Copyright Laws Play Catch-Up in Digital Age

A BATTLE royal is brewing over intellectual property rights on the information superhighway.

From potential patent violations to unauthorized duplication of copyrighted material, computer users, software manufacturers, and bulletin-board operators are walking in a virtual minefield. Policymakers, meanwhile, try to play catch-up in adjusting laws to new technologies and the networks envisioned to connect them.

Two recent events hint at the challenges to come:

* On Dec. 29, a federal court judge in Boston dismissed a case involving a student at the Massachusetts Institute of Technology, who had been indicted for wire fraud. The student allegedly used an MIT computer to run an Internet bulletin board that encouraged people to post and download popular software such as WordPerfect, Microsoft's Excel, and SimCity 2000, a computer game.

According to the United States Attorney's Office, the student, David LaMacchia, cost copyright holders more than $1 million in losses. The judge concluded that Mr. LaMacchia's alleged actions were not illegal under criminal copyright law, largely because LaMacchia wasn't in it for money.

* The same day, CompuServe began demanding royalties from softwaremakers for a graphics-format design it developed, known by the acronym GIF, and widely thought to be in the public domain. Its free availability helped make it an industry standard. Software companies were so outraged that on Jan. 17 CompuServe agreed to help them develop a new standard format that would be available for free.

The copyright issue is now getting the attention of policymakers.

A working group chaired by Commissioner of Patents and Trademarks Bruce Lehman is putting final touches on proposals that try to bring intellectual property protections into the digital age. While the panel's work discusses all forms of intellectual-property protections, its primary focus is copyright law.

The idea is to make it more difficult for the information superhighway to become the high-tech equivalent of the Spanish Main, where byte-hungry buccaneers log on to bulletin boards to pirate software and other protected information.

The fundamental challenge: to balance financial rewards for creativity against society's access to information, says Ethan Katsh, a professor of legal studies at the University of Massachusetts at Amherst.

But that balance is complicated by not only the transmission speeds and geographic reach of computer networks and bulletin boards, but also the quality of the reproductions. ``The 103rd copy is as good as the master,'' says Terri Southwick, an attorney with the US Patent Office's legislative and international affairs office.

Underlying those challenges is an intrinsic problem. ``The mere process of using information in digital form requires copying,'' Professor Katsh says, whether from one computer to another or within an individual computer.

``If you believe in copyright law as a way to foster innovation, current laws are not adequate,'' says Don Berman, a professor at Northeastern University School of Law in Boston and counsel to one of the firms that defended the MIT student. ``But I'm not sure what they should be.''

That uncertainty is reflected in the Patent Office working group's efforts. It characterizes its draft revisions as modest. These include amending key provisions, such as distribution and publication, to include digital transmission. In addition, draft proposals seek to outlaw ways to thwart technologies that might be developed to prevent unauthorized copying.

Even these proposals have generated debates among academics, intellectual-property lawyers, and information network users and operators who have been invited to comment on them, Ms. Southwick says. One point of contention: the liability of on-line services for copyright violations that might take place in a forum or during an exchange of electronic mail.

Another sticking point: What constitutes ``fair use'' in the electronic environment? Currently, the fair-use doctrine allows researchers, teachers, and the news media to copy portions of protected works under certain circumstances. But in an age of speed-of-light multiple copies, does fair use now represent a significant loophole? For example, downloading an entire work is easier than visiting a library, scanning an article for the passage, and photocopying the page.

``The public's access to information is at stake here,'' says Carol Henderson, executive director of the American Library Association's Washington office. ``The series of amendments proposed to the copyright laws are small individually, but put together they could easily tip a careful balance between the legitimate needs of copyright holders and the legitimate needs of the users of copyrighted material.''

Professor Berman argues that instead of treating all protected materials equally, the initial focus should be on software. With software pirating, he says, ``you have a $100 product suddenly being uploaded and distributed. No one is going to upload a Tom Clancy novel.''

Indeed, in his dismissal order in the LaMacchia case, Judge Richard Stearns indicated that Congress could replace civil penalties with criminal penalties when, even without a commercial motive, someone willfully copies and distributes protected software.

Another approach might be to create a threshold of financial losses to the copyrightholder, Berman says. The problem: ``Whose numbers do you believe?''

One significant software sieve, says the American Software Association in Washington, is the workplace. The group estimates that its industry lost $1.6 billion last year to employees making illegal software copies - often for personal use.

That problem can be dealt with through licensing, Berman says. Site licenses, which govern the use of software by many users in one location, could be written to allow companies to offer employees one copy of the software for personal use for a modest fee. This, he says, would be a relatively inexpensive way for companies to reduce their exposure to copyright in-fringement suits while reducing the incentive for employees to illegally copy the software.