From phm@a2e.de  Sun Sep 10 10:40:49 2000
Date: Sun, 10 Sep 2000 12:40:49 +0200 (CEST)
From: PILCH Hartmut phm@a2e.de
Subject: [Patents] US government concerned about deleterious impact of software patents

The following e-book seems to be unaccessible from the Net at the moment:

	http://books.nap.edu/html/digital_dilemma/

As you can see from the table of contents, it is a report by an agency of
the US administration exploring possible ways of protecting intellectual
property in a digital world, where this type of property is becoming
increasingly destabilised.

The report proposes ways of extending copyright, but at the same time is
very skeptical about applying patents to "information innovations" --- a
good term that maintains the distinction between a patentable "invention"
and immaterial "innovations", which are outside the scope of the patent
system.

   Committee on Intellectual Property Rights and the Emerging Information
                               Infrastructure
                                      
               Computer Science and Telecommunications Board
                                      
       Commission on Physical Sciences, Mathematics, and Applications
                                      
                   National Research Council-[comm4.gif] 
                                      
                                      
                                  Contents
                                      
                          Title Page and Notice i
                      National Academies Statement iii
                                Committee v
                                 Preface ix
                       Acknowledgment of Reviewers xv
                                      
                            EXECUTIVE SUMMARY 1
                                      
                1   THE EMERGENCE OF THE DIGITAL DILEMMA 23
                        An Enduring Balance Upset? 24
                            Scope of the Report 27
                           Origins of the Issues 28
       Technology Has Changed: Digital Information, Networks, and the Web
                                     28
                        Why Digital Information Matters 28
               Why Computer Networks Matter: Economics and Speed of
                              Distribution 38
                              Why the Web Matters 39
                The Programmable Computer Makes a Difference 43
        Technology Has Emerged into Everyday Life, Running Headlong into
                          Intellectual Property 45
                    Intellectual Property Law Is Complex 47
                       Cyberspace Is an Odd New World 49
                      What Makes Progress Difficult? 51
                     Stakeholders' Interests Are Diverse 51
                    There Is a Variety of Forces at Work 52
           Many Threads Are Intertwined: Technology, Law, Economics,
               Psychology and Sociology, and Public Policy 53
            The Problems Are Global, with Differing Views, Laws, and
                      Enforcement Around the World 54
           Potential Solutions Have to Be Evaluated from a Variety of
                              Perspectives 58
                          Road Map for the Report 60
                                  ADDENDUM:
                      The Concerns of Stakeholders 61
                      Creators of Intellectual Property 61
                                Distributors 65
                            Schools and Libraries 68
                           The Research Community 70
                             The General Public 71
           Other Consumers and Producers of Intellectual Property 73
                          Governmental Organizations 73
                         Private Sector Organizations 74
                                  Journalists 75
                            Standards Organizations 75
                                      
   2   MUSIC: INTELLECTUAL PROPERTY'S CANARY IN THE DIGITAL COAL MINE 76
                                Why Music? 77
                           W(h)ither the Market? 78
                             What Can Be Done? 79
                         The Business Model Response 79
           Make the Content Easier and Cheaper to Buy Than to Steal 80
            Use Digital Content to Promote the Traditional Product 81
         Give Away (Some) Digital Content and Focus on Auxiliary Markets
                                     82
                      The Technical Protection Response 83
                                 Mark the Bits 83
                               Reattach the Bits 84
                                A Scenario 86
                  Constraints on Technological Solutions 87
                Industry Consequences of the New Technology 89
                            The Broader Lessons 94
                                      
   3   PUBLIC ACCESS TO THE INTELLECTUAL, CULTURAL, AND SOCIAL RECORD 96
              Public Access Is an Important Goal of Copyright 97
              Access: Licensing Offers Both Promise and Peril 100
                  Access and Technical Protection Services 104
        The New Information Environment Challenges Some Access Rules 106
         The New Information Environment Blurs the Distinction Between
                           Public and Private 107
            Noncopyrightable Databases Present Access Challenges 109
       The Information Infrastructure Is Changing the Distribution of and
                Access to Federal Government Information 111
          Archiving of Digital Information Presents Difficulties 113
        Fundamental Intellectual and Technical Problems in Archiving 116
          Intellectual Property and Archiving of Digital Materials 119
                Technical Protection Services and Archiving 121
                                      
   4   INDIVIDUAL BEHAVIOR, PRIVATE USE AND FAIR USE, AND THE SYSTEM FOR
                               COPYRIGHT 123
            Understanding Copyright in the Digital Environment 123
                             The General Public 124
                               Rights Holders 128
      The Challenge of Private Use and Fair Use with Digital Information
                                    129
                   The Wide Range of Private Use Copying 130
             Arguments That Private Use Copying Is Not Fair Use 132
               Arguments That Private Use Copying Is Fair Use 133
              Private Use Copying: The Committee's Conclusions 135
           The Future of Fair Use and Other Copyright Exceptions 136
           Is "Copy" Still an Appropriate Fundamental Concept? 140
                             Control of Copying 140
       Is Control of Copying the Right Mechanism in the Digital Age? 141
                             What Can Be Done? 144
                                  ADDENDUM:
          Sections 106, 107, and 109 of the U.S. Copyright Law 145
                                      
    5   PROTECTING DIGITAL INTELLECTUAL PROPERTY: MEANS AND MEASUREMENTS
                                    152
                           Technical Protection 153
        Encryption: An Underpinning Technology for Technical Protection
                           Service Components 156
                   Access Control in Bounded Communities 158
         Enforcement of Access and Use Control in Open Communities 159
         Copy Detection in Open Communities: Marking and Monitoring 164
                              Trusted Systems 167
       Protection Technologies for Niches and Special-Purpose Devices 171
       Technical Protection Services, Testing, and the Digital Millennium
                         Copyright Act of 1998 171
           What Makes a Technical Protection Service Successful? 173
        The Role of Business Models in the Protection of Intellectual
                                Property 176
          The Impact of the Digital Environment on Business Models 177
                  Business Models for Handling Information 179
                         Traditional Business Models 179
            Intellectual Property Implications of Traditional Business
                                 Models 180
                       Less Traditional Business Models 181
         Intellectual Property Implications of Less Traditional Business
                                 Models 182
        Business Models as a Means of Dealing with Intellectual Property
                                    183
                        Illegal Commercial Copying 186
        The Impact of Granting Patents for Information Innovations 192
                                      
                  6   CONCLUSIONS AND RECOMMENDATIONS 199
           The Digital Dilemma: Implications for Public Access 201
                         The Value of Public Access 201
       Consequences of the Changing Nature of Publication and the Use of
              Licensing and Technical Protection Services 202
                     Publication and Private Distribution 205
                             Mass Market Licenses 205
             Archiving and Preservation of Digital Information 206
                               Digital Archives 206
                                 Preservation 209
                  Access to Federal Government Information 211
        The Digital Dilemma: Implications for Individual Behavior 212
                  Perceptions and Behavior of Individuals 212
                      Fair Use and Private Use Copying 213
                            Copyright Education 216
     Moving Beyond the Digital Dilemma: Additional Mechanisms for Making
                                Progress 217
                       Technical Protection Services 217
                The Digital Millennium Copyright Act of 1998 221
                              Business Models 224
       The Interaction of Technical Protection Services, Business Models,
                         Law, and Public Policy 225
     Moving Beyond the Dilemma: A Call for Research and Improved Data 225
                         Illegal Commercial Copying 226
       Research on the Economics of Copyright, Use of Patents, and Cyber
                                  Law 227
           Is "Copy" Still the Appropriate Foundational Concept? 230
                Content Creators and the Digital Environment 232
             The Process of Formulating Law and Public Policy 233
          Principles for the Formulation of Law and Public Policy 235
                            Concluding Remarks 239
                                      
                              BIBLIOGRAPHY 240
                                      
                                 APPENDIXES
                     A Study Committee Biographies 253
                      B Briefers to the Committee 261
                   C Networks: How the Internet Works 263
                   D Information Economics: A Primer 271
          E Technologies for Intellectual Property Protection 282
                         F Copyright Education 304
    G The Digital Millennium Copyright Act of 1998 and Circumvention of
                   Technological Protection Measures 311
                                      
                                 INDEX 331
                                      
                      Buy this book-[0309064996.gif] 
                                      
                         Buy this book-[buyit.gif] 
                                      
                   [copy_nas2000.gif]-[copy_nas2000.gif] 
                                      
                          [USEMAP:nav.gif]-[nav.gif]

The Chapter on p 192-197

	The Impact of Granting Patents on Information Innovation

reports how the US patent system was gradually broadened by the patent
courts (without legislative support) to include software and business
methods, and analyses a few of the famous cases.  The report concludes:

>         The effects of this substantial de facto broadening of patent
>    subject matter to cover information inventions are as yet unclear.
>    Because this expansion has occurred without any oversight from the
>    legislative branch and takes patent law into uncharted territories, it
>    would be worthwhile to study this phenomenon to ensure that the patent
>    expansion is promoting the progress of science and the useful arts, as
>    Congress intended.
>    
>         There are many reasons to be concerned. There is first the
>    concern that the U.S. Patent and Trademark Office lacks sufficient
>    information about prior art in the fields of information technology,
>    information design, and business methods more generally to be able to
>    make sound decisions about the novelty or nonobviousness of claims in
>    these fields.47 A related concern is the insufficient number of
>    adequately trained patent examiners and inadequate patent
>    classification schemata to deal with this new subject matter. The
>    success of the patent system in promoting innovation in a field
>    depends on the integrity of the process for granting patents, which in
>    turn depends on adequate information about the field. Serious
>    questions continue to exist within the information technology field
>    about the PTO's software-related patent decisions. A number of legal
>    commentators have pointed out that allowing these kinds of patents
>    potentially makes concepts, not technology, the protectable property
>    of the patent holder, "allow[ing] virtually anything under the sun to
>    win patent protection."48
>    
>         Second, the tradition of independent creation in the field of
>    computer programming may run counter to assumptions and practices
>    associated with patents as they are applied to its traditional
>    domains. When someone patents a component of a manufactured system,
>    for example, it will generally be possible for the inventor to
>    manufacture that component or license its manufacture to another firm
>    and reap rewards from the invention by sale of that component. Rights
>    to use the invention are cleared by buying the component for
>    installation into a larger device.
>    
>         But there is little or no market in software components.
>    Programmers routinely design large and complex systems from scratch.
>    They do so largely without reference to the patent literature (partly
>    because they consider it deficient), although they generally respect
>    copyright and trade secrecy constraints on their work. With tens of
>    thousands of programmers writing code that could well infringe on
>    hundreds of patents without their knowing it, there is an increased
>    risk of inadvertent infringement.49 An added disincentive to searching
>    the patent literature is the danger that learning about an existing
>    patent would increase the risk of being found to be a willful
>    infringer. The patent literature may thus not be providing to the
>    software world one of its traditional purposes--providing information
>    about the evolving state of the art. Much the same could be said about
>    the mismatch between patents and information inventions in general.
>    
>         Third, although patents seem to have been quite successful in
>    promoting investments in the development of innovative manufacturing
>    and other industrial technologies and processes, it is possible that
>    they will not be as successful in promoting innovation in the
>    information economy. One concern is that the pace of innovation in
>    information industries is so rapid, and the gears of the patent system
>    are so slow, that patents may not promote innovation in information
>    industries as well as they have done in the manufacturing economy. The
>    market cycle for an information product is often quite short--18
>    months is not unusual; thus, a patent may well not issue until the
>    product has become obsolete. If information inventions continue to
>    fall within the scope of patents, then, at a minimum, the patent
>    cycle-time needs to be improved significantly. Patent classification
>    systems for information innovations may also be more difficult to
>    develop and maintain in a way that will inform and contribute to the
>    success of the fields they serve.
>    
>         One final reason for concern is that developing and deploying
>    software and systems may cease to be a cottage industry because of the
>    need for access to cross-licensing agreements and the legal protection
>    of large corporations. This in turn may have deleterious effects on
>    the creativity of U.S. software and Internet industries.





