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addition, there is substantial precedential weight for the proposition that utilitarian devices are ineligible for copyright on the ground that they are not "writings." While that term has been construed ever more broadly as such media as photography, motion pictures, sound recordings, and television have developed, it has never been held to apply to purely utilitarian devices.

The bill seeks to finesse the useful article issue by creating a new subject matter category, which purports to be nonutilitarian. Nevertheless, Sec. 2, Clause (3) attempts to establish a constitutional basis for protecting the material object semiconductor chip products. It is the constitutional basis of the copyrightable subject matter works"

that is ordinarily significant.

It is likely that, if the

"mask

Congress should decide that a "mask work" is a "writing," the courts would uphold that decision.

The Office suggests further reflection about Clause (3) of the definition of semiconductor chip product. In any event, we recommend elimination of the reference to "discovery" in that clause.

3. Distinction between mask works and other works. One of the most difficult tasks in considering how best to afford intellectual property rights with respect to semiconductor chips is separating the notion of protecting the design or layout of the chip from protecting the work of authorship which may (but need not be) contained therein. It is possible to store conventional copyrighted material, such as written text, on chips, in which case copyright would clearly apply to the copying of such works. Unconventional materials (at least in copyright terms), such as video games and computer programs, may also be stored therein. The jurisprudence of

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the last three years permits the observation that courts have ordinarily been willing to grant relief to copyright proprietors whose works, distributed in chip form, were the subjects of unauthorized reproductions. 30/

Unfortunately, the selective inclusion of semiconductor chips as "copies" under certain sections of the Copyright Act, but not under others, may lead to confusion about where chips fit within the copyright law and, at root, what the rights of chip-copyright owners31/ are.

Some of the proposed new exclusive rights for chip-copyright

owners appear to track traditional rights.32/ The right to embody the mask work in a mask looks rather similar to the classic "copyright "33/ now codified in section 106(1), i.e., the right to reproduce, in copies, the copyrighted work. The right to distribute mask and chip works looks almost exactly like the right provided already in section 106(3). On the other hand, the "use" right proposed here seems unrelated to anything known to any copyright system, past or present, here or abroad. It is a right found in patent law, but alien to copyright law. Such a right appears, by its terms, to give a copyright owner the right to control the manufacture of a

30. 31.

32.

33.

Supra, note 25.

By "chip-copyright owners" we mean the owner of the new rights in the new subject matter category "mask works," as established in H. R. 1028.

The structure of the bill, which deliberately attempts to confine the term "copy" in relation to semiconductor chips, to only a few sections of the statute, necessitates this tracking of certin rights.

However, the bill, for the first time, would grant a right to make a useful article.

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useful article and to control in every respect how a bona fide purchaser of

a chip product uses that copy (subject to the compulsory license and

innocent infringer provisions).

While copyright has long forbidden specific restricted acts, this provision appears to permit chip-copyright owners to define any use of which they disapprove as infringing.

Control over copying, adaptation, distribution, public

performance, and public display are the rights which presently comprise American copyright. The law is rather clear about the meaning of those rights, and certain limitations on them, but the ability of a chip-copyright owner to control the use of a semiconductor chip product would make him or her far more powerful, and customers (and, for that matter, customers' customers) far less free in their businesses, than any other class of copyright users. 34/

The compulsory license and innocent infringer provisions

establish same limits to the broad reach of the proposed "use" right, but those chip purchasers who cannot meet the terms of those provisions would apparently be prohibited from using a lawfully acquired chip. The Copyright Office does not believe such an unprecedented right is justified.

34. In the case of a new subject matter category, the exclusive rights perhaps should be somewhat limited rather than expanded, in comparison with the rights granted traditional subject matter. Sound recordings, for example, were accorded rights only against exact, unauthorized duplication and distribution initially, in 1972. The 1976 Copyright Act later extended a modified adaptation right, but the public performance right has still not been granted to sound recordings.

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5. Compulsory license.

The "compulsory license" provisions in the bill are markedly different than existing compulsory licenses in the Copyright Act. The chip compulsory license could only be invoked by a bona fide purchaser of infringing products who bought without having notice of infringement, who committed substantial funds to the use of the infringing product, who offered to pay the copyright owner a "reasonable" royalty, and who could not receive the product directly from the copyright owner or licensee at a "reasonable price." Whether the purchaser has actually received notice of infringement, what amounts to "substantial funds," and the meaning of "reasonable royalty" and of "reasonable price," are left undefined by the

bill.

Perhaps, clarification and explication in the Committee report would satisfy some of our concerns about this new "compulsory license." Without further clarification in the bill or the report, most of these terms may be an invitation to litigation, thus virtually guaranteeing that the licensing procedure will be both slow and unpredictable. It might be more desirable to require the services of a non-judicial arbitrator in determining the eligibility and price issues associated with this somewhat complex licensing scheme, if "voluntary" negotiations fail.

6. Concluding thoughts. The introduction of a "mini-term" of ten years into an otherwise uniform law, although not uncommon in foreign copyright statutes, may cause some problems, especially if the relationship between "mask works" and other works embodied in chips is not entirely clear. Copyright now arises in every type of work upon its creation, while this proposal would have chip-copyrights last for ten year from the first (query: the earliest of?) distribution, use, or manufacture.

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The problems seem in trying to create one class of works subject to a set of special rules, including a very different period of protection, demonstrate how difficult it may be to fit semiconductor chips into copyright. The very brevity of the proposed term, 35/ when compared with life-plus-fifty years or seventy-five years for other works, suggests that traditional copyright protection may not be appropriate for these works. Likewise, the bill's statements that chip products are devices (i.e, they perform electronic circuitry functions), or discoveries, or products distributed in interstate commerce, suggest that they do not fit easily, if at all, into the constitutional class of works for which Congress may authorize copyright: "writings."

The concerns expressed by the Copyright Office regarding H.R. 1028 are the same as those expressed by us and several others witnesses before the Senate Subcommittee on Patents, Copyrights, and Trademarks at a hearing held on May 19, 1983. In response to those comments, the Senate Subcommittee reported S. 1201 with substantial amendments. In general, the Copyright Office believes that the Senate Subcommittee version represents an improvement over the original bill, but several major problems remain.36/

35.

The Copyright Office does not oppose a short term of protection for chips; indeed, overprotection was one of the major objections to the 1979 bill (H.R. 1007).

36. Notwithstanding the commendable effort by the Senate Subcommittee to meet the technical objections to the original bill, the following major problem areas remain, in the opinion of the Office: 1) what are "copies;" 2) relationship between chip copyright and copyright in other works embodied in chip products; 3) inclusion of a constitutional basis for a useful article (semiconductor chip product) rather than for the subject matter of copyright under the bill (the mask work); 4) scope of "substantially to reproduce. an image of the