COPYRIGHTS IN THE INFORMATION AGE

by Robert Kost


INFORMATION AS PROPERTY:
Capitalism in the Information Age

Your participation in this conference, and your use of this
medium, are very much at the center of an emerging upheaval in
the concept of information as property; an upheaval that
occurs, ironically, just as we enter an Information Age. The
source of wealth for this information age rests, in part, on an
obscure area of the law known as copyright.

Copyright is suffering from a growing number of anomalies
- deviations from a general rule or policy -- which, like the
epicycles invoked to preserve the Ptolomeic view of the solar
system, can be understood as indications of some very
fundamental difficulties with the concept of property rights in
information. The problem can, I believe, be summed up in the
following way: the copyright system grew out of the printing
press, which placed the printer/publisher at the center of the
known technological universe, but computers and
telecommunications are creating a user-centered universe that
copyright has yet to come to terms with.

Copyright and information technology, in contrast to their
present antagonism, were originally wedded together, and
coexisted in bliss for nearly three centuries. This marriage
has, however, been on the rocks since the beginning of this
century, and the technologies of the next century will require
a new reconciliation between the interests of creators and
those of the public.

COPYRIGHT

We can begin to lay the groundwork for this discussion by
defining some of the terms we will use. And, where better to
begin than with copyright itself. By copyright, I understand a
set of positive, statutory rights (as opposed to natural
rights) which attach to the particular expression or
manifestation of information. Information is a more nettlesome
concept, to which I'll return in a moment. It is often said
that the function of copyright is as an incentive to create and
distribute information. This is true, but what we really mean
by this is that the function of copyright is to make
information behave in the marketplace as if it were tangible
property -- hard goods like shoes, refrigerators, and
automobiles. The way in which copyright accomplishes this is
by use of a tautology; the res, the thing that is owned, is an
original work of authorship, and an original work of authorship
is one that is not a copy. Now this definintion presents
little difficulty for cases of "knock off" duplication, where a
copy is a copy is a copy. But it becomes considerably more
difficult in cases, such as the recent computer related
litigation in Whelan v. Jaslow, where what is a copy must be
determined ad hoc by identifying the so-called "expression"
peculiar to a given original. Expression defines what is owned.

INFORMATION AS PROPERTY

If, for the time being, we ignore these complexities, we
can say very simply that copyright turns information into
property. But information is a very reluctant form of
property. Information, which I will define as the meaningful
concatenation of symbols, images, or sounds, is neither
naturally scarce nor naturally exclusive. It is not scarce
because, unlike shoes, refrigerators, and automobiles,
information can be given or taken with no diminution in the
number of "pieces" of it available once it is produced (and
there's the rub). Unlike tangible property, where 1-1=0,
information has a strange arithmetic: 1-1=2. A corollary to
this is that information is not exclusivity; it is not the case
that either *you* or *I* must possess it at any given moment,
as is the case with tangible goods. Instead, both you and I
can possess it, and my possession is not in derogation of
yours. Note that I'm not saying that copying a computer
program doesn't displace a sale, nor that harm to a producer's
market hasn't occured; only that, in the case of information,
the stolen goods need never leave the warehouse.

Scarcity and exclusivity, which do not come naturally to
information, are nevertheless fundamental to the notion of
property, and at the very heart of a market economy. It is,
after all, how we tell buyers from sellers -- sellers have, and
buyers want!

And this is where copyright comes in. Because the Framers
of the Constitution, and before them, the House of Lords,
decided that having lots of books and maps and charts around
was a good idea, and because the free market was so adept at
providing other types of goods demanded by society, some
mechanism had to be found to remedy the market failure of
information. Copyright was a truly ingenious solution; it made
information plentiful by making it scarce, and available to all
by making it exlusive. This was possible because information
was always and everywhere to be found embedded in tangible
goods -- copies -- which went proxy for information in the
marketplace. What was bought and sold in the marketplace was
wood pulp with ink stains -- never mind the fact that what you
were really after was the complete works of Thomas Paine or
Charles Dickens. What we had going was a product compromise:
information could be sold like goods as long as it acted like
them.

THE AGE OF STATIC MEDIA

This compromise, which is today coming unglued, really
began in the mid-1400s, when Johannes Gutenberg concocted a
clever, high volume, low overhead scheme for selling church
indulgences; the moveable, interchangeable, type printing
press. The invention of the printing press necessitated the
invention of copyright. Because books could be mass produced
in days rather than years, because printing allowed for the
standardized, cononical version of works to appear, rather than
being scattered in fragments throughout the monastaries of
Europe, and because authors could be idenfied with their works,
writings became a commercially hot item, and piracy followed in
due course.

But if the printing press made copyright necessary, it
also made it possible. Printing was a capital intensive,
highly visible, 16th century high tech business. It formed a
perfect bottleneck, or chokepoint, by which the King, through
licensing, could control infringements -- or more importantly
at the time, sedition. Of equal was the fact that, once words
were printed on a page, they *stayed* on that page -- fixed,
static, immutable, petrified on paper -- never again to be word
processed. And, at the time, clear and commonsense
distinctions existed between hardware and software, between
inventions and writings; no one could ever mistake the book
explaining the construction of a coke oven for the cast iron
real McCoy.

During this period, which I call the age of Static Media,
copyright was essentially a form of commercial regulation,
since the ability to "print, publish, and vend" a writing --
the original copyright rights -- lay exclusively with
commercial enterprises, rather than private individuals.
Infringement, where it occurred, was a business proposition,
and not a matter of casual button pushing by private
individuals.

THE AGE OF DYNAMIC MEDIA

The age of Static Media ended abruptly near the beginning
of the 20th Century with the invention of new ways of moving
information in intangible, electromagnetic signals -- the
telegraph, the radio, and the television -- and with new ways
of liberating information from the package in which it was sold
- the paper copier, the tape recorder, and the camera. During
this period, which in contrast to its predecessor might be
called the age of Dynamic Media, copyright lost control over
the bottleneck. It was no longer possible or adequate for
copyright to control the sale and distribution of *copies*.
Instead, the Copyright Act of 1976, which was really a response
to the dynamic media of 50 years prior, sought to control the
*use of the work* itself. The distinction between the work and
the copy in which it resides is a point belabored in sections
102 and 202 of the Copyright Act, and is a recognition of the
fact that information is devolving back into its elemental,
nonproperty, form.

THE AGE OF DIGITAL MEDIA

Today, with the emergence of what I call the age of
Digital Media in the late 20th Century, we may have come full
circle, returning in a strange way to a pre-Gutenberg era, with
fragments of full text, searched and summarized by AI editors,
floating in bit streams across national borders. The full
impact on copyright of optical mass storage, computers and
computer networks, analogue to digital conversion devices,
satellite communications, and broadband fiber optic highways
into the home will probably not be felt for some time.
Nevertheless, I believe the enduring effects of modern
technology on copyright can be sorted into basically two types:
effects on practical matters such as enforcment and
permissions, and effects on theoretical matters such as: "what
is it that is owned, anyway?"

One of the charms of copyright was that it was essentially
self-enforcing. Rights holders could spot infringing copies,
and bring the infringers to justice with administrative
mechansims no more complex that the federal courts. Technology
itself imposed limits on the ability of private individuals to
avoid the marketplace. I suspect, for example, that the paper
copier was never a real challenge to a finely bound book. But
with information in digital media, the copy of the work does
not degrade from generation to generation. Moreover,
electronic communications allows copies to be transported
anywhere on the planet at little less than the speed of light,
without the hassles associated with cars and airplanes. For a
particularly compelling illustration of the scope of this
power, imagine that a computer program was "shared" on NWIIS by
one person with two of his friends. These friends, in turn,
"shared" with two of their friends through Gateways to other
networks, and so on, once every 15 minutes. In just 32
iterations taking just over 8 hours, the entire population of
the planet could, in principle, be blanketed with 4.29 billion
copies of the program: The chain letter has returned with a
vengence!

---

Of course, this scenario supposes that the public is
largely dishonest, which, according to a public survey
conducted for OTA's intellectual property report, is not really
true. Instead, the survey revealed that the public is by and
large unaware of some of the more basic principles of
copyright, and is apt to believe that they can do as they wish
with their own possessions. But, even on the supposition that
we have a law abiding, informed public, making full use of the
available technology poses extremely cumbersome problems for
the individual seeking permission from copyright holders. The
CD-ROM, which holds over 550 megabytes of data, or over 200,000
pages of text, or copious amounts of music or still and motion
picture video, is a case in point. Imagine that I am a law
abiding CD-ROM based, value-added, information purveyor who
wants to store a multitude of different texts, musical
compositions, and images on my CD-ROM disk. To store anything
on disk -- possibly even for personal use -- involves
reproducing it under the terms of the copyright act. I have to
get permission, and very likely pay royalties. Provided I know
who they are, this may be as simple as making a phone call to
hundreds or thousands of authors, copyright holders, or their
assignees to negotiate their "OK." "Simple," of course,
provided that I have a WATS line or plenty of spare change
available.

If the attorneys of the copyright owners I are able to
reach some accord on the reproduction rights involved in my
CD-ROM venture, we still have distribution, performance, and
display to think about. Most CD-ROMs work in conjunction with
computers, and it is a simple matter to have computers work in
conjunction with communications facilities. Any communication
of a work stored on CD-ROM (or any other medium) is probably
either a performance or a display, whether sent to 10 people in
Japan via satellite, or to 1000 people in your business via
Local Area Network. Now, if calling the distribution of a work
over phone lines a performance or display sounds like an overly
legalistic stretch, consider this: electronic distribution is
not distribution at all -- at least in the legal sense -- since
one can distribute only copies of a work, and copies are
material objects under the law.

In any event, I'm back on the phone negotiating with an
attorney, who probably want to know how I intend to control the
use of the material on the CD-ROM once the disk is sold. I
probably can't answer...truthfully at least.

TRANSACTIONS COSTS

The enforcement and permissions problems are two sides
of one coin known as transactions costs. The question in the
both cases is whether it will cost me more to enforce my rights
in a work or to gain permission to use it than the revenues
that that work generates. One way around the problems of
transactions costs is to create a compulsory license and have
the government pick up the tab for the costs associated with
pooling and distributing income, but this will not work well
for markets where there are an excessive number of hard to
identify buyers or sellers, as is the case with the audio and
video cassette markets, and probably the microcomputer software
market as well. In this case, a tax can be imposed on blank
media and revenues doled out to copyright holders based on an
estimate of their share of the market which copying supplants.
The problem with this is that, while single purpose media such
as video or audio tape and possibly even floppy disks, may
submit to market substitution analyses, versatile media, such
as CD-ROM and eventually, erasible-programmable compact disk,
do not -- there is simply no way of estimating fairly how much
these disks are used for recording Michael Jackson and how much
they are used for DBase III.

THE CASE OF COMPUTER SOFTWARE

As difficult as the practical problems for copyright may
be, the truly thorny problems are theoretical. In case of
software, for example, I believe we have a choice between too
little protection and too much; the protectable expression can
either be the literal line by line code, in which case the
protection is trivial; or the literal code can be interpreted
in terms of the processes which it executes in a computer, in
which case we have endowed the program with patent like
protection without a showing of novelty or advance over prior
art (even supposing that a record of prior art exist, which it
doesn't). To see how this is so, go back to the watershed case
of *Baker v. Selden*, which held that, though the petitioner's
design for an accounting book could be copyrighted, the system
of accounting that the book implemented could not. "There is a
clear distinction between the Book, as such, and the art it is
intended to illustrate," said the Supreme Court, and the latter
is protected, if at all, by letters patent, and not copyright.
Now imagine that Selden's account ledger was written in
computer code, and try to separate 'the book, as such, from the


art it was intended to illustrate.' I cannot, and I suggest to
you that the clear distinction has collapsed.

It is not clear yet what effect this confusion may have
on the software industry. I understand, however, that Lotus
Development Corporation, which is rightly jealous of its rights
in its excellent 1-2-3 software, is presently being sued by
members of its intellectual and marketplace ancestor.

But I suspect this is the tip of the iceberg. The day is
not long in coming when, within the limits of our ability to
formalize the syntax and semantics of natural language,
computers will execute programs based on commands in spoken
english, and we will be face to face with the question of
whether the logical structure of algorithms is copyrightable.
In a way, such questions are here today: can the factory
foreman who runs a robot arm through a series of steps, which
are simultaneously recorded in code in computer memory, claim
copyright in the procedure for welding a chassis to a frame?

WORKS OF FACT

But software is only part of the problem, and an argument
can be made that software and other *works of function*, such
as the nucleotide sequence that controls the manufacture of
insulin in a microbe, are more coherently treated as patentable
inventions, rather than copyrightable writings. But *works of
fact*, such as stock market information, news stories,
telephone directories, and the like are most emphatically not
patentable, and their protection, absent trade secret, falls to
copyright. Copyright in works of fact ostensibly protects only
the organization, arrangement, design, and selection in works
of fact, and not the underlying information. But computers are
arrangers and designers par excellance; this after all, is the
great power of text editing, spreadsheet, word processing, and
list processing programs. It would seem that copyright is a
slender reed upon which to hang the protection of computer
processable works of fact. The recent case of *West Publishing
v. Mead Data*, which held that West's system of pagination in
its online database was copyrightable, has muddied the waters
somewhat and I think we can anticipate more litigation on this
subject as time goes on.

CONCLUSION

I'd like to close by hazarding a guess about where all
this is headed. For computer programs and for machine
processable works of fact, I suspect that courts will continue
in the direction that they are already going. That is, the
focus will be on infringing conduct, rather than infringing
works. Under this approach, which hearkens back to the common
law doctrine of missappropriation, similarity between works
becomes an indication of malfeasance on the part of a
defendant, rather than the sina qua non of infringement, and it
is the defendant's acts which constitute the important object
of proof. This is a subtle, yet very significant shift, for it
turns copyright on its head. It may in fact be the best way of
avoiding the difficulties of treating information as property,
while at the same time providing the software and database
developer with the protection they need to conduct business.
The question is whether caselaw can be fully developed within
the confines of the current copyright law.

Although I once believed that software and associated
developments in technology were the gordian knot for copyright,
I suspect the issues of enforcement, permissions, and
transactions costs will loom larger as the first large scale
attempts at an Integrated Services Digital Network begin in the
early 1990s, and as computer networks proliferate and become
common, and as digital audio and video tape, optical storage
media, expert systems, and a host of other technologies
converge in an interconnected information utility. Technology
itself may provide some of the stopgap measures, with embedded
copy or transmit disabling signals, public key encryption, and
so forth. Compulsory licensing and collecting societies may
also help to preserve some semblance of copyright, by providing
for network access tariffs and sampling of useage. Contracts
between the electronic publisher and its clients may also help
to keep legal reigns on the problem.

But, the real question is whether we want to continue to
find patchwork solutions for the sake of preserving copyright,
or whether there isn't some better way of taking full advantage
of all the technology can offer, while at the same time
observing the old addage: to every cow her calf.

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Author's note:
Robert Kost is somewhat gainfully employed as a Legal Analyst
for the U.S. Congress' Office of Technology Assessment (OTA),
whose mission is to assist Congress in anticipating and
planning for the social consequences of technological change.
The views represented in this article do not necessarily
represent those of the OTA. If proven wrong, even Mr. Kost may
disown them. He welcomes all comments on this article, hostile
or sympathetic.