May 2001 Public Policy Computer Graphics Column

Introduction

Laurie Reinhart

This year at SIGGRAPH 2001 there will be a Public Policy course and panel. Digital copy protection, electronic commerce, free speech, intellectual property, internet futures, privacy, broadband telecommunications, and the role of tech societies are among the topics. The column begins with a description of this course and panel.

Next Myles Losch provides an update on the leadership transition at the FCC and also some information on the Napster situation and related copyright issues.

In our third section, Bob Ellis reports on his personal activities in his home state working to defeat enactment of UCITA legislation. UCITA would regulate and enforce shrink-wrapped software licenses. This section includes a sample letter to representatives, which could be used by individuals concerned about UCITA. Finally, we present a dialog with a reader of the previous column, concerning electronic signatures, UCITA, and DMCA.

1. Update on SIGGRAPH 2001 Policy Course and IP Panel Proposals

Bob Ellis

The course proposal described in the last issue was accepted by the SIGGRAPH 2001 Committee and will be presented as a two-hour tutorial on Sunday, August 12, in Los Angeles. Barbara Simons, ACM Past-President and Co-Chair of USACM and I will present the course. Myles Losch will be helping us prepare some material and providing assistance during the presentation.

We are currently refining the syllabus and starting to prepare presentation material for the course notes.

Course Syllabus

Introduction to Public Policy (Ellis and Simons) (5 Minutes)
           Introduce Ellis and Simons
           Purpose of Course
           Why is this important?
           Organization of course

Overview of Computing and Public Policy (Simons and Ellis) (10 Minutes)
           Cryptography (Simons)
           Digital Copy Protection (Ellis)
           Electronic Commerce (Simons)
           Free Speech (Simons)
           Intellectual Property (Simons)
           Internet Futures (Simons)
           Privacy/Surveillance (Simons)
           Telecommunications (Ellis)
           Convergence of Computing and Television (Ellis)
           User Access (Ellis)

Deployment of Broadband Telecommunications (Ellis) (20 Minutes)
           Digital Subscriber Lines
           Cable Modems
           Satellite
           Terrestrial Wireless
           Security
           Privacy
           Regulatory Policy

Use and Protection of Intellectual Property (IP) (Simons) (30 Minutes)
           Definition of IP
           Using IP
           Creating IP
           World Intellectual Property Organization (WIPO)
           Digital Millennium Copyright Act (DMCA)
           Fair Use/First Sale Rights
           Contract Law/Shrink Wrap Licenses (UCITA)

Digital Copy Protection (Ellis) (10 Minutes)

Convergence of Computing and Television (Ellis) (10 Minutes)

Research Support (Ellis) (10 Minutes)
           Role of Government
           Role of the Private Sector
           SIGGRAPH Activities

Public Policy (Ellis and Simons) (10 Minutes)
           How Effected
           How Influenced
           Role of Technical Societies
           Role of Professionals
           Outreach to general public
           Role of Citizens
           Public Policy Organizations
           Web Resources

Summary and General Discussion (Ellis and Simons) (10 Minutes)

We have a lot of material to cover in a short amount of time, but Barbara and I are confident that we will be able to provide important information to the attendees.

I also submitted a proposal for a panel on the issue of intellectual property. The panel has been accepted. Quoting from the proposal:

"Panel Description

As more intellectual property (writing, music and images) becomes widely available in digital formats, there is increasing concern over protection of the material against unauthorized use and the sometimes conflicting rights of the originators and users of the material. Computer graphics professionals will find that they must be concerned with not only technical capabilities but policy and legal issues as well. Issues surrounding the use of MP3, the Secure Digital Music Initiative (SDMI) and the DVD Content Scrambling System (CSS) are currently the subject of substantial coverage in the technical, business and popular press. As creators, inventors, and users of digital content in the field of computer graphics and interactive techniques, SIGGRAPH attendees will have an opportunity to hear and interact with key panelists in this arena.

Panel Statement

This topic is well suited to a panel because the topic is currently very visible and controversial with new developments occurring daily. Every attendee of the annual SIGGRAPH conference has a vested interest in intellectual property as students, researchers and content developers.

While there is considerable written material, including that produced by the panelists, these are best presented as interactive presentations. Each panelist represents a different point of view on the key issues in policy and legislative decisions made concerning intellectual property. The panelist's interaction with one another and with the attendees of the panel should make way for a very timely and interactive panel session.

The panel will address the following questions:

• Have new laws at the national level, e.g., the Digital Millennium Copyright Act (DMCA), and treaties at the international level, e.g., the World Intellectual Property Organization (WIPO), significantly altered the balance of the rights of IP owners and IP users?
• Will the use of digital copy protection systems such as DVD's Content Scrambling System (CSS) help or hinder the acceptance of these devices by consumers?
• Is there a need for digital copy protection in the broadcast and distribution of digital video?
• How does the traditional concept of fair use apply to digital forms of IP?
• How does the existence of peer-to-peer files sharing systems (such as Napster) effect IP rights and fair use?
• What is the legal status of the portability of the computer-based tools (and the tool developers) typically used to create digital imagery?
• Because much intellectual property is created by teams of people rather than a single author, what forms ownership of IP are appropriate?
• What are the limits on the modification of an artist's work by the audience?

Panel Format

The proposed panel will be organized slightly differently than is traditional. Instead of having each panelist make an introductory statement that often leads to tedious presentations and insufficient time for discussion, we will begin with the panelists responding to specific questions (see above) from the moderator. The panelists will be advised in advance of the possible questions and their responses will be subject to a strict time limit. The order of panelist responses will be varied from question to question and will not be known to the panelists in advance.

Approximately 2/3 of the way through the panel, questions will be solicited from the audience. Audience input will be restricted to questions for the panel with a strict time limit enforced. Panelist responses will also be subject to a strict time limit.

The use of enforced time limits may seem harsh, but there are many precedents including attorney presentations in appeals courts. An electronic timer (to be provided by the SIGGRAPH 2001 Committee) will be required and will be operated by organizer Nelson. Amplifying the timer's audible output will help enforce the time limits. Organizer Ellis has run panels this way and can assure the Panels Committee that the time limits can be enforced.

This panel would lend itself to the talk-show configuration because all panelists will be speaking from their seats. We are open to possibilities of online adjuncts, SIG-Talk Video Clips, audience polling or other technology supported enhancements but have not yet made any implementations. The organizers are experienced in creating material and developing interactive capabilities for websites including interactive surveys (see www.siggraph.org/pub-policy)."

The panelists are Dan Burk, the Vance K. Opperman Research Scholar and a law professor at the University of Minnesota, Deborah Neville, Senior Counsel at Manatt Phelps & Phillips, specializing in intellectual property law, Barbara Simons, ACM Past President and Co-Chair of ACM's US Public Policy Committee (USACM) and Sarah Stein, Assistant Professor in the Department of Communication at North Carolina State University and a documentary filmmaker. I will be the panel moderator and David Richard Nelson the co-organizer will assist and keep us all on time and on track.

As you can see, the format is somewhat unusual and the speakers are from outside the traditional computer graphics fields in order to provide a fresh approach to the topic. Prospective panelists include a law professor who specializes in intellectual property law, a practicing attorney who also specializes in intellectual property and an independent filmmaker.

2. Update on the leadership transition at the FCC and some information on the Napster situation and related copyright issues.

Myles Losch

The Federal Communications Commission (FCC) has had a pivotal role in the U.S.' adoption of digital TV (an enticing market for computer- generated imagery), as well as in promoting the spread of graphics- friendly broadband Internet access. Accordingly, this space has often noted such FCC activities, e.g. in November 1999, February and May 2000, and February 2001. In this issue we do so again, for the FCC has shifted to a new (and less regulatory) course under incoming chair Michael Powell, a Bush appointee.

Industry analysts expect that dominant cable TV and telephone companies will prosper as a result, while new competitors and independent Internet providers will face greater challenges. This in turn worries groups that advocate for diversity among service providers, the better to protect consumer choice, freedom of online expression, and related values.

Departing FCC chair Bill Kennard, in one of his last acts, led his colleagues in rejecting demands from digital TV broadcasters that cable TV operators be required to offer digital as well as analog versions of each broadcast channel. This concept, often called a "digital must-carry" rule, would have greatly eased consumers' shift to digital TV, since some three-fourths of U.S. homes get TV over cable.

But cable systems with few channels would have had to drop other content to make room for the digital broadcasts, thus reducing consumer choice. Now, given the FCC's decision, cable subscribers in such areas may need to install outdoor antennas for digital TV reception, a substantial obstacle. The likely result: slower conversion to digital TV.

Napster and Copyright

As previously noted in these columns (e.g. in August 1998, November 1999, February and May 2000), another factor delaying the move to digital entertainment has been legal conflict over the terms of public access to digitized works under copyright. We pointed out (in the August 2000 column) why these issues have first come into focus for music, and indeed as this is written, the huge Napster online music-trading service is being strongly impacted by court challenges from the recorded music industry.

A recent consequence (not surprising in light of traditional copyright principles) is that open, online sharing of copyrighted works has been judged illegal in the U.S. Enforcing this against end users, though, is problematic, nor will content trading services in other countries (as well as those that lack central servers) be easily suppressed by courts.

Software protection for content has been advanced as a solution, but is vulnerable to hacking. Copyright holders, accordingly, are pressing for "secure" (i.e. non-hackable) hardware architectures in personal computers, but some PC makers have resisted such changes. Moreover, moves of this kind ignore the fact that audio CDs have always come "bundled" with digital fair use privileges, and that this has shaped public attitudes on the matter since the mid-1980s.

The copyright industries would like to end digital fair use (e.g. unlicensed copying for criticism, parody, comment, study, one's own personal use, etc.), but legal obstacles and/or customer preferences may not allow this.

As for Napster et al., U.S. legislators have begun to float the possibility of ending the conflict with a compulsory licensing system, in which statutory royalties would be paid to rights holders. While there is precedent for this in copyright law, it would limit the control that rights holders have over uses of their works, and is thus unpopular in the entertainment industry. Yet the Napster trial judge seemed to hint at such an outcome by saying, "There's no such thing as a free lunch, but sometimes lunch is more expensive than it should be."

For SIGGRAPH's August, 2001 conference in Los Angeles, Public Policy chair Bob Ellis has organized a high-quality panel session about these and related issues. More details on the session can be found in the first section of this column.

3. UCITA Diary #1

Bob Ellis

The Uniform Computer Information Transactions Act (UCITA) was featured in the November 2000 and February 2001 columns. Just to remind you, UCITA is the model law that would make "shrink-wrap" and "click-on" software licenses enforceable. Even though most software "sold" today is already licensed, these licenses have not had a good track record in the courts of being held enforceable. This is because these licenses are contracts and a requirement for a binding contract is that all parties must agree on the terms first. When software is purchased under these licenses, the customer typically does not have an opportunity to agree to the terms before making the purchase.

UCITA originally started as an update to the Uniform Commercial Code (UCC) called UCC2B. The UCC is a set of model laws, which if passed by all the states, insures that commercial transaction law is uniform throughout the U.S. The UCC is the responsibility of the National Conference of Commissioners on Uniform State Laws (NCCUSL - http://www.nccusl.org) and the American Law Institute (ALI - http://www.ali.org). The ALI did not agree with UCC2B and withdrew its support. NCCUSL then renamed the model law UCITA and proceeded to work towards its passage in all 50 states.

Because of a number of restrictions on the licensee, UCITA has been generally been opposed by almost all users of software and supported primarily by the software publishers. The history of UCITA in the states has been checkered. At this time, only two states have passed UCITA: Virginia and Maryland. Both states have made changes, which means that it's not uniform any more. Several states have declined to pass UCITA and several states are currently considering it.

While personally opposed to UCITA, we do not take positions on policy issues in the SIGGRAPH Public Policy Program, so our activities have been limited to education. Other groups, such as the IEEE-USA, have actively gone on record as opposing UCITA and have mounted a campaign to oppose its passage (http://www.ieeeusa.org/forum/grassroots/ucita/index.html).

I was roused out of my rather passive approach to UCITA when it was introduced into the current legislative session of my home state. These "UCITA Diaries" will be my reports on what has happened. I'm not going to identify the state in order to give me more freedom to discuss the activities here.

While thinking about what I could do, I received an email from Barbara Simons, ACM Past President and Co-Chair of USACM informing me that an organizing meeting was scheduled. This was good news. In affecting public policy, timing is everything. If you approach policy makers too early, they aren't worried about it yet. If you get to them too late, there's nothing anybody can do about it. It's a full time job that requires special knowledge (access to the right people doesn't hurt either) to track the progress of prospective legislation and provide appropriate information.

The local group consists of attorneys, lobbyists, representatives from government organizations and government affairs people from companies and associations. Because I'm retired, I don't represent anybody but myself. While many of the others are highly informed about the implications of UCITA, only one other person beside myself has a technology background.

Because the others all represent "special interests", I decided to represent the only group of which I was an obvious member: consumers. The only other consumer representative is the attorney general's office. The other members of the group welcomed this position because a "concerned citizen" offered a contrast to the others with their paid status.

Policy makers love to hear from the people. Unfortunately for most individuals, they like to hear from three types of people: campaign contributors, representatives of groups, and constituents. This means that the doors get opened to people from one of these groups. The group opposing UCITA is in the process of having meetings to present our information and position. Having your facts in order is essential. A policy maker may need to be convinced of your position; or, one already convinced needs material to help them convince their peers. At any rate having definite data at hand will convince policy makers that you are worth listening to. Fortunately, our group has some very knowledgeable and effective people.

What we've found so far is that once the full set of UCITA issues are presented, it takes very strong proponents to keep UCITA alive. In Virginia, for example, it was passed (and then only with modifications and a one year delay to study the implications) because of the desire to make the state a good place to do business for software publishers. Having AOL located there didn't hurt either. Most states don't have very many prominent software publishers, but they usually have many large businesses that use software and who are opposed to UCITA. Libraries would face special problems under UCITA and are very strong opponents. Finally, consumers are a big force in the economy and, if united, can present a very strong position.

Because policy activities are greatly aided by brief written materials, I've prepared three pieces. The first is a "talking points" document that lays out the problems with UCITA from a consumer perspective. The second is a letter from constituent to legislator. The third is a model letter to the editor that is currently under development. The first two appear below.

The consumer "talking points" document focuses on four problems with UCITA. First, UCITA turns what consumers typically think of as a simple purchase agreement into a complex contract which consumers do not have the ability to negotiate. Second, the "self-help" provision of UCITA, which requires licensees to provide a back door into their computers so the software publisher may disable the software if some provisions of the license are violated (for example, failure to make a periodic license renewal or update), presents unacceptable security risks to the typically technologically naive consumer. Third, UCITA can prevent full disclosure of the software product by not requiring the publisher to document defects already known to exist and by including terms which forbid the publication of reviews of the software without prior approval. Finally, UCITA provides that the software publisher can choose the venue where a licensee must bring action against the publisher; this might preclude the consumer from getting maximum assistance from their state's attorney general's office and would entail substantial personal expense. Legislators like to hear from constituents. Unfortunately none of my legislators are members of the committees which will hear the bill. Nevertheless, I have written a letter to all of them outlining my position. I modified the model letter provided by IEEE-USA.

Letters to the editor of newspaper can be an effective policy tool. While many papers will print letters that are not in response to something that has appeared in the paper, they like the other kind better. UCITA has had no exposure in the press here. In part, it's because the only legislative action taken to date has been to assign the bill to committees. No hearings have yet been held. Also, many people think of UCITA as either dull commercial legislation and not something of interest to the general public or esoteric high tech stuff. Little do they know! Sooner or later, this will hit the press (perhaps because of the activities of the lobbyists) and I need to have a letter almost ready to go. As the title suggests, this is the first in what I hope will be a series of reports on my activities. Stay tuned.

UCITA References:

Americans for Fair Electronic Commerce Transactions -
http://www.4cite.org/
Association of Research Libraries -
http://www.arl.org/info/frn/copy/ucitasum.html
Bad Software -
http://www.badsoftware.com/
Computer Professionals for Social Responsibility -
http://www.cpsr.org/program/UCITA/ucita-fact.html
Digital Commerce Coalition -
http://www.ucitayes.org/
Institute of Electrical and Electronics Engineers (IEEE) on UCITA -
http://www.ieeeusa.org/forum/grassroots/ucita/index.html
Federal Trade Commission -
http://www.ftc.gov/be/v990010.htm
National Conference of Commissioners on Uniform State Laws -
http://www.nccusl.org/
UCITA News -
http://www.ucitanews.com/
UCITA On-Line -
http://www.ucitaonline.com/
USACM on UCITA -
http://www.acm.org/usacm/IP/#ucita

Why UCITA is Bad for All Consumers

Bob Ellis - Concerned Citizen
February 2001

Summary

While there are many problems with UCITA that affect all users of software products, consumers are particularly hard hit. This bill, if enacted, can legally prevent consumers from learning about a prospective software purchase including any defects known to the software manufacturer. UCITA places expensive, if not impossible, requirements on consumers seeking redress for problems with the software.

Currently, when many consumers purchase software, they believe that they own the software, subject to copyright laws. After all, they do not license the right to read a book, listen to a CD or watch a videotape; they purchase those items outright. In fact those consumers have only purchased a license to use the software. Typically, if the consumer does not violate copyright laws, the difference is not distinguishable. Under Representative XXX's bill (H.B. XXX, "U.C.I.T.A."), the laws concerning software licenses will dramatically favor the software companies. This is particularly offensive given that the average consumer does not have the means to negotiate fair terms. Additionally, consumers are not generally technologically sophisticated and are unaware of the privacy and security issues that will be significantly impacted when using software if H.B. XXX becomes law.

UCITA makes what consumers think is a sale into a complex contract

The fundamental problem with UCITA is that it permits enforcement of "shrink-wrap" and "click-on" licenses (called "mass-market licenses" in UCITA). UCITA turns what many consumers believe is a simple purchase arrangement into a complex contract called a license. The manufacturer may use this license to levy burdensome requirements on the consumer such as requiring approval for disposing of the software even by gift or requiring periodic renewals of the license. This situation is particularly troublesome because the consumer is not able to negotiate special terms and conditions or even examine the license before the purchase. Consumers frequently can't even vote with their purses due to the dominant market positions of certain manufacturers.

UCITA's "self-help" provisions present unacceptable security and privacy risks to consumers

The UCITA requirement that the consumer provide access (for example to permit the manufacturer to disable the software if the consumer has not renewed the license) into their computers presents tremendous risks to the technologically unsophisticated consumer. The timing is particularly inopportune because it comes just as consumers are moving to broadband Internet services. Broadband connections to the Internet already present significant opportunities and incentives for hackers and crackers to attack consumers' computers in their homes without the addition of a well defined access mechanism.

UCITA prevents full disclosure of the software product to consumers

Not only does UCITA allow the software manufacturer to not disclose defects known to the manufacturer in advance, it can be used to specify licensing terms which prohibit the publication of reviews of the software which are critical in nature. This puts the consumer, who generally does not have the capability to test the software before accepting it, at a considerable disadvantage in making a purchasing decision.

UCITA shifts the jurisdiction of disputes to a location of the manufacturer's choice

Consumers are used to getting protection against manufacturers' actions and product deficiencies from their state's attorney general. UCITA would permit the software manufacturer to require consumers to bring all claims in a state or country of the manufacturers own choosing, regardless of the cost of the software. This would require consumers to undertake expensive and burdensome efforts to protect their rights. In fact, in California, a software company litigated the issue of venue with a woman who purchased and attempted to use her software in California, attempting to make the venue a state on the East Coast. Because all of this was over a $65 software purchase, it is not hard to believe that no other consumer would ever try to initiate such an action.

About the Author

Bob Ellis

Bob Ellis is a concerned citizen, not a lobbyist nor the representative of any industry or group. Bob and his wife Margery have lived in XXX since 1995. He retired in 1993 as Sun Microsystems' representative on the Technology Committee of the Computer Systems Policy Project (CSPP - an industry policy study organization) and co-manager of Sun's university research program. Previously, he held computer graphics software development and management positions with Sun, GE-Calma, Atari, Boeing and Washington University (St. Louis, MO). He received BS and MS degrees in Electrical Engineering and Computer Science from Washington University (St. Louis). Bob currently does work as a volunteer for technical societies; he is a member of the Association for Computing Machinery's (ACM) U.S. Public Policy Committee (USACM) and serves as the Chair of the Public Policy Program of ACM's Special Interest Group on Computer Graphics and Interactive Techniques (SIGGRAPH). As a service to the community, he is currently giving a series of presentations to the computer-using general public on the implications of digital technology policy issues.

A Letter from a Constituent

February 15, 2001

Representative XXX
XXX State Capitol

Dear Representative XXX: I am writing as a constituent to urge you to oppose HB XXX, the Uniform Computer and Information Transaction Act should it come before you during the legislative session. As a retired software development manager with 35 years of professional experience and as a consumer who uses computers and the Internet extensively, I am excited about the opportunities these capabilities will bring to the XXX economy. However UCITA is not the answer. If passed, I believe it will have the opposite effect by hurting XXX consumers and making it more difficult for business users of software to do business.

By changing what should be considered a sale into a licensing transaction, UCITA encourages the broad use of "shrink-wrap" software and "click-on" licenses whose terms become fully enforceable when the customer opens the package or clicks the button on-line. The customer cannot negotiate the terms even if he or she is aware of them. Similarly, the vendor can reserve the right to change them at any time without what reasonable people would consider effective notice.

Software publishers will be able to enforce contract provisions that are onerous, burdensome or unreasonable, such as disclaiming any liability for failure to disclose known defects or requiring permission to dispose of the software even as a gift or donation. The purchaser bears the burden of proving that these provisions are unconscionable and may not even be able to seek remedy in their own state. UCITA can be used to restrict the practice of "reverse engineering" to develop compatible or complimentary products; it can also be used to prohibit any reviews of the product that may contain negative comments on the software. UCITA requires that purchasers have a "back door" into their computer to provide the publisher access, a process that compromises the security of their computer and the privacy of their information.

UCITA is also so broadly drafted that it may ultimately affect transactions of all types of goods where software is involved (e.g., a car, house, kitchen appliances, etc.). UCITA has been actively opposed or criticized by over twenty-five state attorneys general, businesses which use software, software developers, consumer advocacy organizations, library associations, writers and photographers, the Federal Trade Commission, the American Law Institute and the Institute of Electrical and Electronics Engineers - United States of America (IEEE-USA). Please oppose this legislation until these problems are fully addressed and take action to ensure that UCITA provisions adopted in other states do not adversely affect us here in XXX.

Thank you for you attention to this matter. If I may be of further assistance in this matter, please do not hesitate to contact me.

Yours Truly,
XXX

4. Further Dialog, from February 2001 column: electronic signatures, UCITA, DMCA

Bob Ellis

In reading this section on our third online survey in the February 2001 column,

"The respondent probably was referring to the Digital Millennium Copyright Act (of 1998) when saying: "The Electronic Signature Act represents a radical increase in the power of copyright holders, giving them far greater ability both to restrict 'fair use' and reverse engineering and to criminalize minor individual copyright violations ... (resulting in) the potential for prohibitions on reverse engineering to stifle research and development . . . ",

reader Dan Burk had the following to say:

"I just looked over the policy survey results in your column on the ACM SIGGRAPH site -- in summarizing the written responses, you mention one comment regarding the "Electronic Signatures Act" and say that the person was probably thinking about the DMCA. I think it is pretty clear that the commentor was actually talking about UCITA, and is quite correct: it is a major, major issue for SIGGRAPH, and one that is worth investing some effort to raise consciousness about."

In my response to him, I said:

"Interesting observation - thanks. I guess it could be either (DMCA or UCITA). Don't they both contain provisions which could be said to "restrict 'fair use' and reverse engineering and to criminalize minor individual copyright violations."?"

To which he replied:

"UCITA and the DMCA work hand in glove -- I copy protect my data and attach some sort of "click wrap" license to which you have to agree before you get access -- the license is enforceable under UCITA -- if you hack around the technical protection instead of agreeing to the license, you're a DMCA violator."

"The giveaway in the comment was "Electronic Signatures" -- UCITA is often bundled with and confused with UETA, which covers digital signatures."