IV. Preliminary Findings and Recommendations

A. Law
1. Distribution by Transmission
a. The Distribution Right
b. Publication
c. First Sale Doctrine
d. Other Related Amendments
2. Technological Protection
3. Copyright Management Information
4. Public Performance Right
5. Fair Use
6. Licensing
7. International
B. Technology
C. Education

These findings and recommendations represent the result of the Working Group's examination and analysis to date. While the findings and recommendations are preliminary, specific language is offered with any proposals for legislative change to elicit and facilitate more detailed public comment.

A. LAW

It is difficult for intellectual property laws to keep pace with technology. When technological advances cause ambiguity in the law, courts rely on the law's purposes to resolve that ambiguity. However, when technology gets too far ahead of the law, and it becomes difficult and awkward to apply the old principles, it is time for reevaluation and change. "Even though the 1976 Copyright Act was carefully drafted to be flexible enough to be applied to future innovations, technology has a habit of outstripping even the most flexible statutes."[343]

The coat is getting a little tight.[344] There is no need for a new one, but the old one needs a few alterations.

1. DISTRIBUTION BY TRANSMISSION

a. THE DISTRIBUTION RIGHT

The Copyright Act gives a copyright owner the exclusive right "to distribute copies or phonorecords of the copyrighted work" to the public. A copy or phonorecord is a material object in which a copyrighted work is fixed, such as a compact disc, a videocassette or a paperback book. It is not clear under the current law that a transmission can constitute a distribution of copies or phonorecords of a work. Yet, in the world of high-speed, communications systems, it is possible to transmit a copy of a work from one location to another. This may be the case, for instance, when a computer program is transmitted from one computer to ten other computers. When the transmission is complete, the original copy remains in the transmitting computer and a copy resides in the memory of, or in storage devices associated with, each of the other computers.[345] The transmission results essentially in the distribution of ten copies of the work. Therefore, the Working Group recommends that the Copyright Act be amended to reflect that copies of works can be distributed to the public by transmission, and such transmissions fall within the exclusive distribution right of the copyright owner.

The Working Group recommends that the Copyright Act be amended to recognize that copies or phonorecords of works can be distributed to the public by transmission, and that such transmissions fall within the exclusive distribution right of the copyright owner. The Working Group recommends that Section 106(3) be amended to read as follows:[346]

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending, or by transmission.

The Working Group also recommends other related amendments to the definition of "transmit" and the importation prohibitions.

A transmission is not necessarily a transmission of a performance or display of a work.[347] A transmission may be a transmission of a reproduction of a work. Therefore, the Working Group recommends that the definition of "transmit" in Section 101 of the Copyright Act be amended to clarify that reproductions, as well as performances and displays, can be transmitted, and to delineate between those transmissions that are communications of performances or displays and those that are distributions of reproductions.

How to delineate between these types of transmissions is a difficult, but necessary, issue to resolve. The transmissions themselves hold no clues; one type often looks the same as the other during the transmission. To delineate between those transmissions that are communications of performances or displays and those that are distributions of reproductions, then, one must look at both ends of the transmission. Did the transmitter intend to communicate a performance or display of the work or, rather, to distribute a reproduction of the work? Did the receiver simply hear or see the work or, rather, receive a copy of it? If the transmitter intends to both communicate a performance or display and distribute a reproduction--or if the receiver hears or sees a performance or display of the work and receives a copy of it, what is the transmission? The resolution of these issues should rest upon a "primary purpose or effect" analysis of the transmission.

The Working Group, therefore, recommends that the definition of "transmit" be amended to read as follows:

To "transmit" a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent. To "transmit" a reproduction is to distribute it by any device or process whereby a copy or phonorecord of the work is fixed beyond the place from which it was sent. In the case when a transmission may constitute both a communication of a performance or display and a distribution of a reproduction, such transmission shall be considered a distribution of a reproduction if the primary purpose or effect of the transmission is to distribute a copy or phonorecord of the work to the recipient of the transmission.

The Working Group also recommends that the prohibitions on importation be amended to reflect the fact that, just as copies of copyrighted works can be distributed by transmission in the United States, they can also be imported into the United States by transmission. Although we recognize that the U.S. Customs Service cannot, for all practical purposes, enforce a prohibition on importation by transmission, given the global dimensions of the information infrastructure of the future, it is important that copyright owners have the other remedies for infringements of this type available to them. Therefore, the Working Group recommends that Section 602 of the Copyright Act be amended to read as follows:

(a) Importation into the United States, whether by carriage of tangible goods or by transmission, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.

b. PUBLICATION

The legislative history to the Copyright Act makes clear that "any form of dissemination in which a material object does not change hands . . . is not a publication no matter how many people are exposed to the work."[348] Thus, a transmission of a performance or display via the NII would not constitute publication, because, technically, a material object does not change hands.[349] However, in the case of a transmission of a reproduction, the recipient of the transmission ends up with a copy of the work. Therefore, the Working Group recommends that the definition of "publication" in Section 101 of the Copyright Act be amended to include the concept of distribution by transmission:

"Publication" is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, lending, or by transmission. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication. A public performance or display of a work does not of itself constitute publication.[350]

c. FIRST SALE DOCTRINE

The first sale doctrine allows the owner of a particular, lawfully-made copy of a work to dispose of it in any manner, with certain exceptions,[351] without infringing the copyright owner's exclusive right of distribution. It seems clear that the first sale model--in which the copyright owner parts company with a tangible copy--should not apply with respect to distribution by transmission, because under current applications of technology, a transmission involves both the reproduction of the work and the distribution of the reproduction. In the case of transmissions, the owner of a particular copy of a work does not "dispose of the possession of that copy or phonorecord." A copy of the work remains with the first owner and the recipient of the transmission receives a reproduction of the work. Therefore, to make clear that the first sale doctrine does not apply to transmissions, the Working Group recommends that Section 109 of the Copyright Act be amended to read as follows:

(a) (1) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

(2) This subsection does not apply to the sale or other disposal of the possession of that copy or phonorecord by transmission.

d. OTHER RELATED AMENDMENTS

The legislative changes outlined above give rise to some difficult issues. The term "distribute" (or a variant form of the term), which is not defined, is used more than 90 times in the Copyright Act.[352] Moreover, the term is used in the definition of "publication," which, in its variant forms, is used more than 100 times. Therefore, care must be taken to identify and analyze all of the ramifications of a change in the Section 106 right to distribute.

The Working Group is in the process of completing that process and welcomes public comment in this regard. The Working Group is analyzing whether each of the limitations of the copyright owner's distribution right should apply with respect to distribution by transmission.[353]

2. TECHNOLOGICAL PROTECTION

The ease of infringement and the difficulty of detection and enforcement will cause copyright owners to look to technology, as well as the law, for protection of their works. However, it is clear that technology can be used to defeat any protection technology provides. The Working Group finds that legal protection alone may not be adequate to provide incentive to authors to create and to disseminate works to the public, unless the law also provides some protection for the technological processes and systems used to prevent unauthorized uses of copyrighted works.

Sufficient protection cannot be gained through suits for contributory infringement. Under the Sony decision, a manufacturer is not liable for contributory infringement if the device is capable of a "substantial noninfringing use," even if the device is rarely or never put to those uses, and even if the use to which it is primarily put is infringing.

The Working Group finds that prohibition of devices, products, components and services that defeat technological methods of preventing unauthorized use is in the public interest. Consumers of copyrighted works pay for the acts of infringers. The price of copyrighted works for legitimate users is higher due to infringement losses suffered by copyright owners. The public will also have access to more works via the NII if copyright owners can more effectively protect their works from infringement.

Therefore, the Working Group recommends that the Copyright Act be amended to prohibit the importation, manufacture and distribution of devices, as well as the provision of services, that defeat anti-copying systems.

Legislation of this type is not unprecedented. The Copyright Act already protects sound recordings and musical works by prohibiting the circumvention of any program or circuit that implements a serial copy management system or similar system included in digital audio recording devices and digital audio interface devices. Section 1002 provides:

No person shall import, manufacture, or distribute any device, or offer or perform any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate, or otherwise circumvent any program or circuit which implements, in whole or in part, a [serial copy management system or similar system].[354]

The Communications Act includes a similar provision:

Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or is intended for any other activity prohibited by [Section 605(a)] shall be fined not more than $500,000 for each violation, or imprisoned for not more than 5 years for each violation, or both. For purposes of all penalties and remedies established for violations of this paragraph, the prohibited activity established herein as it applies to each such device shall be deemed a separate violation.[355]

Precedent for this type of legislation is also found in the international arena. The North American Free Trade Agreement requires each party to make it a criminal offense to "manufacture, import, sell, lease or otherwise make available a device or system that is primarily of assistance in decoding an encrypted program-carrying satellite signal without the authorization of the lawful distributor of such signal . . . ."[356] In 1988, the United Kingdom enacted legislation prohibiting the manufacture, distribution or sale of a device designed or adapted to circumvent copy-protection systems.[357]

The Working Group recommends that Chapter 5 of the Copyright Act be amended to include the following new section 512:

No person shall import, manufacture or distribute any device, product, or component incorporated into a device or product, or offer or perform any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate, or otherwise circumvent, without authority of the copyright owner or the law, any process, treatment, mechanism or system which prevents or inhibits the exercise of any of the exclusive rights under Section 106.

The Working Group recommends other related amendments to provide civil causes of action and remedies for violations of the proposed prohibition. The Working Group recommends that Section 501 of the Copyright Act be amended to read as follows:

(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be. Anyone who violates section 512 is an infringer of the copyright in a work that utilizes the process, treatment, mechanism or system which the violator's device, product, component or service circumvents.

The Working Group recommends that Section 503 of the Copyright Act be amended to read as follows:

(a) At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable, of all copies or phonorecords claimed to have been made or used in violation of the copyright owner's exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced, and of all devices, products or components claimed to have been imported, manufactured or distributed in violation of section 512.

(b) As part of a final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner's exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced, and of all devices, products or components found to have been imported, manufactured or distributed in violation of section 512.

The Working Group also recommends that Section 506 of the Copyright be amended to read as follows:

(a) Criminal Infringement.--Any person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain shall be punished as provided in section 2319 of title 18.

(b) Forfeiture and Destruction.--When any person is convicted of any violation of subsection (a), the court in its judgment of conviction shall, in addition to the penalty therein prescribed, order the forfeiture and destruction or other disposition of all infringing copies or phonorecords and all implements, devices, products, components or equipment used in the manufacture of such infringing copies or phonorecords infringement.

The proposed prohibition on the importation, manufacture and distribution of devices, products and components, and the provision of services, that circumvent anti-copying systems is intended to assist copyright owners in the protection of their works.[358] Copyright owners who use anti-copying systems to protect their works may bring actions for infringement against persons who, inter alia, manufacture or distribute devices whose primary purpose or effect is circumvention of those systems. The Working Group recognizes, however, that copyright owners may wish to use such systems to prevent the unauthorized reproduction, for instance, of their works, but may also wish to allow some users to deactivate the systems. Therefore, the proposed legislation prohibits only those devices or products, the primary purpose or effect of which is to circumvent such systems without authority. That authority may be granted by the copyright owner or by limitations on the copyright owner's rights under the Copyright Act.

Standing to bring actions for violations of the proposed legislation is granted only to copyright owners whose works are protected by the system that the violator's device, product, component or service circumvents; the manufacturers of anti-copying systems defeated by violators may not bring actions for the defeat of such systems.

The Working Group is not without some concerns regarding this proposal, particularly with regard to works whose term of copyright protection expires but are still protected by anti-copying systems, and works in the public domain. However, the Working Group believes the "primary purpose or effect" standard will allow for the distribution of devices that deactivate the anti-copying systems used in such works, and that the benefits of the proposed legislation outweigh the possible problems.

3. COPYRIGHT MANAGEMENT INFORMATION

In the future, the copyright management information associated with a work --such as the name of the copyright owner and the terms and conditions for uses of the work--may be critical to the efficient operation and success of the NII. The public should be protected from fraud in the creation or alteration of such information. Therefore, the Working Group recommends that the Copyright Act be amended to prohibit fraudulent inclusion of copyright management information and fraudulent removal or alteration of such information. The Working Group recommends that Section 101 of the Copyright Act be amended to include the following definition:

"Copyright management information" means information associated with a copyrighted work, including, but not limited to, the name and other identifying information of the copyright owner, the terms and conditions for uses of the work, and identification codes such as an ISBN number.

The Working Group also recommends that Section 506 of the Copyright Act, which contains the prohibitions against fraudulent copyright notices and fraudulent removal of copyright notices, be amended to include the following new subsections (g) and (h):

(g) Fraudulent Copyright Management Information.--Any person who, with fraudulent intent, digitally links with a copy of a copyrighted work copyright management information that such person knows to be false, or who, with fraudulent intent, publicly distributes or imports for public distribution any work with which copyright management information that such person knows to be false is linked, shall be fined not more than $2,500.

(h) Fraudulent Removal of Copyright Management Information.--Any person who, with fraudulent intent, removes or alters any copyright management information digitally linked with a copy of a copyrighted work shall be fined not more than $2,500.

4. PUBLIC PERFORMANCE RIGHT

Transmissions of sound recordings may eventually replace the current forms of distribution of phonorecords. In the very near future, consumers will be able to receive digital transmissions of sound recordings on demand--for performance in the home or for downloading--from the so-called celestial jukebox. The legal nature of such transmissions--whether they are performances or distributions--has been widely debated. As discussed above, the Working Group recommends that Section 106 of the Copyright Act be amended to make clear that copies or phonorecords can be distributed by transmission. The Working Group also recommends that a "primary purpose or effect" test be used to determine whether a transmission is a performance (or display) or a distribution. However, many of these transmissions will clearly constitute exercise of the public performance right--a right which the Copyright Act fails to grant to copyright owners of sound recordings.[359]

The lack of a public performance right in sound recordings under U.S. law is an historical anomaly that does not have a strong policy justification--and certainly not a legal one. Sound recordings are the only copyrighted works that are capable of being performed that are not granted that right. Therefore, to play a record on the radio without infringement liability, a radio station must get a license from, and pay a royalty to, the copyright owner of the underlying musical work (i.e., the person or entity who owns the rights in the notes and the lyrics), but it does not have to obtain permission from, or pay a license fee to, the copyright owner of the sound recording or the performer on the record. The Working Group believes that it is time to rectify this inequity.

The Working Group notes that the Administration supports two bills introduced in Congress that would grant a limited performance right to sound recordings. The bills, H.R. 2576 and S. 1421, would add to the exclusive rights of a copyright owner in a sound recording the right to perform or authorize the performance of the sound recording by "digital transmission." The right granted in the bill is not the full performance right granted to other copyrighted works. For instance, the legislation would not change the law with respect to live public performances. It would also not touch analog transmissions--the transmissions currently received over the radio. It would only grant a right with respect to transmissions in a digital format--those that pose the greatest threat to the copyright owners of sound recordings.

5. FAIR USE

The Working Group has significant concerns regarding the ability of the limitations on copyright owners' exclusive rights--particularly those limitations found in Sections 107 (fair use), 108 (library exemptions) and 110(1) and (2) (educational uses)--to provide the public with adequate access to copyrighted works transmitted via the NII. As more and more works are available primarily or exclusively on-line, it is critical that researchers, students and other members of the public have opportunities on-line equivalent to their current opportunities off-line to browse through copyrighted works in their schools and public libraries.

The Copyright Act exists for the benefit of the public. To fulfill its constitutional purpose, the law should strive to make the information contained in protected works of authorship freely available to the public. "Freely available," of course, does not necessarily mean "available free." The Working Group does not believe that authors should be required to donate access time to their works on-line, but some reasonable approach must be adopted to ensure that the economically disadvantaged in this country are not further disadvantaged or disenfranchised by the information revolution. Public libraries and schools, and the access to information that they provide, have been important safeguards against this nation becoming a nation of information "haves" and "have nots." We must ensure that they continue to be able to assume that role.

Guidelines for library and educational use of printed matter and music were voluntarily adopted by diverse parties and set out in the House and Conference reports accompanying the 1976 revisions to the Copyright Act.[360] While the principles should still be applicable, it is difficult and, perhaps, inappropriate, to apply the specific language of some of those guidelines in the context of digital works and on-line services.

Therefore, the Working Group will sponsor a conference to bring together copyright owner and user interests to develop guidelines for fair uses of copyrighted works by and in public libraries and schools. To increase the productivity of the conference, the number of participants will be limited. However, attendance at the conference will be open to the public. Those wishing to participate in the conference should send a one-page request to Terri A. Southwick, Attorney-Advisor, Office of Legislative and International Affairs, U.S. Patent and Trademark Office, Box 4, Washington, D.C. 20231. Requests must be received by July 25, 1994, and should include a brief description of the interests that would be represented at the conference by the requestor.

The location and date of the conference will be announced in the press, on the IITF Bulletin Board, and in the Federal Register.

6. LICENSING

With limited exceptions, intellectual property law leaves the licensing of rights to the marketplace. In certain circumstances, particularly where transaction costs are believed to dwarf per-transaction royalties, Congress has found it necessary to provide for compulsory licenses.[361] The Working Group finds that under current conditions, additional compulsory licensing of intellectual property rights is neither necessary nor desirable. Transaction costs--and the attendant savings from compulsory licensing--can be minimized in a digital environment. The marketplace should be allowed to develop whatever legal licensing systems may be appropriate for the NII.

7. INTERNATIONAL

There is little dispute that worldwide high-speed digital communications networks will have an enormous effect on the way in which works of authorship will be created, stored, communicated to the public, distributed and paid for. This communication revolution is now bringing new opportunities and new challenges to creators and users of intellectual property. The full implementation of the NII and the GII will have an immense effect on our economy, and implementation of such systems internationally will have an equally broad impact on world-wide commerce. We must be committed to finding the means to preserve the integrity of intellectual property rights in the materials that will flow in the commerce created in this environment. This is a daunting challenge in the context of the U.S. domestic market. Today we are faced with an even greater challenge, to lay the groundwork for an international basis which ensures that the digital revolution will not disadvantage those whom we seek to protect.

As we move toward a world where dissemination of entertainment and information products through on-demand delivery services operating through interactive digital information communications networks is the norm, it may be necessary to harmonize levels of protection under disparate systems of copyright, authors' rights and neighboring rights, and consideration should be given to ways to bridge the gaps among these systems.

If the GII as well as national NIIs are to flourish, then the intellectual property rights that will undergird the economic structure supporting these infrastructures must unequivocally be granted in national legislation fully on the basis of national treatment for all rights and benefits. However, there is some controversy over the scope of the national treatment obligation under the Berne Convention and its application to what some may regard as newly created rights and subject matter. Similar questions arise under other international copyright and neighboring rights conventions as will be later discussed.

U.S. copyright legislation has granted rights that some may regard as new rights--rental rights in computer programs, sound recordings, and musical works embodied in sound recordings--exclusively on the basis of national treatment. The United States has instituted a system of royalties on blank digital audio recording media and digital audio recorders. Benefits from these rights have all been granted on the basis of full national treatment. We believe that this is consistent with our obligations under the Berne Convention and other international intellectual property and trade treaties and agreements.

The author or rights holder should be able to realize fully the economic benefits flowing from the free exercise of his or her rights in any country participating in a GII. This is required by Article 5 of the Berne Convention. To do otherwise in either a Berne Protocol or another agreement on copyright protection would be contrary to Article 20 because it would be a derogation of rights existing under Berne and not be an Agreement to "grant to authors more extensive rights than those granted by the Convention, or contain other provisions not contrary to this Convention" as provided for under Article 20.[362] To protect new works or to grant new rights in respect of those or presently protected works on the basis of reciprocity, would be contrary to the letter and the spirit of the Convention.

As the GII continues to develop through the international interconnection of NIIs, rules must be formulated to protect the economic rights of providers of entertainment and information products. Such rules should be based on principles of national treatment along the lines of the following:

1. Each country participating in the GII shall accord to nationals of another country participating in the GII no less favorable treatment than it accords to its own nationals with regard to all rights and benefits now, or hereafter, granted under its domestic laws in respect of literary and artistic works or fixations[363] embodying such works.

2. Benefits shall include the same possibility to exploit and enjoy rights in the national territory of a country participating in the GII as the respective country grants to its own nationals.

3. No country participating in the GII shall, as a condition of according national treatment, require rights holders to comply with any formalities in order to acquire rights in respect of literary and artistic works or fixations embodying such works.

One of the most important issues will be what is the nature of a dissemination of a work or a fixation of a work in digital format? Is it a public performance of the work or fixation, an act of reproduction, or a distribution? How do rules concerning the right of importation apply in a digital environment? Just as these questions are critical in the domestic context, they are equally acute in the context of international treaties and harmonization of laws.

Additionally, the issue of multimedia works will take on an important international dimension. If these are regarded at the international level as works in a new, separate category, the issue of their coverage under the existing conventions and the rule of national treatment will be open to debate. If, however, they are subsumed into the existing categories of works, establishing meaningful rules internationally will be simplified.

Further study to determine what other rights may need to be adapted to the emerging digital environment are underway both in domestic and international fora. However some issues merit identification here, and one of those is the level of protection to be accorded to sound recordings.

Many believe that the time has come to bring protection for performers and producers of sound recordings into line with the protection afforded to the creators of other works protected under the Berne Convention. This includes providing high-level standards for rights and benefits granted on the basis of national treatment. This is necessary for a number of reasons. First, there is no just reason to accord a lower level of protection to one special class of creative artists. Second, the extent of international trade in sound recordings makes it imperative that standards of protection be harmonized at a high level. Third, and perhaps most importantly, the digital communications revolution--the creation of advanced information infrastructures--is erasing the distinctions among different categories of protected works and sound recordings and the uses made of them.

Concerns have been raised over the extent and scope of moral rights in the world of digital communications. Some believe that the ability to modify and restructure existing works make moral rights more important than ever before. Others take the view that moral rights must be rethought in the digital world. We agree with this view. New thought must be given to the scope, extent and waivability of moral rights in digitized information.

The harmonization issues most relevant to the NII arise in the context of WIPO efforts to establish a Possible Protocol to the Berne Convention (Berne Protocol) and a Possible New Instrument for the Protection of Performers and Producers of Phonograms (New Instrument). In the Berne Protocol, the relevant activities concern the protection of computer programs as literary works, protection for databases as compilations of information other than works, the possible elimination of compulsory licensing for broadcasting, and special provisions for the use of materials in digital distribution systems. In the New Instrument, the most relevant issues are the possible establishment of a public performance right for sound recordings (possibly limited to digital broadcasting) and the possibility of a digital distribution or dissemination right for sound recordings.

To attain the needed level of protection internationally, we must find ways to span the differences between the continental droit d'auteur and neighboring rights systems and the Anglo-American copyright systems. An essential element of this effort will be to harmonize levels of protection by establishing standards that can be implemented through either system.

B. TECHNOLOGY

Interoperability and interconnectivity of networks, systems, services and products operating within the NII will enhance its development and success. Standardization of copyright management (standardized header information and format, for instance) as well as technological protection methods (such as encryption) may also be useful. The question of whether any standards should be established, either through government regulation or industry consensus, however, is not within the purview of this Working Group. The issue of what those standards should be, if established, is similarly outside the scope of the area of inquiry of the Working Group.[364] If a standard is established, however, protection of intellectual property rights used in that standard is of concern to this Group.

The intellectual property rights implications of the standards-setting process are not new with the development of the NII. The Federal Communications Commission, for instance, has established standards in related areas without interfering with the legitimate rights of intellectual property rights owners.[365]

The Working Group finds that in the case of standards to be established, by the government or the private sector, the owner of any intellectual property rights involved must be able to decline to have its property used in the standard, if such use would result in the unauthorized exercise of those rights. If the rights holder wishes to have its intellectual property as part of the standard, an agreement to license the necessary rights on a nondiscriminatory basis and on reasonable terms may be required. In the case of de facto standards, arising out of market domination by an intellectual property rights holder, unfair licensing practices can be dealt with through the antitrust laws.

C. EDUCATION

Effective education of the public about intellectual property rights is crucial to the successful development of the NII. Therefore, the principles of intellectual property law must be taught in our schools and libraries. Educational efforts to increase the public's awareness of their own intellectual property rights, as well as those of others, will increase respect for those rights. Clearer guidelines with respect to the exclusive rights of copyright and other intellectual property rights holders, as well as the limitations on those rights, will make compliance with the law easier.

Following its conference on fair use, the Working Group will sponsor a second conference on intellectual property education. The purpose of that conference will be to develop curricula that may be used in schools and libraries. Additional means of education, particularly those that use the NII itself, will also be explored and developed. To increase the productivity of the conference, the number of participants will be limited. However, attendance at the conference will be open to the public. Those wishing to participate in the conference should send a one-page request to Terri A. Southwick, Attorney-Advisor, Office of Legislative and International Affairs, U.S. Patent and Trademark Office, Box 4, Washington, D.C. 20231. Requests must be received by July 25, 1994, and should include a brief description of the interests that would be represented at the intellectual property education conference by the requestor.

The location and date of the conference will be announced in the press, on the IITF Bulletin Board, and in the Federal Register.

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