A Common-law Approach to DRM

by on February 26, 2006

Following a citation from Doug Lichtman’s latest paper on the legal implications of DRM, I found this longer paper on the legal status of self-help mechanisms. It covers a lot of the same ground, but it does so much more thoroughly, and includes some interesting examples outside the realm of high tech. I was particularly amused by the dispute between the Chicago cubs and the owners of neighboring buildings, who were erecting de facto skyboxes on their roofs and selling tickets to watch the Cubs play. This set off an arms race, in which the Cubs erected structures to obscure their view, while the property owners made plans to raise the height of the skyboxes to compensate. Sadly, the parties reached a profit-sharing agreement before courts could rule on the legal merits of the dispute.

The part I liked best about the paper was his discussion of the Grokster decision that begins on page 47. For example:

Consider the question of which legitimate uses should count as “substantial noninfringing uses” for the purposes of the Sony balance. In my view, a use should count only if it is both lawful and sincere, which is to say that the use is both technically permissible as a matter of law, and also a use for which the technology at issue has plausible charm. Grokster could in theory be used to disseminate copies of the Bible. That would be lawful, as there is no copyright in the Bible, but not sincere, in that there are so many equally good ways to acquire a copy of the Bible–websites that post free copies online, religious institutions in every community that offer free copies in print, hotel rooms where the Bible can routinely be found in a drawer–that there is little reason to defend the ability to acquire a copy through Grokster per se. Grokster similarly cannot be defended on the argument that peer-to-peer file sharing helps strangers recommend new music one to another, because suggestions could be made without actually offering the music files at the same time. Nor can KaZaA be defended as a mechanism for new artists to introduce their work, given that free centralized websites–like the original mp3.com–can easily be used as centralized repositories for music that is willingly placed in the public domain. Phrased another way, a legitimate use must be evaluated in light of plausible alternative means to accomplish the same end result. This is an important detail left unmentioned in the Sony decision, and a detail that the appellate courts seem also to have thus far overlooked.

I made a similar argument last year. More generally, he argues that when considering whether a particular technology has “substantial non-infringing uses,” they should take into account not only the bare technical characteristics of the product, but also should make a judgment of whether the developer made a good-faith attempt to discourage piracy.

I think this approach has applications beyond file-sharing issues. One application would be as an alternative to the DMCA. The DMCA currently says that (with a few narrow exceptions) no one is allowed to circumvent DRM controls for any reason. I think this is clearly too broad a rule, because there are cases where DRM prevents users from engaging in perfectly legitimate activities–for example, playing a DVD on a Linux computer, or transferring a legally-purchased iTunes song to a non-Apple MP3 player.

A better approach would be a legal standard that requires technology designers to make a good faith effort to discourage piracy with their products. So, for example, if you have software that transfers DRMed iTunes music to a Windows Media-based music player, you could open yourself up to liability if you failed to apply Windows Media DRM protections to the music.

One of the beneficial effects of this rule is that it would give DRM vendors a strong incentive to open up access to their platforms. If Apple makes FairPlay libraries available for anyone to use, then it has a much stronger case against those that circumvent the protections, because they could just as easily have used Apple’s libraries to accomplish the legitimate uses in question without exposing the files to casual copying. On the other hand, if there’s no reasonable way to accomplish a particular fair use (i.e. creating a Linux DVD player) without circumventing copy protection, then the courts probably ought to allow the circumvention, because DRM isn’t an end in itself, but a means to the end of discouraging piracy. DRM vendors would have an incentive to make sure their schemes weren’t overly restrictive, because the more fair uses the DRM restricts, the weaker their case would be against those who circumvent it.

There are some obvious problems with this approach, the biggest being its vagueness. Obviously, we don’t want legitimate electronics and software firms living in fear that their products will be declared piracy devices in the future. But there are a couple of ways this problem can be minimized.

First, Grokster got it right by focusing primarily on business decisions rather than technology, per se. Often, the best way to decide if a particular product is a piracy device is to look at its business plan, not its technological design. Grokster’s Achilles’ Heel was that it had plainly designed its software to profit from illegal file sharing. The “substantial non-infringing uses” they offered were red herrings. Grokster couldn’t possibly have been profitable based on those uses alone; the vast majority of Grokster’s profits came from piracy.

Secondly, the balance between encouraging innovation and discouraging piracy should be struck by the courts, not by Congress. The courts have the distinct advantage that they make law in an evolutionary fashion, considering one technology at a time and and attempting to draw clear but nuanced distinctions among technologies. They have been doing this for the last quarter century: in 1984, they ruled that VCR players are on the “legal” side of the line. In 1998, they said that MP3 players were also on the “legal” side. In 2000, they ruled (incorrectly, in my view) that MP3.com was on the “illegal” side of the line. In 2001, they ruled (correctly, I think) that Napster is on the “illegal” side, and they reached the same conclusion (again, correctly, I think) about Grokster in 2005. By considering one technology at a time, the courts avoid sweeping mandates like the DMCA’s anti-circumvention rule. It allows the law to evolve along with the technology it regulates, rather than being frozen in place by the whims of Congress in 1998.

I’m not sure precisely what legal principles would have emerged from this process had the courts not been strait-jacketed by the DMCA for the last 8 years. But I think the resulting body of law would have been more nuanced, more flexible, and more innovation-friendly than the rule we’ve got now. And I think they might have even done a better job of preventing piracy. Right now, software that “circumvents” DRM–even legitimate software like Liinux DVD players–exist only on the black market, so those who develop it have no incentive whatsoever to discourage consumers from engaging in piracy. Compare that to the peer-to-peer realm, in which post-Grokster companies like BitTorrent are making a good faith effort to discourage piracy with their products. I think everyone would be better off if the courts had the opportunity to develop Grokster-style rules for DRM technologies rather than being preempted by Congress.

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