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In a recent editorial in PC Week, Eamonn Sullivan noted that when the first automobiles started showing up on the roads, a whole series of incredibly stupid laws were enacted to control them. "One law required drivers to exit the car at every intersection, walk to the center of the intersection, and make several loud noises before proceeding across. In Pennsylvania, drivers were even asked to fire a rocket into the air every mile and wait 10 minutes for the road to clear."

The Internet is becoming an increasingly important communications vehicle, yet we have already seen an onslaught of legislative proposals that attempt to tame and control this new territory known as "cyberspace." Many would argue that the Communications Decency Act was the cyberspace equivalent of asking drivers to fire a rocket into the air. As Representative Rick White (Republican-Wash.) has stated, "When you get right down to it, Congress is lost in cyberspace. Most legislators here rarely turn on a computer, so it should come as little surprise that they don.t understand the democratic implications of sending e-mail, publishing on the Web, or posting to Usenet news groups." He also predicts that "like it or not, Congress will be passing lots of Internet-related laws during the months ahead."

Some netizens argue that the government has no right to regulate the Internet at all. They contend that the intellectual property laws of any single country are inapplicable to works on the Internet, which is international in scope, and that the Net culture itself will impose and enforce its own values. Often cited is John Gilmore.s quote, "The Net interprets censorship as damage and routes around it."

However, lawless freedom on the Internet can be both illusory and deceiving. If someone submits a post that violates someone else.s sensibility on the Internet, that individual may be publicly flamed or spammed, privately chastised, or add to the user.s "bozo filter" and silenced from reaching certain users in the future. Joel Snyder noted in his article "Frontier Justice" in the July 1996 issue of Internet World, "The much-vaunted self-regulation on the Internet quickly can turn into vigilante justice."

What can copyright owners do to protect their intellectual property on the Internet? In September 1995, a Working Group of President Clinton.s Information Infrastructure Task Force issued a white paper on "Intellectual Property and the National Information Infrastructure," which noted that the development of the Information Superhighway is not the first technological challenge to copyright owners. ability to prevent unauthorized uses of works. Photocopy machines, for example, caused great fear among copyright owners. The Working Group concluded that "it was, and still is, more efficient and cheaper to buy an extra copy of most books than to photocopy them."

However, this conclusion is at variance with what the Authors. League views as the nearly complete failure to collect photocopy royalties. The Authors. League, which represents more than 13,700 authors, journalists and playwrights, notes that John Willy Rudolph, the head of Norway.s photocopy collection system (which is considered the most effective in the world estimates) that the annual collectible photocopy royalties in the Untied States is $2 billion. The U.S. collects about 1 percent of that $2 billion---or $20 million per year---for a copyright royalty equal to $.08 per capita, compared to annual per-capita collection in Norway of $3.30.

The distribution of content on the Internet poses an even greater threat to content owners than the photocopy machine. In fact, the Internet has often been referred to as one large copy machine that can make and distribute an unlimited number of copies of content worldwide.

Security via Technology

Fortunately for content owners, technology is becoming available that will allow them to mark and track their works on the Internet.

This past May, IBM announced its Cryptolope technology---secure packaging for digital information, which will enable Internet users to buy and sell content securely. The Cryptolope technology is a fundamental part of IBM.s new InfoMarket service, which combines a sophisticated search engine with a body of content, secure container technology, and IBM.s expertise in transaction and billing management to provide a framework for secure electronic commerce. An author who wants to protect content can wrap it in a Cryptolope container, which would include a content abstract to provide users with the product knowledge that they need to make a purchase decision (information on content, source, summary, author, last update, size, price and any unique terms of the sale). Once the user decided to open the contents of the Cryptolope package, he would pay for the product and receive a transparent digital key that would unlock the material contained within the package.

Copyright owners are also banding together to enforce their intellectual property rights. An example of this is the Copyright Clearance Center (CCC), which licenses photocopy reproduction rights for 9,000 publishers representing hundreds of thousands of authors of more than 1.7 million titles. The CCC has adopted a technology similar to Cryptolope, known as DigiBox from InterTrust Technologies Corporation (formerly EPR Electronic Commerce Technologies), which it uses to provide core content and rights management encapsulation technology for works that are distributed electronically.

Other technologies are also available to content owners. Digimarc recently announced a new technology for embedding information such as electronic signatures or serial numbers directly within photographs, videotapes, audiotapes, and other creative property. The Digimarc technology combines the information to be embedded with a random code pattern that is added to the digitized image at a very low signal level, resulting in an invisibly signed image that survives conversions from digital to analog and back. If a copyright owner wants to distribute a photograph, drawing, or musical composition over the Internet, she can include a Digimarc signature that will uniquely identify her as the copyright owner. If she subsequently sees an image that she believes is derived from her copyrighted work, she can convert the image to digital form by scanning it and can then run a Digimarc-recognition application to determine if her digital watermark is present.

Piracy Issues

Content owners cannot be solely responsible for enforcement of their rights. Electronic theft via the Internet and other on-line services accounted for over $660 million in lost sales in the United States alone.

In the software industry, which is just a small portion of the content industry, there are approximately 20 major groups dedicated to software piracy on the Internet. They have names like Razor 1911, Tristar Red Sector Inc., Pirates with Attitude Revolutionizing International Piracy, Legion of Doom, Masters of Deception, and Malice.

These groups find unwitting host computers and secretly set up stores of expensive stolen software. The pirates then pass messages around the world, and in a few hours the pirates can start making copies of the software from their own remote locations. This continues until someone at the host notices that there is a sudden jump in network communications traffic, or available disk storage suddenly disappears, at which point the illegal software-distribution center is shut down. Since the entire operation may take no more than 24 hours, it is virtually impossible for law-enforcement officials to take steps to shut it down. And even where they are able to do so, it is virtually impossible to know where the next site will emerge.

The issues of piracy on the Internet are further complicated by the complex jurisdictional issues that result from the international scope of the Internet, which spans more than 90 countries. What country.s law will prevail when the pirated software belongs to a company in one country, the host computer is located in a second country, the pirate is located in a third country, and the software is copied and downloaded to an entity in a fourth country? Because of the increased risk of piracy, the difficulty of finding infringers and shutting them down, and the uncertainty concerning applicable law, the assistance of on-line service providers is a critical component of any effort to protect intellectual property rights in cyberspace.

The Role of On-Line Service Providers On-line service providers argue that they cannot be held liable for infringement. But they are not only service providers being held responsible for infringements that they might not be able to detect or prevent. Every day, millions of photographs are taken to photofinishers, who cannot reasonably view all of these works before they are reproduced from undeveloped film. Bu they are still held to a standard of strict liability for copyright infringement, just as booksellers, record stores, newsstands, and computer software resellers are held liable. And these on-line service providers have built huge businesses based on the distribution of content---both noninfringing and infringing---on the Internet. In 1995, America Online, CompuServe, and Prodigy had gross revenues of more than $1 billion!

Indeed, a strong argument can be made that if on-line service providers want the Internet to remain an essentially unregulated environment, they should be willing to assume greater responsibility for preventing copyright infringement. After all, on-line service providers are uniquely suited to help find, control, and prevent on-line infringement because they have direct contractual relationships with both subscribers and content providers.

Many of the actions on-line service providers are taking today to permit individuals to monitor and restrict content available to children could also be used to prevent or deny access to sites that are known to infringe third-party intellectual property rights. For example, on-line service providers are already participating in the Platform for Internet Content Selection (PICS), a program to develop technical standards to support parents. ability to filter and screen materials that their children see on the Internet. PICS will provide the ability for selected parties, as well as content providers, to rate content on the Internet in a variety of ways. When fully implemented, PICS-compatible browsers, Usenet News Group readers, and other Internet applications will provide parents with the ability to choose from a variety of rating services, or a combination of services. There is no reason why PICS could not also be used to block infringing sites.

There are also a number of companies that offer standalone software intended to enable parents and other adults to limit the Internet access of children. CyberPatrol software, for example, contains approximately 7,000 sites in 12 categories and is designated to let parents selectively block access to any or all of the 12 CyberNOT categories by checking boxes in the CyberPatrol Headquarters. The developer of CyberPatrol, Microsystems, employs people to search the Internet sites containing material in these 12 categories and updates the list on a weekly basis. Once installed on a home PC, the copy of CyberPatrol receives automatic updates over the Internet every seven days. Microsystems has signed agreements with CompuServe and Prodigy, which provide CyberPatrol free of charge to their subscribers. There is no reason why similar software to detect infringing materials could not be developed and distributed.

A company called Television Computer Inc. has already devised the first "cyber-robot" service to police Web sites for infringing materials and report back. A serialized HyperStamp bears a globally unique serial number with a known owner and a known location (the URL of the document bearing that stamp). The owner can then, through Television Computer.s CyberGumshoe Services, order an audit for the document, pursuant to which Television Computer will track the contents of the document and inform the owner if the contents are discovered anywhere else on the World Wide Web. This type of software could be licensed by on-line service providers to find infringing sites and to deny them access to their subscribers.

The recent settlement in the action filed by the Church of Scientology against Netcom On-Line Communication Services Inc. provides an excellent example of how content owners can work with on-line service providers to prevent infringement. In this acrimonious dispute, the Church of Scientology claimed that Dennis Erlich (one of its outspoken critics), as well as Netcom and a bulletin board service that posted Erlich.s messages, had infringed its copyrights by posting large portions of the Church.s copyrighted materials on-line. In November 1995, a U.S. district court held that Netcom could be liable to the Church for contributory infringement since it had failed to take any action after being notified of infringement.

In the settlement announced on August 3, Netcom admitted no liability, but adopted a five-part procedure for dealing with future intellectual property disputes:

1. A complaining party must notify Netcom and the posting party of an infringement and request that it be removed.
2. The complaining party is required to substantiate its claim by providing evidence of ownership and of infringement.
3. The posting party has an opportunity to respond to the complaint.
4. While investigating the complaint, Netcom will remove or deny access to the infringing material.
5. If it concludes that the complaint is legitimate, Netcom will continue to deny access to the material.

The settlement is groundbreaking because it is the first time that an on-line service provider has set out guidelines dealing with intellectual property disputes.

Reprinted from Exploration, Fall 1996

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