Taking Away Your Personal Use Rights, One Anti-Innovation Lawsuit at a Time

Last week, a California Superior Court judge ruled that Kaleidescape did not violate its contract with the DVD DRM licensing authority by distributing a home media server that rips and plays DVDs. This is an important victory for consumers, but it’s also a sad reminder of how your ability to make personal use of digital media is under attack.

As the LA Times’ Jon Healey nicely explains, this suit had absolutely nothing to do with stopping “Internet piracy” and everything to do with controlling innovation. In the DVD world, technology creators have to beg permission first from the DVD Copy Control Association, which is essentially controlled by the movie studios. That’s why to this day there are still no mass market tools for backing up your DVDs or copying movies to portable devices, for instance.

Kaleidescape is a telling exception. To sell its expensive, niche market, thoroughly locked-down media server, it has had to go through years of costly litigation. DVD CCA still claims that the license forbids this technology and may appeal the decision; in other words, Kaleidescape is still having to defend itself in court in order to deliver its award-winning, innovative new product.

Of course, Kaleidescape isn’t the only personal use technology under attack in court. Consider the lawsuits against Cablevision’s remote DVR service and XM Radio’s Inno portable player, which may become “victim[s] of the engineering police,” as Public Knowledge‘s Art Brodsky puts it in an excellent column here. Consumers have long used VCRs and audio tape decks to record off TV and radio, but the entertainment industry wants to decide if and how those abilities come into the digital age. Neither the Cablevision DVR nor XM’s Inno is about “Internet piracy”; just like in the DVD context, the entertainment industry is simply aiming to force innovators to beg permission first.

You can help fight back against this assault on your digital media freedoms — use EFF’s Action Center to support the FAIR USE Act and oppose the PERFORM Act, a digital radio restrictions bill.

(Cross-posted from DeepLinks)

Former EMI Exec Ted Cohen’s P2P Proposal

Will try to link up if/when the article becomes publicly available. Coolfer has the scoop — here’s an excerpt:

“What I propose is an aggressive six-month trial by a major P2P service (any takers?) that could finally give us clear insight into the behavior of P2P users. Is it about interoperability, community and deep catalog, or is it all about free? We need to know.

“Here’s how it would work: Leave the service exactly as it is: no filtering, no DRM, no changes to its current offering of unprotected MP3s. The rare tracks, bootlegs-they all stay there. Just charge for each piece of content and split the revenue between the service and the content owners.

“Yes, I know. Deals aren’t in place with labels and publishers. Some content out there (bootlegs, etc.) isn’t ‘cleared,’ and yes, it might keep some accountants working overtime. But wouldn’t it be better to figure out how to allocate all the revenue than not to have it at all? For the ‘gray’ content, I suggest labels consider a 50/50 percentage share with the artists, obviating arguments on who owns it.”

Fixing Copyright’s Corporate Death Penalty

I wrote an editorial for TomPaine.com about the FAIR USE Act:

“The punishment should fit the crime,” but copyright law’s harsh penalties don’t match up with this maxim, and the entertainment industry has taken full advantage of that in its misguided war on new technologies. A bill recently introduced in Congress would help address this imbalance and add crucial protections for the rights of innovators and fans.

Just last week, Viacom sued YouTube and Google for hosting allegedly infringing videos uploaded by users, and nearly every news headline highlighted the one billion dollars in damages that the entertainment company is seeking. In fact, the suit declares that figure as a floor, not a ceiling—the penalty could be billions higher if the suit is successful, even without Viacom proving that much actual harm.

The threat of so-called “statutory” damages hangs over the heads of technology creators of all stripes, not just YouTube. Reps. Rick Boucher and John Doolittle have introduced the FAIR USE Act of 2007 to limit this draconian penalty and provide innovators with some much-needed breathing room.

Read the whole thing here.

Links and Rough Notes on the Cablevision Remote DVR Decision

Sherwin Siy nails the bottom line on the Cablevision remote DVR decision — why should it matter whether customers store their DVRs at home or with Cablevision? There’s an artificial product-service distinction here, and the judge doesn’t clarify exactly why or how the law supports it. Bill Patry has a nice analysis of what’s lacking in the judge’s arguments.

The more I thought about the copying issue, the less clear it was to me — here are some rough notes:

One of things that caught my eye was the court distinguishing Netcom, in which a court held that an ISP and bulletin board provider was not directly infringing. The judge says that Netcom was “premised on the unique attributes of the Internet.”

This reading was notably rejected as an “overstatement” in CoStar, in which the court held “more must be shown than mere ownership of a machine used by others to make illegal copies;” instead, “the Copyright Act require[s] some aspect of volition and meaningful causation.” The Cablevision judge never really addresses this framing head-on.

The court declares that Cablevision is playing an “active” role in the copying of TV shows, and it thus is more like a copyshop clerk who copies a book on behalf of a customer, rather than simply providing machines for the customer to use himself. But no Cablevision employee hits the record button; the user is in control of what gets recorded.

The court highlights Cablevision’s “on-going participation” — it houses the system, monitors it, repairs it, and has a continuing ability to control it. These are all issues that would typically come up in the secondary liability context, but how they necessarily matter in terms of direct infringement isn’t clear to me. Kinkos performs all those functions too, after all. The sophistication of the technical system shouldn’t be determinative.

The court also points out that Cablevision supplies the content to be copied and has “unfettered discretion” over what particular content may be recorded. Now imagine a bookstore in which a fixed set of books on shelves were provided alongside photocopy machines. It too has “unfettered discretion” over what content will go on the shelves. The bookstore maintains the machines and even provides staff that will retrieve books for patrons. A customer gets a book and then copies it — is this so different from the Cablevision case?

DMCA Architect Says Law Hasn’t Achieved Goals

What refreshing honesty — at least, that’s what this appears like based on Geist’s summary. I still haven’t been able to watch the video for myself.
Nearly a decade after the DMCA passed, both empirical evidence and the insights of the Darknet paper convincingly demonstrate that the DMCA+DRM cannot stop or even slow “Internet piracy.” Yet DMCA defenders so often ignore this, or, instead, turn it into a reason to ratchet up copyright’s restrictions through DRM mandates, harsher secondary liability rules, mandatory filtering by Internet intermediaries, and so on.

I find this stay-the-course mentality completely confounding, and I’m glad that even Bruce Lehman appears to agree. I don’t think we’re in a “post-copyright era,” but it is long past time for a better way forward.

American Studios’ Secret Plan to Lock Down European TV Devices

Hollywood’s desire to force DRM on TV fans doesn’t stop at the U.S. border — an international consortium of television and technology companies is devising draconian anti-consumer restrictions for the next generation of TVs in Europe and beyond, at the behest of American entertainment giants.

EFF is the only public interest group to have gained entrance into the secretive meetings of the Digital Video Broadcasting Project (DVB), a group that creates the television and video specifications used in Europe, Australia, and much of Asia and Africa. In a report released today, we show how U.S. movie and television companies have convinced DVB to create new technical specifications that would build digital rights management technologies into televisions. These specifications are designed to give content providers a veto over innovation and take away consumers’ rights to make legitimate uses of lawfully acquired digital television content.

Consumers would never choose this future, so Hollywood will try to force it on them by regulatory fiat. In the US, the studios have wielded the DMCA against innovators and fans, worked to foist DRM into pay TV systems, and lobbied hard for a broadcast flag mandate for over-the-air TV. Hollywood’s strategy overseas is patterned after its work here in the US, and DVB is now developing technical standards that are intended to serve as the basis for legal regulations that will force device manufacturers to use DRM.

As a condition of participation, DVB imposed restrictions on our ability to report on these meetings. Now, after key parts of DVB’s new DRM specification have been sent to the European standards body and may soon be provided to other EU regulators, we are releasing this briefing paper to summarize and expose Hollywood’s plan.

As a condition of participation, DVB imposed restrictions on our ability to report on these meetings. Now, after key parts of DVB’s new DRM specification have been sent to the European standards body and may soon be provided to other EU regulators, we are releasing this briefing paper to summarize and expose Hollywood’s plan.

Read our analysis here.

(Cross posted from DeepLinks)

Support the FAIR USE Act!

Reps. Rick Boucher and John Doolittle’s FAIR USE Act [PDF] would remove some of the entertainment industry’s most draconian anti-innovation weapons and chip away at the Digital Millennium Copyright Act’s (DMCA) broad restrictions on fair use. Take action now and tell Congress to help restore balance in copyright now.

Technology companies play a game of Russian roulette whenever they create products with both infringing and non-infringing uses. Current “secondary liability” standards don’t provide enough certainty, and if innovators guess wrong, they can be hit with statutory damages as high as $30,000 per work infringed. When it comes to mass-market products like the iPod or TiVo, damages could run into the trillions of dollars — more than enough to bankrupt anyone from the smallest start-ups to the biggest companies. Unlike in other areas, the private assets of corporate officers, directors and investors are not shielded from liability in copyright cases.

The FAIR USE Act would limit the availability of statutory damages for secondary liability and allow innovators to make more reasonable business decisions about manageable levels of legal risk. Meanwhile, copyright owners could still get injunctions and actual damages for harm suffered, putting them in no worse a position than civil litigants in most other areas.

The bill would also codify the Supreme Court’s “Betamax doctrine” as it pertains to hardware devices, making clear that manufacturers cannot be held liable based on the design of technologies with substantial non-infringing uses.

Finally, the bill would loosen the grip of the DMCA, which restricts circumvention of digital rights management (DRM) restrictions even for lawful uses. The FAIR Use Act adds 12 exemptions, including the ability to circumvent for classic fair use purposes like news reporting, research, commentary, and criticism.

Broader DMCA and copyright reform remains absolutely necessary, but if passed, this bill would be a big first step in the right direction. Tell your representatives to support it now.

For more information, read the bill here, and check out this EFF article from last year discussing statutory damages and proposing their elimination in secondary liability cases.

(Cross-posted at DeepLinks)

Unfairly Caught in Viacom’s Dragnet? Let EFF Know!

Last week, Viacom sent 100,000 takedown notices to YouTube, but not all the videos included Viacom content. Among the 100,000 videos targeted for takedowns was a home movie shot in a BBQ joint, a film trailer by a documentarian, and a music video about karaoke in Singapore. For its part, Viacom has admitted to “no more than” 60 mistakes, so far. Yet each mistake impacts free speech, both of the author of the video and of the viewing public.

If they are making these kinds of blatant mistakes, who can tell how many fair uses of Viacom content they also targeted in their 100,000 takedowns? If you think your video was removed based on a bogus takedown, contact the Electronic Frontier Foundation at information@eff.org — we may be able to help you directly or help find another lawyer who can. In this situation, as in so many others, EFF will work to make sure that copyright claims don’t squelch free speech.

We’ve also put together this video about the takedowns on YouTube, which you can embed on your website or blog. Check it out, Digg it and spread the word — the more it rises in YouTube’s listings, the more likely it will be seen by users who have received takedowns.

(Cross posted from DeepLinks)

Steve Jobs: DRM Is Bad for Consumers, Innovators, *and* Artists

Today, Apple’s Steve Jobs publicly threw down this gauntlet: “If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store… Apple will embrace this wholeheartedly.”

Why should the labels listen?

* DRM is bad for consumers: “[A] world where every online store sells DRM-free music encoded in open licensable formats … is clearly the best alternative for consumers.”

* DRM is bad for innovation: “If [DRM] requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players.”

* DRM is bad for artists: “So if the music companies are selling over 90 percent of their music DRM-free [as audio CDs], what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none…. [More innovation in stores and players spurred by DRM-free downloads] can only be seen as a positive by the music companies.”

    Jobs isn’t the only music service provider to invite an end to music download DRM — Yahoo!’s Dave Goldberg has long urged the labels to remove the restrictions, and Real’s Rob Glaser said last month that “DRM-free purchases is an idea in ascendance and whose time has come.”

    We agree wholeheartedly with Jobs, since EFF has been making exactly the same points for several years now. As a first step in putting his music store where his mouth is, we urge him to take immediate steps to remove the DRM on the independent label content in the iTunes Store. Why wait for the major record labels? Many independent labels and artists already recognize that DRM is a dumb idea for digital music, as demonstrated by the availability of their music on eMusic. Apple should let them make that music available without DRM in the iTunes Store now.

    There are also bigger lessons here for policymakers. The harm done by DRM could be reduced by reforming the DMCA to allow the evasion of DRM for lawful purposes. Moreover, Jobs’ remarks are another reason for policymakers to reject proposed government DRM mandates, which would only serve to further harm innovation, consumers, and artists. Clearly what’s needed in the digital music world is less, not more, DRM.

    Make your voice heard in Congress now by opposing mandatory digital and satellite radio restrictions.

    (Cross-posted from DeepLinks)

How Many Mistaken Takedowns Did Viacom Send?

JP has everything you need to know to get caught up on Viacom’s C&D’s to YouTube. TopTenSources is aggregating stories about takedown misfires, whether outright errors or overreaching copyright claims.

JP quotes Viacom’s Michael Fricklas saying, “Under DMCA, I believe that YouTube needs to retain the material and repost it if an individual believes that the copyright notice was in error.” As I pointed out in the comments, I don’t think that’s right — YouTube does not have to put the material back up. As long as YouTube takes the allegedly infringing content down, it gets the safe harbor and Viacom can’t go after it. It keeps that safe harbor if the content stays down, and it keeps that safe harbor if it puts the back up pursuant to 512(g).

Responding to a counter-notice following 512(g) protects YouTube from a claim brought by a *user*, but YouTube’s ToS may take care of that anyway.

RealNetworks’ Plea: No More DRM For Downloads

First it was Yahoo!’s Dave Goldberg, now Real’s Rob Glaser has called for an end to DRM on music downloads. At the Midem conference, Glaser reportedly stated that he is “seeing some signs the industry is open to … giving consumers a way to purchase music with the flexibility that you can only get if you take the DRM off…. For purchases, move away from DRM” (emphasis added). What common sense — when you buy music, you own it and should be able to make personal use of it however you want.

This is yet another sign that 2007 will be the year music DRM begins to fade. Glaser did suggest that music services should treat “rental” downloads differently, but will that line hold? I think not, principally for two reasons. First, the rental subscriptions are struggling mightily to gain subscribers, and customers won’t switch to DRMed rentals when they’re already used to unencumbered CDs and unencumbered online purchases. Selling consumers on the monthly subscription model is hard enough without DRM getting in the way.

Second, I am highly skeptical of the argument that the services need DRM because otherwise many users would simply sign up for a month, download a ton of music, and then cancel. Music fans who buy into the subscription model in the first place are precisely the sort who are likely to keep subscribing tomorrow, to keep the flood of music flowing onto their hard drive. What kind of music fan has an appetite for one million tracks today, but doesn’t care about getting the newest albums tomorrow? And why wouldn’t that sort of fan go to P2P, rather than deal with DRMed downloads? What’s more, using DRM isn’t the only way to address this potential problem — Rhapsody et al could allow people to stream all they want, but cap the number of monthly downloads to a reasonable number.

Glaser apparently thinks I’m wrong, but the bottom line is that the subscription model doesn’t by definition demand DRM. Just as the labels are finally starting to come around to MP3 purchases, I think they’ll eventually experiment with subscriptions minus the DRM.

BackupHDDVD Explained by Author

Follow the Engadget story here. Here’s the key section:

“Affirmation 4: BackupHDDVD is nothing, only one person out of a million have the technical skills to extract keys.

My comment: BackupHDDVD is a proof of concept.

Picture this:
Few skilled persons can do massive volume key extraction, and send the keys to a central server on the internet. Then, they create an easy to use decryption program, with a nice GUI that do online key recovery. That way, my father and your father can backup movies.
Or they can send the keydb.cfg file on P2P networks (BitTorrent, E-Mule, etc..)
See the problem now?

The attack I describe in “Affirmation 4″, is not here yet, but it’s coming.”

In other words, darknet, here we come.

HD-DVD DRM Reportedly Broken

Another DRM scheme (inevitably) yields yet another evasion tool. Apparently, Engadget has verified that the BackupHDDVD utility unlocks AACS encrypted HD-DVD discs, allowing users to make copies of the data onto their computer. The utility was released via the doom9 messageboard, home to the FairUse4WM tool as well.

It’s unclear right now whether this break can be easily patched. Felten discusses AACS’ specs here, with links. If you follow the Engadget story to doom9, you can read about how the utility was created.
Blu-Ray discs also use AACS, along with BD+, which is explained by Felten here.

Grokster + DSU = ?

EFF’s Fred von Lohmann, post-Grokster: “A variety of new digital technologies are advertised and promoted for uses that the technology vendors believe to be fair uses. For example, Time Trax promotes its technology for recording satellite radio, Mercora for recording music from webcasts, and Sling Media for transmitting your TiVo’d TV shows to yourself over the Internet….

“Is it inducement if you reasonably, but incorrectly, believed that the use for which you promoted your product was covered by fair use (or any other copyright exception)?”

The Federal Circuit, today (via Jason): “Grokster, thus, validates this court’s articulation of the state of mind requirement for inducement. See Manville, 917 F.2d at 544. In Manville, this court held that the ‘alleged infringer must be shown . . . to have knowingly induced infringement,’ 917 F.2d at 553, not merely knowingly induced the acts that constitute direct infringement. This court explained its ‘knowing’ requirement:

‘It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement. The plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.'”

MS Buys WeedShare Patent; Will Zune Users Be Paid to Share?

Answer: probably not immediately, although some think it’s certainly on the way.

When WeedShare came out, major labels treated its model — paying ordinary fans for sharing music with other buyers — as a passing fad rather than a sign of things to come. They refused to license it, never giving it the fair shot it deserved.
Today, it’s increasingly impossible to ignore the potential business benefits of embracing taste sharing tools, among many other pathways to reach fans. The Zune’s sharing features may be incredibly limited, but it is yet another sign that relying on fans to help drive sales is getting a more serious look.

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