Part 4 of 7
f. PRIVATE COPYING ROYALTY SYSTEMS
The manner in which portions of the audio and video private copying royalties collected in some European countries are distributed to claimants may prove to be an impediment to future development of the GII if a similar approach is adopted in respect of digital information dissemination systems. To illustrate, France's Law of July 3, 1985 (1985 Law) establishes a system of neighboring rights protection for performers, audiovisual communication enterprises, producers of phonograms and producers of videograms. The 1985 Law, inter alia, grants specified categories of right holders an entitlement to equitable remuneration in respect of the private copying of their works. Some of the 1985 law's provisions are based on reciprocity and thus discriminate against, for example, foreign motion picture interests. Consequently, those provisions may be inconsistent with France's obligations under the Berne Convention and the Universal Copyright Convention, at least to the extent that they apply to Berne or UCC protected subject matter and rights. If this pattern is followed in implementing future legislation, serious impediments to the development of the GII may arise.
g. MORAL RIGHTS
The author’s moral rights are provided for under Article 6bis of the Berne Convention which requires recognition of the right of an author to be named as the author of a work (the right of paternity) and the right for an author to object to uses of a work which would bring dishonor or discredit on his or her reputation (the right of integrity).447 The controversy over moral rights was one of the reasons that kept the United States out of the Berne Convention for over a century. However, during that time our legal regime evolved and when the United States finally joined Berne, the Congress determined that no changes to U.S. law were necessary to comply with the moral rights provisions of Article 6bis. Congress found that the existing panoply of remedies available under U.S. common law, various state statutes and Federal laws provided sufficient moral rights protection. These findings were explicitly stated in the Berne Convention Implementing Act. [448] When the Congress was convinced that enhanced protection for moral rights was necessary, legislation was passed. [449]
For the United States, the question is what should be the scope of moral rights under our law. What is the appropriate role for Federal and state legislation? There are even serious Constitutional questions about the possible scope of moral rights legislation that could be part of our Federal copyright law. Such rights would have to be seen as promoting the progress of science and useful arts. They would have to be viewed as part of the Constitutional quid pro quo of providing protection in order to promote creativity. Some have argued that such a justification may prove difficult to make.
Even among Berne members, the nature and scope of moral rights varies considerably from country to country, but regardless of their scope and extent, moral rights are typically not transferable and sometimes, may not be waived. The fact that these rights are non-waivable may create difficulties for the commercialization of works in the GII environment. A current report of the multimedia study committee of the Japanese Institute for Intellectual Property suggests that there may be a need either to permit the specific waiver of the right of integrity or to limit its application in the digital world. [450]
h. CONFLICT OF LAWS
Conflict of laws issues may arise in GII-related copyright infringement actions. Resolution of these issues determines what country’s law the court should apply. If the infringer and the infringement are in the United States, the U.S. Copyright Act would apply. However, different situations may present themselves which will raise conflict issues. For instance, users in country A, where certain actions are not considered copyright infringements, may use works located on servers in country B, where such actions are. Which country's law controls the resolution of a copyright infringement dispute -- the country from which a copyrighted work is uploaded or to which it is downloaded, or the country where the host server is located? In the case of direct transmissions, which country's law applies -- the country of origin of the transmission or the transmitter, or the country of the reception? It may be that rights of the copyright owner are exercised in each country. These issues, however, may be no more problematic than the current conflict issues that arise due to the use of telephones, fax machines or modems in international commerce.
i. HARMONIZATION OF INTERNATIONAL SYSTEMS
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. The 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 worldwide commerce. The United States 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. It is an even greater challenge to lay an international groundwork which will ensure adequate and effective protection throughout the world.
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 is 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.
The United States is committed to making progress in WIPO toward improving international protection for works protected by copyright and authors rights and the subject matter of neighboring rights. Such progress is essential, especially in view of the needs to deal with the intellectual property issues associated with the emerging GII. The transition into a world-wide information society demands both a narrowing of the focus on specific issues in the cases of the Berne Protocol and the New Instrument, and the expansion of the WIPO efforts to encompass the digital world in both areas.
In the emerging world of the GII with its digital distribution systems and multimedia works, distinctions among the rights of authors, producers and performers that are the basis for the separation of copyright and neighboring rights are rapidly becoming irrelevant. This new world of information superhighways will mean economic growth, jobs, and exports for all economies to the benefit of authors, producers and performers. Governments need to consider carefully the implications of the inevitable development of the GII for their national economies and their copyright systems. The work in WIPO is relevant to the rapidly emerging digital world of the GII in order to set sound policy, and select the essential elements of the present Berne Protocol and New Instrument texts and work toward reaching international agreement on them.
Discussions on a Berne Protocol and New Instrument afford an opportunity to consider what enforcement norms, beyond the broadly applicable disciplines clearly established in the TRIPs text, will be necessary if rightsholders are to be adequately protected in the NII/GII environment. Thus, rather than replicate the TRIPs enforcement provisions -- which would be redundant and would create the very real possibility of conflicting norms -- work on a Berne Protocol and New Instrument should focus on issues not addressed in TRIPs, such as protection of rights management information, the use of technical security measures and the prohibition of devices and services whose primary purpose or effect is to defeat technical security measures.
One of the most important issues for international norm setting is to define the nature of a dissemination of a work or a transmission of a work in digital form. Is it a public performance of the work or a reproduction and distribution? Can it be all at the same time? 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 levels of protection. The right to distribute copies of a work by transmission should be included both in the Berne Protocol and the New Instrument, perhaps as a separate right, as an aspect of a distribution right, as part of a right of communication to the public, or an aspect of the reproduction right. While this is an issue that needs much further discussion, the United States believes that such a right is an important part of the Berne Protocol and New Instrument which would be aimed at meeting the needs of the emerging GII.
Provisions to prohibit decoders and anti-copy prevention devices and services also should be included in the Berne Protocol and the New Instrument.451 The Protocol and the New Instrument should also include a prohibition of the fraudulent inclusion of rights management information and the fraudulent removal or alteration of such information. [452]
To permit the effective development of the GII, national treatment must be the basis for protection in any intellectual property agreement. At an absolute minimum, national treatment must apply to the minimum obligations established in any agreement in WIPO. 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 party to the Protocol or New Instrument. The United States continues to believe that, in respect of any work, 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 would 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. [453] To the extent that it has been agreed that the principles of the New Instrument should follow those of the Berne Convention, to do otherwise in respect of related rights would be contrary to the letter and the spirit of the Convention.
U.S. copyright legislation has granted rights that some other nations may regard as new rights beyond those set forth in the Berne Convention -- for example, rental rights in computer programs, sound recordings, and musical works embodied in sound recordings -- and has done so 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. The United States believes 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. To protect new works or to grant new rights in respect of new 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 must 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 [454] embodying such works.
2. Benefits must 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 may, 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.
In addition to these issues of general concern, there are issues that are applicable specifically to the Berne Protocol and to the New Instrument.
Following the Supreme Court decision in the Feist case, [455] there is increasing concern that many valuable, factually-oriented databases may be denied copyright protection, or that courts may determine infringement in ways that severely limit the scope of copyright protection for data bases. Providing for a sui generis unfair extraction right to supplement copyright protection may prove to be useful in view of legal developments in various national laws and should be given serious consideration. How a right, such as the unfair extraction right proposed in the EU database directive, could protect such databases should be carefully evaluated.
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, as current discussions seem to indicate, they are subsumed into the existing categories of works, establishing meaningful rules internationally will be simplified.
Further study to determine what existing rights should be clarified or 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 the 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 also 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 and to create new multimedia works makes strengthening international norms for moral rights more important than ever before. Others take the view that any changes to international norms for the protection of moral rights must be carefully considered in the digital world. The United States agrees with this view. Careful thought must be given to the scope, extent and especially the waivability of moral rights in respect of digitally fixed works, sound recordings and other information products.
There are issues such as digital fixation, storage and delivery that will need to be taken into account in the New Instrument. There are also questions concerning the scope of rights and the right owners that might be covered by the New Instrument. To the extent possible, definitions in the New Instrument should be identical to those in the Berne Protocol. Otherwise, differences in phrasing could lead to differences in interpretation, and jeopardize the "bridging" of the New Instrument with the Berne Convention and the Protocol. Many of these issues are critical to the United States and other countries.
To attain the needed level of protection internationally, ways to span the differences between the continental droit d’auteur and neighboring rights systems and the Anglo-American copyright systems must be developed. An essential element of this effort will be to harmonize levels of protection by establishing standards that can be implemented through either system.
B. PATENT
Development of the NII will depend upon, and stimulate innovation in, many fields of technology, especially computer software, computer hardware and telecommunications. An effectively functioning patent system that encourages and protects innovations in these fields of technology is, therefore, important for the overall success of the NII.
The primary goal of the patent system is to encourage innovation and commercialization of technological advances. To this end, the patent system offers an incentive to inventors to publicly disclose their inventions in exchange for the exclusive right to prevent others from making, using, offering for sale or selling the inventions throughout the United States or importing the inventions into the United States. The patent system serves as an important complement to the copyright system for computer and software innovations by providing protection for functional aspects of these innovations.
Unlike copyright protection which attaches automatically at the moment of fixation, an inventor must specifically request protection by filing a patent application and establish that the invention meets all of the statutory requirements of patentability. Rights are obtained by filing a patent application with the Patent and Trademark Office (PTO), and proceeding through an examination process. To be patentable, an invention must be new, [456] useful [457] and nonobvious. [458] In addition, the inventor must fully describe and disclose the invention for which patent protection is sought in a patent application. [459] If the PTO determines that all the patentability requirements have been met for the invention for which patent protection is requested, a patent will be granted to the applicant.
Patent protection is available in the United States for inventions without differentiation as to the field of technology: "any new and useful process, machine, manufacture, or composition of matter" can be patented. [460] Despite this breadth, certain limits do exist on what can be patented. For example, a person cannot patent a process that consists exclusively of the steps one would follow to apply a mathematical principle to solve a mathematical problem. [461] This restriction is not statutory; instead, it arises from judicial interpretation of the law governing patentable categories of invention, and is based on the notion that one cannot preempt use of laws of nature or mathematical truths. Similarly, one cannot patent an arrangement of information or a writing, as such things do not fall within one of the enumerated categories of inventions eligible to be patented. [462]
Once it is determined that an applicant has requested protection for subject matter that is eligible to be patented, the examination process shifts to evaluate the substantive merits of the invention. This evaluation is performed to determine if the invention is "novel" and "non-obvious." The PTO performs this evaluation by comparing the invention undergoing examination to the "prior art." Generally speaking, prior art includes information that is publicly available prior to the filing date of a patent application. [463] An invention satisfies the novelty requirement if it differs in any material way from what is known in the "prior art." [464] An invention satisfies the nonobviousness requirement if a "person of ordinary skill in the art" would not have viewed the invention as having been obvious in view of the prior art at the time the invention was made. [465] Some flexibility is provided to patent applicants in the United States regarding when they must seek protection to avoid losing patent rights due to prior public disclosure of the invention. [466]
An applicant must also satisfy a number of requirements that govern the contents and form of a patent application. A patent application consists of a specification and claims. The claims of a patent define the metes and bounds of the invention by specifically defining the features of an invention which are protected. Among other things, Section 112 requires that the inventor provide an adequate disclosure of the invention that the applicant has claimed. [467] A disclosure is adequate when it enables a person of ordinary skill to "practice" the invention as claimed without undue experimentation or effort. [468] Section 112 also requires that the inventor disclose the "best mode" of practicing the invention known to him. The requirements of Section 112 serve to ensure that the patent provides a high-quality, technically accurate disclosure of the invention.
Once issued, a patent grants its owner the exclusive right to prevent others from making, using, offering for sale, or selling the claimed invention in the United States, or importing the claimed invention into the United States. [469] A patent owner is given a term of protection that begins on the date the patent is granted and ends 20 years from the date the application leading to the patent was filed. [470] The patent owner must assert these rights against a party that performs any of the acts that would infringe the patent. The patent owner has the initial burden of proving that the accused party infringed one or more of the patent claims. [471] Patent infringement is established by demonstrating that the accused party has made, used, sold, imported or offered to sell a product that falls within the scope of a product patent claim. [472] Similarly, if a patent has been granted on a process, the patent owner must show that the accused party engaged in activity that would infringe the process claims, or that the accused party made, used, sold, offered to sell or imported a product produced using the claimed process. [473] A patent owner’s failure to promptly enforce its rights once an infringement is discovered can limit his or her remedies or may even preclude enforcement against that party.
A party accused of infringement can avoid liability by asserting that the patent does not cover the accused product or process. [474] The accused infringer can also assert that one or more of the patent claims is either invalid [475] or that the patent as a whole is unenforceable. [476] Every claim in a patent, however, is presumed valid. [477] Thus, in district court, the party challenging patent validity must demonstrate through clear and convincing evidence that the patent fails to satisfy one or more of the statutory criteria of patentability (e.g., novelty, utility, nonobviousness), or that the application is defective because it has an inadequate disclosure. [478]
1. PATENTABILITY DETERMINATIONS
The NII will have a tremendous impact on the flow of information. As new sources of information are made available and old sources are made more accessible, the accumulated body of knowledge available for use in patentability determinations will expand. This means that more information will be available to influence decisions on the patentability of an invention, whether in the context of the patent examination process or during challenges to patent validity through litigation in the Federal courts. [479] Thus, the most significant impact that the NII will have on the patent system will be in relation to issues that are affected by the degree of availability of "prior art."
Over the past twenty years, access to sources of information -- particularly patents and printed publications -- has been vastly improved through the development and use of on-line database services. These services document the existence and content of patents and printed publications, and in some instances, provide access to the complete text and electronic images of such documents. It is important to recognize, however, that the information that can be retrieved through these services invariably exists as an original, paper document disseminated through traditional publication channels (e.g., technical journals or publications, domestic and foreign patent documents).
The NII will dramatically change the way information is prepared and disseminated. It will improve the number, diversity, accessibility and quality of traditional on-line services. It will also foster creation of new forms of "electronic publications" that are different in character from traditional paper-based publications. Examples of such electronic publications include electronic versions of traditional paper-based publications that supplement or reorganize presentation of the content of the paper-based publication; informally prepared documents such as a posting of technical or other information on a particular topic-driven forum; and formally designed and developed electronic publications that are not printed on paper, but are disseminated exclusively through an electronic forum.
Electronic publications such as these will supplement the wealth of publicly accessible information that is used in patentability determinations. However, these new types of electronically disseminated documents are different in character from traditionally printed and indexed patents and publications, and as such, could raise questions when used as prior art in a patentability determination, either before the PTO or during litigation. For example, the information contained in electronically-disseminated documents may not be printed originally on paper, and as such, there may be no tangible evidence regarding the date the information was first publicly disclosed or as to the contents of the document as disclosed on that date. There are no uniform guidelines or industry standards presently that govern the memorialization of either the contents or the date of first public disclosure of such documents. A second problem is that the degree of distribution of or public accessibility to electronic documents is not presently measured and may prove unmeasurable. Limited availability of a document can render that document unusable as a source of information as prior art. [480] Both issues, however, are key factors in determining whether a document is in the prior art.
A second category of concerns relates to the technical accuracy of electronically disseminated documents. To be a usable and reliable prior art document, the contents of the document must be technically accurate and informative. The types of documents that are disseminated electronically today, however, vary tremendously as to their content and accuracy. Thus, while certain information could be posted on a forum, with a reliable documentation of the date of that disclosure and its contents, it would not be certain that the disclosure itself is technically accurate and usable as prior art. Informally created documents, such as postings on a forum, are not typically subjected to any form of peer review or content screening. The lack of quality control could therefore complicate evaluation of information contained in these electronic documents, which, in turn, could affect patentability, particularly in the context of litigation.
2. INFRINGEMENT DETERMINATIONS
As noted in other sections of this Report, some questions exist regarding whether or how copyright owners will be able to effectively enforce their rights in their works on the NII. The issues related to the enforcement of copyrights on the NII do not have an analogue with regard to patent protection. This is because each patent provides a precise definition of the nature of activities that will infringe the patent owner’s rights. And while some have raised concerns over the ability of patent owners to prove infringement where the infringing activities were facilitated by or conducted on the NII, these concerns do not appear to be well founded.
Consider a patent claim covering a new data compression process used for communicating information over the NII. To infringe the patent owner's rights, one would have to perform each of the acts specifically outlined in the process claim. To prove infringement, the patent owner could rely on any evidence that the accused party used the process. This could be done by showing that the accused infringer developed and distributed a software program that, when used by a third party, would infringe the process claim (e.g., the software would require the third party to follow the steps outlined in the process claim and thus lead to infringement of that claim). Alternatively, the patent owner could show that data was distributed over the NII in the compressed format, and then establish the source of the data. Considered fully, it does not appear to be an insurmountable problem for the patent owner to identify infringing parties and establish a sufficient quantum of proof that the accused infringer performed a particular series of acts, which, once performed, infringed one or more patent claims.
3. PATENTABILITY OF SOFTWARE
Another issue considered with regard to its relationship to the NII is the eligibility of computer software for patent protection. Computer software-related inventions have enjoyed some degree of protection under the patent system since the beginning of the computer industry. In terms of distinguishing which aspects of software-related inventions could or could not be patented, the courts and the PTO have relied on a number of legal doctrines. Under one of these doctrines, computer program code per se has been held to be ineligible for patent protection because it is a writing that does not fall within one of the enumerated categories of invention. Another of these doctrines provides that processes, including those implemented in software, that are indistinguishable from the steps one would follow in applying a mathematical principle to solve a mathematical problem cannot be patented. [481] These two doctrines have served to exclude protection for software-related inventions independent of machines or processes as implemented on a computer.
A series of decisions rendered in 1994 by the Court of Appeals for the Federal Circuit has clarified the boundaries of patent-eligible subject matter for software-related inventions. In one decision, the Federal Circuit concluded that an "old" memory that was "reconfigured" through the storage thereon of a "data structure" (an ordered arrangement of information) constituted a patentable invention. [482] In other cases, both before and after this holding, the Federal Circuit concluded that a data structure, per se, and as incorporated into a process without any additional physical elements or steps in the process, did not create patentable subject matter. [483] The combined effect of the cases suggests that software can transform unpatentable objects into patentable ones and as such must be given weight in patentability determinations, but information per se and abstract ideas continue to be treated as non-statutory subject matter. The trend -- as far as can be ascertained -- is to provide a broader eligibility for software aspects of inventions than was available previously.
While there may be some degree of uncertainty relating to the precise boundaries of patent-eligibility for software, this alone does not suggest that this topic should or even could be resolved by the Working Group. Finer resolution of the boundaries of patent-eligibility for software could result in greater or more restricted protection for software. Whatever the result, the ramifications run far past those that must be considered in the context of the NII. Changes affecting patent eligibility for software-related technologies will affect more than simply the software innovation that will develop incident to development and use of the NII. And resolution of these boundaries of protection under the patent law for software will not directly affect the significant development efforts underway now related to the NII. Considered from a different perspective, development of the NII may lead to more software development, particularly related to telecommunications and networking, but it will not present unique issues in terms of patent eligibility for software.
C. TRADEMARK
A trademark is quite different from either a copyright or a patent. A trademark is any word, name, symbol or device, or any combination thereof, that serves to identify and distinguish the source of one party's goods or services from those of another party. A service mark is the same as a trademark, except that it identifies and distinguishes the source of services rather than goods. In this report, the terms "trademark" and "mark" are intended to refer to both types of marks.
The purpose of a trademark is twofold -- to identify the source of products or services and to distinguish the trademark owner's goods and services from those of others. As long as a trademark fulfills these functions, it remains valid. Trademark ownership rights in the United States arise through use of a mark. Continued use of a mark is necessary to maintain trademark rights. The owner of a trademark is entitled to the exclusive right to use the mark. This entitlement includes the ability to prevent the use, by unauthorized third parties, of a confusingly similar mark. Marks used by unrelated parties are confusingly similar if, by their use on the same, similar, or related goods or services, the relevant consumer population would think the goods or services come from the same source.
Unlike patent and copyright law, Federal trademark law coexists with state and common-law trademark rights. Therefore, registration at either the Federal or state level is not necessary to create or maintain ownership rights in a mark. For example, priority of trademark rights between owners of confusingly similar marks, regardless of whether the marks are Federally registered, is based upon first use of the mark. [484]
Federal trademark law is embodied in the Lanham Act [485] and is based upon the commerce clause of the Constitution. [486] Therefore, to obtain a Federal trademark registration, in most cases [487] the owner of a mark must demonstrate that the mark is used in a type of commerce that may be regulated by Congress. [488] Additionally, the Trademark Law Reform Act of 1988 [489] amended the Lanham Act to establish trademark rights, which vest upon registration following use of the mark in commerce, as of the filing date of a trademark application indicating a bona fide intent to use the mark in commerce. [490]
Goods and services to which a mark applies in a trademark registration are categorized according to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of June 15, 1957, as revised at Stockholm on July 14, 1967, and at Geneva on May 13, 1977 (International Classification). This treaty, of which the United States is a member, is administered by WIPO. WIPO convenes a meeting of experts, including representatives of the United States, every five years to consider and adopt changes to the International Classification. These meetings will be an important means to effect changes to the International Classification to accommodate the changing goods and services available in connection with the NII and the GII. In preparation for the next meeting of experts, which is likely to take place in late 1995, a working group which includes the United States convened in March 1995 at WIPO to discuss proposals to amend the International Classification.
Remedies against trademark infringement and unfair competition are available to trademark owners under both state and Federal law. [491] In this regard, the owner of a Federal trademark registration has certain benefits. In a court proceeding, registration on the Principal Register constitutes prima facie evidence of the registrant's ownership of the mark. [492] Registration on the Principal Register may also be used as a basis to block importation of infringing goods [493] or to obtain remedies against a counterfeiter. [494] The Lanham Act provides that under certain conditions the right to use a registered mark may become incontestable. [495] Additionally, the Lanham Act provides for cancellation of registrations on certain grounds. [496]
Existing legal precedent accepts electronic transmission of data as a service and, thus, as a valid trademark use for the purpose of creating and maintaining a trademark. [497] Additionally, existing legal precedent applies the available remedies for infringement and unfair competition to such acts occurring through the unauthorized use of trademarks electronically. [498] However, in the future, with widespread access to and use of the NII, both the legitimate and infringing electronic uses of trademarks may increase. Unfair competition may increase in the context of the NII to the extent that it may be easier to copy or remove trademarks from electronically transmitted information than from labeled products or from services identified in print media.
In the global context for trademarks, there are likely to be ramifications of global electronic transmission of trademarks in view of the fact that trademark rights are national in scope. Conflicts may arise where the same or similar trademarks are owned by different parties in different countries, or where different countries apply different standards for determining infringement. Additionally, conflicts may arise where terms are in general use in one country, but restricted as either trademarks or geographical indications in another country.
With regard to access to the NII, several conflicts have arisen where trademark owners are aware that third parties have registered Internet domain names that are identical to their trademarks. One of the first opportunities for a court to define the legal relationship between trademarks and the registration and use of site domain names on the Internet could be presented in an action presently in Federal district court in the Southern District of New York. The owners of the MTV cable network ("MTV") have filed an action seeking injunctive relief and monetary damages from a former employee who is offering a daily report about the rock music industry on the Internet using the site name "mtv.com." MTV is alleging, inter alia, trademark infringement and unfair competition. [499] In another instance, Kaplan Educational Centers filed an action alleging trademark infringement and unfair competition against its competitor, Princeton Review, which had registered an Internet domain name of "Kaplan.com." Kaplan reported that an arbitration panel ruled, in an unreported opinion, that Princeton Review must relinquish all rights in the "Kaplan.com" name and transfer it to Kaplan. Other companies noted in the news that have expressed concern recently about third party domain name registration of their well-known trademarks include Coca Cola, McDonald’s, MCI and Hertz.
D. TRADE SECRET
Unlike many of the other forms of intellectual property protection previously mentioned, trade secrets are generally protected by state law, not Federal law.500 Trade secret protection is very limited. A trade secret holder is only protected from unauthorized disclosure and use of the trade secret by others and from another person obtaining the trade secret by some improper means. [501]
There are several factors used to determine if subject matter qualifies as a trade secret. Among the factors considered are the extent of measures taken by the trade secret owner to guard the secrecy of the information and the ease or difficulty with which the information could be properly acquired or duplicated by others.502 Based on these considerations, the general rule is that subject matter cannot be successfully protected as a trade secret if it is widely distributed. However, if adequate security precautions are taken to ensure that access to the subject matter being distributed is treated as secret, the subject matter may still be considered a trade secret.
Whether trade secret owners distribute their trade secrets through the NII will largely depend on the extent that they believe that the secrecy of the trade secret will not be compromised by such a distribution. Consequently, if the NII is going to be used as a tool for disseminating trade secret information the NII must be equipped with adequate security measures to ensure that trade secrets distributed through the NII will remain secret. [503]
In addition to the concerns regarding security precautions, issues of jurisdiction may also arise when the NII is used to transmit trade secrets. As trade secrets are generally protected by state law, determining which state’s law should control in a trade secret dispute may become an important choice of law issue in the NII. This choice of law issue, however, is no more problematic than those issues presently associated with the distribution of trade secrets and can be adequately resolved by the choice of law rules presently codified in state law.
To some degree, whether trade secret owners distribute their trade secrets through the NII may also depend on the type of information products and services being disseminated. For instance, it has been suggested that the most common way to protect software is through trade secret protection.504 Unlike most trade secret information, computer programs can be copied and used without the copier ever understanding or viewing the information in a comprehensible form. Although the trade secrecy problems associated with computer programs are not unique to the NII, the capabilities of the NII may cause these problems to become more prevalent.
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Notes:
30. See U.S. CONST., art. I, § 8, cl. 8.
31. On August 18, 1787, James Madison submitted to the delegates to the Constitutional Convention a list of powers to be granted Congress, which included the power "To secure to literary authors their copyrights for a limited time" and "To encourage, by premiums and provisions, the advancement of useful knowledge and discoveries." At the same time, Charles Pinckney submitted a list which included the power "To grant patents for useful inventions" and "To secure to authors exclusive rights for a certain time." On September 5, the clause "To promote the progress of science and the useful arts, by securing for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries" was agreed to unanimously. On September 17, 1787, the draft was signed by the delegates to the convention with no substantive changes. See Debates on the Adoption of the Federal Constitution as reported by James Madison. The clause was finally ratified in its present form in 1788. George Washington signed the first copyright law on May 31, 1790.
32. THE FEDERALIST NO. 43 (James Madison).
33. Goldstein v. California, 412 U.S. 546, 555 (1973).
34. Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 558 (1985) (hereinafter Harper & Row). See also id. at 546 ("'monopoly created by copyright thus rewards the individual author in order to benefit the public'").
35. Fogerty v. Fantasy, Inc., 114 S. Ct. 1023, 1029 (1994) (quoting Sony, supra note 22, at 429).
36. Feist Publication, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 349-50 (1991) (citations omitted) (hereinafter Feist).
37. Mazer v. Stein, 347 U.S. 201, 219 (1954).
38. Sony, supra note 22, at 429.
39. Harper & Row, supra note 34, at 545-46 (citing Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975)).
40. United States v. Paramount Pictures, Inc., 334 U.S. 131, 158 (1948).
41. Washingtonian Publishing Co. v. Pearson, 306 U.S. 30, 36 (1939).
42. Id.
43. Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975).
44. H.R. REP. NO. 2222, 60th Cong., 2d Sess., 7 (1909) (report accompanying the Copyright Act of 1909, the first comprehensive revision of the copyright laws).
45. See discussion of term of protection infra pp. 59-60 and fair use and other limitations on an author's exclusive rights infra pp. 73-100.
46. See discussion of unprotected subject matter infra pp. 32-35.
47. HOUSE REPORT at 56, reprinted in 1976 U.S.C.C.A.N. 5669.
48. Fogerty, supra note 35, at 1030.
49. 17 U.S.C. § 102(a) (1988 & Supp. V 1993). The Copyright Act specifically excludes from protectible subject matter any "idea, procedure, process, system, method of operation, concept, principle or discovery" even if it meets the criteria for protection. See 17 U.S.C. § 102(b) (1988). The Copyright Act also preempts any grant of equivalent rights for works of authorship within the specified subject matter. Section 301 provides:
On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.
17 U.S.C. § 301(a) (1988).
50. Many courts consider creativity to be an element of originality. For purposes of discussion, we examine originality and creativity as separate requirements.
51. See 17 U.S.C. § 102(a) (1988 & Supp. V 1993). The statutory qualification is derived from Congress' limited Constitutional authority to grant copyright protection to "authors" for their "writings." See U.S. C ONST., art. I, § 8, cl. 8.
52. Feist, supra note 36, at 345 ("vast majority of works make the grade quite easily, as they possess some creative spark").
53. Copyright protection literally begins when, for instance, the ink dries on the paper. There are no prerequisites, such as registration or affixation of a copyright notice, for obtaining or enjoying copyright protection.
54. 17 U.S.C. § 101 (1988) (definition of "fixed").
55. See 17 U.S.C. § 102(a) (1988 & Supp. V 1993).
56. 17 U.S.C. § 101 (1988) (definition of "copies").
57. 17 U.S.C. § 101 (1988) (definition of "phonorecords").
58. HOUSE REPORT at 53, reprinted in 1976 U.S.C.C.A.N. 5666-67. This Report generally uses the term "copy" or "copies" to refer to copies and phonorecords except in those instances where the distinction is relevant.
59. HOUSE REPORT at 52, reprinted in 1976 U.S.C.C.A.N. 5665-66.
60. See id.
61. See, e.g., Stern Electronics, Inc. v. Kaufman, 669 F.2d 852, 855 (2d Cir. 1982) (putting work in "memory devices" of a computer "satisf[ies] the statutory requirement of a 'copy' in which the work is 'fixed'").
62. See, e.g., Atari Games Corp. v. Oman, 888 F.2d 878 (D.C. Cir. 1989).
63. Unfixed broadcasts are not within the subject matter of Federal copyright law. Therefore, protection of such works is not preempted and may be provided by state statutory or common law. See 17 U.S.C. § 301 (1988 & Supp. V 1993).
64. See 17 U.S.C. § 101 (1988) (definition of "fixed"); see also Baltimore Orioles, Inc. v. Major League Baseball Players Assoc., 805 F.2d 663, 668 (7th Cir. 1986) (telecasts that are videotaped at the same time that they are broadcast are fixed in tangible form), cert. denied, 480 U.S. 941 (1987); National Football League v. McBee & Bruno's, Inc., 792 F.2d 726, 731-32 (8th Cir. 1986) ("the legislative history [of the Copyright Act] demonstrates a clear intent on the part of Congress to resolve, through the definition of 'fixation' . . ., the status of live broadcasts, using -- coincidentally but not insignificantly -- the example of a live football game"). It is understood that the "fixation" must be made or authorized by the author.
65. 17 U.S.C. § 101 (1988) (definition of "fixed").
66. HOUSE REPORT at 53, reprinted in 1976 U.S.C.C.A.N. 5666-67.
67. See Advanced Computer Services of Michigan Inc. v. MAI Systems Corp., 845 F. Supp. 356, 363 (E.D. Va. 1994) (conclusion that program stored only in RAM is sufficiently fixed is confirmed, not refuted, by argument that it "disappears from RAM the instant the computer is turned off"; if power remains on (and the work remains in RAM) for only seconds or fractions of a second, "the resulting RAM representation of the program arguably would be too ephemeral to be considered 'fixed'"); Triad Systems Corp. v. Southeastern Express Co., 1994 U.S. Dist. LEXIS 5390, at *15-19 (N.D. Cal. March 18, 1994) (“[C]opyright law is not so much concerned with the temporal ‘duration’ of a copy as it is with what that copy does, and what it is capable of doing, while it exists. ‘Transitory duration’ is a relative term that must be interpreted and applied in context.”).
68. See Wheaton v. Peters, 33 U.S. (1 Peters) 591, 662-63 (1834).
69. See 17 U.S.C. § 104 (1988 & Supp. V 1993). Prior to 1978, certain unpublished works, particularly dramatic works and musical compositions, could obtain Federal copyright protection through registration with the Copyright Office. Since 1978, all otherwise eligible unpublished works are protected under Federal law. See 17 U.S.C. § 104(a) (1988 & Supp. V 1993).
70. HOUSE REPORT at 129, reprinted in 1976 U.S.C.C.A.N. 5745.
71. 17 U.S.C. § 407 (1988). "[T]he owner of copyright or of the exclusive right of publication in a work published in the United States shall deposit, within three months after the date of publication -- (1) two complete copies of the best edition; or (2) if the work is a sound recording, two complete phonorecords of the best edition, together with any printed or other visually perceptible material published with such phonorecords." 17 U.S.C. § 407(a) (1988). The deposit requirements are not conditions of copyright protection, but failure to deposit copies of a published work may subject the copyright owner to significant fines. See 17 U.S.C. § 407(a), (d) (1988).
72. See 17 U.S.C. § 408(b) (1988) ("the material deposited for registration shall include -- (1) in the case of an unpublished work, one complete copy or phonorecord; (2) in the case of a published work, two complete copies or phonorecords of the best edition; (3) in the case of a work first published outside the United States, one complete copy or phonorecord as so published; (4) in the case of a contribution to a collective work, one complete copy or phonorecord of the best edition of the collective work").
73. The first factor of the fair use analysis -- the nature of the copyrighted work -- generally weighs against a finding of fair use if the work is unpublished. See Harper & Row, supra note 34. In 1992, Congress was prompted to amend Section 107 by the near determinative weight courts were giving to the unpublished nature of a work. See Act of October 24, 1992, Pub. L. 102-492, 1992 U.S.C.C.A.N. (106 Stat.) 3145 (adding to the fair use provisions, "The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.").
74. 17 U.S.C. § 104(a) (1988 & Supp. V 1993); HOUSE REPORT at 58, reprinted in 1976 U.S.C.C.A.N. 5671 (Section 104(a) "imposes no qualification of nationality and domicile with respect to unpublished works"); see also 17 U.S.C. § 104(b) (1988 & Supp. V 1993) (national origin requirements for published works).
75. 17 U.S.C. § 405 (1988 & Supp. V 1993). For such works, failure to include a copyright notice risks total loss of copyright protection. See id. Works published after March 1, 1989 (the effective date of the Berne Implementation Act) may (but are not required to) bear a copyright notice identifying the year of publication and the name of the copyright owner. See 17 U.S.C. § 401 (1988 & Supp. V 1993).