The Privatization Of Information Policy

Ethics and Information Technology 2: 201–209, 2000. © 2001 Kluwer Academic Publishers. Printed in the Netherlands.

The Privatization of Information Policy Niva Elkin-Koren University of Haifa School of Law, Mount Carmel 31905, Haifa, Israel

Abstract. Copyright law in recent years has undergone a process of privatization. While weakening the enforceability of conventional legislation (copyright rules), cyberspace facilitates alternative types of regulation such as contracts and technical self-help measures. Regulation by the code is significantly different from traditional types of public ordering (copyright law) and private ordering (contracts). Norms that technically regulate the use of information are not merely self-made they are also self-enforced. Furthermore, the law was recruited to uphold the superiority of such technical self-help measures. The recently adopted U.S. Digital Millenium Copyright Act (DMCA) 1998 prohibits the development and use of technologies designed to circumvent copyright management systems. The underlying assumption of this legislation is that in Cyberspace, the target of regulation should become the technologies that affect users’ behavior rather than the behaviors themselves. This paper critically examines this regulatory approach and highlights its shortcomings. Key words: copyright, information policy, privatization Introduction In his 1994 seminal paper “The Economy of Ideas” John Perry Barlow proclaimed the end of copyright law. It is inevitable, he argued, that the current system of intellectual property law would collapse. A law that is based on the physical parameters in which intellectual property protection has resided is incompatible with the virtual environment of cyberspace. The challenges created by digital technology are simply too great to be overcome by existing laws. Copyright law, as we know it, may indeed come to an end, yet for very different reasons than those predicted by Barlow. Copyright law was never overthrown by digital technology. Instead it was recruited to uphold the superiority of technologies that facilitate control over access and use of information. Digital distribution extensively enhances the ability of rightholders to control the use of their information. Copyright management systems allow owners to physically control and manage information and to set the terms of use by means of contracts. Consequently, the copyright landscape is displaced by privately generated norms, the enforceability of which is supported by legislation. The law has never really abandoned the copyright scene in cyberspace. Indeed the recently enacted U.S. Digital Millennium Copyright Act (DMCA)1 introduces novel rights related to copyright management systems that are protect1 Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998) (“DMCA”).

ing such systems against any competing technology. The law prohibits the development and use of technologies designed to circumvent protection measures employed by rightholders to control access to information distributed digitally. The privileged status awarded to copyright management systems under the DMCA gives rightholders much stronger legal protection than the rights they hold under traditional copyright regime.2 Privatization by technology introduces a unique set of issues. While both contracts and copyright management systems are self-help means, contracts must be enforced by courts, and may therefore be subject to legal review. Courts could potentially mitigate any negative effects of contracts on information policy by applying existing legal doctrines on a case-by-case basis.3 2 See Pamela Samuelson. The Copyright Grab. Wired, 4.01, January 1996. 3 Mark A. Lemley. Symposium: Beyond Preemption: The Law and Policy of Intellectual Property Licensing. California Law Review, 87: 111–172, 1999; Lorin Brennan. The Public Policy of Information Licensing. Houston Law Review, 36: 61–119, 1999; this approach was also adopted by the drafters of UCITA as further discussed below. Elsewhere I argued, however, that current contract law is ill-equipped for addressing the threats raised by such licensing strategies to the public domain. See Niva Elkin-Koren. A Public Regarding Approach to Contracting Copyrights. In Rochelle Dryfuss and Dianne Zimmerman, editors, Expanding the Bounds of Intellectual Property: Innovation Policy for the Knowledge Society. Oxford University Press, forthcoming 2000.

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Right management systems are not subject to any equivalent legal scrutiny. Quite the contrary. Protective technologies are self-enforced. Moreover, once adopted by a rightholder, these technological selfhelp means are no longer vulnerable to circumventing technologies because these technologies are now prohibited by law. This paper critically examines the regulatory approach adopted by the DMCA. It argues that this law overlooks the unique regulatory environment that exists in cyberspace. Cyberspace is not merely a web of interconnected communication networks in the technical sense. It also constitutes a complex web of norms that regulate behavior. This web of norms is comprised of laws generated by territorial states; contracts that rely on a state’s enforcement institutions, netiquette and, finally, norms embodied in the technology itself. The technical means that regulate the use of information in cyberspace are not merely self-made; they are also self-enforced. As such they pose distinctive challenges to traditional regulatory framework.

The privatization of copyright law Copyright law in recent years has undergone a process of privatization. The use of information is no longer governed by legislation alone; it is also regulated by private parties acting in the market. Not long ago it was copyright alone that defined the terms of use for information. Copyright law itself is a property rule defined by the legislative bodies of territorial states and applied by their enforcement systems. It provides owners with the legal power to control access to their works by granting them a set of exclusive rights to use their copyrighted materials.4 The standard justification of copyright law perceives it as a response to a market failure.5 This instrumentalist perspective views the purpose of law as providing sufficient incentives to invest in the production of content. The traditional copyright narrative assumes that since authors cannot effectively control the use of 4 Section 106 of the 1976 Copyright Act defines the set of

exclusive rights granted to copyright owners under the law: the exclusive right to reproduce, prepare derivative works, distribute copies to the public, publicly perform, and publicly display the copyrighted work. See 17 U.S.C. § 106 (1976). 5 See Paul Goldstein. Copyright (2nd ed.). Little, Brown, Boston, 1996, §§ 1.14–1.15, pp. 1:40–1:45. Other justifications emphasize the natural rights of the author in her work reflecting her personality or her entitlement to receive just reward for her labor. See Kevin Garnett, Jonathan Rayner, Gillian Davies, editors. Copinger and Skone James on Copyright (14th ed., volume one), Sweet & Maxwell, London, 1999, para. 2–04, p. 29.

their works, they would lack sufficient incentives to create. While the narrative of the individual author is still proclaimed, the modern reality of copyright law is concerned with providing incentives to the content industries.6 Copyright law secures incentives by granting copyright owners the legal right to exclude others from using their materials. For instance, distributing copies of a computer program by email may infringe upon the exclusive rights of copyright owners to reproduce and publicly distribute the work. Copyright law further affects access to information by defining the privileges of users with respect to copyrighted works. For instance, the use of copyrighted materials for the purpose of criticism would usually be privileged under fair use doctrine. Cyberspace challenges traditional regulation by the territorial state. Conventional enforcement by the state is much less effective in cyberspace, where it is always possible to cross geographical boundaries or to disguise the physical identity of the infringer.7 The enforcement of copyright law becomes particularly difficult due to the low cost of copying and distributing information on the net. Tracking down copyright violators and taking legal action becomes prohibitively expensive. Yet while weakening the enforceability of conventional legislation (copyright rules), cyberspace facilitates alternative types of regulation. The terms of use for information in cyberspace are increasingly defined by contracts. Content providers are increasingly relying on standard form contracts for expanding the rights granted to them under copyright law. The pervasive use of form contracts for distributing content is changing the terms of access to information. Contracts are employed to restrict or prohibit altogether certain uses of the work that are otherwise permissible under copyright law. For instance, a contractual provision may limit the use of search results, which are factual information that may not be copyrighted.8 Copyright law currently offers limited protection to search engines. The results returned by a search engine in response to a user’s query are facts indicating the URLs of web pages that match the user’s request. Facts, as such, are not protected by copyright law and are purposely left in the public domain. Metacrawlers, which enable 6 Debora J. Halbert. Intellectual Property in the Informa-

tion Age: The Politics of Expanding Ownership Rights. Quorum Books, Westport, Connecticut, 1999. 7 I. Trotter Hardy. The Proper Legal Regime for ‘Cyberspace’. University of Pittsburgh Law Review, 55: 993–1055, 1994. 8 Feist Publications v. Rural Tel. Services, 499 U.S. 340, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991).

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users to submit their query to several search engines simultaneously, threaten to reduce potential revenues received by search engines from advertisers who pay according to the number of hits on the page where the banner is posted. Thus, search engines seek to restrict the use of their output by Metacrawlers. Therefore, many license agreements of search engines limit the license to personal use and prohibit automated queries and use for commercial purposes.9 Similarly, software licenses may prohibit reverse engineering of the computer program. Such provisions, if enforceable, may restrict users from accessing unprotected parts of the program or developing legitimate compatible products.10 The pervasiveness of license agreements reflects one form of privatization of information policy. Indeed, contracts apply only to the parties of the agreement. Yet when the content distributed is subject to standard form contracts, the applicability of such terms is universal. The technical ability to make access to informational products contingent upon accepting the terms of a license allows information providers to govern the use of information by standardized terms of use. Enforcement itself is also privatized. New intermediaries are becoming potential players in the enforcement process. Online service providers may often control a gateway to their system or services. Consequently, providers may technically monitor the content posted on their facility and detect copyright infringements. This potential for monitoring made online service providers a particularly attractive target for rightholders seeking enforcement of their copyrights. Consequently, during the 1990’s online service providers were increasingly exposed to legal liability for copyright infringement committed by their users. Several courts in the United States held online providers liable under copyright law, primarily under the legal doctrines of “vicarious liability” or “contributory liability,” which hold liable a party who helps someone else infringe copyright under certain circumstances.11 Several courts in Europe have reached similar outcomes.12 The potential copyright liability 9 See, e.g., the terms of service of Google.com at www.

google.com/terms_of_service.html; Yahoo! (docs.yahoo.com/ info/terms – term 10); AltaVista (doc.altavista.com/legal/ termsofuse.html) (last visited on August 2000). 10 Sony Computer Entertainment v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000). 11 Religious Technology Center v. Netcom Online Communication Services Inc, 907 F. Supp 1361 (N.D. Cal. 1995); Sega Enterprises v. Maphia, 948 F. Supp. 923 (N.D.Cal 1996). 12 Scientology, President of District Court of Hague, 12 March 1996. See Koelman, Online Intermediary Liability, at 20–21.

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imposes a heavy burden on providers, requiring them to exercise legal discretion ascertaining whether any particular content is infringing. To reduce liability providers have exercised inspection policies to monitor and supervise the use of content. Recent legislation, which created “safe harbors” for online service providers, further induces private enforcement policies by intermediaries. Even though the DMCA imposes no duty to monitor the service for copyright infringements,13 it requires providers to implement enforcement policies. Under safe harbor provisions of the DMCA, online service providers14 are exempt from liability for infringing materials posted by others on their system, provided that they undertake some enforcement responsibilities.15 To be eligible for the exemptions, an online service provider must accommodate the technical measures adopted by copyright owners, adapt a copyright policy that would allow termination of users who are repeat infringers, and handle infringement complaints by an appointed Copyright Agent implementing a “Notice and TakeDown Policy.”16 By implementing copyright enforcement policies, online service providers are enrolled in protecting the interests of rightholders. Thus enforcement functions, once performed exclusively by courts and the police, are increasingly assigned to online service providers.17 Aware of the downsides of delegating such discretion and monitoring responsibilities, the U.S. Congress and courts limited the liability of online service providers for other types of harm caused by their users, such as harm caused by defamatory statements.18 13 17 U.S.C.A. § 512(m) (“Nothing in this section shall

be construed to condition the applicability of subsections (a) through (d) on – (1) a service provider monitoring its service or affirmatively seeking facts indicating infringing activity, except to the extent consistent with a standard technical measure complying with the provisions of subsection (i);”). 14 Online Service Providers are broadly defined by the DMCA to cover “(a) An entity offering the transmission, routing, or providing of connections for digital online communications between or among points specified by a user, of material of the user’s choosing without modification as to the content to the material as sent or received; and (b) Provider of online services or network access, or the operator of facilities therefor” 17 U.S.C Section 512(k)(1) (1998). 15 17 U.S.C Section 512 (1998) (“Limitations on liability relating to material online”). 16 17 U.S.C Sections 512(a)–(d), and (i) (1998). 17 See, for instance news.cnet.com/news/0-1007-2001995157.html?tag=st.ne.1.srchres.ni (reporting claims against eBay for censoring the sale of products copyrighted by Microsoft). 18 Communications Decency Act 1996, 47 U.S.C 230(c)(1) (“no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided

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Finally, the technology itself is employed to set limits on the use of information. Digital distribution allows information providers to define the terms of use for informational products, in the code that provides them. The computer programs, communication design and network architecture that constitute cyberspace, define the potential choices of action available to information users. The same system that provides the service (such as the computer program that facilitates access to a website) also defines the terms of access and usage by preventing some uses, such as copying, and permitting other uses, such as browsing. The distribution system may allow access to information only after payments have been made. A computer program may prevent the creation of copies or may disable unauthorized copies. Only uses that are licensed by providers become technically available to users. This type of regulation (by the code) is significantly different from traditional types of public ordering (copyright law) and private ordering (contracts). Rather than defining undesirable behaviors by law, or providing incentives for a desirable behavior, regulation by the code makes it possible to prevent certain behaviors while allowing others.19 Copyright law prohibits the creation of copies without authorization by the copyright owner. A copier will pay the owner damages for the infringing copies she has made. In by another information content provider”); Zeran v. AOL, 985 F. Supp. 1124 (E.D.Va 1997), aff’d 129 F. 3d 327 (4th Cir. 1997); Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998). 19 See Lawrence Lessig. Symposium: Surveying Law and Borders: The Zones of Cyberspace. Stanford Law Review, 48: 1403–1411, 1996, 1407-08; Joel R. Reidenberg. Lex Informatica: The Formulation of Information Policy Rules Through Technology. Texas Law Review, 76: 553–593, 1998. These differences between the traditional system of law enforcement and enforcement by the code raise conceptual issues regarding the notions of enforcement and regulations. The literature on technological self-enforcement, regards the code as a type of regulation. A preliminary question is whether it is justified to talk about regulation by the code and enforcement by the code as part of the law. Economic theory may treat technology as simply design or an architectural constraint because the notion of regulation under economic analysis of law assumes a choice. The underlying assumption of the economic approach to rules is that rational agents are able to control their behavior. They are motivated by their wish to maximize their utility. Rules are sometimes necessary to correct an otherwise distorted set of incentives (due to market failures), and provide individuals with appropriate incentives so they will choose to act efficiently. If a design simply prevents a certain behavior we can no longer talk about regulations and incentives since there is no longer a choice by individuals for the law to promote or prevent. See Niva Elkin-Koren and Eli M. Salzberger. Law and Economics in Cyberspace. International Review of Law and Economics, 19: 553–581, 1999.

cyberspace a computer program may simply prevent the creation of uncompensated copies by employing copyright management systems,20 encryption, digital watermark or other types of technologies that restrict access. Such means may substitute reliance on copyright laws. Technology in cyberspace allows efficient enforcement to a degree that never existed in the non-virtual world. Enforcement by the code involves relatively lower costs than enforcement by the legal system. It avoids the costs of identifying, seizing and prosecuting violators and the administrative costs of maintaining the legal enforcement system, such as the police and the courts. While the costs of self-enforcement by the code are usually borne by users, the burden of administrative costs involved in enforcing copyright law via the legal system would be distributed among taxpayers.21 Means for technological self-help also entail perfect performance. Such means do not offer users a choice of whether to go by the rule or to violate it.22 Terms of use implemented by technological means are automatically enforced. The architecture simply prevents any undesirable behavior from occurring in the first place. Consequently, the level of enforcement and its success do not depend on the extent to which the public comprehends and internalizes the rules.23 Compliance is particularly crucial for copyright law that creates abstract “fences” around virtual informational goods (such as musical compositions and television broadcasts), which often lack physical boundaries. Copyright law is therefore very much dependent on compliance and self-restraint.24 20 See Tom W. Bell. Fair Use v. Fared Use: The Impact

of Automated Rights Management on Copyright’s Fair Use Doctrine. North Carolina Law Review, 76: 557–619, 1998. 21 Niva Elkin-Koren and Eli M. Salzberger. Law and Economics in Cyberspace. International Review of Law and Economics, 19: 553–581, 1999. 22 Joel R. Reidenberg. Lex Informatica: The Formulation of Information Policy Rules Through Technology. Texas Law Review, 76: 553–593, 1998; Lawrence Lessig. Symposium: Surveying Law and Borders: The Zones of Cyberspace. Stanford Law Review, 48: 1403–1411, 1996. 23 Somewhat similar questions are addressed by social norms economic literature, see in Cass R. Sunstein. Emerging Media Technology and the First Amendment: The First Amendment in Cyberspace. Yale Law Journal, 104: 1757–1804, 1995; Mark A. Lemley. The Law and Economics of Internet Norms. ChicagoKent Law Review, 73: 1257–1294, 1998. 24 See Debora J. Halbert. Intellectual Property in the Information Age: The Politics of Expanding Ownership Rights. Quorum Books, Westport, Connecticut, 1999, pp. 93–94 (discussing the significance of copyright narrative for establishing a public basis for compliance, self-restraint and enforcement).

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To the extent self-enforcement is perfect, it may reduce the price of information products. Consider, for instance, the price of copyrighted works. The price has to cover not only the large investment in creating and marketing the work, but also the cost of enforcement and the expected loss from failure to enforce the rights of the copyright holder. If the expected market for a music publisher is substantially reduced due to the creation of unauthorized copies, the publisher will raise the price per copy in order to cover its expenses. If enforcement by the code prevents the creation of unauthorized copies, it will reduce the price of copyrighted works.25 What are the implications of self-enforcing means for the legislators of territorial states? Should this privatization leave the legislators out of the regulatory picture? The law is deeply involved in the enforcement of contracts. For a contract to be enforceable it must comply with (minimal) legal requirements. Thus courts will not enforce an illegal contract or a contract that jeopardizes public welfare. Regulation by the code seems, however, free from such legal scrutiny since it is not dependent on a state’s enforcement procedures. Self-help technological means would not normally provide an opportunity for legal review. They do not require any law enforcement institutions such as courts and the legal system. They are self-executed and self-implemented. Since terms of use are automatically enforced, they are not subject to legal review. Nevertheless, regulators did address self-help technological means in the DMCA. The underlying rationale of this legislation was that enforcement by technology can be violated by technology of counter coding. The development of exclusion measures is likely to encourage users to develop counter codebreaking and hacking tools. For every protection measure there is always a counter-technology to crack it. Therefore the efficacy of technological protection of copyrighted works depends on the absence of circumvention means. After reviewing the legal approach toward self-help technologies reflected in the DMCA, I will discuss the appropriate scope of regulating self-help technological means.

Regulating technologies: the anti-circumvention legislation In October 1998 the U.S. Congress passed the Digital Millennium Copyright Act. This legislation sought to 25 See Tom W. Bell. Fair Use v. Fared Use: The Impact of Automated Rights Management on Copyright’s Fair Use Doctrine. North Carolina Law Review, 76: 557–619, 1998.

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implement the anti-circumvention provisions in the 1996 Geneva Internet Treaties. The DMCA prohibits the circumvention as well as manufacturing and distribution of technologies designed to circumvent protection measures employed by copyright rightholders.26 The underlying assumption of this legislation is that in cyberspace, the target of regulation should become the technologies that affect users’ behavior rather than the behaviors themselves. Indeed, considering the significant market power of the American Internet industry, the anti-circumvention provisions are likely to become prevalent and shape the online legal regime. Even if foreign legislators fail to adopt the new law, industry is likely to comply with the U.S. legal requirements to minimize its legal exposure. Title I of the DMCA amends U.S. copyright law by adding section 1201, which addresses circumvention of copyright protection systems. This section prohibits unauthorized access by circumvention and the manufacturing and distribution of technological means designed to circumvent either access control or copyright control. It provides for civil remedies and in addition imposes criminal penalties for willful violations committed for commercial advantage or private financial gain. In essence the law prohibits the following: A. Gaining unauthorized access to works by circumventing27 a technological protection measure put by the copyright owner.28 B. The manufacturing or making available “technology, product, service, device, component” 26 This approach is also reflected in the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty, adopted at the WIPO Diplomatic Conference in December 1996. Under the treaty contracting parties are required to provide legal remedies against circumventing protection measures and against tampering with copyright management information. 27 Circumventing a technological measure is defined by the law as “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner;” 17 U.S.C. Section 1201(a)(3)(A)(1998). 28 “No person shall circumvent a technological measure that effectively controls access to a work protected under this title”. Indeed this provision will only become effective two years after enactment during which Librarian of Congress is to conduct a rulemaking proceeding to determine the appropriate exceptions to the prohibitions. However, other provisions that prohibit the manufacturing and making available of technologies that are used to defeat technological measures controlling access, and other rights of a copyright owner, took immediate effect. 17 U.S.C. Section 1201(a)(1)(1998).

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that is used to defeat technological measures’29 controlling access.30 C. The manufacturing or making available the means of circumventing protection afforded by technological measures that effectively protect the rights of a copyright owner.31 The limitation on manufacturing (or otherwise making available) circumventing devices applies only to devices that are “primarily designed or produced for the purpose of circumventing”; have only a “limited commercially significant purpose or use other than to circumvent”; or are marketed “for use in circumventing”. The DMCA further prohibits tampering with Copyright Management Information (CMI).32 This includes the terms and conditions for using the work.33 The law also covers circumvention under circumstances that do not otherwise constitute a copyright infringement. This would be the case, for instance, when a particular use of the work is privileged under the fair use doctrine.34 A defense to a copyright infringement is not a defense to the prohibition established under the DMCA. This view was recently adopted by the court in one of the first cases which applied the anti-circumvention legislation. This case involved the distribution of a computer program designed to decrypt a DVD encryption system CSS (Content Scrambling System). The DeCSS allowed a non-CSS-Compliant DVD player to play copies with DVD content. In Universal City Studios, Inc v. Reimerdes, an action filed by film distributors against DeCSS distributors, the court found the defendants liable under the anti-circumvention provisions. Judge Kaplan rejected the defendants’ claim that their actions constitute fair use and therefore could not be illegal under the anti-circumvention laws. While stating that this argument could be correct in some cases, it held that Congress intentionally left anti-circumvention outside of the reach of fair use doctrine.35 The law recognizes a limited number of exemptions, narrowly defined, in which circumvention would 29 A technological measure that effectively controls access to a work is defined as a measure that “in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work.” 17 U.S.C. Section 1201(a)(3)(B)(1998). 30 17 U.S.C. Section 1201(a)(2) (1998). 31 17 U.S.C. Section 1201(b)(A) (1998). 32 This includes providing false copyright management information and removing or altering CMI. 17 U.S.C. Section 1202 (a)(b)(1998). 33 17 U.S.C. Section 1202 (1998). 34 17 U.S.C Section 107. 35 Universal City Studios v. Reimerdes, 111 F. Supp. 2d 294 (S.D.N.Y. 2000).

be allowed when it is done for a legitimate cause.36 The broad prohibition and limited scope of exceptions create a comprehensive all-encompassing protection to rightholders. The DMCA sought to adopt copyright law to the novel needs of the digital era. The anti-circumvention legislation protects the right to control access to copyrighted works, which some believe should be an integral part of the copyright in the digital era.37 Digital distribution is no longer dependent on material copies but rather on constant availability of works in a non-material form. The law should therefore award rightholders with the right to control the manner in which the work is accessed. Nevertheless, in contrast to the classic exclusive rights, the scope of which is explicitly defined by legislation, the so-called “right to control access” is a by-product of regulating technologies. Even if one agrees that copyright owners should be accorded the right to control access, such right could have been simply added to the bundle of rights defined by law. Yet, the DMCA went further and prohibited any act of circumvention for acquiring access, and restricted the manufacturing and distribution of technologies that enable it. Others believe the DMCA is designed to serve an economic purpose. The economic rationale for the DMCA anti-circumvention provisions seems pretty simple. The development of exclusion measures is likely to encourage users to develop counter codebreaking and hacking tools. This in turn will lead to sophistication of the exclusion tools and a continuous technology race between the two sorts of devices. Such a race increases the cost of employing protection measures by requiring rightholders to invest in preserving their technological superiority. This may divert funds that might otherwise be invested in more productive directions; in other words, so it is argued, this infertile 36 The exceptions include reverse engineering. 17 U.S.C.

Section 1201(f). Reverse engineering was recognized by U.S. courts as “fair use” and therefore does not constitute a copyright infringement even if unauthorized by the copyright owner. Note, however, that the exception defined by the law is very limited and does not cover all types of circumvention that were found by the courts as fair use. Other exceptions include an exception for law enforcement and intelligence activities, encryption research (if it satisfies a fairly strict requirements defined by the law), security testing, the manufacture of circumvention measures for the sole purpose of supervising the use of the internet by minors, protection against invasion of privacy, nonprofit libraries and educational institutions for the purpose of determining whether to acquire a work. 37 Jane Ginsburg. From Having Copies to Experiencing Works: the development of An Access Right in U.S. Copyright Law. In Hugh Hansen, editor, U.S. Intellectual Property: Law and Policy. Sweet & Maxwell (forthcoming 2000).

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race is sheer waste. It may require central intervention, which is very different from government intervention in the form of copyright law. Central legislation is no longer necessary to create copyright, namely to provide the legal means of exclusion to make possible the production of information products by private firms. Central intervention may now be necessary to stop the wasteful technological race between exclusion tools and their counter technologies.38 In other words, intervention by regulation might be needed as a second-degree enforcement control.39 The DMCA thus demonstrates a new regulatory strategy in information policy. Rather than directly regulating the behavior of users (prohibiting unauthorized copying of a copyrighted work) the DMCA regulates technologies. It seeks to govern the use of content by directly regulating the technologies that enable access and use of informational products. Regulation thus focuses on the technologies that affect users’ behavior rather than the behaviors themselves. A major concern in regulating technology is the risk of throwing out the proverbial baby with the bathwater. Regulating technology may impede, rather than induce, technological development.40 The DMCA’s regulatory approach overlooks the significance of a technology race and competition between protective systems and hacking technologies as the driving forces of technological innovation. In fact, development of circumventing means to bypass, remove or disable other technological measures is an integral part of the hacker culture that contributed to the development of cyberspace. Investments in developing measures and anti-measures may contribute to technological development, in that some inventions sometimes have other uses. The purpose of intellectual property laws is to promote the development of new technologies. Regulating technological development may impair this objective. But the danger reflected in such regulation goes beyond its impact on technological development. A 38 Kenneth. W. Dam. Self-help in the Digital Jungle. The

Journal of Legal Studies, 28: 393–412, 1999 (arguing that it is inevitable that counter technologies which defeat self-help system will arise. Dam believes that such a race requires government intervention in prohibiting circumventing means, though suggesting that such regulation should carefully drafted to avoid hindering technological development altogether). 39 Niva Elkin-Koren and Eli M. Salzberger. Law and Economics in Cyberspace. International Review of Law and Economics, 19: 553–581, 1999. 40 See Pamela Samueslon. Intellectual Property and the Digital Economy: Why the Anti-Circumvention Regulations Need to be Revised. Berkeley Technology Law Journal, 14: 519–566, 1999 (arguing that the anti-circumvention regulation may obstruct the progress of technology).

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more significant concern raised by the DMCA’s anticircumvention provisions has to do with the question of how, and by whom, terms of access to information are defined in our society.

Letting the cats watch over the cream The DMCA allocates decision-making power regarding the most important resource in our information society in private hands. The law provides a privileged status to restrictions on access to information that were defined unilaterally by information providers. Restrictions enforced by copyright management systems are not subject to legal review. It is the very availability of protective technologies that gives copyright owners such power to regulate the use of information. Yet were it not for the DMCA, those who are technologically skilled could resist such restrictions. If it were legal to develop and distribute circumventing technologies, the market effect could mitigate the power of copyright owners. A rule that prevents the development of circumventing means accords a privileged status to such self-made regulation. Suppose that a new technology allows landowners to prevent an airplane from flying above their land and ensure that only authorized airplanes are able to pass. Some landowners may use the new device to collect fees from airplanes that fly over their plot. Imagine that air carriers have managed to develop a device that would circumvent the virtual fee-collecting air-gate. So, the landlords develop more sophisticated air-gates and correspondingly air carriers develop circumventing devices. Then the government decides to prohibit the manufacture and use of circumventing devices by air carriers. The property rule that defines the proprietary rights of landowners is intact. It still provides that ownership in land, in and of itself, does not extend to the right of passage in the sky. Yet, in fact, landowners are now able to collect fees for every such use. The special immunity provided by the law to copyright management systems suggests that such systems will increasingly displace copyright law in governing the use of information. What are the consequences of replacing the regulatory regime of copyright law by terms of access to information generated by information providers? The privatization of information policy under the patronage of law, not only privatizes the rule-making, but it is also likely to privatize the information itself. Once a copyright owner uses a technology to restrict access to his or her materials, it becomes a violation of the law to attempt to bypass the protective measures. This legal outcome remains the same even when

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a user who circumvented the system was entitled to access the materials under copyright law. The list of exceptions defined by the law does not cover all legitimate uses of information. However, unless permitted under one of the exceptions, any access to a work by circumvention becomes illegal. If terms of access to information are exclusively defined by rightholders, it is expected that more information will be subject to private control. Information providers are likely to use technology to maximize their control over the use of their informational products, including those currently unprotected under copyright law. Copyright law leaves out a pool of information that is publicly accessible, immune from the power of any private party to exclude its use. Information in the public domain, under a copyright regime, is therefore legally accessible in the sense that its use is privileged to all. The privatization of this public domain may entail some negative effects for creation and innovation. Information is often developed incrementally and therefore widespread access to information may increase the chances of further innovation. Existing cultural artifacts build on the works of the past.41 Exposure to current innovations may stimulate the creation of new technological developments. So extensive use of information may increase the likelihood of further innovation. A pay-per-access regime, in which every access to information is fared, may impede innovation. That is because innovative developments are not necessarily tied to any financial resources and may depend instead on intellectual capability, circumstances, level of cooperation and luck.42 Some level of free access to information is furthermore essential for democracy. Information has social and political significance. It affects the shaping of preferences and identities and may be essential for individuals to participate in political deliberation. If we believe that democracy is not simply about securing equal voting rights but also requires equal access to the political process in a more substantial way, then the tenets of democracy must also apply to these will formation processes. This requires reasonable access to information and some freedom to transform and shape informational works so that they reflect one’s political agenda, belief system and identity. Public access to information, freed from any veto power of any private 41 William M. Lands and Richard A. Posner. An Economic

Analysis of Copyright Law. Journal of Legal Studies, 18: 325– 363, 1989, p. 332. 42 See Jessica Litman. The Public Domain. Emory Law Journal, 39: 965–1023, 1990, fn 264–265 and accompanying text (arguing that authorship processes may be inadvertent).

party, is currently available for information in the public domain. It is unlikely that information providers will preserve such a level of privileged usage. The new legal regime under the DMCA protects the claim of rightholders to maximize their profits and utilize every economic potential related to their work. If copyright law had once created islands of information that were subject to the sovereign control of copyright owners, these islands are now turning into a continent leaving little available space in between. The totality of restrictions on access is what makes such a regime risky from a democratic perspective.

Where do we go from here? Information policy that is configured by copyright owners, enforced by technology and backed by anticircumvention rules could not sufficiently protect the public interest. The DMCA has distorted the long tradition of balancing the economic interests of owners and public access to information. I do not intend to claim here that copyright law necessarily reflects the right balance under all circumstances. Indeed, it seems that digital distribution would require us to draw a different balance – to better accommodate the different information environment. Copyright law, however, provided a framework for balancing in the old regime. It had some legal mechanisms for introducing public considerations into the rules that govern the use of information, such as the idea/expression distinction, the fair use defense and other limitations on the owner’s exclusive rights. Such mechanisms are completely absent under the new legal regime. Powerful technologies of exclusion seem to introduce a greater threat to the continuous existence of the public domain. If the greatest threat in our information age is blocking – withholding information and restricting access – we must rethink our rights paradigm. The challenge for regulators is therefore to secure unconstrained access to information in the technologically regulated environment. It is one thing to keep your information secret or physically (and technologically) guard it against unauthorized use. It is quite another to ask that the law would enforce such self-help means. When the (public) legal system is asked to enforce norms created by private parties (such as in contracts), these norms would normally be subject to scrutiny. Courts could make certain that the public enforcement system is not abused to achieve goals that conflict with public policy. Regulation by technology introduces a harder case. Under the traditional copyright regime, information

T HE P RIVATIZATION OF I NFORMATION P OLICY

in the public domain was only legally accessible, in the sense that its use is privileged to all. It was not, however, physically accessible. Copyright law never imposed a legal obligation to provide access. Protective technologies require us to rethink the boundaries of access rights. How to secure access without forcing rightholders to provide access to content? To what extent should the law intervene in securing access? To what extent should limits on access to information be permissible? The real challenge for regulators is to define not merely new access rights of owners but also access privileges of users.

Acknowledgement I am indebted to Matan Goldblatt for his useful and thoughtful research assistance.

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