B  U  L  L  E  T  I  N


of the American Society for Information Science and Technology       Vol. 30, No. 2      December/January  2004

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Breaking News on the Database Front

The issue of the protection of databases, not otherwise subject to copyright because they consist of basic factual, government or public domain information, has been an objective of the publishing industry for some years and actually appeared in early versions of the Digital Millennium Copyright Act.  Although deleted from the enacted version of that law, it re-emerged in two incarnations in the 106th Congress. One was H.R. 354 the Collections of Information Antipiracy Act that would have made illegal most uses of databases without payment and was highly controversial. In essence, it was a radical departure from our intellectual law and policy that protects expression, not basic facts; it would have provided perpetual protection for every dynamic database and would have created monopoly control over vast amounts of information given the consolidation of the publishing industry. The other was H.R. 1858, the Consumer and Investor Access to Information Act, which was introduced by Rep. Bliley (R-VA) and balanced the interests of database producers and users by focusing on direct competition and not the mere use of factual information. However, the intractable policy conflict between the approaches and the war on terrorism diverted attention, prevented compromise and doomed passage of any version.

Attention to the issue returned in March of this year when Rep. Tauzin (R-LA), chairman of the House Energy and Commerce Chairman, and Rep. Sensenbrenner (R-WI), chairman of the House Judiciary Committee, announced that their two committees planned to work together to produce a database protection bill acknowledging that past differences had led to a stalemate on any database legislation. As Rep. Sensenbrenner stated: "We are going to do our level best to make it work."

That effort culminated on October 8, 2003, when the chairmen jointly introduced H.R. 3261 the Database and Collections of Information Misappropriation Act that does not particularly resemble either previous bill. Rather, its approach reflects common law misappropriation theory the basis of the U.S. Supreme Court decision in International News Service v. Associated Press, 248 U.S. 215 (1918) and more recently National Basketball Association v. Motorola, 105 F.3d 841 (2nd Cir. 1997). These and other cases have given protection to "hot news" outside of copyright where the plaintiff generates or collects information at some cost, the value of the information is highly time sensitive and the defendant's free-ride and direct competition causes economic harm. And, because of the substantively different elements of such claims, they are not pre-empted by federal copyright law that is, the common law legal right exists even though federal copyright law is not applicable.

To understand the industry drive for database protection, we must consider that copyright and other extant laws either do not apply or have limited applicability in many cases. First, although compilations are included as a subject of copyright under the 1976 Act, the courts have made clear that the copyright of such works extends only to the selection and arrangement of the information and only if there is at least some minimal creativity in that effort. Thus, at best, there exists a thin copyright in compilations covering the selection and arrangement of the information but not the information itself. In the worst case, often seen in electronic databases, there is no protection whatsoever since their inherent nature and value, such as completeness and automated alphabetical access, obviate the requisite creativity. Second, the Digital Millennium Copyright Act, codified at 1201 of the Copyright Act, prohibits only unauthorized access to technically protected works and requires that the underlying work be properly copyrighted. In other words, encrypted un-copyrighted databases enjoy no DMCA protection and, even if copyrighted, the DMCA applies only to the initial access and not to subsequent distribution by others. Third, the Computer Fraud and Abuse Act, 18 USC 1030, and the state-equivalent law, apply only to computer-resident databases and then, similarly, only to the initial unauthorized access. And fourth, various state laws, such as misappropriation (discussed above), trespass or contract (license agreement), have two major shortcomings they differ by state and again reach only the initial offender.

Into this void comes the latest congressional effort H.R. 3261. With the focus on misappropriation in a commercial environment that results in economic harm, the bill imposes liability only if a number of specific elements are met:

  • The plaintiff's database was the result of a "substantial expenditure of financial resources or time" and
  • The defendant has made a "quantitatively substantial part" of the database available "in commerce to others" in a "functionally equivalent" manner and
  • The defendant knows that this act was "not authorized" and
  • The defendant's act was "time sensitive" and
  • The defendant's act has caused an "actual loss of revenue" in the same market and has "reduced the incentive" of the plaintiff to continue to serve the market.

But, as with many legislative proposals, there are weaknesses. First, the "time sensitive" language is vague and may or may not be equivalent to the "hot news" standard recognized by the courts. Second, the exemption for non-profit educational, scientific or research institutions is similarly vague the use is allowed if "reasonable under the circumstances, taking into consideration the customary practices associated with such uses of such databases." Third, the protection would extend to databases of government information if compiled by other parties and thus has the potential to alter dramatically the effective availability of government information. Fourth, the bill may exceed the constitutional authority of Congress in this arena. Since the copyright clause is not available, perhaps the commerce clause will serve as the basis, although, that limits the applicability to interstate and foreign commerce a distinction that may prove problematic in application. And fifth, the dreaded DMCA subpoena authority (to ascertain the identity of alleged violators) also appears in this bill but without any requirement to file a statement with the court as to the basis of the claim. As such, there is even greater potential here for abusive action against individuals or organizations deemed to be offenders but without a scintilla of supporting evidence.

On balance, the focus of the bill misappropriation in commerce and not the use of information per se is good. This conclusion follows, we submit, from the standards for liability as well as other provisions that protect, for example, the use of hyperlinking. The execution, however, is less strong in that there are too many vague elements that will undoubtedly generate prodigious litigation pitting the powerful industry elements against those with lesser resources. The need, however, is quite certainly questionable as Rep. John Dingell cites the enormous growth of commercial databases as evidence there are no serious gaps in current legal protections.

What is certain is that this legislation may serve to undercut our basic national information policy. Facts are public domain, while the particular expression of ideas based on those facts may be protected for a limited time. This policy has been the historic foundation of our economy and system of government and must remain so. Continued legislation in the realm of intellectual property, with implications evident only after years of application and judicial decision, are worrisome indeed.

Lee S. Strickland

 


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