Comment of American Library Association, et al.

Before
The Library of Congress, The United States Copyright Office
and
The Department of Commerce, National Telecommunications
and Information Administration
Washington, D.C.

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Inquiry Regarding Sections 109 and 117 )                     Docket No. 000522150-0150-01

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Comments of the Library Associations

We file these comments to the Copyright Office's Inquiry on behalf of five major library associations, the American Library Association, the American Association of Law Libraries, the Association of Research Libraries, the Medical Library Association, and the Special Libraries Association (the "Libraries"). These associations represent the interests of tens of thousands of libraries, librarians and institutions, as well as their public and private patrons.

Section 104 of the Digital Millennium Copyright Act ("DMCA") directs the Register of Copyrights and the Assistant Secretary for Communications and Information of the Department of Commerce to submit a report to the Congress by October 28, 2000, evaluating the effects of the amendments made by title 1 of the Act and the development of electronic commerce and associated technology on the operation of sections 109 and 117 of title 17, United States Code, and the relationship between existing and emerging technology and the operation of those sections.

The Libraries believe there are unsettling trends undermining the Constitutional and legislative balance between incentives to create works and the public access to ideas and content that require federal review and action. Consumers obtaining digital works are routinely required to assent to contract terms that require waiver of long-standing limitations on the exclusive copyright rights, including the first sale doctrine, fair use and preservation. While copyright policy supports a digital first sale doctrine, the current state of the law post-DMCA permits diminished use of the doctrine, impeding the free flow of information and libraries' ability to provide public access to digital works. The Copyright Office should use this inquiry as the platform from which to urge Congress to take meaningful steps to clarify the terms of a digital first sale doctrine to ensure that state laws and contractual terms that unduly restrict the rights of information users do not preempt federal copyright policy.

Introduction: The Role of the First Sale Doctrine In U.S. Copyright Law

The balancing of incentives to create and provide public access to ideas and content is fundamental to U.S. copyright policy. See, e.g. Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975). The Constitution empowers Congress to enact copyright legislation for the specific purpose of "promot(ing) 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." U.S. Const., art. I, § 8, cl. 8. Pursuant to that public purpose, the Copyright Act grants to authors the exclusive right to distribute copies of their work, 17 U.S.C. §106(3), but limits that right by distinguishing between ownership of a copyright (the bundle of exclusive rights granted an author) and ownership of a copy (the tangible material in which a work is fixed), 17 U.S.C. §202, and by extinguishing the copyright owner's distribution right upon the first sale of each copy, see 17 U.S.C. §109. Of course, no copyright exists in government works, nor in facts or data.

The limitation of the distribution right to the first sale, as codified in Section 109 of the 1976 Act, was intended to continue the first sale doctrine established by decisions under Section 27 of the 1909 Act.1 The treatment of the first sale doctrine by U.S. courts has consistently reflected the belief that the public benefit derived from the alienability of creative works outweighs the increased incentive to create that would stem from granting authors perpetual control over copies of a work. Burke & Van Heusen, Inc. v. Arrow Drug, 233 F. Supp. 881, 884 (E.D.Penn. 1964);² Blazon, Inc. v. Deluxe Game Corp., 268 F. Supp. 416, 434 (S.D.N.Y 1965) (quoting Nimmer, Copyright, §103.31 at 385 (1963) for the proposition that "[after the first sale], the policy favoring a copyright monopoly for authors gives way to the policy opposing restraints of trade and restraints on alienation."); See, e.g., C.M. Paula Co. v. Logan, 355 F. Supp. 189, 191 (N.D. Tex. 1973) (same). The balancing approach to the doctrine was recognized by the Supreme Court early this century. See Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908).³ The Libraries believe that recent developments surrounding distribution practices involving digital works undermine this constitutionally crafted balance.

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¹ See Staff of House Comm. on the Judiciary, 89 th Cong., 1 st Sess., Copyright Law Revision, Part

6, Supplementary Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law:

1965 Revision Bill 28-29 (Comm. Print 1965) (submitted by Register of Copyrights) reprinted in 4

Omnibus Copyright Legislative History (George S. Grossman ed., 1976) (clarifying that the distribution

right would not prevent an owner of a lawfully made copy from selling, lending, renting, giving, or

destroying the copy). See also Act of Mar. 4, 1909, ch. 320, §41, 35 Stat. 1075, 1084 (stating that "nothing

in [the Copyright Act] shall be deemed to forbid, prevent or restrict the transfer of any copy of a

copyrighted work the possession of which has been lawfully obtained."). The doctrine is said to have its

roots in the English common law rule against restraints on alienation of property. See, e.g., H.R. Rep. No.

98-987 at 2 (1984), reprinted in 1984 U.S.C.C.A.N. 2898, 2899.

² In Burke & Van Heusen, a copyright proprietor attempted to restrict use of records containing its

copyrighted musical compositions to promotional distribution in conjunction with shampoo sales. Id. at

884. The court held that the defendant's sale of the records independent of shampoo did not infringe the

plaintiff's vending right, because receiving proceeds from the initial sale of the records completed the

plaintiff's reward under the copyright statute. Id. at 882. Beyond that reward, the plaintiff enjoyed "no

further right of control over the use or disposition of the individual copies of the work. Id.

³ In Bobbs-Merrill, the plaintiff owned copyright in a book, copies of which were printed with the

following notice: "The price of this book at retail is one dollar net. No dealer is licensed to sell (the copies)

at a less price, and a sale at a less price will be treated as an infringement of the copyright." Id. at 341.

Notwithstanding the notice, the defendant sold the books at retail for eighty-nine cents. Id. at 342. The

Court rejected the plaintiff's copyright infringement claim, holding that the while the vending right protected plaintiff's multiplication and sale of his production, the right had been exhausted when the

plaintiff sold copies of the book "in quantities at a price satisfactory to it." Id. at 351.

America's libraries have long been among the nation's largest volume-purchasers of copyrighted works.4 Libraries and their staffs are also diligent law abiders. They understand and adhere to the balance that the Constitution and copyright law have struck between the rights of copyright owners and users. However, recent adoption of legislative changes in the DMCA has reinforced a view of the legal environment that makes sharing of certain digital works suspect. It must be stressed that from the Libraries' perspective, fair use, preservation and the first sale doctrine are as important in a digital environment as they are in the print world. Technological measures, augmented by the threat of criminal sanctions for circumventing those measures, permit publishers to control uses in new and unprecedented ways. Publishers can now block a lawful licensee's access to digital content by activating a control and device embedded into the code. While the law prohibits sale of devices designed to circumvent technological protections, and certain individual practices will be prohibited commencing October 28, 2000, the mechanisms may be activated without regard to whether the conduct at issue is infringing. License restrictions on what would ordinarily be fair use, permissible dissemination under the first sale doctrine or allowable preservation, may ultimately be enforced through these measures. Moreover, one patron's misuse may be used as the pretext for foreclosing access not just to the offending individual but to all authorized users, to the public's detriment. For example, one university recently had several services turned off by the

4 According to surveys published in 1998 by the National Center for Education Statistics (U.S. Department of Education), the 8,891 U.S. public library systems alone spent $789 million on library materials, including electronic formats, in 1995. The 3,303 U.S. academic libraries spent $1.3 billion on information resources in all formats in 1994. These libraries now spend well over $2 billion.