Thursday, November 04, 2004

(Some) Limits on the DMCA?

by Tom Bozzo

I'd initially missed this with most of my non-baby attention focused on politics, but the Sixth Circuit -- responsible for putting the Ohio vote challengers back in business early Tuesday morning -- took a solid whack at one of the more consumer-unfriendly applications of the Digital Millennium Copyright Act last week. The addictive Groklaw has the ruling and the concurring and partially dissenting opinions.

At issue is the practice of putting computer chips in consumer products (in this case, Lexmark v. SCC, toner catridges for laser printers) that control use to the product in some way (i.e., requiring that the toner cartridge authenticate itself to the printer). The theory is that adding the chip can shut out potential competitors via copyright law and the DMCA's broad prohibition against the circumvention of access schemes for digital representations of copyrighted materials -- such as software on the chip or in a compatible product. The harm to consumers stems from paying higher (monopoly) prices due to the lack of competition.(1)

The Sixth Circuit's panel wasn't at all receptive to this application of the DMCA, as it evaluated the merits of Lexmark's DMCA claims in the course of vacating a preliminary injunction imposed by the district court. From the main opinion:

Nowhere in its deliberations over the DMCA did Congress express an interest in creating liability for the circumvention of technological measures designed to prevent consumers from using consumer goods while leaving the copyrightable content of a work unprotected.

The concurring opinion went further, and nailed the underlying economic harm:

We should make clear that in the future companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves just by tweaking the facts of this case: by, for example, creating a Toner Loading Program that is more complex and "creative" than the one here, or by cutting off other access to the Printer Engine Program. [snip]

By contrast, Lexmark would have us read this statute in such a way that any time a manufacturer intentionally circumvents any technological measure and accesses a protected work it necessarily violates the statute regardless of its "purpose.[..]" If we were to adopt Lexmark's reading of the statute, manufacturers could potentially create monopolies for replacement parts simply by using similar, but more creative, lock-out codes. Automobile manufacturers, for example, could control the entire market of replacement parts for their vehicles by including lock-out chips. Congress did not intend to allow the DMCA to be used offensively in this manner, but rather only sought to reach those who circumvented protective measures "for the purpose" of pirating works protected by the copyright statute. [Emphasis added.]

Among other things, this logic would seem to apply to Apple's threat last summer to pursue DMCA remedies against RealNetworks over technology that would allow music from Real's online music store to be played on the iPod (which evidently involved some reverse engineering of iPod digital rights management software). An irony of that situation was that Real's efforts would tend to help iPod sales (which are apparently highly profitable for Apple) at the possible expense of iTunes Music Store sales (which are apparently not highly profitable for Apple, and which are substantially intended to help sell more iPods).


(1) A minor complication arises in cases where a manufacturer effectively gives away a product to gain access to a stream of profits from selling aftermarket supplies, as seems to be the case in the printer market. This could lead to heavy users of official supplies subsidizing the low entry price for light users, so not every user need benefit individually from removing a monopoly on aftermarket supplies.
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