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2.

g. by establishing a separate legislative scheme for designs of this one type of useful article, avoids granting copyright protection under the 1976 Act to this one article,

while denying protection to all other designs of useful

articles.

Common problems. The following problem areas are common to

it is not clear how this new type of work will be protected internationally, regardless of whether it is labeled a design or a mask work;

both approaches turn on the issue of whether this new work is a "writing", although the design approach appears to finesse the constitutional problem;

since the semiconductor chip industry expressed a preference for legislation that would allow them to continue to reverse engineer following the 1979 hearing, either bill would have to provide for some innocent infringer/reverse engineering type provision(s);

Detailed comparison

General approach and definitional problems. The focal point of the protection provided under H. R. 1028 is not precise.

Does a "mask work" actually exist in cases where no mask is used

in the manufacturing process?

There is also a basic question concerning the extent of protection under the new exclusive rights. What does it mean for an owner of copyright in a "mask work" to have the right to authorize the substantial

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reproduction of "an image" of a mask work? Is an image the same as the pattern of a single layer, or possibly a substantially similar copy of such a pattern? Or, does it mean that it is possible to trace a particular configuration of a layer of part of a semiconductor chip product to its description in a schematic data base or some other representation?

The proposed extension of copyright to select images(s) of a mask work embodied in a semicondutor chip product would presumably protect same, but not all original design features of the product. In any event, the protection provided in H. R. 1028 for certain aspects of the surface of layers of a semiconductor chip product would mark a serious departure from the current protection afforded designs of useful articles. The bill would afford copyright protection to this category of designs where both the design and the article in which it is embodied may be considered useful articles, and where the design may not possess any features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the semiconductor chip product in which an image of the design is reproduced.

Instead of introducing such confusing terms as "mask work" and "an image of a mask work" as subject matter of copyright, under a design approach, the law would specifically protect the features of shape, patter or configuration of the surface of the layers of semiconductor chip products. There would be no question of protecting the electrical components as such. Protection for a design of semiconductor chip products would be available even though the design has an intrinsic utilitarian function that is not merely to portray its own appearance or to convey information. Copyright Office believes that a design approach would be a more effective way to protect this particular type of industrial design.

The

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b. Clear distinction between different protected works.

With respect to copyrighted works, such as computer programs,

that may be fixed in a semiconductor chip product, the design bill clearly provides that: "Nothing... shall affect any right or remedy now or hereafter held by any person under chapters 1 through 8 of this title [the Copyright Act of 1976], subject to the provisions of section 113 of this title." A clear distinction is possible since different laws would be involved.

c. The "copies" problem.

Section 2 of H. R. 1028 provides that: "As used in sections 109(a), 401, 405, 501(a), 503, 506, 509, and 602 of this title, 'copy' includes a semiconductor chip product that is subject to the exclusive rights described in section 106." As noted previously, this provision raises serious questions about the applicability of those sections of the 1976 Act that are not listed, but that include the word "copy". No such problem arises in connection with the design approach. separate from the 1976 Act. There would be no need to refer back to sections of chapters 1 through 8 of title 17 U.S.C. in order to ascertain the scope of protection for designs of semiconductor chip products.

d. Reverse engineering and fair use.

Protection would be

Section 908(b) of the draft design bill would allow limited

use of the chip design "for the purpose of teaching, analysis, or evaluation" (reverse engineering provision). Since the bill is independent of chapters 1 through 8 of title 17 U.S.C., however, no confusion arises regarding "fair use," and no reference to section 107 is required.

H.R. 1028 would establish a compulsory license subject to

specific terms and conditions. The proposed design bill has no such compulsory license. Its innocent infringer provision would shift the emphasis from the ultimate consumer of a semiconductor chip product to the initial infringer. Under 908(a) of the proposed design bill, a seller or distributor of a semiconductor chip product who did not make or import the product would be deemed an infringer only if he or she induced or acted in collusion with a manufacturer to make, or an importer to import, infringing products; or where, upon the request of the proprietor of the design, they did not disclose the source of the products, and ordered or reordered such products after receiving appropriate notice of the protection subsisting in the chip design.

f. Retroactivity.

The design bill clearly would have no retroactive effect. The Copyright Office believes non-retroactivity is a fair policy and avoids the otherwise necessary inclusion of complicated "savings clauses."

VIII. CONCLUSION

In conclusion, while the Office fully supports the general proposal to protect the innovators of semiconductor chips, we tend to believe that a better system of protection could be achieved under a design approach. If the Subcommittee decides to legislate protection under traditional copyright, the Office will be happy to work with the Subcommittee in correcting the problems with the pending bill.

Thank you.

I will be pleased to respond to any questions.

APPENDIX A