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6. The dissemination of scientific and technical information should
be maximized, subject to resource constraints, excepting where such principles as personal privacy, trade secrecy and national security take precedence.
There would be transaction costs attached to any market, including the market for intellectual property, even if there were no copyright protection. The trade-off in structuring a market is in the kinds of transaction costs a society is willing to tolerate, as well as in the size of such costs. All other things being equal, the size of transaction costs should be minimized.
Decisionmaking on copyright involves the achievement of a balance of equities between user needs and owner rights that should include consideration of the general public as well.
1.4 RECOMMENDATIONS FOR IMPLEMENTATION 1.4.1 Computer-Readable Data Bases
1. Computer-readable data bases, whether compilations, collective
works, or reference works of a single author should be copyrightable in any tangible medium of expression.
Complete disclosure of the contents of the data base to the Copyright Office should be required, in some tangible medium, when the data base is initially registered.
Deposit requirements for data-base updating should be satisfied by a yearly submission of a complete list of additions and deletions. At some multi-year interval, e.g. ten years, a complete re-disclosure should be made if the data base has been frequently updated.
4. Clarification of what constitutes publication of a data base is
needed when a data base is distributed only in computer-readable form via a terminal query system through one or a very few specifically-licensed computer systems.
1.4.2 Computer Programs
1. A computer program written by a person in a source language,
with or without the assistance of a computer, generically qualifies as a work of authorship. An original computer program should be copyrightable in source language in any tangible medium of expression. Machine (object) code should not qualify as a source language.
Disclosure of the computer program upon copyright registration should be accompanied by definition and usage manuals for the computer language and dialect in which the program is written, if such information is not on file already with the Copyright
The transformation of a copyrighted computer program into object code from source language should be considered to be the making of a copy, even if the translation requires the implementation of some housekeeping functions such as the selection of peripheral units, storage allocation and the assignment of absolute addresses.
The translation of a copyrighted computer program into a completely different source language (not just a dialect or variant) should constitute the authorship of a derivative work.
5. The duration of copyright protection for computer programs
should be no less than the duration of protection of other original works of authorship, in order to promote the use of computer languages that can be expected to endure regardless of changes in hardware technology.
Decisionmakers should be aware that assignment of computer programs to a particular category of copyrighted work forces the adoption of the limitations on exclusive rights already inherent in that category. For example, categorization of a computer program as a "literary work", rather than as a separate copyrightable category assigns to computer program users the exemptions to exclusive rights granted to users of literary works in Section 110 of the 1976 General Revision of Copyright Law.
The flowchart of a computer program ought to be separately
Transfer of Ownership of Copies of Computer-Readable Works
1. Outright sale of computer-readable works, i.e. transfer of own
ership of copies as distinguished from lease or rental with permissions, should be promoted so as to reduce transaction costs.
In order to effectively use a copyrighted computer-readable
copyright owners from retaining all exclusive rights in situations not involving transfer of ownership of copies.
1.5 CONCLUSIONS 1.5.1 Technological Change and copyright 1. An essential point at issue, as seen by decisionmakers in copy
right policymaking, is the definition of the boundaries of the property right, regardless of the specific technologies involved.
A major effect of technological change is that it causes ambiguities in some of the definitions of property rights that may have seemed perfectly clear before the change.
An effect of successful technological change is a multiplication of interest groups organized around the new technologies. The increase in number of interest groups causes an increased incidence of inter-group conflict. This often results in additional rules as well as more complex rules regulating group interactions.
It seems inescapable that "a complex civilization necessarily develops complex political arrangements" if each interest group is granted a certain legitimacy through a democratic process.
1.5.2 Judicial Decisionmaking Under Technological Change
One viewpoint taken by the Federal Courts in copyright litiga-
A second viewpoint is that stretching the law's meaning (or specifically defining the ambiguous) beyond a certain point would be for the Federal Courts to take on a responsibility better left to Congress. This viewpoint is more likely to be taken in a situation in which a decision has ramifications beyond the particular litigants, i.e., affects the balance among interest groups.
In taking the second viewpoint, the Courts apparently recognize that Congress is much more capable of implementing a flexible solution involving give and take among interest groups, while the Courts are simply required to give a right-wrong solution. Therefore, it appears that the Courts have decided these cases
in favor of the side upholding the status quo, so that Congress can receive the situation without the effect of an unbalancing Court decision.
1.5.3 Models of Copyright Policymaking
1. Decisionmaking in copyright in the twentieth century has been
essentially a pluralist process, that is, has consisted of compromises among various interest groups gathered around different functions related to copyrighted works.
The power arena model of Theodore Lowi which assigns decisions
Individual copyrights may be the ultimate distributional good, since they can be dispensed in small units, and since registration of copyrights does not reduce the stock of unregistered or uncopyrighted works waiting for claimants. Originality is an unlimited resource, although nurturing and institutionalizing originality may not be.
The effect of technological change has been, in Lowi's terms,
5. As long as copyright continues to be seen mainly as a problem
of "balancing the equities" (i.e., in the regulatory arena), Congress will retain the major role vis-a-vis the Executive Branch.
Increasing concern for consumer welfare and for prevention of monopoly are indicative of redistributional concern and with the potential for increased Executive Branch involvement.
While not apparent at present, it is conceivable that changes
1.5.4 Economic Efficiency
1. Clearinghouses are useful multi-producer organizations for re
ducing the transaction costs of information and communication in the collection and payment of royalties for a permission system, but there may be a blurring of individual proprietor considerations.
The selection of blanket or per-use licenses on a least-cost basis in a permissions system may be technologically determined. For example, a computerized system of data base access is likely to develop usage information at low cost. In that situation, per-use calculation of royalties is not difficult.
3. With high data-collection costs of usage information, a blanket
license is likely to result in lower overhead costs than a peruse license, provided the less-precise information available from the reduced data collection does not result in inequitable treatment of some of the concerned parties.
Price differentials in subscription charges between individual purchasers of journals and institutional purchasers are economically justified on efficiency criteria. This concept can be applied to computer-readable works that are sold, as it has been to journals.
The exemption from royalty payments for "worthy" users is inefficient because it forces the "less worthy" users to carry more than their share. On efficiency criteria, "worthy" use is public good which should be paid for by everyone.
Whether a copyright is an exercisable economic monopoly depends on the substitutability of other copyrighted works as determined by the actions of consumers of such works.
7. Since a researcher must be comprehensive in the literature of
his field, there may be very little substitutability among
The possibility exists that in some field of research, by virtue of economy of scale, an established system of suppliers and customers and already amortized costs of market entry, a single organization may achieve a virtual market monopoly over a class of nonsubstitutable computer-readable data bases.
If there were no copyright protection at all, there would still be the transaction costs of increased secrecy, cut-throat competition, and lowered opportunity for recognition of creative talents.
1.6 RECOMMENDATIONS FOR FURTHER INVESTIGATIONS
The potential for monopoly in the delivery of computer-readable
2. The effectiveness of discovery of infringements in the copying