Overall, we need to look at the purposes the new media fill and the interests served by compensation and protection. In doing so, we should not be bound by the precedents of copyright and patent law, even though the social and economic objectives underlying these laws may guide us.

The ascendancy of the computer parallels the ascendancy of knowledge workers in society. Today, over half of all working Americans are directly involved in the processing of information. The proportion increases each year. Knowledge workers may be likened to farmers and factory workers in years past. Farmers were aided by harvesting machines, manufacturing workers by heavy industrial machine. Knowledge workers are being aided by the computer.

The computer was fully inducted into society in 1982 when Time Magazine named it Man of the Year. The computer is an engine of change. It is not itself a medium of communication. Rather, it provides an environment for other media. Through electronic publishing, for example, once very different communication media are now merging and emerging in new forms.

Newspapers, magazines, and books once provided almost all of the information available to the general public. Today, they produce less than 18 percent. Americans now consume over four times as many works electronically as they receive in print. Even newspaper and magazine copy is composed, stored transmitted, and printed electronically.

We are at a turning point in the move to computer-communications. As in 17th and 18th century England, the legal precedents established in coming years are likely to become norms governing information distribution in future decades. This poses an obligation and a challenge. The present generation must think clearly, judiciously, and boldly about the issues and opportunities of the new electronic environment. Wise and innovative legislation is needed for the computer industry to maintain its innovative nature and for democratic societies to preserve their independence and freedoms.*

[Applause.]

Mr. KEPLINGER. Thank you, Dr. Greenberger, for your stimulating comments. At 9:00 we'll resume our program again in the ampitheater with the beginning of our panel discussion to explore the exciting and important policy issues that arise from the technology that you heard discussed today.

Again, let's all say thanks very much to the people who provided very kindly our demonstrations today and Haines Gaffner who provided us with overview for the sessions today.

A SERIES OF PANEL DISCUSSIONS ON THE FUTURE IMPACT OF TECHNOLOGY ON
INTELLECTUAL PROPERTY

Panel Discussion I: Information Processing in the Future-Joe B. Wyatt, Chancellor, Vanderbilt University; Frederick Weingarten, Office of Technology Assessment; Christopher Burns, Executive Officer, Christopher Burns, Inc.; E.C. McIrvine, Manager of Advanced Planning, XEROX Corp.; and Donald Devine, Chief Executive Officer, Trilog Inc.

Panel Discussion II: Publishing, Libraries, and Education-Toni Carbo Bearman, Executive Director, National Commission on Libraries and Information Science; Hon. Stephen Breyer, Judge, U.S. Court of Appeals for the First Circuit; Karen Hunter, Planning Officer, Elsevier Science Publishers, B.U.; Joseph P. Lash, author; Jay Luker, Director of Libraries, Massachusetts Institute of Technology; and Warren Spurlin, Deputy Superintendent, Sarasota County, Florida.

Panel Discussion III: Mass Media Distribution: The Future-Harvey Zuckman, Director, Communications Law Institute, Catholic University School of Law; Bryan L. Burns, Director of Broadcasting, Office of the Commissioner of Baseball; Mel Harris,

*Many of the ideas in this talk are based on the writings and thinking of the late Ithiel de Sola Pool. See, especially, Pool's Technologies of Freedom, The Belknap Press of Harvard University Press, Cambridge, Massachusetts, 1983; also, Pool's posthumous paper on electronic copyright in Martin Greenberger, ed., Electronic Publishing Plus: Media for a Technological Future, Knowledge Industry Publications, Incorporated, 1985.

President, Paramount Video; Gustave M. Hauser, Chairman, Hauser Communications; William Lilley, III, Vice President, Corporate Affairs, CBS, Inc.; and Clyde Washburn, Chief Scientist, Earth Terminals, Inc.

Panel Discussion IV: Administration of Rights in Copyrighted Works in the New Technologies-Paul Goldstein, Stanford University School of Law; Thomas C. Brennan, Chairman, Copyright Royalty Tribunal; Harlan Cleveland, Director, Hubert H. Humphrey Institute of Public Affairs, University of Minnesota; Alexander Hoffman, Senior Vice-President, Doubleday & Co.; John Kernochan, Columbia University School of Law; Paul Weiss, Rifkind, Wharton & Garrison, and George Willoughby, Vice President, King Broadcasting.

Rapporteur's Summation-Paul Goldstein.

Dinner speech-"Trends, Development, and Projections," Frederick Pohl, writer. TRANSCRIPT OF PROCEEDINGS

INFORMATION PROCESSING IN THE FUTURE

Mr. GOLDSTEIN. Good morning, everybody. If we can be seated, we have a very full program today, and the sooner we can begin, the more knowledge we can all gain from the very illustrious group of panelists that we have.

Yesterday, we all had the opportunity to look over the various types of technological devices that are more and more becoming a part of our lives. We then built upon those technical demonstrations with the stimulating presentation last night by Professor Greenberger. And now, we continue that process with four panel discussions focusing on these various issues.

The first panel concerns information processing in the future, and I have the pleasure to introduce our moderator.

Joe Wyatt presently is the Chancellor of Vanderbilt University. Before joining Vanderbilt, he was Vice President of Harvard University and is the co-author of Financial Planning Models for Colleges and Universities. Finally, he also is a member of the Advisory Committee on Information Sciences and Technology of the National Science Foundation. And I think we're all honored to have Joe join us and I'm going to turn the podium over to him now.

Mr. WYATT. Good morning. I will take little of your time except to introduce the panelists very briefly, tell you who they are. I'll introduce each one individually before they speak. Our topic is Information Processing in the Future, certainly a broad and deep topic. Yesterday, we gained some perspective on the topic generally, and we each had an opportunity to gain some personal experience at the demonstrations, a remarkable experience indeed.

The view of the future that will be taken by the panelists is each from his own perspective around the design, development, application, ownership of computer communications hardware and software and, of course, the processing of information. This is an area that has had a brief, robust, and rather remarkable history, and each of these gentlemen has a view on it that I think you will find most valuable.

The panelists are Christopher Burns, Executive Officer of Christopher Burns, Incorporated; Donald Devine, Chief Executive Officer of Trilog Incorporated; Ted McIrvine, Manager of Research and Development Planning in Xerox Corporation; and Frederick Weingarten, Program Manager of the Communication Information Technology Program at the Office of Technology Assessment. We will have each of the panelists speak for about ten minutes, and after that we will have a discussion, entertaining questions from you and from the panelists.

Our first speaker on this panel is Rick Weingarten. He is now Manager of the Communication and Information Technologies Program at the Office of Technology Assessment. Before that, he was Program Director in the Computer Sciences Section of the National Science Foundation, Director of Computing Services for The Claremont Colleges, and has worked at the Lawrence Radiation Laboratory in the Jet Propulsion Laboratory. He has a bachelor of Science degree in engineering from Cal Tech and a Ph.D. in mathematics from Oregon State.

Rick?

Mr. WEINGARTEN. Thank you, Joe. I want to first thank the Copyright Office for inviting me to speak here. I must say that as a staff member of a Congressional agency, I feel it more appropriate that I sit out there and learn from this meeting tha sit up here and play the role of expert. I assume that the reason I've been asked to talk is that the Office of Technology Assessment has been asked by both the House and Senate Judiciary Committees to do a study of the impacts of information technology on intellectual property law. We are currently formulating a proposal

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that we expect to go to our Technology Assessment Board, of which Senator Mathias is a distinguished member, in about a month.

Now, at that stage of the process, we're not worrying about answers. We're not even thinking about answers. What we're worrying about are the questions. How does one think about the relationship between information technology and intellectual property law? The linkage is not direct. Copyright law, patent law, are not technology laws as such. They deal with something different; they deal with something abstract, intangible.

At the same time, it's very clear that technology is a major force raising critical issues for these committees.

So I would like to spend my time talking a bit about the question stage, exploring how we think about the relationship of technology to intellectual property protection. The first point I'd like to make is that somewhere in between the technology that you heard about yesterday and will hear more about today and explored in the exhibits, and the law and the policy issues that we're grapping with, is an intermediate step. There are a number of institutions, market organizations, and cultural values, that affect the way the technology is used, which in turn affects the kinds of stresses that are placed on the system of intellectual property protection.

Let me go back a little bit into history to illustrate that. Currently, as you heard last night at the banquet speech, the protection of software is of major concern to the software industry. Well, 30 years ago, when computers were first entering the marketplace, software was free. IBM and the other computer manufacturers gave software away if you bought their machine. Users, faced with these complex, new, incomprehensible devices, were left on their own to develop the application systems that would make the computers do the work they wanted them to do. And, in response, a cultural social value of sharing, or cooperative effort, arose. In fact, the IBM users group was called "Share." Programmers from computer centers would get together, exchange code, and exchange tips and ideas on how to develop the software packages that were needed.

In the 70s, two key events occurred to change that picture. In early 1970s, the Justice Department told IBM that bundling the software together with the hardware was in violation of antitrust, so the "unbundling" decision that took place in the early 1970s separated software out as a commodity that was sold by IBM or by any other manufacturers along with the hardware.

The second event took place in the 70s and early 80s. This was the explosion of the micro-computer market. Instead of a market of a few thousand, we had several million computers out there. And most of those computers now use software that is purchased from retail stores or mail order or whatever.

Suddenly, there's an entirely different process of exchanging computer software in our society, and it's that new process that creates the demands for protections of that as intellectual property, and I would submit that it's the conflict between this new marketplace and a deeply held tradition of sharing in the programming and computer community that's causing some of the problem that we have labelled "piracy" recently.

But this is also an example of how it's not the software technology that creates intellectual property problems, its the way that technology is used and brought into the marketplace.

It seems to me that there are five questions we ought to ask about any technology, five characteristics that we need to identify in order to understand how it's affecting intellectual property. 1) How will it affect the creation of information products, 2) how does it affect the marketing of information products, 3) how does it affect the distribution and dissemination of those products, 4) how does it affect the use, and finally, 5) how does it affect access-the public's access to information. I don't think there's anything magical about those five categories, but I'll throw them out as something to at least think about.

Let me give you examples of each of those five categories. In the creation of software, software engineers are working as hard as they can to find tools that can be used to shorten the step between the conceptualization of a piece of software and its realization in a program. Now, artifical intelligence experts tell us that within a decade they'll have what they call "expert systems," which will provide intelligent help, guidance, from the computer to the programmer or to the person trying to develop code to produce more sophisticated information products. That may have strong effects on what the producers of these programs need to have protected.

If it's a simple and very economic step to move from the original concept to a new program, rather than the laborious, time-consuming task it is now, then protecting the end product may not protect much. There may be increasing pressure to protect the idea rather than the product, which raises enormous ramifications.

In the area of how technology affects the market, broadcast television has developed a system, which a very profitable business, is distributed for free. This system is partly driven by the nature of broadcast technology. Once the program goes out from the antenna, the producer or seller of it no longer has any control, so there's no way of getting a return; in the past there was no way technologically of getting a return from the recipient. The system of advertiser support in some sense had to develop to compensate for this technological limitation.

New technologies are changing that. They will allow the producers and disseminators of information to control it much further along the path of dissemination. That may have ramifications on intellectual property law.

How does the technology change the way information is disseminated? One of the trends in the technology is towards an international communication system. For example, satellites don't observe national boundaries very well. On another front, engineers are inter-connecting all communication systems in the world together into one single network. Those trends creates stresses on the international copyright agreements between nations, as I'm sure we're all aware.

The video cassette recorder is an example of how technology affects the way information products are used by the person who receives them.

And, finally, we come to the question of access. I don't have a good example of this, except to point out that the three major mass communication media in the past: radio and television broadcast, newspapers, telephones have all provided us as a society with what is equivalent to "universal service," service that is either very low cost or free.

Some of the new technologies coming along, like videotext, appear to be focusing on very narrow and very high income markets. If that's true, it may be that the new communication and information media in the future will increase the gap between those who have access to these products and those who don't. To the extent that intellectual property law draws some of those boundaries, or referees in that marketplace, I think it's an important effect to consider.

Well, any scientist knows that you are 90 percent on the way to answering questions if you can identify the proper questions to ask. And I think that's the stage we're at in this area now. And I would encourage everybody, as they listen to the technological descriptions over the day, to think in their own minds what the characteristics of the technology are that are going to affect the policy.

Thank you.

Mr. WYATT. Thank you, Rick. Our next speaker, Chris Burns, is President of Christopher Burns, Incorporated, a research and development consulting firm specializing in business development issues within the information industry. He was previously Senior Vice President and Associate Publisher of Minneapolis Star and Tribune, Vice President of Planning for the Washington Post Company, and a senior consultant at Arthur B. Little, where he directed much of that firm's research and consulting in the area of new technology and its impact on the media. He is a former member of the Board of Directors of the Information Industry Association, former chair of its Proprietary Rights Committee, and former chair and member of the Planning Committee of the Board.

Chris?

Mr. BURNS. Thanks, Joe. The information industry whose concerns I've been asked to comment on this morning consist of creators, distributors, and publishers of information for scientists, economists, financial analysts, lawyers, credit managers, market researchers, and other professionals, primarily through looseleaf publications, newsletters, special reports, and a variety of electronic information services. In 1983, revenues for this sector of the economy were about 12 and a half billion dollars, larger than either books or magazines, about the size of the whole television industry, half the size of the newspaper industry, and growing twice as fast as the economy. Although this activity is an old one-as a matter of fact, Abraham Lincoln was a credit reporter for Dun & Bradstreet-it's the most modern of the media, the most aggressive in its use of new computer and communications technologies, and the perpetrator as well as the victim of much of today's copyright confusion. We're the ones who, having successfully pried the expression free from traditional books and pamphlets so that it could be sold more efficiently, are now learning to extract the pure idea from an expression and we wonder what laws, if any, will ultimately govern what we're doing.

We are caught, as you are, between a commitment to the free exchange of ideas, which is the flower of our civilization, and the business notion of secure property, which makes that civilization prosper. The law no longer provides the unambiguous guidance that information companies need to avoid injuring each other during the

rapid expansion period ahead, and we fear that it may no longer even be capable of prescribing a fair remedy.

Consider how the industry derives and compiles new products and services from existing ones. An original report, well researched and perceptively written, often becomes itself an event to be reported. A Wall Street research report, for example, will create news. It will get quoted in the newspaper, picked up by a market newsletter, and circulated by clients who find the information valuable. While all this is meant to enhance the distribution of important ideas, it often ends up eliminating exclusivity which was the one advantage the research firm intended to provide its clients.

Meanwhile, an abstracting service writes a brief summary of the newspaper article and mails it to subscribers, even as an on-line financial wire service writes another abstract of the story and sends it out over the phone. Copies of the report go into private libraries from which they freely circulate and, inevitably, the full text of the original report makes its way into the hands of a competing research firm which then prepares a larger market study using these findings as the keystone. None of these efforts quote very extensively from the original material. Prose style is not the essence of the value here. But all of them try mightily to capture the central ideas. In due time, a new publisher strips the market forecast numbers from the abstract and includes them in a data collection which is then sold to major corporations and to other investment analysts. The wire service abstracts are added to an on-line data base which can be accessed more easily by future researchers. An enterprising subscriber to the data base signs on, starts up a search, and records it on his floppy disk-which we've learned to call "downloading"-and in time, he transfers the content of that disk to the company's central computer archive where others can retrieve it.

In this very real but much simplified description of the information industry, a number of laws are imperfectly at work. In theory, all of these products are copyrighted, but in practice, they borrow liberally from each other without once paying license or royalty fees. The analyst who wrote the original report gnaws glumly on the bones of notoriety vowing next time to say something really provocative, while his employer swears to restrict future distribution even more sharply.

The journals that quoted him are emboldened to be more specific and more comprehensive in their coverage of such reports and the abstractors who feed on the journals resolve themselves to take even bigger bits next time. In fact, there is no protection.

A few years ago, this subsidiary distribution took time; sometimes it took months, during which the original audience had an information advantage over those who were getting it secondhand. But today's technology allows us to abstract the New York Times, for example, and make it electronically available for browsing or for systematic searching by 8:00 a.m. the morning of publication. A market research study can be abstracted or summarized and stored in computer memory within hours where anyone with a PC and a password can benefit from its advice.

The law says that derivative works require permission of the original author, but the definition of derivative is ambiguous in this context, leading us to believe that rigorous abstracts, like brief plot summaries, may not be among the author's exclusive rights. And that old standby, fair use, now seems to cover a number of forms of re-use, even those that might erode the market for future sales. A family that can take a movie off television is less likely to buy that tape in the future. If a subscriber to an on-line economic data base retrieves the U.S. economic model from 1972 to 1982 for all the industries in his SIC code and records that retrieval on his disk as he does it, is that fair use?

Even the copyright procedure for a data base seems difficult and inappropriate, since the copyright seeks to protect the data set, which is ephemeral, not the rules that fashion that set into a usable form, which are the real genius of the publisher's effort.

We look for protection under various unfair competition laws and in fact there is case law, International News Service versus Associated Press, to discourage the systematic misappropriation of hot news. And yet, radio stations rip and read the press with impunity and some on-line services use others as unidentified and unpaid sources. We've developed elaborate leases and contracts that try to prevent subscribers from reselling data base access, or building compilation products in any form, but since many of the individual items of information are freely available from other sources, it's often impossible to prove that the contract was broken.

We watch usage patterns and build software in the computer system to help identify the downloader, but as a matter of fact, it's very difficult to write a contract