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U.S. intelligence gathering and law enforcement. The Working Group believes that proliferation of such technology will enable U.S. industry to meet the needs of the international market for these products and continue to lead the development of the GII.

G. DEVELOPMENT OF STANDARDS

A common concern related to development of the NII is the development of standards. Obviously, some level of interconnection, interoperability and standardization of telecommunications, computer, wireless, satellite, broadcast and cable television technologies and networks will be needed to achieve the full potential of the NII. The need for standards, however, does not suggest that any one entity must be established to develop and implement a comprehensive suite of standards. Rather, consistent with historical trends firmly established in the computer industry, the marketplace will develop the best suite of standards to make the NII viable.

The computer industry tends to follow certain general trends in the development and implementation of solutions to commonly encountered problems. 24 The most common

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Many examples of this evolutionary pattern exist. Examples of de facto and formally recognized standards that derived from a single company include the Hayes-compatible modem command set, developed by the Hayes Company to control its modem products; the Ethernet local area network standard developed by Xerox to link minicomputers at the Palo Alto Research Center which eventually led to the development of the IEEE 802.3 standard; and the PCL and Postscript printer control/page description languages, developed by Hewlett-Packard and Adobe, respectively.

Examples of standards that evolved from a collaboration of companies include: the Extended Industry Standard Architecture (EISA) bus standard, introduced by a consortium of nine companies including AST Research, Compaq, Epson, Hewlett-Packard, NEC, Olivetti, Tandy, Wyse, and Zenith; the Musical Instrument Digital Interface (MIDI) interface standard for the connection of synthesizers, instruments, and computers, developed by the major synthesizer manufacturers; and the Personal Computer Memory Card International Association (PCMCIA) standard for PC Cards, PC Card-based peripherals, and the slot designed to accept them developed by the PCMCIA group of manufacturers and vendors.

trend is for an "early implementer" to develop a "point-topoint" solution to a specific problem (e.g., a solution which solves the problem solely from the perspective of that developer's needs). Alternatively, a consortium of companies will work together to jointly develop a solution to address the problem. Depending on the frequency of the problem, other individual companies or consortia will develop different solutions to the problem. Over time, one solution will begin to emerge as a de facto industry standard. It may gain that status through consumer or user preference, through effective promotion by one company or à consortium of companies, or, more typically, a combination of both. Once it appears that an industry consensus is emerging, efforts begin to convert that de facto standard into a more formally recognized industry standard. This can occur through accreditation efforts sponsored by private organizations, such as the American National Standards Institute (ANSI) or the Institute for Electrical and Electronic Engineers (IEEE); through domestic governmental standard setting organizations, such as the National Institute for Standards and Technology (NIST), the Department of Energy (DOE) or the Department of Defense (DOD); or through international organizations like the International Telecommunication Union. As these de facto standards become established, either informally or formally, vendors and systems providers incorporate these standards into their products or make those products compatible with those standards. Once established, the standards tend to evolve to accommodate improvements using the standard setting organizations. Eventually, many standards are implemented at the operating system level. 25

Understanding this common progression is important in understanding how the NII will likely develop. At this point in time, many different solutions are being developed

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For example, essentially every modern personal computer operating system available today supports a number of de facto or recognized industry standards such as Ethernet, PCL/Postscript, and TCP/IP.

to address the needs of users, content providers, service providers and carriers. Most of these developments fall into the class of point-to-point solutions to serve specific needs. As these early systems lead to development of standards, the various industries supporting the NII's development will formally or informally establish de facto and formally recognized standards. Once standards begin to emerge or become established, the major operating systems developers will incorporate or support them at the operating system level. Thus, solutions developed to address the needs and concerns of users, content providers, service providers and carriers will evolve and become integrated into the infrastructure of the NII.

Over time, point-to-point solutions will become established as standards and/or incorporated into operating systems. When this happens, uniform means for identifying the author of a work, authenticating the contents of an information object, ensuring the secure transmission of information objects between remote sites, and authorizing subsequent use of information objects after the first transfer, will be possible. At this point, however, given the nascent state of the NII, it would be inappropriate to suggest that a comprehensive system could best be devised from a central planning perspective.

Interoperability and interconnectivity of networks, systems, services and products operating within the NII will enhance its development and success. Standardization of copyright management (standardized header information and format, for instance), as well as technological protection methods (such as encryption), may also be useful. The question of whether any standards should be established, either through government regulation or industry consensus, however, is not within the purview of this Working Group. The issue of what those standards should be, if established, is similarly outside the scope of the area of

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inquiry of the Working Group. 526 If a standard is established, however, protection of intellectual property rights used in that standard is of concern to this Group.

The intellectual property rights implications of the standards-setting process are not new with the development of the NII. The Federal Communications Commission, for instance, has established standards in related areas without interfering with the legitimate rights of intellectual property rights owners.

The Working Group finds that in the case of standards to be established, by the government or the private sector, the owner of any intellectual property rights involved must be able to decline to have its property used in the standard, if such use would result in the unauthorized exercise of those rights. If the rights holder wishes to have its intellectual property as part of the standard, an agreement to license the necessary rights on nondiscriminatory basis and on reasonable terms may be required. In the case of de facto standards, arising out of market domination by an intellectual property rights holder, the antitrust laws may provide a remedy for anticompetitive uses of the standards.

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The IITF Committee on Applications and Technology has responsibility for addressing the issue of standards.

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Recently, the FCC adopted technical standards that define a patented system as the AM radio stereophonic transmitting standard in the United States. See 58 Fed. Reg. 66,300 (daily ed. Dec. 20, 1993). The FCC conditioned the selection of the patented system as the standard on the agreement of the patent owner to license its patents to other parties "under fair and reasonable terms." Id. at 66,301.

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Public awareness of the importance of intellectual property in the information age is essential to the successful implementation and growth of the NII. The average citizen has only the most general understanding that there are patents, copyrights and trademarks, let alone an understanding of the legal, economic and trade issues involved. Indeed, many lawyers do not have an understanding of this highly specialized area of the law. However, as the convergence of computer and communications technology brings the capability of high speed computers and communications networks into our homes, we all have the possibility to become not only authors and users of copyrighted works, but printers, publishers, exhibitors and distributors as well.

Most people do not have a very clear idea about the role of intellectual property law in encouraging creativity and the importance of intellectual property to our economic well-being. Recent studies show that the core copyright industries those that create copyrighted works represent an estimated $238.6 billion in annual contribution to the U.S. economy. Moreover, other related industries, such as those that distribute copyrighted works, account for an additional contribution of approximately $120 billion annually. Between 1991 and 1993, while the entire U.S. economy grew at an annual rate of approximately 2.7 percent, the core copyright industries grew twice as fast, at the rate of 5.6 percent. Furthermore, the employment generated by these industries grew at four times the annual rate of the whole economy in the period between 1988 and

Users must learn enough about this topic to appreciate just what respect for intellectual property laws

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See Copyright Industries in the U.S. Economy, supra note 426.

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