The global growth of the Internet presents new challenges to efforts to safeguard the rights of intellectual property producers. While the issuance of patents may be facilitated by the new global electronic networks, trademark protections need to be extended to the Internet, and there are serious issues involving the protection of copyrighted printed and visual materials, says Bruce Lehman, an assistant secretary of the U.S. Department of Commerce and the head of its Patent and Trademark Office. Copyright protections are threatened by the ease of reproduction and worldwide distribution and by the argument that copyright laws should not apply in cyberspace.

The rise of globe-spanning communications networks -- along with the rapid growth of electronic commerce that has accompanied it -- require us to reflect and plan for new ways to protect intellectual property rights if we are to avoid major problems in the 21st century. Significantly, these are issues that cannot be solved without international cooperation.

In today's global economy, we are making great strides in protecting copyrights, trademarks, and patents. We are obliged to make these advancements, and make them quickly. Our analog world has gone digital. Digital technology and the Internet are being welcomed into our lives as enthusiastically as typewriters and photocopiers once were. Yet we need to update copyright laws in order to protect original literary and artistic works distributed over the Internet from unauthorized copying. Similarly, we must align laws governing the Internet with trademark law so that registered marks are protected from unauthorized use as domain names. And we should build upon our already strong patent laws to promote technological advancement.

A recent study by the International Telecommunications Union (ITU) reports that by the year 2001, 112 million host computers will be connected to the global information system, up from 16.1 million in 1996. That same study predicts that on-line sales will grow from $314,000 million to $357,000 million by 2001. The bulk of these connections will be in the developed world, but rapidly growing economies in Latin America, Asia, and parts of Africa are also experiencing high rates of expansion. Electronic commerce is growing rapidly, and we need to address the important legal issues that it raises so as to guarantee that the potential growth predicted by the ITU study will take place.

New patent, trademark, and copyright issues all arise within this new environment and have both domestic and international consequences.

PATENTS

The U.S. Patent and Trademark Office (PTO) sees the Internet less as a challenge than as a useful tool in managing the rapid growth of patent applications. In the United States, the number of patent applications filed is increasing by more than 5 percent per year -- or by around 10,000 filings annually. In the future, simply increasing our staff or making it operate more efficiently, as has been done in the past, will not be a realistic solution for addressing the increased workload.

Patent filings are increasing in many countries around the world. To meet this surge in the use of the international intellectual property system, the United States has proposed that the World Intellectual Property Organization (WIPO) promote the greater use of information technologies within WIPO member states and the WIPO International Bureau, with the objective of creating a secure global network that links intellectual property offices with fast, cost-effective, and secure communication. The long-term goal of this effort will be a more closely integrated worldwide patent examination and granting process. This will be the most significant means to cope with the ever-increasing levels of application filings. On the trademark side, such a network could allow the electronic filing of trademark applications within the Madrid system of international trademark registration, the exchange of trademark data bases, and the filing of protected state emblems requests.

TRADEMARKS

To understand the impact of information technology on the protection of trademarks, one has only to look at the rapid growth of the Internet and the problems associated with that growth, such as the activities of "cybersquatters" and "cyberpirates." These new categories of wrongdoers have hijacked trademarks, registered them as domain names, and demanded payment from the legitimate trademark owners before relinquishing any rights.

The Patent and Trademark Office is actively addressing a number of trademark issues relative to the Internet, including the relationship between the registration of domain names and the protection of trademarks. As a member of an intergovernmental committee -- led by the Commerce Department -- PTO is working to develop a suitable transition plan for the registration of Internet domain names. Many trademark owners are not happy with the current system and are very concerned about the protection of trademarks on the Internet. On September 30, the cooperative agreement under which Network Solutions, Inc., the current registrar, administers the domain name registration system will end. The time is short for making major decisions about a new system.

In February, the Commerce Department published a Green Paper on Internet governance that describes how the U.S. government will transfer management of the Internet domain space to a private, not-for-profit corporation. The need for change in this system has been obvious for some time. There has been widespread dissatisfaction about the lack of competition in the domain space, especially in the ".com" domain category. A proliferation of lawsuits raises the possibility of chaos as courts around the world apply different antitrust laws and intellectual property laws to the disputes that arise. The current mechanisms for resolving trademark-domain name disputes are cumbersome and expensive. As the Internet becomes more important as a business resource -- and as more of the Internet stakeholders reside outside the United States -- it is crucial to have it managed in a professional and accountable way. We want to see a system that will make electronic commerce on the Internet more trademark-friendly and therefore more consumer-friendly.

The U.S. government wants to end its stewardship of the Internet in a responsible manner. This means devising a plan for a stable transition to an accountable body. The proposal is for a U.S.-based not-for-profit corporation that will set policy for such matters as Internet protocol number allocation, the operation of the root server, development of technical protocols, and the establishment of new top-level domains to replace or add to the already existing ".com," ".edu," ".org," as well as the country-based top-level domains. The board of directors for such a corporation will be made up of representatives of Internet-related organizations and the user community. The new corporation's processes should be fair, open, and pro-competitive; its decision-making processes should be open and transparent. It should act as a standards-setting body.

We are also at a rare confluence of events in the world of intellectual property protection. In large part due to the World Trade Organization agreements, countries are rapidly improving, or in some cases establishing, intellectual property protection systems. This development presents us with great opportunities and challenges as we strive to make the most of the revolution in information technologies.

COPYRIGHTS

Modern copyright law is the creature of technological change -- from Gutenberg's movable type to digital audio recorders, and everything in between. Today, information technologies -- computer hardware and software, and communications technologies such as cable and satellites, are coming together and having an enormous impact on the ways that copyrighted works are created, reproduced, and disseminated.

Digital technology is not the first, and probably not the last, challenge to the ability of copyright owners to authorize or prohibit the reproduction, adaptation, distribution, public display, and performance of their works. Yet combining advances in digital technology with the rapid development of electronic networks and other communications technologies has greatly raised the stakes. Any two-dimensional work can be "digitized" -- translated into the series of zeros and ones that are digital code. The work can then be stored and used in that digital format. This dramatically increases the ease and speed with which it can be copied, the quality of the copies, the ability to manipulate and change the work, and the speed with which copies of it -- both authorized and unauthorized -- can be "delivered" to the public.

Works also can be combined easily into a single medium, such as a CD-ROM. This is causing a blurring of the lines between types of works. All would agree that an interactive multimedia CD-ROM with text, sounds, and still and moving images is a work, but is it a literary work or an audiovisual work or something else entirely? Answers to this question will have effects on the availability of protection internationally.

High-speed, high-capacity electronic information systems -- the information superhighways -- make it possible for one individual, with a few key strokes, to deliver perfect copies of digitized works to scores of other individuals virtually anywhere in the world. Users can "post" or upload a copy to a bulletin board or other service, where thousands upon thousands of individuals can download it -- or print out unlimited "hard" copies on paper or disks. This convergence of information and communications technologies is changing dramatically how people and businesses deal in information products and services, and how works are created, owned, distributed, reproduced, displayed, performed, licensed, managed, presented, organized, sold, accessed, used, and stored.

The international community well understood its obligation to find a solution to address this potential for massive global piracy. That solution, which took a number of years to emerge, is the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, both concluded in December 1996. These treaties, which will greatly facilitate commercial applications of on-line digital communications, were submitted to the U.S. Senate in July 1997 for ratification. The treaties, plus implementing legislation, are currently moving through the Congress.

Responding to the same concerns but taking a decidedly different approach, Senator John Ashcroft of Missouri has introduced legislation that addresses the copyright issues raised by the Internet and digital technology by seeking to clarify the liability for copyright infringement. His legislation would provide for a take-down notice procedure for dealing with infringing material, provide a conduct-oriented standard for anti-circumvention, and address issues involving fair use, distance learning, ephemeral copying, and library copying. Meanwhile, on-line service providers maintain that any final implementing bill for the two treaties must contain provisions that limit and clarify their potential liability for copyright infringement.

The Clinton administration believes that treaty implementation and liability are separate issues and that nothing in the two treaties requires Congress to specifically address the issue of liability. However, we are pleased to see these two issues addressed simultaneously so long as the consideration of the liability issue does not impair prompt consideration and passage of the implementation legislation. The sooner the treaties enter into force, the better for all of us.

Cooperation should not end, however, with the entry into force of the treaties. With the rapid growth of the Internet, we see that works can be disseminated from any country in the world to any other country in the world at the speed of light. While there will be no barriers to dissemination, there could be barriers to enforcement of copyrights if countries do not implement these treaties. Given technological advances, it is conceivable -- and even probable -- that a lax legal regime in one country could provide a haven for pirates who could undermine the market for legitimate "goods" throughout the world. Therefore, it is imperative that industries and governments around the world share in the work that still needs to done to put the principles set into the treaties into practice.

THE "FAIR-USE" QUESTION

As for the issue of "fair use" of copyrighted works, both treaties contain provisions that permit member countries to provide for exceptions to rights in certain special cases that do not interfere with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.

The explanatory notes to the treaties make clear that these provisions "permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention."

All of these changes represent practical extensions of copyright law in the international arena in order to deal with electronic reality. Yet there are those who are attempting to use this opportunity to undermine the balance necessary to the functioning of our copyright system. The vehicle for this attack is a revisionist view in the United States of fair use as a constitutional right. Their mantra is that fair use should be expanded and that everything on the Internet should be free. Yet fair use is by no means the same as free use.

At stake in this argument over fair use is the very preservation of the incentive for authors to create new works and for entrepreneurs in information-based ventures to profit from the creative expressions of the mind -- an incentive grounded in the U.S. Constitution. The dawn of the digital age is not the time to debate anew a right to take another's property and means of livelihood without compensation. What we are seeing today in some respects is no less than an attempt to establish a radical new regime that puts fair use ahead of intellectual property rights.

Some aspects of our copyright law will need to be adjusted and revised in light of the realities of the new technologies. But this has always been true. What is different and more threatening is the attempt to recast the debate in anti-property terms, as if copyright protection is an evil nuisance that can and should be banished in cyberspace.

The fallacy in this is that just because so much can be made available on the information infrastructure, this does not mean it will be, absent adequate protections for the authors and purveyors of such works. We should not lose sight of the benefits to society and creativity that flow from maintaining a fair balance between the protections given to the rights of copyright owners and the uses allowed of copyrighted works for education, instruction, and research. Any imbalance favoring one group over another will upset the delicate equilibrium achieved in the copyright law and endanger creativity and innovation. The Internet is the sum of its parts, and if we want it to be something more than a global mailbox and message system with advertising and public domain information, then we have only one choice to make it so -- strong copyright protection.