TechLaw

HR 1201 is back. And this time, it is has been repackaged with a host of narrow exemptions.

The Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (FAIR USE Act), introduced by Reps. Rick Boucher and John Doolittle on Feb. 27,  adopts a multi-prong approach to correct perceived imbalances in the way the DMCA handles fair use.

The bill drops the broader fair use exemption of HR 1201--no DMCA violation for circumventing a DRM to make a noninfringing use--in favor of a series of specific, limited exemptions. No DMCA liability would attach where the circumvention is carried out solely for the purposes of:

1. Making a compilation of portions of audiovisual works for educational use in a classroom. (While the Librarian's latest rulemaking included a similar exemption, that exemption is limited to film scholars.)
2. Skipping commercials or "personally objectionable content" in an audiovisual work.
3. Transmitting a work "over a home or personal network," but only to the extent that the circumvention does not interfere with DRM restrictions that prevent the uploading of the protected content to the Internet. (Thus, this exemption could not be used as a loophole to bypass the proposed broadcast flag content protection system.)
4. Gaining access to public domain works contained within a compilation "consisting primarily of works in the public domain."
5. Gaining access to works of "substantial public interest solely for purposes of criticism, comment, news reporting, scholarship, or research."
6. Enabling a library or archive to preserve a copy or replace a copy that is lost or stolen.

Conspicuously absent from this list is an exemption for making backup copies, a feature that has long been cited by proponents of the measure as a legitimate activity that the bill would enable. In an explanatory document accompanying the legislation, the authors do address the issue, though not in the way one would expect. They point out that the scene-skipping exception "does not authorize consumers to make back up DVDs for archival or any other purpose."

This is an important concession to content owners, who have argued previously that giving consumers the tools to make archival copies would lead to rampant piracy. The Copyright Office reached a similar conclusion in its recent recommendation during the last triennial rulemaking, concluding that making backup copies of DVDs would sanction widespread circumvention and, in any event, is probably not a fair use. Undoubtedly, this took the steam out of the backup copy argument.

Though, in practical effect, it is hard to see how enabling the other exceptions Boucher does call for could be accomplished without the same technology that would allow for the making of backup copies. For this reason, the content industries will likely reiterate many of the same piracy concerns they have previously raised.

The consumer electronics industry will certainly benefit from the bill. Once again, Boucher's bill would codify the Sony-Betamax innovation principle: no secondary liability for designing, making, or distributing a hardware device or component that "is capable of substantial, commercially significant noninfringing use." What is noteworthy here is the addition of the words "commercially significant," a key qualification contained in the Supreme Court's opinion but omitted from HR 1201. Further insulating the consumer electronics industry from secondary liability is a provision in the measure that would foreclose the possibility of statutory damages against secondary infringers except where the secondary infringement occurs "under circumstances in which no reasonable person could have believed such conduct to be lawful."

Finally, the FAIR USE Act provides permanent exemption status to the classes of copyrighted works identified in the most recent triennial rulemaking by the Librarian of Congress. This removes the possibility of the Librarian later having a change of heart and ejecting these exemptions from the list the next go-around.

Trademark lawyers yearning for the Second Circuit to reconsider its position on keyword advertising might be wishing for a better case than the one that has landed on the court's docket, Rescuecom Corp. v. Google Inc. (No. 06-4881).

Rescuecom failed to persuade a district court that Google's sale of "Rescuecom" as a keyword to a competing computer repair services company was a "use in commerce." 456 F. Supp. 2d 393 (N.D.N.Y. 2006). But if Rescuecom wants the Second Circuit to reach a different conclusion, it must convince the court that controlling precedent, 1-800 Contacts Inc. v. WhenU.com Inc., 414 F.3d 400 (2d. Cir. 2005), is distinguishable.

To that end, Rescuecom tries to distance itself from the infamous pop-ups case, though not very convincingly.

It is helpful to review the facts of that earlier case to provide context to Rescuecom's arguments. WhenU.com's "SaveNow" adware featured a directory of many thousands of Web site addresses and generic search terms. That directory was invisible to users, its sole purpose to act as a trigger to display pop-up ads that corresponded to generic search terms or Web site addresses input by the user into the browser. While the URLs contained in the list undoubtedly incorporated trademarks of other firms, the Second Circuit reasoned that this invisible use was not a trademark use; such internal use of the mark is equivalent to an individual's private thoughts about the trademark, the court concluded, and is thus outside the reach of the Lanham Act.

But the situation here is much different, Rescuecom urges. The trigger is not merely a Web address but an actual trademark which, unlike WhenU.com, Google sells to competitors as keywords. Also, there was no direct exchange of information between the user and the SaveNow software, according to Rescuecom.

"This is markedly different from Appellee Google, which is an interactive service communicating with Internet Users and purporting to provide Internet Users with lists of websites related to their search queries," reasons Rescuecom.

Neither of these arguments is particularly strong. True, Google sells actual trademarks, but the usage is still invisible to the end user; there was no allegation in the complaint that the sponsored links displayed Rescuecom's trademark. The best Rescuecom could muster is that the display of the mark appears in the search query box, but that of course is the user's doing, not Google's. And in both WhenU.com and here, the resulting ads came about through the user inputting specific search terms. It is hard to see how Google is doing anything that is much more "interactive" than the operation of the SaveNow software.

Meanwhile, the Electronic Frontier Foundation has filed an amicus brief in the case. An overly rigid approach to keyword advertising could muffle speech on the Internet, EFF asserts in its brief. Sponsored links keyed to trademarks allow advocacy groups to get the attention of users searching for a particular company's name. Absent this option, the Web sites for these organizations might appear so far down the list of organic search results that they go unnoticed by all but the most diligent searchers. Forbidding the use of trademark-based keywords would stymie noncommercial, critical speech regarding the trademarked figures or entities, says EFF.

With so many CDA Section 230 decisions already on the books, the First Circuit did not have to break any new ground when it ruled, in Universal Communication Systems Inc. v. Lycos Inc., No. 06-1826 (1st Cir. Feb. 23, 2007), that Lycos is immune to a defamation claim arising from user posts made on its Raging Bull message boards. Yes, Lycos is a "provider ... of an interactive computer service." Yes, the plaintiff's complaint is based on "information provided by another information content provider." Yes, the plaintiff's defamation claim would treat Lycos "as the publisher or speaker" of that information -- a legal claim for which CDA Section 230 clearly provides immunity. So ruled the First Circuit in this case.

However, along the way, the court disposed of a novel attempt to plead around a clear case of CDA immunity. Draping itself in language borrowed from the copyright infringement case of MGM Studios Inc. v. Grokster Inc., 125 S. Ct. 2764 (2004), the plaintiff claimed that Lycos "actively induced" the spread of disinformation by its message board users. Even assuming that CDA Section 230 could be read to contain an "active inducement" exception, the court said, Lycos did not do anything that would qualify as active inducement of defamatory postings by its users.

The court specifically rejected the contention that Lycos' history of taking legal steps to protect its subscribers from attempts to uncover their identities -- including moving to quash subpoenas and intervening in court cases -- amounted to an inducement of unlawful activity.

For most consumers, technical standards are about as interesting as nutritional labels. We know they are out there, but most of us are happy to remain blissfully ignorant of the details. Fortunately for us, legions of volunteer tech mavens obsess over those details, working in obscure ad hoc groups with strange acronyms. Their aim is simple but maddeningly difficult to execute: socializing our pricey high-tech gadgets to get along well with others on the digital playground.

I, for one, am grateful. For without these Emily Posts of digital discourse, my Linksys wireless router would think my Xbox 360 is speaking Klingon. And it wouldn't be the Vulcan peace symbol that would flash on my TV screen.

So, I was eager to meet those few to whom we owe so much. As it turned out, I did not have to travel far. A hundred or so of them gathered recently at the National Academies here in Washington as part of a symposium on cyberinfrastructure.

One thing I learned: the quantum mechanics of Internet speed have played tricks with time no less in the standards community than they have done in marketing departments throughout Silicon Valley. The chicken is often left waiting for its egg to hatch, quipped Andrew Updegrove to the audience. And he should know. Over the course of nearly 20 years, Updegrave has worked with more than 75 standards consortia, has counseled all branches of the U.S. government, and is on the board of ANSI.

Historically, standards setting was a "sleepy process," he explained. First came the technology, and then came the standard. Someone invented the screw; standardized threads followed. That model held up reasonably well even when adapted to the first network-enabling standards. Locomotives hit the scene first; later, engineers standardized gauges.

James J. Hill, CEO of the Great Northern Railroad and the brains behind the first privately funded transcontinental railroad, faced many business challenges during the late 1800s. But the problem of patent trolls was probably not among them. Nor did he have to worry about steam engine technology completely reinventing itself every six months.

Technology has picked up the pace since then, sometimes leaving standards setting organizations choking in the dust as they scramble to play catch up. Updegrove encouraged innovators to "merge the chicken with the egg" by developing the technology side-by-side with standards. That this may result in multiple, competing standards vying for dominance is not all bad, he explained. One advantage to a "swarm of standards" is that manufacturers can easily switch out of failed ones and into the emerging winners.

Wireless networking is one such example. Its ecosystem has, at one time or another, hosted HomeRF, Wi-Fi (802.11), Bluetooth, WiMax, and Wireless USB. HomeRF is now gone. Bluetooth has gravitated to the mobile device segment, while Wi-Fi has become the preferred approach for home networks. The IEEE has yet to finalize the draft n standard for Wi-Fi, but that has not stopped some manufacturers, such as Apple and Linksys, from going ahead and releasing routers that use the current draft.

To be sure, letting the marketplace referee standards grudge matches does carry its risks, he added. The market may not always opt for the superior technology. Or it may forego a single solution in favor of multiple standards (such as with the U.S. cell phone market). Or it may trigger a standards war that leaves otherwise willing purchasers on the sidelines, holding the jackets, waiting for the loser to flatline.

Updegrove prefaced his talk by calling it a "report from the trenches." How true that is.