Geronimo's September 22, 1998 Letter Regarding Database Legislation

                      September 22, 1998
  The Honorable Charles Robb
  SR-154, Russell Senate Office Building
  First and Constitution Avenue, Northeast
  Washington, D.C. 20510 
       RE:  Database "Antipiracy" Legislation
  Dear Senator Robb:
        Geronimo Development Corporation ( Geronimo") publishes
  a CD-Rom legal research system containing a complete library
  of Virginia jurisprudence on a single disk. Our system is
  used every day by judges, prosecutors and attorneys
  throughout the Commonwealth of Virginia. Though
  headquartered in St. Cloud, Minnesota, Geronimo is a
  Virginia corporation, founded by my wife and I, both
  Virginia attorneys. I also serve as the Executive Director
  of the American Association of Legal Publishers ( AALP"),
  whose members believe that the law is, and should remain,
  the property of  the public. I am writing to you on behalf
  of Geronimo and the members of AALP.

      Database  antipiracy" provisions are included in the
  House version of a copyright treaty implementation bill
  (H.R. 2281) which may be considered by a conference
  committee yet this session. The Senate version of the bill
  does not include these provisions, as the Senate has held no
  hearings on this issue. According to the proponents, these
  provisions are needed to protect and/or encourage database
  publishers. However, in the field of legal publishing, these
  provisions will legalize the de facto monopolies that
  dominate the market today and will permanently deny
  potential competitors access to the public domain data they
  need in order to be able to produce competing products.

       A brief discussion of the current state of the law, and
  a bit of company history, will provide a clearer view of the
  peril this legislation poses for us, and for competition in
  the legal publishing industry.
       The Supreme Court's first copyright case, Wheaton v.
  Peters, 33 U.S. (8 Pet.) 591 (1834), held that opinions of
  the Court are not copyrightable; that holding remains the
  law. Subsequent cases and the present Copyright Act
  reinforce and expand upon the point: the law, whether in
  court opinions or statutes, cannot be reduced to property
  through copyright, whether by individuals or by the
  government itself. Unfortunately, a line of cases developed
  in the early 1900's which granted copyright protection to
  compilations of facts or other works ineligible for
  copyright, on the basis of the  industrious collection" of
  the compiler. The landmark decision in Feist Publications,
  Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991)
  rejected this "sweat of the brow" theory of copyright,
  holding that U.S. Constitution demands some modicum of 

  The Honorable Charles Robb
  September 22, 1998
  Page Two
  originality as a prerequisite for copyright protection.
  Thus, under current law, anyone may copy the text of any or
  all of the court opinions from books printed by any
  publisher and use that text for any purpose, including the
  production of a competing product.
       In 1991, Geronimo brought to market the first
  stand-alone computerized legal research system for attorneys
  in the Commonwealth of Virginia. We produced the database
  for this system by scanning the pages of the Virginia
  Reports, converting the scanned image into digital text with
  optical character recognition software, and proofreading the
  resulting text against the printed original. We didn't need
  to fear litigation because the volumes of the Virginia
  Reports are unique; they bear no claim of copyright
  whatsoever. Shortly after we introduced our product, larger
  publishers announced that they would soon market similar
  systems. Lacking the brand-name recognition and marketing
  clout of these giant firms, we countered by providing more
  databases, with more frequent updates, at lower cost, with a
  better search engine and better customer service. Because we
  were able to enter the market, the benefits of competition
  have been enjoyed by the consumers of legal research systems
  in the Commonwealth of Virginia.
       After seven years, we are ready to expand into another
  state. The critical element of a state-based computerized
  legal research system is a database of state supreme court
  decisions. To prepare a database like this, we need to
  obtain the text of the target state's supreme court
  decisions back to 1925, scan that text into digital format,
  proofread it, and process it into our system. We have
  verified that we can obtain copies of the legal opinions
  from the clerk of the supreme court in our target state back
  to about 1980, but the only source for earlier decisions is
  in books published by private companies. Under present law,
  discussed above, we can copy the actual text of the judge's
  opinions from these books (but not the headnotes, or any
  other original works of authorship) and use it to produce a
  competing product. However, if the database  antipiracy"
  measures presently under consideration become law, it will
  be illegal for us to obtain the text of those decisions, we
  will be unable to produce a competing product, and the
  existing publisher will have been granted a permanent
  monopoly upon the law.
       It appears that the major proponent of database
   antipiracy" legislation is the West Publishing Company
  ( West"), located in Eagan, Minnesota (West, the largest
  legal publisher in America, was purchased by the Thomson
  Corporation of Toronto, Canada in 1996 for $3.4 billion).
  Lexis/Nexis, the second-largest publisher of American legal
  research materials, also supports the  antipiracy"
  legislation (Lexis was purchased by Reed-Elsevier, an
  Anglo-Dutch conglomerate, in 1993).
       West maintains a de facto monopoly over the print
  publication of decisions of the Federal District Courts and
  the Federal Circuit Courts of Appeal (and shares a monopoly
  with Lexis over electronic publication of a complete
  collection of these cases). With virtually no competition,
  West has been able to charge high prices for its print and
  CD-ROM collections of these cases. 
       Recent events have challenged this monopoly. The
  American Bar Association and others have urged the Federal
  Judiciary to create a public domain citation system, which
  would begin to weaken that monopoly. More importantly, in
  1997 a New York federal district court denied West's claims
  of copyright in the text of the judge's decisions as
  reported in its books, and in the 

  The Honorable Charles Robb
  September 22, 1998
  Page Three
  page numbers of those books (Matthew-Bender v. West, 94 Civ.
  0589, SDNY (May 22, 1997)). The appeal has been heard by the
  Second Circuit Court of Appeals; a decision upholding the
  trial court is expected soon. Consequently, West appears to
  be pushing database  antipiracy" legislation in order to
  preserve by legislation the monopoly it is losing in the
       H.R. 2652, the  Collections of Information Antipiracy
  Act," was introduced in the House in the beginning of the
  105th Congress. At hearings in October, 1997 and again in
  February, 1998, those testifying in favor of the bill either
  had connections with West or Lexis, or were from groups over
  which West or Lexis exerted a dominant influence. Despite
  significant opposition to the bill from the scientific and
  library communities, it was reported favorably by the
  Judiciary Committee and passed the House by voice vote
  earlier this year. A counterpart, S. 2291, was introduced in
  the Senate by Senator Grams in early August, but Senator
  Hatch has not scheduled hearings on it.
       Meanwhile, bills to implement certain copyright
  treaties passed both the House (H.R. 2281) and the Senate
  (S. 2037), albeit in different versions. Sensing that the
  copyright treaty legislation would move in this Congress,
  the supporters of H.R. 2652 managed to get their bill
  incorporated as Title V in the House bill, after it was
  passed. It is our understanding that staff members from
  Senator Hatch's office and the House Judiciary Committee
  then met with representatives from various industries to try
  to resolve differences regarding the database  antipiracy"
  issue, but no consensus was reached. Last week, the Senate
  amended H.R. 2281 by substituting therefor the text of S.
  2037 (which does not contain  antipiracy" provisions),
  requested a conference with the House, and appointed as
  Conferees Senators Hatch, Thurmond and Leahy.
       We urge you to contact these conferees and to demand
  that they reject the inclusion of database "antipiracy"
  provisions in any bill that might be reported out of the
  Conference Committee. Naturally we are concerned about the
  harm this legislation will cause us and the other members of
  AALP, as set out above. There are additional, broader
  reasons for opposing the database "antipiracy" provisions:
       Hearings have not been held on the database
   antipiracy" issue in the Senate
       Title V of the House version of H.R. 2281 constitutes
  the verbatim text of H.R. 2652, the  Collections of
  Information Antipiracy Act," passed earlier by the House. A
  full day of hearings on H.R. 2652 was held in the
  Subcommittee on Intellectual Property and the Courts of the
  House Judiciary Committee on October 27, 1997; Subcommittee
  Chairman Coble announced to the standing-room only audience
  that due to the significant concerns expressed on both sides
  of the issue, another day of hearings would be held,
  adamantly declaring that the bill was not  on a fast track."
  Testimony that day was evenly divided between proponents and
  opponents. On February 12, 1998, another full day of
  hearings on H.R. 2652 was held by the House Judiciary
  Committee. Again, the witness list was evenly divided
  between proponents and opponents.
       H.R. 2652 was considered by the House under a
  suspension of the rules, a procedure generally reserved for
   non-controversial" measures, and was passed by unrecorded
  voice vote 
  The Honorable Charles Robb
  September 22, 1998
  Page Four
  on May 19, 1998. Subsequently, it was  folded" into H.R.
  2281, which had earlier passed the House.
       On August 4, 1998, Senator Rod Grams introduced S.
  2291, the Senate companion to H.R. 2652. Hearings have not
  been scheduled on the Senate bill.
       During the past month, staff members from Senator
  Hatch's office and from the House Judiciary Committee met
  informally over several days with representatives from
  various industry groups to discuss the database  antipiracy"
  issue. It was impossible to reach a consensus.
       Clearly, the database  antipiracy" provisions are
  contentious. Their inclusion in the House version of H.R.
  2281 owes more to parliamentary chicanery than to considered
  reflection of the evidence. In no event should the Senate
  conferees report back a bill containing such far-reaching
  provisions without a single hearing in the Senate.
       These  database antipiracy" provisions were deemed
  unconstitutional by the Department of Justice and in the
  Minority Report of the Subcommittee on Courts and
  Intellectual Property of the House Judiciary Committee.

       In a July 28, 1998 memorandum to the White House, the
  Department of Justice (the  Department") considered whether
  H.R. 2652 constituted a valid exercise of Congress's power
  under the Intellectual Property Clause of the Constitution.
  The Department stated that the controlling precedent for
  such a determination was the Feist decision, supra, which
  held that the Constitution requires some modicum of
  creativity for copyright protection and that mere  sweat of
  the brow" is an insufficient basis. The Department observed
  that because H.R. 2652 provides protection for  collections
  of information" without regard to originality and defines
   information" expansively, it would protect unoriginal
  factual compilations and thus would run afoul of the Supreme
  Court decision in Feist. 
       The Department's memorandum rejected the claim that
  H.R. 2652 could pass muster as a valid exercise of
  Congress's power under the Commerce Clause of the
  Constitution. The Department found that the Feist decision
  can be read to hold that the Intellectual Property Clause
  prohibits Congress to rely on any other constitutional power
  to provide copyright-like protection to facts or to the
  non-original parts of factual compilations. The Department
  also found that those few circumstances where the Supreme
  Court has recognized intellectual property interests not
  grounded in the copyright clause, such as trade secrets and
  trademarks, were clearly distinguishable from the broad
  protection envisaged in H.R. 2652.
       In her Dissenting View to House Rpt. 105-525, Rep. Zoe
  Lofgren noted that the Intellectual Property Clause could
  not serve as the basis for enactment of H.R. 2652, stating:
       The drafters of H.R. 2652 have attempted to avoid this
       defect by styling the bill as a Federal
        misappropriation" statute, as though we were not
       creating a new property right, but establishing a new
       tort. However, the bill seeks to establish a new property
       right for  collections of information," complete with
       civil and criminal remedies for unauthorized 

  The Honorable Charles Robb
  September 22, 1998
  Page Five
     use, and exceptions for the use of individual items or
        insubstantial parts," scholarly activity, and news
       reporting. Such characterizations belie the
        misappropriation" label, and look suspiciously analogous
       to those of copyright (infringement, fair use, etc.).
       Even though database  antipiracy" legislation would
  drastically change intellectual property law, it has never
  been the subject of hearings in the Senate.
       Representative Coble succeeded in characterizing H.R.
  2652 as  non-controversial," enabling it to be considered
  and passed with no debate by voice vote in the House under a
  suspension of the Rules. This parliamentary chicanery
  ignores the strong opposition that was expressed by
  libraries, academia and industry in hearings before the
  House Judiciary Committee and earlier in Rep. Coble's own
  Subcommittee on Courts and Intellectual Property. Senator
  Hatch's staff recently met with representatives of various
  industry, library and academic groups to discuss database
  piracy issues, and reached no consensus on whether there is
  a problem and if so, how to solve it. In light of this, and
  at a minimum, hearings should be held in the Senate to
  receive the views of all of those who would be affected by
  such legislation.
       The language the database "antipiracy" is overbroad in
  most respects, yet fails to address an obvious issue that
  will arise.
       The asserted goals of H.R. 2652 are to stimulate the
  creation of more databases, to increase their dissemination
  to the public, and to encourage competition among producers.
  What the bill will actually do is destroy competition by
  creating permanent monopolies over facts and data currently
  in the public domain, which in turn will inevitably increase
  the price the public pays for information.
       H.R. 2652 seeks to protect  collections of information"
  produced by the expenditure of substantial monetary or other
  resources by making it illegal for anyone to extract and use
  information from such a collection in a way that harms the
  market for the collection. It defines  information" to
  include  facts, data, works of authorship, or any other
  intangible material capable of being collected and organized
  in a systematic way" (emphasis supplied). The bill imposes
  civil and criminal penalties upon anyone who extracts
  information from such a collection if such extraction harms
  the actual or potential market of the collector. In order to
  protect the profits of publishers, the bill discards 209
  years of judicial and legislative wisdom which has
  recognized that facts belong to no one and that the vast
  body of knowledge should remain in the public domain.
       The proponents will undoubtedly claim that H.R. 2652
  does not create permanent monopolies, because protection
  under the bill is limited to fifteen years. However, as the
  Department noted in its memorandum, since protection is
  given to collections which are  gathered, organized or
  maintained" (emphasis supplied), every time the collector
   expands" or  refreshes" the collection, the 15-year period
  of protection would start anew, making it easy for the
  collector to obtain perpetual protection.
  The Honorable Charles Robb
  September 22, 1998
  Page Six
       The proponents also deny that the bill creates
  monopolies because it provides that no one is prohibited
  from creating a competing product by independently gathering
  the information in a collection. This claim applies only in
  situations where the information still exists. In the
  specific case of the legal publishing industry, the claim is
  a fallacy. The original copies of the decisions rendered by
  judges in many courts simply no longer exist. The only
  available source of the text of these decisions is in
   collections of information" (i.e., books or databases)
  covered by H.R. 2652, and no other publisher will be able to
  extract this information and use it to create a competing
  product. A similar lack of original sources may exist in
  other areas; adequate hearings and investigation are
  necessary to determine the scope of this problem.
       There is no demonstrated need for database "antipiracy"
       The Committee Report on H.R. 2652 states that recent
  legal and technological developments threaten to cast a pall
  over the database industry by eroding incentives for
  continued investment. Further, the Report noted that lower
  court decisions show that copyright cannot be relied upon to
  prevent a competitor from lifting factual data from a
  database to use in preparing a competing product. However,
  in two days of hearings (October 23, 1997 and February 12,
  1998), only one of fourteen witnesses described a situation
  in which he had suffered harm by the alleged extraction of
  information from his database. Certainly, when the
   solution" proposed by H.R. 2652 overturns a landmark
  Supreme Court decision, runs afoul of the U.S. Constitution,
  and eviscerates 209 years of copyright law, one would expect
  more than  token" testimony about the problem.
       I appreciate your taking the time to listen to my
  concerns. I have testified in several forums in favor of the
  adoption by state and federal courts of a public-domain
  citation system, and I have filed briefs as amicus curiae in
  antitrust and copyright cases dealing with these issues. If
  I can supply you with any additional information, please do
  not hesitate to call or have one of your staff members
  contact me.
       Thank you.

  O. R. Armstrong

This page has been accessed times since September 23, 1998.