Protecting Digital Property With Intellectual Contract

by on February 17, 2005 · 12 comments

Digital rights management is technical term for digital packaging. It is also a digital contract. An article I published earlier this week talks about the future of digital content that draws from both property and contract law. We should not be scared by contract law’s growing role in copyright. Nor should we attempt to provide affirmative consumer rights as a sort of public policy exception to certain contractual provisions. I write:

Most consumers would welcome the benefit of a DRM contractual bargain, but only if they perceive that the agreement is fair. What is a fair bargain in the marketplace and what is “fair use” according to copyright law are much different, though not necessarily conflicting, concepts. The legal conception of fair use is a loose definition that is a defense to infringement, often associated with free speech such as for criticism or parody. Fair use, in a colloquial sense, is often used as a proxy for consumer expectations and preferences–the desirability for backup copies, transfer to different hardware devices, etc.

Consumer expectations of “fair use” that extend beyond criticism, news reporting, etc. should also be defined by contract, not property law. Competition in the digital content market will dictate that consumer preferences be met.

Adam’s entry indicates that the market is working to utilize DRM with P2P and that the result will be pro-consumer. After all, a government that is big enough to provide affirmative content rights is big enough to restrict content (see the entry by James on broadcast censorship).

  • http://www.digital-copyright.ca/petition Chris Brand

    Why “that extend beyoind criticism, news reporting, etc” ?

    If contract law is good enough to secure our fair use rights, why isn’t it also good enough to preserve our rights to criticise and news report ?

    I suspect that it isn’t, and it also isn’t good enough to secure things like reverse-engineering rights, which are only likely to be exercised by a small subset of purchasers.

    There’s also the issue of all those people who were quite happy with the restrictions on songs “bought” from iTunes at the time of purchase, but who later discovered that the limitations on the number of machines *did* affect them.

    Finally, do we really want libraries and the like to pay extra for a copy that they can actually copy freely when the copyright term has expired ? Most regular purchasers aren’t going to care about that, for sure.

  • http://www.digital-copyright.ca/petition Chris Brand

    Why “that extend beyoind criticism, news reporting, etc” ?

    If contract law is good enough to secure our fair use rights, why isn’t it also good enough to preserve our rights to criticise and news report ?

    I suspect that it isn’t, and it also isn’t good enough to secure things like reverse-engineering rights, which are only likely to be exercised by a small subset of purchasers.

    There’s also the issue of all those people who were quite happy with the restrictions on songs “bought” from iTunes at the time of purchase, but who later discovered that the limitations on the number of machines *did* affect them.

    Finally, do we really want libraries and the like to pay extra for a copy that they can actually copy freely when the copyright term has expired ? Most regular purchasers aren’t going to care about that, for sure.

  • http://www.freedom-to-tinker.com Ed Felten

    I don’t understand how you can assert that DRM is a contract. A contract is an agreement; DRM is a machine. DRM tries to enforce some limitations on usage. Those limitations may or may not coincide with the terms of an actual contract.

    This is not just a theoretical objection. I have yet to see a real DRM system that enforces rules that coincide with the terms of the copyright statute, or with the terms of any contract.

    What’s more, in real DRM systems, the consumer isn’t allowed to inspect the DRM system to learn what it will do. How can there be a contract where one party is not allowed to know the terms?

  • http://www.freedom-to-tinker.com Ed Felten

    I don’t understand how you can assert that DRM is a contract. A contract is an agreement; DRM is a machine. DRM tries to enforce some limitations on usage. Those limitations may or may not coincide with the terms of an actual contract.

    This is not just a theoretical objection. I have yet to see a real DRM system that enforces rules that coincide with the terms of the copyright statute, or with the terms of any contract.

    What’s more, in real DRM systems, the consumer isn’t allowed to inspect the DRM system to learn what it will do. How can there be a contract where one party is not allowed to know the terms?

  • http://www.techliberation.com Braden

    Ed – Yes, DRM is a technological enforcement measure of some limit on usage. I apologize for any sloppy short-hand in this blog entry. It is the the limitations on usage that I want examined in terms of contract, not property law. And I want DRM to be the technological enforcer, the self-help, of the contract. And I think that the law should encourage this self-help.

    If DRM were to be the contract itself, then I would agree that the DMCA would be a problem in any “meeting of the minds” needed for a binding legal contract.

  • http://www.techliberation.com Braden

    Ed – Yes, DRM is a technological enforcement measure of some limit on usage. I apologize for any sloppy short-hand in this blog entry. It is the the limitations on usage that I want examined in terms of contract, not property law. And I want DRM to be the technological enforcer, the self-help, of the contract. And I think that the law should encourage this self-help.

    If DRM were to be the contract itself, then I would agree that the DMCA would be a problem in any “meeting of the minds” needed for a binding legal contract.

  • http://www.techliberation.com Braden

    Chris – thank you for raising some interesting points. The answer to why contract is not good enough for securing “fair use” rights for criticism, etc. well, the short answer is the free speech rights of the U.S. Constitution. Usually courts express the free speech principle under the language of the Copyright & Patent Clause iteslf: “promote the Progress of Science and Useful Arts.” Promotion obviously entails some limited copying to debate the “marketplace of ideas.” As copyright is a creation of government, to restrict some copying would be to restrict free speech.

    I’ll let the fact that “iPod” is fast entering the lexicon of generic trademarks (like Xerox or Band-Aid) speak for itself. I think iTunes will be looked upon as a positive revolutionary force in technology history.

    Your point about subsets of purchasers – the libraries, etc. – will they not have the same bargaining power as the consuming public at large? No, I don’t think so. Libraries and other educational institutions will always have privileged access to content – it’s good from a business goodwill perspective. And as for copying after the expiration of the copyright, DRM should only secure copyrightable portions of public domain works – (indeed, not that this is the preferable solution, but it it is legal to hack DRM to gain access to public domain works, is it not)?

  • http://www.techliberation.com Braden

    Chris – thank you for raising some interesting points. The answer to why contract is not good enough for securing “fair use” rights for criticism, etc. well, the short answer is the free speech rights of the U.S. Constitution. Usually courts express the free speech principle under the language of the Copyright & Patent Clause iteslf: “promote the Progress of Science and Useful Arts.” Promotion obviously entails some limited copying to debate the “marketplace of ideas.” As copyright is a creation of government, to restrict some copying would be to restrict free speech.

    I’ll let the fact that “iPod” is fast entering the lexicon of generic trademarks (like Xerox or Band-Aid) speak for itself. I think iTunes will be looked upon as a positive revolutionary force in technology history.

    Your point about subsets of purchasers – the libraries, etc. – will they not have the same bargaining power as the consuming public at large? No, I don’t think so. Libraries and other educational institutions will always have privileged access to content – it’s good from a business goodwill perspective. And as for copying after the expiration of the copyright, DRM should only secure copyrightable portions of public domain works – (indeed, not that this is the preferable solution, but it it is legal to hack DRM to gain access to public domain works, is it not)?

  • http://www.freedom-to-tinker.com Ed Felten

    Self-help is fine, but it has to be a two-way street. If I don’t have the right to do something, you should be free to use self-help to keep me from doing it. But if I *do* have the right to do something, then I ought to be able to defeat your self-help in order to do it. It’s bad policy to automatically give one party’s self-help mechanisms the force of law.

  • http://www.freedom-to-tinker.com Ed Felten

    Self-help is fine, but it has to be a two-way street. If I don’t have the right to do something, you should be free to use self-help to keep me from doing it. But if I *do* have the right to do something, then I ought to be able to defeat your self-help in order to do it. It’s bad policy to automatically give one party’s self-help mechanisms the force of law.

  • http://blogs.law.harvard.edu/cmusings Derek Slater

    Braden, interesting article. I tie this, Adam Thierer’s cited entry, and the Cato P2P and DRM piece together in this blog post:

    http://blogs.law.harvard.edu/cmusings/2005/02/21#a1039

  • http://blogs.law.harvard.edu/cmusings Derek Slater

    Braden, interesting article. I tie this, Adam Thierer’s cited entry, and the Cato P2P and DRM piece together in this blog post:

    http://blogs.law.harvard.edu/cmusings/2005/02/2

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