anti-
 21  circumvention measures of H.R. 2281, as the
 22  legislation then was denominated, were intended to
 23  leave users, and I quote, "free to circumvent
 24  technological protection measures to make fair use
 25  copies."
 26              This sensible vision of the Section

                                                   PAGE 19
  1  1201(a)(1) prohibition now deserves attention and
  2  respect.  The future of fair use and other
  3  traditional copyright defenses will be determined in
  4  significant part by the outcome of the current rule
  5  making.  By adopting the proposed exemption, the
  6  Librarian could take an important step towards
  7  stabilizing the balance of copyright law in the new
  8  electronic information environment.  Thank you.
  9              MS. PETERS:  Thank you very much.
 10  Sarah.
 11              MS. WIANT:  Good morning.  My name is
 12  Sarah Wiant.  I'm the director of the Law Library
 13  and a professor of law at Washington and Lee
 14  University School of Law.  Among the subjects that I
 15  teach there include intellectual property and
 16  copyrights.
 17              I appreciate the opportunity to testify
 18  this morning on Section 1201(a)(1), anti-
 19  circumvention provisions of the DMCA.  This is an
 20  issue critical to the future of copyright law
 21  because it determines whether public policy, such as
 22  fair use and other exemptions, will survive in fact
 23  in the digital world.
 24              I am here today as a representative of
 25  the American Association of Law Libraries and while
 26  I'm primarily here on behalf of AALL, I also speak

                                                   PAGE 20
  1  for libraries in general and in some sense, a very
  2  real sense for the American public.
  3              Law libraries serve their
  4  constituencies, law students and faculty,
  5  researchers, the general public, the legal
  6  community, bench and bar, in our Nation's more than
  7  1,900 law libraries.  Our members are committed to
  8  the principles of public access to government
  9  information that are a fundamental requirement of
 10  our democratic society.  For most American citizens
 11  their local law library is the only source of access
 12  to comprehensive federal, state and local law and
 13  law related materials.                         0
 14  important publications are becoming increasingly
 15  available only in electronic formats.
 16              My statement this morning is going to
 17  focus on three areas.  First, I will describe the
 18  adverse effect of the new anti-circumvention
 19  prohibitions on faculties, students and legal
 20  researchers in their ability to make non-infringing
 21  uses of works legitimately acquired by our
 22  institutions.
 23              Second, I will highlight the legal
 24  community's concerns regarding limitations of access
 25  or on access to federal government publications for
 26  which no copyright protection is available.

                                                   PAGE 21
  1              And, third, I would like to discuss our
  2  concerns that as more and more information becomes
  3  available only on-line, the ability of libraries to
  4  provide permanent access to some publications and to
  5  preserve and achieve them has been and will continue
  6  to be adversely effected.
  7              As to my first point, in the formal
  8  comments provided by AALL and other major library
  9  associations, we explained the unique role of our
 10  Nation's libraries in serving the information needs
 11  of the American public.  Millions of users walk into
 12  libraries each day looking for information across a
 13  broad span of topics and academic disciplines.
 14  Their needs are met through a variety of formats.
 15  These may be print, it may be microfiche, it may be
 16  video, sound recorders, computer discs, CDs, DDDs
 17  and, yes indeed, the Internet.
 18              Federal copyright law has for more than
 19  200 years provided the historic balance between the
 20  rights of copyright owners and users.  We believe a
 21  broad exemption from the 1201(a) restriction against
 22  accessing and using copyrighted works protected by
 23  technological measures, is essential to insure that
 24  the public continues to enjoy uses of information
 25  provided by libraries.
 26              The anti-circumvention technologies now

                                                   PAGE 22
  1  in place and those under development have a purpose
  2  beyond that of controlling unlawful access.  They
  3  are a mechanism for controlling all uses of work.
  4  For both libraries and our users, they will limit
  5  use of legally acquired digital information by
  6  effectively destroying the first sale doctrine.
  7  They will prevent libraries from fulfilling their
  8  mission to achieve and provide long term access to
  9  information resources and they will impeded all
 10  other non-infringing activities that advance the
 11  fundamental public good purposes of the copyright
 12  law.
 13              From our joint library communities'
 14  initial comments I would like to summary just a
 15  couple of comments.  The role of libraries is to
 16  insure fair access and use to copyrighted works and
 17  part of our responsibility is to bridge the digital
 18  divide.
 19              Every community in the nation is served
 20  by libraries and these libraries spend billions of
 21  dollars annually to provide their users with access
 22  to electronic information.  Many of the
 23  technological measures will erase the distinction
 24  between access and use, regulating the exploitation
 25  of the work.  Any rollback to preserving fair use in
 26  the digital information environment will further

                                                   PAGE 23
  1  increase the digital divide.
  2              Fair use, the library achieves and
  3  educational institution exemptions to the Copyright
  4  Act are key to the ability of libraries to serve
  5  social needs and public policy.  Copyright law is
  6  the very foundation by which libraries and
  7  educational institutions provide the public with
  8  products and services necessary to meet their
  9  information needs.
 10              The first sale doctrine allows libraries
 11  to load information products they have purchased.
 12  The fair use provisions allow users to exploit fully
 13  their access to information resources for the
 14  legitimate purposes of education, research,
 15  criticism and other socially beneficial purposes.
 16  Section 108 allows libraries to make single copies
 17  of works in their collections available to patrons
 18  engaged in private study, research and scholarship
 19  and to achieve and preserve these works for long
 20  term access.  Section 110 includes provisions to
 21  facilitate classroom and distant learning.  And,
 22  Section 121 contains limitations that insure the
 23  reproduction and distribution of copyrighted
 24  material for the use by the blind and disabled.
 25              These principles must be preserved in
 26  the digital environment just as they have applied

                                                   PAGE 24
  1  historically to print resources.  Any technological
  2  measures limiting these principles will seriously
  3  and irreparably harm the ability of libraries to
  4  serve the public good.
  5              Another point we made is that Section
  6  1201 expands the boundaries of criminal laws in ways
  7  that are vague and poorly defined and that cover
  8  acts that are legal and acceptable behavior.  Our
  9  initial comments describe in greater detail the
 10  language of 1201(a).  It contains troubling
 11  ambiguities in such key terms as technological
 12  measures, circumvent, access and class of works.
 13              There are few legal precedents
 14  interpreting these terms to guide libraries and
 15  their users in the application, nor is the
 16  legislative record particularly helpful.  Court
 17  decisions may help clarify some meanings, but in the
 18  meantime library users face criminal and civil
 19  penalties for exploitations that have been
 20  considered until now to be legal and non-infringing.
 21  The threat of litigation will serve as the deterrent
 22  from uses, some of which may be lawful, perhaps
 23  maybe most which may be lawful.
 24              As a practical matter most libraries
 25  could not afford the high cost of litigation to
 26  determine the definition of these terms.  This

                                                   PAGE 25
  1  uncertainty will have a chilling effect on users and
  2  will inhibit legitimate non-infringing uses for
  3  education, research, criticism and other public
  4  information uses.
  5              As to the second focus of my comments
  6  this morning, I would like to now address the legal
  7  community's concerns regarding limitations on access
  8  to federal government publications for which no
  9  copyright protection is available.  As previously
 10  noted, the purpose of technological measures is to
 11  limit or control access and use of digital
 12  information.
 13              In the earlier comments, on March 20,
 14  2000, in comments filed by Kent Smith, Deputy
 15  Director of the National Library of Medicine, reply
 16  comment 75,  he notes circumstances in which works
 17  by government scientists receive copyright
 18  protection.  Technological measures to control the
 19  use of copyrighted works have also limited the
 20  ability of this library, as well as all other
 21  libraries, to achieve, preserve and provide
 22  continuing access to some publications.  This rule
 23  making seeks to determine classes of works that
 24  might be adversely effected by such technological
 25  protections.  Clearly all forms of scientific
 26  technical information dissemination would be

                                                   PAGE 26
  1  adversely effected.
  2              Most blatant would be the limitation on
  3  access to publications of government scientists for
  4  which no copy right protection is available, but
  5  which constantly appear within the copy premature
  6  and under technological barriers of published works.
  7              While these comments from the National
  8  Library of Medicine define the problem only from the
  9  perspective of government funded scientific and
 10  medical research, the identical situation exists
 11  with many other subject areas of government
 12  information, particularly, legal information, which
 13  is aggregated into large electronic databases.
 14              Law libraries are in the unique role of
 15  serving the American public by providing access to
 16  print and electronic law and law related resources.
 17  More and more government information is being
 18  published only electronically under licenses that
 19  restrict access and use.  The technological measures
 20  which may be as simple as a password place
 21  restrictions on who can use the digital information
 22  and often disenfranchise the public.  Whereas the
 23  public may use the same print resource in a law
 24  library, in the digital arena law libraries are no
 25  longer able to provide equal access to all users.
 26              While many students and colleges and

                                                   PAGE 27
  1  universities and their libraries and other
  2  institutions do have access to legal and other
  3  information through consortia agreements or other
  4  forms of licensing agreements to online information,
  5  other students and members of the bar and equally
  6  important members of the public who are served by
  7  these institutions are able to neither access nor
  8  use information in online systems such as West Law
  9  and Lexis due to licensing arrangements.
 10              In the paper world these individuals
 11  would be permitted to make their use copy of
 12  information.  Most state college and university
 13  libraries and many non-profit organizations has as a
 14  part of their mission the obligation to provide
 15  members of the public with access to information and
 16  to make available the information for the public's
 17  use.
 18              There is no distinction among the
 19  classes of works needed by users, only the use to
 20  which the information is put can be distinguished.
 21  That is to say the uses may be educational, personal
 22  or commercial purposes.  There must be no
 23  restrictions on the uses of federal government
 24  information because it falls outside of copyright
 25  protection.
 26              Finally, we are concerned that as more

                                                   PAGE 28
  1  and more information becomes available only online
  2  the ability of law libraries to provide permanent
  3  access to some publications and to preserve and
  4  achieve them will be adversely effected.  A
  5  preponderance of comments from users' communities in
  6  the initial rule making including those from the
  7  National Library of Medicine and the National
  8  Achieves raise very legitimate concerns about the
  9  loss of digital information and the need to provide
 10  permanent access and to achieve and preserve
 11  electronic information.
 12              The anti-circumvention systems create
 13  another injustice by denying libraries access to
 14  works which they previously and lawfully acquired.
 15  In the print world the issues of archiving and
 16  preservation are much clearer.  Libraries have the
 17  historic and important role of preserving and
 18  archiving knowledge and our cultural heritage.  It
 19  is critically important that the electronic
 20  information produced today will be readily available
 21  to future generations.
 22              Of particular concern to the law library
 23  community is the loss of important information
 24  content when the publisher of an online resource
 25  either ceases publication or goes out of business
 26  with no advance warning, such as or

                                                   PAGE 29
  1  instances when CD products protected by
  2  technological measures can no longer be reformatted
  3  and, therefore, are unreadable.
  4              Technical obsolescence is an equally
  5  important aspect of the problem.  When an
  6  educational institution or achieve for library buys
  7  a subscription or has print copy of the book, the
  8  library can make a copy.  However, if the
  9  technological measures prohibitive producing a work
 10  in the electronic world, then no archival copy may
 11  exist.  Although publishers should achieve their
 12  works, and in fact some do, more often than not
 13  publishers fail to achieve their works.  Moreover,
 14  when publishers are the sole source for archival
 15  copies of their works, replacing the political,
 16  social and cultural mission of many libraries and
 17  achieves, there is a greater risk of selective
 18  archiving.
 19              The judgment of what to preserve and
 20  whether or not to preserve should not be solely in
 21  the hands of publishers.  Unlike in the print world,
 22  because there may be no secondary market for
 23  electronic works, libraries and educational
 24  institutions may be unable to acquire works that
 25  they were initially able to acquire, furthermore
 26  exacerbating he problem of preservation.

                                                   PAGE 30
  1              During the lengthy debate over the most
  2  contentious provisions of the Digital Millennium
  3  Copyright Act.  Distinctions were blurred between
  4  the act of circumvention and the act of digital
  5  piracy.  They are not the same.
  6              The need to circumvent technological
  7  measures for legitimate purposes of fair use, first
  8  sale, inter-library loan, permitted access,
  9  archiving and preservation are needed to permit
 10  libraries to serve their users in the digital world.
 11  Libraries adhere strongly to the limitation of
 12  copyright law while providing their users with
 13  access to information within the rights allowed
 14  users under the law.
 15              We believe that it is essential for the
 16  librarian to create a meaningful exemption before
 17  Section 1201 does irreversible harm to the rights of
 18  users allowed under the statute based on public
 19  policy.
 20              Thank you for allowing me to testify
 21  this morning.
 22              MS. PETERS:  Thank you.  Betty.
 23              MS. LANDESMAN:  I'm afraid I'm real new
 24  at this.  Like my colleagues I do have written
 25  testimony.  Would you like it?
 26              MS. PETERS:  Certainly.  Yes.

                                                   PAGE 31
  1              MS. LANDESMAN:  Good morning.  My name
  2  is Betty Landesman and I am a librarian with the
  3  Research Information Center, which is what we call
  4  our library, of the AARP, which was formerly known
  5  as the American Association of Retired Persons.
  6  It's now just the AARP for official records, by the
  7  way.
  8              MS. PETERS:  That makes me happy since
  9  I'm a member.
 10              MS. LANDESMAN:  The membership age is
 11  now 50 and there are not a lot of retired 50 year
 12  old people.
 13              Prior to taking this position, which
 14  will be a year ago tomorrow, happy anniversary to
 15  me, it's a brand new job, I worked at a number of
 16  college, university and research libraries, as well
 17  as for a vendor of computer systems for libraries.
 18  So, you may think I'm here today because I've been
 19  around, which I have, but in fact I am wearing the
 20  hat today of president of the District of Columbia
 21  Library Association.  DCLA is one of the chapters of
 22  the American Library Association.  They like to call
 23  us a state chapter, but, okay.  And, we have members
 24  from all of the many diverse types of libraries in
 25  the District, including public, school, academic,
 26  medical, law, special and government libraries.

                                                   PAGE 32
  1              I want to talk today not about the legal
  2  aspects of the new provisions of the Copyright Act,
  3  for which fortunately I can rely on my colleagues,
  4  but about the practical effects of the new Section
  5  1201(a) and the need for a broad exemption that
  6  takes those practical effects on libraries into
  7  account.
  8              Without an exemption by the Librarian
  9  from the anti-circumvention prohibition, libraries
 10  will not be able to carry out their primary mission,
 11  which is providing access to information resources
 12  for the communities of patrons that they serve.
 13              At all of the institutions that DCLA
 14  represents, as is true all over the country,
 15  electronic services have become an integral part of
 16  the services that we provide.  As you are already
 17  aware from the comments provided during the rule
 18  making process, electronic information is invaluable
 19  to all kinds of research from the youngest school
 20  child to the most in depth medical and legal
 21  research.  But, much of the material that is
 22  necessary to support the information, education and
 23  research goals of our library users is increasingly
 24  available only in electronic form or where
 25  electronic versions of a print counterpart provide
 26  additional and valuable research tools that are

                                                   PAGE 33
  1  simply not available in the print.  My written
  2  testimony gives some examples of specific titles.
  3              All libraries, whether directly or
  4  indirectly, serve the public.  I work in a library
  5  that is part of a non-profit organization and my
  6  clientele are the staff of the association.  We
  7  support the research on aging that is done by those
  8  staff members.  That research is then made available
  9  to the public through published studies which are
 10  available free of charge and also through a database
 11  called Age Line, which we produce.
 12              Library materials are available to any
 13  patrons outside of our association through inter-
 14  library loan in which we participate very actively.
 15  And, our library itself is accessible to researchers
 16  who need to use our collections or our research
 17  expertise.  For many people in the communities we
 18  serve, particularly the poor, the elderly and school
 19  age children, the public library serves as the
 20  primary access point for information, both printed
 21  and electronic that they need.
 22              In the non-public environment the
 23  library, like mine for example, is accountable to
 24  the members of its organization, whether that be
 25  students, faculty, or staff for the support of their
 26  education and research needs.  My written testimony

                                                   PAGE 34
  1  has some statistics on the number of libraries and
  2  so forth.  So, our concern about the technological
  3  protection measures and their potential restrictions
  4  on use is the threat that they pose our library's
  5  ability to serve our users in the way that we have
  6  always done.
  7              We note that some content providers
  8  during their comments have suggested that librarians
  9  want information for free.  That couldn't be further
 10  from the case.  We spend an enormous amount of
 11  money, according to my colleague, millions.
 12  According to my date, hundred of millions.  A lot of
 13  money in fees every year to provide access to
 14  databases and electronic materials and services.
 15              In my library, for example, last year
 16  the amount, the number of dollars which I will not
 17  disclose, but the number of dollars that was
 18  budgeted for electronic services was more than
 19  double the number of dollars budgeted for print
 20  materials.  And, I fully expect that this proportion
 21  will continue to grow.
 22              My concerns are in three main areas
 23  which in many ways will echo my colleagues: cost,
 24  inter-library lending and access to information.
 25              First, we expect that technological
 26  measures will be used in ways that increase the

                                                   PAGE 35
  1  overall cost of the information that we already
  2  purchased.  As the library associations pointed out
  3  in their comments, we are very concerned that the
  4  effect of these technological measures will be to
  5  move us toward a pay-for-use pricing model, as well
  6  as the charge for uses that are legitimate and non-
  7  infringing under copyright law.  That would put
  8  additional pressure that I don't think we can bear
  9  on already strained acquisitions, budgets and reduce
 10  the level of services that we can provide.
 11              Secondly, the first sale and fair use
 12  provisions of the Copyright Act provide libraries
 13  with the ability to lend the information products
 14  that they purchase and to make copies available of
 15  these works to patrons engaged in research and
 16  scholarship.  In addition to supporting the
 17  information needs of their own users, libraries
 18  share their resources by participating in inter-
 19  library loan.  Since no library is able to own all
 20  the materials that are needed to support the
 21  information needs of their users, certainly not
 22  mine, it is only by cooperating and helping each
 23  other that we have been able to provide the
 24  information that our patrons need.
 25              Persistent access control, such as
 26  electronic books with limits imposed on

                                                   PAGE 36
  1  redistribution, would undermine the basic concept of
  2  the library as an institution that lends information
  3  resources to users.
  4              Finally, I'm concerned that these
  5  protection schemes will seriously reduce our library
  6  users' ability to make full and non-infringing use
  7  of the material that we already purchase,
  8  legitimately acquire.  The restricts that we already
  9  see in electronic resources, licensing arrangements,
 10  include limiting access to a particular resource to
 11  one computer in the library, to restricting use to a
 12  specific number of simultaneous or even consecutive
 13  users and precluding access to material after a
 14  certain period of time.  And, as noted above, the
 15  harm these restrictions pose to our communities will
 16  fall particularly heavily on those who have no
 17  alternative sources for access.
 18              A related aspect of this concern is that
 19  technological measures will hamper or negate the
 20  ability of libraries to achieve and preserve
 21  information products so that they will continue to
 22  be available to our users in the future.
 23  Researchers of all types need to be able to depend
 24  on having access to materials that may not be this
 25  years.  They may be a few years older and yet these
 26  products or access to them may disappear at some

                                                   PAGE 37
  1  future time, either because they are no longer
  2  available from that particular vendor or that vendor
  3  has gone out of business or they are simply taken
  4  out of the date base and the library is not able to
  5  make an archival copy, or because the library no
  6  longer subscribes to the product, but is barred
  7  access to the information that they did subscribe to
  8  in the past.
  9              So, as I ask that as you consider the
 10  breadth and focus of an exemption for Section
 11  1201(a) you will keep in mind the importance of
 12  libraries in serving all aspects of our society.
 13  Since all types of materials are used in research,
 14  not only books and journals, but photographs, motion
 15  pictures, sound recordings, you need it, it would be
 16  impossible to identify specific classes of works
 17  that should be exempted.  So, I encourage a broad
 18  exemption.
 19              Technological measures that control both
 20  initial access to a product and also its continued
 21  use prevent libraries from providing necessary and
 22  non-infringing information to our users.  So, please
 23  make sure we can continue to do our job.  Thank you.
 24              MS. PETERS:  Thank you.  Now the panel
 25  gets to ask the questions and we're actually going
 26  to start with Rob and the questions could be

                                                   PAGE 38
  1  directed to a particular person or to the panel as a
  2  whole.  Even if it is directed to a particular
  3  person, if one of the three of you wants to say, you
  4  know, I want to answer that, too, please feel free
  5  to jump in.
  6              Let's start with you, Rob.
  7              MR. KASUNIC:  A number of you have
  8  discussed a broad exemption cutting across the
  9  categories and over a number of potential classes of
 10  works.  What would be the basis for that in the
 11  statute and in the legislative history? We do have a
 12  legislative history that specifies some pretty
 13  narrow interpretations of what a class of work would
 14  be: something narrower than a category of work, but
 15  not so narrow as an individual type of work as in
 16  western movies or something that narrow.  How do we
 17  deal with this broader exemption that cuts across
 18  various categories?
 19              MR. JASZI:  If I could start, I think
 20  the problem is a real one, although I might quarrel
 21  a little bit with the suggestion that some of the
 22  exemptions that have been explicitly or implicitly
 23  suggested in the last few minutes are ``broad''
 24  exemptions as distinct from exemptions which are
 25  oriented at least in part toward the nature of use,
 26  rather than exclusively toward the nature of the

                                                   PAGE 39
  1  work as such.  And the suggestion that it might be
  2  possible to cast a definition of a class of works in
  3  terms of the nature of use was, of course, one that
  4  was raised by your initial notice of inquiry in this
  5  rule making.
  6              As I read the legislative history it
  7  calls for the class of works defined in this rule
  8  making to be one that is focused, and cites as
  9  examples of the way in which such a focus might be
 10  achieved, the subdivision (if you will) of existing
 11  categories: audio visual works broken down to
 12  western movies example.  I do not read the
 13  legislative history as excluding the possibility of
 14  the Librarian, in his discretion and taking into
 15  account all of the material adduced in the rule
 16  making hearings, conceiving of other classes of
 17  works which have in other ways their own specific
 18  focuses.
 19              So, that would be my initial response
 20  and I would add another response, too.  To some
 21  extent, given the nature of the problems that
 22  Section 1201(a)(1) potentially gives rise to, as
 23  they have been revealed in the record so far, any
 24  approach to the rule making that is strictly limited
 25  to sub-divisions of existing statutory categories of
 26  works will almost certainly fail to meet the real

                                                   PAGE 40
  1  issues.
  2              MS. WIANT:  Can I just add?  I would add
  3  to what Peter says and I also would suggest that
  4  when we start speaking of categories we have
  5  categories of works within the statute that
  6  organizes works that are eligible for copyright
  7  protection within the subject matter portion of the
  8  statute.  But, there is nothing in there that
  9  suggests that we should further define those by
 10  classes of works and indeed if we do do that it will
 11  be very difficult to figure out what specific kind
 12  of work that a researcher could look at, based
 13  specifically on a redivision of, I hate to use the
 14  word categories and classes, because it leads us
 15  down a road that I think is untenable and, so,
 16  therefore, I would reiterate what Peter had said
 17  about I think it's more important to look at the
 18  uses of the works.  Because anybody has a legitimate
 19  need for a wide range of information needs and if we
 20  narrow these by what one can or cannot look at, we
 21  will redirect research in some very limiting ways.
 22              MR. KASUNIC:  In terms of the specific
 23  requirements under the statute, requesting that the
 24  Librarian publish a particular class of works, how
 25  do we get to that step? If there is a possible
 26  exemption, how do we exempt the type of use that is

                                                   PAGE 41
  1  being made of a particular class of works?  How does
  2  that fit in with the requirements that Congress put
  3  on the Librarian: to specifically publish a class of
  4  works?
  5              MR. JASZI:  In fact, to begin again, in
  6  the proposal that I suggested, for example, the
  7  suggested class is one which, by virtue of being
  8  keyed to the forum in which the works in question
  9  are represented or fixed, cuts across the statutory
 10  categories of Title 17.  Also inherent in that
 11  proposal is the limitation on the exemption to
 12  situations of otherwise lawful use.  So, the nature
 13  of the use enters into the latter part of the
 14  suggestion or recommendation.  That's one
 15  possibility.
 16              I think another possibility is to think
 17  about classes in which the use factor is, so to
 18  speak, implicit.  The proposals to provide
 19  exemptions for ``thin copyright'' works or for
 20  copyrighted works that contain significant amounts
 21  of public domain government information, are ones
 22  which, although they do not directly reference use,
 23  do so by implication, since works of those kinds and
 24  categories are, as we have heard, of special
 25  interest and importance to the research community.
 26              So, I think there are a number of

                                                   PAGE 42
  1  different ways, both explicit and implicit, in which
  2  the consideration of potential or actual use might
  3  come into the definition of an exemption.
  4              MS. PETERS:  Charlotte.
  5              MS. DOUGLASS:  My question is whether
  6  the First Sale Doctrine has any special application
  7  to use of encrypted works that are purchased for
  8  personal use?  Does that make any sense?  How does
  9  the First Sale Doctrine impact encrypted works where
 10  you have bought a DVD for your personal use, for
 11  example?  Are there any implied assumptions that go
 12  with purchasing a work, which would seem to flow
 13  from the First Sale Doctrine?
 14              MS. WIANT:  Do you want me to start on
 15  this?  It seems to me that if we keep the exemption,
 16  unless we clarify the exemption, that -- clarify an
 17  exemption, that the anti-circumvention could indeed
 18  do away with the First Sale Doctrine.  It seems to
 19  me that if we believe, as a matter of public policy
 20  that when somebody has lawfully acquired a piece of
 21  intellectual property, that we have historically
 22  allowed them to share uses and without this there
 23  couldn't even be a sharing of use arguably, whether
 24  it's a DVD, whether it's an E-book and that would
 25  present a critical problem, I think, for the public
 26  and I think it would present a critical problem for

                                                   PAGE 43
  1  libraries to acquire this information that
  2  historically they would at least be allowed to use
  3  that the public wouldn't be allowed to make a copy,
  4  necessarily, but they would at least be allowed to
  5  use the information in whatever its electronic
  6  format.
  7              MS. LANDESMAN:  I think the E-book is a
  8  very good example, in fact.  What I'm seeing, what
  9  we're all seeing, actually, is that in this new
 10  digital age the pricing of all the new products,
 11  like E-books, and even the conception of the
 12  producers of these and who their audience might be
 13  is very directed with the individual consumer in
 14  mind.  And, I've been to conferences about E-books
 15  and ever so often, you know, someone will say what
 16  about, you know, if I play it for my library, can I
 17  lend it?  And, we're going, lend?  No, no, you buy a
 18  single -- and we're going libraries.  And, they go,
 19  oh, right.  So, we have no objection to pricing it
 20  in a way that will allow more than one use, as we
 21  have always paid more for a subscription to a print
 22  journal for a library will cost typically -- well,
 23  more, certainly than for an individual, because part
 24  of that is because many people are going to use it
 25  and that's the understanding under which we acquire
 26  it, that we can then share it with our legitimate

                                                   PAGE 44
  1  patrons for whom we buy that and if I were seeing E-
  2  books priced in a way that says here's the library
  3  version and this gains -- you can now lend this out,
  4  we wouldn't be having a discussion.
  5              MR. JASZI:  I would just add that full
  6  implementation of Section 1201(a)(1), coupled with
  7  the use of so-called second level access controls on
  8  electronic information products has the potential
  9  for hollowing out all sorts of traditional copyright
 10  doctrines, of which first sale is clearly one.
 11  Although there might remain a literal first sale
 12  right to pass on the physical medium to another
 13  person, to the extent that there was no possibility
 14  of that other person achieving the ability to read
 15  or view the content recorded on that physical
 16  medium, the first sale right, which has been a very
 17  critical engine of cultural development throughout
 18  the history of the United States, would be formally
 19  preserved but substantively empty.
 20              And, that I think is true of many of the
 21  traditional limiting doctrines of copyright law,
 22  that are put under pressure, so to speak, or would
 23  be, by full implementation of Section 1201(a)(1).
 24              MS. PETERS:  Let me just make a note
 25  that there is a separate study that is being done by
 26  the Copyright Office in conjunction with NTIA, which

                                                   PAGE 45
  1  is to look at the effect of electronic commerce and
  2  the DMCA on Section 1201(a)(1), the First Sale
  3  Doctrine.  And, so that is an inquiry that was
  4  mandated.
  5              Those arguments that you're making now
  6  were made before Congress.  Congress is interested
  7  in that effect and so we will be studying that
  8  particular topic separately from this.
  9              Okay.  Rachel.
 10              MS. GOSLINS:  Yes.  I just had a couple
 11  of questions.  One is more practical and the other
 12  is a little more esoteric so we'll start with the
 13  practical one.  And, this is for the whole panel,
 14  although I'm specifically interested in the
 15  experience of the people who had experience actually
 16  working in libraries in the recent past.
 17              I think it's fair to say that access
 18  protection is probably the oldest form of
 19  technological protections we've seen on digital
 20  works.  Of course, oldest is relative when we're
 21  talking about the Internet, but password protections
 22  and I.D. and I.P. domain validations have been
 23  around pretty much since the Internet.  So, in a way
 24  we're lucky that we have some historical experience
 25  with these kind of protections.
 26              I participated in a study the Copyright

                                                   PAGE 46
  1  Office gave on distance education where we were
  2  trying to look at copy control protections and it
  3  was impossible to draw too many conclusions, because
  4  there really wasn't a lot of experience with them.
  5  But, as librarians you are perhaps the best suited
  6  to educate us about your experience thus far with
  7  access control protections.
  8              So, I'm curious to know whether in the
  9  current world in which there is not a prohibition on
 10  circumventing access control protections there are
 11  situations in which you have to do that, you have to
 12  circumvent access control protections in order to
 13  make what you consider a fair use of the work and if
 14  you currently experience problems where you face a
 15  choice of either circumventing an access control
 16  protection or foregoing use of the work?
 17              MS. LANDESMAN:  Well, I can -- I can't
 18  say I've ever done anything along those lines.  And,
 19  I think most people haven't either, but I could give
 20  a couple examples of why our inability to do that is
 21  a real problem.  One, is in fact, the I.P.
 22  recognition is not the panacea that everyone would
 23  like it to be.  It isn't just for distance learning.
 24  That's typically the context, but the fact is that
 25  in most libraries our patrons, whoever they may be,
 26  are not in the building or not all in the building.

                                                   PAGE 47
  1  In my specific case there are 2,000 staff working
  2  for the AARP.  About half of them are here in
  3  headquarter's building in D.C. and the other half
  4  are all over the country.
  5              And, they're coming in through an intra-
  6  net so it's a very secure environment, but we are
  7  still really unable to negotiate an appropriate use
  8  of things, because they're coming in from a
  9  different I.P. address or because licensing is
 10  still, much to my surprise, here it is 2000, is very
 11  geographically oriented.  I'm looking at a potential
 12  license now to acquire some materials for use by the
 13  association and the price quote, it says very
 14  specifically, this is for a single building.  Call
 15  us for a quote.
 16              So, we really have a huge long way to go
 17  on that.  The most concrete example I could give you
 18  where our inability to -- even if were to wish to
 19  "crack into it" or whatever, has to do with the
 20  leasing, whether than actually owning of the
 21  information.  Most electronic journals or other
 22  databases you have the right to whatever is on the
 23  database for the term of your subscription.
 24              Now, let's say I subscribe today to
 25  Journel of XYX and in three years I need to cancel
 26  that subscription or let's say Journel XYZ goes out

                                                   PAGE 48
  1  of business, okay, but I can the print of Journel
  2  XYZ in 2000 because I can't afford both.  The
  3  literal truth is my users will have no -- we have
  4  nothing to show for those three years.  We don't
  5  have the electronic version.  We don't have the
  6  print version.  We don't have anything.  And, most
  7  licenses at this point preclude that or for those
  8  databases that have a rolling effect, so you
  9  subscribe and what you have access to is what's in
 10  the database at that time, but every year they roll
 11  off an earlier year.  And, this is fairly common.
 12              When that goes you have nothing.  We've
 13  paid a lot of money, but we do not have the
 14  information to give to our patrons.  Some libraries,
 15  certainly bigger than mine, might wish to -- well,
 16  there is a lot of issues with this.  We want the
 17  publishers to do the archiving and the publishers
 18  and saying, why should we archive?  The fact is that
 19  right now nobody, whether you're doing it or not,
 20  you just don't have the access to get at it.
 21              I don't know how concrete that is, but
 22  that's what we're up against and I don't have the
 23  solution, but that's the problem.
 24              MS. GOSLINS:  That's --
 25              MS. WIANT:  There are a couple of things
 26  I would like to add to that.  Yes, it's true that in

                                                   PAGE 49
  1  many cases that password protection works and I.P.
  2  protection works and even those of us in
  3  universities with a high level of technological
  4  support have difficulty in serving students and
  5  faculty from home unless we have something of a
  6  proxy server, but we can figure out ways to deal
  7  with those.  The more critical problem is I'm in a
  8  private university, but we still have as part of our
  9  mission serving anybody who has need of legal
 10  information on the western part of the state.  And,
 11  for a very long time we were the only significant
 12  law library in the state west of the Blue Ridge.
 13              If we have any member of the public who
 14  comes in and physically comes to the library for
 15  legal information, if that legal information happens
 16  to be electronic, typically we cannot serve those
 17  individuals unless it's just on a web base, because
 18  the licensing agreements typically cover only
 19  students and faculty and sometimes those are
 20  limiting so that they only cover the law student and
 21  law faculty, not even the undergraduate faculty.
 22  So, that's problematic, but more problematic is the
 23  member of the public who comes to us for legal
 24  information and whom we cannot serve because they're
 25  restricted.  They can't search themselves and even
 26  if we were to do it, the licensing agreements would

                                                   PAGE 50
  1  say you can't have access to this information.  It
  2  might well be information that is federal government
  3  information and of value at a database.  It matters
  4  not to them that the value is added, they simply
  5  want access to information and we can't -- we can't
  6  provide it and it is nowhere else available to them
  7  in any other form as more and more information
  8  becomes available electronically.
  9              Then we have the additional problem that
 10  information that has, on occasion, been available to
 11  us as was mentioned, disappears from a database.
 12  The most significant example that I can think of
 13  that is in my written testimony, is an example of
 14  one of the major legal databases which for a period
 15  of time had a French database and one day it was
 16  there and the next day it was not.
 17              Now, many of us cannot maintain
 18  collections of primary legal information in either
 19  its original language or even an English translation
 20  and so our only access would be to that and suddenly
 21  it's gone and totally gone.  And, for many of us an
 22  access would be one of the few major law libraries
 23  in the country that have foreign legal collections.
 24  So, that becomes problematic for us when that
 25  disappears.
 26              And, another example, and while it's not

                                                   PAGE 51
  1  legal information, just points up the problem of not
  2  only access, but when we're talking access we are --
  3  if you control the access, in point of fact you are
  4  controlling the use.  There is no way, unless we
  5  figure out some way to do read only, there is no way
  6  that somebody could look at that information.
  7              But, this is a separate point, but it
  8  actually speaks in some ways to the preservation
  9  problem and this example came up sort of repeatedly
 10  during CONFU, but it's an example that I think very
 11  clearly does represent, although a situation in
 12  which we are all facing, and I would hate to be in
 13  20 years the person who cite checks for a law review
 14  article and then finds that the electronic sites are
 15  not there to be cite checked.
 16              The example that was given in CONFU
 17  happened to be in the software world.  For instance,
 18  if you had somebody who had, as their research, the
 19  development of software programs, I want to say
 20  computer scientists.  I would not be the person who
 21  would be studying the development of software
 22  programs, but in the event that that happened there
 23  isn't anyone, including the software developers, who
 24  are keeping the really early versions of operating
 25  systems.
 26              Now, if we don't figure out a way that

                                                   PAGE 52
  1  libraries are authorized not only to access, but to
  2  make copies for preservation copies, there is a lot
  3  of that information that simply will be totally
  4  unavailable, whether it's licensing or any other way
  5  that would restrict access.
  6              MS. GOSLINS:  I have one brief follow-up
  7  question and then I'll get to my esoteric question,
  8  which actually all of you have started to answer
  9  already, which makes me very happy.
 10              I just wanted to follow-up briefly on
 11  the French database.  I guess I want to understand
 12  better how that's a problem of access, as opposed to
 13  a problem of a producer deciding to no longer
 14  maintain a database.  It's not that there is an
 15  access control that is then preventing you from
 16  accessing the French party's databases, but it no
 17  longer exists.  Right?  I just want to make sure I'm
 18  not missing something.
 19              MS. WIANT:  In that particular instance
 20  it is less one of access than one of the library's
 21  responsibility to preserve its collection and had we
 22  been able to continue to have access to a collection
 23  of information that we had acquired lawfully, even
 24  after they ceased to maintain it, if for instance we
 25  had been given notice, we might have been able to
 26  take over the responsibility or collectively we

                                                   PAGE 53
  1  might have been able to work with say even the law
  2  library of the Library of Congress, so that somebody
  3  would have kept that information.
  4              MS. GOSLINS:  Okay.  I love you.  You're
  5  leading right into my next question.  And, I would
  6  like to spend a little time understanding the
  7  panel's view on the inter-relation between the
  8  1201(a)(1) prohibition on circumventing access
  9  control protections and circumventing controls on
 10  copying, which is not prohibited under the DMCA, the
 11  conduct of circumventing the copy control.  All of
 12  you in someway have identified concerns about
 13  abilities to preserve and archive works.
 14              I believe, Mr. Jaszi, you made a
 15  suggestion for types of works that should be
 16  exempted, which involved uses made after a
 17  legitimately acquired copy is obtained.  Ms. Wiant,
 18  you talked about when a library buys a print
 19  subscription there is an ability to make a copy and
 20  that might not be the case in the digital world.
 21  And, Ms. Landesman, you've also identified archiving
 22  as one of your three major concerns.
 23              And, I guess what I would like to
 24  understand a little more is what is it about
 25  1201(a)(1) that would prevent you from making a copy
 26  once you have access to work?  Because again we have

                                                   PAGE 54
  1  to remember the distinction between access control
  2  technologies and copy control technologies.  And,
  3  after you have access to a work, how is your ability
  4  to copy that work for non-infringing uses, effected
  5  by the prohibition on access control?
  6              MR. JASZI:  Well, if I might begin, I
  7  think the answer to that question lies in
  8  fundamental definitions.  And, one of those is the
  9  definitional distinction between copy and work.  The
 10  person who has purchased a fixation of a particular
 11  work or works has of course now achieved access to
 12  that physical copy, but not necessarily access to
 13  the works contained in it.  And, as the record in
 14  this rule making makes clear, the content industries
 15  look at the question of access control as having two
 16  dimensions, initial access and second level access.
 17              In other words, in the vision of the
 18  content industries, the access controls, to which
 19  Section 1201(a)(1) speaks include not only controls
 20  that would, for instance, control whether someone
 21  could initially download an electronic work from the
 22  Internet, but also embedded code within that
 23  download that would require reauthorization for
 24  subsequent consultations of its content.
 25              In effect, in that vision, access and
 26  use merge, and access controls -- so-called second

                                                   PAGE 55
  1  level access controls -- become effectively a means
  2  for regulating use.  The burden of my suggestion for
  3  an exemption today was really that as far as it is
  4  possible to accomplish within the scope of this rule
  5  making, the thrust of Section 1201(a)(1) should be
  6  focused toward issues of controls on initial access,
  7  and not toward issues of second level access
  8  controls which functionally merge with controls on
  9  use.
 10              MS. WIANT:  I think Peter said it as
 11  well as I could have said it.
 12              MS. GOSLINS:  Thank you very much.
 13              MR. CARSON:  I would like to follow-up
 14  on a question Rachel asked.  And, first of all I
 15  guess I need to make sure we all understand and
 16  maybe that I understand correctly the question
 17  Rachel asked.  What I think Rachel was asking a
 18  couple of questions ago, was basically for whatever
 19  evidence any of you have, that up to now, in any
 20  way, the technological measures currently in place
 21  that control access to works have been impediments,
 22  have actually in practice been impediments to lawful
 23  uses of those works.
 24              And, if that wasn't how you understood
 25  it, I guess I would like to re-ask the question and
 26  just make sure we have the universe of experiences

                                                   PAGE 56
  1  that you are aware of up to now with respect to
  2  those impediments that have been imposed by
  3  technological measures controlling access.
  4              Does anyone have anything to add to
  5  what's already been said?
  6              MR. JASZI:  Well, I guess the only
  7  addition I would make, although I'm the least well-
  8  qualified person, because I'm not in the day to day
  9  information use business, is that it seems to me
 10  that although the inquiry is a very important one,
 11  it goes to only part of what should be the factual
 12  foundation for whatever action is taken in this rule
 13  making. That is because it's not clear to me, by any
 14  means, that we have yet seen the most aggressive,
 15  likely implementation of technological controls on
 16  access, especially the second level controls to
 17  which I referred earlier.
 18              In fact, I think we are likely to see
 19  more aggressive implementation of second level
 20  technological access controls when Section 1201
 21  takes full effect.  So, what I've heard from many
 22  information professionals is that there are a
 23  variety of situations in which their ability to do
 24  their jobs today is to some extent frustrated by
 25  access controls, some of which were detailed a
 26  moment ago, but I fear that there is every reason to

                                                   PAGE 57
  1  believe that the worst is yet to come.
  2              MS. LANDESMAN:  I think we haven't
  3  really seen the impact quite yet, but I keep my eye
  4  on the E-book analogy that I mentioned before,
  5  because there just aren't that many of them yet, but
  6  every meeting I've been to where the E-book
  7  producers are discussing our new product and our new
  8  this and our new that, has very clearly got a -- I
  9  don't know how they do it, but it's a technological
 10  thing that gives rights for use to the purchaser
 11  only of the book and precludes any other -- lending
 12  it to anybody for that matter.  And, that is the
 13  direction that they're going.  And, I think that's
 14  going to really start hitting, you know, as the E-
 15  book becomes more prevalent than it current is,
 16  which should be anytime now.
 17              MS. PETERS:  Can I ask you a question
 18  with regard to the E-book, or any of you?  It really
 19  has to do with where you use access versus licensing
 20  terms and conditions.  It is very clear that when
 21  Steven King's book was made available most of the
 22  purchasers were individuals.  If a library wanted to
 23  acquire for its patrons the Steven King E-book, is
 24  there any way that you could have worked with the
 25  publisher to have access for that?  In other words,
 26  to what extent can libraries, following what you say

                                                   PAGE 58
  1  is, you've got to serve the public, you're the place
  2  of last resort, work with the publisher to get,
  3  through an agreement, what you believe is the access
  4  that you need to serve your patrons.
  5              MS. LANDESMAN:  I think that's an
  6  evolving thing, too.  I can only keep going back to
  7  the meetings that I go to and the look of
  8  astonishment on the publisher's face when the word
  9  library is mentioned.
 10              So, I think part of that is I would love
 11  to work with the publishers, but the publishers are
 12  going down another path.  Not all of them.  There
 13  are exceptions to this, but the development may
 14  already be in place that doesn't allow for this.  I
 15  can't actually answer your question.  Certainly we
 16  would be happy to negotiate with the publishers, but
 17  I'm also seeing -- going back to my licensing
 18  question, it's all moving toward a pay-for-use and I
 19  guess our fear of the technological measures of that
 20  just lets that happen before you can negotiate it
 21  out.
 22              MR. CARSON:  We're heard the term pay-
 23  for-use a lot and I guess to what degree are we
 24  there already?  To what degree is that a reality
 25  today?  And, if it is a reality today, what problems
 26  does that impose?

                                                   PAGE 59
  1              MS. LANDESMAN:  The definition of use
  2  can be very broad.  What I've seen so far have been
  3  a little broader maybe than that literal thing, but
  4  the next effect is say when you have to negotiate a
  5  license for use of a product it can be for a certain
  6  number of people or -- every vendor has its own
  7  version of how that happens and it's either by
  8  blocking unauthorized users or providing you only
  9  with a certain number of passwords and when that's
 10  exceeded the next person can't get on or the CD ROM
 11  that we've mentioned, you know, if you buy a CD --
 12  if the information is on a CD or will be a DVD, and
 13  the software and the way that works it has to
 14  physically be used at one specific computer, because
 15  there is all this other stuff that has to get loaded
 16  along with it.  And, so that certainly effects the
 17  use limiting to one person at a time that specific
 18  computer.
 19              I don't have personal experience with a,
 20  oh, you're the next user, click here and pay us, you
 21  know, X amount of dollars, because I'm not sure how
 22  far along that is and I can't speak to it
 23  personally.
 24              MS. WIANT:  I guess in my mind your
 25  question raises for me the issue about the extent to
 26  which a contract could prohibit legitimate uses

                                                   PAGE 60
  1  which the copyright law has historically provided.
  2  And, I guess I find that an equally unclear area to
  3  provide any guidance to libraries about the extent
  4  to which any use that's not spelled out, but which
  5  otherwise might have been made, they continue to be
  6  legal.
  7              I was just trying to think of an example
  8  and I haven't played this out completely, so let me
  9  just put it on the table and we'll see where it
 10  goes.  Suppose an academic law school chooses or has
 11  faculty among us who typically teach from an
 12  electronic course book.  Typically that would be
 13  licensed for, I guess, for the term in which or if
 14  it was a couple terms in any year, would be licensed
 15  for use by the students who are specified to be in
 16  that class for that particular time.
 17              Now, historically libraries, some of
 18  them, choose to keep earlier versions of case books,
 19  because the faculty choose to go back for varying
 20  reasons or if you're developing a historical area
 21  you would want to have that in the collection.  Case
 22  books are typically licensed annually or by the
 23  term, so how does an academic library or any other
 24  library maintain an access which might have been a
 25  fair use some years down the road, presuming that
 26  they still had an electronic file of that particular

                                                   PAGE 61
  1  information, now would that be a fair use?  I would
  2  argue it would indeed be a fair use for a faculty
  3  member to look at an electronic file that was used
  4  in a class X years earlier, but we would have had it
  5  only for those students and that faculty in that
  6  particular window of time.
  7              It's likely that any negotiated
  8  agreement might not even contemplated the use by
  9  that or if your school used it and another school
 10  was contemplating using a future edition and wanted
 11  to looked at an earlier edition, where it wasn't
 12  maintained any place else, would that be a
 13  legitimate use for someone to actually access and
 14  use that?
 15              Now, the access controls would say, no,
 16  you couldn't have access.  That's where access and
 17  use, I think, merge in the secondary use.  So, I
 18  think there could be -- that's just one that came to
 19  mind while I was sitting here thinking about, well,
 20  how would you make these pieces fit?  And, I think
 21  we -- I presume that's why we're here today, to talk
 22  about how we might make these pieces fit, but this
 23  is one aspect of the problem.
 24              The intersection between how the
 25  copyright law and license agreements merge I think
 26  is another area that we can't overlook as we talk

                                                   PAGE 62
  1  about how access controls would effect subsequent
  2  uses.
  3              MR. JASZI:  In my view we are not there
  4  yet.  In my view we are only on the threshold,
  5  trembling on the brink of a pay-per-use universe.
  6  And one of the reasons why we're not there is that
  7  legal support does not currently exist for the
  8  aggressive implementation of second level access
  9  controls.
 10              Whether we would be disadvantaged if all
 11  information or much information were to become in
 12  the future, available to consumers only on a pay-
 13  per-use, or by the drink, formula is, I think, an
 14  issue that brings us back to questions of what I
 15  might call cultural faith.  There is a set of deep
 16  underlying assumptions about cultural practice with
 17  respect to information use, which I think we might
 18  discover many of us share.  One is the notion that
 19  there is something good -- something positive --
 20  about the kind of ability to use information that
 21  comes to us under existing law and existing
 22  technology when we purchase or otherwise lawfully
 23  acquire a copy of a copyrighted work.
 24              Under those circumstances we are
 25  permitted to make use of the contents of that work
 26  that's comprehensive, that's repeated, that's

                                                   PAGE 63
  1  perhaps inefficient, but ultimately productive.  I
  2  think that the concern about the coming of a pay-
  3  for-use information environment is not only a
  4  concern about cost, although cost is certainly an
  5  issue to be considered, but a concern about the ways
  6  in which the requirement to make more parsimonious,
  7  more efficient and more restricted use of
  8  information in various electronic media would effect
  9  our cultural practice.
 10              I realize that that's a very difficult
 11  thing to get at in a rule making proceeding of this
 12  kind, but I also think that to fail to consider
 13  questions about the effects of the implementation of
 14  second level access controls on existing cultural
 15  practice would be to overlook what might may
 16  ultimately be the most important area of adverse
 17  affectation likely to arise in connection with the
 18  full enforcement of Section 1201(a)(1).
 19              MR. CARSON:  Well, on a couple of things
 20  Professor Wiant said.  First of all I'm not
 21  persuaded how relevant it is, but I just want to
 22  explore it a little bit anyway.  It's going a bit
 23  far afield, perhaps.  You gave the example of a
 24  situation where a university or library might
 25  acquire rights for a limited time and then
 26  subsequent to the termination of that period may

                                                   PAGE 64
  1  discover that it has ultimate need to have access
  2  again to that work.
  3              Typically, if there is anything typical
  4  about this, in those situations does the library or
  5  university have the option of negotiating for
  6  permanent rights or rights for a limited time and
  7  make a choice, no, we only need it for this limited
  8  time, so we'll pay the lesser price?  Or do you just
  9  not have a choice?
 10              MS. WIANT:  I think it's fair to say
 11  both proprietors and libraries are becoming more
 12  sophisticated in their negotiations, but for a long
 13  period of time there wasn't a choice because they
 14  were not preserving the files and if we chose not to
 15  or we were not given the option to even decide that
 16  we were going to figure out a way to preserve that
 17  information, it wasn't available.  So, I would say
 18  that the answer to your question is not clear.
 19              MR. CARSON:  I had that feeling.  I
 20  wanted to follow-up on your responses to Rachel as
 21  well.  You gave a situation where some of your
 22  license agreements permit use only by students and
 23  faculty.  So, if someone else walks into the library
 24  you couldn't give them access.  I want to make sure
 25  in the context of this rule making whether that's a
 26  problem in the context of this rule making.  In

                                                   PAGE 65
  1  other words, to what degree are the technological
  2  controls preventing you from giving access to that
  3  outsider and to what degree is it simply the terms
  4  of the license?  If you wanted to breach the license
  5  you could give them access, I assume.  Nothing
  6  prevents you in the technology from getting that
  7  access.
  8              MS. WIANT:  I suppose that is -- in the
  9  instance again that's coming to mind, I suppose it
 10  is one in which one could violate a provision to do
 11  so, it may not be the technological controls, but I
 12  can think of -- simply because the piece of
 13  information that I'm thinking of happens to be in
 14  one of the major legal databases and the way we
 15  access that is different.  But, the example that is
 16  immediately coming to mind is one of let's say a
 17  local attorney who has a tax question and needs a
 18  private letter ruling, the full text of which are
 19  not in print and the access to which is in a major
 20  legal aggregated database and because of the
 21  restrictions on that we couldn't legitimately supply
 22  a walk-in attorney who is not a member of our
 23  immediate community.
 24              Now, it is true that that would be -- in
 25  that particular instance, because of the database in
 26  which I happen to know there was full text opinions

                                                   PAGE 66
  1  available, that would be a licensing scenario.
  2  That's not to say though that if that same
  3  information were in some other database on the
  4  Internet that it would not be an access problem, as
  5  well as again we're back to the secondary use of
  6  could one even look at it to decide whether or not
  7  that was the private letter ruling they wanted
  8  before you actually got to the level of getting a
  9  copy.
 10              How one goes about making sure that
 11  you've actually located the piece of information
 12  that you need, particularly when you can't see it in
 13  any other way in a whole text scenario and I'm
 14  thinking conceivably that could be in a database for
 15  which the access is technologically controlled and
 16  therefore the use is controlled.  But, because I
 17  don't know whether the private letter rulings in
 18  full text are in such a database, I can't answer the
 19  question in the situation it was a licensing
 20  limitation.
 21              MR. CARSON:  Okay.  What I'm trying to
 22  get out is what could we do to help you in that
 23  situation and I think what I'm hearing is confusion
 24  at best and perhaps there is nothing we could do in
 25  the context of this rule making that would help you
 26  in that situation.

                                                   PAGE 67
  1              MS. WIANT:  What you could do to help us
  2  is figure out an exemption that would at least allow
  3  us to look at the information to decide whether it's
  4  information that we go to the second level and get a
  5  copy.
  6              MR. JASZI:  And, I might add that I
  7  think one thing you could do to help in the rule
  8  making is to make it clear that the use of access
  9  controls will not supersede the use of licensing in
 10  the future, because I think there is a real
 11  possibility that the terms and of use that are open
 12  to be negotiated between suppliers and consumers in
 13  the present environment would in the conditions of
 14  the full implementation of Section 1201(a)(1) come
 15  simply to be dictated by technological means.
 16              MS. PETERS:  My question had to do with
 17  kind of where part of the problem is when we say
 18  that there is not fair use at all.  What we're
 19  really talking only about is access control and your
 20  example had a member of the public who presumably
 21  was not a student trying to look at a database for a
 22  class project, but more likely a practicing attorney
 23  who was trying to look at it for a client.
 24              MS. WIANT:  But a federal government --
 25  a piece of federal government information that
 26  otherwise would not be available for copyright

                                                   PAGE 68
  1  protection I believe was my example there.
  2              MS. PETERS:  Yes.  And, you're saying
  3  the only place that this is available is in this one
  4  database?
  5              MS. WIANT:  That I can think of at the
  6  given moment.
  7              MS. PETERS:  Okay.  Because that -- with
  8  a lot of information with Lexis and Nexus, I mean
  9  almost all the court opinions are available
 10  elsewhere.
 11              MS. WIANT:  Elsewhere now.
 12              MS. PETERS:  Yes.
 13              MS. WIANT:  Or becoming increasingly
 14  available, yes.  But, as I say, there are many
 15  examples and there are many examples of federal
 16  government information that has historically been in
 17  print and that are not becoming only electronically
 18  available as well.  But, some of those are still
 19  available electronically from the government, but
 20  there are examples, such as the one I just raised,
 21  that don't fall into that category.
 22              MR. CARSON:  Let me follow-up on your
 23  example, the French database where it suddenly
 24  disappeared.  First of all are you talking about
 25  something where you actually had the physical copy
 26  or are you talking about something where you had it

                                                   PAGE 69
  1  online.
  2              MS. WIANT:  No.  I'm talking about an
  3  electronic database.  One day it was there and then
  4  without notice was not.
  5              MR. CARSON:  Okay.  What could we do in
  6  the context of this rule making to resolve that, to
  7  help you out with that situation?  How would
  8  anything we do permit you to get access to that when
  9  it's no longer there?   Okay, that's the wrong way
 10  to put it, perhaps, because I think I answered my
 11  own question.  What could we do that would resolve
 12  the problem?
 13              MS. WIANT:  As in other formats, when
 14  publishers are no longer maintaining in print and
 15  now lets say in access, historically libraries if
 16  after making a reasonable search in the market,
 17  libraries have been able then to make a copy for
 18  preservation purposes.  Maybe a similar pattern if
 19  the proprietors are no longer going to maintain
 20  electronic copies, that if libraries were allowed,
 21  as they are under Section 108, if libraries are able
 22  to make preservation copies if after a reasonable
 23  venture into the market that they cannot find a
 24  replacement copy at a reasonable cost, that
 25  libraries be allowed to make some preservation
 26  copies.

                                                   PAGE 70
  1              MR. CARSON:  In this rule making all we
  2  can do, I think, is determine whether there are
  3  particular classes of work for which the anti-
  4  circumvention prohibition, with respect to access,
  5  is exempted.  How does that solve this problem?  Do
  6  we have a tool that will really solve the problem
  7  for you?
  8              MS. WIANT:  I guess I come back to
  9  Peter's comment that when you look at access you are
 10  in fact looking at use in many ways.  I mean, if we
 11  can't get access to it, we can't use it.  If the
 12  restrictions control the access, they therefore
 13  control the use and therefore it simply doesn't
 14  exist to us.
 15              MR. JASZI:  In other words it would be
 16  possible in a rule making such as this one, to
 17  enable the archival copying of potentially ephemeral
 18  electronic information products, despite the fact
 19  that those products might bear technological
 20  protection measures which would otherwise bar such
 21  archival copying.
 22              MR. CARSON:  So, you're saying even
 23  though this is in a remote database you would
 24  download it somehow and then after it is no longer
 25  available in that database, if there is any
 26  technological protection to access you should be

                                                   PAGE 71
  1  able to circumvent that protection?
  2              MR. JASZI:  Well, I don't know enough
  3  about the library technology involved to be able to
  4  go to that level of specificity, but my
  5  understanding of the problem is that one reason it
  6  exists is that under current arrangements, in part
  7  because of the use of technological protection
  8  measures, archival copying of these materials is not
  9  a possibility.  Thus, when the materials are gone
 10  they're gone.
 11              Again, I don't have the library
 12  expertise necessary to answer at the level of
 13  precision that I would like, but I think in more
 14  general terms the answer to your question is that it
 15  would seem to be within the scope of this rule
 16  making potentially to enable some forms of archival
 17  copying, despite the fact that those forms of
 18  archival copying might involve circumvention of
 19  access controls.
 20              MR. CARSON:  One final line of question.
 21  I would like each of you to put yourselves in the
 22  place of the register right now.  And, it's time to
 23  make your recommendation to the Librarian and it's
 24  time to tell the Librarian that this is the class or
 25  these are the classes of work which you should
 26  exempt.

                                                   PAGE 72
  1              Now, you have all, I think, to varying
  2  degrees, sort of hinted or perhaps explicitly stated
  3  this in your testimony, but I guess I would like to
  4  hear it succinctly now from each of you, what class
  5  or classes would you advise the Librarian to exempt?
  6              MR. JASZI:  What I've heard today, if I
  7  can recap from our testimony, is a series of
  8  recommendations.  There is the class of works to
  9  which I referred in my testimony; that is, works
 10  embodied in lawfully acquired copies, which are
 11  sought to be used for otherwise lawful and non-
 12  infringing purposes.
 13              I think we're also heard that works
 14  embodying significant amounts of otherwise public
 15  domain -- and particularly government -- information
 16  are an area of special concern.  Those are two that
 17  immediately spring to mind, based on today's
 18  testimony.  Perhaps as well my colleagues have
 19  others to suggest.
 20              MS. LANDESMAN:  I would support what he
 21  said.  I think we get a little hung up between
 22  what's in it and the format that it's in.  And, I
 23  guess a lot of -- it's no different than it was in
 24  print, so as he very ably described.  This is the
 25  type of thing that should be exempted.  Whether it's
 26  now in a digital format should not be the negating

                                                   PAGE 73
  1  factor.  So, if it were in print then we would
  2  legitimately be able to make use of it.
  3              MS. WIANT:  I would encourage the
  4  Librarian to define classes as classes of legitimate
  5  uses of works of lawfully acquired materials and to
  6  look at the relationship between 1201(c) and
  7  1201(a).
  8              MR. CARSON:  One question for Professor
  9  Jaszi.  I just want to get a little clarification so
 10  I understand what you meant when you talked about
 11  works embodied in copies that have been lawfully
 12  acquired by users.  A typical example, I suppose,
 13  would be you get a CD ROM with something on it.  I
 14  can understand that.  Would you also include a
 15  situation where you're on the Internet and you're
 16  able to download something from the Internet so it's
 17  now sitting on your hard drive?  Is that a work that
 18  you have now acquired that would be subject to this?
 19              MR. JASZI:  Yes, it is.
 20              MR. CARSON:  Okay.  Tell me what
 21  wouldn't be subject to that?
 22              MR. JASZI:  Any work that is provided
 23  electronically in a format which limits the ability
 24  to fully download or acquire a copy; for instance,
 25  when I go on line I cannot with Lexis and Nexis,
 26  download the Lexis/Nexis database.  It's not a

                                                   PAGE 74
  1  facility they provide to me.  They provide me the
  2  ability to read and the ability to capture portions
  3  of the database, but not the ability to capture the
  4  collection as a whole.
  5              And, I think we're going to see, as my
  6  testimony indicates, a great many other
  7  implementations of that kind of limited access
  8  electronic information commerce, so much so that
  9  three years from now we may well be back talking
 10  about the necessity of further qualifying the reach
 11  of 1201(a)(1) with respect to those emerging
 12  business models. The distinction is between the
 13  business model, which depends on the enabling the
 14  consumer, by one means or another, to acquire a
 15  lawful copy and the many emerging business models
 16  which are based on more limited forms of electronic
 17  access.
 18              MR. CARSON:  It sounds like you're
 19  willing to define the scope of your exemption by
 20  reference to an almost acquiescence in the
 21  technological controls that the provider puts on
 22  copying and reproduction and so on, if I understand
 23  you correctly.  If the content provider won't let
 24  you copy the work, then you're willing to say fine,
 25  I don't have it, and I'm not entitled to the
 26  exemption.  If the content provider is willing to

                                                   PAGE 75
  1  let you copy it, then you have it and you're
  2  entitled to the exemption.  Is that the effect of
  3  what you're suggesting or am I missing something?
  4              MR. JASZI:  I don't think you're missing
  5  anything.  I think that the goal of this, if I can
  6  go back to first premises, the goal that the Digital
  7  Future Coalition has had from its formation in this
  8  process has been that of preserving the existing
  9  balance of forces between proprietary control and
 10  use privileges in copyright law.  One of the central
 11  features or aspects of that balance is that existing
 12  copyright doctrine facilitates wide ranges of
 13  legitimate uses of information by individuals who
 14  have purchased or otherwise lawfully acquired copies
 15  thereof.
 16              The model of information commerce that
 17  involves the distribution of copies has been and
 18  continues to be a very important part of the
 19  information commerce picture overall.  The specific
 20  exemption that I'm proposing is one which would be
 21  designed to assure that insofar as that model of
 22  information commerce is perpetuated its consequences
 23  for the consumer remain functionally similar,
 24  although the media involved may change.
 25              I absolutely concede the possibility
 26  that as new business models are implemented further

                                                   PAGE 76
  1  issues about the adverse effects from the
  2  implementation of Section 1201(a)(1) may arise with
  3  respect to those new business models.  But the
  4  proposal that I'm making today is one that is
  5  specifically concerned with, the perpetuation of
  6  traditional models of information distribution,
  7  which I think will continue to have some vitality in
  8  the new information environment.
  9              MS. PETERS:  I'm struggling to try to
 10  figure out where our direct charge is with relation
 11  to all what we're hearing as a whole.  Much of what
 12  we've heard with regard to the problems that
 13  libraries are encountering are problems that we
 14  could sit here and discuss whether or not there ever
 15  was an enactment of Section 1201.  We have said
 16  access controls have been in place for a long time.
 17  Copyright owners have licensed libraries to a
 18  variety of things.
 19              To date, to your knowledge, even though
 20  the provisions of the DMCA are not in place, you're
 21  not aware of the fact that libraries have basically
 22  downloaded like CD ROMs and for preservation
 23  purposes because the CD ROM may have an expiration
 24  date with regard to the access to the information.
 25  I guess, so I'm struggling with where we are today
 26  and where we will be in three years, because that's

                                                   PAGE 77
  1  the period of time that this rule making will cover
  2  where there is, because of control of access
  3  provision, will not be able to get certain
  4  information any other way.  Because I think it
  5  really is an issue about, as we mentioned in the
  6  beginning, it's not how inconvenient it is to get
  7  the information, but whether or not you can get the
  8  information and I guess I'm still struggling because
  9  some of the concerns that you have, which are very
 10  legitimate concerns, I'm just not at the point where
 11  I can figure out that they really directly relate to
 12  our activity with regard to excepts for access
 13  controls.
 14              So, I'm kind of back where David is.
 15  Given the scope of what our direction is -- having
 16  read the -- let me back up.  Having read legislative
 17  history, when you're directed to create exemptions
 18  for classes of works and we know that exemptions are
 19  crafted narrowly to address a certain problem, and
 20  yet what we hear with regard to the scope of what
 21  you think the exemption would be, I have a concern
 22  that you vacillate the very protection that Congress
 23  intended.
 24              So, I guess my question is, if we exempt
 25  broadly, then what happens to the protection that
 26  Congress intended to give copyright owners with

                                                   PAGE 78
  1  respect to the access controls that they would be
  2  using?
  3              MR. JASZI:  Well, I think that, in fact,
  4  the exemption that I have proposed is one which, as
  5  I suggested in my testimony, might effectively
  6  restore Section 1201 to what was the original
  7  Congressional intent.
  8              My reading of the legislative history --
  9  not only the legislative history relating to this
 10  rule making, but the legislative history relating to
 11  the DMC as a whole -- is that throughout the access
 12  control/use control distinction was taken seriously,
 13  and that it was the understanding of the principal
 14  proponents of the legislation that the term ``access''
 15  as employed in Section 1201(a)(1) was in effect
 16  limited in scope to what might be called initial
 17  access or first level access controls.
 18              The exemption that I have proposed is
 19  one which would, if employed, in effect restore that
 20  understanding of Section 1201(a)(1).  I'm not sure
 21  that that would by any means cure all of the
 22  potential difficulties with the effect of access
 23  controls on information consumers.  But it would
 24  certainly have the effect of bringing the 1201(a)(1)
 25  provisions back to their roots or origins, so to
 26  speak.

                                                   PAGE 79
  1              So, far from representing a departure
  2  from the original understanding of the legislation
  3  as represented by the legislative history, it would,
  4  in my view, represent a return to that
  5  understanding.
  6              MS. PETERS:  My question you were
  7  focused on, initial access, if I am a library and
  8  I'm negotiating for use for a particular year, I can
  9  basically say I want unrestricted access to my
 10  patrons, on the premises, for X dollars.  It's a
 11  fair amount because it's for the whole year for
 12  everybody who comes in.  Is it not possible that the
 13  business model that says I'm going to basically bill
 14  you per month, based on usage, could be cheaper or
 15  less than the per year projection for the whole?
 16  That was  anyone.
 17              MS. WIANT:  I can think of scenarios
 18  where that might be cheaper.  Well, one of the
 19  problems of this is an inconvenience problem though.
 20  I recognize that.  If you're in an academic
 21  environment where you're being billed on how many
 22  times a student chooses to look at whatever and each
 23  one of those are charged, particularly when we're
 24  wanting an environment where inquiring minds want to
 25  know.  We would like them to be inquiring and some
 26  of that may be an environment in which say school

                                                   PAGE 80
  1  boards or at the universities or whatever, would
  2  have a very hard time estimating cost of how many
  3  times somebody is going to look at something.
  4              So, yes, it is a changing business model
  5  and probably the other --
  6              MS. PETERS:  I'm just trying to get at
  7  that per se it not necessarily is a bad model.  I
  8  mean, obviously with the Internet within a
  9  transition and we're going to see many, many new
 10  business models and in any business model it's the
 11  consumers who ultimately accept or don't accept the
 12  business model.  So, I was just getting at your
 13  focus on, you know, we really should only be talking
 14  about initial access versus later access.
 15              MR. JASZI:  I see no difficulty with a
 16  situation in which consumers, library consumers in
 17  this case, or as it might be individual consumers in
 18  some other case, can freely accept the consequences
 19  of their choice as to the form of access that they
 20  receive, provided that there is, in fact, a
 21  meaningful opportunity to negotiate that issue. But
 22  I am very concerned about the possibility that terms
 23  of access will in effect be technologically imposed
 24  rather than made subject to that kind of
 25  negotiation.  It's there, I think, that the role of
 26  this rule making, in creating exemptions which may

                                                   PAGE 81
  1  have an effect on shaping the market environment in
  2  which those choices are made, is so important.
  3              MS. PETERS:  One of the beauties, I
  4  think, of what Congress did is by imposing a three
  5  year kind of a look see.  It's a way in which you
  6  continue to look at what happens and you strike the
  7  balance as you see it.  I guess I was a little
  8  surprised at some of the comments that we received,
  9  because working in a library where all of us who
 10  work here access to the Internet and I don't have
 11  authority to go on bill anything to the Library of
 12  Congress.  I can spend most of my day going on the
 13  Internet and getting a lot of stuff free.  So, I
 14  haven't seen it as a locking up necessarily of
 15  information, but in many ways too much information
 16  that was out there and yet we're focusing, you know,
 17  the locking up.
 18              So, I guess what I'm trying to get at is
 19  what I've sort of heard is, except for some examples
 20  that you gave where certain information, whether
 21  it's public domain or federal that isn't really
 22  available openly, in the next three years what
 23  information do we actually think is not going to be
 24  available to people who want to use libraries?  Is
 25  it as broad as you -- I mean, do you -- I want to
 26  say, do you honestly -- in the next three years do

                                                   PAGE 82
  1  you actually predict that we are going to see this
  2  massive locking up of information in all categories
  3  of works?
  4              MS. WIANT:  The short answer is yes.
  5              MS. PETERS:  Okay.  Does anyone else
  6  have any questions?
  7              MR. KASUNIC:  A couple of things.  Are
  8  there any particular technological control measures
  9  that seem to be more restrictive than any other?
 10  Are there certain things that are less objectionable
 11  or controlling in terms of secondary uses or
 12  secondary access of works?
 13              MS. WIANT:  I'm having a difficult time
 14  of answering that, because I think technological
 15  measures is one of those totally undefined terms on
 16  the one hand and, two, I also am not sure I know
 17  enough technologically to answer that.
 18              MS. LANDESMAN:  Yes, I'm not quite sure,
 19  you know, quite where that is.  I personally have a
 20  real problem with having to enter a password.  And,
 21  the reason I say that is that you really don't want
 22  to be giving out this password to thousands of
 23  people and saying keep this a secret.  You also
 24  don't want them to have to come to you and you have
 25  to log them on.  It's just a very difficult, you
 26  know, arrangement, but I'm not sure if that's where

                                                   PAGE 83
  1  you were going.
  2              MR. JASZI:  My response is that I don't
  3  think so. I'm by no means a very good technologist,
  4  but the little I know about the different levels of
  5  intensity of access controls, actual or potential,
  6  suggest to me that the real distinction among them
  7  is not one based on technology, but based on the
  8  purposes for which they're implemented. Many of the
  9  available forms of technological access control can
 10  be implemented for a variety of different purposes,
 11  and that to the extent there are distinctions to be
 12  made, they ought to be made in terms of the purpose
 13  for which the controls are implemented, what they
 14  are designed to restrict, rather than on the basis
 15  of the technology itself.
 16              MR. KASUNIC:  I think that some of the
 17  comments stated that certain measures were merely an
 18  obstacle to obtaining initial access and that some
 19  of those measures were -- in terms of passwords --
 20  less restrictive. That once you had enabled initial
 21  access, then it was only a question of using the
 22  work.  A technology or protection measure didn't
 23  really have any other effect on uses. So, I guess
 24  part of my question is: are the technological
 25  measures distinguishing in anyway between access and
 26  the use of works?

                                                   PAGE 84
  1              MR. JASZI:  Well, just to give a simple
  2  example, perhaps over simplified from a
  3  technological standpoint, but illustrative, let's
  4  take the simple measure of the password.  We could
  5  imagine an implementation of password security which
  6  would permit the user, once the password has been
  7  requested and given in the first instance, to make
  8  continuous and free use of content thereafter.  We
  9  could, by contrast, imagine an implementation of
 10  password security that would require that every time
 11  the individual revisited the work embodied in that
 12  physical medium or download, the password would be
 13  requested again or that the password would be
 14  requested every few minutes, so that the use of the
 15  work could be billed in five minute periods or two
 16  minute periods.
 17              In other words, we could imagine -- at
 18  least theoretically and perhaps there would be
 19  practical difficulties -- the implementation of a
 20  measure like a password as a first level access
 21  control or as a relatively comprehensive second
 22  level access control.  The distinction is not in the
 23  technology, but in the manner and purpose of its
 24  implementation.
 25              MS. PETERS:  Anyone else?
 26              MS. DOUGLASS:  I just wanted to make

                                                   PAGE 85
  1  sure that I got your answer correctly about whether
  2  or not we should be looking at 1201(f) fixed this or
  3  1201(g) fixes, like reverse engineering or
  4  encryption in the course of doing exemptions or
  5  possible exemptions of 1201(a) or should we stick to
  6  our knitting and vote that 1201(a) only?  I think I
  7  heard your answer, if you would clarify it or did
  8  you answer that?
  9              MR. JASZI:  Well, I'm not sure I
 10  answered that.
 11              MS. DOUGLASS:  Okay.
 12              MR. JASZI:  I would be pleased to try to
 13  do so.  Your charge, as I understand it, relates to
 14  1201(a)(1) as such, but the question of how that
 15  charge should be considered and executed seems to me
 16  inevitably related, to some extent, to your
 17  understanding of the specific exemptions.  In other
 18  words, since the specific exemptions of Section 1201
 19  bear on the scope of Section 1201(a)(1) itself,
 20  providing in some cases potential carve outs from
 21  1201(a)(1)'s scope, then the question of how
 22  adequate or complete those exemptions are with
 23  respect to the kinds of legitimate activities to
 24  which they were originally addressed seems relevant
 25  to your undertaking.
 26              If we were to decide, for example, that

                                                   PAGE 86
  1  one of the specific exemptions was in fact so
  2  narrowly cast that it failed to provide scope for
  3  otherwise important and legitimate activities that
  4  potentially fell within the Section 1201(a)(1)
  5  prohibition, then that conclusion would bear on the
  6  discharge of your rule making responsibility.
  7              MS. PETERS:  Anyone else?  If not, I
  8  want to thank our witnesses for their testimony.  We
  9  really did appreciate it.  And, to all of the rest
 10  of you, we will resume around 2:30.  If you know any
 11  of the witnesses who are not and you can tell them
 12  that, for this afternoon, it will be around 2:30.
 13  It depends on my emergency that I have to resolve.
 14              Thank you very much.
 15              (Whereupon, the hearing was recessed at
 16  12:30 p.m. to reconvene at 2:30 p.m. this same day.)

                                                   PAGE 87

                                                   PAGE 88
  1            A-F-T-E-R-N-O-O-N  S-E-S-S-I-O-N
  2                                             2:30 p.m.
  3              MR. CARSON:  Unfortunately, the Register
  4  is not going to be able to be with us, at least
  5  initially.  She is still attending to some other
  6  urgent business that she needs to attend to.  We're
  7  hoping we'll see her before we say good-bye to you
  8  today.
  9              I'm not going to repeat the Register's
 10  introductory remarks.  For those of you on the panel
 11  who were not here this morning, I've provided copies
 12  for you so you have an understanding of the basic
 13  ground rules are.  I'm sure you already do, but if
 14  there is any doubt in your mind have a quick read of
 15  this thing.
 16              And, I guess we'll get started with the
 17  panel.  This afternoon -- actually do we have
 18  everyone here?  I see three people up there and I
 19  thought we had four --
 20              MR. KUPFERSCHMID:  David is here.  We
 21  can start and --
 22              MR. CARSON:  Okay.
 23              MR. KASUNIC:  David Mirchin is doing the
 24  slide show.
 25              MR. CARSON:  He's number one on our
 26  list, although I don't -- do we have any agreement

                                                   PAGE 89
  1  among the people as to who is going to go first?  If
  2  not, I'll just follow the order on the list, which
  3  means we're waiting for David.
  4              MR. KUPFERSCHMID:  We were just thinking
  5  we would go from, I guess, right to left.
  6              MR. CARSON:  Okay.  Let's just give
  7  David a moment to come and catch his breath.
  8              (Whereupon, at 12:35 p.m. a recess until
  9  12:36 p.m.)
 10              MR. CARSON:  This afternoon's panel is
 11  first of all David Mirchin from SilverPlatter, Keith
 12  Kupferschmid from the Software and Information
 13  Industry Association, Joseph Montoro, Spectrum
 14  Software and Chris Mohr representing the American
 15  Business Press and a number of others.
 16              And, you decided you would go from which
 17  side to which side?
 18              MR. KUPFERSCHMID:  That way.
 19              MS. DOUGLASS:  Okay.  Then, Chris, I
 20  guess you're on.
 21              MR. MOHR:  Good afternoon.  My name is
 22  Chris Mohr.  I'm an attorney in private practice
 23  with the firm of Meyer and Klipper.  I am here today
 24  on behalf of the McGraw-Hill Companies, American
 25  Business Press, the Newspaper Association of
 26  American, Phillips International, the National

                                                   PAGE 90
  1  Association of Securities Dealers, Reed Elsevier,
  2  SilverPlatter Information, Skinder Strauss
  3  Associates, the Software and Information Industry
  4  Association and the Thompson Corporation.
  5              These vastly different organizations,
  6  some of whom have filed statements and are
  7  testifying on their own account, all have one thing
  8  in common.  They create and commercial market
  9  databases.  As database producers we, therefore,
 10  feel compelled to respond to attempts by certain
 11  university and library associations to have
 12  databases excluded from the scope of Section
 13  1201(a)(1)(A)'s protection.
 14              More specifically, the argument that
 15  databases should be excluded under the, in our view,
 16  flawed rubrics of thin copyright works and fair use
 17  works seems at odds with the legal frameworks set
 18  forth in the NOI and the statute.  We also believe
 19  that such a determination would be ill-advised as a
 20  matter of public policy.
 21              The world of databases is not a
 22  homogenous one.  Databases vary greatly in their
 23  subject matter, methods of organization and the
 24  manner in which protected expression is integrated
 25  within them.  Databases also feed the needs of a
 26  variety of organizations in both the non-profit and

                                                   PAGE 91
  1  for profit markets.  The companies I represent today
  2  from small businesses to much larger corporations
  3  collectively invest billions in the creation and
  4  distribution of material in nearly every field of
  5  human endeavor.
  6              The Internet has conferred tremendous
  7  benefits on the database business.  It has made
  8  distribution of these products possible on a scale
  9  and in a manner never imagined just 10 years ago.
 10  In all likelihood increases in band width and
 11  processing power will make today's technologies seem
 12  hopelessly slow and archaic just a decade hence.
 13  The other side of this equation is, as you well
 14  know, that digital technology enables unscrupulous
 15  users to make perfect and instantaneously
 16  distributed copies of a work at a fraction of the
 17  cost of creation.
 18              Congress, therefore, concluded that the
 19  threat caused by unauthorized access to such works
 20  would result in publishers refusing to fully embrace
 21  digital media, unless legal protection from
 22  circumvention existed.  Congress enacted the DMCA to
 23  "facilitate the robust development and world-wide
 24  expansion of electronic commerce communication,
 25  research development and education by making digital
 26  networks safe places to discriminate and exploit

                                                   PAGE 92
  1  copyrighted material."
  2              Our position is more fully set forth in
  3  the reply comment we filed and I will not go through
  4  all of it here.  In short, nothing we have seen in
  5  either the initial round or the reply comments leads
  6  us to believe that an exemption is warranted for any
  7  class of works, much less one made up of databases.
  8  The reasons for this belief are as follows.
  9              First, as a general matter, as both the
 10  legislative history and the notice of inquiry make
 11  very clear, proponents of an accepted class of works
 12  bear the burden of demonstrating the necessity of a
 13  delay in Section 1201(a)(1)'s effective date.  This
 14  point is set forth extensively in the NOI and
 15  legislative history and it sets the framework for
 16  the Librarian's determination.  Nonetheless, many
 17  comments have viewed the burden to be on copyright
 18  owners.  This view is simply mistaken, but so
 19  strongly espoused that we felt it necessary to
 20  repeat it here.
 21              The burden extends to several areas.
 22  First, the proponent of an exemption must properly
 23  identify a class of works.  The legislative history
 24  instructs us that this category must be carefully
 25  drawn in order to preserve the incentives Congress
 26  intended the statute to foster.  Despite the

                                                   PAGE 93
  1  enormous diversity of the database, the association
  2  comments have attempted to lump these products
  3  together under the umbrellas of fair use works and
  4  thin copyright works.  This approach, in our view,
  5  has several fatal defects.
  6              First, one cannot blindly lump databases
  7  into one category.  The argument rests on the
  8  premise of because certain works of authorship,
  9  specifically scientific and academic databases or
 10  databases, generally contain large amounts of
 11  information and unprotected expression they should
 12  be exempt from the access control provision.  This
 13  argument is boundless.  Every copyrighted work
 14  contains material to which the copyright does not
 15  adhere and by the nature of the regime itself every
 16  work is potentially subject to fair use.
 17              What Professor Jaszi's comments this
 18  morning seemed to me did was to attempt to create a
 19  reverse presumption that because a work is subject
 20  to fair use -- because a work is potentially subject
 21  to fair use, that that work should be excluded.
 22  This effectively eviscerates the protection and
 23  repeals Section 1201(a)(1)(A).  We believe that that
 24  answers essentially a question that was not asked in
 25  this proceeding.
 26              With respect to the definitions of works

                                                   PAGE 94
  1  proffered by the AAU, the universities offer no
  2  method by which thin works may be distinguished from
  3  their thicker counterparts.  Not all databases
  4  contain a thin protection or material.  Some contain
  5  great originality and section coordination and
  6  arrangement.  Others contain works composed entirely
  7  of the "thicker" copyright in photograph, new
  8  stories or paintings.  We believe that such a
  9  distinctions would be unworkable in practice.
 10              Moreover, if one look looks at the list
 11  in the comment, the list ends with the word et
 12  cetera, which is not, in our view, a good way to
 13  develop a narrow and focused class.
 14              Third, there seemed to be an assertion
 15  that because a non-profit user makes use of the
 16  materials it is entitled to an exemption from the
 17  prohibition against unauthorized access.  We did not
 18  find support in the language of the legislative
 19  history that a class of user can define a class of
 20  works.  The flaws in the class of user distinction
 21  become more apparent when one considers that
 22  database producers, such as SilverPlatter, market
 23  their products primarily to the non-profit
 24  educational communities.
 25              The adoption of that kind of framework
 26  effectively penalizes certain publishers that derive

                                                   PAGE 95
  1  most of their revenue from these markets.  Given
  2  Congress's stated desire to make content richly
  3  available in all markets, such a result seems to run
  4  contrary to legislative intent.
  5              Finally, we believe that adoption of the
  6  AAU's recommendations with respect to either fair
  7  use or thin works would have disastrous practical
  8  effects for database producers.  Database publishers
  9  typically invest tremendous effort into producing
 10  products that are thorough, accurate and
 11  comprehensive.  The current scope of copy right
 12  protection and compilations has caused several
 13  entities to modify their business plans and they
 14  question the manner in which these products and
 15  services are offered making investment in future
 16  products increasingly risky.                   0
 17  infringer from eviscerating the fruits of their
 18  labor is the originality surrounding selection
 19  coordination and arrangement.  Once the egg shell
 20  has shattered the yolk is free for the taking.  
 21       Protection from unauthorized circumvention of
 22  the technological measure preserves incentives and
 23  current law to create and distribute these valuable
 24  products.
 25              In short, neither the university
 26  comments, the library comments or, in fact, any

                                                   PAGE 96
  1  other comments have identified a class of work with
  2  the precision that Congress asked for.  This is an
  3  element of the case that must be proved and it is
  4  one that has not been proven.
  5              The next point of proof borne by
  6  proponents of an exception is that of showing
  7  substantial adverse effects.  The universities in
  8  advocating that databases as a class be exempted
  9  have not documented a single instance of an adverse
 10  effect.  With respect to the libraries, we believe
 11  that the adverse effects listed simply do not meet
 12  the test of causation.
 13              Now, the legislative history here is
 14  instructive and as it was said earlier this morning,
 15  that adverse effects means more than inconvenience
 16  or individual antidotal cases.  Moreover, in this
 17  situation the proponents of an exemption must show
 18  actual "extraordinary circumstances," that's from
 19  the manager's report, where non-infringing use is
 20  likely to be curtailed.
 21              The libraries' claims, for example, that
 22  many databases include technological measures that
 23  limit the number of users.  If five users are
 24  allowed access, number six cannot make any fair use.
 25  The same is true if one of them gets there after the
 26  library closes.  These so-called adverse effects

                                                   PAGE 97
  1  cataloged revolve around inconvenience, not around
  2  any chilling effect of the prohibition of non-
  3  infringing use.
  4              Finally, the proponent of an exemption
  5  must show that on balance the positive effects of
  6  the statute are outweighed -- rather, that the
  7  negative effects are outweighed by the positive
  8  effects.  Now, we've heard a lot about potential
  9  negative effects that might occur and statements by
 10  the librarians that bad things might happen and
 11  maybe some of those concerns are justified and maybe
 12  they're not.  But, we heard nothing about the
 13  positive effects that security measures have
 14  allowed.
 15              For example, password controls and more
 16  sophisticated technology enabled Reed Elsevier to
 17  embark on its academic universe program.  And, they
 18  submitted a separate comment to the library
 19  detailing the way that that program works.  Secure
 20  web access has enabled Lexis and West Law to be
 21  available from any computer on the plant, via the
 22  World Wide Web.  Ninety percent of daily newspapers
 23  have online web sites and lots of them don't charge
 24  subscription fees.
 25              Maps, another class singled out by the
 26  universities for exemption are routinely available

                                                   PAGE 98
  1  on numerous web sites.  We don't see on balance the
  2  substantial adverse effects referenced in the
  3  legislative history, which warrant exercise of the
  4  discretion to issue an exemption.
  5              For these reasons and those more fully
  6  laid out in reply, we believe that the record does
  7  not support an exemption specifically for databases
  8  of any kind.  Thank you for the opportunity to
  9  present our views and I'll be happy to answer any
 10  questions that you might have.
 11              MR. CARSON:  Thank you.  Next is Mr.
 12  Montoro, I believe.  No, Mr. Mirchin.
 13              MR. MIRCHIN:  Okay.  Thanks.  So, here
 14  you are in the middle of the afternoon, the trough
 15  point of energy in the day and you're sort of
 16  wondering, you know, should I join Marybeth in her
 17  important meeting. I can hear this on the audio feed
 18  later, why do I need to stay here?  So, I just
 19  wanted to tell you that I was recently at a talk and
 20  there were fewer people than here, but fortunately I
 21  was able to get a picture of them and I thought I
 22  would share that with you.
 23              Now, I can't say that actually if you
 24  were to stay here you would have the same benefit as
 25  these nine people, but hopefully what you will get
 26  out this afternoon's presentation is an overview of

                                                   PAGE 99
  1  SilverPlatter Information, what our company does,
  2  what access controls we use, how those access
  3  controls benefit the users, how we would be harmed
  4  by the suggestion to exempt so-called ``thin
  5  copyright'' works and ``fair use works'' and finally
  6  just to say that these two classes, as well as the
  7  other classes that were mentioned this morning, are
  8  not really the definable classes of works that I see
  9  as part of this rule making.
 10              First of all, SilverPlatter. What do we
 11  do?  We're a small but globally oriented electronic
 12  publishing company.  We were founded in 1985.  We
 13  employ about 175 people, mostly software developers,
 14  librarians, database designers, a lawyer.  Our main
 15  office is in Norwood, Massachusetts.  As I say there
 16  are many charming New England villages and then
 17  there is Norwood.  And, then we have offices in
 18  London, Amsterdam, Berlin, Paris, Hong Kong and
 19  Sidney and I work in Norwood.  Okay.  So, there you
 20  have it.
 21              We publish about 250 reference databases
 22  in electronic format.  Typically they're abstracts
 23  of articles and full text of articles in areas like
 24  medicine, humanities, sciences.  An example,
 25  actually, is AgeLine mentioned this morning by Betty
 26  Landesman, published by the AARP.  They licensed it

                                                   PAGE 100
  1  to us and then we do some database formatting.  We
  2  have a consistent look and feel for all 250
  3  databases.  You can search across all of them and we
  4  do the marketing and the search and retrieval
  5  software.
  6              Some of the other organizations that we
  7  would license from would be professional societies
  8  like the American Psychological Association.  It has
  9  PsycLit, which is a database of about maybe 1,000
 10  psychology journals. We also license from private
 11  companies like Bell and Howell Information and
 12  Learning.  They publish a product called
 13  Dissertation Abstracts.  It's a database containing
 14  abstracts and full text of dissertations and
 15  master's theses.  Our primary markets are university
 16  libraries and medical libraries.  Basically we're
 17  marketing to libraries.  Our smaller markets are
 18  public libraries and then research libraries inside
 19  corporations like biotech companies, pharmaceutical
 20  companies, engineering companies.  And, most of our
 21  sales are outside North America.
 22              So, that's what our company does.  Now,
 23  I want to tell you about what access controls we
 24  use.  Our databases are accessible via the Internet
 25  or servers that are located at the customers'
 26  premises. We have networking software we call

                                                   PAGE 101
  1  SilverPlatter's ERL, electronic reference library,
  2  software.  The customers choose how they want the
  3  information.  Do they want it over the Net or do
  4  they want it typically on a CD ROM, which they can
  5  then load onto the servers? We've used access
  6  controls since our earliest days, since 1985.  So,
  7  if you get the product on the ERL servers or the
  8  Internet our networking software allows access both
  9  from local area networks, as well as wide area
 10  networks. The access controls that we use are IP
 11  filtering, Internet protocol filtering, as well as
 12  password and user name.
 13              The customer receives a Database
 14  Authorization Sheet, and I'll just show you what one
 15  looks like, which indicates the numbers of
 16  simultaneous users that they can have.  So, this is
 17  an example where we have a license ID number and
 18  then we have the customer name, okay.  And, then we
 19  have a particular server ID.  It could actually be
 20  many servers at a university.  And, then we give the
 21  maximum number of users that they can have access
 22  the database.  Ninety-nine is our unlimited use
 23  number.
 24              I should add here that the price per
 25  user drops dramatically as you increase the amount
 26  of access.  So, if you have one simultaneous user

                                                   PAGE 102
  1  that can access the database at one time it is a
  2  certain price and as you go up to 2-4, 5-8, 9-12 the
  3  price per user goes down dramatically.  The Database
  4  Authorization Sheet says whether you are allowed to
  5  install it to a hard drive and then finally there is
  6  an expire date when you can us it until and then
  7  there is an authorization code.  And, that code,
  8  that 40477182. It's a unique code for each
  9  university and it's generated randomly. They have to
 10  enter that into the servers and that indicates which
 11  databases they can have access to and the maximum
 12  number of simultaneous users simultaneous users who
 13  can access the database.
 14              So, that's the access controls that we
 15  use.  To insure access from a particular university,
 16  we use Internet protocol filtering, so it says all
 17  of these people who are accessing are coming from
 18 or, but the problem
 19  with that is that it can be very restrictive,
 20  because the faculty members who are on sabbatical,
 21  there are students who are accessing it from their
 22  AOL account, so we say, fine.  This allows them to
 23  access it from anywhere in the world, because if
 24  they are not coming from, then they just
 25  type in user name and password and they can access
 26  it from anywhere.

                                                   PAGE 103
  1              So, the advantage here is that the
  2  technology controls actually are allowing us to
  3  provide much broader availability of the information
  4  than was formerly available.
  5              So, what are some of the benefits of
  6  these technological protection measures?  Because,
  7  one of the things that Congress instructed the
  8  Librarian in this rule making is, I know there is
  9  all this negative stuff out there, but maybe there
 10  are some positives.  So, I just want to tell you --
 11  go over the five habits of highly effect access
 12  control technologies.
 13              First, this allows us to meet the varied
 14  needs of different institutions.  For some large
 15  institutions, research institutions, they can have
 16  an unlimited level of access or they can have a
 17  specified level of access.  And institutions in fact
 18  are all over the board.  We have a lot that have
 19  unlimited -- have chosen unlimited access, some 5-8
 20  users, et cetera.  And, some down to one
 21  simultaneous user.
 22              The fees are fixed for a year for any of
 23  those bands, so there is no additional pay-per-view
 24  or pay-for-use.  You decide, okay, I want five to
 25  eight paid simultaneous users.  That's it.  You
 26  don't pay any more the rest of the year.  We're not

                                                   PAGE 104
  1  charging for any of the additional users.
  2              Secondly, we don't dictate at all what
  3  use is made of the information.  It is really access
  4  control.  When they get access to it they can do
  5  whatever they're permitted to do by law.  We're not
  6  controlling subsequent use, how they're using it.
  7  We're not controlling fair use.
  8              Thirdly, this allows remote access and
  9  more convenient access to information.  So, if
 10  you're sailing you can then get access to our data.
 11  Unlike some of the comments made in the -- the
 12  initial written comments, we don't tether it to a
 13  specific computer in the library.  We really free it
 14  up to allow the information to be accessed from
 15  anywhere.
 16              Fourth is we, contrary to what some of
 17  the statements made, we're not exacerbating the
 18  digital divide.  By limiting unauthorized use we
 19  actually allow anyone who walks into a library or
 20  uses the library to use it.  So, for example, if
 21  that person wanted to go into Sarah Wiant's library
 22  at Washington and Lee, they could do that.  We're
 23  just saying you can only have five paid simultaneous
 24  users.  You decide, do you want to have walk-ins
 25  allowed to use the database?  That's up to you.
 26  You, the library, are allowed to do that.  Our

                                                   PAGE 105
  1  technology certainly is not preventing that.
  2              And, finally, I think what is important
  3  to realize is that the access controls are not new.
  4  I mean, these are not new things -- I think it was
  5  the American Library Association that said that --
  6  they worried that there was going to be a wide range
  7  of controls just now being deployed by content
  8  providers.  We have priced our products on the
  9  concurrent model for 15 years.  We've used our
 10  current access control technologies, essentially
 11  unchanged, for the last six years. This is a model
 12  that's really been worked out with the libraries and
 13  I would urge that it doesn't make too much sense to
 14  be meddling with this scheme, which has actually
 15  worked out pretty well.
 16              The other thing that I would raise is
 17  that what's here in today's rule making is a three
 18  year time window.  We're not saying what will happen
 19  forever.  There were a lot of comments this morning
 20  saying, like Peter Jaszi was saying, the worst is
 21  yet to come with access control or you haven't seen
 22  the most aggressive use of access controls, but you
 23  will starting October 28th of the year 2000.  And,
 24  sorry, this was the most aggressive guy that I could
 25  think of, James Carville, if you remember him.
 26              In other words these are words from this

                                                   PAGE 106
  1  morning, as you know, we're on the brink of bad
  2  access control.  We're on the threshold of it. Betty
  3  Landesman mentioned that we haven't seen the impact
  4  yet.  And, we talked about the E-book example.  I
  5  guess what I see is that in terms of actual real
  6  harm that we see today, I'm not saying that there
  7  are no examples that you can find, but it's not
  8  really there.  And, in fact, even the panel this
  9  morning said we think it's going to get worse.  I
 10  would say, let's see what happens, because in the
 11  past there have been also a lot of these things that
 12  they talked about, which is geographic location of
 13  the information tethered to computers.  That all was
 14  true five and 10 years ago, but the publishers
 15  responded.  So, if you looked at a license
 16  agreement, for example, SilverPlatter five and 10
 17  years ago, you actually would see lots of geographic
 18  boundaries, but over the course of time our market
 19  was saying, well, wait a second, we don't want that
 20  anymore.  We want remote learning.  We want
 21  professors on sabbaticals to have access to it and,
 22  in fact, the licenses and the technology in sync
 23  have allowed that that wider access.
 24              So, I would say, even in the E-book
 25  example there is not -- really E-books are not being
 26  used all that much.  Let's see what happens and

                                                   PAGE 107
  1  let's see how the market accepts the idea if you
  2  can't pass it along to someone.  I am sure that
  3  there will be other competitors that say, you know,
  4  my book you can pass along to someone else.
  5              And, fourth, I would just like to say in
  6  the written comments that the Association of
  7  American of Universities stated that it should be
  8  permissible to circumvent access for thin copyright
  9  works.  So, what they called thin copyright works
 10  are works like scholarly journals law reviews,
 11  databases primarily valuable for the information
 12  they contain.  I guess I would just like to say, for
 13  a company like SilverPlatter, in our self-interest,
 14  all of our SilverPlatter products are databases.
 15  That is all we sell. We license these from database
 16  producers who have been slaving away in dimly lit
 17  basements since 1911, putting together their
 18  databases.  All we're trying to do is have some
 19  access protection and someone comes along and tries
 20  to circumvent that access protection they scream,
 21  but can they help it?  No, because based on the
 22  comments here, even if a customer pays for only one
 23  simultaneous access, it will be permissible to
 24  circumvent and permit unlimited use.
 25              What I would say is that Silver Platter
 26  was successful in our business model because we

                                                   PAGE 108
  1  specifically moved away from the idea that every
  2  single minute the clock was ticking in the
  3  background for every use.  I mean, what we really
  4  wanted to have, and as we've done, it's a model of
  5  unlimited use within a certain access level.  So, my
  6  conclusion would be that the access controls really
  7  increase the availability of copyrighted materials.
  8  If we couldn't use access controls, that's exactly
  9  what would lead to pay-per-view because we couldn't
 10  enforce the concurrent user model.  We couldn't
 11  enforce even our other access controls -- or I
 12  should say not that we couldn't enforce, but that it
 13  would be permissible to circumvent the Internet
 14  protocol filtering, the user name. Then we wouldn't
 15  be able to say to a university, you can have
 16  unlimited access, because they could let in anyone
 17  from any other university in the world. From an
 18  economic point of view, it simply doesn't work.  I
 19  mean, we cannot have -- instead of having our 15,000
 20  subscriptions out there, to have one university
 21  having a single subscription and letting everyone
 22  else in for free.  It's just not going to work
 23  practically in the market.
 24              And, the losers are not just
 25  SilverPlatter, its employees, its investors, but
 26  also the customers.  I mean the whole thing we're

                                                   PAGE 109
  1  about here is providing good, high quality databases
  2  for our users.  The other problem is there is not
  3  really a narrow and focused sub-set. It's impossible
  4  to distinguish who's who here. What's a thin
  5  copyright work, what's a thick copyright work?  You
  6  can't really tell the disguises from what's beneath
  7  it.
  8              It's not something in the Copyright
  9  Office that you check off.  Oh, hey, I'm registering
 10  a thin copyright work.  And, then there are other
 11  aspects here that are really problematic in this
 12  supposed class of works, which is why should
 13  scholarly journals not be protected?  To me that
 14  seems like the stuff you do want to protect rather
 15  than the checkouts, the stuff that you see on the
 16  check-out line of the supermarket.
 17              Finally, the ``fair use works'' has the
 18  exact same problem. This is not a class of works.
 19  This is a defense to infringement.  Our entire
 20  market would be considered fair use works.  It's the
 21  scientific, educational and research community and
 22  it would undermine a company's viability, like
 23  SilverPlatter.
 24              So, in conclusion the final answer is
 25  that we feel that the people, the proponents have
 26  not met their burden of proof of saying why there

                                                   PAGE 110
  1  should be an exemption, why there should be a class
  2  of works.  There is no basis for permitting
  3  circumvention for scholarly journals or other
  4  databases under the rubric of fair use works or thin
  5  copyright works.  These works contain a significant
  6  amount of copyrighted material and so I just say
  7  there is really no defined class that I see yet --
  8  I've seen some defined classes.  I don't think those
  9  make sense, like fair use works, and I haven't seen
 10  any other defined classes that I think are
 11  appropriate for this rule making.  And, finally,
 12  there are benefits from access controls that
 13  facilitates remote access, allows sharing of
 14  resources between universities and consortia, permit
 15  smaller universities and medical schools to pay a
 16  small amount and larger universities to pay a larger
 17  amount and we do, in fact, permit walk-ins.
 18              Thank you very much.
 19              MR. CARSON:  Thank you.  We'll move
 20  across the isle to Mr. Montoro.
 21              MR. MONTORO:  Thank you, sir.  My name
 22  is Joe Montoro, and my presentation is not as
 23  colorful, unfortunately, but I will try to get in
 24  some reasons why I think there should be some
 25  exemptions to the copyright, 1201(a).
 26              Thank you for inviting me to come before

                                                   PAGE 111
  1  you today.  As a software developer and a U.S.
  2  citizen it is a great honor for me to take part in
  3  our legislative process and I deeply appreciate the
  4  opportunity.
  5              While do not officially represent any
  6  trade groups or organizations, I do represent the
  7  views of numerous individuals, businesses and
  8  universities that have expressed first hand problems
  9  with various technological means.  I will also echo
 10  the opinions of several well-known authors such as
 11  Ed Foster of InfoWorld Magazine, who has written
 12  about computer and technological issues for over 20
 13  years, as well as Jim Seymour of PC Week Magazine.
 14              Reading the DMCA and its legislative
 15  history has raised some areas of concern.  As per
 16  the summary of the DMCA from Copyright Office,
 17  Section 1201 divides technological measures into two
 18  categories: measures that prevent unauthorized
 19  access to a copyrighted work and measures that
 20  prevent unauthorized copying of a copyrighted work.
 21  Copying is used in this context as a shorthand for
 22  the exercise of any of the exclusive rights of an
 23  author under Section 106 of the Copyright Act.
 24  Consequently a technological measure that prevents
 25  unauthorized distribution or public performance of a
 26  work would fall in this second category.

                                                   PAGE 112
  1              Making or selling devices or services
  2  that are used to circumvent either category of
  3  technology measure is prohibited in certain
  4  circumstances described below.  As to the act of
  5  circumvention in itself, prohibition prohibits
  6  circumventing in the first category of technical
  7  measures, but not the second.  And, where I actually
  8  have a problem is trying to draw that line in what
  9  is access and what is copy control.
 10              Distinction was employed to assure the
 11  public will have the continued ability to make fair
 12  use of copyrighted works.  Since copying of a work
 13  may be a fair use under appropriate circumstances,
 14  Section 1201 does not prohibit the act of
 15  circumventing a technological measure that prevents
 16  copying.  By contrast, since the Fair Use Doctrine
 17  is not a defense to the act of gaining unauthorized
 18  access to a work, the act of circumventing a
 19  technological measure in order to gain access
 20  prohibited.
 21              My understanding of Congress's intent in
 22  establishing the prohibition on circumvention of
 23  access control technologies is to primarily to
 24  prevent cable and satellite theft and to control
 25  illegal access to software, primarily over the
 26  Internet.  An example would be downloading a trial

                                                   PAGE 113
  1  program such as Norton's Anti-Virum, that requires a
  2  password or a serial number to make it a registered
  3  version.  Once the program has been purchased or
  4  registered, the access control technology is no
  5  longer in effect.  The consumer is no longer
  6  burdened by the protection measure and can run and
  7  make a backup of the program.  Someone selling or
  8  distributing a serial number that would illegally
  9  create an authorized version of that trial program
 10  -- or excuse me, create an illegally authorized
 11  version of that trial program, would violate this
 12  act.  With Section 1201 implemented in this manner,
 13  I have no objection whatsoever.
 14              What does concern me, however, is when
 15  one purchases a software program or DVD, becomes an
 16  authorized user and the access control measure
 17  remains in effect.  These are similar to Mr. Jaszi's
 18  comments this morning.  In a case such as this will
 19  the lawful user be able to make a fair use of this
 20  work?
 21              The issue before us is whether persons
 22  who are users of a copyrighted work are or are
 23  likely to be adversely effected in their ability to
 24  make a non-infringing use of copyrighted access
 25  controlled works and the answer to that question is
 26  yes.

                                                   PAGE 114
  1              In the world of computer software there
  2  exists something called the hardware lock or dongle.
  3  It is a small device that goes on the back of an IBM
  4  compatible printer port and prevents unauthorized
  5  copying or distribution of the software.  As a class
  6  of work, these fall under category two and it is not
  7  a violation to circumvent these devices under this
  8  act.
  9              It is important to distinguish and make
 10  clear that the large majority of these devices are
 11  used simply to prevent unauthorized copying or
 12  distribution.  We are starting to see, however, some
 13  devices that control the number of uses, the number
 14  of times you can use a program.  Here a user has
 15  paid up front for a specific number of uses.  A good
 16  example might be the software that this Copyright
 17  Office used to scan our 364 letters in response to
 18  this hearing.  The software Adobe Acrobat Capture is
 19  priced from $699.00 and includes the ability to scan
 20  20,000 pages.  It comes with a dongle or hardware
 21  lock.  Under ideal conditions, when 20,000 page have
 22  been scanned the device no longer functions and you
 23  may purchase the additional pages or buy an
 24  unlimited page version for $7,000.00.
 25              A typical user has received
 26  authorization to access this work, but this device

                                                   PAGE 115
  1  also prevents one from making unauthorized copies or
  2  the distribution of software.  As implemented it
  3  prevents the authorized user from making a
  4  functional archival copy of the program because of
  5  the usage control device.  This would be a fair use
  6  under previous copyright law, but not under Section
  7  1201(a).
  8              The intent of Congress and the courts
  9  was clear before 1201(a) that if anything happens to
 10  the original software program the archival copy can
 11  be used and the user can continue with the quiet use
 12  and enjoyment of the program.  With these hardware
 13  lock devices that is not possible and these works
 14  cannot be preserved.  If the lock were damaged and
 15  could not be replaced, then the user would not be
 16  able to use the remaining pages that they had
 17  already paid for.
 18              The same problem exists with DVDs,
 19  unfortunately because of the Content Scrambling
 20  System.  A consumer that lawfully acquired a DVD is
 21  not able to make a backup of that media.  Media and
 22  hardware can be damaged and I would ask who has not
 23  come across a bad floppy disk, a chewed up
 24  videotape, a scratched record or a damaged compact
 25  disk?
 26              I am not suggesting that the rights of

                                                   PAGE 116
  1  manufacturers be ignored.  I am a software
  2  developer.  I hold six registered copyrights with
  3  this office, a manufacturer and of course a
  4  consumer.  If a software manufacturer wants to
  5  protect their software with a hardware lock, so be
  6  it, providing the authorized user has a way to use
  7  that software in an unencumbered, non-infringing way
  8  once they have made a purchase.  Circumvention or
  9  replacement technologies should be made available to
 10  them providing they can provide the proper
 11  authentication.
 12              The reason an exemption for fair us is
 13  needed, on October 12, 1998 in a statement by the
 14  President, Mr. Clinton said "This bill will extend
 15  intellectual protection into the digital era while
 16  preserving fair use."  Fair use policies are
 17  intended to protect the public interest and I hope
 18  that during my testimony I can show you why they are
 19  needed in this case.
 20              There are numerous problems a consumer
 21  faces when using these devices.  While most
 22  manufacturers will replace a damaged lock device, as
 23  a general rule they will not simply replace lost or
 24  stolen lock devices.  They require the end user to
 25  purchase another program at whatever the retail cost
 26  may be.  This could be devastating to a small

                                                   PAGE 117
  1  business, a library or educational facility.
  2              Harvard locked software programs can be
  3  very expensive.  A program called 3D Studio by
  4  AutoDesk cost $3,000.00.  Another called Mastercam
  5  by CNC Software is over $13,000.00.  Surfcam by
  6  Surfware is priced around $22,000.00.  Others are
  7  priced even higher.  Some companies are honest and
  8  up front about their replacement policy, such as 3D
  9  Studio.  To replace a hardware lock that is lost or
 10  stolen or destroyed you need to purchase another
 11  copy of 3D Studio Max.  Another company, Cadlink
 12  Technology said if the security device is lost,
 13  stolen or damaged by whatever means, a replacement
 14  must be obtained from Cadlink before the software
 15  will function properly.  Cadlink can charge the full
 16  current list price of the original software to
 17  replace the security device.  Others make no mention
 18  of it in their documentation or their web sites.
 19  Can you imagine Ford Motor Company telling a
 20  consumer, Ford will not replace a lost or stolen
 21  ignition key and that the consumer must purchase a
 22  new automobile at the regular price?  Would anyone
 23  tolerate this, but yet we do here in the computer
 24  industry.
 25              Computer theft and damage is a very real
 26  concern and if the authorized user of a program has

                                                   PAGE 118
  1  a hardware lock device on the computer they are
  2  simply out of luck.  According to statistic 26
  3  percent of all notebook reported losses in units
  4  were due to theft in 1998.  An estimated 1.5 million
  5  computers were stolen, damaged or otherwise
  6  destroyed during 1998.  An estimated $2.3 billion in
  7  computer equipment was lost, or stolen or damaged by
  8  accidents, power surges, natural disasters and other
  9  mishaps during 1998 and the numbers were even higher
 10  for 1999.  In a library or university setting there
 11  are many people who have access to these devices and
 12  it is these institutions that are the least likely
 13  to be able to afford purchasing another program.
 14              Technology changes very fast.  What is
 15  current today my be old technology tomorrow.  It
 16  wasn't too long ago that we all used 5\274 inch floppy
 17  disks.  Even Time Warner concedes "many technical
 18  protections are still in their infancy."  It is
 19  reasonable then to believe that just as in the past
 20  today's media and technical protections will become
 21  obsolete.  Examples of this include vinyl records,
 22  8-track tapes, laser disks, DIVX, which was Circuit
 23  City's failed attempt at the pay-per-use CVD, and 5\274
 24  inch floppies.  High Definition Television is also
 25  on the way.  The current DVDs are not of HDTV
 26  quality.  Is there any guarantee that future DVD

                                                   PAGE 119
  1  players will be able to pay today's movies?
  2  Considering that just two weeks ago the FCC began
  3  proceedings to resolve compatibility and copy
  4  protection issues involving digital television
  5  receivers and cable systems, it is not very likely.
  6              The National Library of Medicine has
  7  experienced problems where they have computer
  8  programs on obsolete disk formats that incorporate
  9  technological measures that do not permit the
 10  information to be restored or archived to other
 11  platforms.  They are forced to maintain obsolete
 12  operating systems and equipment to access these
 13  materials.  This is not a cost effective way to
 14  enter the 21st century.
 15              All of the concern regarding the year
 16  2000 and its effect on computer systems and software
 17  was brought about because of the real possibilities
 18  of network and computer shutdowns and errors in
 19  software.  Jason Mahler, vice president and general
 20  counsel of the Computer and Communications Industry
 21  Association whose members include AT&T, Bell
 22  Atlantic, Intuit, Oracle, Verisign and Yahoo said
 23  "the year 2000 problem demonstrated software
 24  programs of all types can require error
 25  correction.... Once one has lawfully obtained a copy
 26  of a software program, he or she should certainly

                                                   PAGE 120
  1  have the opportunity to repair that program so that
  2  it functions properly."
  3              Many of these devices have a limited
  4  life span since they use a small proprietary built
  5  in battery.  When the battery dies, the hardware
  6  lock becomes non-functional and once again a program
  7  that costs thousands of dollars is worthless if the
  8  device cannot be replaced.
  9              Technology companies are constantly
 10  being bought and sold and some simply are forced to
 11  go out of business.  If a company goes out of
 12  business, there is no one to support the authorized
 13  customer when a hardware lock is damaged and needs
 14  to be replaced.  Here a perfectly good software
 15  program becomes worthless without the hardware lock
 16  and the consumer suffers.  Steven Jacobs, president
 17  of Individuals with Disabilities at National Cash
 18  Register Corporation used dongled software from
 19  Microsystems Software.  Every member of that
 20  division works on a volunteer basis and the software
 21  evaluates the abilities of children with
 22  disabilities.  Microsystems was sold to the Learning
 23  Company, who no longer supports these products and
 24  Mr. Jacobs wrote "one of our dongles is broken
 25  leaving us out in the cold."  Another letter says
 26  "We are a manufacturer that has a program called

                                                   PAGE 121
  1  "NSEE verify" that was sold through
  2  Microcompatibles.  It has a black dongle block.  The
  3  company was sold to Preditor Software and Preditor
  4  has discontinued the software product and does not
  5  support it anymore.  WE have had hardware lock
  6  burnouts in the past and almost could not get a
  7  replacement last year."
  8              In another example once a company has
  9  been acquired their software program is generally
 10  phased out.  After a period of time, the program and
 11  lock device is no longer supported because companies
 12  either want the customer to upgrade to the newer
 13  combined product or they are using a different
 14  hardware lock device.  So, even though the software
 15  they purchased for $6,000 some five years ago still
 16  serves all their needs, they are being forced to
 17  upgrade at nearly twice the cost.  This says nothing
 18  of the costs associated with training employees to
 19  use the new computer program.  One example is a
 20  gentleman named Bill Hendershot.  He won an Emmy
 21  Award for his creation of time base correctors in
 22  the video industry.  He quotes "he had a hardware
 23  lock fail..... and we had no success in dealing with
 24  the company to replace it.  They tried to find
 25  another old key, but none would work.  Our PADS
 26  systems has now been down for over 30 days."  I

                                                   PAGE 122
  1  don't think we can ask consumers to tolerate this
  2  kind of problem.
  3              Some, such as the Software and
  4  Information Industry Association have suggested "at
  5  first blush.....these examples appear to justify the
  6  creation of an exemption to Section 1201(a)."  The
  7  SIIA goes on to say that other options make this
  8  exception unnecessary.  The first option they list
  9  is "if consumers are concerned about having access
 10  to code due to irreparable damage to the access
 11  control technology or the demise of the copyright
 12  owners' business, they an use trusted 3rd parties to
 13  escrow the software code in confidence to ensure
 14  future access to the content if such events occur."
 15  That was reply comment number 59.  The mistake made
 16  here is simple and obvious; consumers do not have
 17  access to the source code written by a developer.
 18  Further, developers are not required to escrow their
 19  materials with any 3rd party and even if they were,
 20  it does not overcome the issues of fair use,
 21  interoperability, theft and security testing and
 22  research.  The second solution the SIIA offers is
 23  "to get the copyright owner or the manufacturer of
 24  the access-control technology to "fix" the
 25  technology."  The problem with this logic is
 26  twofold.  First, the question was what do we do when

                                                   PAGE 123
  1  the copyright holder is out of business or the
  2  product is no longer being supported?  Second,
  3  because of the secure nature of the technological
  4  measure, only the developer of the software, not the
  5  manufacturer of the hardware lock, can program the
  6  dongle or fix the application.  The reason is
  7  because these devices have unique information
  8  embedded in them from the developer and there are
  9  also unique codes that are embedded in the software
 10  program that only the developer would know.
 11              Jim Seymour in PC Week Magazine wrote
 12  about another reason we cannot depend on the
 13  manufacturers to fix a problem.  PC Week Labs does
 14  product evaluations and AutoDesk sent in their
 15  software 3D Studio, an animation program, to be
 16  evaluated.  The techs couldn't get the program to
 17  run with the security device, so AutoDesk sent
 18  another one, but it wouldn't run either.  They tried
 19  another computer with the same results.  When they
 20  contacted AutoDesk again they were told, "Buy
 21  another computer."  Reminiscent of earlier testimony
 22  today, Mr. Seymour goes on to say that "dongle
 23  makers and the software vendors that support them
 24  argue that dongles are essentially trouble fee, no
 25  burden at all to honest users."  He goes on to say,
 26  "Ahh, if only that were so.....dongles cause a world

                                                   PAGE 124
  1  of trouble for those unlucky enough to buy
  2  applications using them."
  3              When AutoDesk's customer satisfaction
  4  director said to Ed Foster of InfoWorld magazine,
  5  AutoDesk has found dongle type hardware locks more
  6  annoying than authorization code schemes, Mr. Foster
  7  received a wave of dongle hell letters from readers
  8  that had similar experiences.  One reader from an
  9  academic institution reports that out of 16
 10  computers the school had recently upgraded from
 11  AutoCAD version 13 to version 14, 5 were put out of
 12  action when the dongles failed.  Many readers report
 13  having to put up with multiple dongles, a situation
 14  that can lead to trouble.  Another reader wrote
 15  "some vendors always say, "If you have multiple
 16  dongles be sure to put ours on first or else the
 17  computer might hang or crash"."
 18              The availability for use of copyrighted
 19  works.  The availability of dongle-protected works
 20  for use by libraries, companies and universities is
 21  also diminishing.  Some refuse to use software that
 22  is protected in this manager.  The loss to our
 23  students is that schools will be forced to select
 24  alternative software that may not be the most common
 25  or the best in the field.  For example, AutoCAD is
 26  the largest and most used CAD program and often

                                                   PAGE 125
  1  comes with a hardware lock.  It is used to design
  2  anything from houses to gears.  By schools selecting
  3  another program that is not dongled, the students
  4  really don't learn on the platform they need to, in
  5  order to prepare them for entry into the job market.
  6              I have some quotes here from people.
  7  I'm going to try to move through these.
  8              Incompatibility problems.  While the
  9  manufacturers of these devices claim that they are
 10  trouble-free and transparent to the user, they are
 11  anything but.  On the companies' web sites are many
 12  examples of incompatibilities and conflicts.  Often
 13  months will go by before a solution is found, in
 14  some cases there is no solution.  Incompatibility
 15  problems and hardware conflicts exist, hardware
 16  conflicts such as not being compatible with new
 17  Hewlett Packard printers, where the lock device
 18  cannot support bi-directional printing, the computer
 19  is too fast, so it can't find the lock device, too
 20  many lock devices on the parallel port, so the lock
 21  device can't be located, the lock device won't work
 22  with a certain chip set, the driver is not
 23  compatible with a new service pack release of
 24  Windows NT.
 25              One fear many people have is that not
 26  only expensive high end applications will use these

                                                   PAGE 126
  1  technologies, but everyday software and even kid
  2  games will come with these devices.  Unfortunately,
  3  these people are correct.  In a document by Hewlett
  4  Packard, "My Interactive Pooh," that's Winnie the
  5  Pooh, comes with a dongle.  This device causes
  6  incompatibilities with Hewlett Packard DeskJet
  7  printers.  They've gone on to say that they actually
  8  found problems with the dongles and that you should
  9  contact the Mattel Company to try to get your
 10  product replaced.
 11              I don't think I'm exaggerating when I
 12  say that we are inviting a technological nightmare
 13  and soon will see a protection device on every piece
 14  of software we use.  In anther HP document two-way
 15  communication cannot be established with a printer
 16  using a dongle.  HP's solution is to simply remove
 17  the dongle.  So, now you can print, but cannot run
 18  your program.  And, sometimes a hardware lock driver
 19  will be updated by a new application, cause the
 20  older application not to work.
 21              It's the consumer that suffers while
 22  they wait for some software genius to figure out
 23  what the problem is and/or if it can be fixed.  One
 24  of the lock companies commissioned a study to use
 25  the findings as a sales tool against competitors.
 26  The results was the Rainbow's documentation and

                                                   PAGE 127
  1  frequently asked questions on their web site
  2  specifically mentioned security key daisy-chaining
  3  constraints and hardware revision incompatibilities
  4  among selected security keys.  And, we've got
  5  documents under here to back that up.
  6              The interoperability is another issue.
  7  In an age where interoperability between computer
  8  platforms is more and more important these devices
  9  force us to take a giant step backwards.  One
 10  customer was referred to me a software manufacturer,
 11  PADS, who sent the customer a demo of their product
 12  which he like enough to purchase.  After the
 13  customer purchased it he was surprised to find the
 14  full working version came with a parallel port
 15  hardware lock device.  The customer called PADS to
 16  inform them that a Macintosh computer does not have
 17  a parallel port in which to put the lock and that he
 18  was running IBM compatible software on his Macintosh
 19  through a program called Soft Windows.  Rather than
 20  lose a $4,500.00 sale, the software manufacturer
 21  referred him to my company to purchase one of my
 22  programs.
 23              Several companies view a cross platform
 24  solution as important.  Insignia software has
 25  developed Soft Windows for the Power Mac which
 26  allows you to run your Windows and DOS programs.

                                                   PAGE 128
  1  They've also develop soft-UNIX as well.
  2              The same statements are true for DVD.
  3  Being able to view or operate a DVD on other
  4  platforms such as Linux is also at issue.  The
  5  Justice Department has spent a considerable amount
  6  of time and money investigating MicroSoft and one of
  7  the reasons given by the Assistant Attorney General
  8  of the United States for splitting up MicroSoft was
  9  that they would not make their office software
 10  available on a competing platform like Linux.
 11              There are physical problems as well.
 12  for a university, library or other facility that
 13  must run some of its software on a server or a
 14  laptop, there is a physical problem.  When a
 15  business such as Durham Electric Company in North
 16  Carolina has 6 dongles hanging off the back of a
 17  computer, imagine the number that a university or
 18  library has or will have in making works available
 19  to the public.
 20              Today's laptops are as powerful as any
 21  desktop computer and more people than ever before
 22  either commute or take their laptops on the road.
 23  What is it like having 5 to 10 inches of hardware
 24  sticking out of your laptop?  And, if I may, I would
 25  like to show you.  These are 6 dongles that the man
 26  in North Carolina had to put up with to use his

                                                   PAGE 129
  1  computer and let's take a look and see what it looks
  2  like on the back of a laptop.  Okay.  That will give
  3  us some idea of what we're looking at.
  4              Now a library or an educational facility
  5  that has multiple programs, that has multiple
  6  software that they're trying to instruct with or
  7  databases -- I'm not sure about the databases,
  8  Chris, but this is a real concern.  This is only 6
  9  from one electric company, yet alone a library or
 10  any other kind of educational facility will just go
 11  further and further.  And, it gets to the point
 12  where it is ridiculous.
 13              In addition, these companies also say
 14  that the lock device, as you've heard earlier, needs
 15  to be first.  So, okay, when I want to run this one
 16  program, this one needs to be the first one, but
 17  when I want to run the second program I've got to go
 18  over here and it's just a physical nightmare.
 19              Does the act of circumvention effect the
 20  value or price of copyrighted works?  Not paying for
 21  software you obtained illegally wrong and it
 22  deprives the developer the fruits of their labor,
 23  but we need to distinguish this act from an
 24  authorized user gaining access to a product they are
 25  authorized to use and have already paid for.  Here
 26  the only negative impart would be to the company or

                                                   PAGE 130
  1  individual if they were not able to use what they
  2  paid for.  The effect of circumvention for
  3  authorized users will increase the sale of DVDs and
  4  software, where previously unsupported platforms are
  5  now available and those institutions that have
  6  policies against using dongled software will once
  7  again become users.
  8              No one wants to see computer software
  9  pirated, however, there are other ways to protect
 10  software besides hardware lock devices, such as pass
 11  codes, software license files where the program
 12  checks for the presence of the file and the software
 13  protection systems that permit functional archival
 14  backups and fair use.  Perhaps we should follow the
 15  lead of a company called Unisoft of Milford,
 16  Connecticut.  Unisoft is a software developer that
 17  used dongles on their software from day one.  When
 18  the manufacturer of the dongle discontinued the
 19  model, they considered other brands.  Their
 20  conclusion, "A determined pirate can make an
 21  unauthorized copy of software and make it run
 22  regardless of dongles.  To a legitimate user,
 23  however, a dongle is an inconvenience at best, and
 24  at worst makes completely legal software completely
 25  useless."  ".....we are more interested in
 26  satisfying our legitimate customers than foiling

                                                   PAGE 131
  1  pirates.....we will, however, aggressively
  2  investigate and prosecute any and all illegal
  3  copying of our software, but will not do it at the
  4  expense of our honest customers."  They now usa a
  5  simple license file and pay a referral fee to the
  6  customers if the customer gives a copy of the
  7  software to someone and they end up purchasing.
  8  They value their support, their subscriptions and
  9  feel that that adds significant value to their
 10  software and that it is reasonably priced.  "Most of
 11  all, we don't think that our customers would try to
 12  cheat us."
 13              In my conversation yesterday with Mr.
 14  Lareau, the vice president of sales at Unisoft, he
 15  confirmed that customer satisfaction has increased
 16  and there are less headaches for the company and was
 17  not able to identify any decrease by using this
 18  policy, any decrease in sales.
 19              An independent study that was done in
 20  Canada bears this out.  Of those polled 48 percent
 21  had an unfavorable opinion of hardware lock software
 22  and 52 percent felt that there was a need for a
 23  replacement device.
 24              I'd like to stress again that most of
 25  these devices are primarily used to control
 26  unauthorized copying or distribution, however, the

                                                   PAGE 132
  1  rights of the consumer to use and enjoy software in
  2  a trouble-free manner must be of foremost concern,
  3  whether the technological measure controls access or
  4  controls unauthorized copying or distribution.  The
  5  computer industry needs an alternative to hardware
  6  lock devices and the problems they pose and should
  7  let the marketplace determine what is effective and
  8  what is not.  As Mr. Leahy stated in the conference
  9  report on the DMCA dated October 8, 1998, this
 10  legislation should not establish or be interpreted
 11  as establishing a precedent for Congress to
 12  legislate specific standards or specific
 13  technologies to be used as technological protection
 14  measures, particularly with respect to computers and
 15  software.  Generally, technology develops best and
 16  most rapidly in response to marketplace forces.
 17              To date we have only looked at this
 18  issue tin terms of black and white, either access
 19  control technology is circumvented or it is not.  I
 20  submit we should look at it in a third way.  We
 21  should let the industry develop legitimate ways to
 22  replace troublesome access control and/or copy
 23  prevention technologies if one can do so and
 24  preserve the rights of the copyright holder.
 25              Through my software development I have
 26  been able to create a one for one hardware lock

                                                   PAGE 133
  1  replacement that is done in software, that has all
  2  the functionality of the original device, yet cannot
  3  be copied unless you are authorized to do so.
  4  Through this product I have been able to overcome
  5  every objection raised regarding software, including
  6  interoperability, compatibility and fair use while
  7  still protecting the rights of the copyright holder.
  8              I would respectfully submit that an
  9  exemption be made so that once a person has lawfully
 10  acquired access to a work subsequent uses of that
 11  work will be exempt under fair use.  At the very
 12  least this should be applied to computer software
 13  and DVDs where media can be damaged and there will
 14  always be an issue of compatibility and
 15  interoperability.
 16              Lastly, it would be a waste of resources
 17  for any institution, agency or user that my qualify
 18  under current or future exemptions to bypass or
 19  replace a technological measure themselves when this
 20  is not their field of expertise, therefore,
 21  companies should be permitted to advertise and
 22  provide these services providing certain criteria
 23  that you decide is met.
 24              Once again, thank you for the
 25  opportunity to appear before you and I look forward
 26  to answering any questions you may have.  Thank yo.

                                                   PAGE 134
  1              MR. CARSON:  Thank you, Mr. Montoro.
  2  Mr. Kupferschmid.
  3              MR. KUPFERSCHMID:  Good afternoon.  I'm
  4  Keith Kupferschmid, Intellectual Property Counsel
  5  for the Software & Information Industry Association.
  6  I appreciate the opportunity to testify here today
  7  and would like to thank the Copyright Office and the
  8  panelists in particular for both conducting these
  9  hearings and for creating what I consider to be a
 10  very open and efficient rule making process.
 11              By way of background, I would like to
 12  talk a little bit about SIIA, which is the principle
 13  trade association of the software and information
 14  industry.  We represent about 1,400 high tech
 15  companies that develop and market software,
 16  electronic content for business, for education, for
 17  consumers, for Internet, and for entertainment
 18  purposes.  Our membership is quite diverse.  In
 19  fact, especially in relation to other trade
 20  associations, we have information companies as our
 21  members, such as Reed Elsevier, the West Group, the
 22  McGraw-Hill Companies.  We have software companies,
 23  such as Oracle and Sun, hardware companies like
 24  Hewlett Packard and Apple and many e-commerce
 25  companies, such as America OnLine and Cybersource.
 26  So, as you can see, just from this diverse interest,

                                                   PAGE 135
  1  diverse membership that we have, our members
  2  represent a wide range of business and consumer
  3  interests.
  4              Our members create and develop new and
  5  valuable access control technologies for use by
  6  others.  They also use access control technologies
  7  to protect their proprietary content. And they
  8  purchase and license software and information
  9  products and other content and services that utilize
 10  these access control technologies.  So, our members
 11  basically span the gambit of all the effected
 12  interests that might be at issue here in this rule
 13  making process.
 14              Consequently, our members are extremely
 15  interested in the issues relating to the protection
 16  and use of access control technologies and the
 17  relationship between fair use of copyrighted content
 18  as it relates to the anti-circumvention provisions
 19  in Section 1201(a)(1) of the Digital Millennium
 20  Copyright Act.  Because of the many interests of the
 21  SIIA members and because of time constraints, I will
 22  divide my testimony into two separate sections.  The
 23  first section of my testimony will focus on general
 24  concerns of SIIA and its membership and in the
 25  second half I will attempt to address four specific
 26  concerns raised by the comments that were filed.

                                                   PAGE 136
  1  Because of the time constraints, however, I will
  2  just summarize our comments and hopefully expand
  3  upon them with some of the questions that are asked.
  4  A more detailed discussion of our comments can be
  5  found in our written reply comments and in any post-
  6  hearing comments that we may file and based on some
  7  of the comments I've heard today, I think we
  8  probably will be filing some post-hearing comments.
  9              In sum, we concluded that none of the
 10  initial or reply comments submitted, either
 11  individually or taken as a whole, provide sufficient
 12  concrete evidence to justify the creation of an
 13  exemption to Section 1201(a)(1).
 14              Let me go into my three general
 15  comments.  First and foremost, several commentators
 16  contend that the burden of persuading the Copyright
 17  Office in the rule making is on proponents of the
 18  prohibition.  I am not going to go into a detailed
 19  discussion of the statute, of the legislative
 20  history or the notice of inquiry itself, but if you
 21  review those sources or review our written
 22  statements or the other written statements of those
 23  in the copyright industry, you will see that each of
 24  these documents, each of these three sources clearly
 25  establish that number one, the burden of persuading
 26  the Copyright Office that a certain class of work

                                                   PAGE 137
  1  should be exempt from the prohibition in Section
  2  1201(a)(1) is on those who seek to establish an
  3  exemption, not on the proponents of the prohibition.
  4              And, then number two, these resources
  5  also establish that the burden of persuasion is
  6  extremely, extremely high and based on what we have
  7  seen the proponents of an exemption have not met
  8  this burden at all.  Those who seek to establish an
  9  exemption must prove that the prohibition has a
 10  substantial adverse effect on non-infringing use and
 11  those words, each of them, have a very significant
 12  meaning.  In this regard mere inconvenience or
 13  individual cases are insufficient evidence.
 14  Proponents of an exemption rather must come forth
 15  with evidence that establishes distinct, verifiable
 16  and measurable impacts.  None of the proponents
 17  provide this evidence.
 18              Those who seek to establish an exemption
 19  must also establish a causal connection between
 20  alleged substantial adverse effects and the
 21  prohibition in Section 1201(a)(1).  If the adverse
 22  effects are caused by factors other than Section
 23  1201(a)(1), then the Copyright Office should
 24  disregard such effects and I think this mandate is
 25  especially important given that the prohibition in
 26  Section 1201(a)(1) has not yet come into effect.  We

                                                   PAGE 138
  1  fail to see how any of the alleged existing adverse
  2  impacts complained of in the comments can be caused
  3  by a provision that has not come into effect yet.
  4              In fact, because the prohibition is yet
  5  to become effective, to the extent that any alleged
  6  existing adverse impacts complained of in the
  7  comments are bona fide, I'm not saying they are, but
  8  to the extent that they are, they must have been
  9  caused by some factor other than the prohibition
 10  itself, because the prohibition is not in effect.
 11              It is SIIA's view that none of the
 12  comments submitted to the Copyright Office comes
 13  even remotely close to meeting the high burden
 14  established by the law.  The comments fail to
 15  provide distinct, verifiable and measurable impacts
 16  and none of the comments establish a causal
 17  connection between the supposed adverse impacts and
 18  the prohibition.
 19              My second general comment deals with, I
 20  guess as the Library Association has suggested, the
 21  right of fair access.  We consider this to be
 22  somewhat a twisted view of the fair use exception,
 23  one that is sweeping enough to allow hackers to
 24  circumvent access control technologies in order to
 25  make fair use of protected copyrighted content.
 26              Now, in thinking about what my comments

                                                   PAGE 139
  1  were going to be here today, I did consider
  2  characterizing the views of these commentators as
  3  perhaps overly broad, but I thought that that might
  4  actually suggest that this narrow interpretation has
  5  some basis in law and fact.  I want to be absolutely
  6  clear, it does not.  In fact, Congress clearly
  7  considered these issues and rejected the Library
  8  Association's interpretation on its face.  Fair use
  9  is an affirmative defense.  As such it is a
 10  privilege, not a right.  The fair use privilege has
 11  never been used to allow a party to get access to
 12  copyrighted work where the party does not otherwise
 13  have the authority to access that work.
 14              In fact, because the fair use privilege
 15  is an equitable defense to infringement, case law
 16  has shown that no fair use defense may be had where
 17  access to the copyrighted work has been gained
 18  illegally.  SIIA supports the Fair Use Doctrine.  We
 19  recognize the important societal good, as well as
 20  the public and private benefit that results from the
 21  doctrine.  Now, while SIIA supports the Fair Use
 22  Doctrine, we cannot support the twisted
 23  interpretation supported by the libraries and the
 24  other commentators.
 25              My third and final general comment
 26  relates to the general lack of understanding of the

                                                   PAGE 140
  1  scope of the rule making and the prohibition itself.
  2  In particular, several commentators failed to
  3  distinguish between the protections afforded by
  4  Section 1201(b) and 1201(a)(2), which are not
  5  subject to this rule making and those in Section
  6  1201(a)(1) which are.  Several commentators also
  7  incorrectly believe that Section 1201(a)(1) covered
  8  public domain and other non-copyrightable materials
  9  when, in fact, it does not.
 10              And, finally, several commentators
 11  failed to consider the existing exemptions in
 12  Section 1201, such as those that exist for security
 13  testing and for reverse engineering.  Given the
 14  limited time today, I will merely direct you to our
 15  formal written comments submitted by SIIA for a
 16  detailed explanation of why these arguments are
 17  either incorrect or immaterial to this rule making.
 18              With that let me move on to my specific
 19  comments.  The first one I would like to deal with
 20  is the American Association of Universities and to a
 21  lesser extent the Library Association's
 22  recommendation that an exemption for so-called thin
 23  copyrighted works and fair use works be created.
 24  There are several problems with this so-called
 25  classes of works, I guess if you can call them that.
 26              First, these so-called classes are

                                                   PAGE 141
  1  extremely broad and indefinite.  As a result they do
  2  not comply with the congressional mandate that the
  3  class of works be a sub-set of the categories of
  4  works in Section 102 and be narrow and focused.  So,
  5  it fails on two accounts.
  6              Second, the AAU provides no means to
  7  distinguish between works that qualify as thin
  8  copyrighted works or fair use works and works that
  9  do not qualify.  In fact, as Mr. Mohr mentioned,
 10  they even have an et cetera thrown in there in case
 11  they may have forgotten to throw anything in there.
 12              The AAU also failed to provide even a
 13  single example of how its members would be adversely
 14  effected in their ability to make non-infringing
 15  uses of these works.  Presumably, if the works are
 16  causing a substantial adverse effect, they should be
 17  able to come up with at least one example, but
 18  nevertheless the comments, as far as I can see,
 19  don't have one example in them.
 20              And, finally, with regard to this
 21  categorization of thin copyrighted works and fair
 22  use works, I should mention that adoption of a thin
 23  copyrighted work exemption or a fair use work
 24  exemption would clearly adversely effect the
 25  availability of these works. Because databases and
 26  other fact intensive works are accorded a lesser

                                                   PAGE 142
  1  level of protection by the courts as compared to
  2  other types of copyrighted works, the owners of
  3  these works are more reliant on technological
  4  protections to protect against illegal uses of these
  5  works.  As the result, exempting so-called thin
  6  copyrighted works from Section 1201(a)(1) would
  7  lessen the incentive for owners of these works to
  8  distribute them to the public.
  9              The second set of specific comments I
 10  would like to discuss is related to concurrent
 11  access.  The Library Association suggests an
 12  exemption is appropriate to ensure that their users
 13  are able to concurrently access the works they
 14  license. To the extent that there is any adverse
 15  impact resulting from a work being protected by
 16  technology that controls the number of concurrent
 17  users, this impact is insignificant and more than
 18  offset by the numerous benefits libraries and their
 19  users have gained from having greater access and
 20  less expensive access to these works.
 21              While technological measures may impose
 22  certain limitations on concurrent access, these
 23  limitations pale in comparison to those libraries
 24  and their users have been and are currently subject
 25  to with regard to non-electronic copies of works.
 26  In particular, the suggestion that there should be

                                                   PAGE 143
  1  an exemption for concurrent access is of great,
  2  great concern to SIIA's software and information
  3  company members.  Many of these companies routinely
  4  license their copyrighted products to consumers in a
  5  way that limit the number of concurrent users.
  6              Consumers enjoy this licensing option
  7  and find it beneficial to their business model.  If
  8  people were permitted to circumvent the technologies
  9  that allow such limitations on concurrent access,
 10  the concurrent access licensing system would quickly
 11  become ineffective and obsolete.  In its place
 12  software and information companies would be forced
 13  to use other licensing alternatives, perhaps to the
 14  detriment of consumers of these products.
 15              The third set of specific comments I
 16  would like to discuss relate to preservation and
 17  archiving.  Some comments suggested an exemption be
 18  created for preservation and archiving when a user
 19  has initial lawful access to a work.  This
 20  recommendation is based on a perceived concern that
 21  access control technology will prevent libraries
 22  from archiving or preserving works protected by such
 23  measures.  If an entity has initial lawful access to
 24  a work and desires to make a copy of it for
 25  preservation or archival purposes, to the extent it
 26  is prevented from making such a copy, it will be a

                                                   PAGE 144
  1  result of a copy control technology protected under
  2  Section 1201(b), not access control technology
  3  protected under 1201(a).
  4              Thus, the preservation and archival
  5  issue is actually one that falls outside the scope
  6  of this rule making.  If, however, the Copyright
  7  Office should conclude that the preservation and
  8  archiving issue falls within the scope of this rule
  9  making, we assert that the commentators have failed
 10  to provide the requisite evidence to establish that
 11  an archival and preservation exemption to Section
 12  1201(a)(1) is necessary.
 13              In this regard we point out that one of
 14  the focuses of this rule making is whether copyright
 15  content is available to persons who desire to make
 16  non-infringing uses of such content.  Accordingly,
 17  if copies of a work are available for non-infringing
 18  uses through a license, then there would be no
 19  reason whatsoever to create a statutory exemption to
 20  Section 1201(a)(1).  Because none of the
 21  commentators have demonstrated an inability to
 22  license the materials and, in fact, the commentators
 23  say the opposite, they are able to license the
 24  materials, we find no justification for a so-called
 25  preservation or archival exemption.
 26              My final set of specific comments relate

                                                   PAGE 145
  1  to hardware locks.  Several commentators recommended
  2  that exemptions be created to address situations
  3  where a company goes out of business and there is no
  4  one to support the authorized customer when a
  5  hardware lock is damaged, it is lost or is stolen.
  6  The first point I should make in response to these
  7  comments, and I cannot make this emphatically
  8  enough, is that it is extremely rare, I mean
  9  extremely rare for someone to lose a hardware lock.
 10  The reason for this is because the locks and the
 11  software that it protects are just too darn
 12  expensive and too valuable.  Therefore, people who
 13  own these locks and software products take the
 14  utmost care in protecting the software and the locks
 15  against theft, against loss and against damage.
 16              In the unlikely situation where a
 17  hardware lock is damaged, lost or stolen, there are
 18  real life solutions to these problems that are
 19  easily implemented without the need to establish an
 20  exemption.  The best of these solutions is for the
 21  consumer to protect his or her investment in the
 22  software by taking out an insurance policy.  The
 23  software that is protected by the hardware locks is
 24  not inexpensive.  Contrary to Mr. Montoro's comments
 25  and with apologies to my colleagues in the recording
 26  industry, this software is not a scratch record. It

                                                   PAGE 146
  1  is a lot more expensive than a scratch record.  It
  2  is a lot more valuable than a scratch record.  A
  3  single program can cost as much as $22,000.00 or
  4  even more.  It is, therefore, extremely reasonable
  5  for any business or university to protect its
  6  investment in such valuable items, just as it does
  7  with other property that has similar significant
  8  value.
  9              In addition, there are numerous third
 10  party companies that offer to escrow software and
 11  hardware locks, in confidence. As Mr. Montoro
 12  mentioned, this is not required. But if companies
 13  are really concerned about these products being lost
 14  or stolen or destroyed, then this is something they
 15  should negotiate, in their license agreement.
 16              Another option is to get the copyright
 17  owner or manager of the access control technology to
 18  fix the damaged technologies.  In talking to our
 19  members, in virtually all cases, if we're talking
 20  about damaged technology and I think Mr. Montoro
 21  from his comments does not dispute this, if we're
 22  talking about damaged technology, then they will in
 23  fact, in most cases, fix that technology.  In the
 24  rare instance that a fix is necessary, this is often
 25  the solution that software companies and their
 26  customers come to.

                                                   PAGE 147
  1              Now, where the copyright owner is out of
  2  business, I guess I thought the question is to, well
  3  then who has standing in this 1201(a)(1) to begin
  4  with?  So, I just throw that out for consideration.
  5              And, just touching upon very quickly
  6  some of Mr. Montoro's other comments, he mentioned
  7  things about printer problems with printer
  8  complaints and other interoperability problems.  I'm
  9  not exactly sure what this has to do with defining a
 10  class of works or trying to create an exemption
 11  under 1201(a)(1).  Another thing I think is worth
 12  mentioning is that regardless of Section 1201(a)(1),
 13  these companies will continue to use dongles, so
 14  they will continue to have these problems if in fact
 15  these problems are accurately reflected and I have
 16  significant doubts that they are, of course.
 17              And, then also, something also worth
 18  mentioning how it is explicitly considered whether
 19  to make any of the rights or the exceptions
 20  technology specific.  And, they said no, that's not
 21  a wise way to go.  Congress decided to not make any
 22  of these an exemption or a right specific to a
 23  certain type of technology, realizing that
 24  technology is going to change over time.
 25              So, anyway, that's the extent of my
 26  comments.  I would like to again thank the Copyright

                                                   PAGE 148
  1  Office and the panel for giving me the opportunity
  2  to testify here today.  And, I will be pleased to
  3  answer any questions the panel might have, either
  4  here today or following this hearing, in writing
  5  later.  Thank you very much.
  6              MR. CARSON:  Thank you.  And, once
  7  again, thanks to everybody.  We'll now move on to
  8  questions and we'll start with Rachel Goslins.
  9              MS. GOSLINS:  Hi.  For those of you that
 10  were here this morning my questions are going to
 11  follow a similar path and start at the practical end
 12  and move to the esoteric.  But, actually to begin I
 13  would just like to ask a fairly simple question,
 14  just for my own personal edification while anybody
 15  on the panel can answer them.  I'm particularly
 16  interested in the answers with the software experts
 17  here.
 18              And, that is, how easy is it to
 19  circumvent these kinds of access control protections
 20  that you're talking about?  Mr. Mirchin, you
 21  detailed technologies that I'm not anywhere near
 22  understanding, but they seem to be pretty
 23  sophisticated authentication systems.  And, what I
 24  would need to circumvent that?  And, what kind of
 25  time and resources will I need, just a computer
 26  program and I guess that goes for you as well, Mr.

                                                   PAGE 149
  1  Montoro, with the famous dongle, sort of what does
  2  it take to get around them?
  3              MR. MIRCHIN:  The authorization code, we
  4  don't know of any examples where people are
  5  circumventing it, which doesn't mean that they're
  6  not. Our technology people tell me that that's
  7  pretty secure.  Using a password I would say is sort
  8  of the other end of the spectrum in that typically
  9  it's administered by the institution itself. Our
 10  view is that it's in the institution's interest,
 11  because they have limitations on server capacity, to
 12  typically limit it to people who are actually
 13  somehow related to the institution.  So, we're
 14  really relying on them.  You know, that really is
 15  something that is much easier to circumvent.
 16              MS. GOSLINS:  And, how do you decide
 17  when you use one or when you use the other?
 18              MR. MIRCHIN:  Oh, we actually use both
 19  in every instance.  The using of a password is a way
 20  if people are not coming from
 21  It allows those people
 22  who are not local to be able to access the database.
 23  If you're coming from the institution, you don't
 24  need to use a password.  So, it's another way of
 25  access in, really, rather than preventing anyone
 26  from getting access.

                                                   PAGE 150
  1              MR. MONTORO:  I can only speak as to the
  2  dongle incident.  There is a couple of ways to do
  3  that and one way to circumvent the dongle is to
  4  modify the actual application itself, where you
  5  would go in and when the dongle or when the program
  6  goes to look for the lock device, you would modify
  7  the program portion of that so it no longer looks
  8  for the lock device.  That's certainly is,
  9  obviously, illegal to do, because you're violating
 10  the owner's copyright when you enter that program.
 11              The other way is a different way.  It's
 12  what we've been able to do by no circumventing, but
 13  replacing.  And, the way I do that is my writing
 14  software that actually knows the contents of what's
 15  inside one of these devices.  It responds in the
 16  appropriate manner when the software program looks
 17  for the actual device and instead it finds our
 18  software and that's all we've been able to not
 19  circumvent, but replace the technology.  The
 20  technology that I have also then relocks itself back
 21  to the computer, which protects the copyright
 22  holder.  So, it can't be redistributed and you're
 23  not going to see 500 copies of that same program
 24  out.
 25              MR. MIRCHIN:  May I say one other thing
 26  on using the password?  We also monitor logs to see

                                                   PAGE 151
  1  some general usage from a particular community.  So,
  2  to the extent that we were getting a sense that that
  3  -- that the user name and password was not
  4  effectively controlling it to a particular
  5  community, there are a lot of things that we could
  6  do.  For example, change the user name and password
  7  and require that to be redistributed.  So, there are
  8  things that we could do if we felt that it was being
  9  abused. 
 10              MS. GOSLINS:  I guess what I'm trying to
 11  get at is we're heard a lot about how adversely
 12  effected the date base industry would be if we
 13  crafted any kind of an exemption to the prohibition
 14  access control that effected databases and one thing
 15  I would like to talk about in a second is how that
 16  would be different from the last six years of
 17  experience that your company has had in using access
 18  control protections, it seems pretty effectively.
 19  Even were we to exempt all databases from the access
 20  control protection, you're still better off then you
 21  were before the passage of the DMCA because you have
 22  the prohibition on the manufacturer and marketing
 23  design of devices and it sounds like, from what
 24  you're talking about, that when you have
 25  sophisticated access control protections, you're
 26  going to need some kind of software, some kind of

                                                   PAGE 152
  1  device to circumvent -- anyway, so I guess what I
  2  would like to hear you talk a little bit about is
  3  how much value added the conduct prohibition really
  4  gives you if a librarian is not really going to be
  5  able to get around your user ID authentication
  6  servicer.
  7              MR. MIRCHIN:  I guess a couple of things
  8  come to mind.  One is I would say that probably
  9  applies not just to us, but applies actually to
 10  every copyright owner. Congress decided that if a
 11  copyright owner decided that they wanted to use
 12  access control technology, then they should be
 13  allowed to do it and that it should generally be
 14  prohibited to circumvent it.  So our situation is
 15  actually no different than anyone else's.  And, I
 16  would say though, my sense is in terms of how it
 17  would be interpreted, which is when you start
 18  getting carved out, when everybody gets protected
 19  except you, I have to believe that the way the
 20  courts might interpret it would be, in a way to be
 21  detrimental to database owners or my sense is that
 22  the court could very well find ways to carve out and
 23  say, well, it's clear that the Copyright Office in
 24  this rule making felt that you were entitled to a
 25  lower level of protection.  So, I am a little
 26  worried about what would happen.

                                                   PAGE 153
  1              MR. MOHR:  I'd like to add to that a
  2  little bit.  I mean, I think also there is a
  3  practical concern and that what has changed in the
  4  last several years is the ability of competitors.
  5  If a database compiler invests a lot of money
  6  verifying information and being sure it's accurate,
  7  if someone can get in -- if someone can get access
  8  to that, the remedies for using the material that
  9  was invested in are very, very scant.  And, that is
 10  certainly a concern of the companies that I
 11  represent.
 12              MS. GOSLINS:  Ah hah.  That brings me to
 13  my next more esoteric question.  Many of you and
 14  your member countries or the entities that you
 15  represent have been active in the progression of the
 16  database bills before Congress.  And, as I'm sure
 17  you're all aware there is no bill yet.  So, my
 18  concern or a concern that has been raised in a
 19  number of the comments, is it by prohibiting
 20  circumvention of access controls on largely
 21  factually based databases, which have a sort of
 22  thin, I know, I apologize for using the word, I know
 23  it's touchy, selection and arrangement copyright.
 24  We are, in fact, creating de facto database
 25  protection.  This is not going to be true for a lot
 26  of databases that have copyrightable content in

                                                   PAGE 154
  1  them, but I believe as, I think it was you, Keith,
  2  talked about databases that are not as protected in
  3  the courts, precisely because of this issue and then
  4  have to rely more severely, more strongly on
  5  technological protections.
  6              I'm not saying that someone who puts a
  7  tremendous amount of effort in selecting and
  8  arranging factual or public domain material is not
  9  entitled to a return on his or her investment or to
 10  some kind of protection under the law.  My concern
 11  is that the pretext of protecting the copyright and
 12  that's the appropriate vehicle to do that.
 13  Congressional intent is always a bit obscure.  It's
 14  hard to know what Congress intended in any case and
 15  especially sometimes in the context of 1201, but I'm
 16  pretty sure that they didn't intend to circumvent
 17  the process of the database bill.  So, I would be
 18  just interested in hearing your responses to that.
 19              MR. KUPFERSCHMID:  Let me -- first I
 20  think my colleagues here also to respond, but let me
 21  first also actually -- I didn't get a chance to
 22  respond to your previous question, which is that,
 23  you know, we're dealing with big new technology like
 24  the Internet and so distribution mechanisms and
 25  business models are going to be changing over time,
 26  along with technology.  So, while we have, our

                                                   PAGE 155
  1  companies have certainly used these technologies in
  2  the past, perhaps they have not used them as they do
  3  today and certainly not as they're going to use them
  4  in the future.  You know, big things certainly now
  5  days in the software industries if you go on to find
  6  these warez web sites and they will tell you exactly
  7  how to crack -- how to get behind some technology or
  8  crack some code or something like that.  So, that's
  9  exactly why we need 1201(a)(1) for that type of
 10  thing, where maybe someone is not providing a device
 11  or a service.
 12              To get to the second part or the next
 13  question or the question that is actually on the
 14  floor right now, is, if I understand your question
 15  correctly, I think if you look toward what the
 16  Congress's intent was, Congress's intent is --
 17  especially when it comes to the exemptions and
 18  exceptions, you see right there on the papers what
 19  they thought the reasonable exceptions or the
 20  appropriate exceptions that are put in, such as
 21  reverse engineering and security testing and things
 22  like that and the fact that, you know, this was
 23  never discussed or proposed that there be sort of --
 24  I guess, certain works such as, I could say so-
 25  called thin copyrighted works or fair use works, be
 26  exempted at that time and if it was, I'm sure it

                                                   PAGE 156
  1  would have been shot down for the fact that how do
  2  you -- as I mentioned in my comments and I think
  3  others mentioned in their comments, well, how do you
  4  define those works?  I mean, I have no idea how to
  5  define those works.  I read the comments; I still
  6  have no clue how to define those works.
  7              And, as I mentioned earlier, the burden
  8  of proof is on the proponents of an exemption to
  9  define how these works, you know, what these classes
 10  of works are.  So, I'm still sort of waiting to hear
 11  from them as to what exactly -- what works we're
 12  talking -- we're actually talking about.
 13              I think -- I hope that sort of gets to
 14  your question -- the answer to your question.
 15              MR. CARSON:  Would you be more
 16  comfortable if we just exempted databases? It's easy
 17  to define.
 18              MR. KUPFERSCHMID:  No. But, then as I
 19  think David mentioned in a previous question, what
 20  you do is you're creating this negative implication,
 21  certainly, that databases are not, you know, worthy
 22  of copyright protection, not worthy of the
 23  protection the other words are afforded.  What's
 24  next, are you going to limit the term of protection
 25  for databases to five years perhaps?  I don't want
 26  to give you any ideas, but, I mean, what path do we

                                                   PAGE 157
  1  go in 20 years?
  2              MS. GOSLINS:  Do you --
  3              MR. MOHR:  Yes, I would like to add a
  4  couple of things.  I mean, part of the concern is
  5  really that 1201(a)(1) only applies if there is an
  6  access control and there are people who still, for
  7  example, put out printed compilations.  That
  8  increases improvements in scanning technology, for
  9  example.  It's very easy to scan that in and put it
 10  on a CD ROM.  I mean one of the, you know, best
 11  known cases in this area arose from someone simply
 12  keying a compilation, extracting the facts and
 13  keying the compilation into a computer and then
 14  selling it on CD ROM.
 15              Secondly, it does not, in that same
 16  vein,  it does not protect people who adopt a
 17  broadcast model and sell advertising on a web site.
 18  That has nothing to do with 1201(a)(1).
 19              MR. MIRCHIN:  And, I would just add that
 20  I actually don't think that it would expand or
 21  contract the amount of protection that databases
 22  would have.  The same standard that's been applied
 23  to this string of database cases would apply here,
 24  which is is it a copyrightable work?  If it is, you
 25  can have access control technology which can't be
 26  circumvented.  Is it not copyrightable, not part of

                                                   PAGE 158
  1  1201 and, therefore, it's not illegal to circumvent?
  2  So, I think actually I don't see that as --
  3              MS. GOSLINS:  That brings up an
  4  interesting question that we've talked about.  How
  5  should we think about a user who circumvents access
  6  control protections to a database sole to get access
  7  to a public domain work?  How do we think about
  8  that?  Is that not to get access to selection and
  9  arrangement, but just wants the text of Feist?
 10              MR. MONTORO:  They're not a lawful user,
 11  correct?
 12              MS. GOSLINS:  What?
 13              MR. MONTORO:  They are not a lawful
 14  user?
 15              MS. GOSLINS:  What do you mean by lawful
 16  user?
 17              MR. MONTORO:  They're gaining access
 18  improperly, not --
 19              MS. GOSLINS:  They're circumventing
 20  access control protections to a primarily factual
 21  database, but that has a layer of copyright
 22  protection, but just to get access to the text of
 23  the public domain document.
 24              MR. KUPFERSCHMID:  I guess, and I'll let
 25  Chris take over in a second, from a technology
 26  standpoint, I don't know how this is done.  I mean,

                                                   PAGE 159
  1  if you're accessing the database you're accessing
  2  the database.  And, especially if you don't have
  3  access in it, how do you determine beforehand what
  4  is the government information and what isn't?
  5              MS. GOSLINS:  Well, in the case of a
  6  legal database you could tell what is -- you know,
  7  what are the head notes and what are the actual text
  8  of the case.
  9              MR. KUPFERSCHMID:  And, I guess what I'm
 10  saying is I -- just knowing how our members at least
 11  or many of our members distribute their content or
 12  databases, I just don't know how you would make that
 13  division, how you would draw that line between -- I
 14  mean, I understand how you can see what is the
 15  government information and what is not, but when
 16  you're talking about the access control measures,
 17  how do you circumvent and not get to the protected
 18  coordination, selection and arrangement?  Because
 19  you are circumventing to get to that. They're
 20  intertwined.  You can't separate one from the other.
 21              MR. MOHR:  And, I would also -- I mean,
 22  I'd also like to add to add to this.  I mean, that
 23  this information -- I mean, the sort of common sense
 24  answer that comes, is why does this person need
 25  FEIST from us when it's, you know, readily available
 26  through a host of other sources?

                                                   PAGE 160
  1              MS. GOSLINS:  Maybe that was a bad
  2  example.  We heard one of the librarians this
  3  morning talk about tax decision, I guess, that are
  4  not available online, that are not available
  5  anywhere else, even though they are public domain
  6  documents, other than through a research database
  7  that the library had access to.
  8              MR. MOHR:  Well, if it's, I mean, if
  9  it's government information I don't know exactly --
 10  I mean I'm not a tax lawyer.  I don't know how one
 11  goes about finding such things, but I do know that
 12  there are obligations on the government to disclose
 13  certain things and to make certain things available.
 14  If a private service aggregates that material has
 15  value to it and makes it more convenient to users to
 16  get it, I would think that conditions under which
 17  those materials are made available are a licensing
 18  issue between the library and the publishing company
 19  and have nothing whatsoever to do with 1201(a).
 20              MR. MIRCHIN:  I would say also there is
 21  a real practical economic impact.  I mean, some of
 22  our largest databases are arguably government domain
 23  databases, Medline put out by the National Library
 24  of Medicine.  The reason I say arguably is, the
 25  question is, are those abstracts that are written in
 26  that database by the publishers or individual

                                                   PAGE 161
  1  authors? It is not clear to me if that is public
  2  domain or not, but let's take other examples by the
  3  Government Printing Office.
  4              But, if you allowed databases that
  5  contain government information, public domain
  6  information, to be circumvented, then really you're
  7  saying that companies can't have any pricing model
  8  at all based on usage.  So, for our situation we
  9  would be in a situation where we can't say, okay,
 10  you, University of Michigan, a large user, you might
 11  want to have unlimited use and you, small Western
 12  University might want to just have a single
 13  simultaneous user.  If we can't have different
 14  pricing, then we're going to have to do something in
 15  the middle, essentially.  So, the result is not
 16  going to be beneficial to users.  I see that's not
 17  very convincing to you.
 18              MS. GOSLINS:  I think it's a great
 19  argument for database protection.  I'm just not sure
 20  it's a great argument for using a few copyrightable
 21  elements of a factual database that's concerned
 22  primarily with public domain information, to
 23  consider that a work protected under this title, the
 24  title being the  act.  Then again, nobody is saying
 25  you can't use your own -- do whatever pricing law
 26  you want and employ vigorous access control

                                                   PAGE 162
  1  protections that nobody -- that it wouldn't be in
  2  anybody's time or interest to break.  It would be
  3  more cost effective to pay your licensing fees.
  4  And, we're talking about a very narrow value added
  5  here to the arsenal that you already have as a
  6  database producer of protecting your investment.
  7              MR. MIRCHIN:  Then you're saying that
  8  the selection coordination and arrangement that
  9  compilation copyright is the class of works that's
 10  not protected.  I mean, that's sort of what you're
 11  saying.  And, that really -- to me flies -- you
 12  know, Congress could have said, compilation
 13  copyrights are the class, is one of those
 14  exemptions.  They didn't do that.
 15              MR. CARSON:  We could say that.
 16              MS. GOSLINS:  Sorry.  Christopher,
 17  comment?
 18              MR. MOHR:  Yes.  I just wanted to add
 19  one more point.  I mean, again, I come back to the
 20  burden of proof.  I mean, there is no evidence that
 21  this is necessary.  I mean the -- you've heard
 22  testimony today that it's, you know, basically about
 23  inconvenience.  And, that, as the legislative
 24  history stated, does not warrant the issuance of an
 25  exemption, now at least in our view.  
 26              MS. GOSLINS:  I see we're losing a lot

                                                   PAGE 163
  1  of audience members, so I'm going to turn over the
  2  mic so it will be more entertaining.
  3              MR. KASUNIC:  Okay. Following up on some
  4  of those same comments then, in fear of losing more
  5  audience...  If something is protected, you're
  6  talking about there being no showing, for Chris, of
  7  there being any adverse effect. But, something
  8  that's clearly in the public domain, when we're
  9  taking about factual material, it's not something
 10  that -- you don't have to make a showing of an
 11  adverse effect for something that's not protected
 12  under Title 17.  That's not something that is
 13  covered by 1201(a)(1). When the factual materials
 14  itself is not necessarily something that falls
 15  within the scope of 1201(a)(1), which only protects
 16  works that are protected within Title 17.  So, who
 17  should really -- when we talk about burdens, who
 18  should bear the risk of this technology now that's
 19  currently in place?  Some of this technology is not
 20  really discriminating between the copyrightable
 21  elements of these databases or compilation which
 22  would be the selection and arrangement, or I believe
 23  you said that for SilverPlatter, that the
 24  protectible elements and there is the search engine
 25  within the database.  That would be something that
 26  is copyrightable and would be protected under the

                                                   PAGE 164
  1  scope of 1201(a)(1), but some of these masses of
  2  facts are just not within the scope of copyrightable
  3  material that would be protected.  So, if the
  4  technology that is currently in existence and this
  5  is within the current period, right now, we're
  6  talking about what adverse effects are going to be
  7  in the future. But we're also looking forward to
  8  what some of the changes in technology are going to
  9  be. The technology could become more discriminating
 10  at some period of time and be applied to only the
 11  copyrightable elements as opposed to both the
 12  copyrightable and the non-copyrightable elements.
 13  Who should bear the burden of this current state of
 14  non-discriminating technology?  Should it be the
 15  public that are the ones who should not be able to
 16  gain access to these public domain elements at this
 17  point, because the technology right now is not
 18  discriminating and is just broadly protecting both
 19  copyrightable and uncopyrightable elements?
 20              MR. KUPFERSCHMID:  Let me take a stab at
 21  that one.  I think it is very, very clear that,
 22  based on the statute, the legislative history we
 23  have, that the burden is on, should be on,
 24  proponents of an exemption.  I'm a little concerned
 25  that the fact that the creativity in the selection,
 26  arrangement, coordination of databases is being

                                                   PAGE 165
  1  somewhat discounted here.  Where there is sufficient
  2  creativity to warrant copyright protection in the
  3  selection, arrangement, coordination of a database,
  4  I mean, why is that creativity any less worthy of
  5  any less protection than any other creative work
  6  just because it happens to include public domain
  7  material?
  8              If the selection, arrangement,
  9  coordination is not worthy of copyright protection,
 10  is not sufficiently creative, well, then it's not
 11  covered by 1201(a)(1).  Now, maybe we'll have a
 12  database bill and the investment, rather than the
 13  creativity will be protected, but I just -- I'm
 14  concerned also that we're kind of skipping over the
 15  fact, which is ignoring the fact that -- about the
 16  creativity that is involved in the selection,
 17  coordination, arrangement and there is, I know, just
 18  from talking to our member companies, how much
 19  effort they put in and creativity is involved in
 20  these databases.  And, I would really -- and that
 21  worries me if we just sort of skip over that and
 22  talk about the material that's in the databases.
 23  It's copyrightable, maybe owned by somebody else, or
 24  maybe it's public domain information or maybe it's
 25  government information.
 26              So, I think the burden of proof does not

                                                   PAGE 166
  1  change here.  It remains on the proponents of an
  2  exemption.
  3              MR. MIRCHIN:  And, I don't -- I haven't
  4  seen in the record any need for it.  I mean, I
  5  haven't seen people saying they can't get access,
  6  information isn't available, they can't get to
  7  Medline.  In fact, a lot of the products that are
  8  done in the private sector are also done, often for
  9  free, in the public sector and actually an example
 10  is Medline, put out by the National Library of
 11  Medicine.  You can go to Pubmed and yet a lot of the
 12  private providers, like SilverPlatter, still license
 13  a lot of it and the reason is because we provide
 14  some other benefits.
 15              The other benefits might be that you can
 16  search across a whole range of databases, so in
 17  other words, I think there really needs to be some
 18  showing that people are not being able to get at
 19  this material, that there is a real problem that
 20  needs to be addressed.  
 21              MR. KASUNIC: There was a lot of
 22  discussion about what is not a class of works and I
 23  heard a lot of specifics about what things that were
 24  claimed to be classes of works and how they didn't
 25  fit in.  Can you offer any assistance in what
 26  criteria we would use to figure out what is a class

                                                   PAGE 167
  1  of works?
  2              MR. KUPFERSCHMID:  I think I'll leave
  3  that up to those who want an exemption.  I mean, I
  4  really -- I don't.  I don't think an exemption is
  5  appropriate  and I honestly don't have any helpful
  6  hints to help these proponents of the exemption out.
  7              MR. KASUNIC:  If we decide that
  8  databases is a class of works that fits in there,
  9  then would the exemption be something that should be
 10  related to a particular use of that database, or
 11  should we just exempt all databases per se.
 12              MR. KUPFERSCHMID:  I'm not sure I follow
 13  your question, but certainly if you're talking about
 14  exempting all databases per se, I would have a
 15  problem with that.  I think you certainly have the
 16  definitional problems with databases, or at least as
 17  some would have you think that we have definitional
 18  problems defining a database, so, I don't think you
 19  resolve any issues by just saying okay, databases
 20  are not, you know, aren't -- don't warrant the
 21  protection here and as I mentioned before, I think
 22  we're going down a really bad path here by creating
 23  some negative implication and if we start off with
 24  databases, well what category of works might be
 25  next?  You know, in that vein I should add that
 26  databases is sort of a -- is not really a very

                                                   PAGE 168
  1  narrow sub-set as required by the Congressional
  2  mandate, as a sub-set of a class of works.
  3              MR. MIRCHIN:  Yes, I would just say,
  4  again, as a practical matter, you're talking about a
  5  lot of organizations that put a huge amount of time
  6  selecting, you know, these are the economics
  7  journals we're going to include; these are the ones
  8  we're not; these are the proceedings we're going to
  9  include from various economic conferences; these are
 10  the ones that are not, as an example.  And, saying
 11  that that selection and arrangement is entitled to
 12  no copyright protection would sort of write that out
 13  of the copyright law.
 14              You know, there is nothing here that
 15  says that that's entitled to less copyright
 16  protection.
 17              MR. CARSON:  And, yet you have a
 18  database let's say of -- well, let's take one that
 19  I'm more familiar with and that's easy for most
 20  people in this room to relate to I suppose, because
 21  you have a database of judicial opinions.  You may
 22  have engaged in a great deal of selectivity and
 23  creativity in determining which judicial opinions to
 24  put in that database.  If I have access to that
 25  database and I decide I am going to reproduce one of
 26  those judicial opinions in whole and in fact I'm

                                                   PAGE 169
  1  going to distribute that opinion to everyone I know,
  2  you wouldn't have a leg to stand on in a copyright
  3  infringement suit, would you?  Your copyright
  4  doesn't protect that.  Your copyright protects the
  5  overall selection, coordination and arrangement, not
  6  the individual work within that database.
  7              MR. MIRCHIN:  I think in the 8th Circuit
  8  it's still okay.
  9              MR. KUPFERSCHMID:  But, I mean, we're
 10  still talking about access here and what you're
 11  talking about is reproduction and distributing,
 12  which is something entirely different.
 13              MR. CARSON:  Granted.                          0
 14  sometimes how we do it.  But, I think maybe I'm
 15  hearing an overstatement in terms of what the
 16  copyright is protecting and that's what I'm trying
 17  to get at right here.
 18              MR. MIRCHIN:  I mean, it's clear we're
 19  taking about the access, distinguishing between the
 20  access and the further use down --
 21              MR. CARSON:  No question.  No question.
 22              MR. MIRCHIN:  Okay.  Okay.
 23              MR. KASUNIC:  Well, I think we're going
 24  full circle back to some of the original questions
 25  that were asked.  So, if we understand that there is
 26  copyright protection -- and not demeaning that

                                                   PAGE 170
  1  protection in anyway by saying that databases or
  2  compilations of any sort are not deserving of that
  3  creativity. While I don't know about using the term
  4  ``effort'', which is something that we've been told is
  5  not a consideration in this, but rather whether
  6  there is originality in compilations or in the
  7  creation of these works. But that copyright is
  8  limited. Whether we like it or not, it's a thin
  9  copyright that is involved here. And should these
 10  technological access control measures be allowed to
 11  lock up these entire works, including things that
 12  maybe should be accessible to the public.  There is
 13  a claim that the public has a right to access, at
 14  least -- not the creative original parts that is
 15  entitled to copyright protection -- but some of the
 16  other elements that are part of the public domain.
 17              MR. KUPFERSCHMID:  But, once again, I
 18  don't know how you separate the creativity selection
 19  and arrangement, which protectable by copyright and
 20  if it's not we're talking about some other issue.
 21  But, I don't see how you separate that and the
 22  particular work.  I mean, if you're talking about
 23  accessing one work of many works, then you're
 24  talking about a different situation, because the
 25  access control technologies that we're talking about
 26  generally they would cover the entire database, not

                                                   PAGE 171
  1  a particular work, because then you're talking about
  2  a different issue.
  3              I mean, if you're talking about an act
  4  to circumvent an access control technology that
  5  covers, that protects only one particular work of
  6  the database, then you're not talking about
  7  protecting the database.
  8              MR. KASUNIC:  I'm talking about the one
  9  particular work in the database, unless there could
 10  be something that would obtain copyright protection
 11  if you were talking about collective work, and you
 12  have individually protected works within that.
 13              MR. KUPFERSCHMID:  Yes.
 14              MR. KASUNIC:  We're talking about a
 15  compilation of facts in terms of a database.
 16              MR. KUPFERSCHMID:  And, you're trying --
 17  if I understand you correctly, you're talking about,
 18  well, why shouldn't people be able to get at that
 19  one fact, right?
 20              MR. KASUNIC:  At the factual material,
 21  as opposed to any particular selection or
 22  arrangement.  If you have a database that has a
 23  search -- the search engine would be the tool that
 24  would select and arrange the data within a database.
 25  Isn't that --
 26              MR. KUPFERSCHMID:  If you're talking

                                                   PAGE 172
  1  about circumventing an access control, technological
  2  measure that's protecting a database, in order to
  3  get at the underlying facts, I don't see how you
  4  circumvent that technology without also accessing
  5  the selection, arrangement and coordination of that
  6  database.  That's what I'm saying, they're two --
  7  they're intermingled.  And, that's talking about
  8  access control technology protecting a particular
  9  fact and that's outside the range of what we're
 10  talking about here.
 11              We're talking about when a user protects
 12  a database.   By circumventing that you're -- not
 13  only are you -- well, I mean, you're getting out the
 14  underlying factual information that's incorporated
 15  into the database, but you're also getting at the
 16  selection, coordination and arrangement of the
 17  database.  They're intertwined.
 18              MS. DOUGLASS:  Does it have to be?
 19              MR. KUPFERSCHMID:  I'm not a technology
 20  expert, so I don't really know the answer to that
 21  question, although -- I mean, that's what database
 22  owners are concerned with, protecting their
 23  database, so that's what they're going to protect.
 24              MS. DOUGLASS:  Can't you code it
 25  separately?  Can't you code separately the
 26  uncopyrightable material and then hold the other

                                                   PAGE 173
  1  part differently?
  2              MR. KUPFERSCHMID:  Well, I mean for one
  3  thing I think you're talking about -- that is
  4  obviously on a case by case basis, depending on the
  5  database you're talking about and secondly that's a
  6  tremendous burden to put on -- to put on any
  7  copyright owner, especially, certainly database
  8  owners where you can have fields upon fields upon
  9  fields of information and, you know, determining and
 10  labeling exactly what may or may not be public
 11  domain.  I mean that's a unbelievable amount of
 12  effort.
 13              MR. KASUNIC:  So, should the public bear
 14  that burden now to try and make that determination,
 15  which they can't make, because they can't access it
 16  to begin with, so that this really becomes circular?
 17  Who should bear that burden of making that decision
 18  of only protecting the appropriate material which
 19  would be the copyrightable material, at least to
 20  gain protection under 1201(a)(1)?
 21              MR. KUPFERSCHMID:  Going back to my
 22  original statement.  The burden is on the proponents
 23  of an exemption here.  The law is what it is and
 24  it's proponents of an exemption or an exception,
 25  they're the ones that need to go forward and prove
 26  their case and I haven't seen it yet.  I mean, I

                                                   PAGE 174
  1  think that's why we're having some difficulty here,
  2  because maybe if we had some facts from which to
  3  work with, we could have more detailed conversation,
  4  but we're sort of talking in theory.
  5              MS. DOUGLASS:  The law is what it is,
  6  but a lot of people say on one side that the law
  7  provides for fair use and on the other side people
  8  say that you don't really need to talk about fair
  9  use, you need to talk about negotiated use.
 10              As a matter of fact, I believe I heard
 11  you say that you really are not necessarily
 12  referring to fair use as much as you are referring
 13  to negotiated use or use that you have to have --
 14  that provides for a contract.
 15              In other words, what I really want to
 16  know is how does fair use figure in the 1201(a)(1)
 17  calculation?  Some people say that there is no such
 18  thing as fair use unless you tried to make an
 19  agreement and you failed to make an agreement.  How
 20  does fair use actually figure into 1201(a)(1)?  Are
 21  you always talking about first obtaining permission?
 22              MR. KUPFERSCHMID:  Fair use has nothing
 23  to do with this inquiry at all on 1201(a)(1).  It
 24  really doesn't.  We're talking about circumvention
 25  of access control technologies.  We're not talking
 26  about copying, distributing, anything like that.

                                                   PAGE 175
  1  We're talking about access.  To give you an example,
  2  I have tons of stuff back in my office that a lot of
  3  which is protected by copyright.  That doesn't give
  4  you any right to break down my door and access that
  5  information under the guise of fair use.  And, so
  6  when we're talking about 1201(a)(1), fair use has
  7  absolutely nothing to do with the consideration
  8  here.
  9              I mean, you'll see from the library
 10  comments, they don't even call it fair use.  They
 11  call it a right of fair access, which sort of comes
 12  out of nowhere.
 13              MR. MOHR:  I would also add to that that
 14  this was something that was considered by Congress
 15  and rejected.
 16              MS. DOUGLASS:  So, fair use is out the
 17  window as far as access control is concerned.
 18              MR. KUPFERSCHMID:  I wouldn't say it's
 19  out the window.  It's never been in there to begin
 20  with.
 21              MS. DOUGLASS:  It's not part of the
 22  calculus at all.
 23              MR. MONTORO:  Well, I think it does make
 24  a difference though after you have lawful access to
 25  the program.  After you have a lawful access then
 26  fair use does come into play.

                                                   PAGE 176
  1              MR. KUPFERSCHMID:  I would agree, but
  2  then, of course, you're talking about a different
  3  situation and one that is not within the scope of
  4  the rule making.
  5              MS. DOUGLASS:  I have a hypothetical.
  6  Suppose that you suspected someone had taken part of
  7  your encrypted -- taken part of your copyrighted
  8  material, one of our databases, and put it in some
  9  encrypted material.  Should you be able to
 10  circumvent that technological measure to find out
 11  whether or not your material was contained in that
 12  encrypted material?  Suppose you think --
 13              MR. MIRCHIN:  So, what would be --
 14              MS. DOUGLASS:  Suppose SIIA has a flashy
 15  database and, not that SIIA publishes databases, you
 16  know, members do, but anyway, suppose they did.
 17  And, suppose you, SilverPlatter, thought that hey,
 18  they've got Psyclit in that database, would you be
 19  able to circumvent any access control SIIA had in
 20  order to find out?  Should you be able to, would you
 21  be able to?
 22              MR. MIRCHIN:  We would never be
 23  circumventing any access control.
 24              MS. DOUGLASS:  So, you shouldn't be able
 25  to?
 26              MR. MIRCHIN:  Well, I guess I'm not sure

                                                   PAGE 177
  1  why that should be different.  Yes, I guess it just
  2  doesn't seem to me like that, the fact that they use
  3  encryption should make it different that I should be
  4  able to do that or not.
  5              MS. DOUGLASS:  Shouldn't be able to,
  6  even if it's for what you might think would be a
  7  legitimate purpose?
  8              MR. MIRCHIN:  Well, I mean, there is an
  9  exception on the encryption research and all that.
 10              MS. DOUGLASS:  So, you would be
 11  conducting encryption research to find out whether
 12  they had a --
 13              MR. KUPFERSCHMID:  I think what he's
 14  trying to get at is is that there is -- I mean there
 15  -- you basically you look to the law.  You look to
 16  the what the exceptions are.  If you want to get at
 17  the underlying database and it falls within one of
 18  those exceptions, great, but I mean I don't think
 19  the situation you state does.
 20              MS. DOUGLASS:  So, you wouldn't be able
 21  to do it?
 22              MR. KUPFERSCHMID:  No.  I mean,
 23  according to my reading of the law, no.
 24              MS. DOUGLASS:  And, you shouldn't be
 25  able to do that sort of thing?
 26              MR. KUPFERSCHMID:  There are other ways

                                                   PAGE 178
  1  to find out whether somebody is taking your
  2  material.
  3              MS. DOUGLASS:  Okay.  I just want to
  4  have a -- I just have one final just general
  5  question, just sort of a -- for my information.  You
  6  license your databases or do you sell them?
  7              MR. MIRCHIN:  We license them, largely.
  8  I mean, there are actually some exceptions where
  9  they actually are sold, but that's really rare.
 10              MS. DOUGLASS:  And, do you register them
 11  for copyright protection?  I don't want to put you
 12  on the spot.  Maybe you don't know.
 13              MR. MIRCHIN:  Well, we have a really
 14  small legal department and we personally don't
 15  register them.  I actually believe probably the
 16  database producers do.  The problem of the dynamic
 17  databases and registration is that some of them are
 18  changing on a daily basis or more frequently than
 19  that.  And, there is always the question of, you
 20  know, how are you going to register them. We
 21  personally do not register the databases.  We have
 22  probably in excess of 2,000 updates a year in
 23  various databases.  So, we don't.
 24              MS. DOUGLASS:  I'm just trying to find
 25  out whether you registered them as published works
 26  or whether you considered them as published works,

                                                   PAGE 179
  1  whether you considered them as unpublished works, et
  2  cetera, et cetera.
  3              MR. MIRCHIN:  I would say -- I mean,
  4  SilverPlatter's interest in this, as well as,
  5  obviously, database protection, you know, we're all
  6  fellow travelers, is that -- the issue for us is
  7  it's our supply.  It's our life blood.  I mean, if
  8  there is not protection, if the database producers
  9  cannot make a reasonable living, there simply is no,
 10  you know, there would be -- there would be no supply
 11  for us.  So, that's -- that would be our interest in
 12  that sort of thing.  So, how they register in terms
 13  of copyright, actually I don't know.
 14              MS. DOUGLASS:  I'm just trying to
 15  generally get at the idea of whether these are
 16  considered to be published works, are they
 17  considered to be unpublished works?  Are they then
 18  -- do you have any -- as a published work are there
 19  any things that sort of follow as far as use is
 20  concerned, in terms of what should a purchaser be
 21  able to do with the work once he purchases it?  I
 22  guess that's my point.
 23              MR. MIRCHIN:  I guess you know, that
 24  really raises sort of a general issue which is, you
 25  know, in -- also in terms of this rule making, that
 26  there are a lot of things that are happening well

                                                   PAGE 180
  1  outside the access control technology, in terms of
  2  the use that people make.  I mean, often that's very
  3  much a licensing question and a lot of these issues
  4  actually come up very much in the licensing context,
  5  rather then the access control context.
  6              MR. CARSON:  Chris or Keith, do you want
  7  to add any views at whether in general databases
  8  should be considered published or unpublished?
  9  Obviously that depends on a case by case basis.  I
 10  mean I don't -- I never asked actually what our
 11  members' practice is, but I'm sure it also -- for
 12  them it's on a case by case basis.
 13              MR. KUPFERSCHMID:  No.
 14              MR. MOHR:  I mean, it seems that -- I
 15  would echo that.
 16              MS. DOUGLASS:  So, you -- so, they might
 17  be published, they might be unpublished.  Is that
 18  what you're saying?
 19              MR. MOHR:  Yes.  Just like any other
 20  work.
 21              MR. CARSON:  My memory is failing me,
 22  but my notes, assisted by a vague recollection, tell
 23  me that at least one of you made a point that you
 24  can't define a class of works by reference to the
 25  type of use someone is making of it.  And, I'm
 26  wondering if anyone would like to champion that

                                                   PAGE 181
  1  point of view and explain to me why you can't do
  2  that?
  3              MR. MOHR:  I believe the point was class
  4  of user.
  5              MR. CARSON:  All right.  Let's do it
  6  that way.
  7              MR. MOHR:  I mean, the problem with
  8  doing it that way is basically that the way this
  9  issue has been phrased is in terms of education,
 10  library, other miscellaneous uses, that they use the
 11  entire gambit of copyrighted works.  It's basically
 12  a way of writing the prohibition out of the statute,
 13  in our view.
 14              MR. KUPFERSCHMID:  If I could just --
 15  I'm sorry, just stop for a second, just because this
 16  was actually considered by Congress and rejected and
 17  they went with the other approach, which is to
 18  define class of works.  So, they actually reviewed
 19  the legislative history and the proposals -- this
 20  was actually proposed and rejected and instead when
 21  with the class of works option.  So, that's, at
 22  least from my understanding, was actually considered
 23  at one point and decided that was not the way to go.
 24  But, anyhow, I didn't mean to cut you off, Chris.
 25              MR. CARSON:  Is there anything in the
 26  statutory language that forbids us from deciding,

                                                   PAGE 182
  1  all right, we're going to decide that one class of
  2  works is databases when used in an academic library.
  3  I'm just -- I'm making this up on the fly, so that
  4  may not be a good example, but let's just say that
  5  that's -- someone comes forward with evidence that
  6  that's where there is a real problem.  Why can't we
  7  narrowly define a class in that respect?
  8              MR. KUPFERSCHMID:  I think that if
  9  somebody and that's a big, big if, somebody were to
 10  come up with that evidence, then we would certainly
 11  have to determine if that evidence corresponded
 12  with, number one,  if there is a causal connection
 13  between that evidence and the prohibition, if that
 14  evidence was substantial and that that evidence did
 15  correspond with the class of works, but once again
 16  we're sort of talking about this all in theory
 17  because you don't have any actual information to
 18  deal with.  But, I would be happy when they come
 19  forward with the information to talk about it in
 20  detail then.
 21              MR. MIRCHIN:  I know I just say again,
 22  would sort of say, just wait a second.  It says
 23  class of works.  Now, you're talking about class of
 24  works, but in terms of the users that are -- and the
 25  uses that are being made of it.  And, I wouldn't
 26  want to make your job anymore difficult.

                                                   PAGE 183
  1              MR. CARSON:  All right.  That's a
  2  question that has been asked a number of times.
  3  What on earth is a class of works in the context of
  4  Section 1201(a)(1)?  How do we determine what a
  5  class of works is?
  6              MR. KUPFERSCHMID:  Right about now I'm
  7  glad I don't work at the Copyright Office.
  8              MR. CARSON: Would you take my resume?
  9              MR. MOHR:  I would just like to add one
 10  more thing to that.  I mean, another thing is that
 11  on balance there has to be a balancing and the
 12  benefit from these measures, you know, is outweighed
 13  by the negative effects.  I mean, again, that's a
 14  burden that the proponents of an exception bear and
 15  that is something, at least in our view, that has
 16  not been shown.
 17              MR. MIRCHIN:  This isn't a test.  You
 18  don't fail by coming up with the empty slate here.
 19  In other words, what I really mean is that it is not
 20  incumbent on you to sort of, you know, I think it is
 21  incumbent on people who want to propose an exemption
 22  to propose some genuine exemption and see what the
 23  evidence is behind it.  And, then we can actually
 24  address it, but I mean I guess I haven't seen the
 25  evidence of people genuinely being harmed that they
 26  can't get at the information because of it.

                                                   PAGE 184
  1              MR. CARSON:  Mr. Montoro, I don't want
  2  you to feel ignored.
  3              MR. MONTORO:  That's all right.
  4              MR. CARSON:  So, I'm going to ask Mr.
  5  Kupferschmid some questions.  I'm picking on you as
  6  the punitive representative of the software
  7  industry.
  8              Let me first ask you whether SIIA has
  9  any particular point of view with respect to whether
 10  people should, as a general proposition, be able to
 11  circumvent the protections that dongles provide with
 12  respect to software?
 13              MR. KUPFERSCHMID:  In our written
 14  comments and also I tried to address them a little
 15  bit today, I mean, the answer to that is no, unless
 16  of course, like I mentioned before, for some reason
 17  it falls under -- within one of the exemptions.
 18  And, I can actually cite an example and I think this
 19  is backed up by Mr. Montoro's comments.  He
 20  discusses the fact that universities like to use the
 21  AutoCAD programs and which cost a lot of money, but
 22  the fact is that the dongles for these programs keep
 23  in getting stolen.  And, guess what, they're being
 24  stolen by students and the software is also being
 25  stolen.
 26              I mean, that's exactly the type of thing

                                                   PAGE 185
  1  we're trying to prevent.  And, if there is an
  2  exemption for lost, damage or stolen dongles, then
  3  universities aren't going to take any precautions at
  4  all to make sure that their dongles aren't stolen.
  5  But, if the burden falls on those who actually
  6  purchase the software and the dongles, then they
  7  will take out insurance to protect themselves and
  8  maybe they'll lock up the dongles when there is no
  9  one, you know, watching the computer, the security
 10  guard or whatever they use.  They're lock them, that
 11  type of thing.  So, it's best here, certainly, from
 12  this standpoint to put the burden on those who
 13  actually are purchasing the software to make sure
 14  it's not stolen or lost.
 15              MR. CARSON:  Mr. Montoro, you're raising
 16  your hand.  I gather you would like to say
 17  something.
 18              MR. MONTORO:  Thank you, Mr. Carson.
 19  And, sorry, Rachel.
 20              It's amusing and it's amusing, I guess,
 21  because for those that are really in the situation,
 22  educational facilities and to take a lock device, to
 23  take it back whether you've got 30 computers,
 24  perhaps, in a shop, is not a real practical
 25  solution.  What I suggested perhaps of having a
 26  replacement technology made available is something

                                                   PAGE 186
  1  viable, of course.  That could be used and that
  2  could be used effectively.
  3              I might agree with Keith, I'm not so
  4  sure that what I have talked about with these
  5  dongles is actually access control.  But, I never
  6  quite heard and I would like the Copyright Office
  7  maybe to clarify that what we are talking about is
  8  copy protection instead.
  9              MR. CARSON:  Let me ask you, Keith, do
 10  you have a viewpoint on whether dongles are access
 11  control measures?  Are they something that fall
 12  within the scope of Section 1201?
 13              MR. KUPFERSCHMID:  I think -- I mean, I
 14  think they are access control measures from what I
 15  understand about the technology, but I do -- would
 16  like to leave the opportunity open, because of my
 17  more technical experts back in the office and what
 18  have you.  But, my understanding is they are in fact
 19  access control technological measures, you know, but
 20  obviously if you don't have access you can't copy
 21  either.
 22              MR. MONTORO:  I believe what Keith, what
 23  he had said earlier in his testimony, however, was
 24  that he believed that these devices were copy
 25  protection devices unless the Copyright Office ruled
 26  otherwise, if I characterize that correctly.

                                                   PAGE 187
  1              But, the problem, again --
  2              MR. KUPFERSCHMID:  I'm not sure I said
  3  that, but go ahead.
  4              MR. MONTORO:  So, there is a problem
  5  with these devices.  They cannot be backed up.  If
  6  they are -- what happens after you receive your
  7  first access?  Let's say this is -- I purchase a
  8  program.  It comes with a lock device.  Now, I am a
  9  lawful authorized user to use that program, but
 10  without this device I cannot use that program.  Does
 11  it mean that I -- is it then an access device or is
 12  it copy protection device.  And, I think that's what
 13  Mr. Jaszi was trying to get at this morning, where
 14  he was talking about second usage and that's where
 15  I'm going also.
 16              MR. CARSON:  Keith, I would like to
 17  follow up on a comment you made.  I can understand
 18  the fear of a potential for abuse if someone just
 19  says we lost it, it was stolen, go back and get
 20  another one or being able to circumvent in those
 21  case.  I understand the potential for abuse there.
 22  But, at least what we're hearing from Mr. Montoro is
 23  there are cases where it's damaged.  And, you can't
 24  get the company to replace it.  A, what on earth
 25  would justify a company in refusing to replace it
 26  and second, if that company refuses to replace it,

                                                   PAGE 188
  1  when it is demonstratively proven that the thing is
  2  just damaged.  Here it is, it's damaged.  I didn't
  3  give it to someone else.
  4              What on earth would justify not
  5  permitting a person in that position to circumvent?
  6              MR. KUPFERSCHMID:  A couple of things.
  7  One, as I mentioned, is that there are third parties
  8  that will agree to escrows and this happens all the
  9  time.  Will escrow software.  Will escrow hardware
 10  locks, that type of thing.  They will do that, so if
 11  that's a concern of yours, certainly you can do
 12  that.  But, that's beside the point.
 13              MS. GOSLINS:  Although that requires the
 14  permission and effort on the part of the software
 15  publisher, right?
 16              MR. KUPFERSCHMID:  Oh, sure.
 17              MS. GOSLINS:  There is no guarantee
 18  that --
 19              MR. KUPFERSCHMID:  Without a doubt.
 20              MS. GOSLINS:  -- that they would make
 21  that available to the third party.
 22              MR. MONTORO:  Hindsight is 20/20.  After
 23  somebody has gone out of business, trying to say
 24  that they should escrow this material for future
 25  people to use is a little too late at that point.
 26              MR. KUPFERSCHMID:  Escrow is something

                                                   PAGE 189
  1  you would do at the time of agreement, certainly,
  2  and that is actually a practice that is somewhat
  3  common.  We have a lot of members, a matter of fact
  4  --
  5              MR. CARSON:  Can I stop you right there?
  6              MR. KUPFERSCHMID:  Yes.
  7              MR. CARSON:  Just for a second.  I've
  8  got another point.  This may be my ignorance.  How
  9  do you meaningful escrow a piece of hardware and
 10  what does that mean?
 11              MR. KUPFERSCHMID:  You would just get a
 12  third party who would basically hold that hardware
 13  and if the dongle wasn't operable, then you would
 14  have this other, this other hardware that sort of
 15  been, sort of in storage, I guess, for lack of a
 16  better term.
 17              MR. MONTORO:  It's not possible.  I'm
 18  sorry, it's not possible to do that.  The hardware
 19  piece is unique to each customer.  That would mean
 20  that the manufacturer would have to send out one
 21  dongle, one of these pieces to the customer when he
 22  gets the software package and one to a third party
 23  escrow person to hold onto it in the eventuality
 24  something happened.
 25              MR. KUPFERSCHMID:  But, that's exactly
 26  what we're talking about.  That does happen.

                                                   PAGE 190
  1              MR. CARSON:  Is that a typical practice?
  2              MR. KUPFERSCHMID:  For dongles, I really
  3  don't know.  With software, it is. Let me take that
  4  back, depending on the software, okay, it could be a
  5  typical practice.  I mean, we're talking about many
  6  different software products here.
  7              MR. CARSON:  Okay. Let's assume that
  8  that didn't happen.  You know, there wasn't a, I
  9  guess another dongle in the hands of some third
 10  party escrow.  The user's dongle is broken.  And, he
 11  goes back to the software company, if it still
 12  exists, and says, hey, it's broken.  Here, I'll ship
 13  it to you.  You can look at it.  You can find out
 14  for yourself.  And, the software company says, too
 15  bad, buy another $7,000.00 software package. Why,
 16  under those circumstances, should the user not be
 17  permitted to circumvent?
 18              MR. KUPFERSCHMID: And, this actually was
 19  -- now, you're getting back to the very first point
 20  I wanted to make, which is what I read in Mr.
 21  Montoro's comments, I said -- I mean, gee, is this
 22  right and when I called our software companies that
 23  have an interest here and use dongles and, I mean,
 24  they informed me that is actually not the case.  I
 25  mean, if -- and I think actually there is one line,
 26  although I don't have it handy, in Mr. Montoro's

                                                   PAGE 191
  1  testimony where it says, if you're talking about
  2  lost or stolen, but if you're talking damaged
  3  dongles, in most cases the software provider will
  4  actually replace that or work with the customer.
  5              I mean, they don't want to lose
  6  customers it's bad business.  So, they will actually
  7  work with the customer in virtually all cases.  In
  8  talking to our members this was confirmed.
  9              MR. CARSON:  Let me make sure I'm not
 10  misunderstanding what you said.  Have there been
 11  cases?  Are you aware of cases where you have the
 12  damaged dongle and there is simply no recourse from
 13  the software company?
 14              MR. MONTORO:  Well, the first instance
 15  would be if a company went out of business and there
 16  was nobody to go back to and I mentioned that
 17  already.
 18              MR. CARSON:  Right.
 19              MR. MONTORO:  Generally, companies will
 20  replace one that is damaged, if they are still
 21  around to do so.  The problems come up, of course,
 22  that if the lock device is lost, there is a burglary
 23  and I think Keith raised earlier the point that you
 24  should go ahead and you take your software and you
 25  lock it up, you lock up your hardware lock at night.
 26  Well, the truth is that most people will obviously

                                                   PAGE 192
  1  lock up their software and keep it in a certain
  2  spot.  The software, however, is already install on
  3  your computer.  Once it's installed on the computer
  4  with the hardware lock, you don't ever touch it.
  5  You don't climb behind your desk every night before
  6  you go home to remove a device.
  7              And, so those are real problems and
  8  we've had people actually call us, hey, I've got a
  9  police report, this is exactly what happened.  It's
 10  to the dealers, typically that deal the software
 11  that's out there, they -- generally it's up to them
 12  if they're going to replace something or not and the
 13  problem is that they are motivated by making another
 14  sale.  And, I've come across this once before, where
 15  they had no incentive really to help out somebody if
 16  it's actually been lost.  They will say you simply
 17  can go ahead and try to claim it on your insurance.
 18              And, I've had customers come back to me
 19  and tell me my insurance does not cover this.
 20              MR. CARSON:  Okay.  Let's take your
 21  scenario where the software company is out of
 22  business.  What's your response to Mr.
 23  Kupferschmid's point that if a software company is
 24  out of business, who on earth has got a claim
 25  against you under Section 1201(a)?  What's your
 26  problem?

                                                   PAGE 193
  1              MR. MONTORO:  It's still breaking the
  2  law as I understand the way 1201(a) would be.
  3  You're still circumventing a device -- a copyright
  4  protection device or even maybe an access control
  5  device, depending on how we define it.  So, whether
  6  you're breaking the law and no body knows about it
  7  or you still maybe breaking the law and that's why
  8  we need the exemption.
  9              MR. CARSON:  That's all I have.  I want
 10  to thank you all for sharing your thought with us.
 11  Our work still -- we still have a lot left to do,
 12  just in the next two days.  I apologize on behalf of
 13  the Register who really did want to be here.  She
 14  will have the opportunity of reading the transcript
 15  and/or hearing the audio tape of your testimony.  As
 16  we mentioned at the outset, it may well be that
 17  after you've all left we'll realize, oh, my God, we
 18  really should have asked you this question or that
 19  question or the Register herself may well have some
 20  questions that none of us thought of and we are
 21  certainly reserving the right to get those to you
 22  and ask you to get back to us in writing in
 23  sufficient time that that can be made part of this
 24  record and hopefully in time for others to comment
 25  upon that in their post-hearing comments.
 26              So, with that we will adjourn until

                                                   PAGE 194
  1  tomorrow morning at 10:00 a.m.  Thank you, everyone.
  2              (Whereupon, the hearing was adjourned to
  3  reconvene tomorrow at 10:00 a.m.)