Jean Cantrell
Director - Government and Industry Affairs
Dun & Bradstreet
1001 G St. NW, Suite 300 East
Washington D.C. 20001
voice: (202) 393-5000 fax: (202) 393-5412

22 November 1996

Ms. Carmen Guzman Lowrey
Associate Commissioner for Governmental and International Affairs
United States Patent and Trademark Office
Crystal Park Two
2121 Crystal Drive
Arlington, Virginia 20231

Re: Comments of the Dun & Bradstreet Corporation on the Proposed Treaty for the Sui Generis Protection of Databases

Dear Ms. Lowrey:

This letter is submitted by The Dun & Bradstreet Corporation ("D&B"), in response to the 10 October 1996 Request for Comments on the Chairman's Text of the Proposed Treaty for the Sui Generis Protection of Databases, which is currently scheduled for consideration at a Diplomatic Conference of the World Intellectual Property Organization in Geneva from 2 to 20 December 1996.

D&B appreciates this opportunity to express its views on a matter of potentially great importance to the future of its industry and to continued leadership by the United States in the creation and dissemination of information and ideas. Although much of what follows is cautionary in tone and substance, D&B (a) supports continued deliberate and intensive consideration of the important issues at stake in the database protection proposal and (b) appreciates the work that you and your colleagues have done to bring attention to these issues.

I. INTEREST OF THE DUN & BRADSTREET CORPORATION.

D&B just completed a substantial corporate restructuring, in which several business units were spun off into two newly independent, public companies: Cognizant Corporation and ACNielsen Corporation. After that restructuring, D&B remains a leading firm in the field of business information. Its activities include creating and disseminating the Dun & Bradstreet business credit ratings, the ratings business of Moody's Investors Service, and the yellow pages publishing and sales business of The Reuben H. Donnelley Corporation. The operating units of D&B are firms directly engaged in compiling databases and making the information in those databases commercially available to users. Thus, D&B is a prominent member in the class of

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intended beneficiaries of the protections proposed to be adopted in the database protection treaty, and certainly fall into the category of "interested parties" from which comments have been invited.

D&B is a member of the Information Industry Association ("IIA"), a trade association that has played a prominent role in advocating adoption of sui generis database protection, both in domestic US legislation and by international treaty. D&B supports IIA's efforts to focus attention on the issues relating to database protection but does not favor IIA's call for immediate adoption of the proposed database protection treaty.

II. SUMMARY OF D&B'S RECOMMENDATIONS.

First, D&B fully supports careful consideration of the potential costs and benefits of sui generis database protection. D&B may in the future support some form of additional legal protections for databases. D&B believes, however, that neither the overall question of sui generis database protection nor the specific provisions of the proposal in the current WIPO draft has received sufficient review and analysis in the US to justify immediate adoption of the proposed database protection treaty.

Second, given the uncertainties and conflicting views about the costs and benefits of the proposed treaty, and the type of legislation contemplated by it, it is especially important to note that D&B - a major US-based firm in the database industry - knows of no exigency that would require immediate action on these issues at the December Diplomatic Conference. Nothing is likely to occur over the next year or so that would materially reduce the efficacy of existing copyright, contract, administrative, and technological protections for databases.

Third, several interested parties, particularly representatives of the scientific and educational communities, have raised genuine concerns that the legislation contemplated by the proposed treaty would unreasonably curtail access to basic factual data and thereby undercut the very purpose of intellectual property protection-the promotion of the free flow of information and ideas, of robust, free, and creative expression, and of science, invention, and the useful arts. It would be prudent to take time to ensure that the proposal, as written or amended, will in fact promote rather than weaken this fundamental purpose, especially as there is no significant evidence of the immediate need for the treaty.

Therefore, D&B respectfully urges that the Untied States Government (1) support intensive discussion of the proposed database treaty at the Diplomatic Conference and (2) oppose any effort to bring the treaty to a vote. If a vote is nonetheless taken, the US should oppose the adoption of the database treaty at this time.

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III. US SUPPORT FOR THE ADOPTION OF THE PROPOSED DATABASE PROTECTION TREATY WOULD BE PREMATURE BECAUSE AFFECTED INTERESTS IN THE US HAVE NOT HAD AN ADEQUATE OPPORTUNITY TO CONSIDER, DEBATE, AND FORM A CONSENSUS ON THE ISSUES PRESENTED BY THE DATABASE PROTECTION PROPOSAL.

D&B respectfully submits that the newness of the database proposal and the evident uncertainty about the form and the substance of the rights and obligations it would create, as implemented in national legislation in the US and elsewhere, all counsel that the database proposal be carefully discussed, but not voted upon, at the December Diplomatic Conference. [1]

D&B representatives attended the 12 November 1996 public briefing on the three treaties scheduled to be discussed at the December Diplomatic Conference, a summary of which appears in the 14 November 1996 edition of BNA's Patent, Trademark & Copyright Journal. The issues raised by these treaties discussed at that briefing are all important so it is significant that the overwhelming majority of the questions raised and discussed at that four-hour briefing related to the database proposal. D&B understands that a similar level of concern was expressed at the African and Latin American regional briefings conducted by Mr. Liedes. This focus is not surprising, given the relative novelty of the database protection issues in comparisons to those at issue in the proposed Berne Convention protocol and the proposed New Instrument. The potential adoption of the database protection provisions has been on the agenda of even the most involved persons and parties for barely a year and had been the subject of little public discussion in the U.S. before the single four-hour session on 12 November.

From the comments made at the 12 November briefing, and from other commentary circulating in the database industry and the broader community of commercial information providers and users, it is clear that there are deeply held concerns and conflicting viewpoints about the database proposal and its potential implications for commercial, scientific, and educational interests in the U.S.[2]

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For example, Chairman Liedes said on 12 November that article 5(1) of the proposed treaty contemplates the adoption of limitations-such as the "fair use" principle embodied in US copyright law, 17 U.S.C. section 107-upon the rights that the treaty would confer on database proprietors. The fair use principle of US law itself reflects the notion that some uses should be permissible because they do not unreasonably detract from the proprietor's economic interest and incentives. This aspect of the proposal needs far more attention and explanation than it has received to date.

At the 12 November briefing, questions also arose regarding the legal and economic implications of the proposed database treaty for infrastructure providers. Those are questions of particular importance as the Internet and related technologies, still in their infancy, continue their rapid development and evolution. Uncertainty as to legal rights and obligations could disrupt the progress now ocurring.

Chairman Liedes noted at the 12 November 1996 briefing that experts in the field of intellectual property rights, especially in Europe, have been considering the issue of sui generis (e.g., outside the scope of copyright) protection for databases for at least six or seven years. Chairman Liedes noted further that the European model apparently followed in the proposal now being discussed had its origins in earlier domestic laws of the Nordic countries (such as Chairman Liedes' home country, Finland). These issues have received dramatically less attention in the US, where particular constraints-such as the Patent and Copyright Clause of the Constitution-present unique issues and require careful public evaluation.

The traditional approach to intellectual property issues in the US has typically involved thorough (and, at times, prolonged) dialogue among the interested parties and the legislature in an effort to reach an outcome that serves the best interests of the US public. In the case of sui generis database protection, that process has not had a chance to occur.

With the clearer understanding of the proposal and the issues it raises that would result from discussion at the Diplomatic Conference, interested parties in the US could then undertake the traditional efforts at understanding, consensus-building, and compromise that have been the hallmarks of intellectual property legislation in the US. The necessary deeper understanding could best be developed by opening the issues to widespread public debate through the usual means by which proposed laws are debated- legislative hearings and public exchanges of views within trade associations, at conferences, and in the press. If, after these domestic processes have run their course, some form of additional database protection treaty seems advisable, there will be ample opportunity for discussion, negotiation, and adoption of such a treaty at one or more future WIPO Diplomatic Conferences.

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IV. THERE IS NO APPARENT REASON TO RUSH TO A VOTE ON THE DATABASE PROPOSAL.

It is important to note the absence of any identified reason to rush to adopt the current database protection proposal. D&B is not aware of any commercial or technological threat requiring immediate action to which adoption of the proposed treaty would be a necessary or appropriate response.

As exemplified in Chairman Liedes's responses to questions at the 12 November briefing, the databases typically identified as being the objects of sui generis protection under the proposed database treaty are those that contain basic factual and public domain data. In the US, for example, those are the only kind of databases likely to fall outside the protection of the copyright laws as defined in Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991). Where the contents of a database - even if comprehensive and composed of numeric entries - reflect some judgment or creativity, existing US law already affords protection against substantial copying. CCC Information Services, Inc. v. Maclean Hunter Market Reports, Inc., 44 F.3d 61 (1994), cert. denied, 116 S. Ct. 72 (1995).

Two reasons for immediate action on the database proposal have been advanced by its proponents. First, proponents have publicly argued that the provisions of the European Union's "Database Directive" contemplate national legislation in the EU countries that would discriminate against proprietors of databases that are nationals of countries that do not have in effect domestic legislation comparable to that mandated by the Database Directive. That does not seem to be a very serious problem, since no existing rights of US database proprietors would be impaired. Even if it were a serious problem, the proposed treaty would not solve it, since only the adoption of domestic US legislation would suffice, and that action can be taken, if necessary, as easily without as with an international treaty. That such legislation was actually introduced in the last Congress, and attracted little attention or support, strongly suggests that there is no great sense of urgency to have such legislation enacted..

The second concern typically cited is international piracy. However, D&B knows of no commercially significant piracy of US-owned databases currently ongoing that would be meaningfully arrested by the early adoption of the proposed treaty. Indeed, when asked at the 12 November briefing to identify concrete examples of the problems to which the treaty was to be a solution, even Chairman Liedes had to resort to a hypothetical example involving soil temperature data. In short, there is no apparent crisis or emergency necessitating early adoption of a sui generis database protection treaty.

Today, D&B finds the existing combination of copyright law, contractual safeguards, administrative practices, and technological security to be adequate to protect its commercial

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interests. These existing protections, together with evolving means for encryption of data, are likely to suffice for the time period necessary for the careful evaluation of the additional and alternative protection contained in the proposed database treaty.

V. CARE MUST BE TAKEN NOT TO UPSET THE DELICATE BALANCE BETWEEN THE RIGHTS OF DATABASE PROPRIETORS AND BROADER SOCIETAL INTERESTS IN THE FREE FLOW OF INFORMATION.

There is a very real and, to date, unquantifiable danger that the legislation contemplated by the proposed treaty would unreasonably curtail access to basic factual data. As a database proprietor, D&B would naturally tend to welcome greater protection against unpaid exploitation of its work, assuming that the costs of such protection do not outweigh the benefits. However, D&B - like most database proprietors - is also a database user. Whether the regime contemplated by the proposed treaty would be beneficial on balance to firms that both produce and use information cannot be determined on the basis of the limited understanding of the proposal currently available to the industry.

These concerns about "locking up" factual data seem especially acute when expressed by the scientific and educational communities. Progress in all areas of human endeavor depends fundamentally, on access to information, increasingly on a global scale. Given the complete absence of any proof that the flow of such information is inhibited today by the absence of the proposed treaty, it would be wise to take the time to ensure that the proposal will, in fact, help rather than hinder the advancement of science and education, the flow of creative expression, and other important societal interests.

Intellectual property protection around the world generally embodies the notion of a limited monopoly for a limited time, tailored to the goal of protecting an economic incentive to create useful works and to promote the flow of information and creative expression. Sound public policy should ensure that the monopoly conferred is no greater, in scope and duration, than is necessary to create the desired incentives. So far as can be determined, the proponents of the current proposal have not advanced any evidence that existing economic incentives are inadequate. The costs and benefits of the proposed new protections are not easy to measure but some estimate is necessary to determine whether, on balance, they help or hinder legitimate commercial interests and societal goals.

In a world of dynamic databases, a literal reading of the provisions of the database treaty could support the contention that the contents of a regularly updated database, no matter how old, are essentially subject to perpetual protection - 15 (or 25) years form the last update could be a very long time, and could mean that data many decades old would still be out of the public

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domain so long as some money could be derived from selling access to them. By contrast, patents often expire while they are still valuable, reflecting a societal balancing between the patent owner and the public. The proposed new protection seems, in this respect, to be a far more expansive form of protection than is available under traditional forms of intellectual property protection (such as copyright and patent). D&B recognizes the force of the argument advanced by proponents of the current proposal [3] that the additional elements of proof as to unfair competition that would be needed to establish database protection limit the protection, but there needs to be more and clearer discussion of just how and to what extent those additional elements would limit protection in practice.[4]

CONCLUSION

For all of the foregoing reasons, D&B respectfully submits that the United States Government should support thorough discussion of the proposed database treaty at the Diplomatic Conference but should strongly oppose any effort to bring the treaty to a vote and, if a vote is nonetheless taken, the US should oppose the adoption of the treaty at this time.

ENDNOTES:

[1] As a practical matter, there will be relatively little time available for discussion of the database issues at the Diplomatic Conference. Approximately 15 working days have been allocated to the conference. Three days will probably be devoted to procedural matters, leaving only 3 or 4 days of substantive discussion for each of the three treaties on the agenda.

[2] See, for example, the exchange of views between the library and scientific community (including the National Academy of Sciences, the National Academy of Engineering, and the National Institute of Medicine) and the Association of Research Libraries on the one hand, and a subgroup of commercial database vendors represented by IIA on the other.

[3] See, e.g., Database Protection-the Time is Now", posted at http://www.infoindustry.org/ppgrc/prc/prdoc005.htm.

[4] The extent to which such "unfair competition" protection for materials otherwise in the public domain would be permissible under the US constitution is an interesting and potentially unsettled question after Feist, which acknowledged the continuing vitality of the doctrine of International News Service v. Associated Press, 248 U.S. 215 (1918), see Feist, 499 U.S. at 354 n.*, but left unanswered just how that doctrine could coexist with a constitutional proscription on intellectual property protection for facts. Careful consideration needs to be given to the question whether the US Constitution would permit enactment of domestic legislation embodying intellectual property rights on material outside the scope of patents and copyrights.

Respectfully submitted,

Jean Cantrell