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With regard to bibliographic data bases, the only purposes of their input into a computerized system is to make them available for output in pertinent portions in response to inquiries. Assuming that the copyright owner is entitled to payment, at some stage of the inputoutput process, for the use of his data base in the system, three considerations seem to us to be of prime importance:

(1) It is more practical for the parties concerned to agree

upon the payment to be made, and the other conditions
relating to the use of the data base in the system,
before the process of use begins that is, before
input. This would be true even if the amount to be paid
were made dependent in part upon the volume of output.
To defer negotiating the terms and conditions of use
and payment until after the operator has incurred the
trouble and expense of input could be awkward and per-
haps abortive if the parties then find it difficult to
reach an agreement.

(2) Where the data base is not obtained from the publisher,

he would not be assured of learning of its use in the system, and would not be able to exercise any control over its use, unless the system operator is required to deal with him before input takes place.

(3) There may be room for dispute as to whether the output,

which would ordinarily consist of no more than a fragment of the content of the data base, amounts to a fair use rather than an infringing reproduction of the work. (We shall have more to say about this later.)

These three considerations, among others, would seem to justify the conclusion that a license to use a copyrighted data base in a computer system should be negotiated before input.

A.4.4.4 Output from Data Base

A.4.4.4.1 Normal Output. The output of material from a data base in a computerized system may be in the form of a printout ("hard copy") or in the form of a display on a cathode ray tube (CRT). There was formerly some question as to whether a CRT display of copyrighted material would constitute an infringement of the copyright owner's exclusive right to make a "copy" of his work. But the new Copyright Act of 1976 provides, in section 106(5), that the public "display" of a work, such as would appear on a CRT, is among the exclusive rights of the copyright owner; and under the definition in section 101, a

display is made "publicly" if (among other things) it is transmitted "to the public, by means of any device or process, whether the members of the public capable of receiving the ... display receive it in the same place or in separate places and at the same time or at different times."

The output of material from a data base will usually consist, in each individual instance, of no more than a few of the great mass of index entries, citations, and abstracts making up the copyrighted compilation of data. As mentioned earlier, it may be contended that the extraction of a few such items from a data base is a fair use rather than an infringement of the copyright. To appraise this contention, the criteria of fair use as stated in section 107 of the Act of 1976 should be recalled:

"In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include

(1) the purpose and character of the use, including

whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in

relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for

or value of the copyrighted work.'

It may be conceded that the taking of a few items from a data base by an individual researcher on any one occasion may meet the criteria of fair use. The posture of the system operator, however, appears to quite different in this regard. The operator is supplying many portions of the work, though each may be small in itself, to many persons; the aggregate is quite substantial. He does so for commercial purposes. The repeated use of the work in small portions is the normal use for which the work was intended. And finally, since such output fulfills the user's need for the work, it displaces what might otherwise be potential sales of copies of the work.

In sum, while the output of a small fragment of a data base on any one occasion would have the indicia of fair use, the aggregate of the output of fragments on many occasions in the operation of a computerized system can be seen to constitute an infringing activity for which a license from the copyright owner should be required.

Here again, the matter of copyright infringement by the system operator will be set at rest where the operator contracts with the publisher for use of the data base in his system. It may be assumed that such a contract would cover output as well as input. In the lease agreements known to us for the use of data bases in computerized systems, provision is made for an initial payment to the publisher for the lease of the data base and additional periodic payments based upon the volume of output.

A.4.4.4.2 Extraction of Bulk of Data Base by User of System. A different question may arise in relation to the users who extract data base material from a computerized system. The system will ordinarily provide users with the capability of extracting as much of the material in a data base as they wish and are willing to pay for. It is conceivable that an individual user might take out an entire data base, or so much of it as to constitute an infringing reproduction usable as an abbreviated data base in itself. He might do so, for example, in order to have his own data base for his future use, or to supply a data base for use by others.

The act we are assuming here by the user may be characterized as a theft of the data base and is clearly an infringement of the copyright. The problems are practical ones: what can be done to prevent such a theft, and how can it be detected?

The answers appear to lie in the way the system deals with its users and the way it monitors the volume of their uses. In current practice, as we understand it, a system will make some provision, in its agreement with each user, that purports to limit the extent of the material to be taken from any data base, and to restrain the user from supplying the material taken to anyone else. Moreover, since the fees charged for use of each data base in the system are based on the length of time that the user is on-line, or on the number of items included in an off-line report, the system must keep records of the extent of uses made of each data base. If the recorded use of a data base seems suspiciously excessive, the system could report the facts to the publisher for further investigation. Publishers might require, in their contracts with system operators, that such cases be reported to them.

Another factor serving to inhibit the theft of a data base by the online user of a computerized system, under present-day conditions, is the very high cost of using the system for the length of time it would take to do so. It might be less expensive to lease the whole data base from the publisher.

A.4.4.5 Exclusive and Compulsory Licenses for Use of Data Bases. In some instances publishers of data bases have leased them exclusively for use in one computerized information service system, thereby making them unavailable for use by any other such system. This practice of exclusive licensing may have either of two results that might eventually prove to be undersirable.

First, if each of several competing systems has its own exclusive group of data bases in some particular subject area, no one system will be able to provide researchers with comprehensive coverage of that area. The consequent necessity for searching through more than one system -perhaps through several of them -- will probably diminish the convenience and effectiveness and increase the cost of bibliographic searches, as compared with a single search through one comprehensive system.

Second, exclusive licensing of data bases may tend to foster the monopolization of data base search services by one or two giant systems. Whether the prevention of such a monopoly or the regulatory control of a permitted monopoly as a public service organization, would be preferable is an open question.

From the standpoint of providing maximum service for researchers, and at the same time preventing the development of a monopoly in the business of providing bibliographic search services, the ideal situation might be the development of a number of competing systems each of which can offer comprehensive coverage of any subject area. One way of encouraging such a development would be to provide for a compulsory licensing scheme under which a data base made available for use in any one system would thereupon become available for use in all other systems.

A compulsory license of this character would be similar to the one (the first of its kind) that was established by the Copyright Act of 1909 for the making of mechanical sound recordings of copyrighted music. (See sections A.2.3.1 and A.2.3.2 of this report.) In that precedential case the compulsory license scheme was prompted by the threat of a monopoly being established in the manufacture of such recordings of music. This and other compulsory licensing schemes will be discussed later in section A.4.6.3 of this report.

Whether a compulsory licensing scheme for the use of data bases in computerized information systems is needed, and whether it would be desirable, are debatable issues. There is no doubt much to be said in favor of allowing market forces to operate normally in the leasing of data bases and the development of information systems. We merely mention the proposition of compulsory licensing here as a possibility that may be worth consideration in the future.

A.4.5 FULL-TEXT STORAGE AND RETRIEVAL OF DOCUMENTS

A.4.5.1 Preliminary Observations. A few years ago there was a good deal of speculative discussion of the possibility that, at some time in the future, computer technology will have developed to such a farreaching extent that computer systems might become the principal storehouse of the world's published knowledge. In this dream of a brave new era, computer systems were pictured as replacing printed copies of books and journals as the primary means of recording and disseminating works of authorship. Computer systems, in conjunction with modern communications technology, would then become the main source of documents for reference or reading.

By now, this dream has receded into the far distant future. It is generally acknowledged that the full-text storage of a large mass of documents in a computer system would be far too costly to be feasible now or in the predictable future. And as long as copies of documents are made readily available in some other manner -- as in printed or photocopied pages or in microform reproductions --, there would be no apparent reason to incur the very high cost of using computers for full-text storage and retrieval of a vast collection of documents.

To a limited extent, however, some complete documents are now being put into computer systems for various purposes, and this practice may well expand rapidly in the coming years. Moreover, it may be important to consider now the problems that can be anticipated with respect to the future possibility of computer storage and retrieval of the fulltext of copyrighted documents on a large scale.

The anticipated problems relating to the use of copyrighted documents in computer systems have been discussed at some length in the Congressional hearings on the copyright revision bills, especially in the Senate hearings in 1967, and in more recent articles. The discussion of those problems has been concerned primarily with the following questions:

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