.I Introduction.II The Digital Economy Is A High Growth, High Potential Sector Whose Needs Deserve Careful Consideration.III The Wipo Copyright Treaty Is Good For The New Economy.IV DMCA’s Overbroad Anti-Circumvention Provisions Are Neither Consistent With Framework Principles Nor Good For The New Economy.V The Enumerated Exceptions In The Act-Of-Circumvention Ban Are Unduly Narrow And Inconsistent With Framework Principles.A The Statutory Exceptions to the Circumvention Ban.B Circumvention for Other Legitimate Reasons Should Be Privileged.VI The Anti-Device Provisions Should Be Narrowed By Legislative Amendment Or Judicial Interpretation.VII Policymakers Should Periodically Review Both The Act And Device Provisions.VIII ConclusionINTELLECTUAL PROPERTY AND THEDIGITAL ECONOMY: WHY THE ANTI-CIRCUMVENTION REGULATIONS NEED TOBE REVISEDBy Pamela Samuelson †ABSTRACTThe Digital Millennium Copyright Act of 1998 (“DMCA”) prohibitsthe circumvention of technological protection measures used by copyrightowners to control access to their works. It also bans devices whose pri-mary purpose is to enable circumvention of technical protection systems.The Clinton administration proposed these anti-circumvention rules as im-plementations of U.S. obligations under the World Intellectual PropertyOrganization Copyright Treaty. However, the DMCA’s provisions are sig-nificantly broader than the treaty required. They violate the Administra-tion’s stated goal of only imposing “predictable, minimalist, consistent,and simple” regulations on the budding digital economy.Although Congress heeded some concerns of digital economy firms bycrafting certain exceptions to authorize legitimate circumvention, thoseexceptions are overly narrow and shortsighted. They should be supple-mented by a more general “other legitimate purposes” exception. TheDMCA’s anti-device provisions are, moreover, overbroad and unclear, es-pecially on the question whether it is legal to develop a technology neces-sary to engage in a privileged act of circumvention (e.g., a fair use). EitherCongress or the courts will be forced to constrain the reach of the anti-de-vice rules so as not to undermine Congressional intent to preserve fairuses and so as not to harm competition and innovation in the informationtechnology sector. Finally, though the DMCA provides for a study of oneclass of potentially harmful impacts of the anti-circumvention rules, this†© 1999 Pamela Samuelson.† Professor of Information Management and of Law, University of California atBerkeley; Co-Director of the Berkeley Center for Law and Technology. This paper is anoutgrowth of work initially done for an Emory Law School conference on the law of cy-berspace held in February 1996. The draft article produced for that conference entitledTechnical Protection for Copyrighted Works discussed a 1995 legislative proposal forregulating the circumvention of technical protection systems. I am deeply indebted toBenjamin Black who was my research assistant during preparation of this draft. He sub-sequently collaborated with me on a derivative work of that paper. Although that projectwas never completed, this article builds on the base of that collaboration. I am alsograteful for comments on this draft from Hal Abelson, Jonathan Band, Yochai Benkler,Julie Cohen, Gideon Frieder, Joan Feigenbaum, Bob Glushko, Peter Huang, LaurelJamtgaard, and Kurt Opsahl.2 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 14:1study needs to be broadened to consider the full impact of this unprece-dented legislation. TABLE OF CONTENTSI. INTRODUCTION...................................................................................................520II. THE DIGITAL ECONOMY IS A HIGH GROWTH, HIGH POTENTIAL SECTOR WHOSENEEDS DESERVE CAREFUL CONSIDERATION........................................................525III. THE WIPO COPYRIGHT TREATY IS GOOD FOR THE NEW ECONOMY.....................528IV. DMCA’S OVERBROAD ANTI-CIRCUMVENTION PROVISIONS ARE NEITHERCONSISTENT WITH FRAMEWORK PRINCIPLES NOR GOOD FOR THE NEWECONOMY.......................................................................................................... 534V. THE ENUMERATED EXCEPTIONS IN THE ACT-OF-CIRCUMVENTION BAN AREUNDULY NARROW AND INCONSISTENT WITH FRAMEWORK PRINCIPLES...............537A. The Statutory Exceptions to the Circumvention Ban....................................537B. Circumvention for Other Legitimate Reasons Should Be Privileged............543VI. THE ANTI-DEVICE PROVISIONS SHOULD BE NARROWED BY LEGISLATIVEAMENDMENT OR JUDICIAL INTERPRETATION.......................................................546VII. POLICYMAKERS SHOULD PERIODICALLY REVIEW BOTH THE ACT AND DEVICEPROVISIONS........................................................................................................ 557VIII. CONCLUSION...................................................................................................... 562.I INTRODUCTIONThe Clinton Administration’s Framework For Global Electronic Com-merce aims to promote the development of a vast global market in whichelectronic contracts will be made for delivery of electronic informationproducts and services via digital networks which will be paid for with elec-tronic currencies.1 The Framework simultaneously encourages private in-vestment and entrepreneurship, urges governments at all levels to act withrestraint in considering regulations of the emerging digital economy, and ar-gues for international cooperation in adopting consistent policies that willpromote this commerce.2 The Commerce Department’s First Annual Re-port on the Framework initiative indicates that this initiative has met withsome success.3 Passage of the Digital Millennium Copyright Act(“DMCA”)4 is among the successes claimed in this report.5The Commerce Department may be correct in thinking that the inter-ests of the digital economy will be furthered by widespread acceptance of1. See WILLIAM J. CLINTON & ALBERT GORE, JR., A FRAMEWORK FOR GLOBALELECTRONIC COMMERCE (1997), available at <http://www.iitf.nist.gov/eleccomm/ecom-m.htm> [hereinafter FRAMEWORK].2. See id. at 2-4.3. See U.S. GOV’T WORKING GROUP ON ELEC. COMMERCE, FIRST ANNUALREPORT (1998), available at <http://www.doc.gov/ecommerce/E-comm.pdf> [hereinafterFIRST ANNUAL REPORT].4. Digital Millennium Copyright