A Question of Balance Private Rights and the Public Interest in Scientific and Technical Databases (1999) / Chapter Skim
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4 Assessment And Recommendations
4 Assessment And Recommendations
Pages 73-110
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From page 73... ...
Advances in computing and communication technologies make S&T databases and the facts they contain increasingly valuable for producing new discoveries and for accelerating the growth of knowledge and the pace of innovation. The same technologies that facilitate the effective production, dissemination, and use of data, however, can also expedite their unauthorized dissemination and use, with the potential effect of undermining incentives to create new databases, facilitating unfair competition and wholesale piracy, and in the most extreme cases, exposing the original database rights holder to market failure.
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From page 74... ...
The almost universal use of licensing, rather than sale, of online databases and other digital information, coupled with technological enforcement measures, on balance potentially provides much stronger protections to the licensers vis-a-vis their customers than they enjoyed prior to Feist and under the print media copyright regime (see Table 3.2 in Chapter 3~. While some of the current law providing protection to database rights holders remains uncertain in terms of scope of applicability, the trend in recent years has been to broaden, rather than narrow, applicable intellectual property protections.
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From page 75... ...
James Neal, director of the Milton S Eisenhower Library at Johns Hopkins University and president of the Association of Research Libraries, during the March 18, 1999, Hearing on H.R 354, the "Collections of Information Antipiracy Act," held by the Subcommittee on Courts and Intellectual Property of the Committee on the Judiciary of the U.S.
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From page 76... ...
The Intellectual Property Counsel to Senator Hatch, Edward Damich, moderated the negotiation process. 15 For a detailed discussion of the Senate negotiations and the legislative process associated with the database protection legislation in the U.S.
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From page 77... ...
A principal concern of the committee, therefore, is that the development of any new database protection measures aimed at protecting pnvate-sector investments take into account the need to promote access to and subsequent use of S&T data and databases not only by the not-for-profit sector, but by commercial producers of derivative databases as well. Of course, it is in the common interest of both database rights holders and users and of society generally to achieve a workable balance among the respective interests so that all legitimate rights remain reasonably protected.
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From page 78... ...
354 prohibited the "extraction or use" of a substantial part of a database if it results in "harm to the actual or potential market" for any product or service incorporating the database.2i A "potential market" includes any market the database rights holder "has current and demonstrable plans to exploit" or a market that is "commonly exploited by persons offering similar products or services." The Senate Discussion Draft narrowed the protection of actual markets to those markets commonly exploited by persons offering similar products.22 The Coalition Proposal took a different approach, prohibiting only the "duplication of another's database [and inclusion of those records in]
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From page 79... ...
The intent was to recognize that competitors who add value and generate socioeconomic benefits should not incur liability if they do not directly harm the market of the original database rights holder, i.e., if they do not compete unfairly. The committee believes that strong protection based on a broadly framed standard of harm test, such as the one proposed by H.R.
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From page 80... ...
Value-adding database producers that use multiple data sources to create new products, as is common in both the private and the public sector, are particularly penalized by a strong standard of harm test.29 Although the consequences would be difficult to measure, strong new rights for database rights holders would probably result in a broad loss of research opportunities.30 If, for example, potential users opted to engage in other professional activities rather than deal with more expensive and onerous restrictions on database use, the probability of subsequent discoveries, innovations, and advances in knowledge would decrease, not only because of the reduced number of users, but also because the remaining database users would be constrained in their activities. Downstream commercial providers who must pay license fees to the rights holders of sole-source databases can recover such fees only if they themselves charge more for access, costs that are passed down the chain of derivative products to all users, including investigators in not-for-profit institutions.
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From page 81... ...
Sherry (1997) , Statutory Protection for Databases: Economic & Public Policy Issues, research paper prepared under contract to Reed-Elsevier, Inc.
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From page 82... ...
Moreover, enhancing database protection would also serve as an incentive to both government agencies and not-for-profit organizations to privatize or commercialize their research databases. Such action would have the undesirable outcome of reducing the number of databases in the public domain and thus would have a chilling effect on the full and open data exchange and sharing ethos that benefits so many areas of scientific and engineering research.
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From page 83... ...
The standard of harm should be sufficiently clear to permit good-faith users to know when they are infringing on a database rights holder's rights and should not undermine the nation's capabilities for innovation or competition in the marketplace. Such a formulation would help prevent undue and inappropriate interference with scientific inquiry and with other traditional and customary public-interest uses of data, as well as promote legitimate and socially beneficial commercial competitive activities.
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From page 84... ...
database protection to meet the needs of the American economy....", p.
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From page 85... ...
However, the committee has been unable to find any rationale for the 15-year term and, based on market factors relevant to databases, questions that length of protection for noncopyrightable databases or "substantial portions thereof." The committee notes that the average high-activity life span of original data in an online commercial database is approximately 3 years.41 Consequently, most of the incentive for creating and distributing databases comes from the return on investment achieved in the first 3 years, when demand for and use of databases are highest. It is important to note, however, that there is a significant difference between how long databases have value and how long statutory protection for noncopyrightable databases should be accorded.
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From page 86... ...
The committee finds little justification for legislation that is supposed to be necessary to stimulate and protect new investment to apply to databases already created without the benefit of such protection. The Coalition Proposal traded off a much weaker standard of harm and scope of protection for an unlimited term of duration basically for as long as the database has some commercial value to the rights holder.
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From page 87... ...
Specifically, any such legislation should: · Require database rights holders to identify the date on which the database was created so that the user will know when it no longer enjoys statutory protection (of course, those databases that remain commercially valuable longer than the statutory period of protection can continue to be protected by other means, such as copyright, trade secret, contract, and technical and other measures) ; and · For databases that are updated continuously, or at periodic intervals, require database rights holders to identify with reasonable precision those substantial portions of the database that are and are not subject to protection.
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From page 88... ...
H.R. 354 and the Senate Discussion Draft initially permitted extraction or use of information for not-for-profit educational, scientific, or research purposes, as long as the use does not interfere with the database rights holder's "actual market."50 Under this provision, research that produces a product that potentially, or in fact, opens a new market not exploited by the database rights holder would not violate the law.
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From page 89... ...
Finally, the Coalition Proposal recognized the fairness of reasonable access charges for databases whose only purpose is for scientific research.58 However, PER. 354 and, to a lesser extent, the Senate Discussion Draft would represent a considerable risk for the conduct of research and education.
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From page 90... ...
The Coalition Proposal permitted research using existing databases unless the purpose of the researcher was direct competition with the database rights holder, an approach that fosters continuous discovery using databases.63 The provisions proposed in H.R. 354 and the Senate Discussion Draft also should be contrasted with the operation of fair use under the Copyright Act.
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From page 91... ...
. The Coalition Proposal, on the other hand, adopted a "misuse" provision, which would authorize courts to deny relief to a database rights holder if "permitted acts" of database use are "frustrated by contractual arrangements or technological measures" or if "access to information necessary to research" is prevented.70 As noted above, research and education produce externalities that confer benefits on society at large.
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From page 92... ...
The customary and traditional practices of the research and educational communities were formed under the copyright law milieu, which achieved a careful balance of the rights of rights holders and users over time. The balance of interests struck by the law in paper publishing environments has worked well, and an analogous balance has to be developed in electronic sharing environments, particularly for scientific and technical databases.
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From page 93... ...
Courts should be allowed to invalidate any non-bargained73 licensing terms that are shown to interfere unduly with otherwise legislatively permitted customary uses by not-for-profit entities. Additional steps need to be taken by the government and by the research, education, and other public-interest communities, however, in the implementation of a new database protection regime to help ensure that the traditional and customary rights of public-interest data users are not unduly compromised.
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From page 94... ...
2281, had any provision for review of the economic effects of the bill on competition, consumers, or public-interest users. In contrast, the Senate Discussion Draft did provide for the conduct of a "Study Regarding the Effect of the Act" by the General Accounting Office, in consultation with the Register of Copyrights and the Department of Justice, within 5 years of enactment and every 10 years thereafter.76 The issues for study that the Senate Discussion Draft would require are fully reproduced below, not only because they represent concerns regarding effects that might arise as a direct consequence of the enactment of this type of legislation, but also because they form the basis for a core set of questions that can be addressed independently by those studying the effects of the bill.
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From page 95... ...
such other matters necessary to accomplish the purpose of the report.77 95 This type of monitoring and review of the effects of database protection legislation should focus not only on national database activities, but on international ones as well, since the market for all online databases is inherently international, as are many S&T research activities. Although the committee believes that such periodic reviews would be important, particularly if they are not carried out prior to enactment of any new legislation, there are a number of other aspects to consider.
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From page 96... ...
H.R. 354 made it clear that the proposed legislation, and presumably federal copyright law, would preempt conflicting state laws.79 This means that state misappropriation laws could not be applied by a state or local agency in a claim against a commercial business or vice versa.
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From page 97... ...
Under the Coalition Proposal, prohibitions against duplication would not apply to "government databases."84 Here, however, "government database" was defined as being "a database (A) that has been collected or maintained by the United States of Amenca; or (B)
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From page 98... ...
The Senate Discussion Draft more closely paralleled H.R. 354 than it did the Coalition Proposal in its effect on government data collections.
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From page 99... ...
Since stronger statutory database protection is likely to enhance the potential for profit by commercial data distributors, it also is likely to encourage the licensing of government data dissemination functions, perhaps on a de facto exclusive basis and without appropriate safeguards, thus defeating the existing open access and use law and policy of the U.S. government.
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From page 100... ...
The areas addressed include promoting availability of government S&T data; maintaining nonexclusive rights in government-funded databases by not-for-profit institutions and their employees; organizing discussions of licensing terms for not-for-profit uses of commercial S&T databases; improving the understanding of complex economic aspects of S&T database activities; and promoting international access to S&T data. Although the committee believes that its recommended actions in these areas ought to be undertaken whether or not any new statutory database protection is enacted by Congress, all of these actions will take on an increased urgency and importance if relatively strong new proprietary rights in databases are established by federal statute.
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From page 101... ...
Scientific and technical data owned or controlled by the government should be made available for use by not-for-profit and commercial entities alike on a nonexclusive basis and should be disseminated to all users at no more than the marginal cost of reproduction and distribution, whenever possible. While the private sector's creation of derivative databases from government data should be encouraged, the source 93 See generally National Research Council (1995)
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From page 102... ...
Authorized Users may transmit downloaded copies of individual items to persons who are not Authorized Users for the purpose of scholarly communication, so long as the transmission is not done on a systematic basis. At the same time, the traditional user rights under the first sale doctrine are in danger of being significantly eroded by the Uniform Computer Information Transactions Act, which is currently being considered for enactment at the state level.
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From page 103... ...
It is already common practice in electronic publishing and one of its tremendously productive features to link electronic articles to the data sets upon which the research results depend. If legislation protecting databases is enacted, the current practice of requiring scientific authors to give up exclusive rights in their research articles on a take-it-or-leave-it basis could be extended to the data sets underlying the results reported in the research articles.
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From page 104... ...
, nor would it apply to state or local government databases or to databases generally. The requirement also would not automatically apply to databases created with only partial (e.g., less than half)
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From page 105... ...
legislation, as they already are in the European Union. In addition to promoting some mutual understanding regarding licensing terms, clarifying discussions might help prevent unnecessary conflicts and litigation.
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From page 106... ...
as possible, and to do that within an environment that encourages, rather than inhibits, the inquisitiveness and inventiveness of the user while encouraging the entrepreneurship of suppliers. It is in the common interest of both database rights holders and users and of society generally to achieve a workable balance among the respective interests so that all legitimate rights remain reasonably protected.
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From page 107... ...
Certainly, at a minimum, the questions raised in the E.U. Database Directive and in the Senate Discussion Draft, as well as any other questions that are ultimately identified in the course of the legislative process, should be the subject of more detailed study in advance of any legislatively mandated report on effects of increased protection.
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From page 108... ...
Database Directive and with possible adoption of restrictive database protection legislation in the United States and elsewhere, since the negotiated terms of those agreements can specify the terms under which databases related to the research in question can be accessed and used. As the world's largest producer and disseminator of S&T data, the U.S.
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From page 109... ...
Database Directive. RECOMMENDED APPROACH FOR THE NOT-FOR-PROFIT SCIENTIFIC AND TECHNICAL COMMUNITY Finally, there is the question of what the research and education community should do in the event that highly restrictive statutory protection of databases is enacted by Congress.
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From page 110... ...
Therefore, as its last recommendation, the committee urges that the notfor-profit S&T community continue to promote and adhere to the policy of full and open exchange of data at both the national and international levels.
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