The NII intellectual property report

In July 1994 the Clinton administration’s Working Group on Intellectual Property Rights issued a preliminary draft report on Intellectual Property and the National Information Infrastructure (NH) [Z]. This column reflects the principal comments I made about the report in response to a call for public comments on it. If the ND is to achieve its potential as a channel for distribution of a wide range of creative works, says the report, authors and publishers of those works will need reasonable assurance their intellectual property rights will be respected. Digital networked environments pose particularly severe challenges for owners of intellectual property rights because digital networks make it so simple for members of the public to make multiple copies of those works and distribute them to whomever they choose at virtually no cost. Left unregulated, this activity would undermine the incentives of authors and publishers to invest in the creation and distribution of creative works; the first distribution of a digital copy to the public would enable those who receive it to set themselves up a~ alternative publishers of the work, enabling them to undercut the first publisher’s price because they need not recoup any development costs. On this point, the drafters of the report and I are in agreement. Where we principally disagree is about the wisdom of making certain changes to copyright law and about the report’s characterization of these proposed changes as “minor clarifications and changes necessary to modernize copyright law for digital networked environments.” The report recommends: 1) making digital transmission of a copy of a copyrighted work an act of copyright infringement; 2) abolishing the “first sale” rule for works distributed by digital transmission (this rule generally per-