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SEC. 104. Evaluation of Impact of Copyright Law and Amendments on Electronic Commerce and Techno-Logical Development
By Margee Fagelson
(more articles from this author)
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On November 29, 2000, from 9:30 am to 5:00 pm, the Unites States Copyright Office, the National Telecommunications and Information Administration (NTIA) and the United States Department of Commerce will be holding a public hearing on the effects of the amendments made by Title 1 of the Digital Millennium Copyright Act ("DMCA"). The hearing will also address the development of electronic commerce on the operation of sections 109 and 117 of Title 17.

The US Copyright office is trying to hold fast to copyrights without necessarily taking into consideration the viability of content needing to be accessed from multiple locations. It is easy to assume that their attempts to pass legislation may not be altogether welcomed.

Title 1-WIPO Treaties Implementation
This Title implements two new intellectual property treaties, the WIPO (World Intellectual Property Organization) Copyright Treaty and the WIPO Performances and Phonograms Treaty, signed in Geneva, Switzerland in December 1996.

This was passed because the United States never signed the treaties but somewhere along the line, our powers that be decided there were some good ideas there. In some respects this could be interpreted as visionary. The U.S. decided to comply with copyright standards in other countries, which is highly relevant today as we watch the world try to figure out the rules and regulations of a global marketplace. The treaties also prohibit circumvention of copyright protection – across the board – but does not make allowances for circumvention that may be lawful or necessary.

Add to that the illegality of promoting or advertising these circumventions…so it would have been illegal for Scour to advertise their file-sharing capability as well as to have file-sharing capability.

It will be considered unlawful to disable the protection mechanism even in the privacy of your own home for use on – for sake of argument – two of your home computers. The product may not be consistent with the system installed on your device. Regardless, you would be unlawful should you choose to disable protective devices in order to make your purchase work on your system.

Section 109 of the Copyright Act, 17 U.S.C. 109, permits the owner of a particular copy or phonorecord lawfully made under title 17 to sell or otherwise dispose of possession of that copy or phonorecord without the authority of the copyright owner, notwithstanding the copyright owner's exclusive right of distribution under 17 U.S.C. 106(3). Commonly referred to as the "first sale doctrine," this provision permits such activities as the sale of used books. The first sale doctrine is subject to limitations that permit a copyright owner to prevent the unauthorized commercial rental of computer programs and sound recordings.

Section 117 of the Copyright Act, 17 U.S.C. 117, permits the owner of a copy of a computer program to make a copy or adaptation of the program for archival purposes or as an essential step in the utilization of the program in conjunction with a machine. In addition, pursuant to an amendment contained in title III of the DMCA, section 117 permits the owner or lessee of a machine to make a temporary copy of a computer program if such copy is made solely by virtue of the activation of a machine that lawfully contains an authorized copy of the computer program, for purposes of maintenance or repair of that machine.

You can make a temporary copy of the product to figure out how to circumvent the protective measures. But this is only in case of an emergency crash landing.

These sections have been made public and some questions have been posed. A request for comments and testimony has been posted. Some of the responses, thus far:

The Future of Music Coalition

The Future of Music Coalition ("FMC") serves as a clearinghouse for research on music technology issues and advocates on behalf of musicians and independent record labels in Washington, D.C. We are composed of leaders from technology and music who came together to confront the issue of how new digital media distribution will impact the creative community. The FMC, among other things, is concentrating on three pressing areas of concern:

i.) what is the recording artist's true stake in the ongoing Napster/Gnutella/Scour dispute considering the perceived inevitability of widespread peer to peer file sharing abilities;

ii.) the inability of the Recording Industry Association of America (RIAA) to represent recording artists' interests (particularly in the all important and under reported Digital Performance Rights in Sound Recordings [DPRSRA] debate)

iii.) how secure digital distribution formats (e.g., SDMI [the"Secured Digital Music Initiative"]) could threaten educators' and academics' access to recorded music and, therefore, jeopardize legitimate educational "fair use."

First, the Congress, the United States Copyright Office and the NTIA should coordinate with the European Economic Community (EEC) in its current efforts to monitor the growth of digital music distribution within its jurisdiction…

Second, it is imperative that the Congress, the United States Copyright Office and the (NTIA) establish a fair and reliable criteria for distributing DPRSRA monies…

The FMC states categorically that hearings are absolutely necessary in the preparation of your report to Congress. We would be prepared to have our technological, academic and legal experts be at your disposal for such hearings.

Digital Media Association

Digital Media Association (DiMA) was formed on June 2, 1998, by seven (7) companies leading the creation of new ways to deliver and market music and video over digital networks to promote three core principles:

To promote pro-consumer competitive opportunities in digital distribution, transmission, broadcast, and retail of digital media;

To encourage the development and use of responsible measures to protect intellectual property rights, including the payment of fair and reasonable royalties associated with such rights; and,

To oppose technological and legal barriers that inhibit innovation or adoption of new technologies, products and services.

On June 5, 1998, DiMA testified before the House Commerce Subcommittee on Telecommunications, Trade and Consumer Protection that resolving both of the issues to be addressed in this Study was essential to growing ecommerce and Internet broadcasting. Thus, DiMA was particularly gratified that Congress had the foresight to require in Section 104 of the DMCA that this Study be timely conducted.

In response to the Notice and the questions set forth therein, DiMA's comments below elaborate on the following three key points:

1. Extending existing limitations on the rights of copyright owners into the digital environment is consistent with the policies underlying the Copyright Act and the WIPO treaties implemented by the DMCA... 2. To create a level playing field for ecommerce in digitally-delivered audio, video and other media, the first sale doctrine of 17 U.S.C. § 109(a) must be extended, either by judicial interpretation or amendment, to apply to content lawfully acquired by digital transmission… 3. The exemption in 17 U.S.C. § 117 that legitimizes archiving and usage of computer software should be adapted and applied to digitally-delivered performances and copies..

DiMA believes that hearings might be useful for the Copyright Office and NTIA to gain a more detailed understanding of the developing technologies and ecommerce business models and how they would benefit from the proposed changes to Sections 109 and 117. In particular, hearings would afford the opportunity to receive additional input regarding new technologies and emerging business models. DiMA and several of its members would be interested in participating in these hearings.


American Film Marketing Association (AFMA), Association of American Publishers (AAP), Business Software Alliance (BSA), Motion Picture Association of America (MPAA), National Music Publishers' Association (NMPA), and Recording Industry Association of America

Each of the undersigned organizations has a strong interest in the issues which Congress, in section 104 of the Digital Millennium Copyright Act (DMCA), instructed the Copyright Office and the NTIA to evaluate. The member companies of each organization are actively involved in electronic commerce, in the development and implementation of new "emergent" technology, and in the distribution of copyrighted materials that are subject to the first sale doctrine codified in section 109 of the Copyright Act (17 USC 109). Several of the copyright industry sectors represented by the undersigned organizations are directly affected by the rental right provisions of section 109, and by the exceptions in section 117 of the Copyright Act, 17 USC 117, to the exclusive reproduction right in computer programs.

In our view, no changes to sections 109 or 117 are needed at this time. We believe these statutory provisions are functioning as intended, to promote the efficient distribution of copyrighted materials (section 109) and the creation, development and distribution of computer programs (section 117) while preserving the legitimate rights of authors and of users of their works. Specifically, we do not believe that either of these provisions needs to be changed at this time in order to facilitate the continued growth of electronic commerce and the advance of technology for conducting electronic transactions in copyrighted materials. We are, of course, interested in reviewing proposed changes that other submitters of comments may offer, and reserve the right to provide further views, either individually or collectively, in the reply round of this proceeding, and in testimony at a public hearing if the agencies decide to hold one.

[We] are unaware of any significant impediments to electronic commerce which have arisen as a result of section 117. This provision was first enacted twenty years ago, upon the recommendation of the National Commission on New Technological Uses of Copyrighted Works (CONTU); it remained essentially unchanged until 1998, when it was amended by the DMCA, as described above. Those amendments appear to be functioning as intended. To the extent that misinterpretations of other aspects of section 117 have been employed by some, not as a legitimate defense to infringement, but as an enticement to engage in online piracy, the report under section 104 of the DMCA should be an appropriate vehicle for dispelling this confusion.

The schedule and composition of the panels will be as follows:

9:30-9:45 Introduction

9:45-11:00 Panel 1
Library Associations (James Neal and Rodney Peterson)
AAP (Allan Adler)
Time Warner Inc. (Bernard Sorkin or substitute)
MPAA (Fritz Attaway)

11:00-12:30 Panel 2
SIIA (Keith Kupferschmidt)
Lee Hollaar
Blue Spike (Scott Moskowitz)
BSA (Emery Simon)
Intertrust Technologies Corporation (Nic Garnett)

12:30-1:45 Lunch Break

1:45-3:10 Panel
NMPA (Susan Mann)
BMI (Marvin Berenson)
HRRC (Gary Klein)
NARM (Pamela Horovitz)
VSDA (Crossan Andersen)

3:10-4:35 Panel 4
DFC (Peter Jaszi)
DiMA (Seth Greenstein and/or Jonathan Potter)
Copyright Industry Associations (Steven Metalitz)
Digital Commerce Coalition (Daniel Duncan)
Red Hat (Carol Kunze)

4:35-6:00 Panel 5
RIAA (Cary Sherman)
Launch Media, Inc. (David Goldberg) (David Beal)
myPlay Inc. (David Pakman)
MusicMatch Inc. (Bob Ohweiler)
RealNetworks, Inc. (Alex Alben)

All parties – even those not quoted above – will have an interesting and somewhat different perspective on the outcome of this hearing. Stay tuned to MusicDish for results of the hearing.


Gnutella -
House -
Napster -
Scour -
Senate -
U.S. Department of Commerce -
U.S. Copyright Office -

Related MusicDish e-Journal Articles:
» The Digital Economy: How Digital Goods are Reshaping the Rules of Commerce - Implications For Distribution (2000-11-01)
»'s Peer-to-Peer Solution Automates Notification of Copyright Violations According to DMCA (2000-09-29)

Related News from Mi2N:
» Report To Congress Pursuant To Section 104 Of The Digital Millennium Copyright Act

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