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STATS, Inc. on WIPO Database Treaty and Sports Statistics (fwd)

  Info-Policy-Notes - A newsletter available from listproc@tap.org
  November 22, 1996
  The following is a letter by STATS, Inc., a well known sports 
  statistics company.  STATS, Inc. is the publisher of 11 annual 
  books on major sports, including such titles as the Major League 
  Handbook, the Pro Football Handbook and the Pro Basketball 
  Handbook.  Stats, Inc. also supplies factual information to 
  Turner Sports, NBC, the AP, ESPN, Fox, America Online and 
  Motorola, among others.  Stats, Inc. is also a current defendant 
  in a lawsuit with the NBA over the real time reporting on NBA 
  scores.  The letter says the proposed WIPO database treaty 
  "presents a very serious threat to the news reporting and 
  analytical activities of STATS and other publishers and media 
  organizations."  The letter says that the treaty could "have the 
  paradoxical effect of providing greater protection for factual 
  databases than copyright now affords to highly creative works."  
  They note that "STATS it itself a `database' proprietor. . . 
  Nonetheless, we have always believed that current law fully 
  protects our rights in those statistical collections against 
  misappropriation, and we have never felt the need for a new form 
  of protection. . . . the Proposed Treaty provides an unwise - 
  indeed, dangerous - solution to a non-existent problem. . . [and] 
  would disturb the traditional balance between private and public 
  interests developed over a century of copyright law."  
  James Love, CPT, love@tap.org; http://www.essential.org/cpt
  The letter follows:    
  html version of this letter will be posted at
  November __, 1996
  Commissioner of Patents and Trademarks
  Box 4
  Patent and Trademark Office
  Washington, D.C.  20231
  Attention:  Ms. Carmen Guzman Lowrey
  Associate Commissioner for Governmental
       and International Affairs
  Re:	Basic Proposal for the Substantive Provisions of the
       Treaty on Intellectual Property in Respect of Databases
  Dear Ms. Lowrey
  	I am president of Sports Team Analysis and Tracking Systems, 
  Inc., which does business as STATS, Inc. We are writing in 
  response to the request for comments contained at 61 Fed. Reg. 
  54159 (Oct. 17, 1996) concerning the Basic Proposal for the 
  Substantive Provisions of the Treaty on Intellectual Property in 
  Respect of Databases, commonly known as the "Proposed Treaty for 
  the Sui Generis Protection of Databases" (the "Proposed Treaty"), 
  which is to be considered at the upcoming Diplomatic Conference 
  sponsored by the World Intellectual Property Organization.
  	The Proposed Treaty presents a very serious threat to the 
  news reporting and analytical activities of STATS and other 
  publishers and media organizations.  It defines the 
  central term "database" far too broadly and lacks the traditional 
  protections for public uses of fact developed under copyright 
  law.  The Proposed Treaty, if implemented by United States 
  legislation, will restrict the production of new creative works 
  which are based on analyzing statistics and other facts 
  traditionally in the public domain.  We believe that the United 
  States delegation to the Diplomatic Conference should not support 
  the Proposed Treaty.
  The Business of STATS
  As a glance at any newspaper will prove, there is a tremendous 
  public thirst for knowledge about sports.  STATS is in the 
  business of collecting and providing sports fans 
  and media organizations with analysis and information about the 
  sports, teams, and players they follow.  The following are some 
  of STATS's current business activities:
  a.	STATS publishes 11 annual books on the major sports,
  some of which are best-sellers in their field.  These books 
  include the Major League Handbook and The Scouting Notebook for 
  major league baseball, the Pro Football Handbook and Pro Football 
  Revealed for NFL football, and the Pro Basketball Handbook for 
  NBA basketball.  These books contain detailed analysis of 
  statistics on teams and players as well as articles discussing 
  performance and trends for the upcoming season.
  b.	STATS provides detailed factual information (including real-
  time scores and statistics) and analysis of sports statistics to 
  many of the most important sports news organizations, including 
  Turner Sports, NBC Sports, the Associated Press, ESPN and Fox 
  Sports.  These organizations in turn use STATS' information and 
  analysis in on-air broadcasts to the public.
  c.	STATS provides its STATS On-Line Service to sports fans 
  who want detailed statistics and current statistical news on 
  professional teams.  In addition, we provide a similar service 
  for professionals in the sports industry called STATS Pro-Line.  
  We also provide real-time scores and statistics on major league 
  baseball and NBA basketball games to SportsTrax, a paging device 
  developed by Motorola, Inc.
  d.	STATS is a content provider to the America Online 
  ("AOL") on-line service.  We currently provide analysis and 
  statistical information on NBA basketball, major league baseball, 
  NFL football, and NHL hockey to a site on AOL.  We also provide 
  score and statistics updates for games in progress for all major 
  sports on the STATS Scoreboard, which is a "location" within the 
  STATS AOL site.  AOL recently issued an award to STATS' Scoreboard 
  as the best application of technology by an AOL content provider and 
  "Member's Choice" award as one of the top sites on AOL.
  	The "raw material" for STATS' analyses are sports statistics 
  -- the at-bats, shooting percentages, times sacked, goals scored 
  type of figures familiar to every sports fan who reads the box 
  scores.  STATS regularly accesses and uses the body of sports 
  statistics which are compiled by the major sports leagues or 
  their outside "official statisticians."  STATS also compiles its 
  own body of statistical information through STATS reporters who 
  attend games or who observe public sources such as television and 
  radio broadcasts.  Both current and historical sports statistics 
  have been a traditional feature of sports reporting and analysis 
  for decades and have uniformly been considered to be within the 
  public domain.  Without free access to this data, companies such 
  as STATS could not provide sports fans with the creative analyses 
  they desire.
  	Current United States copyright law protects the public's 
  right to access and use sports statistics and other purely 
  factual information, even when contained within an otherwise 
  copyrightable work.  Many recent court decisions have held that 
  this information is and should remain in the public domain.  
  STATS' business is dependent on continued free access to that 
  information.  Indeed, STATS is currently engaged in litigation 
  with the National Basketball Association in order to defend the 
  principle that once made public, sports statistics (including 
  those revealed within broadcasts of sports games) are in the 
  public domain and may be redisseminated at any time without 
  permission of the sports leagues.
  Objections to The Proposed Treaty
  	The Proposed Treaty threatens the business of sports 
  analysts such as STATS.  For example, the statistics which STATS 
  uses as material for its analyses would acquire the status of 
  "databases."  Were the Proposed Treaty in effect, STATS' current 
  activities with sports statistics would be very likely to violate 
  the sui generis protection granted to database owners.  The 
  sports leagues would argue that their statistical compilations, 
  including individual game scores and statistics, qualify for sui 
  generis protection, either because they are compiled through 
  their or their statisticians' "sweat of the brow", or because the 
  leagues make substantial investments in the games that produce 
  the statistics.  Although STATS compiles its own statistics and 
  analysis, it also makes use of large portions of seasonal and 
  individual game statistics compiled by the leagues.  Under the 
  Proposed Treaty, this activity is likely to be considered 
  prohibited "extraction" or "utilization" of a database.  Since 
  there is no provision for a fair use doctrine under the Proposed 
  Treaty (see below), STATS would be unable to defend on the 
  grounds that its use of league sports statistics is 
  transformative," that is, used to create wholly new works not 
  directly competing with the database itself.
  	Unless licensed to work with these statistics by the sports 
  leagues, STATS (and any other entity involved in sports analysis) 
  could well be put out of business under a sui generis regime.  
  This is no theoretical risk.  Today sports leagues make 
  substantial sums from exclusively licensing their intellectual 
  property for use within defined markets.  Under a sui generis 
  scheme, a league could similarly license chosen publishers, 
  giving them exclusive rights to use the league's database of 
  statistics in publishing books of analysis.  This arrangement 
  could effectively bar others from bringing out competitive books.
  	The same problems would affect financial analysts and 
  writers.  For example, a stock exchange could obtain sui generis 
  protection for tables of trades and statistics about prices; a 
  company could claim the same rights in its annual financial 
  statements and reports.  Here again, the power to license could 
  easily become the power to suppress, for under the Proposed 
  Treaty a rightsholder could simply deny a license to a financial 
  analyst whose studies were less than flattering.
  	Our concern is not solely for STATS' business.  The proposed 
  sui generis protection would radically transform settled law and 
  would cause serious erosion of the public domain.  At least four 
  aspects of the Proposed Treaty are particularly troubling.
  	First, the key term "database" is defined far too loosely.  
  The definition encompasses a substantial number of works which 
  are traditionally subject to the limited protections of copyright 
  law.  Any literary, musical, or audiovisual work will benefit 
  from sui generis protection, as long as it is contained within a 
  collected group of such works organized in some "systematic" 
  manner and is capable of being individually accessed.  See 
  Memorandum of the Chairman of Committee of Experts, Note 2.02 to 
  Proposed Treaty, Article 2.  Since the sui generis protection is 
  cumulative of copyright, see Proposed Treaty, Articles 1(3), 12, 
  a great many copyrighted works will also be considered 
  "databases" and protected as such.  Copyright holders will 
  naturally prefer to use broad sui generis protection, rather than 
  limited copyright law, to advance their interests.  A century or 
  more of efforts by Congress and the courts to balance the rights 
  of copyright holders and users could be swallowed up by a system 
  of sui generis protection which one-sidedly favors database 
  	Second, the proposed treaty contains no parallel to the fair 
  use doctrine in copyright.[1]  Under fair use, many uses of 
  copyrighted material are permitted where (1) the purpose and 
  character of the use fall into traditionally permitted 
  categories, such as comment, criticism, research and news 
  reporting, or where the use is "transformative" in nature, (2) 
  the work is factual rather than creative, (3) the amount and 
  substantiality of the use is not great, and (4) the effect on the 
  market for the original is not great.  17 U.S.C. Sec 107.  Other 
  commentators have suggested that use of a copyrighted work is 
  fair where the second user's work performs a different function 
  than the plaintiff's.  3 M. and D. Nimmer, Nimmer on Copyright, 
  Sec 13.05[B][1].
  	In contrast, the only defense available to the user of a 
  database under the Proposed Treaty would be the 
  "insubstantiality" of the use.  Whether the use was in the 
  interest of the public or functionally distinct from the method 
  in which the database is now used would be irrelevant.  Almost 
  any use of facts within a systematic compilation of facts can be 
  deemed to take a "substantial part" of the compilation, as long 
  it is of "qualitiative or quantitative significance to the value 
  of the database."  Proposed Treaty, Article 2(v).  The sui 
  generis proposal thus could have the paradoxical effect of 
  providing greater protection for factual databases than copyright 
  now affords to highly creative works.  Moreover, in almost every 
  litigation, the question of whether a use was "substantial" would 
  be one of fact, resolvable only at trial after substantial 
  litigation cost to the user.  This expense and risk of litigation 
  would tend to discourage even insubstantial uses of facts from 
  compilations and databases.
  	Third, the manner of adoption of the Proposed Treaty ignores 
  our country's tradition of altering intellectual property law 
  only after careful legislative attention to the effect of changes 
  on the balance between private and public interests.  For 
  example, the revisions to the copyright law that became the 
  Copyright Act of 1976 were enacted only after extensive hearings 
  and reports over a period of eleven years.  In contrast, the 
  Proposed Treaty would be submitted for ratification only to the 
  Senate, even though matters of copyright law are traditionally 
  within the consideration of the House of Representatives as well.  
  Moreover, ratification would compel ratifying states to adopt 
  national legislation implementing the underlying sui generis 
  protection.  Subsequent congressional hearings on implementing 
  legislation could not undo the fundamental flaws of the sui 
  generis concept.
  	Fourth, the proposed sui generis protection poses serious 
  problems of constitutionality.  The Copyright Clause to the 
  Constitution, article 1, section 8, cl. 8, empowers the Congress, 
  "[t]o promote the progress of science and useful arts, by 
  securing for limited times to authors and inventors the exclusive 
  right to their respective writings and discoveries."  A basic 
  assumption of the Copyright Clause is that only original works of 
  authors are protected.  In contrast, facts are not original, but 
  discovered; copyright cannot extend to facts themselves, although 
  it may cover their arrangement and selection where original.  
  Feist v. Rural Telephone Service Co., Inc., 499 U.S. 340, 347-48 
  (1991).  The Copyright Clause may well limit Congress's power to 
  grant monopoly rights in facts, a limitation which would be 
  breached by adoption of sui generis protection.
  	Even more serious is the clash between the Proposed Treaty 
  and the First Amendment.  The private property rights granted by 
  copyright law are made compatible with First Amendment 
  protections of freedom of speech and press through two concepts: 
  the "fact-expression" doctrine, which permits free use of any 
  facts contained within a work of authorship (see Harper & Row 
  Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 556 
  (1985)); and the fair use doctrine, which allows even protected 
  expression to be taken in certain circumstances.  In contrast, 
  the Proposed Treaty contains neither of these limitations.  It 
  would permit nearly unlimited protection for facts (as long as 
  these are arranged in a "database") and contains no exception for 
  such socially desirable uses of factual information as comment, 
  criticism, news reporting, or research.
  There is No Compelling Need for Sui Generis Protection of 
  	As noted above, adoption of the Proposed Treaty would 
  seriously erode the public's traditional right to access and use 
  facts.   It would limit or destroy socially useful 
  activities such as the statistical analysis which is the heart of 
  STATS' business.  Before considering such a radical change, one 
  should demand irrefutable evidence of a compelling need for broad 
  sui generis protection for databases.  No such evidence has been 
  offered.  In particular, there is no proof that database 
  publishers have been imperiled by the Supreme Court's rejection 
  of the "sweat of the brow" theory for copyright protection of 
  facts in Feist.  Later case law shows that the copyright law 
  still provides substantial protection to database owners who put 
  even minimal originality into their selection or organization of 
  facts.  Nor is there any empirical evidence that the absence of 
  sui generis protection under United States law has depressed the 
  value of databases or diminished the incentive of database 
  compilers to pursue their business.
  	We also have personal experience with this issue, because 
  STATS is itself a "database" proprietor.  Our detailed 
  statistical collections and analyses, which go well 
  beyond any league-compiled statistics, are considered 
  authoritative among sports fans and within the sports industry.  
  We spend substantial sums to develop these compilations and 
  analyses, and they form the core of our business.  Nonetheless, 
  we have always believed that current United States and state law 
  fully protects our rights in those statistical collections and 
  analyses against misappropriation, and we have never felt the 
  need for a new form of protection.  The absence of sui generis 
  protection has not affected our incentive to continue and expand 
  our database business.  In short, the Proposed Treaty 
  provides an unwise -- indeed, dangerous -- solution to a non-
  existent problem.
  Databases are adequately protected under existing United States 
  law.  In contrast, adoption of the Proposed Treaty would disturb 
  the traditional balance between private and public interests 
  developed over more than a century of copyright law.  In our 
  view, the many arguments against adoption of sui generis 
  protection for databases are compelling.  For the reasons set 
  forth in this letter, we urge that the United States delegation 
  to the Diplomatic Conference withhold support for the Proposed 
  Very truly yours,
  John Dewan
  [1] 	Some limitations on sui generis protection may be adopted in 
  national legislation, but only where this does not "unreasonably 
  prejudice the legitimate interests of the rightholder."  Article 
  5(1).  However, H.R. 3531, "The Database Investment and 
  Intellectual Property Antipiracy Act of 1996," introduced in 
  anticipation of the Proposed Treaty, contained no fair use 
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