U. S. Department of Justice
Office of Legal Counsel
Washington, D.C. 20530
Office of the Deputy Assistant Attorney General
MEMORANDUM FOR WILLIAM P. MARSHALL ASSOCIATE WHITE HOUSE COUNSEL
From: William Michael Treanor
Deputy Assistant Attorney
Office of Legal Counsel
July 28, 1998
Re: Constitutional Concerns Raised by the Collections of Information Antipiracy Act,
H.R. 2652.
You have asked for our views on the constitutionality of the
Collections of Information Antipiracy Act, H.R. 2652, 105th Cong.
(1998), which passed the House on May 19, 1998. H.R. 2652 raises very
difficult, and quite novel constitutional questions which are the
subject of this memorandum. The following analysis is preliminary and
general. We would, of course, be pleased to provide views directed to
more specific questions that you might have.
The object of H.R. 2652 is, in effect, to provide a quasi-property
right in certain collections of information that required great effort
to compile H.R. 2652 would impose liability upon anyone who "extracts,
or uses in commerce, all or a substantial part, measured either
quantitatively or qualitatively, of a collection of information
gathered, organized, or maintained by another person through the
investment of substantial monetary or other resources so as to cause
harm to the actual or potential market of that other person, or a
successor in interest of that other person for a product or service
that incorporates that collection of information and is offered or
intended to be offered for sale or otherwise in commerce by that other
person, or a successor m interest of that person " Id. S. 2 (proposed
17 U.S.C. S. 1202),
In assessing the constitutional concerns raised by the bill, which
would provide what is known as "sweat of the brow" protection for
certain compilations of factual material, we address three related
questions:
(i) whether the bill constitutes a valid exercise of
Congress's power under the Intellectual Property Clause of the
Constitution Art. I, S. 8, cl. 8, which provides that Congress
shall have the power "to promote the Progress of Science and
useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and
Discoveries";
ii) whether, if the bill does not constitute a valid exercise
of Congress's power under the Intellectual Property Clause, it
constitutes a valid exercise of Congress's power under the
Commerce Clause, or whether the Intellectual Property Clause
precludes such Commerce Clause legislation; and
(iii) whether, if the Intellectual Property Clause does not
preclude Congress from exercising its commerce power to enact
such legislation the First Amendment restricts such an
exercise of the commerce power.
As to the first question, the Supreme Court's decision in Feist
Publications. Inc., v Rural Tel. Serv. Co., 499 U.S. 340 (1991),
indicates that Congress may not, pursuant to the Intellectual Property
Clause of the Constitution create such "sweat of the brow" protection
for compiled facts, at least insofar as such protection would extend
to what the Court termed the nonoriginal portion of such a
compilation. As to the second and third questions, Supreme Court
precedents do not provide clear guidance; it is fair to say, however,
that either or both the Intellectual Property Clause and the First
Amendment may impose limitations on the exercise of congressional
power under the Commerce Clause that would raise serious
constitutional concerns regarding the constitutionality of H.R.
2652.[1]
I. Description of H.R. 2652
The stated purpose of H.R. 2652 is to "complement" the protection that
copyright law provides to collections of information. See H.R. Rep.
No. 105-S25, at S (1998) ("House Report"). According to the House
Report on H.R. 2652, the Supreme Court's decision in Feist "described
in more detail below)) has substantially reduced the incentives for
the creation of compilations of information at the same time that
"[c]opying large quantities of materials from another's collection,
and using it in a competing information product ã behavior that
copyright protection may not effectively prevent - is cheaper and
easier than ever, through digital technology now in widespread use.
House Report at 7. The House Report recognizes that "[v]arious legal
and technological options exist today for producers of collections of
information to protect their investments" -- copyright and state
contract law, Id.[2] The House Report concludes, however, that these
other existing tools are not "adequate to address the crux of the
problem," and that there are "meaningful gaps in protection that can
best be filled by a new federal statute." Id. at 7-8 In particular,
"the coverage of copyright law is limited after Feist, and the
protection of a contract binds only the parties be that contract."
Id. at 7.
The asserted "goal" of H.R. 2652 "is to stimulate the creation of more
collections [of information], as well as increased dissemination to
the public, and to encourage more competition among producers." House
Report at 8. In particular, the object of H.R. 2652 is to "restore a
modified form of the 'sweat of the brow' protection available in the
past as a separate doctrine and then under copyright law, but under
appropriate Constitutional power and with appropriate limitation."
Id. at 9. The House Report asserts that the Act would not "create a
property right like copyright," but would instead establish "a tort-
based cause of action against misappropriation." Id.
H.R. R. 2652 would establish a new chapter in Title 17, to be entitled
"Misappropriation of Collections of Information." The principal
provision on would establish a "misappropriation" tort, to be codified
as 17 U.S.C. S. 1202:
Any person who extracts, or uses in commerce, all or a
substantial part, measured either quantitatively or
qualitatively,, of a collection of information gathered,
organized,, or maintained by another person through the
investment of substantial monetary or other resources, so as
to cause harm to the actual or potential market of that other
person, or a successor in interest of that other person, for a
product or service that incorporates that collection of
information and is offered or intended to be offered for sale
or otherwise in commerce by that other person, or is successor
in interest of that person, shall be liable to that person or
successor in interest for the remedies set forth in section 1206.
Any person injured by a use or extraction of information in violation
of S. 1202 could file a civil action in federal district court. Id
(proposed is 1206(a)). Such courts would have the power to issue
injunctions enjoining any uses or extraction of information that
would contravene is 1202. Id. (proposed S. 1206(b)). Those courts also
would be able to "impounds[]" any "copies of contents of a collection
of information extracted or used in violation of S. 1202." Id.
(proposed S 1206(c)). A prevailing plaintiff in a civil action would
be entitled to treble damages, as well as any profits realized by the
defendant, costs and attorneys' fees. Id. (proposed S. 1206(d)).
Willful violations would, under certain circumstances, be subject to
criminal felony sanctions, including five years imprisonment. Id.
(proposed S. 1207(b)). No criminal or civil action could be
maintained by virtue of a use or extraction "that occurs more than 15
years after the investment of resources that qualified the...
collection of information for protection under [H.R. 2652]." Id.
(proposed S. 1208(c)). But this limitation might, for all intents and
purposes, create perpetual liability, since every time the collection
of information is "maintained," Id. (proposed S. 1202), that would be
an "investment of.. resources" that qualifies as the "collection of
information" for protection under proposed S. 1202. Thus if the
collector "expand[s]" or "refresh[es]" the collection, arguable the
15-year period would start anew. See House Report at 21.
The proposed legislation sets forth six categories of what it terms
'permitted acts." See proposed S.1203(a)-(f). The first subsection
provides that the legislation shall not prevent "the extraction or use
of an individual item, or other insubstantial part of a collection
of information, in itself, "but notes that repeated or systematic uses
or extractions of individual items or insubstantial portions may not
be used in a manner that would circumvent the general prohibition
against uses or extractions. Id. (proposed S 1203(a)). The second
subsection makes clear that the legislation shall not restrict any
person from independently gathering information or using information
obtained by means other than extracting it from a collection of
information gathered, organized, or maintained by another person
through the investment of substantial monetary or other resources."
Id. (proposed S. 1203(b)). The third subsection provides that the
legislation shall not restrict a person from using or extracting
information contained in a compilation "for the sole purpose of
verifying the accuracy of information independently gathered,
organized, or maintained by that person." Id. (proposed S. 1203 (c)).
The fourth subsection provides that extractions of uses "for nonprofit
educational, scientific, or research purposes" shall not be prohibited
unless such extractions or uses would "harm the actual of potential
market for the product or service." Id. (proposed S. 1203(d)). The
fifth subsection provides an exception for uses or extractions "for the
sole purpose of new reporting" in certain circumstances, Id. (proposed
S. 1203(e)). The sixth subsection permits "the owner of a particular
lawfully made copy of all or part of a collection of information from
selling or otherwise disposing of the possession of that copy." Id.
(proposed S. 1203(f)).
The proposed bill also contains a separate exclusion (with limited
exceptions) for "collections of information gathered, organized, or
maintained by or for a government entity, whether Federal, State, or
local, including any employee of agent of such entity." Id. (proposed
S. 1204(a)). This "exclusion," would be confined to collections of
information gathered, organized, or maintained "in the course of
performing governmental functions," and thus would not appear to
exempt factual databases - even databases made available to the public
- that were compiled by private parties using government funding or
pursuant to government contract. Finally another section of the bill
provides, in pertinent part, that an exclusion for "collections of
information gathered, organized, or maintained in the course of
performing governmental functions other than education or scholarship,
by or for a government entity, whether Federal, State, or local,
including any employee or agent of such entity, or any person
exclusively licensed by such entity, within the scope of the
employment, agency, or license." However, the exception for "education
or scholarship" would mean that S. 1202 would still apply to
information compiled entirely by public colleges and universities. See
also House Report at 17 (confirming that the statute would apply to
information collect by "Federal or State educational institutions in
the course of engaging in education or scholarship."
Particularly in light of the constitutional limitation that might
apply to the type or protection afforded by H.R. 2652, the precise
nature of the prohibition, permissions and exemptions that are
contained in the proposed bill are of critical importance. However,
many of the critical, proposed statutory terms are not well-defined.
Because of the ambiguity of many of these terms, it is impossible to
know for certain how wide-ranging H.R. 2652's applications would be.
Nevertheless, in the remainder of this section, we identify some of
the broadest and most ambiguous provision of H.R. 2652 in order to
clarify is possible scope.
To begin with, "information" would be defined to mean "facts, data,
works of authorship, or any other intangible material capable of being
collected an organized in a systematic way." Proposed S. 1201(2). As a
result, unlike the Copyright Act, the proposed legislation would
provide protection that would not be limited to compilations of what
have been termed expressive or original materials, concepts that we
discuss in more detail below. The legislation would instead also
provide protection to ordinary facts, which are not now subject to
copyright protection and may be unsuited to such protection as a
matter of constitutional law. In addition, the definition of
"information" would not, from its face, appear to be limited to those
compilations of information that are accessible only for a fee.
The proposed legislation also does not define either the term
"extracts" or the phrase "uses in commerce." Given their seemingly
expansive, ordinary meanings, these words would, standing alone,
appear to give H.R. 2652 quite a broad scope. See House Report at 12
(explaining that the provision would cover any "dissemination to
others.) moreover, the bill does not expressly provide that the
prohibition on uses or extractions would apply only to liability to
uses of information that is conveyed for a fee, or that is conveyed
subject to contractual conditions on its further dissemination.[3]
Finally the provision would prohibit certain "uses" or "extractions"
of even quantitatively insubstantial parts of a compilation, if that
part is "qualitatively" substantial. The House Report provides the
following elaboration on this point:
Only portions of the collection that are substantial in amount
or importance to the value of the collection as a whole would
be covered. Qualitative harm may occur through the extraction
of a qualitatively small but valuable portion of a collection
of information. For example, the Physician's Desk Reference, a
work that compiles generally available information about every
prescription drug approved by the FDA, contains some several
thousand drugs and is available to both consumers and medical
professionals. If a second comer extracted information about
the thousand most commonly prescribed medications and offered
it for sale to the general public - for example under the
title "Drugs Every Consumer Should Know" - that extraction and
use, although a fractions of the total collection of
information, would cause the kind of market harm that
Committee intends H.R. 2652 to prevent. Similarly, securities
database, while constituting a relatively small portion of
actively traded or volatile securities, may be of such
"qualitative" importance to the value of the database that it
creates the type of commercial harm that the Committee intends
section 1202 to prevent.
House Report at 12.[4]
At the same time, the bill only prohibits extractions or uses in
commerce that would "harm the actual or potential market" of the person
who gathered, organized, or maintained the collection of information.
Proposed S 1202. The scope of this important limitation is unclear.
The legislation would define "potential market" to mean "any market
that a person claiming protection under section 1202 has current and
demonstrable plans to exploit or that is commonly exploited by persons
offering similar products or services incorporating collections of
information." Proposed S. 1201(3). This definition is arguably an
expansive one that would justify a very broad construction of what
would constitute harm to the potential market. Under such a broad
construction, even an individual's decision to download information
that had been offered for sale, purchased, but then posted on the
internet for free use by the purchaser could give rise to liability on
the theory that such an "extraction" would decrease the "potential
market" by depriving the initial seller of a potential buyer. So
construed, even the provisions in H.R. 2652 that would exempt certain
uses and extractions for scientific or educational purposes would do
little to confine the reach of the bill. As noted above, these
exemption are themselves limited by the requirement that such uses or
extractions not harm the potential market of the original compiler,
and it would appear that any educational or scientific sharing of
information could deprive a potential seller of a potential buyer.
In addition, H.R. 2652 does not include anything resembling the
express exemptions found in the Copyright Act for uses that Congress
previously has considered to be of particular public benefit. See
e.g., 17 U.S.C. SS. 108 (concerning reproduction by libraries and
archives) 110(1) (concerning face-to-face teaching activities), 110(2)
concerning performances and transmissions for educational purposes),
110(3) (concerning performances in the course of religious services
and assemblies), 118 (concerning uses by noncommercial broadcasters).
The absence of these express exemptions in what would be a statutory
scheme closely related to the Copyright Act could be read to suggest
that Congress intended H.R. 2652 to prohibit such uses.
There are, however, factors that counsel against a broad construction
of "potential market," and thus that point toward a more limited
construction of the scope of the protection that would be provided by
H.R. 2652. As an initial matter, the broadest possible construction
would raise very serious constitutional concerns that we discuss in the
following sections, and thus courts may be likely to avoid such a
construction for that reason alone.
In addition, the Copyright Act itself identifies harm to the "potential
market" as one of the four statutory factors to be weighed in
determining whether the "fair use" standard has been met, see 17
U.S.C. S 107(4), and thus the appearance of this same phrase in the
proposed legislation may signal Congress's intention to incorporate
the definition that has been developed in the copyright context.
Moreover, H.R. 2652 would contain, in addition to the "harm to the
potential market" requirement, the requirement that a use or
extraction be of a substantial portion of the compilation. This
limitation also appears analogous to one of the four statutory factors
in determining "fair use" under the Copyright Act. See 17 U.S.C S.
107(3) (describing the factor as "the amount and substantiality of the
portion used in relation to the copyrighted work as a whole).[5] Thus,
there would appear to be some textual basis for concluding that H.R.
2652 is intended to incorporate, albeit implicitly, something like the
"fair use" provision Copyright Act, and thus to limit to a significant
degree the scope of the protection that the statute would provide.
If so, the Court's recent decision in Campbell v. Acuff-Rose music,
Inc., 210 U.S. 569, 590-94 (1994), would be relevant to the
construction of H.R. 2652. The Court there suggested that the
potential market factor is satisfied for purposes of the Copyright Act
when a copyrighted work is used in a way that would create, in effect,
a substitute product in direct competition with the original. See if.
at 590-94. The Court added, however, that when the "second uses is
transformative, market substitution is less certain, and market harm
may not be so readily inferred." Id. at 591. Applying the same
approach here, H.R. 2652 would arguable reach, with some exceptions,
only non-transformative uses for commercial purposes, as it would only
such uses that, in light of the "fair uses standard" developed in
copyright law, would result in harm to the potential market within the
meaning of H.R. 2652. It is important in this regard to emphasize that
the fair uses standard in copyright is an equitable one that requires
a sensitive weighing of the statutory factors in light of the specific
factual context at issues, see if at 577 ("The task is not to be
simplified with bright-line rules, for the statues, like the doctrine
it recognizes, calls for case-by-case analysis."), and that a
determination as to fair use may also depend upon a an evaluation of
the "good faith" of the use, see if. at 585 n. 18.
In sum, while it is clear that H.R. 2652 is intended to cover
nonoriginal, factual material, which the Copyright Act does not (and,
as we explain below, for constitutional reasons, probably could not be
extended to reach), the scope of the protection that H.R. 2652 is
intended to afford to such factual material is far less clear. The
ambiguity concerning the scope of the protection that H.R. 2652 is
intended to afford to such factual materials is far less clear. The
ambiguity concerning the scope of the intended protection for factual
material arises in large part because the legislation does not make
clear whether it is intended to incorporate a version of the fair use
provision that is contained in the Copyright Act or whether it is
instead intended to reach broadly to encompass individual uses by
non-competitors for non-commercial purposes.
Suffice to say that, not withstanding the ambiguities in the text, to
the extent H.R. 2652 would prohibit extractions or uses of substantial
portions of factual compilations by direct competitors, it is much
more likely to be held constitutional than if it would prohibit
extractions or uses by potential consumers for noncommercial purposes.
By contrast if the provision were construed to provide protection
against uses by potential consumers, and not simply direct
competitors, it would appear to be of almost limitless scope and
therefore to raise constitutional concerns that appear insurmountable.[6]
We explain, however, that even if the protection by H.R. 2652 were
construed as limited to direct competitors and to somehow distinguish
between "fair" and "unfair" uses of collections of information, there
would remain substantial constitutional questions concerning the
degree to which any reuse of factual information that would not
infringe on the originality of a work may be deemed by Congress to be
in some sense "unfair" and therefore subject to regulation. In other
words, it is unclear what "unfair uses" of factual material could be
constitutionally prohibited. There is also little precedent to guide
interpretation as to where the line between fair and unfair uses of
factual information is intended to be drawn precisely because the
Copyright Act, which codifies the "fair use" standard, does not
provide protection for facts.
With this background concerning the proper construction of H.R. 2652
in place, we now turn to the constitutional analysis of the bill.
II. The Intellectual Property Clause
We understand that the proposed legislation is not necessarily intended
to constitute an exercise of Congress's power under the Intellectual
Property Clause, and that it is instead apparently premised on
Congress's power to regulate interstate commerce. Nevertheless, it is
instructive for purposes of analysis to examine, as an initial matter,
whether the legislation could be premised on Congress's power under
the Intellectual Property Clause. It is only to the extent that the
legislation would fall outside the permissible scope of the power
conferred by that clause that it would give rise to concerns that, as
an exercise of the Commerce Power, it would impermissibly infringe on
an implicit limitation contained in the Intellectual Property Clause.
The key precedent for assessing whether this proposed legislation
would constitute a valid exercise of Congress's power under the
Intellectual Property Clause is Feist. In Feist, the Supreme Court
considered the extent to which the Copyright Act, 17, U.S.C. SS
101-1101 (West 1996 & Supp 1998), protected the listings in telephone
directory white pages from copying by a competitor. In answering that
statutory question, the Court did not confine itself to a conventional
consideration of congressional intent. Instead, the Court first
examined the constitutional limitations inherent in the power
conferred by the Intellectual Property Clause, on which the Copyright
Act was premised.[7] Only after having considered these background
constitutional limitations on the exercise of the copyright power did
it reach the conclusion that Congress did not intent the Copyright Act
to extend protection to such listings. There is language in the
opinion, however, that indicated that the Courts also predicated its
decision on a judgment that the Intellectual Property Clause would not
empower Congress to provide copyright protection to either the
listings themselves, or the facts contained in the listings, even if
Congress intended to extend such protection.
In addressing the background constitutional limitations on the scope
of the power conferred by the Intellectual Property Clause, the Court
acknowledged that copyright protection may extend to factual
compilations and to other "fact-based works," but concluded that the
prerequisite for such protections is that the selection or arrangement
of the facts is in some degree "original." 499 U.S. at 344-51. The
Court explained that "[o]riginality is a constitutional requirement."
Id. at 346. In order to satisfy this constitutional prerequisite of
originality, the Court opined, the work in question must "possess[] at
least some minimal degree of creativity." Id. at 345. In a factual
compilation, this creativity can be present in the manner in which the
compiler selects or arranges the facts. Id. at 348. Indeed, "[t]he
vast majority of works make the grade quite easily, as they possess
some creative spark, no matter how crude, humble, or obvious it might
be." Id. at 345 (internal quotation marks omitted). The Court noted
"[o]riginally does not signify novelty; a work may be original even
though it closely resembles other works so long as the similarity is
fortuitous, not the result of copying." Id.
Under Fiest, however, even if a compilation is in some sense original,
and thereby entitled to some copyright protection, "the copyright is
in a factual compilation is thin." Id . at 349. That is because, in
such circumstances, the bulk of the material that comprises the work
will, by definition, be facts that in and of themselves lack the
originality that justifies protection pursuant to the Intellectual
Property Clause. As the Court explained:
The mere fact that a work is copyrighted does not mean that
every element of the work maybe protected. Originality remains
the sine qua non of copyright; accordingly, copyright
protection may extend only to those components of a work that
are original collocation of words, he or she may be able to
claim a copyright in this written expression. Others may copy
the underlying facts from the publication, but not the precise
words used to present them...
... Notwithstanding a valid copyright, a subsequent compiler
remains free to use the facts contained in another's
publications to aid in preparing a competing work, so long as
the competing work does not feature the same selection and
arrangement. As one commentator explains it: "[N]o matter how
much original authorship the work displays, the facts and
ideas it exposes are free for the taking.... [T]he very same
facts and ideas may be divorced from the context imposed by
the author, and restated or reshuffled by second comers, even
if the author was the first to discover the facts or to
proper the ideas."
Id. at 348-49 (citation omitted) (quoting Jane C. Ginsburg, Creation
and Commercial Value: Copyright Protection of Works of Information, 90
Colum. L. Rev. 1865, 1868 (1990)). Accordingly, as applied to a
factual compilation that has nonoriginal written expression, the
Court concluded that "only the compiler's selection and arrangement may
be protected; the raw facts may be copied at will. This result is neither
unfair nor unfortunate. It is the means by which copyright advances the
progress of science and art." Id. at 350.
Against this backdrop, the Court rejected the argument that the Copyright
Act incorporated the "sweat of the brow" doctrine &endash; namely, that, whether or
not a factual compilation contained any degree of creativity, copyright still
attached in order to compensate compilers for the hard work and resources that
they expended in the course of compiling the facts. Id. at 252-54. Such a
doctrine was not tethered to the originality requirement that the Court
concluded was the sine qua non for copyright protection.
On the basis of its constitutional and statutory analysis, the Court
concluded that the White pages at issue in Feist contained none of the
creativity that would suffice to render a work "original." It therefore
concluded that the listings were entitled to no protection under the Act,
despite the fact that the defendant had copied significant portions of the
plaintiff's compilation for use in its own competing white pages. The Court
noted that the listings at issue fell into the "narrow category of works in
which the creative spark is utterly lacking or so trivial as to be virtually
nonexistent." Id. at 359. It explained that the white pages at issue are
"entirely typical. Persons desiring phone service area fill out an application
and data provided by its subscribers and lists it alphabetically by surname.
The end product is a garden-variety white pages directory, devoid of even the
slightest trace of creativity." Id. at 362. The Court further explained that
Rural could not claim "originality in its coordination and arrangement of
facts. . . . [T]here is nothing remotely creative about arranging names
alphabetically in white pages directory. It is an age-old practice,
firmly-rooted in tradition and so commonplace that it has come to be expected
as a matter of course." Id. at 363.
The Court therefore concluded that both the compilation itself,
and the particular pieces of information contained therein, lacked
sufficient originality to warrant protection. The Court summarized its
judgment as follows:
We conclude that the names, towns, and telephone numbers copied by
Feist were not original to Rural and therefore were not protected by
the copyright in Rural's combined copyright in white and yellow pages
directory. As a constitutional matter, copyright protects only those
constituent elements of a work that possess more than a de minimis
quantum of creativity. Rural's white pages, limited to basic
subscriber information and arranged alphabetically, fall short of the
mark. As a statutory matter, 17 U.S.C. § 101 does not afford
protection from copying to a collection of facts that are selected,
coordinated, and arranged in a way that utterly lacks originality.
Given that some works must fail, we cannot imagine a more likely
candidate. Indeed, were we to hold that Rural's white pages pass
muster, it is hard to believe that any collection of facts could fail.
Id. at 363-64.
Despite the strong language contained in the opinion, an
argument can be made that the Court's constitutional pronouncements in
Feist were dictim because they were unnecessary to the disposition of
the case. The Court in Feist was asked to resolve a statutory issue
concerning the scope of statutory protection for compilations under the
Copyright Act. On the other hand, the Court in Feist plainly stated at
numerous points that originality and creativity are constitutional
prerequisites for copyright protection under Article I, Section 8,
Clause 8 of the Constitution. (8) Those statements strongly indicate
that the Court's decision rested on a constitutional, rather than
merely a statutory, judgment.
Because the proposed bill would clearly provide protection for
"collections of information" without regard to whether they are
original, and because it would define "information" quite expansively,
it would appear to protect even the type of noncreative white pages
listing at issue in Feist, as well as similarly unoriginal factual
compilations or facts within otherwise original compilations. In this
respect, the prohibition in proposed section 1201 would go well beyond
the "thin protection" for factual compilations recognized in Feist. (9)
Accordingly, to the extent that the proposed bill would attempt to
provide protection, pursuant to the Intellectual Property Clause rather
than some other power, to the very type of unoriginal factual materials
that were at issue in Feist, it would run afoul of recent Supreme Court
precedent that is, if not binding, at a minimum a clear indication of
how the Court would likely rule.
III. Possible Intellectual Property Clause Limitations on the
Commerce Power
The House Report asserts that H.R. 2652 may be enacted "within
Congress' authority to regulate interstate commerce under Article I,
Section 8, Clause 3 of the Constitution." House Report at 9-10.
Absent some external constitutional limitation, the bill would appear
to constitute a valid exercise of the commerce power, as we understand
that extractions, or
uses in commerce, of substantial portions of collections of information
would, in the aggregate, substantially affect interstate commerce. See
United States v. Lopez, 514 U.S. 549 (1995). (10) This section examines
the question whether the Intellectual Property Clause places an
external limitation on such an exercise of the commerce power.
Feist does not provide clear guidance on the question. Nothing in
Feist holds that the Intellectual Property Clause limits the scope of
Congress's power under other Clauses, such as the Commerce Clause, and
the opinion may be read to state limits that pertain to the exercise of
the Intellectual Property Clause itself. At the same time, some
language in Feist might also fairly be read to suggest, not only that
the Intellectual Property Clause does not authorize sweat-of-the-brow
protection for either unoriginal factual compilation or facts in
otherwise original compilations, but also that the Intellectual
Property Clause prohibits Congress from relying on any other
constitutional power to afford copyright-like protection to facts and
to the nonoriginal parts of factual compilations.
For example, the Court noted that all "all facts . . . 'may not be
copyrighted and are part of the public domain available to every
person." 499 U.S. at 348 (emphasis added; citation omitted). See also
id. at 349 ("'[N]o matter how much original authorship the work
displays, the facts and ideas it exposes are free for the taking. . . .
[T]he very same facts and ideas may be divorced from the context
imposed by the author, and restated or reshuffled by second comers,
even if the author was the first to discover the facts or to propose
the ideas.'") (emphasis added) (quoting Ginsberg, Creation and
Commercial Value, 90 Colum. L. Rev. at 1868). The Court also opined
that it is a "constitutional requirement" that persons be permitted to
use "the fruit of the [factual] compiler's labor" without compensation:
It may seem unfair that much of the fruit of the compiler's labor may
be used by others without compensation. As Justice Brennan has
correctly observed, however, this is not "some unforeseen byproduct of
a statutory scheme." Harper & Row, 471 U.S., at 589 (dissenting
opinion). It is, rather, "the essence of copyright," id., and a
constitutional requirement.
Id.
The Court further explained that the constitutional objective is
realized not only by providing intellectual property rights in
expression, but also by permitting ideas and information to be
disseminated freely:
This principle, known as the idea/expression or fact/expression
dichotomy, applies to all works of authorship. As applied to a factual
compilation, assuming the absence of original written expression, only
the compiler's selection and arrangement may be protected; the raw
facts may be copied at will. This result is neither unfair nor
unfortunate. It is the means by which copyright advances the progress
of science and art.
Id. at 350.
Accordingly, one possible reading of the Feist decision is that
a system in which the "raw facts" in a compilation may not be "copied
at will" is a system that necessarily undermines the object of the
Intellectual Property Clause &endash; the progress of science and art &endash; and is
therefore unconstitutional. On this view, the clause would constitute
not only a grant of power to Congress but also a limitation on
Congress. Cf. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489
U.S. 141, 146 (1989) (discussing scope of federal preemption of state
intellectual property law and stating that "[a]s we have noted in the
past, the [Intellectual Property] Clause contains both a grant of power
and certain limitations upon the exercise of that power"); Graham v.
John Deere Co., 383 U.S. 1, 5-6 (1966) (explaining, again with
reference to federal preemption of state law, that "[t]he clause is
both a grant of power and a limitation. . . . Congress may not
authorize the issuance of patents whose effects are to remove existent
knowledge from the public domain, or to restrict free access to
materials already available."); Compco Corp. v. Day-Brite Lighting,
Inc., 376 U.S. 234, 237 (1964) (discussing scope of federal preemption
of state law and explaining that "[t]o forbid copying [under state law]
would interfere with the federal policy, found in [Article] I,
[section] 8, [clause] 8, of the Constitution and in the implementing
federal statutes, of allowing free access to copy whatever the federal
patent and copyright laws leave in the public domain.").
If the Intellectual Property Clause precluded Congress from providing
protection against the copying of nonoriginal portions of factual
compilations, even pursuant to a power other than that conferred by
that Clause, then Congress would not be able to use the Commerce Clause
to avoid the implicit strictures of the Intellectual Property Clause
that the Court in Feist could be said to have recognized, just as
Congress may not use the Commerce Clause to avoid the Bankruptcy
Clause's express requirement that bankruptcy laws be uniform, see
Railway Labor Executives' Ass'n v. Gibbons, 455 U.S. 457, 468-69
(1982). Under this reading, Congress's reliance on the commerce power
would not obviate any of the constitutional problems concerning the
exercise of congressional power under the Intellectual Property Clause
that we have already identified. (11)
On the other hand, prior to Feist, the Court had recognized
intellectual property interests not grounded in the Intellectual
Property Clause. There are at least four notable circumstances outside
the copyright context in which the Court has recognized such interests.
Although these examples, together, indicate that there is no
categorical prohibition on Congress's power to restrict the
dissemination of data and other forms of "intellectual property" that
are not copyrighted, neither do they make clear that Congress would
have the power to enact legislation like H.R. 2652 under the Commerce
Clause against a claim that the Intellectual Property Clause imposes a
limitation. With one exception, the cases are distinguishable, and
even that case does not, by itself, support legislation of this scope.
First, the Court has sanctioned federal limitations on the
dissemination of information where the person who wishes to disseminate
it received such information only on the condition that it remain
secret or confidential, whether such condition was expressly set forth
by contract or impliedly recognized as a matter of law. For example,
the government is able to afford protection to factual information
pursuant to its commerce power in order to protect trade secrets. See
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 155-57
(1989) (discussing compatibility of state trade secret protection with
federal intellectual property regime). See also Seattle Times Co. v.
Rhinehart, 467 U.S. 20 (1984) (federal court may impose protective
order restricting party from revealing trade secrets that it obtained
pursuant to compulsory discovery process). (12) These types of
protection would appear to be distinguishable, however, from the type
of protection that H.R. 2652 would provide.
H.R. 2652 would provide protection to compilers of information so that
they would be able to offer the information to the public for a fee.
By contrast, provisions that protect trade secrets do not restrict the
manner in which information that is offered to the public in the market
may be used. Such provisions instead simply provide protection to
those persons who wish to keep information confidential and therefore
to persons who have no interest in offering to the wider public for
sale. As a result, trade secret protections do not interfere, at least
directly, with the manner in which information that is made available
for sale to the public might be used. By contrast, H.R. 2652 would
impose direct limitations on the manner in which members of the public
might use information that is, in some sense that may be
constitutionally relevant, already in the public domain. Cf. Bonito
Boats, 489 U.S. at 155-157 (explaining that state trade secret
protection is not preempted by federal patent laws because trade
secrets protection does not interfere with policy that "matter once in
the public domain must remain in the public domain."). (13)
Second, protection may be afforded pursuant to the commerce power to
deter false representation, and/or to protect consumers from confusion,
as the trademark laws demonstrate. See The Lanham Act, 15 U.S.C. §§
1051-1540 (1994). An analogy between H.R. 2652 and trademark
protection would appear questionable, as the bill plainly provides
protection that is not directed at avoiding confusion as to the
identity of the source of the information. See Bonito Boats, 489 U.S.
at 154-55 (distinguishing between traditional trade dress regulation
and laws aimed at protecting factual information that would not sow
confusion). Indeed, the provision would provide protection even if it
were made perfectly clear, and no consumer could reasonably conclude
otherwise, that the copier of the collection of information had not
exerted personal effort in compiling the facts provided but had instead
merely copied them from someone who had exerted such personal effort.
In one notable case, protection analogous to that afforded
trademarks has been extended to a word, the use of which would not
cause consumer confusion. See San Francisco Arts & athletics, Inc. v.
United States Olympic Comm., 483 U.S. 522, 539 (1987). That case,
however, is distinguishable. There, Congress had provided statutory
protection for the use of the word "Olympic" in order to protect the
commercial interests of the United States Olympic Committee and "the
value [that] the USOC's efforts have given to [that word]." Id. at 541.
That case did not involve protection of facts, as such, but rather of
the special commercial value associated with the use of a particular
word in a particular context. H.R. 2652, however, would appear to
provide such broad protection that it would protect facts not for any
special value apart from their ordinary meaning that has been given to
them by compiler's efforts but rather merely because the compiler
expended effort in collecting them.
Third, state law has been used to provide protection against
discrimination of certain "copied" materials, in order to protect what
has been termed "the right of publicity." See Zacchini v.
Scripps-Howard Broadcasting Co., 433 U.S. 562, 569 (1977). The right
of publicity protection, however, only guards the use of an
individual's "personality" and personal talents against unauthorized
commercial exploitation. See id. For example, Zacchini concerned the
legality of a news service's airing of film of an individual's paid
human cannonball performance, against the wishes of the performer. The
case therefore involved protection of a depiction of the performer's
original performance, a "fact" &endash; the performance &endash; that existed only
because of the performer's own efforts. The Court expressly noted that
the right of publicity would not serve to prevent reporting of facts
about the cannonball act, as opposed to display of the act itself in
its entirety, id., at 574, and that the right was analogous to
copyright's protection of original expression, id., at 577 n. 13. See
also id., at 569 (a case involving description of the act would be "a
very different case"). By contrast, the protection provided by H.R.
2652 would extend to factual data that exists independently of the
compiler's efforts.
(1985) (plurality opinion) (internal marks and citations omitted)
(permitting recovery of damages for defamatory statement not involving
matters of public concern absent a showing of actual malice).
Finally, competitive misappropriation of so-called "hot news"
information has also been afforded protection by the Supreme Court as a
matter of federal common law. See International News Serv. v. Associated
Press, 248 U.S. 215 (1918). International News Serv. might provide to
create certain torts relating to "misappropriation" of facts, even where
teh facts themselves may not be copyrighted pursuant to the Intellectual
Property Clause.
In International News Serv., the Court, without relying on the
Intellectual Property Clause, recognized the permissibility of a certain
limited form of liability for copying publicly disclosed information. The
case arose prior to the Court's decision in Erie R.R. Co. v. Tompkins, 304
U.S. 64 (1938) and it represented an exercise of the Supreme Court's power
to make federal common law pursuant to the grant of ddiversity
jurisdiction. The case concerned a dispute that arose from a practice of
the International News Service. The news agency systematically reviewed
east coast editions of newspapers published by subscribers to the
Associated Press, copied or rewrote the stories contained therein, and
published the stories in its own west coast newspapers, some of which were
delivered and sold before rival Associated Press newspapers in the same
cities. Id., 248 U.S. at 231. The Associated Press had not copyrighted
its stories, id. at 233, and there was no established cause of action
that hte Associated Press could invoke to stop the International News
Service practices.
The Court held that, even if the Associated Press did not have any
property interest in its reported facts "as against the public," it had a
"quasi property" right vis-a-vis the International News Service, which was
"seeking to make profits at the same time and in the same field." Id. at
236. The Court used this quasi-property right to justify an injunction
because the International News Service was "endeavoring to reap where it
has not sown" Id. at 239. The Court's holding "only postpone[d]
participation by [the Associated Press's] competitor in the processes of
distribution and reproduction of news that it has not gathered, and only
to the extent necessary to prevent that competitor from reaping the fruits
of [the Associated Press's] efforts and expenditure, to the partial
exclusion of [the Associated Press]." Id. at 241.
Although the legal status of the quasi-property right recognized
in International News Serv. -- and, more particularly, the scope of that
right -- is not entirely clear, Feist suggested that the so-called "hot
news" misappropriation tort, at least as it was recognizeed in
International News Serv., itself, cuold survive. The Feist Court
explained that the International News Serv. Court had acknowledged that
the news articles themselves were "copyrightable," but had then "flatly
rejected" the view "that the copyright in an article extended to the
factual information it contained." 499 U.S. at 353-54. Nevertheless, the
Court noted that "[t]he Court ultimately rendered judgment for Associated
Press on noncopyright grounds that are not relevant here." Id. at 354 n *.
More generally, the Feist Court suggested that an "unfair
competition" theory could be the basis for some anti-copying protection of
nonoriginal factual compilations:
Protection for the fruits of such research . . . may in certain
circumstances be available under a theory of unfair competition. But to
accord copyright protection on this basis alone distorts basic copyright
principles in that it creates a monopoly in public domain materials
without the necessary justification of protecting and encrouaging the
creation of "writings" by "authors".
499 U.S. at 354 (quoting Melville B. Nimmer & David Nimmer, Nimmer on
Copyright 3.04, at 3-23 (1990) (footnote omitted)). The passage is
obscure, and thus it is not exactly clear what protection might be
available "under a theory of unfair competition," or even what the Court
intended by the phrase "a theory of unfair competition." It is possible,
however, that the passage provides further support for an argument that
the misappropriation tort recognized in International News Serv. survives
the Feist analysis as an example of permissible regulation of unfair
competition.
Some insight into the possible meaning of the phrase "unfair
competition" as it appears in Feist may be gleaned from Justice O'Connor's
decision for the Court, two years prior to her opinion in Feist, in Bonito
Boats. Justice O'Connor identified the "usual sense [in which] the term
'unfair competition' is understood" by tyuing it to trade dress
protection:
The law of unfair competition has its roots in the common-law tort
of deceit: its general concern is with protecting consumers from
confusion as to source. While that concern may result in the creation of
"quasi-property rights" in communicative symbols, the focus is on the
protection of consumers, not the protection of producers as an incentive
to product innovation. Judge Hand captured the distinction well in
Crescent Tool Col. v. Kilborn & Bishop Co., 247 F. 299, 301 (CA2 1917),
where he wrote:
"[T]he plaintiff has the right not to lose his customers through
false representations that those are his wares which in fact are not, but
he may not monopolize any design or pattern, however trifling. The
defendant, on the other hand, may copy plaintiff's goods slavishly down
to the minutest detail: but he may not represent himself as the plaintiff
in their sale."
489 U.S. at 157 (emphasis added). As the Court in Bonito Boats
concluded,"unfair competition" thus does not describe the object of a
statute "aimed directly at preventing the exploitation of [publicly
disclosed factual information]." Id. at 158. H.R. 2652 would be such a
statute.
If this limited meaning of "unfair competition" were all that the
court intended to cover in the passage quoted above from Feist, then it
would be difficult to rely on that passage as authority for the type of
"unfair competition" protection contemplated here. On the other hand, the
tort recognized in International News Serv. does appear to have been
premised on the notion that the International News Service had engaged in
"unfair competition," and thus that a legal remedy could be provided for
such conduct even though the copyright power would not provide the basis
for such protection. As a result, the general reference in Feist to
protection against unfair competition emanating from the exercise of a
valid power other than the Intellectual Property Clause provides some
basis for the congressional creation of a misappropriation tort, at least
along the lines recognized in International News Serv.
If, as seems fair to be the case, Feist does not foreclose
Congress from enacting something approximating the misappropriation tort
recognized in International News Serv. itself, there remains the question
concerning the permissible scope of an extension of such a tort. There is
little precedent to provide direct guidance on this point in part because
there has been little legal development in the misppropriation tort itself
since Feist. Indeed, even prior to Feist, due to the Court's decision in
Erie R.R. limiting the authority of federal courts to engage in cmmon
lawmaking, federal courts had not accasion to expand upon the tort
recognized in International News Serv. State courts have also had little
occasion to expand upon the tort recognized in International News Serv.,
in part because of the preemptive effect of the Copyright Act. As
explained in the recent case of See NBA v. Motorola, Inc., 105 F.3d 841,
852 (2d Cir. 1997), a state-law tort that would not be preempted by the
Copyright Act must have the following essential elements: (i) the
plaintiff generates or collects information at some cost or expense; (ii)
the value of the information is highly time-sensitive; (iii) the
defendant's use of the information constitutes free-riding on teh
plaintiff's costly efforts to generate or collect it; (iv) the defendant's
use of the information is in direct competition with a product or service
offered by the plaintiff; and (v) teh ability of other parties to
free-ride on the efforts of the plaintiff would so reduce the incentive to
produce the product or service that its existence or quality would be
substantially threatened.
Unburdened as it is by limitations on judicial common lawmaking or
federal preemption doctrine, Congress might have greater freedom than
federal courts or states to expand upon the tort recognized in
International News Serv. It is plain, however, that H.R. 2652 would
constitute, not a modest extension of the "hot news" misappropriation
tort, but a dramatic extension fo the tort recognized in teh case. See
House Report at 17 (explaining that H.R. 2652 would "preserve the holding"
of International News Serv., but would reach far beyond that case to make
impermissible much conduct that toes not fall within the "narrow scope,"
id., of that holding.). H.R. 2652 would not require a civil plaintiff or
a federal prosecutor to prove that the value of the information be highly
time-sensitive, or that incentive to produce the product or service that
its existence or quality woudl be substantially threatened. Moreover, due
to the ambiguity as to the scope of the limitation that there must be a
demonstration of harm to the potential market, it is not at all clear that
H.R. 2652 would even require proof that the offending use or extraction be
committed by a person in direct competition with a product or service
offered by the plaintiff, or even that a use was nontransformative and for
a commercial purpose. In contrast, the Court in International News Serv.
repeatedly emphasized that the tort it was identifying would not extend to
the copying and dissemination of news stories by members of the public, as
opposed to by competitors of the Associated Press. 248 U.S. at 239-41.
Accordingly, to the extent that Feist may be read to have
construed the intellectual Property Clause to have established a kind of
constitutionally prescribed public domain for factual material on which
Congress may not infringe (absent, perhaps, private contractual
agreements), a broad expansion of the "hot news" tort would appear to
raise serious constitutional concerns. h.R. 2652 -- which would apply
well beyond the context of direct competitors, let alone the context of
time-sensitive direct competition -- would therefore raise substantial
questions under Feist (and under the First Amendment, see infra) that
would not be raised by a less ambitious statute that codified a limited
International News Serv.-like tort. See Reichman & Samuelson,
Intellectual Property Rights in Data?, 50 Vand. L. Rev. at 139-45.
IV Possible First Amendment Limitations on the Commerce Power
Even if the Intellectual Property Clause does not itself impose
constraints on Congress's Commerce Clause power, the First Amendment might
nevertheless limit the type of protection that Congress can provide
against the "use" and "extraction" of factual compliations.
One of the principal aims of the First Amendment is to "secure the
'wildest possible dissemination of information from diverse and
antagonistic sources.'" New York Times Co. v. Sullivan, 376 U.S. 254, 266
(1964) (quoting Associated Press v. United States, 326 U.S. 1, 20 (1945)).
In accordance with this objective, the First Amendment imposes significant
constraints on teh ability of the government to restrict the dissemination
of information that has been publicly disclosed and that the disseminator
has lawfully obtained. For example, although the Supreme Court has been
careful never to hold categorically that the publication of lawfully
obtained truthful information "is automatically constitutionally
protected," see The Florida Star v. B.J.F., 491 U.S. 524, 541 (1989(, the
Court has, on several occasions, held that "the government may not
generally restrict individuals from disclosing information that lawfully
comes into their hands in the absence of a 'state interest of the highest
order.'" United States v. Aguilar, 515 U.S. 593, 605 (1995) (quoting
Smith v. Daily Mail Pub. Co., 443 U.S. 97, 103 (1979)). See also
Butterworth v. Smith, 494 U.S. 624, 632 (1990). And even if the state has
such an interest, "punishment may lawfully be imposed, if at all, only
when narrowly tailored to a state interest of the highest order." Florida
Star, 491 U.S. at 541. What is more, even in situations in which the
government hypothetically could impose subsequent sanctions for the
publication or copying of certain information, there is a particular
concern about imposing a prior restraint on a secondary recipient from
disseminating non-commercial speech. See, e.g., New York Times Co. v.
United States, 403 U.S. 713 (1971). That is true even where the
information was unlawfully obtained as an initial matter. Id.
To besure, cases such as New York Times Co. and Florida Star are
not directly on point. Those cases involved governmental attempts to
suppress certain types of information from being disseminated on the basis
of content. By contrast, H.R. 2652 would not target any particular types
of messages for suppression. It would instead prescribe the means by
which collections of information that had been complied may be used by
others. Namely, it would require users, in certain circumstances, to
expend great effort independently before using information contained in a
collection that itself had been compiled only after great effort.
This ground of distinction hardly dispenses, however, with the
concern that H.R. 2652 trenches on First Amendment rights. Copyright
protection similarly does not seek to suppress certain types of messages.
It, too, merely prescribes the means by which information may be used by
others. Nevertheless, the Court has concluded that the First Amendment
may impose limitations on the types of material that may be copyrighted.
Most significantly , in Harper & Row Publishers, Inc. v. Nation
Enterprises, 471 U.S. 539 (1985), the Court explained that the First
Amendment and the Copyright Act can be reconciled by virtue of the fact
that copyright law already embodies a distinction between original forms
of expression -- which are copyrightable -- and facts (and ideas) -- which
are not:
[C]opyright's idea/expression dichotomy "strike[s] a definitional
balance between the First Amendment and the Copyright Act by permitting
free communication of facts while still protecting an author's
expression." No author may copyright his ideas or the facts he narrates.
17 U.S.C. 102(b).
Id. at 556 (citation omitted). See also New York Times Co., 403 U.S. at
726, n.* (Brennan, J., concurring); Feist, 499 U.S. at 344-45 ("The most
fundamental axiom of copyright law is that '[n]o author may copyright his
ideas or the facts he narrates.'")
(quoting Harper & Row, 471 U.S. at 556). Thus, for example, the Court
held that although direct quotations from President Ford's biography
were subject to copyright, the historical facts contained in that
biography were not subject to copyright and could be freely copied.
See Harper & Row, 471 U.S. at 565-66 & n.8 (applying copyright
analysis only to "verbatim quotes" from the biography, and excluding
from infringement consideration historical quotations attributed to
third parties and to government documents). See also Zacchini, 433
U.S. at 574 (right of publicity would not serve to prevent reporting
of facts about the cannonball act, as opposed to display of the act
itself in its entirety); id. at 577 n. 13 (noting analogy to
copyright's expression/idea distinction).
The distinction referenced in Harper & Row may be understood to
reflect the Court's understanding that, in order to reconcile and
accommodate copyright and the First Amendment, no intellectual
property rights can extend to facts that have been released in the
public domain.[19] Moreover, even in the context of creative forms of
expression that can copyrighted (as opposed to factual information,
which cannot), First Amendment values are further protected in the
copyright law by virtue of the "latitude for scholarship and comment
traditionally afforded by fair use." Harper & Row, 471 U.S. at 560.
Furthermore, the Intellectual Property Clause ensures that expression
itself must enter the public domain after the "limited times" for
which copyright protection is available. Indeed, where important
factual information could not satisfactorily be conveyed except by
certain unique expression, the First Amendment might even ensure that
copyright protection for such expression be denied or limited. See
Nimmer on Copyright S. 1.10[C][2], at 1-85--1-92.
Accordingly, H.R. 2652, by providing protection for facts, raises
serious First Amendment concerns. It would restrict the ability of
persons to use and disseminate factual material that are not protected
by copyright, and it arguable would do so even in circumstances where
the copyright law would not protect creative expression.
We can imagine two arguments that might be made in support of H.R.
2652 against a First Amendment challenge. First, it remains the case
that in International News Serv,. the Court permitted a tort for the
dissemination of information, as such. It is unclear to what extent
the International News Serv. tort can be reconciled with modern First
Amendment doctrine. Nevertheless, that case was approvingly cited in
San Francisco Arts & Athletics, where the Court recognized the
possibility that the unauthorized use of an Olympic logo could
impermissibly undermine the "owner's" legitimate commercial
interests, even in the absence of a demonstration that such a use
would be confusing to consumers. 483 U.S. at 541. As the Court there
explained, "[t]here is no question that this unauthorized use could
undercut the [United States Olympic Committee's] effort to use, and
sell the right to use, the word in the future, since much of the
word's value comes from its limited use." Id. at 539. Thus, "[e]ven
though this protection may exceed the traditional rights of a
trademark owner in certain circumstances, the application of the Act
to... commercial speech is not broader than necessary to protect the
legitimate congressional interest and therefore does not violate the
First Amendment." Id. at 540. The Court went on to reject the claim
that the restriction violated the First Amendment because it reached
noncommercial, promotional uses of the word. "The mere fact that
[petitioner] claims an expressive, as opposed to purely commercial,
purpose does not give it a First Amendment right to 'appropriat[e] to
itself the harvest of those who have sown.'" Id. at 541 (quoting
International News Serv., 248 U.S. at 239-40). San Francisco Arts &
Athletics did not consider a broad prohibition against the
dissemination of factual information of the type that is at issue
here; therefore it did not implicate the First Amendment doctrine
discussed above. Nonetheless, that case's favorable reference to
International News Serv. in response to a different First Amendment
argument indicates that the former case provides some authority for a
possible intellectual property exception to certain First Amendment
constraints that would apply outside the intellectual property
context.
Even if International News Serv. does indicate that the First
Amendment permits some anti-copying protection for nonoriginal factual
information, however, it must be emphasized that H.R. 2652 raises
serious constitutional concerns because it provides protection that is
much broader than that at issue in International News Serv. Unlike the
"hot news" misappropriation tort that the Court recognized in
International News Serv,. the bill would not create liability only for
"competitive and systematic interference with dissemination of
unpublished, partially published or access-controlled information,"
where "the timeliness of the information makes its commercial value
of short duration." Ginsburg, No "Sweat"?, 92 Colum. L. Rev. at 357;
see also NBA v. Motorola, 105 F.3d at 852.
Second, there is an important consideration that might distinguish
H.R. 2652 from the prototypical First Amendment case where the
government acts to limit the use of publicly available information. As
we explained above, in the usual First Amendment cases, such as the
ones cited at the beginning of this section, the government
restriction on the dissemination of information has the intent and
effect of constricting the total quantum of information that the public
could put to lawful and valuable use by singling out certain
disfavored messages for suppression. Because H.R. 2652 would simply
regulate the means by which information generally may be re-used, it
arguable could be defended as a legitimate attempt to recognize
individual rights in intellectual property in order to ensure an
overall increase in the amount of available, valuable factual
information (because of the heightened incentives to compile facts).
See Ginsburg, No "Sweat"?, 92 Colum. L. Rev. at 386. It could be
argued that such as statute - like copyright's protection of creative
expression - would secure a wider "dissemination of information from
diverse and antagonistic sources," New York Times, 376 U.S. at 266,
than would result from a regime in which factual compilations are
protected against reproduction only by "thin" copyright and (perhaps -
by state contract law.
The easiest and most direct way to cabin the constitutional issues
would be to limit the statutory liability to the sort of "hot news"
misappropriation tort that the Court recognized in International News
Serv. The law could, for example, create liability for 'competitive
and systematic interference with dissemination of unpublished,
partially published, or access-controlled information," where "the
timeliness of the information makes its commercial value of short
duration." Ginsburg, No "Sweat"?, 92 Colum. L. Rev. at 357. The
elements of a claim under such as status could be: (i) that the
plaintiff generates or collects information at some cost or expense;
(ii) that the value of the information is highly time-sensitive; (iii)
that the defendant's use of the information constitutes free-riding on
the plaintiff's costly efforts to generate or collect it; (iv) that
the defendant's use of the information is in direct competition with a
product or service offered by the plaintiff; and (v) that the ability
of other parties to free-ride on the efforts of the plaintiff would so
reduce the incentive to produce the product or service that its
existence or quality would be substantially threatened. See NBA v.
Motorola, 105 F.3d at 852.
Absent such a fundamental change in H.R. 2652, the following changes
would tend to alleviate some of the constitutional concerns.[20]
1. The provision could dispense with the time-sensitivity element of
the International News Serv. tort of misappropriation, but still
require proof that the defendant's use of the information constitutes
free-riding on the plaintiff's costly effort to general or collect it;
that the defendant's use of the information is in direct competition
with a product or service offered by the plaintiff; an that the
ability of other parties to free-ride on the efforts of the plaintiff
would so reduce the incentive to produce the product of service that
its existence or quality would be substantially threatened. Again, we
emphasize that a statue of even this more limited scope would still
raise substantial constitutional concerns for the reasons provided in
the previous sections.
2. The prohibition in section 1202 could be expressly limited to
nontransformative uses and extractions by direct competitors in the
particular market for the database in question.[21] This could be
accomplished in part by expressly including a "fair use" exception
akin to that contained in the Copyright Act, and other like statutory
exceptions, at least as expansive as those found in the Copyright
Act.[22] As noted at the outset, it may well be that H.R. 2652 is
intended to incorporate something approximating the fair use standard
for copyright by virtue of its reference to two of the four statutory
fair use factors contained in the Copyright Act's fair use provision.
Nonetheless, in light of the difficulties in determining how a fair
use exception would apply to facts, given that it has thus far
developed in the context of copyright, which does not protect facts,
it would be advisable to be far more clear on this point that the
present statues is. Moreover, for constitutional reasons, it would
probably be advisable to provide even greater protection for the
public's interest in freely exchanging information here than would be
necessary outside the context of a statue that would provide
intellectual property interests in factual information. As a result, a
broad definition of fair use would be appropriate.
3. The duration of the protection could be substantially shortened, to
the briefest period that would provide sufficient incentives for the
data collection. Perpetual protection is unnecessary to provide
sufficient inventive to the creation of databases.
FOOTNOTES
[1] It is a matter of some contention whether, and to what extent, the
incentives that would be created by H.R. 2652 are necessary to
stimulate a significant quantum of valuable compilations of facts that
otherwise would remain uncompiled, or whether currently available
incentives and legal protections are sufficient to ensure the
continued wide dissemination of factual compilations in the public
domain. See e.g. J.H. Reichman & Pamela Samuelson, Intellectual
Property Rights in Data?, 50 Vand. L. Rev. 51, 113-36 (1997); Jessica
Litman, After Feist, 17 U. Dayton L. Rev. 605, 611-13 (1992); Jane C.
Ginsburg, No "Sweat"? Copyright and Other Protection of Works of
Information after Feist v. Rural telephone, 92 Colum. L. Rev. 338
(1992). This memorandum does not address the merits of this dispute,
but as we explain below, courts would be more likely to uphold the
legislation against constitutional challenge if they were persuaded
that it would increase, rather than decrease, the collection and use
of information.
[2] Increasingly, compilers of information - particularly those who
incorporate such compilations in electronic form - package such
compilations with a so-called "shrinkwrap" license (or "click-on"
license, for documents posted on-line). This sort of "contract"
purports to condition consumers' use of the product on the consumers'
implicit agreement not to copy the information or disseminate it to
others. See generally ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th
Circ. 1996) Such contract-based restrictions might have a significant
impact on the ability of users of factual compilations to copy or
distribute the facts contained therein. However, because of several
unresolved questions concerning the enforceability of these contracts,
the efficacy of this approach is unclear. See, e.g., id. at 1453-55
(discussing whether contract claim is preempted by the Copyright Act
and holding that it is not); see also Cohen v. Cowles Media Co., 501
U.S. 663, 669-71 (1991) (holding that the First Amendment does not
prohibit a state from applying a "generally applicable" law of
promissory estoppel to impose damages on a newspaper that revealed the
identity of a source to whom it had promised confidentiality).
[3] Indeed, the proposed statute is intended to supplement, rather
than to supplant, any contractual remedies that the compiler might
have. See S. 1205(a)-(b) (expressly providing that state contract law
is not preempted). Accordingly, it would prevent the "use" or
"extraction" of data from a collection even if the creator of the
collection had disseminated it freely, without any contractual
limitations.
[4] The prohibition against extracting or using such information would
not (at least not expressly) be limited to the use of extraction of
those parts of a collection that were compiled "through the investment
of substantial monetary or other resources"; instead, the prohibition
apparently would apply to uses or extractions of a substantial part of
a compilations, so long as the compilation itself (rather than the
extracted components thereof) was "gathered, organized, or
maintained... through the investment of substantial monetary or other
resources."
[5] The two other statuary factors that are identified in the fair use
provision of the Copyright Act are also arguable incorporated by H.R.
2652. The first factor is "the purpose and character of the use,
including whether such use is of a commercial nature or is for
nonprofit educational purposes." 17 U.S.C. S. 107(1). The second
factor is "the nature of the copyrighted work." Id. S. 107(2). These
factors are also arguable implicitly encompassed by H.R. 2652, which
applies to collections of information, broadly defined, with specific
provision permitting certain acts such as educational and scientific
uses (to the extent that they would not harm the potential market).
[6] Read literally, or example, S. 1202 would appear to prevent the
library from disseminating "substantial" (including "qualitatively"
substantial) portions of the compilation to its patrons, and might
prevent the patrons from using such compilations, since such patrons
are part of a market or "potential market" for purchase of the book.
Or, imagine a book that contains a great deal of unearthed factual
material - such as valuable, accurate information on the dangers of
prescription drugs (see House Report at 13), a thorough historical
chronology of important events, or a comprehensive amalgamation of
geographical or topographical data. If a subsequent research,
scientist or historian concluded that a "qualitatively substantial"
portion of such facts are important, and therefore posts them to the
World Wide Web or includes them in a later work - or, possibly, if
that later historian so much as "extracts" the fact by taking notes -
he or she might possibly violate S. 1202, whether or not that later
work uses, incorporates, or transforms the facts in a manner that the
compilation did not. See J.H. Reichman & Pamela Samuelson,
Intellectual Property Rights in Data?, 50 Vand. L. Rev. 51, 135, 143
n. 424 (1997). Of course, the extreme of these example may counsel in
favor of a construction of H.R. 2652 that would exclude them.
[7] There was no contention in Feist that the Copyright Act was
premised on any source of power other than the Intellectual Property
Clause.
(8) See, e.g., 499 U.S. at 346 ("Originality is a constitutional
requirement."); id. at 363 ("[a]s a constitutional matter," copyright
protection requires "more than a de minimis quantum of creativity").
See also Paul Goldstein, Copyright, 55 Law & Contemp. Probs. 79, 88
(1992) (noting that Feist Court indicated 13 times that originality was
a constitutional requirement, and indicated 16 times that creativity
was a requirement of originality).
(9) It is important to note, however, that, due to the breadth of the
definition of "information," which expressly includes works of
authorship, the bill also would appear to provide protection to many
factual compilations that do possess the requisite creativity necessary
for copyright protection under Feist. In addition, it would appear
that at least some, and perhaps many, extractions or uses barred by the
bill might infringe on sufficiently original characteristics of such
work &endash; such as unique arrangements or selections of the facts copied.
We caution, however, that these valid applications of the bill might
not provide much greater protection that would already be provided
under the Copyright Act, although H.R. 2652 would also provide for
criminal sanctions. Moreover, even those seemingly valid applications
of the bill would be authorized under the Intellectual Property Clause
only insofar as the legislation satisfied the requirement that the
"exclusive Right[s]" being conferred were for "limited Times." Article
I, Section 8, Clause 8 of the Constitution.
(10) Of course, as we discuss below, too broad a construction of "harm
to potential market" would give rise to serious First Amendment
concerns, and might, if particularly extreme, raise concerns under
Lopez as well.
(11) See Ginsberg, No "Sweat"?, 92 Colum. L. Rev. at 368 ("Feist's
claim that its standard of originality is 'constitutionally mandated'
may impede enactment of a federal law protecting unoriginal compiled
information under the Commerce Clause."); id. at 349 ("Justice
O'Connor's opinion appears to enshrine a policy of free-riding in the
Constitution").
(12) See also Carpenter v. United States, 484 U.S. 19 (1987)
(conspiracy to trade on newspaper's confidential information is within
reach of federal mall and wire fraud statutes); Snepp v. United States,
444 U.S. 507 (1980) (government can, as a condition of employment,
extract enforceable promise that employees will not reveal classified
information they learn during their employ).
(13) We note, however, that in the specific context of libel law, a
plurality of the Court in one notable case drew significance from the
fact that information was provided only to a limited number of
subscribers for a fee. "[S]ince the credit report was made available
to only five subscribers, who, under the terms f the subscription
agreement, could not disseminate it further, it cannot be said that the
report involves any strong interest in the free flow of information."
Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 762
(1985) (plurality opinion) (internal quotation marks and citations
omitted) (permitting recovery of damages for defamatory statement not
involving matters of public concern absent a showing of actual malice).
[14] International News Service did not discuss the Intellectual Property
Clause, except to note that:
[i]t is not to be supposed that the framers of the Constitution, when the
empowered Congress 'to promote the progress of science and useful arts, by
securing for limited times to authors and inventors the exclusive right to
their respective writings and discoveries (Const. Art. 1, 8, par. 8),
intended to confer upon one who might happen to be the first to report a
historic event the exclusive right for any period to spread the knowledge
of it.
Id at 234
[15] Indeed, the "unusual circumstances" in International News Serv. itself
may not have been limited to misappropriation simplicitor. The Associated
Press alleged that the International News Service had done far more than
simply republish the facts conveyed in the Associated Press's stories.
The International News Service allegedly had bribed employtees of
Associated Press subscribers for an early look at breaking news, 248 U.S.
at 231, occasionally had sold Associated Press's stories "bodily", i.e.,
without rewriting them, id., and had falsely represented to its readers
that the news transmitted was the result of International News Services's
own investigation, id. at 242. Such factors, the Court acknowledged,
"accentuat[ed] the wrong," even if they were not "the essence of it." Id.
[16] For example:
Defendant insists that when, with the sanction and approval of
complainant, and as the result of the use of its news for the very purpose
for which it is distributed, a portion of complainant's members
communicate it to the general public by posting it upon bulletin boards so
that all may read, or by issuing it to newspapers and distributing it
indiscriminately, complainant no longer has the right to control the use
to be made of it; that when it thus reaches the light of day it becomes
the common possession of all to whom it is accessible; and that any
purchaser of a newspaper has the right to communicate the inteligence
which it contains to anybody and for any purpose, even for the purpose of
selling it for porofit to newspapers published for profit in competition
with complainant's members.
The fault in the reasoning lies in applying as a test the right of the
complainant as against the public, instead of considering the rights of
complainant and defendant, ocmpetitors in business, as between themselves.
The right of the purchaser of a single newspaper to spread knowledge of
its contents gratuitously, for any legitimate purpose not unreasonably
interfering with complainant's right to make merchandise of ti, may be
admitted; but to transmit that news for commercial use, in competition
with complainant -- which is what defenda ant has done and seeks to
justify -- is a very different matter.
Id. at 239.
[17] This same restriction does not necessarily apply if the information is
secret, confidential, or classified, and is provided to another on the
express condition that it not be further disclosed. For example, the
Court has upheld the constitutionality of governmental restrictions on its
own employees' activities to ensure that those employees do not disclose
classified information belonging to the government itself. The Court
explained in Snepp v. United States, 444 U.S. 507, 509 n.3 (1980), that
such restrictions on employee conduct generally will not violate the First
Amendment so long as they are a "reasonable means" of protecting the
government's "compelling interest in protecting . . . the secrecy of
information important to our national security." Similarly, a court may
provide trade secrets to a plaintiff as part of discovery in a civil
lawsuit, subject to the condition that the plaintiff not further
disseminate such secrets. Seattle Times Co. v. Rhinehart, 467 U.S. 20
(1984). And even a private party can create enfoceable limits on the
right to publish confidential information that it shares with another,
puruant to state laws of contract or promissory estoppel that are
"generally applicable" (i.e., that do not single out speech for disfavored
treatment). See Cohen v. Cowles Media Co., 501 U.S. 663, 669-71 (1991)
(whereas First Amendment is not implicated by application of "generally
applicable laws" to violations involving speech or the press, there is a
greater constitutional problem where, as in Florida Star, the "State
itself define[s] the content of publications that would trigger
liability"). These cases would not be directly applicable to the proposed
bill, however, in that they involved restrictions on the person to whom
the information had been distributed under the confidentiality agreement,
and not to restrictions on third parties who would be subsequent users or
disseminators of such information.
[18] On occasion, the Court has indicated tha this demanding standard
applies only to information concerning "'a matter of public
significance.'" See, e.g., Florida Star, 491 U.S. at 533 (quoting Smith,
443 U.S. at 103). See also Dun & Bradstreet, 472 U.S. at 759 (plurality
opinion) (speech on matters of "purely private concern" entitled to less
First Amendment protection in defamation cases); id. at 764 (Burger, C.J.,
concurring in pertinent part); id. at 773-74 (White, J., concurring in
pertinent part). But see Florida Star, 491 U.S. at 541 (omitting the
"matter of public significance" standard in the Court's ultimate holding,
quoted in the text above).
[19] Nimmer explains that this would be so even where a great quantity
of labor and expense were necessary to research and compile the facts:
"Would anyone seriously suggest that the Washington Post was entitled
to a copyright on the facts of the Watergate incident because its
reporters, Woodward and Bernstein, through considerable labor, expense,
and ingenuity, discovered such facts?" I Nimmer on Copyright S.
2.11[E], at 2-172.30-172.31.
[20] We should not be understood as suggesting that any or all of
these changes would, or would not, be preferable as a matter of
policy.
[21] See, e.g., Jessica Litman, After Feist, 17 U. Dayton L. Rev. at
615; Ginsburg, 92 Colum. L. Rev. at 386.
[22] See Reichman & Samuelson, Intellectual Property Rights in Data?,
50 Vand. L. Rev. at 146l id. at 155-57