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Finding-A-Balance.Pdf Finding a Balance: Computer Software, Intellectual Property and the Challenge of Technological Change May 1992 OTA-TCT-527 NTIS order #PB92-169242 Recommended Citation: U.S. Congress, Office of Technology Assessment, Finding a Balance: Computer Software, Intellectual Property, and the Challenge of Technological Change, OTA-TCT-527 (Washing- ton, DC: U.S. Government Printing Office, May 1992). I (1[ .+IIC t)) IIIC ( I s ( i(, \ C’1 Illllcll( 1’1 1111111: ()1 I ILL’ $llp,l 1111,11(1,.111 ()[ Ihk UIIIL’ll [., Alclll slop Ss( )1’, W’(l.lllll$l(m. [)( :(1-H )2 ‘) ~zs ISBN 0-16 -036188-5 —. Foreword Our Nation’s intellectual property system is intended to strike a balance between private incentives and protections of public interest. This report examines the rapid and complex technological changes and trends in computer software technologies and their possible effects on the Nation’s intellectual property system. An effective policy must foster technological innovation to preserve economic competitiveness of the U.S. software industry in the face of changing technologies and markets. The report identifies three policy issues: 1) the appropriate scope of copyright protection for computer software; 2) patent protection for software-related inventions and algorithms, and how the U.S. Patent and Trademark Office will handle these types of applications; and 3) complications facing libraries and commercial and private producers and users of digital information, including computer-based mixed media products. This report was prepared in response to a request from the House Committee on the Judiciary. OTA drew upon work by staff and contractors and the comments of participants at six workshops. OTA received valuable assistance from members of the study’s advisory panel, officials of the U.S. Copyright Office, U.S. Patent and Trademark Office, Congressional Research Service, Library of Congress, U.S. International Trade Commission, U.S. Department of Commerce, U.S. Department of Energy, U.S. Department of Defense, Office of the U.S. Trade Representative, and European Economic Community, as well as a broad range of individuals from law firms, trade associations, public interest groups, industry, and academia in the United States and abroad. OTA appreciates the participation of the advisory panelists, workshop participants, Federal agency officials, and interested citizens, without whose help this report would not have been possible. The report itself, however, is the sole responsibility of OTA. w Director ///. Finding a Balance: Computer Software, Intellectual Property, and the Challenge of Technological Change Advisory Panel Michael S. Mahoney, Chairman Professor of History, Princeton University F. Christian Byrnes Robbie Hardy Vice President, Product Planning Senior Principal Landmark Systems Corp. American Management Systems, Inc. Dana E. Cartwright III Mitchell D. Kapor Director, Academic Computing Service chairman Syracuse University ON Technology, Inc. Bill Curtis Ronald S. Laurie Director, Software Process Program Partner Software Engineering Institute Weil, Gotshal & Manges Randall Davis Clifford A. Lynch Associate Director, Artficial Intelligence Director of Library Automation Laboratory University of California Massachusetts Institute of Technology Anita Mergener Walter J. Doherty Director, Product Design Program Manager, Scientific Systems Support Kelly Services Laboratory Jerome H. Reichman Computing Systems Department Professor of Law IBM T.J. Watson Research Center Vanderbilt University Carol Edwards Richard Rubinstein (formerly) Project Director Manager, Technology Assessment and Planning Southern Coalition for Educational Equity Digital Equipment Corp. Nick A. Farmer Robert Schware Director of Information Systems Senior Information Technology Specialist Chemical Abstracts Service The World Bank John Gage Mary Shaw Director of Science Office Professor of Computer Science Sun Microsystems Carnegie Mellon University Morton David Goldberg Partner Schwab Goldberg Price & Dannay NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members. The panel does not, however, necessarily approve, disapprove, or endorse this report. OTA assumes full responsibility for the report and the accuracy of its contents. iv Finding a Balance: Computer Software, Intellectual Property, and the Challenge of Technological Change OTA Project Staff John Andelin, Assistant Director, OTA Science, Information, and Natural Resources Division James W. Curlin, Telecommunication and Computing Technologies Program Manager Project Staff Joan D. Winston, Project Director Karen G. Bandy, Senior Analyst Paula J. Bruening, Analyst Alan Buzacott, Analyst Ann M. Hironaka, Research Assistant1 Mark D. Johnson, Legal Intern2 Administrative Staff Liz Emanuel, Office Administrator Karolyn St. Clair, PC Specialist JoAnne Young, Secretary Other OTA Contributors Linda Roberts, Senior Associate (SET Program) Chair, Workshop on Public Interest Issues Kevin O’Connor, Senior Analyst (BA Program) Chair, Workshop on Patent, Copyright, and Trade Secret Law Contractors Frank W. Connolly, EDUCOM Robert Echols, Consultant Steven W. Gilbert, EDUCOM Paul C.B. Liu, University of Washington 1Until August 1990. 2Catholic University of America (fall semester, 1990). Page Chapter 1.Summary, Issues, and Options . 3 Chapter 2. The Law . 39 Chapter 3. The International Arena . 93 Chapter 4. Software Technology and the Law . .125 Chapter 5. Digital Information and Copyright . 161 Chapter 6. Economics, Intellectual Property, and Software .,... 183 Appendix A. Selected Computer Hardware and Software Initiatives Overseas . 205 Appendix B.The European Economic Community Treaty: Structure and Function . 213 Appendix C. Workshop Participants and Reviewers . .216 Index . 223 Chapter 1 Summary, Issues, and Options Contents Page summary . !! . 3 Background and Study Approach . 3 The Law . 12 The International Arena . .13 Software Technology . .17 Digital Information and Copyright . 19 Economic Perspectives . 20 Issues and Options . ..*...., . ● *..... 22 Technological Challenges for Copyright Law . 22 Technological and Institutional Challenges for the Patent System and PRO . 23 International Dimensions . 25 Digital Information and Copyright . .26 Software Technology, Industry Structure, and the Future . 26 Policy Choices and Options . .. 28 Preparing for the Future . .36 Boxes Box Page l-A.Recompilation . 7 l-B. Patent Problem of Prior Art . 8 l-C. Patent Examination Quality and Speed . 9 l-D.The Software Debate: Some Stakeholder Groups and Their Concerns . 10 Chapter 1 Summary, Issues, and Options Summary technological changes in information technologies offer opportunities for social and private gain, but at Background and Study Approach the same time challenge existing business practices and legal doctrines. It ex When a new technology impinges upon the amined the impact of new technologies on the effectiveness of intellectual intellectual property system, questions arise con- property rights, including the right to control repro- cerning both the scope and appropriateness of its protection and the effectiveness of the system in duction of copyrighted works, the right to control publication and performance of works, and the right promoting “the Progress of Science and useful 3 1 to control the making of derivative works. The Arts. ’ A series of OTA reports has explored the report identified three types of information-based intellectual property challenges presented by new information technologies—particularly by the move products—work of art, works offact, and works of function-and concluded that basic differences among to electronic representation of information and the these types of works create difficulties for the proliferation of digital means of transmission, adap- 4 current intellectual property regimes. tation, and copying-and by biotechnology. Look- ing across these challenges, it would appear that, A 1989 OTA report, New Developments in although the technological, economic, social, and Biotechnology: Patenting Life-Special Report,5 industrial particulars differ, many of the tensions and examined challenges that biotechnology-specifi- issues that arise are general, rather than technology- cally, the patenting of nonhuman living organisms— specific. poses for the patent system (see box 2-A in ch. 2). Many of the questions and difficulties identified in In 1984, the House and Senate Committees on the that report (e.g., questions concerning the appropri- Judiciary requested that OTA examine the impact of ateness and scope of patent protection, the newness recent and future advances in communication and of the technology, institutional difficulties in estab- information technologies on the intellectual prop- lishing a repository of prior art and in administering erty system. In response, OTA prepared the 1986 patent prosecution) have also been noted in this report, Intellectual Property Rights in an Age of study 6 Thus, it appears that-although the particu- Electronics and Information.2 That report found that lars differ—many current questions concerning the ‘ U.S. Constitution, art. I, sec. 8. 2 us+ conge~~, Offiw of Technology Assessment ]nte//ectua/ Property Rights in an Age of Electronics ~n~ ~@~~r@ o~-c~-q~ (Melbourne, FL: Kreiger Publishing Co., April 1986). 3 For exmple, lec~olog1e5 that lower the cost and time required to copy, transfer, or tipdate tio~tion ad intellect~l PmPcfiY cm ‘de works more accessible, make
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