In summary, the Registrar recommended that congress should: (1) amend section 110(2) of the Copyright Act to bring it into the digital age, (2) clarify that fair use is fully applicable in the online environment, and (3) defer consideration for the need for a stand alone distance education exemption until newly emerging licensing schemes and technologies are in place that can limit delivery of distance education courses to enrolled students and the students’ ability to engage in unauthorized copying and downstream distribution.

Background

In April of 1998, Senator Orrin Hatch (R-UT), chairman of the Senate Judiciary Committee, called representatives of content owners, educators, and librarians together in an effort to agree on the elements of a new distance education exemption that could be included in the DMCA. While progress was made, the two groups could not reach an agreement largely because of uncertainty about whether technology exits to ensure that only enrolled students are able to access copyrighted material incorporated in distance education courses and that the students would not be able to engage in unauthorized duplication and retransmission of the copyrighted material.

In response to the parties’ inability to reach agreement, the Senate Judiciary Committee added Section 403 to the DMCA directing the Registrar to send Congress by April 28, 1999 her recommendations on what limitations should be imposed on the exclusive rights of copyright owners to promote digital distance education while maintaining the Copyright Act’s balance between the rights of copyright owners and the needs of users of copyrighted works. In developing the recommendations, Section 403 instructed the Registrar to consider:

• the need for an exemption from the exclusive rights for online distance education,
• the categories of works to be included in a distance education exemption,
• whether appropriate quantitative limitations on the portion of the work that may be used should be imposed,
• the parties entitled to use the exemption,
• whether and what types of technological measures to limit access, reproduction, and retention of protected works made available under the exemption should be required as a condition of institutional eligibility to use the exemption,
• the extent to which the availability of licenses to use copyrighted works in interactive, digitally delivered distance education should be a factor in evaluating the need for an exemption, and
• other interactive, digital distance education issues that the Registrar considers relevant.

Findings. The Registrar’s key findings about distance education include the fact that:

• distance education is a "vibrant and burgeoning field",
• distance education is at a "particularly critical point in time",
• distance education is rapidly expanding because of the use of digital technologies,
• the new technologies provide greater "interactive experience that more closely parallels face-to-face teaching",
• the new technologies have made distance education courses "more convenient and better suited to the needs of different students",
• distance education is "reaching wider audiences, covering all segments of the population",
• the postsecondary audience is increasing at the fastest pace because of distance education’s "responsiveness to the needs of an older, non-traditional student population",
• the audience also includes professionals seeing professional development or training courses and retirees,
• the expansion of distance education has led to changes among the providers of the instruction, "with courses offered by both nonprofit and for-profit entities, on both a non profit and for-profit basis, through varieties of partnerships among educational institutions and corporations",
• many educational institutions have had "recurrent problems with licensing for digital distance education" (primarily difficulty in locating the copyright owners, tardy responses, or unreasonable costs),
• educational institutions commonly "limit access" to distance education courses to "students enrolled in a particular class or institutions" through the use of one or more of the following technologies – firewalls, passwords, IP address and domain name screening, hardware connections, encryption or the use of CD-ROMs for delivery,
• the federal government has actively promoted distance education in recent years through the enactment of new student aid rules and funding programs, and
• current copyright law does not adequately or fully address the needs of distance education or content owners.

Recommendations. The Registrar concluded that some change in copyright law was needed now and that the further action should deferred for a few years to assess the impending impact of emerging protective technologies and easier licensing schemes on distance education.

Section 110(2). The Registrar concluded that in 1976, when Section 110 was adopted, it was the intent of Congress that the face-to-face teaching and transmission provisions of Section 110(1) and (2) together would cover "all of the various methods by which performances or displays in the course of systematic instruction take place." Section 110 provides two exemptions from the exclusive rights of copyright owners for certain types of educational performances and displays by nonprofit educational institutions. Section 110(1) is the broader provision permitting the performance or display (but not reproduction or distribution, or creation of derivatives) of any type of copyrighted work in face-to-face teaching situations and, accordingly, it does not apply to distance education. Section 110(2) is narrower, permitting the display of any type of work but the performance of only non-dramatic literary and musical works via open or closed circuit instructional broadcasting. To be eligible under Section 110(2), the transmission must (I) be part of the systematic instructional activities of the nonprofit and directly related or of material assistance to the teaching content and (ii) be intended primarily for reception by students located in a classroom or similar place devoted to instruction who, because of disabilities or other special circumstances, are not able to attend regular daytime classes at a campus. The narrow language of Section 110(2) and the nature of digital technologies limits the applicability of Section 110(2) to digital distance education.

The Registrar also concluded that the intent of Congress in Sections 110(1) and (2) to permit certain uses of copyrighted works in connection with education in classrooms via transmissions without resort to a license or fair use has been unbalanced because the technology of distance education has so fundamentally changed since 1976. Report at 144-145. To reestablish the balance and to bring Section 110(2) into the digital age, the Registrar recommended the following actions to Congress:

1. Clarify through legislative history that both digital and analog means of "transmission" are covered by Section 110(2),
2. Expand the coverage of rights exempted by the Section 110(2) to the extent technologically required by adding reproduction and/or distribution needed to accomplish digital transmission. This includes the making of transient copies created as part of the automatic technical process of digital transmission of an exempted performance or display,
3. Specify that the performance or display must be "mediated" – made by or at the direction of an instructor to illustrate a point in, or as an integral part of, a class session in a particular course. In other words, the use of the work would have to be an integral part of the distance education class, and controlled by the instructor, rather than for supplemental or background information. The intention would be to permit a performance or display that is analogous to activity that would occur in a live classroom setting.
4. Eliminate the physical classroom requirement, but limit the benefit of the amended provision to students "officially enrolled in the particular course for which the transmission is made." Add a condition that the transmission must be made "solely, to the extent technologically feasible, for reception by the defined class of eligible recipients",
5. Add new safeguards to counteract the new risks to the integrity of the copyrighted works used under Section 110(2). These safeguards could include requirements to (a) retain transient copies only for the period of time "reasonably necessary to complete the transmission", (b) require institutions to provide students, faculty, and staff with information that describes and promotes copyright law compliance, and notify students that materials used in a course may be covered by copyright, and (c) employ technological measures that "reasonably prevent" unauthorized access and dissemination of works after they have been transmitted in digital form,
6. Continue to limit eligibility to use Section 110(2) to nonprofit educational institutions,
7. Expand the categories of works covered by the Section 110(2) performance exemption beyond nondramatic literary and musical works, but with limitations and safeguards to protect the integrity of and market for the work. For example, Section 110(2) could be broadened to (a) permit the performance of only "reasonable and limited portions" of additional categories of works, including audiovisual works; but require that (b) the portion performed must be the subject of study in the course, not for the entertainment of the students, unrelated background or transition, and
8. Require that the performance or display of a work must be made from a lawful copy.

Section 112(b). Section 112 governs ephemeral recordings and authorizes those the Copyright Act permits to transmit performances and displays of copyrighted works to make a limited number of copies of the works for the limited period of time needed to facilitate the transmission. Section 112(b) confers this right, in part, on nonprofit educational institutions permitted to perform or display works under Section 110(2). The Registrar’s proposed amendment to Section 110(2) would not itself permit the reproduction needed for an instructor to post the work to be performed or displayed to a site for later use by students enrolled in the course. Unfortunately, Section 112(b) has limited applicability for digital transmissions because it likely does not apply to reproductions needed to upload a work to a server and the displays of the work to students.

To permit such asynchronous digital distance education to occur, the Copyright Office recommends adding a new subsection to Section 112 that would allow an educator entitled to transmit a performance or display under Section 110(2) to "upload a copyrighted work onto a server, to be subsequently transmitted under the conditions set out in section 110(2) to students enrolled in the course." This new provision would include requirements that limit (a) retention and use of the copy solely to the entity that made it; (b) any further copies that are made; (c) the use of the copy solely for transmissions authorized by Section 110(2); and (d) retention of the copy on the server to the time needed for students to access the work during the course. In addition, the reproduction would have to be made from a lawful copy of the work, copying the work from the website to the instructor’s computer would not be permitted, and any technological protections to prevent unauthorized copying applied to the work by the copyright owner may not be removed.

Fair Use. The Registrar found that fair use is a critical tool for educators that in the proper circumstances sanctions the educational use of a copyrighted work without the permission of the copyright owner. Indeed, in the appropriate circumstance, fair use may permit the performance of more than a limited portion of a work in an educational transmission even though the use may not be permitted under Section 110(2). The Registrar concluded that there is considerable confusion and misunderstanding about fair use, noting that while fair use is a flexible doctrine, its flexibility creates uncertainty and a lack of predictability. The Registrar, therefore, recommended that Congress clarify in legislative history language the scope of fair use in digital distance education in the following manner:

1. Confirm that fair use is technology-neutral and applies to activities in the digital environment.
2. Provide examples of digital uses of works likely to qualify as a fair use, and
3. Clarify the relationship between voluntary fair use guidelines and other Copyright Act defenses, by explaining that guidelines do not have the force of law, but are intended to create a safe harbor rather than a cap on what is permitted.

In addition, the Registrar encouraged representatives of copyright owners, educators, librarians, and other interested parties to engage in discussions under the direction of Congress in that could lead to the adoption of consensus guidelines on the application of fair use to digital distance education.

Licensing. The Registrar concluded that licensing will "continue to be the rule for educational uses not covered by exemptions or fair use," such as performances of entire audiovisual or dramatic works. The Copyright Office Report suggests that Congress may want to address the issue of what happens when an educator wants to obtain permission to use a copyrighted work in a distance education class but cannot locate the owner of the work. These works are sometimes termed "orphan works." The problem will worsen with the recent extension of the term of copyrights and the fact that digital technologies have revitalized the market for some older works. The Registrar noted that Canada handles the "orphaned works" problem through compulsory licensing. The Registrar also noted that the advent of effective licensing and protective technological measures is just on the horizon and may address many of the licensing difficulties that educators described in the Copyright Office proceeding. Therefore, she recommended that Congress wait two or three years to assess the impact of these new developments before considering a new stand-alone digital distance education exemption or a legislative solution to licensing issues.

The Copyright Office’s recommendations set the framework for the real debate on copyright and distance education that will occur in Congress throughout the balance of 1999 and, perhaps, into next year. The Senate Judiciary Committee held a hearing on the Report on May 25, and the House Judiciary Committee has scheduled a late June hearing. Legislation implementing at least some of the Registrar’s recommendations is expected to be introduced shortly in both the House and the Senate. Pleas let us know if you have any questions.

Kenneth D. Salomon