Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
3Activity
0 of .
Results for:
No results containing your search query
P. 1
Circumventing Competition: The Perverse Consequences of the Digital Millennium Copyright Act, Cato Policy Analysis No. 564

Circumventing Competition: The Perverse Consequences of the Digital Millennium Copyright Act, Cato Policy Analysis No. 564

Ratings: (0)|Views: 2,920|Likes:
Published by Cato Institute
Executive Summary

The courts have a proven track record of fashioning balanced remedies for the copyright challenges created by new technologies. But when Congress passed the Digital Millennium Copyright Act in 1998, it cut the courts out of this role and instead banned any devices that "circumvent" digital rights management (DRM) technologies, which control access to copyrighted content.

The result has been a legal regime that reduces options and competition in how consumers enjoy media and entertainment. Today, the copyright industry is exerting increasing control over playback devices, cable media offerings, and even Internet streaming. Some firms have used the DMCA to thwart competition by preventing research and reverse engineering. Others have brought the weight of criminal sanctions to bear against critics, competitors, and researchers.

The DMCA is anti-competitive. It gives copyright holders
Executive Summary

The courts have a proven track record of fashioning balanced remedies for the copyright challenges created by new technologies. But when Congress passed the Digital Millennium Copyright Act in 1998, it cut the courts out of this role and instead banned any devices that "circumvent" digital rights management (DRM) technologies, which control access to copyrighted content.

The result has been a legal regime that reduces options and competition in how consumers enjoy media and entertainment. Today, the copyright industry is exerting increasing control over playback devices, cable media offerings, and even Internet streaming. Some firms have used the DMCA to thwart competition by preventing research and reverse engineering. Others have brought the weight of criminal sanctions to bear against critics, competitors, and researchers.

The DMCA is anti-competitive. It gives copyright holders

More info:

Published by: Cato Institute on Mar 27, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

05/10/2014

pdf

text

original

 
The courts have a proven track record of fash-ioning balanced remedies for the copyright chal-lenges created by new technologies. But whenCongress passed the Digital Millennium Copyright Act in 1998, it cut the courts out of this role andinstead banned any devices that “circumvent” digi-tal rights management (DRM) technologies, whichcontrol access to copyrighted content.The result has been a legal regime that reducesoptions and competition in how consumers enjoy media and entertainment. Today, the copyrightindustry is exerting increasing control over playbackdevices, cable media offerings, and even Internetstreaming. Some firms have used the DMCA tothwart competition by preventing research and re- verse engineering. Others have brought the weightof criminal sanctions to bear against critics, com-petitors, and researchers.The DMCA is anti-competitive. It gives copy-right holders—and the technology companiesthat distribute their content—the legal power tocreate closed technology platforms and excludecompetitors from interoperating with them.Worst of all, DRM technologies are clumsy andineffective; they inconvenience legitimate usersbut do little to stop pirates.Fortunately, repeal of the DMCA would notlead to intellectual property anarchy. Prior to theDMCA’s enactment, the courts had already beendeveloping a body of law that strikes a sensiblebalance between innovation and the protection of intellectual property. That body of law protectedcompetition, consumer choice, and the importantprinciple of fair use without sacrificing the rightsof copyright holders. And because it focused onthe actions of people rather than on the design of technologies, it gave the courts the flexibility they needed to adapt to rapid technological change.
Circumventing Competition
The Perverse Consequences of the Digital MillenniumCopyright Act 
by Timothy B. Lee
_____________________________________________________________________________________________________
Timothy B. Lee is a policy analyst at the Show-Me Institute in St. Louis. He holds a degree in computer science fromthe University of Minnesota and is the science and technology editor of the online magazine
Brainwash
and a con-tributor to the Technology Liberation Front website.
Executive Summary 
No. 564March 21, 2006
 
Introduction 
 As Robert Frost wrote, good fences makegood neighbors. Fences demarcate property lines, enhance privacy, and prevent unauthor-ized entry. No one would dispute that fencesare vital to protecting private property rights. Yet Congress would be rightly ridiculed if itmade it a crime to hop over a fence. Sometimes,hopping a fence is unobjectionable—when youlose a baseball on your neighbor’s property, seeyour stolen bicycle in someone’s yard, or know that a fenced lot has been abandoned, forexample. More important, such a law would becompletely unnecessary, because the commonlaw of trespass already protects property own-ers against intrusions on their rights. Because itwas developed over centuries by judges consid-ering real-world controversies, the law of tres-pass is flexible, sensible, and predictable, ensur-ing that individuals can enjoy their property without unduly impeding the people whomight have legitimate reasons to cross theirproperty lines.Digital rights management (DRM) tech-nologies are the fences of the intellectual prop-erty world. They control access to digitalmedia to discourage copyright infringement.For example, when a customer purchases a song over the Internet using Apple’s iTunesMusic Store, Apple’s DRM system enforcesrules about how the song may be copied. Thesystem permits the customer to copy the songto his iPod, share it with others on his localnetwork, or burn a single copy to a CD, but itdoes not permit him to upload it to a peer-to-peer file-sharing network, transfer it to a Sony Walkman, or burn a dozen copies to CDs.In 1998 Congress gave DRM schemesexplicit statutory protections when it passedthe Digital Millennium Copyright Act. TheDMCA not only made it a crime to “circum- vent” DRM technologies—to hop intellectualproperty’s fences—but it also prohibited creat-ing or distributing “circumvention devices.” Itis illegal under federal law to build digitalstepladders.This section of the DMCA was every bit asunnecessary as a federal ban on fence jumpingwould be. The courts had already successfully addressed several high-tech challenges tocopyright law. A body of law analogous to tres-pass was providing robust, sensible, and flexi-ble protection for intellectual property rights.In passing the DMCA, Congress short-cir-cuited that evolutionary process. It threw outthe accumulated wisdom of legal precedentand replaced it with a rigid and sweepinganti-circumvention rule.The new legislation’s most profoundeffects will be on the evolution of digital media technologies. We have grown accustomed to,and benefit from, a high-tech world that isfreewheeling, open-ended, and fiercely com-petitive. Silicon Valley is a place where upstartslike Apple, Netscape, and Google have gonefrom two-man operations to billion-dollartrendsetters seemingly overnight. The DMCAthreatens to undermine that competitive spir-it by giving industry incumbents a powerfullegal weapon against new entrants.In the name of fighting piracy, the DMCAgives copyright holders—and the companiesthat distribute their material—legal tools thatcan control who makes products compatiblewith their technology platforms and able toaccess their content. Examples can be seen ineach of the next-generation platforms for videoentertainment, including prerecorded home video, cable and interactive television, and evenstreaming Internet media. Copyright holdershave used the DMCA as a contract enforcementtool, promoted criminal actions against pro-grammers who expose flaws in DRM software,and worked to suppress academic research thataffects copyright protection.Not only is that bad for innovation andentrepreneurship, it is bad for consumers aswell. Ordinarily, new technologies allow us toconsume media in new ways. The VCR intro-duced the idea of taping shows for later view-ing. The invention of MP3 players like the iPodallowed consumers to put their entire musiclibraries in their pockets. Software emulatorsallowed consumers to play games designed forpopular consoles like the PlayStation on theircomputers. In each of those cases, industry incumbents sought to use the legal process to
2
The DMCA’smost profound effects will be on the evolution of digital mediatechnologies.
 
block the technologies, arguing that they vio-lated copyright law. And in each case, thecourts rebuffed the industry’s efforts, holdingthat copyright law is designed to promote, notimpede, technological progress.The DMCA puts its thumb on the scales of  justice on the side of copyright holders.Digital rights management technologies givecopyright holders complete control over every aspect of how their products are used. And theDMCA gives DRM technologies the force of law. As a result, when the next VCR or iPod isinvented, the content industry may use itspowers under the DMCA to refuse to allow itscontent to be used on the new device.If new inventions are prevented from evenentering the marketplace, there will never bean opportunity for a public debate abouttheir benefits. Most consumers will not evenknow what they are missing.
High-Tech Challenges forCopyright Law 
Copyright law gives authors, artists, musi-cians, and other creators broad, exclusiverights to commercial exploitation of theircreations. With certain limitations, the copy-right holder is granted the exclusive right tomake and distribute copies of its works.Thus, copyright is designed to promote cul-tural progress by encouraging the produc-tion of new creative works.Congress has been mindful of the dangerthat copyright could itself become an obstacleto progress by unduly inhibiting the free flow of ideas. To forestall that threat, Congressplaced careful limits on the scope of creators’rights under the law. For example, facts cannotbe copyrighted, although a particular descrip-tion of facts can be. Copyrights are granted forlimited times, after which the material fallsinto the public domain. The first sale doctrinegives consumers the right to resell legitimately purchased copies of copyrighted material toothers. And the doctrine of fair use holds thatcertain kinds of innocuous copying—such asincluding a short excerpt in a book review orrecording a TV program for later viewing—arenot violations of copyright.Technological progress has thrown ques-tions about the limits of copyright into starkrelief. Digital technologies give ordinary con-sumers far greater abilities to make unauthor-ized copies than ever before. Sorting out whichof those copies are infringing under copyrightlaw has not been easy. Fortunately, the courtshave consistently risen to the challenge, devel-oping nuanced legal doctrines that protect therights of intellectual property holders withoutunduly burdening high-tech innovation.
1
Important recent intellectual property deci-sions demonstrate that the courts have strucka sensible balance that protects both innova-tion and intellectual property.
Copyrighted Software and “Clean Room”Design 
One frequent subject of copyright litiga-tion is the practice of reverse engineering.Reverse engineering is disassembling a hard-ware or software product from another com-pany to find out how it works with the inten-tion of duplicating some or all of its functionsin another product. For decades high-techcompanies have sought to use intellectualproperty law to create proprietary technology platforms over which they would have com-plete control. Almost from its inception in the1970s, the computer industry has seen bitterlegal feuds in which entrenched incumbentshave sought to use copyright law to preventcompetitors from building products compati-ble with their systems. An early example of that fight was in themarket for “IBM-compatible” computers inthe 1980s. IBM created that market in 1981with the release of the IBM PC, its response tothe popular Apple II personal computer.Thanks to the strength of the IBM brand, itquickly became a leading business computer.Every IBM PC contained software knownas the Basic Input Output System (BIOS), andno IBM-compatible PC could function with-out a BIOS of its own. When other companiesbegan making unauthorized “clones” of thecomputers, most of them simply put a copy of 
3
The courts havedeveloped nuanced legal doctrines that protect the rightsof intellectual property holderswithout unduly burdeninghigh-techinnovation.

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->