Does the current statutory scheme of copyright and patent Does the current scheme create sufficient economic incentives for For Is the current scheme sufficient to maintain U.S. leadership in software in the world market? Do concepts like "lead time" have a drastically different meaning for software or algorithms than for other types of works and inventions? What does this imply for the desirable duration of protection? Questions About Protection and Enforcement What aspects of software and/or algorithms are protectable? How feasible will enforcement of protections for software and/or algorithms be? Will courts be able to draw the distinctions they need? Where will the burden of proof be in enforcing rights? Will they fall equitably on individuals and large and small firms? Does "fair use" need to be interpreted differently for software than for other types of copyrighted works? Do we need special rules for uses of software in education and research? Mr. KASTENMEIER. Does the gentleman from California have an opening statement? Mr. MOORHEAD. Yes, Mr. Chairman. Thank you. Today we will hear from and about the computer industry, an industry that supplies over 70 percent of the world's market for software. I think much of the success enjoyed by the computer industry is a direct result of Congress' decision in 1980 to protect computer programs under the Copyright Act. Supported by this regime of protection, new and in many cases small, innovative computer companies have not only been launched but have flourished in what is a very competitive field. And yet, even as the computer industry has in many respects prospered, there have been calls for reform of our intellectual property laws to more adequately protect computer software. Many advocates of such reform point to the ongoing litigation over various legal questions regarding the protection of computer software, and argue that Congress should intervene to resolve these outstanding issues. This situation reminds me of a meeting I had with former Chief Justice Burger, who told how, when he was pressed from all quarters to decide a case because it represented a conflict among the circuits, more often than not, his response was to simply make the notation "LIS" on the briefs-that is, "Let It Simmer"—the point here being that litigation is often necessary in order to refine existing legal principles as they relate to different factual situations. In my opinion, Congress should proceed cautiously in this area and act only when there is a strong and compelling need, supported by a clear consensus, to do so. Thank you, Mr. Chairman. Mr. KASTENMEIER. I thank my colleague, and I will remember his advice. I would like to recognize my colleague from Oklahoma, Mr. Synar. Mr. SYNAR. Thank you, Mr. Chairman. This morning's oversight hearing is appreciated and, without a doubt, a timely topic. I want to thank you for providing the committee with a varied group of individuals and testimony on this important matter. As you pointed out in your opening statement, changes do come fast and furious in the computer industry. While I would agree that Congress should never be precipitous in its actions, there are times, I think, that it is important that Congress respond quickly to the technological changes taking place around us. Certain issues, such as the intricacies of computer workings and the concepts of intellectual property, may be difficult and technically complex. I think many of us who have dealt with these issues realize that. But Congress still has a responsibility to deal with these matters and make hard decisions as to the statutory treatment of these and other more mundane issues. Since our society and that of our trading partners and competitors in the world is increasingly dependent on the workings of computers and computer software, it would be in our best interests to address this matter head on and to determine the correct action to be taken. I believe that the United States should be in the lead on these issues and set the world standard. In reviewing the testimony that's to be given today, I would have to agree with the statement of Leo Raskind, that the "new technology may take its place within the copyright regime, yet receive special adjustments as are dictated by the structure of that industry and the public interest and its protection." I do not agree, however, that Congress should take a wait and see attitude. Fast and furious changes may well overtake us if we take that attitude. I and other colleagues, including Mr. Moorhead and Mr. Fish, have introduced H.R. 2740, which is meant to deal with some of these technological changes, and I do hope today's hearing will lead us to a proper review of that legislation. Again, I want to thank you, Mr. Chairman, for these timely and important hearings, and I look forward to the testimony this morning. Mr. KASTENMEIER. I thank my colleague. I would now like to introduce our leadoff witness, Anne Wells Branscomb. I would caution all witnesses that while there are, indeed, some giants here in terms of comprehending computer problems, one should not assume that the committee or the wider area of national interests are as well informed as one would otherwise hope. This was true 13 years ago when we gave a commission the responsibility of determining the copyrightability of software, and I think it's still true today. Our first witness, Anne Wells Branscomb, is an attorney specializing in communications, computer and copyright law, and is an adjunct professor of international law at the Fletcher School of Law and Diplomacy, and a research associate of the Harvard University program on information resources policy. Ms. Branscomb has previously served as chairman of the Communications Law Division of the American Bar Association and is currently a member of the National Conference of Lawyers and Scientists. She is today, however, testifying in her individual capacity. We have a copy of your written statement, Ms. Branscomb, and you may proceed as you wish. STATEMENT OF ANNE WELLS BRANSCOMB, ESQ., RESEARCH ASSOCIATE, PROGRAM ON INFORMATION RESOURCES POLICY, HARVARD UNIVERSITY, AND ADJUNCT PROFESSOR OF INTERNATIONAL LAW, FLETCHER SCHOOL OF LAW AND DIPLOMACY, TUFTS UNIVERSITY Ms. BRANSCOMB. Chairman Kastenmeier and other distinguished members of the committee, I want to thank you for the opportunity to appear this morning and to give you my personal views concerning the importance of computer software in the U.S. economy and also to offer some views about changes that might be made in the intellectual property laws to enhance its productivity, both in the domestic and global market. I think it's probably not important for me to dwell on the significance of computer software in the economy because you, as chairman, in your opening statement, have made a very eloquent statement of its importance, and there are other witnesses today who 33-652-91 - 2 can give the dollar value in the economy and its contribution to global trade. Furthermore, the dollar value of the contribution of the computer software industry to the economy is not so important as the fact that it is a critical component in every other sector of our economy. I can use several analogies to describe its importance, such as the "crown jewels," which Professor Oettinger objected to because he said crown jewels were not very productive and that the goose that laid the golden eggs was a better metaphor to describe the role of computers software in generating productivity. Adapso, in testimony before the Senate Judiciary Committee, has called it the brains of industry, and you could also call it the cog in the wheels of commerce. Whatever you call it, computer software is a technology which is highly utilitarian and our productivity as a nation and our competitive position in world markets is dependent upon it. So I think the better question to ask is, what is different about computer software that requires special attention in the law? Simply put, computer software consists of electrical impulses which open or close circuits, and are represented as zeros and ones. It appears in a digital form that disguises the nature of the signal, whether it be a book or a map or data. It can be easily distributed by networks where it's easily copied. The cost of copying is negligible compared to the high cost of development. Therefore, if the treasured asset is different and is difficult to protect other than through the legal system, I think we have to ask what can we do to improve the way the legal system treats computer software. Now, you have my written statement and I'm not going to read from it, but I would like to highlight three areas of concern which I think demonstrate some of the areas which Congress might address. I think one is the question of the intellectual framework of the use of the term "copy" to apply to computer software, in that "use" offers a better intellectual framework within which to analyze the utility of computer software. The second area that I would like to highlight is reverse engineering, which really constitutes a question of what is fair use of intellectual assets. The third area I would like to emphasize is that of the standardization of the user interface or the machine-to-machine interface, which is creating some of the tensions between various components of the computer industry. Now, use is really the measure of success for computer software, and I think the term "copy" is misleading, because in some instances, such as in a database, you may need only one copy for all uses, where people can access that one copy. Therefore, in order to measure the productivity in the economy or to provide fair compensation, it's much better to measure use. Also, it is necessary to make copies in order to use computer software. We make backup copies and archival copies. You have to copy from the disk into the machine memory in order to use it. A screen display is a copy and a printout is a copy. So copying is essential to computer software. The nature of computer software is that it is designed for multiple uses. Use presents a much better intellectual framework from which to determine when one becomes an infringer, so we need to determine what kinds of commercial uses are permitted for exploitation and what kinds of private uses or public uses should be authorized. The next area I would like to highlight is reverse engineering. This is a concept which is borrowed from the patent field and it's really a question which is similar to what constitutes fair use under the copyright rubric. When is it fair use to exploit another's intellectual productivity and when does it become misappropriation? Now, the reason why we have reverse engineering-and there are many people who are wedded to this concept. As you know, the right to reverse engineer was written into the Semiconductor Chip Act. We reverse engineer products to learn, for educational purposes, to improve upon the technology and to build a better mousetrap. But during the period of the monopoly that is granted by the patent laws, one cannot build the same mousetrap and market it during the 14 or 17 years after which that knowledge becomes part of the public domain and may be used by all comers. In computer software, there is no monopoly on the functionality or the ideas behind the development of a software, but only on the expression, which is protected within the copyright rubric. Therefore, there has developed a procedure called a clean room, in which one group of computer programmers sit on one side of a barrier and describe the functionality of a piece of software that they wish to replicate, and the group that has clean hands in the clean room write the code which can carry out that functionality. If they do it without using the original code, then they may copyright the new version and may market it. This process can be completed quite rapidly. Without the protection of patents, cloners, therefore, can produce a similar product without the large investment that's been made by the originator. There is a great reluctance, therefore, on the part of software developers to release their source code and the object code, which many programmers-such as Richard Stallman at the Free Ware Foundation insist upon. Access to the code may be necessary for users in order to be able to use that software productively and to apply it to the particular function that they wish to use, to maintain it and to improve upon it. This is one of the primary areas that Congress should address: What is fair use for what components of software? Perhaps a shorter period than copyright provides of something that is more like patent protection may provide time to recoup the capital investment, yet expedite the sharing of the basic knowledge underlying it. The third area I would like to highlight is the question of the standardization of the human or machine interface. This is a question of when knowledge should enter the public domain, or what my friend Harlan Cleveland calls the global commons. The history of the computer software industry has been one of incremental development with different software programmers using the building blocks to improve upon a previous version. There are a group of cases going through the courts which are called look and feel or structure, sequence and operation cases, in which things like the appearance of a garbage can on the screen |