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Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
Borrowing a book from a local public library would seem to be one of the most routine, familiar, and uncomplicated acts in modern civic life: A world of information is available with little effort and almost no out-of-pocket cost. Such access to information has played a central role in American education and civic life from the time of Thomas Jefferson, who believed in the crucial role that knowledge and an educated populace play in making democracy work. Yet the very possibility of borrowing a book, whether from a library or a friend, depends on a number of subtle, surprisingly complex, and at times conflicting elements of law, public policy, economics, and technology, elements that are in relative balance today but may well be thrown completely out of balance by the accelerating transformation of information into digital form.
The problem is illustrated simply enough: A printed book can be accessed by one or perhaps two people at once, people who must, of course, be in the same place as the book. But make that same text available in electronic form, and there is almost no technological limit to the number of people who can access it simultaneously, from literally anywhere on the planet where there is a telephone (and hence an Internet connection).
At first glance, this is wonderful news for the consumer and for society: The electronic holdings of libraries (and friends) around the world can become available from a home computer, 24 hours a day, year-
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
round; they are never "checked out." These same advances in technology create new opportunities and markets for publishers.
But there is also a more troublesome side. For publishers and authors, the question is, How many copies of the work will be sold (or licensed) if networks make possible planet-wide access? Their nightmare is that the number is one. How many books (or movies, photographs, or musical pieces) will be created and published online if the entire market can be extinguished by the sale of the first electronic copy?
The nightmare of consumers is that the attempt to preserve the marketplaces leads to technical and legal protections that sharply reduce access to society's intellectual and cultural heritage, the resource that Jefferson saw as crucial to democracy.
This deceptively simple problem illustrates the combination of promise and peril that make up the digital dilemma. The information infrastructureby which we mean information in digital form, computer networks, and the World Wide Webhas arrived accompanied by contradictory powers and promises. For intellectual property in particular it promises moremore quantity, quality, and accesswhile imperiling one means of rewarding those who create and publish. It is at once a remarkably powerful medium for publishing and distributing information, and the world's largest reproduction facility. It is a technology that can enormously improve access to information, yet can inhibit access in ways that were never before practical. It has the potential to be a vast leveler, bringing access to the world's information resources to millions who had little or no prior access, and the potential to be a stratifier, deepening the division between the information "haves" and "have-nots."
The information infrastructure has as well the potential to demolish a careful balancing of public good and private interest that has emerged from the evolution of U.S. intellectual property law over the past 200 years. The public good is the betterment of society that results from the constitutional mandate to promote the "progress of science and the useful arts"; the private interest is served by the time-limited monopoly (a copyright or patent) given to one who has made a contribution to that progress. The challenge is in striking and maintaining the balance, offering enough control to motivate authors, inventors, and publishers, but not so much control as to threaten important public policy goals (e.g., preservation of the cultural heritage of the nation, broad access to information, promotion of education and scholarship). As usual, the devil is in the details, and by and large the past 200 years of intellectual property history have seen a successful, albeit evolving, balancing of those details. But the evolving information infrastructure presents a leap in technology that may well upset the current balance, forcing a rethinking of many of the fundamental premises and practices associated with intellectual property.
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
The stakes involved in all this are high, both economically and in social terms. Decisions we make now will determine who will benefit from the technology and who will have access to what information on what termsfoundational elements of our future society.
The Committee on Intellectual Property Rights and the Emerging Information Infrastructure believes that fundamental change is afoot. As a society we need to ask whether the existing mechanisms still work, and if not, what should be done. What options exist for accomplishing the important goals of intellectual property law and policy in the digital age? Test cases are now the stuff of daily news, as for example the upheaval in music publishing and distribution caused by digital recording and the MP3 format. The committee believes that society needs to look further out than today's crisis, try to understand the nature of the changes taking place, and determine as best it can what their consequences might be, what it would wish them to be, and how it might steer toward fulfilling the promise and avoiding the perils. Stimulating that longer-range exploration is the purpose of this report.
Although the report builds on some past efforts, it takes a broader approach, analyzing the issues from the perspective of a multiplicity of relevant disciplines: law, technology, public policy, economics, sociology, and psychology. The committee strongly believes that attempts to consider digital intellectual property issues through a single lens will necessarily yield incomplete, and often incorrect, answers. The report is narrow in one sense, focusing primarily on copyright because it protects the intellectual property most frequently encountered by the general public.
Opinions run strong on almost every issue addressed in this report, in large part because the stakes are so high. If, as is often claimed, societies are seeing a shift in economies as significant as the industrial revolution, with the transition to knowledge and information as a major source of wealth, then intellectual property may well be the most important asset in the coming decades.
Two events motivate reexamining the concepts, policies, and practices associated with intellectual property:
• Advances in technology have produced radical shifts in the ability to reproduce, distribute, control, and publish information.
Information in digital form has radically changed the economics and ease of reproduction. Reproduction costs are much lower for
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
both rights holders (content owners) and infringers alike. Digital copies are also perfect replicas, each a seed for further perfect copies. One consequence is an erosion of what were once the natural barriers to infringement, such as the expense of reproduction and the decreasing quality of successive generations of copies in analog media. The average computer owner today can easily do the kind and the extent of copying that would have required a significant investment and perhaps criminal intent only a few years ago.
Computer networks have radically changed the economics of distribution. With transmission speeds approaching a billion characters per second, networks enable sending information products worldwide, cheaply and almost instantaneously. As a consequence, it is easier and less expensive both for a rights holder to distribute a work and for individuals or pirates to make and distribute unauthorized copies.
The World Wide Web has radically changed the economics of publication, allowing everyone to be a publisher with worldwide reach. The astonishing variety of documents, opinions, articles, and works of all sorts on the Web demonstrate that millions of people worldwide are making use of that capability.
• With its commercialization and integration into everyday life, the information infrastructure has run headlong into intellectual property law. Today, some actions that can be taken casually by the average citizendown-loading files, forwarding information found on the Webcan at times be blatant violations of intellectual property laws; others, such as making copies of information for private use, may require subtle and difficult interpretation of the law simply to determine their legality. Individuals in their daily lives have the capability and the opportunity to access and copy vast amounts of digital information, yet lack a clear picture of what is acceptable or legal. Nor is it easy to supply a clear, "bright-line" answer, because (among other things) current intellectual property law is complex.
The issues associated with intellectual property (IP) in digital form addressed in this report are difficult for a number of reasons:
• The stakeholders are many and varied. A wide variety of stakeholders present a broad range of legitimate concerns about the impacts of information technology. It is important to understand what these different concerns are and how technology affects these stakeholders. For example, the ability to self-publish on the Web may change the interaction between
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
authors and traditional publishers, leading to shifts in power (see, for example, the discussion in Chapter 2 on music).
• Content creators have different agendas, handle IP according to varying strategies, and look for different kinds of return on their investment. Authors have a variety of motivations, different notions of what constitutes a return on their investment, and as a consequence, different strategies for handling intellectual property. The traditional modelcontent produced and sold, either directly or with advertiser supportis the most familiar and encourages a view of IP law as the foundation that provides exclusive rights. But other models include giving intellectual property away in the expectation of obtaining indirect benefit in a positively correlated market (e.g., distributing free Web browser software in the expectation of building a market for Web server software), sharing IP to enhance the community (e.g., providing open source software such as Linux and the Apache Web server), or keeping it private (e.g., establishing trade secrets).
The multiplicity of actors, motivations, returns, and strategies matters because discussions concerning intellectual property (e.g., the effects of changes in levels of IP protection) are often set in the context of a single model, suggesting that all parties are affected equally by any change in IP law or policy. But the actors are not homogeneous, and the consequences of IP policy decisions will not be felt uniformly. Policy discussions must take into account the heterogeneity of strategies for IP (as Benkler, 1999, elaborates).
• Fundamental legal concepts can be interpreted differently. For example, significantly different (and emphatic) views exist on whether the notion of "fair use" is to be construed as a defense against a charge of infringement or an affirmative right that sanctions copying in specific circumstances. 1 The difference matters, for both theoretical and pragmatic reasons. If fair use is an affirmative right, for instance, then it ought to be acceptable to take positive actions, such as circumventing content protection mechanisms (e.g., decoding an encrypted file), in order to exercise fair use. But taking such positive actions may well be illegal under the regime of fair use as a defense. The basic point is very controversial; some legal scholars (and a reviewer of this report) have labeled as "absurd" the notion that fair use could be an affirmative right.
1 When one author quotes another, some (presumably small) amount of literal copying has occurred. The "defense" view of fair use holds that the literal copying, while a violation of the original author's exclusive rights, is excused by fair use and its public policy goal (namely, that society benefits from authors building on and critiquing previous work, even if they have to copy a small part of it). The affirmative right view of fair use, by contrast, holds the public policy goal as key and sees the copying not as a violation to be excused, but as a right that later authors have with respect to work that preceded them (as long as the copying stays within fair use guidelines).
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
• Laws and practices vary worldwide, yet networks have global reach. The information infrastructure, like the communications networks on which it builds, is global, yet there is considerable variation in different countries' laws, enforcement policies, and even cultural attitudes toward IP. This report focuses on U.S. law and practices but acknowledges that larger global issues are important and in many ways unavoidable. For example, it is typically impossible to determine where a reader of electronic information happens to be physically (and hence whose laws apply), and at times quite easy to move information from a country where certain actions may be illegal to one where laws (or enforcement) are lax.
• The economics of information products and IP can be subtle. Although content-producing industries account for a sizable and growing portion of the nation's economy and international trade, the economic significance of protecting IP is not completely clear. Stronger IP protection could encourage increased levels of creative output, resulting in more rapid progress and additional information products. But protecting IP also entails costs, including costs for directly related activities such as enforcement, and other less obvious costs (such as decreased ability to build on the work of others and the increased expenditure of resources to reproduce a product without violating its IP protection). The net economic effects of changes in protection levels are difficult to assess.
In the digital world, even the most routine access to information invariably involves making a copy: Computer programs are run by copying them from disk to memory, for example (an act that some courts have ruled to be "copying" for the purposes of copyright law), and Web pages are viewed by copying them from a remote computer to the local machine. But the exclusive right to copy is the first and perhaps most basic right of a copyright holder. How can the conflict be resolved between the desire to provide access to works and the desire to control copying, if, for digital information, access is copying?
This dilemma affects authors and publishers who wish to distribute digital works and need a way to accomplish this so that the work can be accessed, yet still be protected against unauthorized reproduction. The problem affects policy makers, because the traditional first-sale rule of copyright, an important element of public policy, is undermined by information in digital form. That rule works in the world of physical artifacts
Suggested Citation:"Executive Summary." National Research Council. 2000. The Digital Dilemma: Intellectual Property in the Information Age. Washington, DC: The National Academies Press. doi: 10.17226/9601.
