The DMCA’s Toll on Innovation

by on June 21, 2007 · 6 comments

You’ll occasionally hear the argument that critics of the DMCA are exaggerating its anticompetitive effects. Sometimes, DMCA supporters will demand examples of technologies that have been stifled. This is, of course, an unfair question because it’s impossible to identify the technologies that weren’t developed due to a bad legal regime.

But today Ars has a textbook example of the way the DMCA is being used not to control piracy, but to strangle a new technology that Hollywood doesn’t like:

The proposed amendment was revealed by Kaleidescape CEO Michael Malcolm, whose company triumphed in a legal battle against the DVD CCA earlier this year. Kaleidescape manufactures pricey home media servers (starting at $10,000) that rip and store all of a customer’s media for DRMed playback throughout the home. The DVD CCA said that Kaleidescape was opening the door to piracy and interpreted the license to say that a DVD must be physically present in a drive in order for a movie to be played.

The judge presiding over the week-long trial disagreed, saying that the extremely-complex DVD CCA licensing agreement omitted key details about the CSS General Specification. As a result, the 20-page CSS spec was not technically included as part of the license agreement.

That would be remedied by the proposed amendment, a copy of which has been seen by PC Magazine. “DVD Products, alone or in combination with other DVD Products, shall not be designed to descramble scrambled CSS Data when the DVD Disc containing such CSS Data and associated CSS Keys is not physically present in the DVD Player or DVD Drive (as applicable), and a DVD Product shall not be designed to make or direct the making of a persistent copy of CSS Data that has been descrambled from such DVD Disc by such DVD Product,” reads the amendment.

This closely mirrors the battle over the MP3 player a decade ago. In 1998, the RIAA tried its best to get the first MP3 players ruled illegal. Fortunately, the courts ruled against them and the MP3 revolution was allowed to go forward. Because of the DMCA, that happy ending won’t be repeated in the movie industry. Instead, the law gives Hollywood complete control to decide which devices can play their content and what features those devices can have.

Let’s be clear about this: if CDs had DRM, and if the DMCA were on the books in 1997, the recording industry would have won the legal battle over the MP3 player. The iPod, iTunes, and the rest of the digital music products we now take for granted would never have made it to the market. Instead, we might still be forced to use crippleware services like Unbox, MovieLink, and CinemaNow to get our music. Luckily for all of us, the music industry did not have a veto over high-tech innovation in the 1990s. It seems that we’re not so lucky today.

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