The proposed European Union Intellectual Property Enforcement Directive contains a number of seriously troubling provisions that threaten innovation and competition and endanger civil rights.  Specifically, Article 21 mandates a ban on technical devices that threatens innovation, competition, and freedom of expression rights. One can think of the EU IP Enforcement Directive as the ‘DMCA on steroids' since any industrial property right that can be licensed will be enforced through technical devices that it will be absolutely illegal to circumvent throughout Europe.

Also part of the enforcement proposal, Article 9 creates broad and easily abused subpoena powers for intellectual property holders to obtain personal information on consumers without any traditional safeguards. Similar subpoena powers created by the US Digital Millennium Copyright Act are abused by the Recording Industry Association of America to obtain personal information about thousands of users of file-sharing software. The proposed IP Enforcement Directive would extend the ability to abuse this power to Europe.

On August 11, 2003 an international coaliton of 48 civil liberties groups and consumer rights campaigns sent a letter (translated into 8 languages) to the EU urging it to reject the proposed Directive. In conjunction with the letter, the Coalition for an Open Digital Environment (CODE) was formed to protect the public's rights, innovation and competition against the proposed EU Directive on Intellectual Property Enforcement.

IP Justice published a White Paper on the proposal: "Overbroad Proposal Threatens Civil Rights, Innovation and Competition" and a media advisory about the CODE letter. The Foundation for Information Policy Research analysis argues the proposal will harm competition within the EU Single Market.

The UK Patent Office has requested public comments on the IP Enforcement Directive.

The EUROPARL Committee on Legal Affairs and Internal Market will begin discussion on the merits of the proposed IP Enforcement Directive in Brussels on September 11, 2003.  Amid growing criticism over the proposal's threat to civil rights and damage to European competition, the EU plenary vote on the proposed directive has been pushed back until November 2003. The Directive shall be implemented eight-teen months after its adoption by the European Commission.

Since enforcement of the Digital Millennium Copyright Act (DMCA) in the United States, several efforts have begun to reform it's broad prohibitions that outlaw legitimate consumer circumvention of their own property and ban the publication of technical information.

A .  US Congress Proposes DMCA Amendments

1 .  Digital Media Consumers' Rights Act (DMCRA)

In January, US Congressman Rick Boucher (D-VA) introduced the Digital Media Consumers' Rights Act of 2003 (DMCRA) to restore consumers' right to circumvent the controls placed on their own CDs, DVDs, eBooks, and other types of intellectual property. DMCRA (HR 107) would permit legitimate consumer circumvention for non-infringing uses, such as reading ebooks on laptops, playing a "stereo-only" CD on a computer, watching a DVD on a Linux computer or fast-forwarding through commercials.

The DMCRA attempts to reaffirm the traditional fair use standard applies to digital works by permitting circumvention for legitimate fair uses. The DMCRA would allow circumvention for archival, display, and scientific research, even if the manufacturer claims to have enabled the purchaser to exercise these rights.

DMCRA attempts to reestablish the US Supreme Court's "Betamax" standard by stating that it is not a violation of the DMCA to manufacture, distribute, or make non-infringing use of hardware or software that is capable of enabling significant non-infringing uses.

DMCRA would amend the DMCA to help permit scientific research into technological restriction schemes.

The DMCRA has been referred to the US Congressional Subcommittee on Courts, the Internet, and Intellectual Property. Check the status of this bill here.

EFF maintains an Action Center to assist US citizens in contacting their legislative representatives in support of DMCRA.

Protect Fair Use also operates a website to inform and protect consumers' rights to digital fair use.

2 .  Benefits Authors without Limiting Advancement of Net Consumer Expectations Act (BALANCE)

US Congresswomen (D-CA) Zoe Lofgren introduced the Benefit Authors without Limiting Advancement of Net Consumer Expectations Act (BALANCE) to restore consumers' right to circumvent the controls placed on their own CDs, DVDs, eBooks, and other types of intellectual property. BALANCE (HR 1066) would permit legitimate consumer circumvention only if it is necessary for a non-infringing use and if the copyright owner does not enable the purchaser to exercise their fair use rights.

BALANCE would allow circumvention for archival or display purposes, but would not allow scientific research into technological protection measures or circumvention where the manufacturer has made the non-infringing use available, such as by releasing their own version of software that would allow access to digital content.

Although BALANCE is a good start for restoring consumers' rights, it is not as complete as the DMCRA. For example, manufacturers could continue to prevent consumers from exercising their rights by releasing a limited or crippled method for allowing access to that content, such as a very basic Linux player for DVDs.

BALANCE has been referred to the US Congressional Subcommittee on Courts, the Internet, and Intellectual Property. Check the status of the bill here.
 

B .  Circumvention Reform in the U.S. Copyright Office

Under the DMCA, the US Copyright Office conducts a study every three years to determine which works are adversely affected such that the owners are not able to make lawful use of them due to technological restrictions. Under this Rulemaking, the US Copyright Office may issue exemptions to permit owners to circumvent their media for lawful purposes. In the first Rulemaking in 2000, the Copyright Office issued only two narrow exemptions, one to permit the circumvention of lists blocked by filtering software and another to permit bypassing outmoded or broken dongles.

Under the Rulemaking, the Copyright Office accepts comments from the public in its effort to determine which class of works have been adversely affected by the DMCA's circumvention ban. For more detailed information on the Copyright Office Rulemaking Proceeding, visit the US Copyright Office website here .

IP Justice submitted Comments to the US Copyright Office recommending exemptions for the circumvention of restricted music CDs, DVDs, and eBooks to permit lawful uses. The US Copyright Office was flooded with over several hundred comments from the public during the comment period requesting exemptions to engage in bypassing DVD region codes, skipping commercials, and making fair use of copy or access restricted CDs among other lawful uses.  Reply comments have also been posted.

IP Justice testified at the 2003 US Copyright Office DMCA Hearings on May 14th (transcript) and May 15th (transcript) to request the Office recommend exempting restrictions that block consumers' lawful use of digital media (see schedule).

IP Justice also filed Post-Hearing Comments as part of the DMCA Rulemaking proceedings on June 20, 2003.

The head of the National Telecommunications and Information Administration (NTIA), an agency of the United States Department of Commerce that serves as the President's principal adviser on telecommunication policies, criticized the US Copyright Office for placing an unreasonably high burden of proof on consumers who seek DMCA exemptions under the Rulemaking.

On August 11, 2003 NTIA administrator Nancy J. Victory sent a letter to the Register of Copyrights Marybeth Peters stating that the standard set forth by the US Copyright Office, "imposes a significantly heightened burden on proponents of an exemption, and is therefore inconsistent with the opportunity that Congress intended to afford the user community" by creating the Rulemaking.

Based on the US Copyright Office's recommendation, the US Library of Congress will issue its ruling before October 28, 2003 on what (if any) exemptions will be granted to the DMCA's general ban on circumvention.

The Copyright Office granted a petition by Static Control Components to consider a newly proposed class of works to be exempted from the prohibition on circumvention of technological measures that control access to copyrighted works. Static Control makes printer cartridges that are compatible with Lexmark's printers. Lexmark sued Static Control under the DCMA's access control prohibitions to prevent it from providing compatible lower priced printer toner cartridges. Static Control has asked the Copyright Office to exempt computer programs embedded in machinery such as printers in order to provide interoperable equipment.

Columbia Law Professor Jane Ginsburg was called as a witness by the US Copyright Office during its DMCA Rulemaking on May 9th to address Static Control's Petition. Professor Ginsburg said she worried about the effect that the anti-circumvention provisions could have on other industries. In her testimony, Professor Ginsburg discussed a hypothetical where an embedded chip could be placed in an automobile component to prevent competitors from making aftermarket replacement parts. Static Control's website also provides more information on its petition to the US Copyright Office under the DMCA Rulemaking.

On August 7, 2003 North Carolina Governor Mike Easley signed House Bill 999 into law that allows printer users the right to refill any toner cartridge. While not addressing the federal DMCA issues, this state law does void any contracts or purchase agreements that banned cartridges from being remanufactured.

C .  DMCA Reform in the US Courts

Several cases are currently pending in US federal courts that challenge the DMCA's circumvention prohibitions and could provide some relief for consumers and innovators or could further erode consumer rights, depending on the outcome.

1 .  Lexmark v. Static Control Regarding Printer Toner Cartridges

The US' second largest printer manufacturer, Lexmark, has won an injunction in a lawsuit under the DMCA's circumvention laws to prevent a competitor from selling lower priced toner cartridges that are compatible with Lexmark printers. Citing the DMCA's access control prohibitions, Lexmark claims Static Control Component's less costly printer cartridges "circumvent access" to the toner loading program. Thus Lexmark claims Static Control's chips in the toner cartridge are circumvention devices prohibited by the DMCA. Within weeks of being sued by the printer giant under the DMCA, Static Control agreed to stop making its lower priced compatible chips. 

On Feb. 27, 2003 Judge Karl Forester of the U.S. District Court for the Eastern District of Kentucky issued an injunction against Static Control Components pending the outcome of the trial.  Read Judge Forester's Findings of Facts and Conclusions of Law here .

Static Control filed an appeal brief with the 6th Circuit Court of Appeals at the end of June, and Lexmark filed a response at the end of July. The main Static Control argument was that the toner program was not the object of protection, distinguishing it from works such as DVDs or music. Static Control argues that the purpose of the technological measure is not to protect the work, but rather to preserve Lexmark's business model of selling expensive replacement toner cartridges. Static Control also argues that the exemption for reverse engineering 1201(f) should permit its activity. Static Control also argued that it is entitled to an exemption based on fair use, since consumers have a fair use right to refill and repair their printer toner cartridges. It is expected that the court will hold oral arguments this fall and issue its decision in 2004.

Static Control's website posts court briefs and rulings in its litigation against Lexmark.

2 .  321 Studios v. Hollywood Regarding Fair Use of DVDs

In 2002, a software company called 321 Studios filed a legal challenge to the DMCA's ban on bypassing DVD access controls in order to make lawful copies of DVD movies. In the Declaratory Judgment action, 321 Studios asked the court to approve of its distribution of software that enables fair use and lawful backup copying of DVDs, despite the DMCA's ban on circumvention tools. In response, Hollywood studios have filed a motion for summary judgment against 321 Studios to prevent the fair use software's distribution.

If successful, 321 Studios' legal challenge could create some meaningful breathing space under the DMCA for firms who want to build competing software and devices that can interoperate with digital media, like DVDs. It could also ensure consumers are able to copy and edit their music and movies as they have in the past, despite the legislative and technical prohibitions.

Judge Susan Illston of the US Federal Court for the Northern District of CA heard testimony regarding a summary judgment motion on May 15, 2003.

Amicus briefs supporting the public's right to make fair use of DVDs were filed by a group of civil liberties organizations and a coalition of copyright law professors.

The case is currently pending in US federal court for the Northern District of California. More information on this legal challenge is available at from the consumer rights website Protect Fair Use.

3 .  ACLU/Edelman Regarding Access to Test Website Blocking Software

With the help of the American Civil Liberties Union, Harvard University researcher Ben Edelman launched a legal attack in July 2002 that could overturn portions of the DMCA's circumvention prohibitions. Edelman needs to gain access to lists of websites blocked by filtering software so he can report back to the public on the accuracy and effectiveness of the software. But filtering software companies use the DMCA and encryption to prevent researchers such as Edelman from gaining access to the lists.  This prevents this software from being tested. 

Although the US Library of Congress issued an exemption in 2000 to permit circumvention to access lists of blocked websites, its still illegal under the DMCA for anyone to build a tool that could enable Edelman's explicitly lawful circumvention. Edelman's legal challenge points to the inherent illogic of a law that claims to legalize conduct, but then outlaws all tools necessary to engage in that conduct.

In April 2003 the case was dismissed because Edelman lacked standing to pursue the action and could not show a likelihood that N2H2 would file suit if he continued his research. The appeal deadline for Edelman passed on 5/19/2003, so the case is now officially closed.

More information on this legal challenge is available from the ACLU archive.

4 .  Chamberlain Group v. Skylink Technology Regarding Garage Door Openers

In January 2003 the Chamberlain Group filed a lawsuit under the DMCA against its competitor Canadian-based Skylink Technology in the Northern District of Illinois. Skylink manufactures a universal garage door opener that is compatible with Chamberlain garage doors by tricking the software on the garage door motor into opening the door.

Chamberlain claimed that Skylink's universal garage door opener violated the DMCA by circumventing the security code technology that controls access to the garage door software, and that it has no other significant purpose, and that is marketed for the use of circumvention.

Skylink, in its opposition brief, argued that Chamberlain's claim under the DMCA must fail because the Skylink device only allows access to the noncopyrightable garage door opening process. Skylink argued that since the software (the “protection measure”) and the underlying “work” are the same, the software would be controlling access to itself. This, according to Skylink, is unacceptable, since 1201(a)(2) requires that the protective measure control access to a protected work, not the protective measure itself.

Skylink claims that its device is not “marketed for circumvention”, but rather to allow garage door owners to access their own garage doors.

Skylink also argued that it is not in violation of the DMCA since the statute only prohibits circumvention without the authority of the copyright owner; and since Chamberlain did not shrink-wrap or set other restrictions on the customer's ability to use the garage door software, the use was not unauthorized.

Lastly, Skylink claimed that its product falls under a 1201(f) "safe harbor" exemption for interoperable products.

On August 29th, Judge Rebecca Pallmeyer in Chicago denied part of a summary judgment motion filed by Chamberlain against Skylink. The Court said it disagreed with Chamberlain Group's argument that a garage owner violates the DMCA if he or she loses the transmitter and manages to operate the garage door opener by circumventing the computer program in it. The Court said, "The homeowner has a legitimate expectation that he or she will be able to access the garage even if his transmitter is misplaced or malfunctions."

The Court also expressed appreciation for amicus curie briefs filed by the Consumers Union and the Communications Industry Association (CCIA) that argued Chamberlain's interpretation of the DMCA as prohibiting after-market replacement transmitters would have the effect of stifling innovation and increasing consumer prices.

In rejecting the DMCA claim, the Court said, "for reasons identified by Skylink or by amici, Skylink itself may be entitled to summary judgment."

See IP Justice media release of September 2, 2003: "Court Rejects DMCA Claim Against Garage Door Manufacturer: ‘Common Sense' Prevails in US Copyright Case" see also Chamberlain Group v. Skylink Technologies legal case archive.

5 .  Hollywood v Tritton Technologies Over Distribution of DVD Copying Software

On September 17, 2003 Paramount Pictures and 20th Century Fox sued Tritton Technologies, QOJ, Worldreach, and Pronto Ventures for distributing software that allows people to make back-ups and other lawful fair use copies of their DVD movies. The studios claim the software is illegal under the the US DMCA and have asked a Federal Court in New York to forbid the software's distribution.

This case is similar to the 321 Studios case because the studio's goal is to ban the DVD copying software, but this time, Hollywood aims to extend liability not only to creators of the fair use software, but also to third-party distributors. See IP Justice Media Release of September 18, 2003: "Movie Studios Attack Distributors of DVD Copying Software"

 
  IV .  Circumvention Ban in Free Trade Area of the Americas (FTAA) Treaty

The Free Trade Area of the Americas (FTAA) Treaty, which is currently being drafted and aims to bind the 34 democracies in the Western Hemisphere to the same laws in a broad range of topics, including intellectual property. The FTAA draft treaty includes a chapter on conforming national copyright laws with a proposed clause that outlaws even more legitimate consumer circumvention than the DMCA or WIPO.

At present, there are two possible clauses vying for inclusion in the final FTAA Treaty that deal with "Obligations concerning Technical Measures" (Section 21.1). The first proposal basically mirrors the language of the WIPO Treaties on this subject and would require signatory countries to: "provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors, ... in connection with the exercise of their rights ... and that restrict acts, ... which are not authorized ... or permitted by law." The proposal would not require countries to broadly outlaw circumvention or tools used for circumvention. It would still be possible for a country to permit legitmate consumer circumvention and digital fair use tools under this language.

The second proposed clause for Section 21.1, however, not only goes further than WIPO requires of countries, it even outlaws more legitimate consumer circumvention than the US DMCA. It would require countries to outlaw the act of circumvention and also to forbid tools and services capable of circumventing technological measures "that restrict unauthorized acts". And there are none of the exceptions to the general ban on circumvention that exist (at least theoretically) in the DMCA in an effort to protect reverse engineering and computer security. And the DMCA's requirement that a person have knowledge that a device is offered for circumvention to be liable is deleted from this proposal. This clause creates strict liability for a person providing a tool capable of circumvention even if she had no knowledge that the software or tool she provided could circumvent a technological measure. Nor does this clause include any narrowing provision or other recognition of the need to protect fair use and freedom of expression rights against the misuse of technological restrictions.

Negotiations over the Treaty's final language are ongoing through January 2005. The Treaty's entry into force is sought by December 2005.

The FTAA Committee of Government Representatives on the Participation of the Civil Society issued an open and ongoing invitation to civil society in FTAA participating countries to submit written contributions about the treaty's text. Written submissions through May 1, 2004 will be included in a report for the 2004 Ministerial Meeting on the FTAA Treaty. Information on how to participate in the process and send comments is available at the FTAA's website.