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- Table of Contents -

Introduction to the online version

Chapter 1 – The Commission and Its Recommendations

Chapter 2 – The Establishment, Mandate, and Activities of the Commission

Chapter 3 – Computers and Copyright

- Background

- Computer Programs

   - Recommendations for Statutory Change

   - Recommendation for Regulations

   - Case for Copyright Protection for Programs

   - Copyright and Other Methods Compared

   - Scope of Copyright in Programs

   - Economic Effects of Program Copyright

   - Cultural Effects of Program Copyright

   - Concurring Opinion of Commissioner Nimmer

   - Dissent of Commissioner Hersey

   - Dissent of Commissioner Karpatkin

- Computer Data Bases

- New Works

Chapter 4 – Machine Reproduction – Photocopying

Chapter 5 – Summary

Appendix A – Summary of the Legislative History of Computer-Related Issues and the Photocopy Issue

Appendix B – Public Law 93-573 and Public Law 95-146

Appendix C – Commissioners

Appendix D – Staff

Appendix E – Lists of Witnesses

Appendix F – Alphabetical Listing of Persons Appearing before the Commission

Appendix G – Transcripts of Commission Meetings

Appendix H – Summaries of Commission-Sponsored Studies

Appendix I – Bibliography

Appendix J – Selected Provisions of the Copyright Act of 1976 and Copyright Office Regulations

Full table of contents

PDF version of the report

Picture of commissioners and staff

Final Report of the National Commission on New Technology Uses of Copyrighted Works

Chapter 3 – Computers and Copyright

Foundation for the Recommendations

Computer Programs38

Computer programs are a form of writing virtually unknown twenty-five years ago. They consist of sets of instructions which, when {Page 10} properly drafted, are used in an almost limitless number of ways to release human beings from such diverse mundane tasks as preparing payrolls, monitoring aircraft instruments, taking data readings, making calculations for research, setting type, operating assembly lines, and taking inventory. Computer programs are prepared by the careful fixation of words, phrases, numbers, and other symbols in various media. The instructions that make up a program may be read, understood, and followed by a human being. For both economic and humanitarian reasons, it is undesirable for people to carry out manually the process described in painstaking detail in a computer program. Machines, lacking human attributes, cannot object to carrying out repetitious, boring, and tedious tasks. Because machines can and do perform these tasks, people are free to do those other things which they alone can do or in which they find a more rewarding expenditure of their efforts.

Great changes have occurred in the construction of computers, as well as in the media in which programs are recorded. Periodic progress has seen the development, utilization, and, in some cases, passage into obsolescence of bulky plug boards, punched paper cards and tape, magnetic tapes and disks, and semiconductor chips. It should be emphasized that these developments reflect differences only in the media in which programs are stored and not in the nature of the programs themselves.

The evolution of these media is similar to that of devices for playing recorded music. Circuit boards may be compared to music boxes, and punched paper to piano rolls, while magnetic disks and tapes store music and programs in precisely the same manner. Both recorded music and computer programs are sets of information in a form which, when passed over a magnetized head, cause minute currents to flow in such a way that desired physical work is accomplished.

The need for protecting the form of expression chosen by the author of a computer program has grown proportionally with two related concurrent trends. Computers have become less cumbersome and expensive, so that individuals can and do own computers in their homes and offices with more power than the first commercial computers, while at the same time, programs have become less and less frequently written to comply with the requirements imposed by a single-purpose machine.

Just as there was little need to protect the ridged brass wheel in a nineteenth-century music box, so too was there little reason to protect the wired circuit or plug boards of early computers. The cost of making the wheel was inseparable from the cost of producing the ridged final product. The cost of copying a reel of magnetic tape, whether it contains a Chopin ètude or a computer program, is small. Thus, the following proposition seems sound: if the cost of duplicating information is small, then it is simple for a less than scrupulous person to duplicate it. This means that legal as well as physical protection for the information is a necessary incentive if such information is to be created and disseminated.

This proposition is the underlying principle of copyright, but from 1908 until early 1972 the copyright laws of the United States did not reflect its acceptance with respect to one form of expression: recorded sounds. Because the Supreme Court held in 1908 that since a piano roll was not readily perceptible to human eyes it was not a copy of the music it rendered on a player piano, there was almost “open season” – at least in terms of federal law – on the duplication of piano rolls, shellac and vinyl records, and audio tape recordings.39 Certain states made it illegal to duplicate such works, but federal copyright remained almost powerless in this area. While this rule was often criticized, its effect was apparently not too deleterious to producers of recorded sounds, so long as the cost of disk duplication made commercial piracy an expensive undertaking. Records and piano rolls were doubtless duplicated and sold, but on a less than threatening scale. The development of inexpensive transistorized tape recording equipment and its use by organized pirates posed serious economic problems for either the 1908 rule or the recording industry. But the principle persevered and finally prevailed in the Sound Recording Act of 1971, which provided sanctions against those who engage in the unauthorized duplication of sound recordings.40

As the number of computers has increased {Page 11} dramatically, so has the number of programs with which they may be used. While the first computers were designed and programmed to perform one or a few specific tasks, an ever increasing proportion of all computers are general-purpose machines which perform diverse tasks, depending in part upon the programs with which they are used. Early programs were designed by machine manufacturers to be used in conjunction with one model or even one individual computer. Today, many programs are designed to operate on any number of machines from one or more manufacturers. In addition, and perhaps even more importantly, there is a growing proportion of programs created by persons who do not make machines. These people may be users or they may be – and increasingly are – programmers or small firms who market their wares for use by individual machine owners who are not in a position to write their own programs. Just as Victrola once made most of the first record players and records, so too did early machine manufacturers write most of the first programs. Victrola’s successor, RCA, still produces sound recordings (but, interestingly enough, not phonographs), but so do hundreds of other firms. If present computer industry trends continue, it is all but certain that programs written by nonmachine manufacturers will gain an increasing share of the market, not only because writing programs and building machines are two very different skills that need not necessarily occur simultaneously, but also because program writing requires little capital investment.41

The cost of developing computer programs is far greater than the cost of their duplication. Consequently, computer programs, as the previous discussion illustrates, are likely to be disseminated only if:

1. the creator may recover all of its costs plus a fair profit on the first sale of the work, thus leaving it unconcerned about the later publication of the work; or

2. the creator may spread its costs over multiple copies of the work with some form of protection against unauthorized duplication of the work; or

3. the creator’s costs are borne by another, as, for example, when the government or a foundation offers prizes or awards; or

4. the creator is indifferent to cost and donates the work to the public.

The consequence of the first possibility would be that the price of virtually any program would be so high that there would necessarily be a drastic reduction in the number of programs marketed. In this country, possibilities three and four occur, but rarely outside of academic and government-sponsored research. Computer programs are the product of great intellectual effort and their utility is unquestionable. The Commission is, therefore, satisfied that some form of protection is necessary to encourage the creation and broad distribution of computer programs in a competitive market.

The Commission’s conclusion is that the continued availability of copyright protection for computer programs is desirable.42 This availability is in keeping with nearly two centuries’ development of American copyright doctrine, during which the universe of works protectible by statutory copyright has expanded along with the imagination, communications media, and technical capabilities of society.

This conclusion is in accord with the recommendations of groups studying this issue for the United Kingdom and the World Intellectual Property Organization.43 Both studies recommended that computer programs be afforded protection to a degree that is virtually identical to American copyright.44 A Canadian study {Page 12} reached the opposite conclusion, and an Australian report considered computer issues outside its terms of reference.45

The Commission also believes that the effects of the recommendations pertaining to computer programs made in this report, as well as those pertaining to the other computer-related subjects within the Commission’s jurisdiction, should be periodically reviewed. This could be accomplished on a smaller scale than that undertaken by the Commission but should be performed well and often enough to prevent the copyright law from becoming as anachronistic as did the 1909 Act.

The Commission is unanimous in its belief that computer programs are entitled to legal protection. But the unanimity has not extended to the precise form that protection should take.46 The law as it exists today with respect to the protection of computer programs is not totally clear. What is clear is that today there are different and often conflicting methods used by proprietors to attempt to protect their products. These include patent and copyright – exclusively federal statutory methods; trade secret law – derived from statutory and judicial state law; and unfair competition – based on elements of common law and federal statute.47

To provide reasonable protection for proprietors without unduly burdening users of programs and the general public, the following statements concerning program copyright ought to be true:

1. Copyright should proscribe the unauthorized copying of these works.

2. Copyright should in no way inhibit the rightful use of these works.

3. Copyright should not block the development and dissemination of these works.

4. Copyright should not grant anyone more economic power than is necessary to achieve the incentive to create.

Relatively few changes in the Copyright Act of 1976 are required to attain these objectives, and the promulgation of regulations by the Copyright Office will ease the burden of compliance for both copyright owners and users.

Next section: Recommendations for Statutory Change

38 Separate opinions by Commissioners Nimmer, Hersey, and Karpatkin follow in this chapter.

39 White-Smith Music Pub. Co. v. Apollo Co., 209 U.S. 1 (1908).

40 P.L. 92-140, 85 Stat. 391(1971).

41 For a discussion of barriers to entry in the hardware and software markets, see this chapter under Economic Effects of Program Copyright.

42 The Copyright Office presently accepts computer programs for registration. (See this chapter under Statutory Copyrightability of Programs and Appendix A under Eighty-eighth Congress, 1964 Revision Bill.)

43 Copyright and Designs Law: Report of the Committee to Consider the Law on Copyright and Designs (H.M.S.O., 1976) (frequently known as the Whitford Committee Report); Model Provisions on the Protection of Computer Software (1978).

44 A recent study for the World Intellectual Property Organization (WIPO) notes that “in a number of countries it would already be possible to give such protection [to programs] on the basis of current legislation on copyright . . . and consequently special legislation would not be necessary. In various countries including the United States . . . there would seem to be no particular desire to set up special provisions to protect software” (Kolle, Computer Software Protection – Present Situation and Future Prospects, 1977 Copyright 72).

45 Keyes and Brunet, Copyright in Canada: Proposals for a Revision of the Law (1977); Report of the Copyright Law Committee on Reprographic Reproduction (1976).

46 See this chapter for the separate opinions of Commissioners Nimmer, Hersey, and Karpatkin.

47 See this chapter under Copyright and Other Methods Compared.