Workshop on Technology of
Terms and Conditions
September 24-26, 1996
Report of Working Group 2
Participants: Brian Kahin, Carl Lagoze, Michael Lesk, Vicky Reich, Mark Stefik, and Clifford Lynch (2nd session)
Report Prepared by: Vicky Reich and Carl Lagoze
The group divided the problem of addressing terms and conditions into two sets of issues: uncertainty ("what we don't know") and infrastructure development ("what we haven't done"). In the second breakout, we were asked to elaborate on legal, economic, and social uncertainties, which we expressed as law, business, and users.
A. Law
The globalized Internet creates uncertainty in virtually all forms of intellectual property, including copyright, patents, and trademarks, as well as new forms of intellectual property, such as domain names and special rights in databases. Uncertainty may affect different aspects of the law: ownership, definition of publication, scope of rights, extent of liability, and protectable subject matter. Increasingly, contracts (a different branch of the law) are used to protect content.
Two areas were flagged for special emphasis: the interface between contract and copyright, and software patents.
1. Contract and Copyright Interface. The interface between contract and copyright is presently not well-defined . This is particularly important to developing terms and conditions, because terms and conditions, though contractual, are often enforced through the power of copyright. If the licensee exceeds what the license allows, and the use transgresses one of the copyright owners exclusive rights, the copyright can pursue the licensee with a copyright claim instead of a contract claim.
Although conventional book sales do not usually require a written contract, publishers in the electronic environment perceive copyright protections as insufficient. The group would like the electronic world to mirror this low-administrative-cost system.
Contracts can be negotiated effectively over networks, but questions remain about how much detail mass market contracts can contain without becoming unenforceable adhesion contracts. Libraries and users are concerned that contracting for access may preclude fair use, and questions remain about whether the existence of a contract may affect the determination of fair use.
Another aspect of copyright/contract interface is that international copyright policy favors the abandonment of formalities such as notice and registration. This assumes that most information is protected by copyright. We are building a problem for the future: it will be very difficult to ascertain when something will go into the public domain. On the Web, however, most information is available for free (even though it may be protected by copyright), and there are no conventions for labeling content or expressing the terms of an implied public license. In addition, net transactions can cross many government and legal domains and it is unclear which laws control what content and actions.
2. Software Patents. We next addressed software patents. These patents are problematic on many different levels. The scope of protectable subject matter is a matter of considerable debate. The problem is less the old controversy over mathematical algorithms than it is abstract system level patents, including methods of doing business. Most software patents issued in recent years are invalid because they are not novel and not obvious, but the prior art is vast and disorganized. This may be difficult to prove because so few patents are litigated. Relatively few software patents are litigated because litigation may turn up prior art. In the area of mediated access to information, broad patents have induced major players to assert strong proprietary positions that inhibit the development of standards.
B. Business
The Web environment has become extremely competitive and business strategies are in flux. How to extract and preserve revenue from easily copied digital information poses a basic problem of appropriability. There is fear of cannibalizing established revenue streams from print products. Constantly changing technology and an onslaught of new entrants has created extremely volatile market conditions.
The Internet's layered and decentralized nature causes significant coordination problems. End-to-end accountability is the exception rather than the rule. We need trusted third parties to perform mediating functions. These coordination issues also obscure who is responsible for building and paying for the networking infrastructure.
There are no graceful ways to prevent piracy and no mechanisms to handle the risks of unauthorized use (do we need theft insurance for content providers?). Different content industries have different marketing practices and different expectations of how consumers use and abuse their intellectual property. Content providers and technology companies are developing software to "protect" their content, but these non-interoperable proprietary products will lead to market failure. Industry sectors disagree over who should pay for protective and mediating infrastructure. Content industries would like service providers to be liable for their users' acts as an inducement to develop protective infrastructure.
The group identified numerous uncertainties in the regulatory environment: what transactions are taxable and by whom? Who has jurisdiction? What laws apply to different transactions? Political pressures to regulate different kinds of content vary from country to country. These may also be viewed as a different sort of legal uncertainty than the protection of intellectual property. The business and legal communities need to focus on what kind of protection rules would stimulate the economy.
Consumers need help negotiating business agreements. A consumer group (a Sierra Club for the Internet?) needs to draft simple, straightforward contracts and test different consumer models. We need to adopt appropriate consumer business protection laws for the online world.
The group expressed some overall business goals: to conform to some feeling of "fairness", to have low administrative costs, and to encourage economic growth.
C. User Issues
How do people use information? Librarians have a notion of how information is used in a library, but they have little understanding of how materials are used in personal and workplace settings. The media people know what TV shows are watched, and the music people know what songs are played. If we build a truly interactive Internet, these passive user behavior and payment models may not transfer. Anthropologists have studied how people use information in the workplace and how people gather information before making medical decisions in the paper world. How will the network change every day information seeking behavior (e.g., reading the daily newspaper)? How will the Internet affect traditional social groups and physical community places? Online information is transforming science research (physics, biochemistry and genetics). We do not know the potential impact on the Social Sciences or the Humanities.
How do people value information? Will people accept micropayments for content? How much will a junior high student pay to read the full text of a New York Times article assigned for Government class?
What can users tolerate and manage? People who work in information and computer intense fields find their lives transformed in positive and negative ways. What will the acceptance rate be among people whose lives depend on less complicated information. Will people use the network to buy groceries? To buy cubic zirconia? Will the network replace the telephone? Users will be sensitive to the price of equipment, services, content, and the time required to learn and manage the technology.
Numerous technologies, when implemented or improved, will enhance consumer acceptance and/or encourage more content providers to move online. These include trusted printing, flat panel displays, bandwidth, and memory.
As mentioned, different content industries have different expectations and different business models (the music industry uses ASCAP, the print industry uses subscriptions). These varied business practices and expectations interfere with a user's ability to create new content and knowledge. The network encourages people to experiment and consume different media. Business and legal ambiguities interfere with users interlinking between content types and creating new knowledge.
A related social issue is the preservation and archiving of machine readable content. Until technology provides an easy way to gather, "save", and retrieve content, we need social structures to encourage and protect important digital content to be protected. One possibility is to mimic the registration/deposit program for electronic materials. These functions are traditionally funded as a public good. Since there are no business incentives to "be" a library, who and how will this work be funded?