IP Justice Briefing Paper[1]
1 September 2004 Santiago, Chile
By IP Justice
Executive Director Robin D. Gross
robin@ipjustice.org www.ipjustice.org
Chile-US
Free Trade Agreement (FTA) on
Circumvention of Technological
Protection Measures (TPMs)
that Control Copyrighted Works
The Intellectual Property Rights Chapter of the 2003 Chile-US Free Trade Agreement generally outlaws the circumvention of technological protection measures that control access to copyrighted works. Specifically, Subparagraph 17.7(5) of this bi-lateral trade deal mirrors the language in the 1996 World Intellectual Property Organization (WIPO) “Internet Treaties” by requiring national legislation which provides “adequate legal protection and effective legal remedies against the circumvention of effective technological measures” that are used by rights holders to protect their rights.[2]
Subparagraph 17.7(5)(a) requires both countries to outlaw the act of knowingly circumventing technological access controls in situations where a person does not have authorization from the right holder to access the copyrighted work or in situations that are otherwise not permitted by law.[3] This second clause plainly permits circumvention of access controls in situations where an individual is the lawful owner of a copyrighted work and intends to make a lawful use of that work.
Thus consumers may bypass technological restrictions in situations where they lack technical “authorization” but nonetheless maintain a lawful right to access the copyrighted work. For example, the owner of a music Compact Disc (CD) that will not play in certain car CD players or computers still has a lawful right to listen to that music CD and may bypass those technological restrictions in order to access the music using whatever CD player he or she wishes.
Subparagraph 17.7(5)(a) further states that no party is required to impose liability for a person who circumvents technological restrictions that only protect a right under copyright, and do not also control access to the work. It is only the act of circumventing certain access controls that this sub-paragraph forbids, not circumventing use controls.
Footnote 19 in Subparagraph 17.7(5)(a) creates a “no technology mandate” provision, which makes clear that no country is required to enact legislation forcing technology providers to respond to any particular technological measure.[4] This provision is key, since without it, those who make compatible players could run afoul of the law. Moreover, this provision is a safeguard against rightsholders’ anti-competitive use of technological measures, for example the cartel-like practice of “tying” the ability to play one’s lawfully acquired media to the use of equipment provided only by licensed manufacturers.
Footnote 19 instructs that the trade agreement should be implemented in a manner that guarantees technology companies the freedom to design services and manufacture products without oversight from rightsholders. It calls for a national implementation where competitors remain free to build interoperable systems despite of the aforementioned circumvention prohibition.
Subparagraph 17.7(5)(b) of the FTA also requires both countries to outlaw the provision of tools and services that are marketed for the purpose of circumventing technological restrictions used by rightsholders.[5] It also outlaws providing tools and services that do not have a commercially significant purpose or use other than to circumvent or that are primarily designed for the purpose of enabling a circumvention of a technological restriction.
Like the WIPO “Internet Treaties”, this subparagraph does not require countries to effect a blanket ban all tools and services capable of circumventing technological restrictions. Importantly, only those tools that are primarily intended for infringing purposes need be targeted under the language of both the WIPO “Internet Treaties” and the Chile-US FTA.
Subparagraph 17.5(c) of the Chile-US FTA also provides pointed instruction on how the trade agreement is to be implemented. It states that “Each Party shall ensure that nothing in subparagraphs (a) and (b) affects rights, remedies, limitations, or defenses with respect to copyright or related rights infringement.”
In the US, fair use can be considered a right for individuals, a limitation against copyright holders’ rights, and a defense in a copyright infringement action. This subparagraph in the agreement provides further evidence that neither subparagraphs (a) nor (b) should be implemented in a manner that limits the public’s fair use rights in any way. Laws that broadly outlaw all circumvention tools prevent consumers from exercising their rights to make lawful uses since a rightsholder can lawfully put locks on their products that limit uses that are otherwise lawful; without access to lock-breakers – circumvention tools – the public cannot exercise its rights. In order for subparagraph 17.5(c) to have any meaning, the implementing language must ensure that providing tools and services for fair use purposes remains lawful. Obviously, if consumers were forbidden tools necessary to make fair uses, fair use would unquestioningly be “affected” as this subparagraph aims to prevent.
Subparagraph 17.7(3) provides even further evidence that the Chile-US FTA does not preclude implementing anti-circumvention legislation that protects fair use. It re-affirms the language found in Article 13 of the TRIPS Agreement that permits countries to enact limitations and exceptions to intellectual property holders’ rights, including fair use, in “special cases which do not conflict with the normal exploitation of the work” and “do not unreasonably prejudice the legitimate interests of the right holder.”
Since copyright’s earliest days in the US, fair use has been considered not only an acceptable limitation and exception to intellectual property holders’ rights, but a crucial component of the public’s rights under the copyright balance. This agreement makes no mention of altering this traditional balance.
Quite the contrary, footnote 17 to Subparagraph 17.7(3) makes clear that the agreement “permits a party to carry forward and appropriately extend into the digital environment limitations and exceptions in its domestic laws which have been considered acceptable under the Berne Convention. Similarly, these provisions permit a Party to devise new exceptions and limitations that are appropriate in the digital environment.”
Therefore not only may countries continue to enjoy their traditional fair use rights under the terms of the Chile-US FTA, nations are even encouraged to enact new exceptions and limitations to protect the public in a digital environment, where rightsholders are empowered to prevent lawful uses of digital media through technological measures. The enormous power that technological measures give to rightsholders provide any easy tool of abuse that must be tempered with strong and meaningful exceptions and limitations to circumvention bans.
Viewed together, subparagraphs 17.5(c) and 17.7(3) make plain that the Chilean national implementation of the agreement’s circumvention prohibition may permit fair use by not broadly banning fair use tools and services.
Subparagraph 17.5(d) provides additional evidence that the Chile-US FTA was not meant to eliminate the public’s rights, including fair use. This subparagraph specifically permits countries to enact exceptions and limitations to the new rights granted to copyright holders in subparagraphs 17.5(a) and (b).
Subparagraph 17.5(d) permits countries to enact limitations and exceptions to the circumvention ban in “special cases that do not impair the adequacy of legal protection or the effectiveness of legal remedies.” This language is not particularly helpful, however, since circumvention prohibitions are, by their very nature, generally considered to be inadequate and ineffective at providing legal protection.
Nonetheless, the agreement lists eight exemptions and limitations “in particular” that countries may establish to permit lawful uses of digital media that would otherwise be impaired by a broad circumvention ban. Importantly, the exemptions listed in the agreement are not exhaustive. The exemptions are only given “in particular” and thus countries are free to enact additional limitations and exemptions as best suits their needs.
The eight exemptions listed in Subparagraph 17.5(d)(i-viii) could not possibly be seen as an exhaustive list since they only apply in a narrow set of circumstances, leaving the vast majority of lawful uses guarded behind locked gates. Therefore, subparagraph 17.5(d) must be understood to provide only “particular” exemptions and limitations to the general circumvention ban, but certainly not the only exemptions and limitations permitted under the agreement.
The Chile-US FTA provides some guidance on how to avoid the unintended but troubling consequences of anti-circumvention laws. Subsection 17.1(13) permits countries to enact legislation to help prevent against rightholder abuses of these powerful measures, including enacting national copyright misuse legal doctrines and anti-trust legislation.[6]
The legal doctrine of copyright misuse punishes rightsholders for using their intellectual property rights in abusive ways or that trammel upon the rights of others. Additionally, well-established principles of anti-trust law prevent companies from using their rights in one area, such as copyright, to obtain market dominance in another, such as media devices. Because overly broad anti-circumvention laws can prevent legitimate competitors from building compatible or interoperable equipment, they run afoul of anti-trust consumer protections.
In order to balance the additional power granted to
rightsholders under the powerful new circumvention prohibitions, the legal
doctrine of copyright misuse must become well-enshrined to ward against the
abuses of intellectual property rights.
And anti-trust regulators must be willing and able to prevent illegal
“tying” of media to equipment that the circumvention prohibitions enable.
In 1998, the US passed the extreme anti-circumvention measures contained in Section 1201 of the US Digital Millennium Copyright Act (DMCA). Under severe pressure from the US entertainment industry, the US Congress enacted anti-circumvention legislation in the DMCA that far exceeded countries’ obligations under either the 1996 WIPO “Internet Treaties” or now the Chile-US FTA.
Neither the WIPO “Internet Treaties” nor the Chile-US FTA require countries to outlaw bypassing technological restrictions that prevent fair use, nor do they require broadly forbidding all tools and services capable of bypassing those controls. Indeed that would amount to a dangerously over-broad implementation that endangers innovation, competition, scientific research, and freedom of expression.
Section 1201(a)(1) of the DMCA outlaws the circumvention of technological restrictions that control access to a copyrighted work. Additionally Sections 1201(a)(2) and 1201(b)(1) broadly forbid the provision of tools capable of circumventing technological measures that control either access or use of a copyrighted work. By broadly outlawing all tools and information capable of bypassing technological restrictions, US consumers are effectively unable to exercise their legitimate fair use rights with digital media under the DMCA.
Indeed during US Congressional testimony on the DMCA in the fall of 1997, US Patent and Trademark Office (USPTO) Commissioner Bruce Lehman admitted that the DMCA went further than WIPO obligations require in broadly outlawing circumvention tools.[7] One of the DMCA’s primary authors, Lehman testified to the US Congress that the US would have satisfied WIPO treaty obligations and the international standard for “adequate legal protection and effective legal remedies against circumvention” had the US simply chosen to outlaw the act of circumvention to obtain unlawful access to copyrighted works, rather than broadly banning all tools capable of circumvention, as the DMCA ultimately chose.
The DMCA contains a sparse list of exemptions to the DMCA’s general ban on circumvention in an effort to protect activities such as computer security testing, cryptographic research, and reverse engineering. However these exemptions are inadequate in both number and effectiveness, since they only apply in a few narrow circumstances and are so narrowly tailored as to be useless to every researcher who has tried to avail herself of them.
III. Administrative Review is Inadequate to
Protect Public Interest
One lesson readily gleaned from the DMCA is that Chile should not rely upon the administrative review process envisaged in subparagraph 17.5(d)(i) to adequately address the harm brought on by the public’s inability to make lawful use of digital media.
The administrative review process similarly created by the DMCA (instructing the US Copyright Office to study the law’s harm on consumers’ ability to make lawful uses of media and to recommend new exemptions every three years) has proven to be of no consequence in providing the public with any meaningful relief.
Firstly, the US Copyright Office’s ability to recommend new exemptions is limited only to the ban on the act of circumvention and does not extend to the ban on tools. So under the DMCA’s own construction, it provides a legal mechanism to grant new or protect existing consumer rights, while simultaneously denying the public any means of exercising those rights.
Secondly, the US experience with relying on unelected bureaucratic officials in the US Copyright Office to protect consumers through administrative procedures has been a complete failure since US Copyright Office officials tend to view the US entertainment industry as their constituency and not the general public.
Because the list of exemptions given the Chile-US FTA is only illustrative and not exhaustive (as explained above) and since a triennial review process is of little force, therefore Latin American policy makers should make full use of their right to craft new and more meaningful exemptions and limitations to the general prohibition against circumvention.
US legislators have already tied their hands with the DMCA’s prohibitive restrictions. But Latin American legislators today have the benefit of learning from recent experiences under the US DMCA and an opportunity to correct past errors, rather than repeat them.
Chile is not required by the FTA to follow in the United States’ muddied footsteps in broadly banning all circumvention tools and services. Chile can and should target its national legislation implementing these international obligations as narrowly as possible in order to avoid the negative consequences created by overly broad anti-circumvention laws such as the US DMCA.
Since its enactment in 1998, the DMCA has been widely criticized as and endangering innovation, competition, scientific research, and freedom of expression.[8]
The DMCA’s anti-circumvention measures have been used to threaten competitors for selling interoperable garage door openers[9], ban competing printer toner cartridges[10] and other devices that have nothing to do with protecting copyright.
The DMCA has been invoked to bury innovative companies like 321 Studios in litigation costs for selling software that allows people to view and record their own DVDs[11]. In 2000 it was used to stop open source software developers from independently building a DVD player for computers running the Linux operating system.
In 2003 technology company SunComm used the DMCA to threaten litigation against a Princeton computer science student for revealing that the company’s technological protection measures could be easily bypassed by pressing a computer keyboard’s “shift key”.[12] The US recording industry invoked the DMCA in 2000 to prevent the publication of a scientific paper that revealed flaws in the recording industry’s technology for controlling digital music.[13]
The DMCA has stifled scientific advancement in crucial computer security sectors. Scientists and computer security experts claim they will not travel to the US since the DMCA was passed[14] and technical conferences are moving overseas[15] after Russian computer programmer Dmitry Sklyarov was arrested by the Federal Bureau of Investigation (FBI) in July of 2001 and spent six weeks in a US jail for revealing the weaknesses in Adobe’s eBook technology.[16]
As more evidence mounts that the DMCA and similar far-reaching anti-circumvention laws are placing a chokehold on innovation and competition and threatening consumers’ rights to use digital media, countries are beginning to think twice before modeling their own national legislation on the flawed DMCA.
Indeed a 2003 UK Royal Society Report calls for a re-examination of the balance struck between developing and developed nations in international intellectual property regimes – particularly with respect to anti-circumvention laws.[17] And in 2002 a study from the UK Commission on Intellectual Property warned developing countries to avoid enacting extreme "DMCA-like" anti-circumvention laws.[18] A Canadian Heritage Study from 2002 also rejects the need for enacting such broad anti-circumvention laws.[19]
National courts in both Italy (2003)[20] and Spain (2004)[21] have refused to interpret the anti-circumvention provisions in the EU Copyright Directive as preventing consumers from modifying Sony PlayStation computer chips.
Circumvention prohibitions even remain contentious within
the United States where two separate bills are pending before the US Congress
to amend the DMCA’s anti-circumvention laws due to public opposition in the US
stemming from its harm to civil liberties, innovation, and competition.[22]
A. Recommended
Policy Goals for National Legislation Permitted within FTA:
1. Permit use and distribution of circumvention devices and services that are intended for fair use and other lawful purposes.
2. Ban only the act of bypassing access controls to obtain unlawful access.
3. Only permit criminal penalties in cases of circumvention with intent to infringe on a commercial scale.
1. It shall be unlawful to knowingly bypass effective technological measures that provide access to a copyrighted work in a manner that is not authorized by the right holder or otherwise permitted by law.
2. It shall be unlawful to provide for commercial purposes devices or services known to be marketed primarily for the purpose of bypassing technological measures in order to permit unlawful access to a copyrighted work. It shall not be unlawful under this section to provide devices or services intended primarily to enable the exercise of fair use rights and other unauthorized uses that are permitted by law.
3. Technological
measures shall not be used to enable or facilitate any anti-competitive purpose
or practice. Rightsholders' authorization to access a copyrighted work may not
be withheld if it would result in a loss of legitimate competition for any
product, program, technology, or service that interoperates with that work.
4. Circumvention prohibitions may not be used to prevent research, development, scientific testing, or the publication of information including technical specifications and their vulnerabilities. Criminal penalties are only available in situations involving a willful intent to infringe copyrights on a commercial scale.
[1] Available online at http://www.ipjustice.org/Chile_US_FTA.shtml
[2] WIPO Copyright Treaty (1996) and WIPO Performances and Phonograms Treaty (1996)
[3] Chile-US FTA Subparagraph 17.7(5)(a): “each Party shall provide that any person who knowingly circumvents without authorization of the right holder or law consistent with this Agreement any effective technological measure that controls access to a protected work, performance, or phonogram shall be civilly liable and, in appropriate circumstances, shall be criminally liable, or said conduct shall be considered an aggravating circumstance of another offense. No Party is required to impose civil or criminal liability for a person who circumvents any effective technological measure that protects any of the exclusive rights of copyright or related rights in a protected work, but does not control access to such a work.”
[4] Footnote 19 in Chile-US FTA Subparagraph 17.7(5)(a): “Paragraph 5 does not obligate a Party to require that the design of, or the design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological measure, so long as such product does not otherwise violate any measure implementing paragraph 5(b).”
[5] Chile-US FTA Subparagraph 17.7(5)(b):
“Each Party shall also provide administrative or civil measures, and, where the conduct is willful and for prohibited commercial purposes, criminal measures with regard to the manufacture, import, distribution, sale, or rental of devices, products, or components or the provision of services which:
(i) are promoted, advertised, or marketed for the purpose of circumvention of any effective technological measure, or
(ii) do not have a commercially significant purpose or use other than to circumvent any effective technological measure, or
(iii) are primarily designed, produced, adapted, or performed for the purpose of enabling or facilitating the circumvention of any effective technological measures. …”
[6] “Nothing in this Chapter prevents a Party from adopting measures necessary to prevent anticompetitive practices that may result from the abuse of intellectual property rights set forth in this Chapter.”
[7] See WIPO Copyright Treaties Implementation Act and Online Copyright Liability Limitation Act: Hearing on H.R. 2281 and H.R. 2280 before the House Subcomm. on Courts and Intellectual Prop., 105th Cong., 1st sess. (Sept. 16, 1997) at 62 (testimony of Asst. Sec. of Commerce and Commissioner of Patents and Trademarks Bruce A. Lehman admitting that Section 1201 of the DMCA went beyond the obligations of the WIPO “Internet Treaties”).
[8] See IP Justice testimony and comments before 2003 US Copyright Office DMCA Rulemaking Proceeding available at http://www.ipjustice.org/ipjtestimony051503_1.shtml and
http://www.ipjustice.org/IPJ_1201_Comments.shtml. See also 2003 Report of the Electronic Frontier Foundation, “Unintended Consequences: 5 Years Under the DMCA” by EFF Staff Attorney Gwen Hinze, available online at: http://www.eff.org/IP/DRM/DMCA/unintended_consequences.php
[9] Chamberlain Group v. Skylink Technologies, see http://www.ipjustice.org/skylink.shtml
[10] Lexmark v. Static Control Components, see http://www.ipjustice.org/030303.scc.shtml
[13] Felton v RIAA See http://www.eff.org/IP/DMCA/Felten_v_RIAA/
[14] “Travel Advisory for Russian Programmers” NY Times 2001 available at http://www.nytimes.com/2001/09/10/technology/10WARN.html?searchpv=past7days
[15] “Computer Scientists Boycott US Over Digital Copyright Law” Scientific American 2001 available at
http://www.newscientist.com/news/news.jsp?id=ns99991063
[16] “Artists Scientists Protest US Copyright Law” Associated Press 2001 available at
http://investor.cnet.com/investor/news/newsitem/0-9900-1028-6721527-0.html
[17] The UK Royal Society (April 2003) "Keeping science open: the effects of intellectual property policy on the conduct of science" available at http://www.royalsoc.ac.uk/files/statfiles/document-221.pdf
[18] UK Commission on Intellectual Property Rights, Final Report: "Integrating Intellectual Property Rights and Development Policy" Summer 2002, available at http://www.iprcommission.org/graphic/documents/final_report.htm
[19] 2002 Canadian Heritage Study (Part II) available at http://www.pch.gc.ca/progs/ac-ca/progs/pda-cpb/pubs/protectionII/index_e.cfm
[20] “Italian Court Rejects First EU Copyright Directive Seizure” See http://www.ipjustice.org/media/release20040112_en.shtml
[21] “Spanish Judge Rules X-Box Legal” The Register 2004 available at http://www.theregister.co.uk/2004/04/27/spanish_xbox_modding_ruling/
[22] "Digital Media Consumers' Rights Act (DMCRA)" at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:h107ih.txt.pdf and "Benefits Authors without Limiting Advancement of Net Consumer Expectations Act" (BALANCE) at http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.1066