In addition, we met with the Information Industry Association, and they oppose copyrighting Federal computer software because, in their opinion, the agencies might use this authority to either restrict access or give favored access, if you will, to Federal scientific and demographic data bases such as those at the NIH Library of Medicine or at the U.S. Census Bureau. In conclusion, Mr. Chairman, transferring Federal software with commercial application-and I stress "with commercial application"-could be achieved by amending the copyright law to provide copyright and exclusive licensing authority. We believe this could be accomplished through a couple of options. One would involve amending the copyright law to allow Federal agencies to copyright computer software on a case-by-case basis. The second involves amending the Federal Technology Transfer Act, which would authorize Federal agencies to copyright computer software under a cooperative R&D agreement. Now if needed, GAO would provide suggested legislative language for either of these options. This concludes my summary, and I would be glad to respond to questions that you might have after the other witnesses are complete. Mr. KASTENMEIER. Thank you, Mr. Fultz. We appreciate that report. It is a very interesting new report for us. [The prepared statement of Mr. Fultz follows:] Prepared Statement of Keith O. FULTZ, DIRECTOR, PLANNIng and Reporting, ReSOURCES COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION, GENERAL ACCOUNTING OFFICE Mr. Chairman and Members of the Subcommittee: I am pleased to present our views on the copyright law's prohibition on copyrighting the federal government's computer software. My statement today is based on our ongoing work for this Subcommittee. At your request, we are examining (1) federal agencies' efforts to comply with the prohibition on copyrighting works of the government, (2) the extent to which copyright law has constrained the transfer of federal software, and (3) the pros and cons of amending copyright law to allow federal agencies to copyright computer software. This review follows up on our March 1988 report, in which we identified copyright law as a constraint to the transfer of federal computer software to U.S. businesses.1 I would like to summarize the results of our most recent work, which we will include in a report to this Subcommittee soon. We found no evidence that federal agencies are copyrighting works of the federal government. However, at five federal agencies, 2 senior officials believe their efforts to transfer certain computer software with potential commercial applications to U.S. businesses have been significantly constrained because the government cannot copyright and exclusively license federal software. They estimate that this software could represent as much as 10 percent of all the software developed at their laboratories. In particular, federal laboratories are having only limited success in encouraging U.S. businesses to collaborate on developing computer software, through cooperative R&D agreements, because of uncertainties over the 1Technology Transfer: Constraints Perceived by Federal Laboratory and Agency Officials (GAO/RCED-88-116BR, Mar. 4, 1988). 2 These agencies--the Department of Agriculture, the Department of Commerce, the Department of Defense, the National Aeronautics and Space Administration, and the National Institutes of Health--funded about 88 percent of the research and development performed at all government-operated laboratories in fiscal year 1989. extent of protection they can offer businesses for jointly developed works. According to agency officials and executives from businesses that have considered commercializing federal software, having the authority to copyright and grant exclusive licenses would stimulate the transfer of federal software with commercial applications by providing businesses with protection for their investments. Royalty-sharing authority would also, in their view, provide federal researchers with an incentive to further develop and document the software. However, officials of the Information Industry Association, which represents the business information community, expressed concern that providing copyright and licensing authority for software could, among other things, limit public access to federal scientific and demographic databases that software provides. BACKGROUND Copyrights protect literary and artistic expression by giving the author, for a limited period of time, the exclusive right, among other things, to reproduce and sell copies of the copyrighted work and prepare derivative works. But under 17 U.S.C. 105, the U.S. government is prohibited from copyrighting any of its works, including technical publications, computer software, and databases. The law's legislative history states that this prohibition is intended to place all works of the federal government in the public domain. Most federal computer software is generated by federal agencies' laboratories as part of their research mission. This software is primarily distributed through the National Technical Information Service (NTIS) and other software distribution centers operated by the Department of Energy (DOE) and the National Aeronautics and Space Administration (NASA). With the rising concern about the U.S. trade deficit and the ability of U.S. businesses to compete in world markets, the Congress and the administration have acted to strengthen the links between U.S. industry and the nation's research and technology base. These actions include stimulating the transfer of technology from federal government-operated laboratories, which funded about $14.7 billion in research and development (R&D) in fiscal year 1989, to U.S. businesses. To support this goal, legislation over the past 10 years has authorized federal agencies to (1) grant exclusive patent licenses, (2) negotiate rights to intellectual property under a cooperative R&D agreement, 3 and (3) give federal inventors a share of any royalties from a licensed invention. legislation has facilitated the commercialization of federal inventions; it has not addressed federal computer software-computer programs and supporting documentation--which currently cannot be copyrighted. This AGENCIES' EFFORTS TO COMPLY WITH THE We found no evidence that federal agencies have improperly copyrighted computer software developed by federal workers. In a few limited cases, however, federal software distribution centers have used nɔnexclusive license agreements to restrict either (1) foreign access to the software or (2) customers' rights to further disseminate software unless customers obtain the center's prior permission. In general, these license agreements have been used for software that involved a large investment of federal resources and that may have had the greatest commercial utility. With recent emphasis on transferring technology to the private sector, some federal laboratories have attempted to encourage U.S. 3Intellectual property rights result from the physical manifestation of original thought. businesses to collaborate with them, through cooperative R&D agreements, to further develop and commercialize certain software. But these initiatives are limited and scattered among agencies because of uncertainty about the extent of protection federal agencies can offer for jointly developed works and because of businesses' concern about whether this protection is sufficient for their investment in developing and marketing the software. The prohibition on copyrighting government works does not, on its face, apply to works developed under federal contracts, grants, or cooperative agreements because the copyright law defines a "work of the U.S. government" as one prepared by an officer or employee of the federal government, The legislative history of the Act for the General Revision of the Copyright Law (P.L. 94-553) indicates that the decision on whether to allow copyrights in works produced under contracts, grants, or cooperative agreements should be left to the discretion of the contracting or granting agency. COPYRIGHT LAW CONSTRAINS TRANSFER They According to officials we talked with from seven federal agencies, making software generally available allows for the adequate dissemination of most of their agencies' software. noted that their agencies primarily develop research-related software for specific scientific applications related to their missions. This software typically has little commercial application. According to officials at DOE and the Environmental Protection Agency, most of their research-related software is developed by contractors, who can request authority from the agencies to copyright commercially useful software. However, senior officials from some agencies told us that their inability to copyright and exclusively license computer software has constrained the transfer and use of a certain portion |