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The Database Duel Revisited
by Drew Clark
Long-simmering tensions between two House committees over how to protect factual databases exploded last week as the Energy and Commerce Committee unfavorably reported a Judiciary Committee-approved bill and also approved a narrower, competing bill.
In rejecting the Judiciary measure, H.R. 3261, the Commerce committee abandoned a compromise that had been brokered by the two committees over more than two-and-a-half years. The bill's key champion is the Software and Information Industry Association (SIIA), the primary trade association for software publishers and database providers like Reed Elsevier and Thomson. They argue that the Internet puts their databases at risk for piracy and that they need a new form of protection to stop others from misappropriating their work.
"Copyright law cannot stop a competitor from lifting massive amounts of factual material from a copyrighted publication to use as the basis for its own competing product," Lamar Smith, chairman of the House Judiciary Courts, the Internet and Intellectual Property Subcommittee, said in arguing for the bill at a joint hearing with a Commerce subcommittee last September.
But the leading officials on Commerce, including new Chairman Joe Barton, R-Texas, and ranking Democrat John Dingell of Michigan, said the Judiciary-approved bill would imperil consumers' and competitors' lawful access to factual information contained in databases. A large coalition of technology, telecommunications, brokerage and business groups also oppose the bill, as do librarians and scientists.
"The Judiciary bill could lead to costly litigation or a chill on the use of information for fear of litigation," said Florida Republican Cliff Stearns, chairman of the Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection. Instead, he said his bill, H.R. 3872, would ensure "that incentives to database publishing remain in place by prohibiting the misappropriation of databases" and "that factual data remain accessible to consumers."
A Decade Of Dispute And Deadlock
Experts once believed that copyright law would protect database publishers from the misappropriation of data. But a 1991 Supreme Court decision in Feist Publications v. Rural Telephone Service affirmed that factual information cannot be copyrighted.
The legislative fight over databases began in 1996. The next year, North Carolina Republican Howard Coble, the new chairman of Judiciary's intellectual property subcommittee, aggressively pushed the issue. The House attached his bill to its version of the 1998 Digital Millennium Copyright Act, but the Senate removed it as too controversial after complaints from libraries and universities that feared restrictions on scientific research.
Until now, the issue was most heavily lobbied in 1999, when Internet businesses like Yahoo, brokerage firms like Charles Schwab and telecommunications giants like Verizon Communications began to believe that Coble's bill would stifle their ability to assemble and reuse factual information in Web and other databases.
"You have very divergent opinions about whether there is any problem to fix and how to go about fixing it," said Miriam Nisbet, legislative counsel of the American Library Association and a critic of the Judiciary-approved legislation, also authored by Coble. "A very large number of organizations and businesses find the idea of enacting some new legal scheme of protection for facts to be so contrary to the good of the way business, research and education works."
Joe Rubin, executive director of technology and e-commerce for the U.S. Chamber of Commerce, concurs, saying the bill "locks up use of the facts, which the Supreme Court unanimously said can't be done. We have heard from tech and telecommunications companies, to all aspects of the financial services community, to manufacturers, as well as the scientific and research" groups opposed to the Judiciary panel's measure, he said.
The unusually broad coalition against that bill includes the Computer and Communications Industry Association, Consumers Union, Net Coalition and Public Knowledge.
An Alternative Found Wanting
But proponents of database protection contend that they have sufficiently compromised. Coble's first bill would have created an intellectual property right in factual databases, said Keith Kupferschmid, SIIA's vice president of intellectual property policy, but the new measure was narrowed to create a federal law against the misappropriation of databases.
The text would prohibit people from commercializing "a quantitatively substantial part of the information in a database" without first obtaining the consent of the company or person who assembled the data. The original database would have to require "a substantial expenditure" of money or time, and republishing the data would have to "so reduce the incentive to produce [the database] that its existence or quality" would be threatened.
Critics of the legislation point to other vehicles to stop the theft of databases. Through established contractual terms of service with their customers, database companies can restrict users from taking and reselling data, they said. They are further protected by state laws against misappropriation, by federal laws against computer intrusion and by laws against "trespass to chattels" that have been interpreted to protect Internet publishers like eBay from companies that copy auction data to their own Web sites.
In testimony before the joint hearing of the Commerce and Judiciary subcommittees, Kupferschmid said those laws could not protect a publisher who had 85 percent of its database copied by a rival company that accessed the site with a stolen password.
Current law does not give the ability to sue and to obtain temporary and permanent injunctions and monetary relief for damages, he said. But at the same time, "we have to lose not just one sale but have to lose lots of sales" before the civil remedies apply.
A Return To Stalemate?
A nearly united chorus of Energy and Commerce Committee members disagreed. On Wednesday, the panel unfavorably reported the Judiciary bill and instead passed Stearns' measure, H.R. 3872, by voice vote.
Although Louisiana Republican and former Energy and Commerce Committee Chairman W.J. (Billy) Tauzin co-sponsored the Judiciary-approved bill, Dingell, Stearns and Janice Schakowsky of Illinois, the ranking Democrat on Stearns' subcommittee, strongly disagreed, citing its potential impact on consumers, researchers and businesses.
In joining with Stearns by approving his bill, Energy and Commerce reverted to the contentious approach of the 106th Congress, when the panel pushed a rival to that session's Judiciary-approved bill. Then-Commerce Committee Chairman Tom Bliley, R-Va., countered with a bill promoting e-commerce and access to factual data but prohibiting duplication of databases sold in competition with the original product.
Energy and Commerce's new four-page bill is even simpler. It would declare "misappropriation of a database" an unfair practice and instruct the FTC to take action against people who copy them. It also would establish a five-part test defining misappropriation to mean taking that is "highly time sensitive." That standard was drawn from a court case where Motorola was found not liable for sending National Basketball Association scores to its pagers.
Publishers like Kupferschmid argue that the standard leaves them unprotected against their primary concern: data that is not "highly time sensitive" but that retains its value for months or years. They also fear inaction by the government.
"We have no confidence that the FTC would ever bring any action" on such a claim, he said.
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