Principal, Xamax Consultancy Pty Ltd, Canberra
Visiting Fellow, Department of Computer Science, Australian National University
& Gillian Dempsey
Department of Commerce, Australian National University
Revision of 19 April 1999 [Section 4 amendments]
© Xamax Consultancy Pty Ltd, 1998-99
This paper was prepared for initial presentation at the Australian EDUCAUSE'99 Conference, Sydney, 18-21 April 1999. Section 4 also appeared in the Australian Intellectual Property Law Bulletin 11, 8 (March 1999) 77-81
This document is at http://www.anu.edu.au/people/Roger.Clarke/EC/ETCU.html
Intellectual property laws have long existed to encourage the dissemination of literary, artistic and other categories of works. Until recent decades, such works were generally embodied in physical representations; but many are now originated in digital forms such as text, images, sound, video, static multi-media and interactive multi-media. Digital forms can be delivered on such media as CD-ROM and DVD, affording PC-users convenience, speed of access and easy incorporation into other documents by means of copy-and-paste functions.
Digital formats also lend themselves to transmission across networks very rapidly, and for transaction costs so low that they are barely measureable. Architectures and tools are being developed whereby rights in digital works can be traded electronically. The marriage of digital formats with digital networks offers enormous benefits for consumers of content, and for people and organisations that use existing content as raw material for new content.
For organisations that are dependent on revenue arising from the publishing of copyright objects, these developments also have substantial implications, which are potentially highly threatening to their current patterns of behaviour, and even to their very existence. Enormous impacts can also be readily anticipated on intermediaries, such as libraries, bookshops, teaching institutions and research institutions.
This paper catalogues the factors underlying the dramatic changes in the process, economics and political economy of trading in copyright works. Its purpose is to identify implications for society in general, and for universities in particular. It underlines the tension between the conservation of existing economic power and institutions, on the one hand, and the exploitation of social and economic opportunities created by new technologies.
Universities are highly active originators, owners, storers and users of works that are subject to copyright and other forms of intellectual property law. Valuable background to intellectual property in the context of universities is provided in AVCC (1995).
The form in which the origination, publication and diffusion of intellectual property occurs is rapidly changing from being predominantly physical to predominantly electronic. With that comes a substantial change in the ease, speed and cheapness with which people can discover, access and appropriate intellectual property. That in turn heralds a quite dramatic shift in the economics and politics of publishing. In the words of Barlow (1994), "Information Wants to Be Free".
Large organisations whose empires and profits depend on revenue from works, and whose revenues, empires and profits are seen to be threatened, are taking various steps to shore up their position. Universities are not only caught in the crossfire, but also have interests that are aligned with both sides of the debates: as producers, owners and potential exploiters of intellectual property, universities might like to see revenues sustained (and, under the current funding pressures, even increased); and as substantial purchasers, storers, disseminators and users of intellectual property, they are likely to desire that works continue to be accessible easily and for low cost.
AVCC (1995) was drafted in 1992-93, at a time when the Internet was not yet an effective electronic publishing medium. The purpose of this paper is to provide a readily accessible background to the issues arising from electronic trading in copyright objects. It commences with a brief introduction to intellectual property in general, but thereafter restricts its focus to copyright. It then reviews features of electronic trading in copyright objects. General implications of the changes are drawn, followed by implications specific to the context of universities.
This section commences with a brief overview of intellectual property as a whole, and then examines key aspects of copyright.
Property rights are most commonly thought of in the contexts of land and of goods. Acquiring freehold provides a person with a set of rights in relation to the particular area of land, which is referred to as 'realty'. Almost everything that is not land or attached to land is referred to as 'personal property' or 'personalty'. This is further divided into 'choses in possession' (tangible property such as a watch or a car) and 'choses in action' (intangible property such as shares and intellectual property rights). The final cluster of rights applies to leases, which are referred to as 'chattels real'.
Areas of land possess qualities that are not readily replicable, making each parcel of land scarce. Goods are not readily replicable, and even if a near-duplicate can be produced, the process is generally difficult and expensive, and it may be easy to identify. Hence theories of economics and law based on scarcity are conventional in relation to both land and goods.
During recent centuries, information has become increasingly recognised as being of value. Information, in its various forms, is very easily, cheaply and convincingly replicable, and hence baskets of rights have come to be associated with it that are very different from realty and property in choses in possession.
Intellectual property (IP) rights as recognised by contemporary, English-based legal systems largely arose from an innovation race between the English and the remainder of Europe. Letters Patent have existed since the time of Richard the Lionheart, although initially they were limited to gifts akin to the royal warrant on a soap product or the commission held by a Queen's Counsel. The incentive that such awards provided was recognised (at least tacitly) as a means of inspiring innovation for the benefit of the Crown. The promise of Letters Patent was used to entice skilled masters from Europe to England. Other nations also had related systems of patronage (such as the De Medici family bestowed upon Michaelangelo). England gained a significant advantage when Queen Anne enacted the first copyright statute in 1707, enabling the country to establish a firm foothold in the area of printing.
Letters patent of the old form still exist, but statute-based IP rights have steadily increased in number and sophistication since the Act of Anne. The categories of intellectual property recognised currently in Australia are:
Property rights provide a basis for wealth-acquisition. Powerful interests have advanced the argument that information, in its various forms, is very easily, cheaply and convincingly replicable; and hence existing monopoly rights should be given an increasing duration and breadth, and new rights should be created. These interests have successfully deflected legislators' attention from the fact that a government-gifted monopoly is still a monopoly, with all the disadvantages that a monopoly entails. Where once intellectual property laws existed at English law to ensure that its citizens were not disadvantaged by way of being deprived of innovations, the effect is now increasingly to deprive citizens of the opportunity to innovate.
In Australia, copyright is established by the Copyright Act 1968. Copyright applies to works of a literary, dramatic, musical, artistic, or cinematographic nature, and to what lawyers refer to as 'subject matters other than works': broadcasts and sound recordings. For reasons that would require some time to explain, computer programs are treated as literary works. Somewhat different rules apply to each category.
In addition to individual items, copyright can apply to a collection, a compendium, a collage, a collation, or a pastiche; and hence a particular object might be the subject of multiple, nested copyrights (e.g. a copyrighted set of papers may contain a separately copyrighted paper, which may contain a separately copyrighted image).
Copyright law confers on the owner the exclusive rights to reproduce the work, to publish it, to perform it in public, to broadcast it, to 'submit it to a diffusion service', and to adapt it. A draft Australian Government Bill would combine the existing broadcast and submission rights, add online transmission, and rename it as the 'right to communicate material to the public'.
Ownership may be 'assigned' (i.e. gifted or sold) to someone else. The owner may provide others with a licence to do specific things with the work. In particular, a licensee may be authorised (gratis, or for a fee) to make a designated number of copies, for a particular purpose, or to translate it into another nominated language, or to re-publish it in a collection. Ownership may also be intentionally or accidentally forfeited, which places the object 'in the public domain'.
Copyright infringement occurs when a qualitatively substantial part of a work is appropriated, i.e. reproduced, published or adapted, in the absence of a licence to do so. A breach of intellectual property rights is actionable in the courts. Generally, this involves a civil action; but the availability of the criminal law to assist property-owners has become much more prevalent in recent years.
The rights are subject to a number of qualifications. A copy only infringes if the amount copied is a 'substantial part' of the work, with substantiality depending more on qualitative factors than on quantity. Another qualification of especial significance is the 'fair use' or 'fair dealing' provision, whereby quotations or excerpts can be copied and re-published for the purpose of research, study or comment. A further qualification relates to reproduction and adaptation for the purposes of the physically and intellectually impaired.
The Copyright Act provides for compulsory licences whereby a few categories of organisations, in particular libraries, archives, museums, galleries and educational institutions, are permitted to reproduce copyright material, subject to equitable payment. There is of course ample scope for dispute about the meaning of a word like 'equitable'.
A copyright-object may be the subject of a covenant, which is a limitation with respect to the owner's rights. Arising from European law, an implied covenant referred to as the moral rights of the originator is becoming increasingly important. For example, an artist may create an image with a set of uses in mind. They may have a strong objection to that image being used in conjunction with, say, pornographic material; and in assigning the copyright-object to a new owner, they may expressly or impliedly constrain its use.
Two particular aspects of the underlying philosophy of copyright are of relevance to the analysis that follows:
An outline of copyright, with particular reference to the web context, is at Dempsey (1996).
In what seem now like simpler times, as recently as the early 1990s, most copyright objects were recorded on highly tangible things, such as books, journal issues, photographs, vinyl records, audio-tapes, microfilm, microfiche, video-tapes, cassettes, diskettes, CD-ROMs, games-cartridges, DVD, and Zip and Jazz cartridges. It was the expressions on the media that were protected, not the ideas underlying the expressions.
The primary manner in which one acquired the ability to see and use a work was to buy or rent such a tangible thing, or purchase admission to a location where the work was being reproduced. Examples include the purchase of a book and the viewing of a film. Extensions to copyright law were necessary to cope with broadcast media, access to which involved the selection of a channel of radio and, later, television. In general, the acquisition of a licence was unnecessary.
A secondary, but very important, manner in which a person could gain access was by going to a library which acquired and stored the particular thing that the person wanted, and either lent it, or made it available for inspection on the premises. In either case, a single instance of the tangible storage-medium could mostly only be used by one person at a time.
Most of these tangible storage-media could be copied in some manner that replicated the works contained in them. In most cases, replication involved infrastructure, effort and costs, and most such reproductions were accessible by only one user at a time. Commencing in about 1960, photocopiers applying the technique of xerography quickly became one of the most widespread of these reproduction technologies.
The technology of xerography was a watershed, because suddenly digital representations were the mainstream. A succession of technologies followed. They made it possible to express objects that had previously been conceived as words, letters, shapes, pictures and sounds in patterns that could be stored on digital media. Those patterns could later be recomposed into a form sufficiently similar to the original that the human eye, ear and mind were at least satisfied. In some cases (such as digital audio), the quality of digital formats quickly overtook that of their predecessor technologies. In a very short time, a great deal of copyrightable material has leapt from the physical to the electronic, or, as Negroponte (1995) preferred to put it, has migrated from atoms to bits.
The digitisation of essentially all categories of material that are the subject of copyright protections significantly lowered the costs involved in the publishing 'production-line' or 'value-chain'. At the same time, it greatly reduced the delays between the origination of material and its availability to users.
The digital formats were not only used within the production-chain, but also as the delivery format to the end-users. This was possible because of the low costs of consumer playback devices such as CD drives, and the explosion in the availability of PCs commencing in the late 1970s. This has been highly beneficial for users, providing convenience and speed of access.
The cheap reproduction that many of these digital technologies supported quickly proved to be a double-edged sword, however. In addition to lowering the costs of production for authorised publishers, it also aided reproduction by parties who were not acting within the terms of a licence issued by the copyright owner.
Objects expressed in digital form flow extremely quickly over digital networks, especially (although by no means exclusively) over the Internet. Networks comprise connections among nodes, which can be broadly classified into three types:
Server, client and router software already performs a range of functions that assist providers and accessors. As will be discussed shortly, it is capable of performing a great many more functions as well.
An important change in the effect of copyright law accompanied digitisation, and became even more apparent with the explosion of the Internet. The purchase of a book or tuning to a broadcast channel did not necessitate the acquisition of a copyright licence. The purchase or rental of digital media, on the other hand, generally did. An early and pervasive example was the need to copy a games-cartridge into a computer's memory in order to play the game.
Moreover, a workstation's mode of operation inherently involves the making of a succession of copies of the object. Rather than directly viewing a purchased physical object, the reader sees it on a screen. To achieve this, the workstation moves the transmitted object into its input-buffer (thereby, in copyright law, making a copy), moves it from there into its video-storage or VRAM (another copy), and then displays it on the screen (yet another copy). The operation of routers also involves the making of copies, as the object is transferred, piecemeal, from the node's input-buffer to its output-buffer.
The impact of digitisation combined with cheap consumer devices and networking has been dramatic. Within the space of a mere five years, students have come to expect that the answer to any question will be 'on the Internet', and are now surprised and even dismayed to find themselves directed to sources other than the web. The digitisation of copyright objects, and their transmission over networks, have enormously changed the contexts within which copyright objects exist, and the courts are struggling to understand and to apply copyright law to those new contexts.
This section outlines the patterns of transactions involving copyright objects. It commences by looking at the nature of the commercial exchange involved, then considers the transition from physical to electronic form, including aspects of the technological means whereby an effective trading scheme can be achieved. Several schemes are identified, variously of a competitive and of a standards-based, collaborative nature.
Trading comprises the sale-and-purchase of property (whether realty, personalty or intellectual property); together with, in the case of personalty, the transfer of a relevant real object (a chattel) and, in the case of IP, a virtual object. With copyright objects, the virtual object may be the ownership, transferred by assignment, or a licence.
There is a variety of commercial approaches to trading in copyright objects. These include:
Two additional forms have arisen during the last 30 years. Although they were first applied to software, they are readily applied to any other form of copyright object:
The settlement of debts arising in relation to the trading of copyright-objects can be performed before or after the transfer.
Pre-payment is appropriate where assignment of copyright occurs for a fixed fee, or a publisher pays a fixed amount for a licence to reproduce a given number of copies. In relatively stable markets, this can be an efficient way to do business; but in respect of objects for which the demand is highly unpredictable, it may be difficult for the parties to reach an agreement on a fixed price.
Post-payment is common in cases where the bargain is struck at a price per copy sold by a publisher, or per copy made by a licensee. This may arise in relation to assignments as well as to licences (e.g. a per-copy royalty paid to an author by a book-publisher).
The most obvious arrangements for copyright licensing would be for payment to be made at the time of each relevant action, or for each such action to be recorded, and the small debts accumulated into a periodic invoice. Unfortunately, this approach can be extremely costly to perform, and most schemes use arrangements that are less carefully accounted, but much less expensive.
With pre-electronic copyright objects, licences were either not needed, or were only needed by intermediaries such as publishers or libraries. The revenue flows needed to provide incentive to the owner and those in the production chain were achieved through the sale of a physical thing. Licences to reproduce works, or substantial parts of works, were negotiated between publishers and the representatives of the copyright-owners. Copyright collection agencies (e.g. CAL and Screenrights) assisted in the flow of funds from publishers to owners.
Monitoring was undertaken of the use and abuse of licences, and of reproduction without a licence, particularly in such areas as radio and television broadcasts. Considerable leakages occurred, as 'bootleg' publishers ignored copyright, and sought to avoid legal action by the owners.
The publication of software (necessarily in digital form, on diskettes and CD-ROMs) readily lent itself to the making of unauthorised copies. Large software publishers formed associations such as the Software Publishers Association (SPA), now the Software and Information Industry Association (SIIA), and mounted counter-attacks. In the process, they grossly exaggerated the losses of income they were suffering, but they gained the ear of governments. An increasingly substantial alternative movement gathered momentum. See Stallman (1994) and Open Source Software (1998).
Despite these concerns and tensions, the world continued to go around.
During the 1990s, digitisation matured beyond software, the Internet delivered digital networking for everyone, and electronic publishing took root. This is defined in Clarke (1997) as "electronic commerce in digital goods and services that are intended for consumption by the human senses". Electronic publishing dramatically increases the ease and speed, and reduces the cost, of replication and transmission of copyright objects. It is resulting in a quantum shift in patterns of trading that throws into serious doubt the appropriateness of existing copyright laws, and undermines the status quo. It is hardly surprising that the major players are strenuously resisting, using both fair means and foul.
Transmission technologies are already well-established. The key challenges in copyright trading lie in establishing effective payment mechanisms, in finding a way to express the rights that attach to a copyright-object, and in contriving to protect the object in accordance with those rights.
Electronic payment mechanisms are immature, but progress is being made. A taxonomy of schemes is provided in Clarke (1996b). The primary technique used at present is the transmission of credit-card details over the Internet, with settlement occurring through the private networks that were established for this precise purpose. This is expensive, especially under the current tariff whereby the fee is proportional to the value transferred. It is also highly subject to fraud, and will remain so while authorisations are delayed rather than being performed 'in real-time'. This payment mechanism also precludes anonymity, and makes pseudonymity difficult.
More or less anonymous electronic tokens are a technically proven approach, but have not yet become mainstream. Delays in the widespread implementation of Digicash's eCash have arisen from its owner entering into Chapter 11 bankruptcy protection in late 1998. Compaq/Digital's Millicent, which was designed expressly to support the large numbers of very small 'micro-payments' typical in the reproduction of digital copyright-objects, will not be market-ready before late 1999. A recent arrival that has promise is eCoin. In March 1999, the World Wide Web Consortium (W3C) issued a draft specification for embedding in a web page the information necessary to initiate a micropayment (W3C 1999).
As was discussed in section 2.2, copyright law confers on a copyright owner specific rights in respect of an object and reproductions of it, such as the exclusive rights to reproduce it, to publish it, to perform it in public, to broadcast it, to 'submit it to a diffusion service', and to adapt it.
One capability that a copyright trading scheme needs to do is enable an owner to assign the complete set of rights to another person. A more challenging requirement is that the owner needs to be able to license people to do particular things with an object. Stefik (1997), for example, distinguishes (in terms drawn from the U.S. copyright law):
A Digital Property Rights Language (to use Xerox's usefully descriptive term) must support the unambiguous expression of which of these rights make up the licence. For each right, some additional parameters may be needed, such as the number of times the object may be backed-up, or may be rendered in each format; or the amount or proportion of the object that may be extracted; or the length of time before a loan expires. If the licence is not pre-paid, the price needs to be expressed, and a mechanism created whereby payment may be made in order to exercise the rights under the licence.
A closely related concept is approach is so-called 'smart contracts', which "combine protocols with user interfaces to formalize and secure relationships over computer networks" (Szabo 1997). This appears to be being implemented by a movement called erights.
A number of technologies can be applied by copyright-owners to protect their copyright-objects against particular risks. These include the following:
It was mentioned earlier that software on servers and clients can be used to perform a variety of functions. It is feasible for software to be developed that provides protection of the copyright-owner's interests. In particular, the transmitted object can be contrived to be multi-partite, comprising not only the copyright-object, but also processes that protect the copyright-object. Examples of such active protections include:
It is stressed that most of these examples are currently only gleams in the eyes of publishers, rather than delivered technologies. Designs and prototypes exist, however. Those designs have costs and other disadvantages association with them, and (as with any security feature) a range of counter-measures is capable of being devised and implemented.
This section identifies some specific instances of trading models that have been proposed. They are of two kinds, the first group being largely driven by conventional, competitive innovation, and the second group more strongly oriented towards collaboration, with competition taking place within a standards-based framework.
Electronic schemes to support the trading of copyright objects may come into existence through conventional private sector energy and inventiveness. The original conception of hypertext in 1965, Ted Nelson's Xanadu, included the idea of quoting without copying, which he called transclusion (Nelson 1995). "[Transclusion] was the heart of Xanadu's most innovative commercial feature - a royalty and copyright scheme. Whenever an author wished to quote, he or she would use transclusion to "virtually include" the passage in his or her own document" (Wolf 1995).
Nelson has recently extracted the copyright elements from Xanadu and refers to them as 'transcopyright' (Nelson 1997). This is a contractual rather than a technological approach to solving copyright problems: "Nelson argues that electronic publishers should allow anybody to republish their materials, provided that republication takes place by means of a pointer to the original document or fragment. Just as in Nelson's imaginary Xanadu franchises, publishers of transcopyrighted documents would receive a payment every time one of their bytes was accessed" (Wolf 1995).
A technology leader in the publishing industry, Fuji Xerox, is endeavouring to implement a trading scheme. The approach is described by a researcher at the famed Palo Alto Research Center (PARC) in Stefik (1996, 1997).
An alternative approach is to work through an international standardisation process and thereby achieve a common framework and architecture within which competitive energies can be directed and coordinated.
A European initiative, Imprimatur, has produced a degree of consensus among participants (primarily from organisations within the publishing industry) as to the characteristics required of a rights trading framework.
The Imprimatur 'Business Model' is a purely textual description of a framework, and is therefore imprecise and incapable of being rigorously validated. An Australian project, Propagate, has developed a generally applicable model expressed in a formal modelling language. Its purpose is to stimulate an active electronic market in digital media. This implies a number of objectives, including:
A standards-based scheme of this nature offers a range of potential advantages, including consistency, critical mass, and reflection of the interests of all stakeholders rather than only the sponsors of the scheme.
A range of issues arises from the explosion of electronic publishing. The following matters are of direct relevance to the question of copyright trading. Some of them are also addressed in Clarke (1998).
The move to electronic publishing has resulted in an accidental extension to the rights that copyright owners enjoy. There has never been any right to preclude people from accessing copyright-objects, whether to read them, listen to them, look at them, or watch them.
The nature of electronic technologies is such, however, that the act of accessing a digital copyright-object in a great many cases involves the making of a copy, e.g. in the workstation's RAM and/or VRAM. Because of the wording of copyright law, this intermediate step generally represents a breach of an copyright, and requires a licence. This simple accident has resulted in copyright-owners gaining much more power than they already had, which they are using in their negotiations with and lobbying of governments for yet more protections.
According to Stefik (1997), Xerox's scheme addressed this by proposing a distinction between a 'right to copy' and a 'right to transfer'. A draft Australian Government Bill would enable reproduction of a program "incidental to the normal back-up copying of business data for security purposes" (cl. 43A(1A), and "reasonable or necessary for the normal use of the program" (cl.43B); and would permit "temporary reproduction of [any] work or adaptation as part of the technical process of making a communication, or in the course of looking at material on a computer screen" (cl.43C).
Even prior to the emergence of electronic publishing, the outdatedness of copyright law was becoming very apparent. The following are examples of its misfit to the modern world:
These examples are typical, rather than being mere exceptions; and hence serious doubt exists about the rationality of conventional intellectual property laws in the context of digital copyright-objects, networking and interactive media.
A populist expression of doubt about the law's applicability is at Negroponte (1995, pp. 58-61). See also Samuelson (1996a).
It is argued by some that copyright-owners perceive the Internet in general, and the web in particular, as creating new risks of their materials being appropriated without payment, both by individuals for their own use, and by re-publishers. If the controls that have hitherto kept the lid on widespread appropriation of copyright-objects were to cease to be effective, so the argument goes, the haemorrhage of revenue would remove the economic incentive to originate copyright-objects and to publish them.
A counter-argument suggests that an alternative economics is already evident, whereby revenue can be gained instead from related or adjacent activities. The analyses are based on information economics (Lamberton 1971, 1996), and include Dyson (1995), Romer (with a populist description in Kelly 1996), and Dempsey (1998). Aspects are discussed at Clarke (1994), Clarke (1998) and Clarke (1999).
According to this new economics, copyright law needs to accommodate a culture of appropriation, re-use and interactivity; and hence needs to reflect economic models that resemble 'barn-raising' (Rheingold 1994), a 'bazaar' (Raymond 1998), or a 'honey-pot' (Clarke 1998). There is a brisk transition in train from industrial-era value-chain thinking towards an interdependent, looped, shared future, in which what we have hitherto called plagiarism is a virtue rather than a vice.
The maturation path model of electronic publishing was described in Clarke (1997), and at Clarke (1998). This argues that substantial changes are now occurring in an industry whose structure has remained recognisable throughout the 500 years since Gutenberg.
A hallmark of the change is its impact on intermediaries. In a process referred to as 'disintermediation', existing middleman roles are changed, dramatically reduced, or even cease to be needed. This is because the functions they have performed cease to be of importance, or can be readily performed by the originator or the customer. In particular, publishers can use networks to reach directly out to readers, disintermediating retailers and libraries. Indeed, originators can disintermediate publishers. An example in relation to textual materials is that this article is gaining greater exposure on the authors' web-site than in the (hard-copy and CD-ROM) conference proceedings.
The position is even more fluid in the case of music. The CD-quality MP3 compression standard is directly threatening the bloated music industry value-chain (Robertson 1997). The explosion of MP3 has quickly been followed by a counter-attack, in the form of a proprietary technique, Global Music's MP4, which claims to provide protection for the rights of the publisher. It was launched in January 1999, and has been enthusiastically adopted by an Australian musician-publisher, James Morrison (AFR, 15 January 1999).
Meanwhile, the the Recording Industry Association of America (RIAA), has launched a Secure Digital Music Initiative (SDMI), and issued a functional requirements statement for the technology it seeks, to protect its members' interests.
In some cases, direct relationships between originator and re-user, or originator and consumer, may be the outcome. In many circumstances, however, there is scope for a process of 're-intermediation', with existing or new kinds of middlemen performing new functions. Search-engines play such a role; and successive attempts have been made (and, given their failure to date, more attempts will be made in the near future) to exploit these roles. A recent attempt, due to fade shortly, was 'portals'.
Considerable tension therefore exists between the traditional and alternative economics of electronic publishing. In time-honoured tradition, powerful interests that are well-served by rejection of the alternative have been winning the initial political battles.
One of the main weapons in the armoury of powerful organisations is the ability to arrange for favourable action in legislatures. On the international stage, business lobbies such as ITAA (1998) were successful in having the World Intellectual Property Organization negotiate a new Copyright Treaty WIPO (1996). This appears to have entered into force sometime in late 1997 or early 1998, by virtue of more than 30 countries acceding to it within the 12 month deadline to 31 December 1997 (although at 6 March 1999, the relevant document showed the Treaty as being 'not yet in force'). Australia was not shown as being among the signatories, but has drafted a Bill which would be compliant with the Treaty's provisions.
Article 5 of the Treaty requires countries to extend copyright to "compilations of data or other material, in any form, which by reason of the selection or arrangement of their contents constitute intellectual creations". This has been subjected to severe criticism (e.g. Samuelson 1996a, 1996b).
Article 11 of the Treaty requires countries to "provide adequate legal protection and effective legal remedies" against "the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights [under copyright law]". Article 12 requires similar actions in relation to the removal or alteration of electronic rights management information. The formulation is so open that countries are being invited to criminalise hitherto unregulated actions, which in some cases are quite vital aspects of a free society.
Within the U.S., the large publishers have lobbied successfully for legislation implementing Articles 11 and 12 of the WIPO Treaty. The U.S. Digital Millenium Copyright Act 1998 creates a crime of 'circumvention', and is expressed so widely that many otherwise legal, and in any case reasonable, activities would be criminalised (Garfinkel 1998).
In Australia, a draft Government Bill, the Copyright Amendment (Digital Agenda) Bill 1999 proposes to implement much the same provisions.
The major publishing interests on whose behalf the WIPO treaty was prepared would appear to be winning their battle. They have arranged for activities that offend large copyright-ownership interests to be dealt with by the criminal courts (at public cost) rather than the civil courts (at their own cost). And they have been able to significantly extend the scope of copyright, and hence protect their revenues, profits and empires.
A further manoeuvre whereby copyright-objects can be protected against abuse is to rely less on copyright law and more on contractual arrangements supplemented by tight technological controls.
For example, a publisher could combine:
This would have the effect of restricting not only reproduction outside the terms of the copyright licence, but also access to the object.
Such arrangements already exist in embryonic form, such as expensive hard-copy reports that are sold on the express condition that they cannot be lent to any other person, and databases that are remotely accessible by subscription.
Some scenarios have significant implications for the freedom of information. The large publishers would have us believe that the incentive for originating and publishing is at risk. Proponents of public access to information, on the other hand, perceive there to be far greater risks for society if large corporations gain the enhanced copyright protections that they seek, use their monopoly power to impose contractual rather than copyright-based relationships, and/or apply technology in order to monitor and enforce.
The impacts of the complex amendments to the fair use provisions proposed in the draft Copyright Amendment (Digital Agenda) Bill 1999 are particularly difficult to predict. It is feasible that the combination of these measures could represent the death of the 'fair use' provisions that have served society so well.
Copyright legislation includes the notion of statutory licences. The purpose is ostensibly to ensure that users such as educational and research organisations have access to copyright-objects. The provisions do not necessarily achieve their aim, however, because the licences require equitable recompense to the copyright-owner and this has resulted in both practical and strategic barriers to copying. An example of a practical constraint is that accounting for the vast amount of photocopying that is undertaken on university campuses would be a huge and highly expensive undertaking. As a result, payments by Australian universities are based on less expensive, but nonetheless onerous, sampling arrangements.
An even more serious barrier arises in the case of even accessing, let alone printing from, digital versions of copyright-objects. This would occur if, for example, a university library established an 'electronic reserve' of materials frequently accessed by students. In Australia, the establishment of this vital service has been stymied for years now. Universities have a statutory licence under the Copyright Act, and could establish digital collections of copyright-objects, irrespective of who they are owned by, and allow students and staff to make digital and printed copies from those collections. But the Act makes the licence subject to an equitable payment to the copyright-owner.
Universities and the representative of copyright-owners (CAL) have been unable to agree on a tariff. The AVCC and CAL made a joint application to the statutory arbiter, the Copyright Tribunal. On 2 February 1999, however, it failed to exercise its power to rule on the matter, on the grounds that it did not have enough factual information to decide the issue (the complex judgement addressed a number of matters). The matter has now moved on to the Federal Court. University administrators have been exceedingly cautious, and have not even implemented limited pilots, for fear of impracticably high rates being retrospectively imposed. This impasse represents a grave threat to the performance of the nation in the information era.
There are many different categories of users of copyright-objects, who have differential needs:
The exercise of power that the copyright-owner gains from technological innovations and legislative amendments represents a very substantial negative effect on equitable public access to information. This is further discussed at (Clarke 1998).
On the other hand, it is conceivable that technological features could be developed that overcome this problem. For example, Stefik (1997) raises the possibility of a digital object being lent by a (digital) library, and becoming unusable when the loan-time expires. This of course expressly holds back the improvements that could be attained through modern information technology; but at least it would sustain the present position.
Identification is the association of data with a particular entity, such as a natural person or a corporation. An identified transaction is one in which the identities of the parties to it are known. The degree of assurance that the identification is correct depends on authentication. This typically involves the acquisition of additional items of information about the entity or its behaviour. An anonymous transaction, on the other hand, is one in which the data cannot be associated with a particular entity, either from the data itself, or by combining the transaction with other data. An intermediate condition exists, a pseudonymous transaction. In this case, the data cannot, in the normal course of events, be associated with a particular entity. The data may, however, be indirectly associated with the entity, if particular procedures are followed, e.g. the issuing of a search warrant authorising access to an otherwise closed index. See Clarke (1996).
Historically, a great deal of access to published works has been anonymous, in the form of purchase of books, access to books in libraries and viewing of films in theatres; or pseudonymous, e.g. the borrowing of books from libraries, or the hiring of a video. A relatively small proportion of access has been associated with an authenticated identity; and that has generally been where the material was being adapted or incorporated into another work.
This lack of identification is very important, because it sustains an environment in which information is generally accessible without fear of recriminations from authority-roles such as employers, competitors, teachers, parents and powerful vested interests. Any shift from copyright towards contract as the primary basis risks bringing with it a switch from predominantly anonymous to predominantly identified transactions; and with that would come a serious 'chilling effect' on information availability, and a direct threat to open society and democracy.
Universities have interests in all facets of several kinds of intellectual property, especially patent and copyright; and establishing a coherent policy position is inevitably challenging. This section of the paper examines in succession each of the following facets:
Attention is drawn to AVCC (1995), as a source of information on university ownership of intellectual property in general and copyright in particular, prepared in the pre-electronic world of just a few years ago.
Copyright comes into existence through the performance of some act or acts by one or more individuals. The circumstances of these acts determines whether there is any copyright, and to whom it belongs. This section considers that question. It addresses only copyright, because other forms of intellectual property, and particularly patent, are sufficiently different that they require separate treatment.
Under s.35(6) of the Copyright Act, property in the work of a person employed in a contract of service, which is produced as part of that service, belongs to their employer. A support staff employee working in an administrative or operational area is very probably supervised, and hence under such a contract of service (although the facts of the specific case would be critical to the interpretation of the law). The position relating to technical support staff, and especially research assistants, is far less clear.
As regards the primary producers of new copyright-objects, namely academic staff, it appears unlikely that they are employed in contracts of service. Australia has no binding authority on the matter. British precedents suggest, however, that academics are employed in a 'contract for services', meaning that they are independent contractors. The Privy Council held this because they felt that academics were not sufficiently subject to 'constant supervision and direction' in their work. If the same argument held in Australia, then the property, on creation, belongs to the academic originator(s).
Universities have commonly addressed IP ownership issues by seeking to incorporate an 'intellectual property policy' into employment contracts. Some of these policies suffer deficiencies, such as being vague, riddled with exceptions, not widely respected, and/or seldom invoked. Some are subject to change without notice, or, even less convincingly, contain phrases such as "at the discretion of the Vice Chancellor". The difficulty with such pronouncements is that, in general, the terms of a contract cannot be unilaterally varied subsequent to its formation. There is only limited consistency among the policies of different universities, as would have been likely to emerge had universities taken advantage of AVCC (1995) and/or the relevant associations as a means of addressing common problems.
In short, it is probable that universities are not the initial copyright owners in objects that are created by academics, and it is possible that they are not the initial copyright owners in respect of objects created by some others among their staff-members. Moreover, if they wish to exercise ownership of objects created by their academic staff, they need to ensure that those staff assign them. An assignment must be explicit, and in writing.
A further challenge to intellectual property policies arises in the case of research undertaken under the various forms of collaborative work, including among staff-members from different institutions, and especially externally-funded and industry-linked work. Although online trading does not create such problems, it certainly exacerbates them.
Historically, individual academics earn revenue from the sale of text-books (in the preponderance of instances to a very modest extent only, and in most cases at the cost of assigning the copyright to the publisher). In all other cases (such as learned monographs, journal articles, case studies and working papers), such profits as may accrue almost always benefit entities other than the academic originator and the university that employs them.
In an era in which direct, governmental funding has been substantially reduced, universities as a whole, organisational units within universities, and individual staff-members, are all likely to be attracted to the idea of exploiting their copyright in at least some categories of objects. This section considers whether copyright-owners are in a position to do so.
The first requirement is that the ownership be clear (which, as discussed in the preceding section, it generally is not). The second is that the intention to require payment, for at least some kinds of assignments and licences, be communicated to the people likely to seek to use or abuse the copyright. Thirdly, a process needs to be in place whereby a person wishing to pay for a licence can readily establish how to do so. An example of how this can be done is provided by the copyright notice on this document.
In acquiring assignments from staff-members, and in making assignments of, and granting licences to, its own copyright-objects, a university must act through agents, who, ultimately, must be natural persons. Appointment of agents may need to be done formally by way of statute or rule of the relevant council.
A further consideration is that a university needs to appreciate the responsibilities that come with the publication of a copyright-object. Should it infringe some law (such as confidence, negligent misstatement, contempt of court, defamation or censorship), then the university is liable. Moreover, in most cases, the university is likely to be liable, irrespective of who the copyright-owner might be. These matters are addressed in Clarke (1996) and at Clarke (1998).
A university stores a substantial volume of copyright-objects. This function has been traditionally performed by libraries, but they have been joined by other organisational units offering electronic archives of documentary materials and software. A primary purpose in many cases is the assurance of reasonable service performance, by applying such techniques as networking locally-mounted CD-ROMs, mirroring and caching.
In relation to copyright-objects owned by the university and its employees and contractors (including academics), it is important that the objects carry appropriate rights management information. In respect of these copyright-objects, the university may need to take action to prevent, detect and report unauthorised uses. In respect of copyright-objects that are owned by others, universities may discover a need to be particularly assiduous, in order to avoid civil and even criminal liabilities.
In addition, a university acts as a facilitator of access to copyright objects stored elsewhere. In the electronic context, this involves navigation and search aids, and entry points, specialised by discipline, by topic and/or by educational level of user. This function would appear to be primarily performed by libraries, in conjunction with relevant academic staff; but it may be performed by other organisational units, and by individuals (including staff-members, associates such as visitors, postgraduate students, and undergraduate students).
Where the university enables access under a licence, it is likely to have a legal responsibility to effect access restrictions to ensure only appropriate persons can display and/or print the materials. In addition to authenticating users, the university also needs to act as a buffer, in effect performing access pseudonymisation, such that the copyright-owner does not become aware of the identities of the individuals who access the material.
There is an increasing need to provide assurance against infringements of the copyright of other parties. It is important that universities appreciate that, even if they do not hold the copyright, they can be found to have been complicit in a breach of copyright. Plagiarism has hitherto been perceived mainly in the context of ethics; but in a litigious world, with copyright laws being exploited as a vehicle for sustaining large and powerful organisations, it looms as a significant economic factor. Universities appear likely to need to prevent, detect and report unauthorised usages of other people's copyright-objects.
To protect themselves, universities need to ensure that staff are provided with training to recognise where there is a need to acquire a licence. Moreover, they need to recognise the kind of licence required. The majority of licences may be simply to reproduce or `copy' the work (whether this be downloading from the web or photocopying). A common example in the context of business and commerce schools is the copying of Harvard Business School case-study materials.
Where a staff member wishes to make changes to a work, however, the university needs to acquire a licence to adapt it. A common example is diagrams (which, according to the dictum 'a picture is worth a thousand words' is very likely to be itself a 'substantial part' of a work), where the university employee or contractor amends the diagram, and addresses the ethical issues involved by stating the revised diagram to be 'after <citation>'.
The matter is further complicated by the relatively recent emergence of `moral rights'. Even adaptations that are permitted under a licence are implicitly required to be tasteful to the originator of the copyright. Because matters of taste are relative, carefully worded contracts are desirable.
A further problem for universities is that staff are typically mobile across the university sector, and licences are often geographically limited. A staff member who, for example, acquires a licence in Canberra might not be authorised to exercise the resulting rights in Queensland. This problem could be somewhat mitigated if uniform intellectual property policy and licensing arrangements were implemented throughout Australian universities; but the international problem would remain.
The spectre exists that merely accessing copyright-objects might come to require a licence or contract, and perhaps an associated payment. This could extend further to requiring the provision of identity in order to be permitted to acquire the licence.
Universities as copyright-owners might welcome the significantly enhanced copyright administration being sought by powerful copyright-owners, as a source of assured funding. As information-using organisations, on the other hand, they would abhor it, because it represents a negation of the concept of freedom of access to information, which is fundamental to their existence and functions.
Greater care may be needed in the future to ensure the invocation of 'fair dealing' provisions, the avoidance of reproducing a 'substantial part' of a work, the use of rental copies rather than the making of copies, and the exercise of rights under compulsory licences. Finally, some copyright collection agencies are demanding large sums of money in return for reproduction rights. Universities may need to be equally aggressive in asserting their rights under compulsory licenses.
Universities are both producers and users of information. They are therefore on both sides of the battles over whether copyright will survive the explosive growth in the population of enthusiatic Internet users, and whether freedom of access to information will survive the onslaught of constrictive laws demanded, and constrictive technologies applied, by powerful, information-rich organisations.
Samuelson (1996b) concluded that "The biggest challenge that cyberspace poses for authors and publishers is not how to strengthen copyright law, but how to reinvent their business models so that they figure out how to provide content that will interest potential customers on terms that these consumers find acceptable ... In this new environment, copyright law will likely play a useful, if somewhat minor, role".
There are, however, some very large players whose rearguard actions are exploiting not only existing copyright law, but also their power to have laws extended. Universities should be at least aware of the battle, and arguably should be protagonists.
AVCC (1995) 'Ownership of Intellectual Property in Universities' Australian Vice-Chancellor's Committee, December 1995, at http://www.avcc.edu.au/avcc/pubs/ooipiu.htm
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