© 1999 J.H. Reichman and Paul F. Uhlir.

J.H. Reichman, Professor of Law, Vanderbilt University School of Law and Paul F. Uhlir, National Research Council, Washington, DC. An early version of this paper was presented to the Symposium on The Changing Character, Use, and Protection of Intellectual Property, German-American Academic Council in Cooperation with the U.S. National Academy of Sciences and the Max Planck Institute for Foreign and International Patent, Copyright and Competition Law, Washington, D.C., Dec. 3-4, 1998, and to the Conference on Law in the Information Society, Istituto per la Documentazione Giuridica, Comitato Nazionale della Ricerca, Florence, Italy, Dec. 2-5, 1998. The views expressed in this article are the authors' and not necessarily those of the National Academy of Sciences or the National Research Council.

1. See, e.g., Julie E. Cohen, Lochner in Cyberspace: The New Economic Orthodoxy of "Rights Management," 97 MICH. L. REV. 462 (1998); Trotter Hardy, Property (and Copyright) in Cyberspace, 1996 U. CHI. LEGAL F. 217 (1996); Robert P. Merges, The End of Friction? Property Rights and Contract in the "Newtonian" World of On-line Commerce, 12 BERKELEY TECH. L.J. 115 (1997); Henry H. Perritt, Jr., Property and Innovation in the Global Information Infrastructure, 1996 U. CHI. LEGAL F. 261 (1996).

2. See, e.g., Kenneth J. Arrow, Economic Welfare and the Allocation of Resources to Invention, in THE RATE AND DIRECTION OF INVENTIVE ACTIVITY 609, 616 (National Bureau of Economic Research ed., 1962) (stressing that optimal utilization occurs when information is free, while optimal information production occurs only when producers expect to appropriate the economic value of their investments); see also Mark A. Lemley & David McGowan, Legal Implications of Network Economic Effects, 86 CALIF. L. REV. 479, 591-608 (1995) (describing the economics of networks as "still under construction").

3. See generally, J.H. Reichman, Legal Hybrids Between the Patent and Copyright Paradigms, 94 COLUM. L. REV. 2432 (1994) [hereinafter Reichman, Legal Hybrids]; J.H. Reichman, Charting the Collapse of the Patent-Copyright Dichotomy: Premises for a Restructured International Intellectual Property System, 13 CARDOZO ARTS & ENT. L. J. 475 (1995) [hereinafter Reichman, Charting]; Pamela Samuelson, Randall Davis, Mitchell D. Kapor & J.H. Reichman, A Manifesto Concerning the Legal Protection of Computer Programs, 94 COLUM. L. REV. 2308 (1994) [hereinafter Samuelson et al.].

4. See, e.g., Charles R. McManis, Taking TRIPS on the Information Superhighway: International Intellectual Property Protection and Emerging Computer Technology, 41 VILL. L. REV. 207 (1996).

5. See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 40-41 (2nd ed. 1997) (noting that public goods are both non-excludable and non-rivalrous).

6. See Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the Legal Protection of Databases, 1996 O.J. (L 77) 20 [hereinafter E.U. Directive].

7. See J.H. Reichman & Pamela Samuelson, Intellectual Property Rights in Data?, 50 VAND. L. REV. 51, 72-95 (1997) (tracing legislative history of the E.U. Directive). For different perspectives, see, for example, Robert C. Denicola, Copyright in Collections of Fact: A Theory for the Protection of Nonfiction Literary Works, 81 COLUM. L. REV. 516 (1981) and Jane C. Ginsburg, Copyright, Common Law, and Sui Generis Protection of Databases in the United States and Abroad, 66 U. CIN. L. REV. 151 (1997); G.M. Hunsucker, The European Database Directive: Regional Stepping Stone to an International Model?, 7 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 697 (1997). See also Wendy J. Gordon, On Owning Information: Intellectual Property and the Restitutionary Impulse, 78 VA. L. REV. 149 (1992).

8. See, e.g., PAUL GOLDSTEIN, COPYRIGHT'S HIGHWAY: FROM GUTTENBERG TO THE CELESTIAL JUKEBOX 27 (1994) (stating that "[c]opyright was technology's child from the start [because] [t]here was no need for copyright before the printing press"); Wendy J. Gordon, Asymmetric Market Failure and Prisoner's Dilemma in Intellectual Property, 17 U. DAYTON L. REV. 853 (1992) (relating economic justification of intellectual property rights to the problem of market failure).

9. See J. H. Reichman & Jonathan A. Franklin, Privately Legislated Intellectual Property Rights: Reconciling Freedom of Contract with Public Good Uses of Information, 147 U. PA. L. REV. 875, 897-99 (1999) (discussing "The Restored Power of the Two-Party Deal").

10. See, e.g., Julie E. Cohen, A Right to Read Anonymously: A Closer Look at "Copyright Management" in Cyberspace, 28 CONN. L. REV. 981, 983-89 (1996) (discussing technologies that copyright owners may utilize to monitor and control access to information); see also DanThu Thi Phan, Note, Will Fair Use Function on the Internet?, 98 COLUM. L. REV. 169, 192, 192 n.167 (1998) (defining and discussing "digital watermarks"). See generally NATIONAL RESEARCH COUNCIL, CRYPTOGRAPHY'S ROLE IN SECURING THE INFORMATION SOCIETY (Kenneth Dam & Herbert Lin eds., 1996); Mark Stefik, Shifting the Possible: How Trusted Systems and Digital Property Rights Challenge Us to Rethink Digital Publishing, 12 BERKELEY TECH. L. J. 137 (1997).

11. Digital Millennium Copyright Act, Pub. L. No. 105-304, 103, 403, 112 Stat. 2860, 2863, 2889 (1998) (codified at 17 U.S.C. 1201).

12. See Reichman & Franklin, supra note , at 897-98 (stating that this "gatekeeping function is reinforced by encryption devices, digital watermarking, and other self-help technical measures that permit information providers contractually to impose their own terms and conditions on access to information goods stored at any given network site and on the uses to which end-users can put the information they access").

13. See Digital Millennium Copyright Act, Pub. L. No. 105-304, 103, 112 Stat. 2860, 2863 (1998) (codified at 17 U.S.C. 1201).

14. See U.C.C. Article 2B-Licenses (Feb. 1999 Draft) (attempting to provide a common legal framework for transactions in digital information and software licenses). In April 1999, the American Law Institute, an original sponsor of this proposal, withdrew its support, and the National Commissioners announced their intention to pursue the project in the form of a model law governing computerized information transactions rather than as an amendment to the U.C.C. See NCCUSL & ALI, NCCUSL to Promulgate Freestanding Uniform Computer Transactions Act: ALI and NCCUSL Announce that Legal Rules for Computer Information Will Not be Part of U.C.C. (visited Apr. 23, 1999) <http://www.nccusl.org/pressrel/2brel.html>. For convenience, citations herein continue to refer to draft Article 2B, February 1999, the latest available version at the time of writing.

15. Raymond T. Nimmer, the Reporter for Article 2B, justifies this approach. See Raymond T. Nimmer, Breaking Barriers: The Relation Between Contract and Intellectual Property Law, 13 BERKELEY TECH. L. J. 827 (1998).

16. See, e.g., Julie E. Cohen, Copyright and the Jurisprudence of Self-Help, 13 BERKELEY TECH. L.J. 1089 (1998); Jessica Litman, The Tales that Article 2B Tells, 13 BERKELEY TECH. L.J. 931 (1998); Charles R. McManis, The Privatization (or "Shrink-Wrapping") of American Copyright Law, 87 CALIF. L. REV. 173 (1999).

17. See, e.g., Reichman & Franklin, supra note , at 939-43, 947-51; see also Rochelle Cooper Dreyfuss, Do You Want to Know a Trade Secret? How Article 2B Will Make Licensing Trade Secrets Easier (But Innovation More Difficult), 87 CALIF. L. REV. 191 (1999); Mark A. Lemley, Beyond Preemption: The Law and Policy of Intellectual Property Licensing, 87 CALIF. L. REV. 111 (1999).

18. See McManis, supra note , at 173 (addressing the capacity of Article 2B to alter the existing balance embodied in copyright law); Reichman & Franklin, supra note , at 943-47.

19. See 17 U.S.C. 102(b) (1994) (ideas not protectable), 107 (1994) (fair use), 108-121 (1994) (other exceptions and limitations).

20. See 17 U.S.C. 301 (1994); see also Dennis S. Karjala, Federal Preemption of Shrinkwrap and On-line Licenses, 22 U. DAYTON L. REV. 511 (1997); David A. Rice, Public Goods, Private Contract and Public Policy: Federal Preemption of Software License Prohibitions Against Reverse Engineering, 53 U. PITT. L. REV. 543 (1992).

21. See E.U. Directive, supra note , arts. 7-10. For U.S. proposals spawned by the E. U. Directive, see Collections of Information Antipiracy Act, H.R. 354, 106th Cong. (1999); Collections of Information Antipiracy Act, H.R. 2652, 105th Cong. (1998); Database Investment and Intellectual Property Antipiracy Act of 1996, H.R. 3531, 104th Cong. (1996).

22. See Reichman & Samuelson, supra note 7, at 84-95, 103-110.

23. See, e.g., Nimmer, supra note 15; Hardy, supra note 1.

24. See supra notes 16-17; Reichman & Franklin, supra note 9, at 881 (stating that, to "ignore such discriminations as these is to risk watching model laws, adopted to govern the virtual marketplace for information goods, foster conditions that actually decrease innovation, discourage competition, and stifle the traditional marketplace of ideas"); see also G.E. Evans & B.F. Fitzgerald, Information Transactions Under U.C.C. Article 2B: The Ascendancy of Freedom of Contract in the Digital Millenium?, 21 U. N EW S. WALES L.J. 404 (1998) (arguing for the government's need to protect society given the recent shift of market power in the information economy).

25. See 17 U.S.C. 101 (1994) (defining literary works), 102(a) (1994) (requiring original works of authorship), 103(b) (1994) (protection limited to original and expressive material added by author to a compilation); Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991) (limiting copyright protection of factual compilation to creative elements of selection, arrangement, and coordination).

26. See 17 U.S.C. 106 (1994). See generally L. RAY PATTERSON & STANLEY W. LINDBERG, THE NATURE OF COPYRIGHT: A LAW OF USERS' RIGHTS 47-56, 191-224 (1991); JOEL SHELTON LAWRENCE & BERNARD TIMBERG, FAIR USE AND FREE INQUIRY: COPYRIGHT LAW AND THE NEW MEDIA (2d ed. 1989).

27. See supra note 25; Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985) (stressing First Amendment interest in unrestricted availability of facts).

28. See 17 U.S.C. 106, 106A (1994); Baker v. Selden, 101 U.S. 99 (1879); Ralph S. Brown, Jr., Eligibility for Copyright Protection: A Search for Principled Standards, 70 MINN. L. REV. 579, 588-89 (1985) (noting that the Copyright Act, unlike the Patent Act, does not confer any exclusive right to use the protected work, which helps explain why copyrights are so casually granted).

29. See, e.g., PAUL GOLDSTEIN, COPYRIGHT 7.2.2 (2d ed. 1998) (noting that "conveying evidence" of independent creation constitutes a perfect defense to an infringement action).

30. See 17 U.S.C. 107 (1994) (codifying fair use provisions); Campbell v. Acuff-Rose Music, Inc., 510 U.S. 564, 574-594 (1994) (stressing desirability of promoting transformative, preambular uses under the fair use provision of 107); W ILLIAM F. PATRY, THE FAIR USE PRIVILEGE IN COPYRIGHT LAW 178-84, 416-17 (1985). However, the wholesale duplication of a creative selection and arrangement for commercial purposes is not permitted. See, e.g., CCC Info. Servs., Inc. v. Maclean Hunter Mkt. Reports, Inc., 44 F.3d 61 (2d Cir. 1994); Reichman & Samuelson, supra note 7, at 63 (citing authorities). But see Warren Publishing Inc. v. Microdos Data Corp., 115 F.3d 1509 (11th Cir. 1995) (en banc) (allowing massive extraction and re-use of commercial compilation for competitive purposes and finding no eligibility for copyright protection).

31. See 17 U.S.C. 102(b), 103(b) (1994); Harper & Row v. Nation Enters., 471 U.S. 539 (1985); Key Publications, Inc. v. Chinatown Today Publ'g Enters., Inc., 945 F.2d 509, 514 (2d. Cir. 1991) (stressing "thin" copyright protection doctrine of Feist). See also Reichman & Samuelson, supra note 7, at 63 (citing authorities).

32. See Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as last revised at Paris, July 24, 1971, 828 U.N.T.S. 4, art. 6bis (obliging member states to respect moral rights of authors); Berne Convention Implementation Act of 1988, Pub. L. No. 100-568, 102 Stat. 2853 (1988) (implementing this obligation only indirectly).

33. See Hoehling v. Universal City Studios, Inc., 618 F.2d 972 (2d Cir. 1980); supra notes 31-32 and accompanying text. However, if a second comer were to pass off his article as that of the first scientist, grounds for invoking relief in unfair competition law might also exist. See Lanham Act 43(a), 15 U.S.C. 1125 (1998).

34. For the importance of this practice, in conjunction with the sharing ethos of science, see J. H. Reichman, Why Science is Concerned About an Intellectual Property Right in Databases, in AAAS SCIENCE AND TECHNOLOGY POLICY YEARBOOK 1998 (Albert H. Teich et al. eds., 1998), at 291, 301; see also International Council for Science (ICSU), Position Paper on Access to Databases, paper presented to the World Intellectual Property Organization (Sept. 1997) (unpublished manuscript, on file with authors).

35. See supra notes 26-31 and accompanying text.

36. See 17 U.S.C. 107, 110(1) (1994); but see Princeton Univ. Press v. Michigan Document Servs., Inc., 99 F.3d 1381 (6th Cir. 1986) (en banc), cert. denied, 520 U.S. 1156 (1997) (limits on copies for classroom use).

37. See, e.g., Berne Convention, supra note 32, arts. 9(2) (limits on reproduction right), 10(2) (use for teaching purposes when consistent with fair practice); G UY TRITTON, INTELLECTUAL PROPERTY IN EUROPE 191 (1996). See also Lucie Guibault, General Report to the ALAI Annual Meeting (1998) (unpublished manuscript, on file with authors) (discussing exceptions and limitations in European copyright law).

38. See 17 U.S.C. 109(a) (1994) (first sale doctrine).

39. See id.; see also 17 U.S.C. 108 (1994) (reproduction by libraries and archives).

40. See 17 U.S.C. 107 (1994); supra note 30. However, scientists and engineers working at for-profit institutions have lesser photocopying privileges, at least when secondary markets for photocopies and reprints are operational. See American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 926-931 (2d. Cir. 1994); P ATRY, supra note 30, at 190-94.

41. See European Commission Green Paper on Copyright and Related Rights in the Information Society, reprinted in 43 J. COPYRIGHT SOC'Y USA 50, 91 (1995) ("Most member states have introduced special legal arrangements for ... private copying...."). But see William R. Cornish, Copyright in Scientific Works (Scientific Communications, Computer Software, Data Banks): An Introduction, in EUROPEAN RESEARCH STRUCTURES-CHANGES AND CHALLENGES: THE ROLE AND FUNCTION OF INTELLECTUAL PROPERTY RIGHTS 50 (Max Planck Gesellshaft ed., 1994) (despite case for a measure of free reprography for purposes of academic research, "academic institutions are regarded as relatively soft targets by publishing interests [in U.K.], which ... [have been] inserting initial wedges.").

42. See E.U. Directive, supra note 6; H.R. 2652, 105th Cong. (1998).

43. See H.R. 2281, 105th Cong. (1998) (including the database protection bill as Title V).

44. See H.R. 354, 106th Cong. (1999).

45. See E.U. Directive, supra note 6, arts. 7-10. Besides a list of sixty "Recitals" or premises that underlie the legislation and a small set of definitional articles that apply across the board (arts. 1-2), the E.U. Directive also harmonizes the treatment of copyrightable databases in the member states' domestic laws. See id. arts. 3-6; Reichman & Samuelson, supra note 7, at 76-79. There is a final group of "common provisions" that apply to both copyrightable and noncopyrightable databases (arts. 12-16). While the provisions harmonizing the protection of copyrightable databases approximate the rules in the U.S., see supra notes 26-41 and accompanying text, they lie beyond the scope of this article.

46. See E.U. Directive, supra note 6, art. 7(1).

47. For the very broad definition of databases, see E.U. Directive, supra note 6, art. 1. For example, Reed Elsevier, Inc. has been buying up scientific journals and has recently begun to deliver scientific communications online.

48. See E.U. Directive, supra note 6, art. 10; Reichman & Samuelson, supra note 7, at 85-86.

49. See E.U. Directive, supra note 6, arts. 9, 9(b) (authorizing member states to allow extractions (but not reutilization) "for the purposes of illustration for teaching or scientific research, so long as the source is indicated and to the extent justified by the non-commercial purpose to be achieved").

50. See E.U. Directive, supra note 6, art. 8(1). Member states may allow a broader exception for "extraction for private purposes of the contents of a non-electronic database." Id. art. 9(a) (emphasis added).

51. See Reichman & Samuelson, supra note 7, at 90-91. See also id. at 87-95 (finding that the scope of protection under the E.U. Directive exceeds that of copyright law because 1) no idea-expression distinction is observed and no evolving public domain is generated, 2) the equivalent of a "derivative work" right in dynamic databases is not limited to new matter, and 3) the public interest exceptions are very narrow).

52. H.R. 2652, 105th Cong. 1202 (1998); H.R. 2281, 105th Cong. 1302 (1998).

53. See H.R. 2281, 105th Cong. 1301(1) (1998) (defining "collection of information" to mean "information that has been collected and ... organized for the purpose of bringing discrete items of information together in one place or through one source so that users may access them"); id. 1301(2) (defining "information" to mean "facts, data, works of authorship, or any other intangible material capable of being collected and organized in a systematic way"). See also id. 1301(3) (defining "potential market" to mean "any market that a person claiming protection ... has current and demonstrable plans to exploit or that is commonly exploited by persons offering similar products or services incorporating collections of information").

54. See infra text accompanying notes 143-47.

55. See H.R. 2281, 105th Cong. 1308(c) (1998). The interpretation in the text was confirmed by the position that the publishers took during face-to-face negotiations in the Senate. See infra text accompanying notes 143-47.

56. See H.R. 2281, 105th Cong. 1303(d) (1998). An article attacking the proposed legislation that appeared in Science magazine focused particular attention on the harm to science from a "potential market" test. See William Gardner & Joseph Rosenbaum, Database Protection and Access to Information, 281 SCIENCE 786-87 (1998).

57. H.R. 354, 106th Cong. (1999). See also Hearings on H.R. 354, the "Collections of Information Antipiracy Act" before the House Subcomm. on Courts and Intellectual Property of the House Comm. of the Judiciary, 106th Cong. (1999) [hereinafter Hearings] (statement of the Honorable Howard Coble, Chair of the Subcommittee on Courts and Intellectual Property).

58. See H.R. 354, 106th Cong. 1408(c) (1999) (limiting the term of protection to 15 years).

59. Id. 1403(a)(2) (listing "Additional Reasonable Uses").

60. Id. 1403(a)(2)(A) (allowing individual act of use or extraction "for the purpose of illustration, explanation, example, comment, criticism, teaching, research, or analysis, in an amount appropriate and customary for that purpose ... if [such an act] is reasonable under the circumstances") Criteria for determining reasonable use, and the limits thereon, are also set out. See id. 1403(a)(2)(A)(i)-(iv).

61. See infra text accompanying notes 95-99.

62. See infra text accompanying notes 140-65.

63. See supra text accompanying notes 26-41.

64. While this constraint could occur under existing law, the validity of such standard form contracts remains in doubt at the present time, with some courts upholding them and other courts invalidating them either on contracts grounds or under the doctrine of preemption. See Reichman & Franklin, supra note 9, at 876 n.1 (citing cases). The adoption of a model law governing computerized information transactions (like the previously proposed Article 2B of the U.C.C.), see supra note 14, would validate virtually all such contracts. See id. at 899-914 (criticizing this approach and proposing a new doctrine of "public interest unconscionability" to allow courts to reconcile freedom of contract with public-good uses of information). However, most opportunities to challenge the validity of such contracts as applied to either copyrightable or noncopyrightable databases on existing grounds would vanish if Congress adopted a database law along the lines of H.R. 2281, unless some other countervailing doctrine, such as the proposed "public interest unconscionability doctrine" became available. See Reichman & Franklin, supra note 9, at 947-51 ("Contracts Restricting the Use of Noncopyrightable Collections of Data").

If, instead, H.R. 354 were adopted, or a variant thereof that included a substantial exception for traditional scientific purposes, see infra text accompanying notes 148-52, the opportunities to challenge the validity of such contracts would depend on 1) the extent to which the database law itself restricted contractual overrides (none yet proposed, and all vigorously resisted by the publishers), and 2) the availability of ancillary doctrines in contracts law, such as the proposed "public interest unconscionability" doctrine. See infra text accompanying notes 163-64 (discussing the doctrine of misuse); see generally Reichman & Franklin, supra note 9, at 929-38 ("validating non-negotiable terms that respect the balance of public and private interests").

65. Cf. Reichman & Samuelson, supra note 7, at 117-24 ("Retarding the Progress of Science").

[T]he electronic publisher's growing capacity to charge for each and every use of online data (or at least for every "hit" that accesses such data), and to track and monitor every user ... means that it becomes increasingly capable of serving ... as its own collection society, subject to no consent decrees ... and no external regulation.

Id. at 153. At a recent conference on database protection in Italy that Professor Reichman attended, an Italian professor related that the European Commission had charged him a high price per page to consult official texts concerning antitrust laws and regulations and about double that price per page to download the same information for research purposes. See Tito Ballarino, Remarks at the University of Pavia Conference on "Le banche dati (anche su Internet)," Pavia, Italy, Oct. 2-3, 1997; cf. Jessica Litman, The Exclusive Right to Read, 13 CARDOZO ARTS & ENT. L. J. 29 (1994).

66. See supra note 64.

67. See H.R. 2281, 105th Cong. 1303(b) (1998) (declining to "restrict any person from independently gathering ... or using information gathered ... by another person through the investment of substantial monetary or other resources"); id. 1305(e) (allowing unrestricted licensing agreements). See also H.R. 354, 106th Cong. 1403(c), 1405(e) (1999) (the same in this respect, but attenuated in impact owing to fair-use-like provisions set out in 1403(a)). For possible constitutional overrides, see infra text accompanying notes 182-97.

68. Cf. Reichman & Samuelson, supra note 7, at 84-90 ("Abolishing the Public Domain"). Under H.R. 354 , however, data would enter the public domain after fifteen years. See supra note 58.

69. See NATIONAL RESEARCH COUNCIL, BITS OF POWER: ISSUES IN GLOBAL ACCESS TO SCIENTIFIC DATA 1, 132 (1997) (stressing importance of scientific norms that favor the sharing of data and the cumulative process of acquiring scientific knowledge) [hereinafter BITS OF POWER].

70. See supra note 67.

71. See, e.g., B ITS OF POWER, supra note 69, at 114-24.

72. See id.; Reichman & Samuelson, supra note 7, at 90-95 ("Establishing Legal Barriers to Entry"), 124-30 ("Impeding Competition in the Market for Value-Adding Products and Services"). But see Laura D'Andrea Tyson & Edward F. Sherry, Statutory Protection for Databases, in Hearing on H.R. 2652 Before the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 105th Cong. (1997) (testimony of Laura D'Andrea Tyson, Consultant, Reed-Elsevier, Inc.) (contesting the strength of barriers to entry in database industry). New studies by the National Research Council later in 1999 will attempt to cast further light on these issues.

73. See ICSU Position Paper, supra note 34; infra notes 110-14 and accompanying text.

74. Trip report by Ferris Webster, Chair, ICSU/CODATA Group on Access to Data and Information, International Council for Science (1998) (on file with authors).

75. Whether the new exceptions proposed in H.R. 354 would alter this result remains to be seen. See supra notes 58-60, and accompanying text. See also infra text accompanying notes 140-46.

76. See U.C.C. 2B-502 (Feb. 1999 Draft) (allowing prohibition of any transfer of mass-market licensed goods); Karjala, supra note 20, at 538; Reichman & Franklin, supra note 9, at 965. Unless otherwise restrained, such licenses could override the limited duration clause that H.R. 354 finally introduced. See supra note 58.

77. See Reichman & Samuelson, supra note 7, at 124-30. Cf. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991) (sole-source proprietor of telephone directory denied permission to another directory compiler who wished to combine the data in the former's directory with data from numerous others whose owners had given their consent).

78. See supra notes 71-72.

79. See supra notes 14-15 and accompanying text.

80. Cf. B ITS OF POWER, supra note 69, at 121-23 (chronicling failed attempt to privatize Landsat data in the 1980s, when prices of Landsat images rose from about $400 per image to $4,400 per image, a price at which the joint venture "was able to attract some commercial and federal customers, but few academic or independent researchers").

81. See supra notes 38, .

82. See Reichman & Franklin, supra note 9, at 964-65.

83. See H.R. 2281, 105th Cong. 1302 (1998).

84. See id. 1308(c).

85. See Jane C. Ginsburg, U.S. Initiatives to Protect Works of Low Authorship, paper presented to New York University Conference on "Intellectual Products: Novel Claims to Protection and Their Boundaries," Engelberg Center on Innovation Law and Policy, La Pietra, Italy (June 25-28, 1998) (unpublished manuscript, on file with authors) (arguing that publishers should identify the expired components of protected compilations).

86. See Reichman & Franklin, supra note 9, at 897-913, 947-51.

87. See, e.g., Hearings, supra note 57 (statement of Andrew J. Pincus, General Counsel, U.S. Department of Commerce), at 13-20 (arguing for broad exemptions for government-funded data and warning about the "potential for "capture" of government-generated data) [hereinafter Statement of Pincus].

88. See, e.g., Peter N. Weiss & Peter Backlund, International Information Policy in Conflict: Open and Unrestricted Access versus Government Commercialization, in B ORDERS IN CYBERSPACE 300, 303 (Brian Kahin & Charles Nesson eds., 1997). See also supra note 65.

89. See H.R. 2281, 105th Cong. 1303(a), 1305(e) (1998). But cf. E.U. Directive, supra note 6, art. 8(1). This E.U. privilege may not be overridden by contract, see id. art. 15. United States publishers opposed the ban on contractual overrides of this provision in the E.U. Directive, and indicate that they intend to override it when permitted. See Mark Powell, The European Union's Database Directive: An International Antidote to the Side Effects of Feist, paper presented to the Fourth Annual Conference on "International Intellectual Property Law & Policy," Fordham University School of Law (Apr. 11-12, 1996) (unpublished manuscript, on file with authors).

90. Reichman & Samuelson, supra note 7 at 94.

91. H.R. 354, 106th Cong. (1999). See supra notes 58-61 and accompanying text.

92. See id. 1408(c) (1999) (limiting the term of protection to 15 years).

93. See supra note 85 and accompanying text; Statement of Pincus, supra note 87, at 25-27 (questioning ability of users "to distinguish unprotected data entries from protected data entries" and fearing "de facto perpetual protection").

94. See H.R. 354, 106th Cong. 1405(e) (1999) (allowing freedom of contract); Reichman & Franklin, supra note 9, at 899-914.

95. See H.R. 354, 106th Cong. 1403(a) (1999).

96. See, e.g., Hearings, supra note 57 (statement of James G. Neal, Dean, University Libraries, Johns Hopkins University) ("[E]xemption for education and research ... remains far too narrow.") [hereinafter Statement of Neal]; id., (testimony of Charles E. Phelps, Provost, University of Rochester, for AAU, ACE, and NASULGC) ("[E]xception for non-profit educational activities contains a broad, vague condition that vitiates its protection.") [hereinafter Testimony of Phelps].

97. See id.

98. See, e.g., Hearings, supra note 57 (testimony of Joshua Lederberg, Nobel laureate, on behalf of NAS, NAE, IOM and American Association for the Advancement of Science (AAAS)) [hereinafter Testimony of Lederberg].

99. See infra text accompanying notes 151-55.

100. See, e.g., Reichman & Franklin, supra note 9, at 947-51; McManis, supra note 4.

101. See, e.g., Paul F. Uhlir, From Spacecraft to Statecraft: The Role of Earth Observation Satellites in the Development and Verification of International Environmental Protection Agreements, 2 GIS L AW 1 (1995). While we emphasize the impact of database protection on science and technology in this article, we predict that the larger economy will likewise suffer if the anticompetitive effects we foresee should materialize. There is hardly any sector of the economy that is not significantly engaged in the creation and exploitation of digital databases, and many-such as insurance, banking, or direct marketing-are completely database-driven. See, e.g., Hearings, supra note 57 (statement of the Computer & Comm. Industry Assoc. of America and the Online Banking Association) (stressing how H.R. 354 threatens "legitimate reuse of information") [hereinafter Statement of CCIA et al.].

102. Testimony of Lederberg, supra note 98, at 5.

103. NATIONAL RESEARCH COUNCIL, PRESERVING SCIENTIFIC DATA ON OUR PHYSICAL UNIVERSE 16 (1995).

104. Id.; see also supra note 25.

105. Cf., e.g., B ITS OF POWER, supra note 69, at 113 (comparing contributors and users of scientific data to non-market models of "a family or clan, in which exchange is not monetized but depends on social norms specifying expected and well-understood levels of contribution").

106. See, e.g., Testimony of Phelps, supra note 96, at 3-4 ("The Academic Environment and Activities threatened by H.R. 354").

107. See, e.g., Ginsburg, supra note 7, at 175 ("When the data ... [are] not available elsewhere ... the potential breadth of the potential market is very troublesome.").

108. See, e.g., Testimony of Lederberg, supra note 98, at 2-6 ("Progress in the creation and reuse of new knowledge for the national good depends on the full and open availability of government and government-funded data, and on fair and equitable availability of data from the private sector."); Reichman & Franklin, supra note 9, at 943-47.

109. For the problems that university administrators already foresee, see Testimony of Phelps, supra note 96.

110. See H.R. 354, 106th Cong. 1402 (1999). However, unauthorized extractions or uses for nonprofit educational, scientific, or research purposes incur liability only for harm to actual markets. See id. 1403(a)(1).

111. See, e.g., Statement of CCIA et al., supra note 101; Ginsburg, supra note 85, at 23-24 (stressing need for publisher to identify value-added contributions). The exception that permits anyone to make use of "insubstantial parts" of a collection of information is vitiated by the language inflicting liability for harm to the investor's "actual or potential market." See supra notes 53-55 and accompanying text. Because the user cannot know such matters in advance, the "potential harm" test emasculates the "insubstantial parts" exception in practice.

112. Testimony of Phelps, supra note 96, at 3.

113. Testimony of Lederberg, supra note 98, at 6. See also Testimony of Phelps, supra note 96, at 3 ("In the academic community, ... databases are dynamic instruments: they are not only sources of information, but they themselves-or components of them-become ingredients in new products, both through the combination of multiple contemporaneous data sets to produce qualitatively new products, and through the re-analysis of prior data from new perspectives provided by new findings or new analytic tools.").

114. See Letter from Andrew J. Pincus, General Counsel of the U.S. Dept. of Commerce, to Senator Patrick J. Leahy, Ranking Minority Member of the Senate Committee on the Judiciary (Aug. 4, 1998) (on file with authors) [hereinafter Administration's Letter 1998].

115. See Statement of CCIA et al., supra note 101, at 8-10 (noting that some commercial database providers oppose strong protection owing in part to fears about consequences of sole-source market structure).

116. See supra note 55 and accompanying text; Statement of Pincus, supra note 87, at 21-27.

117. Besides retarding scientific and technical progress, the fifteen-year term has no apparent justification in the rapidly moving commercial database industry either, where economic exploitation of most data products is typically measured in months and years, and even minutes and hours, rather than decades. See Statement of CCIA et al., supra note 101, at 10.

118. See, e.g., Ginsburg, supra note 85, at 30 (acknowledging soundness of lead-time criterion not adopted in E.U. Directive); Reichman & Samuelson, supra note 85, at 145 (proposing lead-time criterion and relating it to lack of actual or legal secrecy).

119. U.S. CONST. art. I, 8, cl. 8.

120. See, e.g., Ginsburg, supra note 7, at 175.

121. See, e.g., Statement of Lederberg, supra note 98, at 4-5; Testimony of Phelps, supra note 96, at 3-4; Statement of Neal, supra note 96.

122. See H.R. 354, 106th Cong. 1404 (1999); see also, Statement of Pincus, supra note 87, at 13-20 ("Third Principle-Preserve access to government data"). The federal basic research budget alone is estimated to be over $19.5B/year, of which a sizeable fraction is devoted to the creation, maintenance, dissemination, and analysis of scientific and technical data. See I NTERSOCIETY WORKING GROUP, AMERICAN ASS'N FOR THE ADVANCEMENT OF SCIENCE REPORT XXIV: RESEARCH AND DEVELOPMENT FY 2000 71 (1999). Moreover, the government at all levels produces data of other importance to the nation, including economic growth, public health and safety, regulatory requirements, cultural affairs, and many other functions. All citizens have an interest in preserving full and open access to all government data that are not otherwise restricted by national security, privacy, or other legitimate limitations.

123. See, e.g., Ginsburg, supra note 85, at 28 ("In the case of sole-source government information, public domain policy favors making the information available to market rivals.").

124. See supra note 88 and accompanying text.

125. See Commercial Space Act of 1998, Pub. L. No. 105-303 (1998).

126. Cf. Statement of Pincus, supra note 87; Ginsburg, supra note 85, at 27-29.

127. See, e.g., B ITS OF POWER, supra note 69, at 169-70 (urging the scientific community to organize its own administration of data in order to preserve the sharing ethos).

128. See H.R. 354, 106th Cong. 1404(a)(1) (1999) (limiting the term of protection); Testimony of Phelps, supra note 96, at 17 (noting that "universities and colleges are not only users of compilations of information, they also act as creators of collections that should be [entitled to] protection to the same extent as collections created by commercial providers").

129. See, e.g., Statement of CCIA et al., supra note 101.

130. Cf. Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCIENCE 698-701 (1998).

131. Letters from the three Academy Presidents to Mickey Kantor, Secretary of Commerce (Oct. 9, 1996) and to Senator Orrin Hatch, Chair of the Senate Committee on the Judiciary (July 10, 1998) (on file with authors).

132. See ICSU Position Paper, supra note 34; Reichman & Samuelson, supra note 7, at 95-102, 110-13 (describing efforts to have WIPO adopt a database protection treaty in 1996).

133. See H.R. 2652, 105th Cong. (1998); H.R. 2281, 105th Cong. (1998); see also C OPYRIGHT OFFICE, REPORT ON LEGAL PROTECTION FOR DATABASES (1997), available at <http://lcweb.loc.gov/copyright/reports>. For the latest position of the Copyright Office, see Hearings, supra note 57 (statement of Marybeth Peters, Register of Copyrights) (noting improvements in H.R. 354, but stating that "it is important not to inhibit or raise the cost of public interest uses" and that an "appropriate statutory balance should result in optimizing the availability of reliable information to the public") [hereinafter Statement of Peters].

134. Administration's Letter 1998, supra note 114.

135. Id.

136. Id.

137. See Statement of Pincus, supra note 87.

138. Administration's Letter 1998, supra note 114.

139. See Memorandum from William Michael Treanor, U.S. Dept. of Justice, Office of the Deputy Ass't. Att'y. Gen., to William R. Marshall, Associate White House Counsel, "Constitutional Concerns Raised by the Collections of Information Antipiracy H.R. 2652" (July 28, 1998) (on file with authors) [hereinafter DOJ Memorandum]. See also Letter from Professor Marci Hamilton to Chairman Howard Coble (Feb. 10, 1998) (on file with authors) (detailing serious Constitutional concerns) [hereinafter Letter from Hamilton].

140. See Letter from Robert Pitofsky, Chair of the Federal Trade Commission, to Tom Bliley, Chair of the House Committee on Commerce (Sept. 28, 1998) (on file with authors).

141. Id. at 7, 14.

142. See U.S. PATENT AND TRADEMARK OFFICE, REPORT ON (AND RECOMMENDATIONS FROM) APRIL 1998 CONFERENCE ON DATABASE PROTECTION AND ACCESS ISSUES (1998).

143. The authors of this article represented the National Academy of Sciences (NAS), the National Academy of Engineering (NAE), and the Institute of Medicine (IOM) during these negotiations.

144. See, e.g., National Academy of Sciences et al., Proposed Amendments to H.R. 2281: Synopsis, Corrections, and Text, submitted for consideration by the Senate Committee on the Judiciary (Aug. 11, 1998) (unpublished manuscript, on file with authors) [hereinafter NAS, Synopsis]; National Academy of Sciences et al., Proposed Amendments to H.R. 2281: Explanatory Memorandum (Part I) (Aug. 13, 1998) (unpublished manuscript, on file with authors) [hereinafter NAS, Explanatory Memorandum]; NAS et al., Opponents' Revised Amendments to H.R. 2281 (Sept. 4, 1998) (unpublished manuscript, on file with authors) (concerning (1) permitted acts for scientific, educational, and research purposes; (2) exclusions; (3) definition of "collections of information"; and (4) licensing).

145. For the latest iteration of the publishers' position, see Hearings, supra note 57 (testimony of Daniel C. Duncan, Vice President for Gov't. Affairs, Software and Information Industry Assoc.) [hereinafter Testimony of Duncan]; Hearings, supra note 57 (testimony of Marilyn Winokur, Exec. Vice President, Micromedex for Coalition Against Database Piracy); Hearings, supra note 57 (testimony of the National Assoc. of Realtors). See also Hearings, supra note 57 (statement of Michael K. Kink, AIPLA); Hearings, supra note 57 (testimony of the Agricultural Publishers Assoc.).

146. See 106 CONG. REC. S.316 (daily ed. Jan. 19, 1999) (statement of Senator Hatch on Database Antipiracy Legislation) [hereinafter Statement of Hatch].

147. See id. at S.322-26 (Chapter 14-Protection of Databases) [hereinafter Hatch Database Discussion Draft].

148. See id. An abridged selection of these points was used in a letter from the Presidents of the NAS, NAE, and IOM to Howard Coble, Chair of the Subcommittee on Courts and Intellectual Property of the House Committee on the Judiciary, March 9, 1999, and subsequently in the testimony of Joshua Lederberg before the Subcommittee at its March 18, 1999 Hearing,. See supra notes 57,

149. See Hatch Database Discussion Draft, supra note 147, 1302.

150. Hatch Database Discussion Draft Proposed, Conference Report Language, 1302, at 33 (on file with authors).

151. See Administration's Letter 1998, supra note 114; see also Memorandum from the Administration to the Senate Committee on the Judiciary, Senate Draft Developments and Suggested Additional changes to Address Key Concerns for Discussion (rev. Sept. 30, 1998) (on file with authors).

152. See Administration's Letter 1998, supra note 114. However, the Government's latest position paper leans towards the compromise "fair use" provision introduced in H.R. 354, which we judge to be inadequate. See Statement of Pincus, supra note 87, at 29-31.

153. Hatch Database Discussion Draft, supra note 147, 1304(a) (emphasis added).

154. See id. 1304(b):

In no case may a use or extraction for a purpose described in subsection (a) be permitted if the substantial harm referred to in Section 1302-

1. arises because the amount of the portion used or extracted is more than is reasonable and customary for the purpose;

2. consists of the use or extraction being intended to, or being likely to serve as a substitute for or to supplant all or a substantial part of the database from which the extraction or use is made or an adaptation thereof that is protected under this chapter;

3. arises because the extraction or use is intended to avoid payment of reasonable fees for use of a database incorporated into a product or service specifically marketed for educational, scientific, or research purposes; or

4. arises because the use or extraction is part of a pattern, system, or repeated practice by the same party, related parties, or parties acting in concert with respect to the same database or a series of related databases.

155. See ICSU Position Paper, supra note 34, at 2.

156. See Hatch Database Discussion Draft, supra note 147, 1307.

157. See also Statement of Phelps, supra note 96, at 16 (proposing exemption for non-profit teaching activities).

158. See Hatch Database Discussion Draft, supra note 147, 1305(a)-(c).

159. See Statement of Pincus, supra note 87, at 13-20 (detailed proposals concerning government-funded data and the need to avoid its "capture" by commercial interests); Ginsburg, supra note 85, at 27-29.

160. See Statement of Pincus, supra note 87, at 24-27.

161. See Hatch Database Discussion Draft, supra note 147, 1310(d); Statement of Pincus, supra note 87, at 24-27.

162. See Statement of Pincus, supra note 87, at 24-27 (discussing dated identity tags and statutory defenses to liability, including lack of public availability of government-funded data); see also Ginsburg, supra note 85, at 24.

163. Hatch Database Discussion Draft, supra note 147, 4. See also id. 1306(a) (preserving doctrine of misuse). But see id. 1306(e) (allowing licensors unrestricted freedom of contract).

164. Hatch Database Discussion Draft, Proposed Conference Report Language, supra note 150, at 36-37.

165. Id. at 131.

166. Compare, e.g., Testimony of Duncan, supra note 145, at 9-10 (presenting a case for broad scope of protection) with Testimony of CCIA et al., supra note 101, at 6-8 (advocating less restricted commercial reuse of data).

167. See NAS, Synopsis, supra note 144, 1303(g) (distinguishing use by competitors on distant markets from use in direct competition for these purposes). See also Reichman & Samuelson, supra note 7, at 146 (proposing "automatic license built into ... [a] modified liability right itself"); Ginsburg, supra note 85, at 28 (proposing automatic license for sole-source collections of government data to benefit "market rivals").

168. See supra note 150.

169. See supra note 146 and accompanying text (expressing Senator Hatch's belief that considerable progress had been made).

170. See H.R. 354, 106th Cong. (1999); supra text accompanying notes 57-61.

171. See Statement of Hatch, supra note 146, at S.320-22 (Proposed Bill to Amend Title 17, United States Code, to Promote Research and Fair Competition in the Database Industry) [hereinafter Minimalist Protection Bill of 1999].

172. See Minimalist Protection Bill of 1999, supra note 171, 1401, 1408.

173. See supra text accompanying notes 10-18.

174. See Reichman & Franklin, supra note 9, at 911-14, 947-51 (exploring impact of online adhesion contracts with or without a codified property right underneath).

175. Cf. Merges, supra note 1.

176. See B ITS OF POWER, supra note 69, at 166-71.

177. See NAS, Explanatory Memorandum, supra note 144, at 9.

178. See E.U. Directive, supra note 6; H.R. 354, 106th Cong. (1999).

179. See Heller & Eisenberg, supra note 130; Suzanne Scotchmer, Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, 5 J. E CON. PERSPECTIVES 29 (1991); Reichman & Franklin, supra note 9, at 884-88. Cf. generally Michael A. Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 HARV. L. REV. 621 (1998) (showing that too many rights to exclude produce anticommons effects as bad as the lack of any powers to exclude).

180. See generally Reichman, Legal Hybrids, supra note 3, at 2434-44; Reichman, Charting, supra note 3, at 485-96, 504-17.

181. See generally J.H. Reichman, Solving the Green Tulip Problem: Repackaging Rights in Subpatentable Innovation, paper presented to New York University Conference on "Intellectual Products: Novel Claims to Protection and Their Boundaries," Engelberg Center on Innovation Law and Policy, La Pietra, Italy (June 25-28, 1998) (unpublished manuscript, on file with authors).

182. See M.B. NIMMER & D. NIMMER, NIMMER ON COPYRIGHT 1.10 (1998); R.A. SMOLLA, SMOLLA & NIMMER ON FREEDOM OF SPEECH 21:8 (1998); Robert C. Denicola, Copyright and Free Speech: Constitutional Limitations on the Protection of Expression, 67 CALIF. L. REV. 283 (1983); M.B. Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA L. REV. 1180 (1970); Alfred C. Yen, A First Amendment Perspective on the Idea/Expression Dichotomy and Copyright in a Work's "Total Concept and Feel," 38 EMORY L.J. 393 (1989).

183. See 17 U.S.C. 102(b) (1994).

184. 499 U.S. 340 (1991).

185. 17 U.S.C. 107(4) (1994). See also Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984); P ATRY, supra note 30, at 205-10.

186. 154 F.2d 464 (2d. Cir. 1946), cert. denied, 330 u.s. 851 (1947). See generally PAUL GOLDSTEIN, COPYRIGHT 7.1.1.2, 7.4.1.2 (1998) (discussing infringement in terms of protection of authors' market interest).

187. H.R. 354, 106th Cong. 1402 (1999).

188. See id. 1403(c), 1403(a)(1) (1999) (listing "certain nonprofit educational, scientific, or research uses"); see also id. 1403(a)(2) (listing "Additional Reasonable Uses").

189. See Letter from Hamilton, supra note 139. See also Malla Pollack, The Right to Know? Delimiting Database Protection at the Juncture of the Commerce Clause, the Intellectual Property Clause, and the First Amendment, 17 C ARDOZO ARTS & ENT. L. J. 47, 67-74 (1999).

190. See Baker v. Selden, 101 U.S. 99 (1879); Brown, supra note 28. Only those uses specified in the Act are protected. 17 U.S.C. 106, 106A (1994).

191. See U.S. CONST. art. I, 8, cl. 8; 17 U.S.C. 301 (1994) (preemption); Bonito Boats Inc. v. Thunder Craft Boats Inc., 489 U.S. 141 (1989); Compco Corp. v. Day-Brite Lighting Inc., 376 U.S. 234 (1964); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964).

192. 17 U.S.C. 107(4) (1994); supra note 185; see also Letter from Professor Harvey Perlman, Co-Reporter, R ESTATEMENT (THIRD) OF UNFAIR COMPETITION LAW (1994), to Senator Orrin Hatch, Chairman of the Senate Committee on the Judiciary (Sept. 8, 1998) (on file with authors) (explaining why neither H.R. 354 nor its predecessors are, in fact, unfair competition laws) [hereinafter Perlman letter].

193. See supra text accompanying notes 120-21.

194. See, e.g., Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991); Harper & Row v. Nation Enter., 471 U.S. 539 (1985). As the Department of Justice's Office of the Legal Counsel recently affirmed, to the extent that the proposed legislation

would prohibit extractions or uses of substantial portions of factual compilations by direct competitors, it is much more likely to be held constitutional than if it would prohibit extractions or uses by potential consumers for noncommercial purposes. By contrast, if the provision were construed to provide protection against uses by potential consumers, and not simply direct competitors, it would appear to be of almost limitless scope and therefore to raise constitutional concerns that would appear insurmountable.

DOJ Memorandum, supra note 139, at 8.

195. See H.R. 354, 106th Cong. 1401(1) (1999).

196. See id., 1401(2).

197. See id., 1403(a)(1).

198. Compare R ESTATEMENT (THIRD) OF UNFAIR COMPETITION LAW 38 (1996) (rejecting general misappropriation doctrine) and Perlman letter, supra note 192 with Gordon, supra note 7 (proposing tort of malcompetitive copying).

199. Cf. Reichman & Samuelson, supra note 7, at 137-45.

200. See 17 U.S.C. 106(1)-(2) (1994).

201. See Reichman, Charting, supra note 3, at 485-96 ("Negative Economic Premises Underlying the Dominant Legal Paradigms"); supra note 191.

202. See, e.g., Tyson & Sherry, supra note 72; Hunsucker, supra note 7.

203. Cf. Heller & Eisenberg, supra note 130 ; Heller, supra note 179.

204. See Testimony of CCIA et al., supra note 101.

205. See also Pamela Samuelson (unpublished and untitled essay, manuscript on file with authors) (explaining the need for a national information policy detached from intellectual property policies); Litman, supra note 16; Reichman & Franklin, supra note 9, at 968-70.