About > Intellectual Property and the National Information Infrastructure: Executive Summary




The convergence of computer and communications technologies has made possible the development and rapid growth of the National Information Infrastructure (NII). The NII will generate both unprecedented challenges and important opportunities for the copyright marketplace, and has tremendous potential to improve and enhance our lives. The NII affords the promise of:

  • a greater amount and variety of information and entertainment resources, delivered quickly and economically from and to virtually anywhere in the world in the blink of an eye;
  • access to rich cultural resources around the world, transforming and expanding the scope and reach of the arts and humanities and broadening our cultural experiences through diversity of content;
  • support for our education and library systems;
  • enhanced competitiveness for U.S. business and the promotion of job creation, economic growth, and well-being for Americans;
  • new job opportunities in the creation, processing, organizing, packaging and dissemination of information, education and entertainment products;
  • technology, trade and business opportunities for new products and new markets for U.S. industries; and
  • a wider variety and greater number of choices for consumers of books, movies, music, computer programs and other copyrighted works; increased competition and reduced prices.

The availability of these benefits is by no means assured, however. Creators, publishers and distributors of works will be wary of the electronic marketplace unless the law provides them the tools to protect their property against unauthorized use. Advances in digital technology and the rapid development of electronic networks and other communications technologies dramatically increases: the ease and speed with which a work can be reproduced, the quality of the copies, the ability to manipulate or change the work, and the speed with which copies can be delivered to the public. The establishment of high speed, high-capacity information systems makes it possible for one individual, with a few key strokes, to deliver perfect copies of digitized works to scores of others -- or to upload a copy to a bulletin board or other service where thousands can download it or print unlimited "hard" copies. Just one unauthorized uploading could have devastating effects on the market for the work.

Thus, the full potential of the NII will not be realized if the legal protections that extend to education, information and entertainment products and their use in the physical environment are not available when those works are disseminated via the NII. Creators and other owners of intellectual property rights will not be willing to put their investments and their property at risk unless appropriate systems are in place -- both in the U.S. and internationally -- to permit them to set and enforce the terms and conditions under which their works are made available in the NII environment. Likewise, the public will not use the services available on the NII and generate the market necessary for its success unless a wide variety of works are available under equitable and reasonable terms and conditions, and the integrity of those works is assured. All the computers, telephones, scanners, printers, switches, routers, wires, cables, networks and satellites in the world will not create a successful NII, if there is no content. What will drive the NII is the content moving through it.

Of course, the NII could continue to serve as a communications tool and resource for Government, public domain and other material for which copyright protection is either not granted or not sought, but that would deny the public the NII's and GII's full potential to inform, entertain, enrich and empower. Unless the framework for legitimate commerce is preserved and adequate protection for copyrighted works is ensured, the vast communications network will not reach its full potential as a truly global marketplace.

Copyright protection is not an obstacle in the way of the success of the NII; it is an essential component. Copyright motivates the creative activity of authors and thereby provides the public with the products of those creators. By granting authors exclusive rights, the public receives the benefit of literature and music and other creative works that might not otherwise be created or disseminated. Effective copyright protection promotes a new Cybermarketplace of ideas, expression and products.


The Working Group on Intellectual Property Rights was established within the IITF to examine the intellectual property implications of the NII and make recommendations on any appropriate changes to U.S. intellectual property law and policy. The IITF was established by President Clinton to articulate and implement the Administration's vision for the NII and to develop comprehensive telecommunications and information policies and programs that will promote the development of the NII and best meet the country's needs.

The Report is based on the Working Group's Preliminary Draft (Green Paper), issued in July 1994, and on extensive public comment and testimony. In September 1994, the Working Group convened four days of hearings in three cities. In addition, more than 1,500 pages of written comments were filed, in paper form and through the Internet, by more than 150 individuals and organizations -- representing more than 425,000 members of the public. The open process instituted by the Working Group resulted in a well-developed, voluminous record reflecting the views of a broad spectrum of interested parties, including various electronic industries, telecommunications and information service providers, the academic, research, library and legal communities, and individual creators, copyright owners and users, as well as the computer software, motion picture, music, broadcasting, publishing and other information and entertainment industries.

The Working Group examined the adequacy of the intellectual property laws to cope with the pace of technological change. It found that the patent, trademark and trade secret laws need no adaptation at this time. It also found that the Copyright Act is fundamentally adequate and effective. In a few areas, however, it has recommended limited amendments of the Copyright Act to take proper account of current technology. Technology has altered the copyright balance -- in some instances, in favor of copyright owners and in others, in favor of users. The goal of the recommendations is to clarify existing law and adapt it where the balance has shifted.



The Report recommends that Section 106(3) of the Copyright Act be clarified to expressly 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 Report also recommends related amendments to the definitions of "transmit" and "publication," as well as distribution-related provisions regarding importation of copies or phonorecords.


The Working Group recommends that the library exemptions be amended to allow the preparation of three copies of works in digital format; to recognize that the use of a copyright notice on a published copy of a work is no longer mandatory; and to authorize the making of a limited number of digital copies by libraries and archives for purposes of preservation.

The Working Group recommends that the Copyright Act be amended to provide an exemption for non-profit organizations to reproduce and distribute to the visually impaired -- at cost -- Braille, large type, audio or other editions of previously published literary works, provided that the owner of the exclusive right to distribute the work in the United States has not entered the market for such editions during the first year following first publication.


The Working Group recommends that the Copyright Act be amended to include a new Chapter 12, which would prohibit the importation, manufacture or distribution of any device or product, or the provision of any service, the primary purpose or effect of which is to deactivate, without authority of the copyright owner or the law, any technological protections which prevent or inhibit the violation of exclusive rights under the copyright law.

The Working Group recommends that the Copyright Act be amended to prohibit the dissemination of copyright management information known to be false and the unauthorized removal or alteration of copyright management information. Copyright management information is defined as the name and other identifying information of the author of a work, the name and other identifying information of the copyright owner, terms and conditions for uses of the work, and such other information as the Register of Copyrights may prescribe by regulation.


The Report also generally supports legislation that would amend the copyright law and the criminal law (which sets out sanctions for criminal copyright violations) to make it a criminal offense to willfully infringe a copyright by reproducing or distributing copies with a retail value of $5,000 or more (S. 1122). By setting a monetary threshold and requiring willfulness, S. 1122 ensures that merely casual or careless conduct resulting in distribution of only a few copies will not be subject to criminal prosecution and that criminal charges will not be brought unless there is a significant level of harm to the copyright owner's rights.

The Working Group also supports a public performance right for sound recordings. Two bills now pending, S. 227 and H.R. 1506, would grant such a right, although more limited than the Report recommends.


The Report also includes recommendations that the Patent and Trademark Office (PTO) obtain public input related to measures that can be adopted to ensure the authenticity of electronically disseminated publications, particularly with respect to verifying the contents and date of first public dissemination of the publication, and evaluating the substantive value of the information contained in the publication as to its role in patentability determinations; and that the PTO explore the feasibility of establishing requirements or standards that would govern authentication of the date and contents of electronically disseminated information for purposes of establishing their use as prior art. In addition, it recommends that the PTO, in the context of World Intellectual Property Organization meetings on the trademark International Classification system, propose changes to ensure that the system accommodates the goods and services of modern information technology; and that the PTO regularly update its trademark Manual for the Identification of Goods and Services to reflect new goods and services used on or in connection with the NII and GII.

In addition, the Working Group supports further study in the following areas:

  • The Working Group encourages copyright owners to explore with libraries and schools special institutional licenses, and endorses increased funding for libraries and educational institutions to assist in their ability to purchase and license works in digital format.
  • The Working Group supports the efforts presently under way to revise Article 2 of the U.C.C. to encompass licensing of intellectual property. Where parties wish to contract electronically, they should be able to form a valid, enforceable contract on-line.
  • Recognizing the important role of encryption technology in fostering a secure and useful NII, the Working Group supports efforts to work with industry on key-escrow encryption technologies and other encryption products which could be exported without compromising U.S. intelligence gathering and law enforcement. Proliferation of such technology will enable U.S. industry to meet the needs of the international marketplace for these products and continue to lead the development of the GII.
  • The Working Group believes it is -- at best -- premature to reduce the liability of any type of service provider in the NII environment. Exempting or reducing the liability of service providers prematurely would choke development of marketplace tools that could be used to lessen their risk of liability and the risk to copyright owners, including insuring against harm caused by their customers, shifting responsibility through indemnification and warranty agreements, licensing, education, and the use of technological protections. At this time in the development and change in the players and roles, it is not feasible to identify a priori those circumstances or situations under which service providers should have reduced liability. However, it is reasonable to assume that such situations could and should be identified through discussion and negotiation among the service providers, the content owners and the Government. The Working Group strongly encourages such actions in the interest of providing certainty and clarity in this emerging area of commerce.

The Working Group continues its work with the Conference on Fair Use and the Copyright Awareness Campaign. The Conference on Fair Use brings together copyright owner and user interests to discuss fair use issues and, if possible, to develop guidelines for uses of copyrighted works by librarians and educators. Some 60 interest groups are participants in the Conference and have been meeting regularly since September 1994. The Copyright Awareness Campaign, co- sponsored with the Departments of Education and Commerce, coordinates educational efforts of approximately 40 individuals and organizations to increase public awareness of the importance of intellectual property in the information age.

A copy of the Report may be obtained by calling the PTO Office of Public Affairs at 703-305-8341 or by sending a written request to:

"Intellectual Property and the NII"
c/o Terri A. Southwick, Attorney-Advisor
Office of Legislative and International Affairs
U.S. Patent and Trademark Office
Box 4
Washington, D.C. 20231
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