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The Current
Situation


Influential
Legal Experts


News Sources
for Tech Law


Advocacy Groups

Industry
Lobby Groups


The WIPO Treaty

The DMCA

The EUCD

The TEACH Act

Whats In The Pipe

About The Author

Law, Politics, and Policy
As They Impact DRM

Check out our DRM in Canada Page !

Background

All around the world, legal instruments such as copyrights exist to balance the rights of authors and inventors with the public good. But these laws are years - or decades - old. They aren't adequate to deal with Internet-age piracy, not to mention related issues such as on-line privacy.

The laws need to be brought up to date.

Since pertinent laws and law making vary from country to country - and even sometimes state to state in the USA - it's not possible to cover these issues comprehensively here. So we offer quick summary of the current situation, with some more detail following on the stake holders, experts, and current developments.

Summary of Current Situation

The governments of all technologically advanced countries are reworking laws impacted by digital commerce, notably copyright laws. Most copyright laws were written when copying a protected work was a non-trivial physical process. They have an implicit assumption that possessing a copy of a work is the same as having the right to use the work. This is patently false for digital goods, where, for example, the goods may already exist on my PC, but not be usable until I perform a Digital Rights Management transaction. In this author's opinion, it is the right to USE, not to POSSESS, which is at issue.
This theme is expanded in Gord's submission Response to Consultation Paper on Digital Copyright Issues(PDF Format), which was submitted to the policy-forming arm of the Canadian government as part of their consultation process in this area.

Copyright laws may not even be the right vehicle, since some content owners are trying to move digital goods to a License Contract model instead, putting the issue in the realm of contract law.

These laws - and associated international developments, such as the World Copyright Treaty are in various states of formulation and adoption. Things are specially interesting in the USA, where a long history of constitutional and "fair use" rights is colliding with powerful Hollywood interests. The most pertinent legal development so far, the Digital Millennium Copyright Act, is hugely controversial and faces many legal challenges.

Through to the end of 2002, input received by government on these issues was disturbingly polarized. Consumers, most technology experts, and most advocacy groups opposed the use of invasive laws and technologies to protect content. On the other hand, companies which own content, or supply DRM technology, have supported them through Lobby Groups, political contributions to sympathetic members of Congress, etc. The political reality has been that content owning companies make a lot more political contributions, and hire a lot more expert lobbyists, than their opposition.

The tide appears to be turning. Most consumer electronic companies and software companies (notably including Intel and Microsoft), and even the RIAA, have come out publicly against legislated-in anti-copy technology. The MPAA appears to the be the only significant American stake holder still in favor of such legislation. More on this can be found in the entry on the Business Software Alliance.

Legislated-in anti-copy technology, if it did come to pass, has the potential to put far more monopoly power in the hands of, say, Microsoft, than they ever had during their many years of anti-trust litigation. It would also almost certainly (based on history) be cracked.

In the absence of mandatory technology, DRM does not go away. It simply keeps improving on the tried-and-true free enterprise model. DRM-based businesses which give both consumers and content owners value will thrive, and those that don't will die. This is a good thing.

Of course, mandatory technology is not the only issue. Spirited debate is under way regarding the tradeoffs between privacy, security, personal vs. commercial interests etc, surrounding DRM. This too is a good thing.
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Influential Legal Experts

Here are some lawyers who have chosen to become visible opinion shapers in the world of Internet law and thus, to a greater or lesser extent, the law as it relates to DRM.

lawbytes is the internet home of Michael Geist, a balanced commentator, pre-eminent Canadian expert on cyber law, and author of "the" book on Canadian Internet Law.
Michael also edits BNAs Internet Law News, a highly regarded free daily cyberlaw email newsletter which is not specific to Canada.

Larry Lessig is an American law professor best known for his role in the Microsoft anti-trust case. He is a prominent libertarian voice and author of several books, most notably this one on the dangers of powerful corporations fostering misguided laws and ever-more pervasive Internet technologies.

Pamela Samuelson is a California law professor who specializes in copyright, especially the practical evolution thereof in the Internet age.

News Sources for Law and Technology


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The WIPO Treaty

This 1996 "World Copyright Treaty" was largely ignored until it achieved a critical mass of ratification in 2002, and still has not been ratified by most Western nations. Given the USA's record of unilateralism in international matters it surprising on the surface that they are one of the few advanced nations to ratify the treaty. It starts to make sense when you look at the nations whose last-minute ratification gave the treaty critical mass - places like Gabon(!). Clearly the United States does not expect huge copyright income from Gabon, but by "persuading" such nations to come on board they achieved critical mass for WIPO, making it an effective weapon to export their own copyright laws around the world. Pretty clever ! Hopefully it will not get as far as the DMCA being global law.. but that is clearly one of the objectives.

A more typical Western reaction is that of Canada, which has not yet ratified the treaty because of concerns it's so vague that complying with it is useless at best, and legally dangerous at worst.

Digital Millennium Copyright Act (DMCA)

The DMCA has generated enormous controversy since it was passed in 1998. Most notably, the DMCA's section 1201 effectively outlaws virtually all research into defeating copyright-related security technology. There are exceptions for "legitimate research", but a careful reading shows them to be of scant comfort to those at risk of prosecution. Ironically, this does more to deter "respectable" research than "underground" research, because respectable researchers have more to lose. And there are many examples of abuse of the DMCA to claim protection for everything from garage-door-opener designs to retail store's price lists, as documented on chilling effects.

Indeed, other than being used against makers of mod chips for video game consoles, there are far fewer documented cases of the DMCA being applied to actually prevent piracy, than there are of misapplications beyond the legislators' obvious intent.

During 2003 the DMCA has resurfaced in the form of state-level versions of the law, some passed and some pending. Most of them are based on proposed wording supplied by the MPAA - hardly an impartial party. In most cases this legislation goes beyond the federal version and could, for instance, be read to mean that Virtual Private Networks are illegal. While parties such as the MPAA argue that this is not the intent, the broad wording used is of real concern.

On a similar note, the DMCA is being exported to other countries as part of various trade agreements; here is an example of exporting the DMCA to Chile.

Opposition to the various flavors of the DMCA persists, as exemplified by pervasive anti-DMCA sentiment on most of the advocacy sites below.
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European Union Copyright Directive (EUCD).

The EUCD is designed to bring the EU in line with the WIPO Treaty and is widely regarded as Europe's equivalent to the DMCA. However, as this analysis shows, gaining consensus among the member states of the EU has proven extremely difficult.
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The TEACH Act

The Technology Education and Copyright Harmonization Act, passed into law in the USA in November 2002, aims to support education by explicitly allowing reproduction of copyrighted material for cetain educational purposes, without requiring permission or compensation. Where it gets interesting is when TEACH meets the DMCA. Is it legal to defeat a content protection measure for the purposes of reproducing material legally under TEACH, when that same action is otherwise illegal under the DMCA ? As of 2003 this question, and many others, are being contemplated by the US copyright office as part of its 3-year review cycle. On the face of it, there is a contradiction, but there are powerful interests on both sides, and no quick technology fixes in sight. This issue is likely to simmer for some time as a result.

What's in the Legal Pipe

For better or worse the USA is leading in proposed DRM-related legislation. Due to the laudable visibility of the American legislative process, many pieces of legislation have been seen to be contemplated, proposed - and, usually, ultimately shot down. For the most part proposed legislation seeks to either increase the ability of content owners to protect their content, or to increase the ability of consumers to maintain fair use. It would take a separate Web site to track all of the proposals, so here are a few highlights.

The Hollings Bill would have mandated the inclusion of security technologies such as Palladium into virtually all PCs and consumer entertainment electronics. Even if this were agreed to be a reasonable objective (which it is not) it is far from clear how this could respect "fair use" or be accomplished reliably with foreseeable technology. Organized opposition such as the Alliance for Digital Progress has effectively killed the bill.

On the opposite side of most of these issues in the United States Congress, the proposed Digital Media Consumers Rights Act aims to specifically preserve the right of consumers to copy media from one form to another.

As of this writing, neither of these bills seems likely to pass in 2003, if at all.
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DRM Related Advocacy Groups

For the most part, these groups are not directly concerned with DRM; that is, they don't find DRM as a concept good or bad. But they DO object to some draconian trends in legislation and technology, supported by Hollywood, which arguably sacrifice things the consumer values - like privacy and Fair Use, in order to protect Hollywood content.

Of course, the major entertainment and technology companies have their lobby groups too.

More background on some of the issues to consumers, technologists, political activists, and others, can be found on the Why DRM Sucks page.

Alliance for Digital Progress

See their entry lower down.

Anti-DMCA.org

(Self-explanatory)

Campaign for Digital Rights

A UK-based lobby group which supports fair use and opposes, among other things, the (European Union Copyright Directive).

Chillingeffects.org

A Web site dedicated to documenting the chilling effects of emerging Net-related laws.

Digitalconsumer.org

A grass-roots organization supporting fair use and opposing existing and proposed restrictive legislation which they believe undermines fair use.

Digital-copyright.ca

A Canadian site lobbying against adoption of DMCA-like legislation in Canada.

Electronic Frontier Foundation

A West-coast based civil liberties group which opposes DRM as a matter of principle and is a singificant thorn in the side of the RIAA, as demonstrated in this Dig at the RIAAs legal tactics. It's hard to argue with the EFFs philosophies of individual freedom and so forth, but some have argued that, by casting the issue in black and white (RIAA bad, DRM bad, P2P good), they are in fact playing into the hands of their enemies. The RIAA casts the issue in black and white too.

European Digital Rights

A European consortium based in Brussels. Recently founded, it does not have much of a track record, but appears to be an umbrella group representing about a dozen national, libertarian-oriented organizations throughout Europe.

Freedom to Tinker

The entertainment industry is probably regretting the day they legally harassed Professor Edward Felten for cracking SDMI's watermarks even though he was doing so as part of an open competition sponsored by the industry's own SDMI group. The lawyers subsequently backed off, but the damage was done; they had created another capable adversary, who built this Web site to promote fair use and the "freedom to tinker", and to oppose heavy-handed legal and legislative manouvering by Hollywood.

IP Justice

To quote this recent (January 2003) group's fledgling Web site: "IP Justice is a new non-profit organization that works to promote balance in global intellectual property law. " Recently formed by a former EFF lawyer, Robin Gross , the emphasis is on international IP law and raising awareness of the erosiion of IP rights in the United States.

Home Recording Rights Coalition

A consumer advocacy group which seeks to preserve the right to home recording in the digital era.

Public Knowledge

A consumer advocacy group that tackles issues from digital video broadcast flags to copyright reform.

Digital Speech

An anti-DMCA site with a free speech flavor, born of Richard Stallman's Free Software Foundation.

DRM Related Industry Lobby Groups

These groups represent the interests of various content and technology industries. They are largely pro-DRM, but only the MPAA favors government-mandated DRM. In some cases, such as the RIAA, these are pre-existing operational businesses within a given industry which include lobbying functions. In other cases, such as the Business Software Alliance, lobbying is the group's reason for being.

Alliance for Digital Progress


A group that blurs the line between industry lobbying and consumer advocacy, whose members include both consumer advocacy groups such as digitalconsumer.org, and major industry heavyweights including Microsoft, IBM, Dell, and Apple. To quote their Web site:
"The Alliance for Digital Progress (ADP) was formed to fight attempts to force the government to design and mandate technology solutions to digital piracy." A particular target seems to the Hollings Bill. This is a fortunate alignment of interests between groups who often don't agree on much.

BSA


The Business Software Alliance is a software industry lobbying group historically concerned with preventing software piracy, similar to the SIIA, but with a somewhat different agenda and, unlike the SIIA, supported by Microsoft. Microsoft withdrew from the SIIA in 2000 when the SIIA appeared to support the government's position in the Microsoft anti-trust case. Interestingly, given its anti-piracy agenda, the BSA has recently stated its opposition to "legislated-in" DRM technology such as the Hollings Bill, and has even managed to get the RIAA to support their position, as captured in the Seven Principles document on their Web site.

Distributed Computing Industry Association (DCIA)

In their words: "a voluntary organization representing all sectors of the distributed computing industry." In plain English: a lobby group founded by kazaa and altnet that is trying to legitimize Peer-to-peer distribution of music. They have a business vision, and the intention is to involve ISPs and content owners in implementing the vision. Whether anything will come of it remains to be seen but it is an encouraging sign that P2P realizes it must grow up.

EICTA

The European Information, Communications and Consumer Electronics Industry Technology Association, which, in their own words, is "representing more than 10.000 companies in Europe, with 1.500.000 employees and revenues of over 190 billion Euro. EICTA’s mission continues to be to promote the common global interests of the represented ICT Industry in Europe."
In regards to DRM, the EICTA is on record as opposing blanket levies on electronic equipment and media, and supporting DRM technology.

IFPI

The International Federation of the Phonographic Industry is the global equivalent of the RIAA, with which they are "affiliated", which presumably means they are partially funded by the RIAA. They lobby on copyright and piracy issues worldwide, especially in Europe. Recently they have slammed electronics companies for not doing enough to stop piracy.

MPAA

The Motion Picture Association of America, the Hollywood movie equivalent of the RIAA. They have enormous political clout and have had the ear of United States presidents going back at least as far as Lyndon Johnson. As of spring 2003 the MPAA is alone in resolutely supporting hard-line, legislated-in copy protection in digital media systems. This is probably because the MPAA isn't at as much risk of disastrous backlash as the music industry is at the moment. In music, high-quality pirate content has been easily obtainable for so long that the industry is beginning to accept that it must win back consumers with attractive offers, (though legal heavy-handedness is still evident.) Pirated movies, on the other hand, have been a pretty low-quality experience due to the limitations of technology. So, the movie industry does not need to "win back" customers to traditional distribution, since it hasn't lost them in significant numbers yet. Given recent changes in technology (e.g. broadband Internet and DVD writers), the United States congress, and in the RIAAs position, the MPAA position seems likely to change sometime in 2003.

RIAA


(NOTE: The Web site is often down because of Net-based attacks, presumably from lovers of the P2P technology which the RIAA is trying to sue out of existence.) The Recording Industry Association of America, the powerful voice of major music studios. They are considered to be in league with Satan by the youthful Peer-to-Peer downloading crowd, whom they have resorted to suing on an individual basis. They are also expert - far more so than Silicon Valley - at influencing Washington, as their recent choice of a well-connected Democrat laywer as their leader demonstrates. That same choice, unfortunately, is probably a hint that they will continue to use legal attacks against new technology, more so than embracing it. To the extent that they are interested in maintaining existing complex business models which subsidize million-dollar salaries for their leader, it is hard to be too sympathetic. But that aside, theirs is a fundamentally difficult position in the face of downloadable music.

SIIA

The Software and Information Industry Association, a trade association for the software industry, formed by the merger of the Software Publishers Association (SPA) and the Information Industry Association (IIA) in 1999. Their mandate includes industry self-promotion and information sharing as well as lobbying on software piracy. Their membership consists of a large number of small companies, unlike the BSA, which has attracted the "whos who" of the software industry. As a result the SIIA seems unlikely to have a material impact on the evolution of Digital Rights Management.
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Footnote: Contracts, not Copyrights ?

Consumers intuitively understand copyright and fair use. Whatever copyright restrictions apply, say, to one book I own, more or less apply to all the others as well. Even if I don't understand it the way a lawyer might, I don't have to look in the back of the book to know what I can do with it. And I know that it's OK to copy a CD for personal use, and not OK to copy one to sell. Again, thanks to the uniformity of copyright, I don't have to look in the jewel case for fine print.

But content owners may not like this uniformity. They may not wish to support copying, even if it is "fair use", or the legitimate reselling of digital goods.

One way around these limitations of copyright is to position the transaction as a contracted license agreement defined by a EULA, not a sale of copyrighted goods.The user and the vendor negotiate a contract and the user is bound by its terms, whatever they may be.

Of course, it doesn't really work like that. Software comes with huge, click-through "license agreements" that would take a qualified lawyer hours to decipher. And they brook no negotiation: click "no" to the agreement at install time, and you can't use the software. Worse yet, with every release, vendors seems to demand more and more of the user; some Microsoft EULAs now effectively give Microsoft root access to your computer !

However, the binding legality of such agreements is debatable, and in the USA, contract law is different from state to state. All in all this is a very fluid and confusing area. Eventually consumers will demand some uniformity of rules for digital goods transactions- perhaps after a few well-publicized fiascos in the area. But we're at least a few years away from it now.