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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

March 18, 1999

Dear Colleague:

This is a follow-up to our March 1 letter concerning the "Collections of Information Antipiracy Act," H.R. 354, which was heard in the Intellectual Property Subcommittee of the House Judiciary Committee today. Enclosed is a copy of our written testimony in opposition to the bill.

You may also wish to read the testimony presented by the AMA on an equivalent bill in the last session of Congress (see http://www.house.gov.judiciary/41145.htm). Early in the statement, Richard F. Corlin refers to the AMA's interest in the Physician Masterfile, the CPT codes, and practice parameters.

The AMA testimony alludes to a court case in which the AMA's use of its copyright on the CPT codes was challenged. The proposed bill would reverse the effect of the decision in Practice Management Info. Corp. v. AMA, No. 94-56774 (9th Circuit), which stripped the AMA of its legal right to charge high royalties for codes that physicians are forced by law to use as a result of a 1983 AMA/HCFA contract.

Interestingly, the bill protects the right to use data for educational, scientific, or research purposes, but not for patient care. It protects nonprofit organizations (such as foundations, academic centers, and the AMA) from 5 to 10 year prison terms and fines up to $500,000, but not physicians or medical facilities that earn a living from providing medical care.

An AMA-proposed amendment was incorporated into the new legislation, defining "substantial" use of a database to be either "qualitative" or "quantitative." The rationale:

This would protect the AMA if relatively small, but significantly important, portions were inappropriately used or copied. As an example, approximately 150 [out of 7,000] CPT medical codes and descriptions covering the full range of the types of physician office visits represent approximately 35% (thirty-five percent) of all physician services billed to insurance carriers including Medicare.

In response to a question concerning the AMA's position on H.R. 354, Dr. Randolph Smoak, chairman of the AMA Board of Trustees, speaking in Chicago on February 27, said that the issue was being referred to a task force on legal issues. It is possible that the business interests and the physician interests of the AMA are in conflict, so that the AMA's support for the bill is occurring primarily behind the scenes in this Congress.

AAPS is strongly in favor of protecting private property, including intellectual property. However, H.R. 354 would have the effect opposite to its stated intention. That is why we have joined 106 other organizations in signing the following statement:

The corporations, educational institutions, non-profit organizations and trade associations listed below are users as well as creators in the compilation and value-added transformation of databases. The Information Age and digital technology provide researchers and consumers across the globe with a unique opportunity to continue to create, maintain, and use new and innovative databases that are essential to science, education, business, and the overall economy.

Because databases are items of commerce in their own right, and are critical tools for facilitating electronic commerce, research and education endeavors, we support Federal legislation carefully tailored to provide database publishers with sufficient protection against incentive-eliminating piracy. Conversely, we oppose legislation which would grant the compiler of any information an unprecedented right to control transformative, value-added, downstream uses of the resulting collection or of any useful fraction of that collection.

The basic information policy of this country-a policy that has existed since the writing of the Constitution-has served us extremely well. The policy is that the building blocks of all information-facts, as distinct from the copyrightable manner in which they are expressed-cannot be owned.

The particular legislative approach that has been considered by the House Judiciary Committee in the past three Congresses would mark a fundamental change in our nation's information policy. The problems raised by this change to commerce and competition were recognized by the Department of Justice, the Department of Commerce, and the Federal Trade Commission last year in separate letters to Congress identifying their concerns with H.R. 2652 considered by the 105th Congress. H.R. 354, the Collections of Information Antipiracy Act, is modeled on last year's bill and does not resolve these concerns.

We support Federal legislation that will not harm legitimate research activities and small businesses, but will prevent unfair competition in the form of parasitic copying; preserve the fair use of information; promote the progress of science, education and research; protect value-added publishers and their customers; and provide safeguards against monopolistic pricing. We look forward to working closely with all Members of Congress to craft well-reasoned, targeted and balanced legislation that will punish database pirates without jeopardizing the thriving commerce in information long at the core of America's economic, scientific and intellectual life.

Please feel free to call us if we can answer any questions about these issues, or for information on how to join us in opposing H.R. 354 on behalf of practicing physicians

Sincerely yours,

Jane M. Orient, M.D., Executive Director