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uncertainty and unnecessary litigation. Still others need new solutions. Technology has altered the balance of the Copyright Act -- in some instances, in favor of copyright owners and in others, in favor of users. The goal of these recommendations is to accommodate and adapt the law to technological change so that the intended balance is maintained and the Constitutional purpose is served. "I

While it is not advisable to propose amendment of the law with every technological step forward, neither is it appropriate to blindly cling to the status quo when the market has been altered.

Sound policy, as well as history, supports our
consistent deference to Congress when major
technological innovations alter the market for
copyrighted materials. Congress has the
constitutional authority and the institutional
ability to accommodate fully the varied
permutations of competing interests that are
inevitably implicated by such new technology.

Throughout more than 200 years of history, with periodic amendment, United States law has provided the necessary copyright protection for the betterment of our society. The Copyright Act is fundamentally adequate and effective. In a few areas, however, it needs to be amended to take proper account of the current technology. The coat is getting a little tight.33 There is no need for a new one, but the old one needs a few alterations.

532

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See discussion of the Constitutional purpose of copyright supra pp. 19-23.

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1. THE TRANSMISSION OF COPIES AND

PHONORECORDS

a. THE DISTRIBUTION RIGHT

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The Copyright Act gives a copyright owner the exclusive right "to distribute copies or phonorecords of the copyrighted work" to the public. It is not clear under the current law that a transmission can constitute a distribution of copies or phonorecords of a work.534 Yet, in the world of high-speed, communications systems, it is possible to transmit a copy of a work from one location to another. This may be the case, for instance, when a computer program is transmitted from one computer to ten other computers. When the transmission is complete, the original copy typically remains in the transmitting computer and a copy resides in the memory of, or in storage devices associated with, each of the other computers. The transmission results essentially in the distribution of ten copies of the work. However, the extent of the distribution right under the present law may be somewhat uncertain and subject to challenge. Therefore, the Working Group recommends that the Copyright Act be amended to expressly recognize that copies or phonorecords of works can be distributed to the public by transmission, and that such transmissions fall within the exclusive distribution right of the copyright owner.

The proposed amendment does not create a new right. It is an express recognition that, as a result of technological developments, the distribution right can be exercised by

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535

In contrast, a "standard" distribution of a copy necessarily divests the distributor of his copy. In the case of a distribution by transmission, the distributor generally retains his copy of the work and a reproduction is distributed.

means of transmission -- just as the reproduction, public performance and public display rights may be. 536

It is argued by some that the existing right of distribution encompasses transmissions of copies and that no amendment is necessary. Indeed, the distribution right, as set forth in Section 106(3) of the Copyright Act, can be and, in at least one case, has been -- interpreted to include transmissions which distribute copies of works to, for example, the memories of computers. Transmission, it is argued, is logically and legally a means of distribution. The Working Group has no argument with such an interpretation; it properly conforms to the intent of the distribution right and, we believe, is correct from both a practical and legal standpoint.

Others suggest that amendment of the law may not be necessary because even if the distribution right does not cover the distribution of reproductions by transmission, the reproduction right is clearly implicated and that will protect the copyright owner. However, the fact that more than one right may be involved in infringing activity does not, and should not, mean that only one right should apply.537 Each

536

It has been suggested that recognition of distribution by transmission may diminish the public performance right. However, if a work is publicly performed by transmission, then there has been a public performance whether or not the distribution right is or is not also involved. The fact that some transmissions may constitute a reproduction and distribution of copies to the public does not mean that transmissions that constitute public performances are not public performances. The scope of the public performance right is not diminished by the recognition that a transmission may fall within the scope of the distribution right. If a copy of a motion picture is transmitted to a computer's memory, for instance, and in the process, the sounds are capable of being heard and the images viewed as they are received in memory, then the public performance right may well be implicated as well. See 17 U.S.C. S 101 (1988) (definition of "perform"). 537

The exclusive rights, "which comprise the so-called 'bundle of rights' that is a copyright, are cumulative and may overlap in some cases. Each of the five enumerated rights may be subdivided indefinitely, and ... each subdivision of an exclusive right may be owned and enforced separately." HOUSE REPORT at 61, reprinted in 1976 U.S.C.C.A.N. 5674.

of the exclusive rights is distinct and separately alienable and different parties may be responsible for infringements or licensing of different rights -- and different rights may be owned by different people. 538 Because transmissions of copies may constitute both a reproduction and a distribution of a work, transmissions of copies should not constitute the exercise of just one of those rights. Indeed, those licensed only to reproduce a work should not be entitled to also distribute the work through transmission thereby displacing the market for the copyright owner or his distribution licensee.

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Infringement takes place when any one of the
rights is violated: where, for example, a printer
reproduces copies without selling them or a
retailer sells copies without having anything to do
with their reproduction.

Clearly, not all transmissions of copies of copyrighted works will fall within the copyright owner's exclusive distribution right. Moreover, even if a transmission of a copy falls within the scope of the right, it is not necessarily unlawful. First, the distribution must be a distribution to the public. The case law interpreting "publication" provides guidance as to what constitutes distribution to the public. 540 If a distribution would not constitute a publication of the work, then it would likely be found to be outside the scope of the copyright owner's distribution right. Therefore, the transmission of a copyrighted work from one person to another in a private e-mail message would not constitute a distribution to the public. 54 Second, all of the limitations,

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539

HOUSE REPORT at 61, reprinted in 1976 U.S.C.C.A.N. 5674.

540

See discussion supra pp. 28-32. The term "public" as used in connection with the distribution right is not coincident with the meaning assigned to that term in connection with the public performance or public display right.

If copies of works are offered to the public -- even though they

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exemptions and defenses that currently apply to the distribution right and allow users to distribute certain copies to the public or to distribute copies under certain circumstances will continue to apply. For example, any exercise of one of the exclusive rights may be fair use -including the reproduction and distribution of copies by transmission.

Some are of the view that the current language of the Act does not encompass distribution by transmission. They argue that the proposed amendment expands the copyright owner's rights without a concomitant expansion of the limitations on those rights. However, since transmissions of copies already clearly implicate the reproduction right, it is misleading to suggest that the proposed amendment of the distribution right would expand the copyright owner's rights into an arena previously unprotected. Further, even if the premise is correct (that the amendment expands the distribution right), the conclusion that the limitations of that right are not similarly expanded is invalid. The limitations on the right -- which place certain distributions to the public outside the scope of the copyright owner's right -- would necessarily expand to also place similar distributions by means of transmission outside the scope of

the right.

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Nevertheless, there is no reason to treat works that are distributed in copies to the public by means of transmission differently than works distributed in copies to the public by other, more conventional means. Copies distributed via transmission are as tangible as any distributed over the counter or through the mail. Through each method of distribution, the consumer receives a tangible copy of the work.

may be distributed one copy at a time -- it would likely constitute distribution to the public. See 17 U.S.C. S 101 (1988) (definition of "publication"); 1 NIMMER ON COPYRIGHT S 4.04 at 4-20.

542

In the future, transmission may become the conventional means of distribution.

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