October 7, 2005

Dear Member of the Yahoo Board of Directors

We are writing to ask that Yahoo reconsider its support for a new intellectual property right for webcasting, as part of a proposed WIPO treaty on the protection of broadcast and webcasting organizations.

Background

In 1996, WIPO adopted two new treaties as part of its "digital agenda." These included the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonographs Treaty (WPPT). These treaties expanded the rights of copyright owners, and created new obligations for countries to prevent the circumvention of technical protection measures (TPMs) or digital rights management (DRM) schemes. Since then trade associations for television and radio broadcasters have lobbied for a new treaty on the protection of broadcasting organizations. The broadcasters refer to this as an "update" of the provisions on broadcasting found in the 1962 Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations.

Under Article 13 of the Rome Convention, broadcasters have special rights in information they broadcast. Specifically, they can authorize or prohibit the rebroadcasting of their broadcasts, and also the fixation, and the reproduction of those fixations, and the communication to the public of the broadcasts, in places that require entrance fees. The minimum term of the so-called "broadcaster right" is 20 years. Some 79 countries have signed the Rome Convention. More than 100 countries, including the United States, have not signed the Convention. As is permitted under the WTO TRIPS Agreement, the United States and other non-Rome countries rely upon copyright laws to protect the content of broadcasts. Some telecommunications regulatory measures also prohibit the unauthorized use of signals for broadcasting (including satellite television or radio) or cable television.

Copyright laws give extensive protections to parties that make a creative contribution to a work. The methods of doing this vary from country to country, and in some countries creative contributions from parties like performers or producers of audio-visual works are protected under a system of "related" (sometimes called "neighboring") rights that largely track copyright, but may have different characteristics, including for example shorter terms. The United States does not follow a "related rights" approach, but does have a complex system for granting copyrights to various parties that make creative contributions to works. In the United States, a work must be "fixed" to qualify for copyright protection. Works that do not have a modicum of creative contribution (like a phone book), or which are created by employees of the US federal government, are not protected material under copyright laws.

The proposed new WIPO treaty for broadcasting organizations would create a new set of economic rights for organizations engaged in broadcastings. The draft treaty follows the "related rights" model found in the Rome Convention, but with expanded and extended rights.

Unlike copyright, the so-called "broadcaster's right" is not based upon a creative contribution to a work. It is based rather on the protection of the broadcaster's investment, and is obtained simply by broadcasting the work to the public. The "broadcaster's right" is an additional IPR layer, that applies top of the copyright, if the work is protected under copyright, and it also applies to works that would be in the public domain under copyright laws.

While press reports about the WIPO treaty have typically followed the broadcasters' spin that the treaty is about piracy, the most controversial aspects concern the economic rights that are associated with persons receiving legitimate broadcasts.

Without the Rome style broadcaster's right, in cases where the broadcaster does not own the copyright, the public can reuse a work they receive from a broadcaster, if they obtain clearance from the owner of the copyright, or without permission from anyone if the work is in the public domain. Some copyright owners choose to freely give permission to use works, such as works licensed under creative commons licenses.

However, with the Rome style broadcaster right, a person receiving a broadcast must obtain two clearances, one from the copyright owner and another from the broadcasting organization, to reuse a work. And the broadcaster right applies even to information that is otherwise in the public domain.

A person who cannot receive permission from a broadcast organization to reuse a work may try to obtain a separate copy from the copyright owner, but this may be very difficult or even impossible, as many works are not "in print" or readily available to the public from a commercial distributor.

The proposed WIPO treaty for broadcasting seeks to greatly expand the scope of the Rome Convention, by doing things like extending the term from 20 to 50 years, and by adding new exclusive rights for additional uses of works. The "casting" treaty also introduces a new layer of TPM and DRM obligations that would apply even to public domain works.

WIPO has proposed the new treaty also be extended beyond traditional broadcast organizations to broadcast/cablecast and webcast organizations.

The extension of the treaty to webcasting is the most controversial. No country has specially sought to adopt special rights for webcasting, and so the treaty seeks to create a global standard on an untried and untested IPR right. The closest thing to the broadcast/webcast treaty proposal is the European Database Directive, which gives a special sui generis IP right in elements of databases, including materials that are not protected by copyright, such as facts and data. The European database sui generis IP regime is very controversial. A 1996 attempt to create a treaty for database protection was defeated at a WIPO diplomatic conference, and the United States Congress has consistently rejected efforts to create such a law here. US opponents of a sui generis database law have included many database companies, like Dun and Bradstreet and Bloomberg, and a diverse set of stakeholders, including the US Chamber of Commerce and many library, education and scientific research organizations.

The Debate at WIPO

In November 2004, Mark Cuban, the owner of the Dallas Mavericks and HDNet, and 19 other technology company leaders wrote the WIPO in opposition to the webcasting treaty. They wrote that copyright is a sufficient tool to protect creative works, and that any effort to create a new layer of IPR based upon transmissions of information would increase the costs of transactions to obtain permissions to use and reuse works. (See: http://www.eff.org/IP/WIPO/?f=20041117_open_letter.html). Leading academic scholars, as well as consumer groups and other civil society NGOs have also expressed opposition to the treaty (See: http://www.cptech.org/ip/wipo/bt/bt-signon.html, http://news.ft.com/cms/s/441306be-2eb6-11da-9aed-00000e2511c8.html, and http://www.cptech.org/ip/wipo/bt/index.html).

The lobbying for the treaty is headed by the Digital Media Association (DiMA), and in particular the DiMA head Jon Potter, and lawyer Seth Greenstein. Yahoo has been the single most active company pushing the Webcasting treaty, and many of the substantive discussions about the treaty have focused on Yahoo's desire for a new IPR right for webcasting (including but not limited to presentations such as these: http://www.wipo.int/documents/en/meetings/2003/webc_im/pdf/webc_im_ge_03_roback.pdf, http://www.wipo.int/documents/en/meetings/2003/webc_im/webc_im_ge_03_1rev.htm)

Nearly all of the major copyright owner groups have opposed the proposals to create sweeping new economic rights for broadcasters, and they also oppose the creation of the new webcasting right. (http://www.cptech.org/ip/wipo/bt/rightholder-quotes.html). The opposition from copyright owners gives lie to the assertion that the primary purpose of the treaty is to reduce the piracy of creative works - a practice the copyright owners are highly mobilized to fight. Copyright owners believe that the exclusive rights under the "casting" treaty would erode their ability to control the distribution and exploitation of their own works, and result in reduced shares of collection society revenues.

In 2004 WIPO Deputy Director Rita Hayes gave a press conference where she announced that webcasting would be dropped from the treaty. But because of the demands by the United States negotiators to include webcasting, and the global lobbying effort headed by DiMA, webcasting continues to be included in the terms of reference for a diplomatic conference (most recently in an April 13, 2005, "Document prepared by the Chair of the Standing Committee on Copyright and Related Rights. Working Paper on Alternative and Non-Mandatory Solutions on the Protection in Relation to Webcasting. SCCR/12/5 Prov.," http://www.cptech.org/ip/wipo/wipo04132005.doc) The European Commission is now moving toward the US position, by proposing a webcasting right in cases involving simulcasting on television and the Internet.

The main argument in favor of giving the webcasting organizations the new rights is to create a "level playing field" between broadcasters and webcasters. Under this approach, the objective of a technology neutral legal regime is more important than the contents of the legal regime. Harmonization is held out as an objective, even if the harmonization is in the direction of a flawed or totally inappropriate IPR regime.

The problems with the broadcaster right will become more pronounced when digital television services are expanded. But for the Internet, the problems are already obvious. The web is a much more horizontal and interactive medium than is traditional television or radio, and the sharing and horizontal distribution of works is key to the functioning of the Internet. This new permissions layer for the Internet will be costly and restrictive and harm the dynamic nature of the Internet.

Yahoo and the WIPO Webcasting Treaty Proposal

Yahoo should realize that it is shortsighted to seek a mandatory and automatic IPR right in works they do not own under copyright laws. They have many other options and methods of protecting their legitimate interests in protecting signal piracy. But to lobby for new 50-year IPR rights in order to obtain "parity," while telling the public this is only about piracy is intellectually dishonest and deceptive.

Yahoo has complex interests that will be poorly served if the Rome+ paradigm is applied to the Internet. If Yahoo wants to distribute a work that is protected by copyright, and take steps to fight unauthorized uses, it can and should obtain sufficient rights from the copyright owner to do so. However, as a creator and aggregator of content, Yahoo will find it important to obtain rights to use works it finds elsewhere. The very layer of rights that Yahoo and DiMA have been advocating in the WIPO "casting" treaty will come back to haunt Yahoo as it seeks to create new value added services that use as inputs works that are in the public domain or licensed (freely or otherwise) from copyright owners.

The fact that legal regimes will be different on the Internet than is the case for traditional television or broadcasting is not by itself a bad thing for the Internet. A legal regime for the Internet that includes the protection of copyrighted works, but which does not include a new transmission based IPR layer, is better for the Internet, and better for Yahoo.

Finally, we note that there are huge definitional problems with the term webcasting in the proposed treaty. Right now the treaty proposal would include all combinations or representations of images and sounds as protected subject matter. The European Commission negotiators say this definition extends not only to audiovisual works, but also to text and data -- essentially anything that would be put on a web page. And as television (particularly digital television) increasingly includes text and data, it becomes very hard to maintain the fiction that this new IPR regime will only apply to a limited number of audio-visual works. Indeed, the very rationale for protection -- the protection of the investment in making the information available to the public, is so broad that it is difficult to explain why the broader categories of web page content should not also be protected.

To the extent that the new IPR regime will cover vast amounts of web page content, it will not only greatly restrict access to information, but it will also threaten Yahoo's core business interests. Consider the comment by Professor James Boyle from Duke University:

"Search engine companies and content companies have realized that adding new layers of rights is not always to their benefit. Increasingly Yahoo will seek to offer search features that deal with audiovisual and other multimedia material. There are already copyright issues involved here -- such as the legality in countries without the United States' tradition of fair use of making available thumbnail images of pictures for example, or snippets of audio or visual material. Frequently getting permission from copyright holders is simply impossible from a logistical point of view. What if every digital file on the internet that had once been broadcast or webcast in any form were subject to an entirely new layer of rights, perhaps without the breathing space afforded by fair use? Now both the broadcaster or webcaster and the copyright holder could claim their rights were infringed by advanced search engine services. And how could one know whether this file -- even if it were public domain, or Creative Commons licensed -- had not been saved from a broadcast or webcast? This would hardly help companies like Yahoo. Yet it is a plausible result of the treaty under some possible outcomes."

We do not argue that the proposed treaty provisions have no plausible benefits. Supporters of the proposals can always point to some scenario where it would seem appropriate and indeed fair to protect an entity against someone free riding off their efforts to disseminate a work. However these IP regimes are never limited to a handful of cases, and in the big picture, you have to look at both benefits and costs, in the countless ways the IP regime will be applied in practice. The elimination of the public domain, or the creation of a new layer of IP rights for the transmission of works, would certainly have some small benefits. It will also have huge costs.

We are being pushed down a road that is not well traveled, and not well understood. We ask that you ask your corporate management to review its support for the WIPO casting treaty, and support also the request for a US federal register notice on this issue.

Sincerely,

James Love
Director, Consumer Project on Technology
1621 Connecticut Avenue, Suite 500, Washington, DC 20009

Letter sent to:

Roy Bostock
Chairman of the Partnership for a Drug Free America
405 Lexington Avenue, Suite 1601
New York, NY 10174

Roy Burkle
Managing Director of the Yucaipa Companies
10000 Santa Monica Blvd., 5th Floor
Los Angeles, CA 90067

Eric Hippeau
Managing Partner of Softbank Capital Partners
1188 Centre Street
Newton Center, MA 02459

Arthur Kern
Investor
72 Lagoon Rd.
Belvedere, CA 94920

Robert Kotick
Chairman and CEO of Activision
11601 Wilshire Blvd., 3rd Floor
Suite 1000
Los Angles, CA 90025

Edward Kozel
Managing Director of Integrated Finance Ltd.
100 Pine Street, Suite 2250
San Francisco, CA 94111

Terry Semel
Chairman and CEO of Yahoo! Inc.
701 First Avenue
Sunnyvalle, CA 94089

Gary L. Wilson
Chairman of Northwest Airlines Corporation
5101 Northwest Drive
St. Paul, MN 55111-3034

Jerry Yang
Co-founder and Chief Yahoo of Yahoo! Inc.
701 First Avenue
Sunnyvalle, CA 94089