1201 roundtable, relation of 1201 to infringement, consumers, and competition

Copyright Office, 1201 Roundtable, DC
James Madison Building, Mumford Room
NB: I won’t be here tomorrow because the Office had the
temerity to schedule the roundtables after I committed to a different exiting
roundtable, this one at Notre Dame on deception.  I wish I could be at both.
Session 1 Relationship of Section 1201 to Copyright
Infringement, Consumer Issues, and Competition
This session will explore the role and effectiveness of
section 1201 in protecting copyrighted content, and will consider how the
statute should accommodate interests that are outside of core copyright
CO: Jason Sloan, Kevin Amer, Regan Smith, Abi Mosheim
Smith: 1201 is part of DMCA; Congress recognized that TPMs
could be deployed not only to prevent piracy but also support new ways of
dissemination of © material to users digitally. 
Protects access controls, trafficking in circumvention tech for access
and rights controls.  Regulatory process
has become burdensome, particularly upon renewal; permanent exceptions may not
have adequately foreseen developments. 
Amer: big picture: overall role and effectiveness of
1201.  Many comments noting the different
distribution models TPMs facilitated; other comments questioned the
relationship between legal protection of TPMs and effectiveness of TPMs. 
Jonathan Band, Library Copyright Alliance: lawyers like to
feel we have an impact on the world, but TPMs, to extent they’ve been
effective, it’s b/c the TPMs have been technologically effective. Saw early on
ineffective measures such as CSS, very easy to hack, and the tech to hack it
was widely available. There was some hacking, some not, but we now are
generations beyond that, especially w/r/t content in the cloud behind
paywalls.  The law has nothing to do with
the effectiveness of those systems, especially w/r/t the general public.  What makes those work is the tech, not the
legal protections.  Hacking into systems
is the purview of the CFAA and state anti-hacking statutes. [Not to mention
that many of these threats are foreign and also by dedicated lawbreakers; not
deterred by anything we can do.]
Allan Adler Association of American Publishers: Recognized
early on [that is, before there was evidence], b/c this legislation was the
result of an int’l treaty determining that legal protections were important.
Common sense that ability to use locks means nothing w/o legal restrictions
against violating locks or creating devices [like secondary liability?].  Compared this to breaking into a locked room
to get a copy of a book.  [Yeah, that’s
totally what vidders do.]  Convenient,
cut expenses, make works easier to find: but access online had to be secure in
the face of all the ways in which online networks are susceptible to
unauthorized activities.  [There will be
no cars on the information superhighway without perfect protection!]  Wild success.
Jonathan Zuck, ACT | The App Association: remembers buying
Copy2PC, in my younger unruly days—I copied software I wanted to use; it took
creating software to respect it, in my case. [Which is why we should make it
hard for people to create new stuff via remix …]  It’s not the availability that matters, it’s
the inability to walk into Best Buy and get the software that matters—practical
availability, not binary connection.
Raza Panjwani, Public Knowledge: WIPO treaty thought
necessity to provide protections to © owners to encourage them to provide
digital goods and distribute them online. We’ve seen DRM unnecessary to various
business models—iTunes, game distribution platforms, Tor book distribution.  Not necessary; 1201 burdens noninfringing
uses to provide protection, and CBA is justified—do we still need high barriers
to encourage distribution? We should also ask how effective 1201 has been at
discouraging piracy, not just
“circumvention”—comments decry how much piracy there is. [Including, not for
nothing, Adler for the APA, as I recall from a few weeks ago.  Zuck has a point about Best Buy, but the
corrollary is that a digital copy in the wild circulates freely once any DRM
has been circumvented once. Bittorrent doesn’t require you to walk anywhere.]  The content allegedly made available by
circumventing DRM and the content existing in marketplaces is the same—don’t
conflate correlation with causation.
Q: how do we get at that? 1201 actions: relatively common or
Stanley Pierre-Louis, Entertainment Software Association:
new consoles, games, are possible b/c of goals of DMCA: the thought was that we
want to expand consumer access to broadband and new tech, and encourage that by
getting © content online and on devices. We’ve seen that growth, which makes
our industry a growing one, $23.5 billion—we know that our investment in our
tech and software will get protected. 
When we’re talking about DRM-free content, that’s a choice; 1201 doesn’t
require it.  [Unsurprising evasion of the
Q: do you use 1201 in court?
Pierre-Louis: we’ve had a lot of success in preventing
access, so we don’t make legal claims; but we know that have that as a
backstop. Internationally as well.  [Even
in places w/o 1201 style law?]
Troy Dow, The Walt Disney Company: There is real value in
the tech.  The law was also
important.  DMCA was directly relevant to
adoption of CSS, allowed intro of DVD, which was fastest growing device.  That was hacked, but that also spawned
precedent of DMCA in enforcement litigation. Not to say that these techs are
hack proof, but that you keep them out of the mainstream.  Zuck talks about Best Buy: when we were in
litigation with 321 Studios, that was exactly the issue. 1201 keeps that at the
fringes.  Business side: availability of
legal tools was directly relevant to getting into these markets—ACS, 4k, over
the top TV, streaming TV through authentication—1201 a factor in all those things.
George P. Slover, Consumers Union: It’s not the intended
uses, it’s the overbroad unintended/uninvisioned uses that are a problem.  “Breaking into a house to steal a book”:
compare “my wife has baked a cake she intends to take to church; she can tell
her hungry son not to touch the cake on the counter or she can lock him out of
the entire kitchen.” Reconfigure to focus on the protection against
infringement, not interoperability and less closely related side benefits to
industry of denying access.
Q: Dow said 1201 successful for motion pictures. Has 1201
played a useful role in the markets for 3D printers or cars?
Aaron Lowe, Auto Care Association: Aftermarket is a huge
industry in the US. Use of software in virtually every component. We can’t tell
if it’s functional or simply to make it difficult to make aftermarket parts.
1201 is used to keep our industry from reverse engineering and even servicing
cars. We see more and more parts with chips on them making it difficult for
aftermarket to exist.
Brian Weissenberg, Institute of Scrap Recycling Industries,
Inc.: Exactly—last year, when we asked for phone unlocking, phone co. said we
rely on DRM to protect our business model, but that’s not a © interest.
Zuck: Non-DRM business models do exist; the people that make
use of DRM don’t like it.  It increases
consumer support costs, but it’s a necessary antipiracy tool. Successful in
software market; distinction b/t software and content is increasingly blurred.
App that teaches yoga positions: 
sometimes piracy is pulling content out of app and repurposing it.  Final point: expanding beyond intention—I’m
not a lawyer, but my understanding is that where adjudication occurred they’ve
interpreted the DMCA more narrowly for garage door openers and printers [unless
you’re in the 9th Cir.].  The
system worked—jailbreaking exception from Congress. Be cautious about upending
Band: There have been relatively few 1201 cases, especially
relative to 512. Keep in mind its role in larger construct.  One reason why so few is that it’s really
broadly drafted; talks about active circumvention and 1201(b) trafficking;
early cases were strongly in favor of rightsholders; there hasn’t been a need
for litigation because it’s so broad. 
Then the action has shifted to the rulemaking b/c of all these adversely
affected people. You have 2 choices: go ahead and hope that in the event of
litigation you’ll end up in the Fed. Cir. or the 6th Cir. and not in
the 9th Circuit.  Good luck on
ensuring that!  Or you can go to the
rulemaking. That’s where the energy and activity has all shifted. That’s why so
many of us are so intent on getting it to work better.
Robyn Greene, New America’s Open Technology Institute:
Agrees with Band re: not much litigation. 
It’s impossible to calculate the chilling effect on the market. Entrepreneurs
trying to enter a marketplace don’t want to take the chance that all their efforts,
expenses etc. are all for naught even if they eventually win litigation.
Litigation has been pushed to rulemaking, and that’s still a chill, especially
for activities very clearly unrelated to infringement, such as security
research, due to the burdens of the exemption process.
Q: add an infringement nexus to 1201?
Adler: there’s already an infringement nexus, but not in
1201(a); access is not part of exclusive rights under 106, but that’s the
threshold issue w/r/t uses that implicate exclusive rights will occur. Congress
structured 1201(a) to deal w/ access independent of the issue of infringement
b/c access was whether consumers could exploit the marketplace for these work
and whether there’d be a market to exploit. 1201(b) doesn’t address
circumvention of TPMs that protects rights of a copyright owner b/c it
recognizes those rights are themselves subjects to exceptions like fair use—have
to look at questions differently. Access isn’t about infringement. [Which is
why (c) owners have merged access and rights controls.] 1201(b) is where the
balance w/exceptions and limitations were struck. [But merger destroyed that
balance, and you guys did that, not us.]
Band: yes, but Congress was thinking about access to
something you hadn’t paid for, such as access to premium cable you hadn’t paid
for.  Not the situation that Lowe deals
w/in auto context, a person not being able to access her own software in her
own car to make sure she doesn’t pay marked up prices for repair parts.  No policy reason for restrictions on rights
to access their own copies for which they have paid.  That’s why we think changes make sense.
Whether through statutory change or liberal application of the rulemaking in
the case of at least software where we see this problem most pervasively, we
could simplify the CO’s work considerably and not regulate the entire US
Q: is your theory dependent on owning the good, rather than
renting? Fear that consumers may have paid for a penny but want to access a
pound? Does it matter whether you own the refrigerator or just lease it?  Is it different w/ a book?
Band: there are various ways to slice the loaf; if amending
1201(a), the best way would be requiring a nexus to infringement.  [The only reason fridge makers now assert
that consumers aren’t really fridge owners is the legal exploitability created
by 1201.  It was uncontroversial that your
thousands of dollars bought you a
fridge until then; they don’t take it back if you breach your “license”; the
legal regime is driving the ownership characterization and that’s bad.] 
Q: would nexus encompass the paradigm “access to watch”?
Adler: problem w/requiring infringement nexus is fails to
recognize that access has its own independent value w/o regard to whether
someone will infringe. We hear all the time about print v. digital that reading
a book isn’t something that exploits one of the exclusive rights of a © owner.
True, but purpose of putting a book on the market is ultimately to have people
read it. [Won’t that involve copies, digitally speaking, especially given the
RAM copy doctrine that Adler surely endorses?] 
Only way to control access is to not require infringement nexus.
Band: could be drafted; if I rent a book for a week, and I
fiddle w/software so I can keep it another week, that might get into what we’re
actually interested in, especially since “reading” involves RAM copies of more
than transitory duration.  Even in that
case, it could be drafted to be w/in the scope of amended 1201.
Dow: Adler is right; absence of nexus to infringement is
deliberate; proposals to require nexus were rejected b/c that would make it duplicative
of 106.  What Congress saw was a world in
which value to consumer and © owner was derived from access, not 106
rights.  Doesn’t require copying, distribution,
public performance, but just access: celestial jukebox. Congress had that in
mind.  [But not the celestial fridge!]
Panjwani: Nexus could help a lot.  “Exclusive right of access for authors” is
the claim of Congress’ intent.  So: Let’s
have a debate about right of access, not circumvention. If Congress had wanted
to do that, they could have put it in 106. 
Instead, Congress said it wanted incentives to enter digital markets,
and thought this was a necessary step. Let’s now evaluate that. WIPO treaty says adequate protections for TPMs employed by authors
in the protection of their existing
rights. Adler/Dow: underestimate ability of plaintiffs’ counsel to find 106
violation: lawfully possessed after the rental expired?  Unlikely! 
Doesn’t require such a broad prohibition, burdening all other
noninfringing uses.
Q: speak to distinction between access and copy controls in
1201(a) and (b).
Panjwani: Antitrafficking provisions’ distinction in
implementation has not worked.  Access
control and copy control are the same in practice.
Q: b/c they’re merged in industry?
Panjwani: yes, in practice.
Pierre-Louis: in our industry that’s not the case.
Publishers and disk manufacturers have separate types of access and copy
controls.  We’re not trying to ID
infringers, but cultivate consumers. Access to work helps distinguish users—some
want it mobile, some online, some on disk. These rules let us meet customers
where they are. Nexus to infringement harms the consumer, b/c right now
possession of the work isn’t infringing, it’s the uses.  That access control allows them to make uses.
Slover: Ownership v. rental: Ownership is the core focus.
The rights of a consumer who owns a product to use it. Be careful: ownership
can be written around by lawyers so a consumer thinks she owns something but
doesn’t.  Concept: consumer’s rights and
dominion about the product they paid for. 
It’s a useful starting point to clear the smoke around the tech.
Traditional incidents of ownership should matter. Auto software: if consumer could
do it in garage w/screwdriver in the past, it wasn’t a © issue.  In the new world, may require access to
software to make adjustment; the fact there’s a TPM on top shouldn’t change the
ultimate calculus.
Q: software embedded devices study: could we treat those
TPMs differently than TPMs protecting expressive works, instead of infringement
Slover: not a © lawyer, and Consumers Union came into this
from phone unlocking. Can’t speak too definitively, but sees a big picture
conceptual distinction b/t core creative works like books, movies, songs and
products that you now can’t use unless you have software inside them.
Adler: Panjwani suggested that Congress could have included
access w/in exclusive rights of © owner. 
Presumably his constituents would vigorously oppose that, b/c it would
make access a property right as the other aspects of 106 are [hah!] as opposed to
encouraging use in a market and ability to assert terms & conditions of
availability & use by controlling access in the first instance.  Concerned by emphasis in notice on 1201 “outside
of core copyright concerns.” Not sure what that means, but mistake to equate
that w/notion of nexus to infringement, b/c © concerns drive far more than
whether one of the exclusive rights is violated. Incentives to create works of
original expression in the first place, which is driven by © incentives [for
fridges, sure].  Access can occur w/o
infringement and that is a core © concern and we shouldn’t treat that narrowly
so that we don’t think that only infringement raises core © concerns.
Q: goes to Slover’s point: is there a way to reform 1201 to
include things like circumventing TPM to watch movie for free, but excluding
garage door openers?  One idea: permanent
exemption for software essential to operation of a device. Would that strike a
proper balance?
Zuck: Discussion on embedded software roundtable was quite
robust, but the same dynamism in product offerings still applies to “embedded
software market” as well. Tivo: the hardware was given away as a loss leader,
and the embedded software and services associated w/it created the value. [You
could do that w/cars too—but usually you do that with leases, and there isn’t
an obvious case to be made that you should be able to do that by preventing
replacement parts from being used.] Couldn’t support broad exclusion of
embedded software. 
Panjwani: a permanent exemption for embedded software would be
a good start, addressing overhang of issues like 3D printers. There are also a
number of issues around traditional expressive works.  [As indeed software must be to be protected
by ©.]  Exemptions involve appropriate
balance b/t access for fair use purposes; 1201 also substantially burdens those
uses.  Caution that any attempt to create
a permanent exemption would instead turn into a fight about what a software-enabled
device is; could spend years hashing out a definition. End result would be
fighting not about © infringement but about the device definition.
Pierre-Louis: tread carefully w/blanket exemptions.  Software is expressive: we use software to protect
software.  Blanket rule could swallow
entire industry. Games are played on game consoles; TV; movies; all manner of
distribution b/c consumers demand it.  So
we have to tread carefully b/c implicates more than just a tractor.
Band: Switching hats to Owners’ Rights Initiative: we could
support that, though a nexus requirement would be better. Embedded software
exemption would be a good start.  There
could be exceptions to the exception for game software.  Bigger point: Congress in 1201, and I was part
of those discussions, wasn’t thinking about tractors. Fact that we’re talking
about tractors does suggest a serious problem. 
Internet of things: CO as sudden regulator of the entire manufactured
world.  We went from 2 exemptions to 22;
in the next cycle it will continue to grow geometrically. 
Lowe: Emphasize parts on a car that used to be repairable
using mechanical means now require software access. The software is equivalent
to the parts; taking away the right to repair threatens our industry. People should
be able to modify their cars in their garages; your suggestion is a good
one.  Mechanical functions taken over by
software, including windshield wipers: the noncopyrightable function should not
be protected.
Dow: Embedded software “necessary to make a device run”—I’m
not sure how to interpret that, which highlights difficulty of drafting.  Thinking back to early cases, RealNetworks—authentication
sequence; you needed to authenticate your device to ensure you were talking to
a real server.  If you spoof the
authentication sequence, that was really software, and a lot of what goes on in
TPMs is authentication. Urge caution of impact on totally different contexts.  [Which is exactly what the car folks are
Q: devices w/ and w/o expressive content?  One testimony said that the software was the same
no matter what the device does. Can we distinguish based on what the device
Pierre-Louis: we have consoles; we have servers in the
cloud. We have different kinds of interoperability/authentication.  It takes a lot of thinking about how those
work before we get into rules.  Software
that operates the machinery might be copyrightable, but I don’t know enough
about the tech to say it shouldn’t count. Some of these other areas, they are
probably doing copyrightable things, and it’s not for me to judge. There are rationales
behind each of our uses of software, and there are unintended consequences. For
us, the leaks are the business; once they’re out, they’re out.
Zuck: There’s certainly software itself; we are interested
in using these protections.  A lot of
different licensing models for software itself, and protecting dynamism is
really important. Allows different models of making software available to
different sectors.  I’d rather approach this
from the other end. 1201 process in place: maybe it’s better to try to
streamline renewals, once you’ve identified a clearly acceptable use.  Seems to be a working process [heh]. Rather
than trying to go through and predict legislatively into the future.  [Because the 1201 prediction was so bad … no,
wait, that’s not your position.  Everyone
likes predictions that predict that they should continue to make money.]  The current system is working. I don’t mind
the default answer being no.  The notion
that people are afraid to start new businesses b/c of © liability is not a
problem—it’s not that confusing what is and isn’t legal. [Uh, ok.]
Greene: We spent a while on marketplace implications of
effectiveness/ineffectiveness of TPMs, but not on public safety. Consider
chilling effect on security research. Geometric increase in connected devices;
1201 is a tremendous obstacle to security research to ensure that cars,
airplanes, fridges, or TV sets are in fact secure. When we set access as the
threshold and tell them that 1201 is meant to stop that, as opposed to
protecting against infringement, then we’re telling the public that market
interests are more important than public safety and health.
Adler: w/r/t those concerns, they’ve been addressed to some
extent by Congress in exemptions in the statute, and every 3 years we revisit
many of those issues in rulemaking. Goes back to the Q of whether the issue of
infringement becomes the tail that wags the dog of 1201. 1201 was a recognition
that wholly apart from infringement there was value to access that had to be
w/in rightsholder to control, otherwise they wouldn’t provide it online.  Courts haven’t had any difficulty dismissing
the notion that fair use contains a right of access to a copyrighted work. It
never has.  [Our folks have lawful,
paid-for access; what they need is the ability to make creative uses. This is
the problem of the merged access/rights control.]
Panjwani: the discussion we’re having now about embedded
software highlights the danger of setting defaults as no. The growth of these
other issues shows that what we thought was small actually implicates a vast
range of economic activity. Reevaluate whether the default being no still makes
sense! The examples of successes—Chamberlain & Lexmark—exist, but MDY v.
Blizzard and RealDVD are counterexamples rejecting the rationales of those
cases.  We never get to core © issues b/c
of 1201.  Adler says access is a right:
but that’s not what Congress said—they said they were creating an ancillary right
for the purpose of discouraging infringement of 106, due to easy
reproducibility of digital content; not a standalone right.
Zuck: Public safety: it’s equally important to recognize
that there are public safety implications to tinkering w/embedded
software.  Medical devices.  [The CO is clearly the correct decisionmaker
here, amirite?]
Adler: for my industry, library elending or print on demand
or rental on demand, the issue is software being used to provide access to the
expressive work that’s protected by ©. Don’t let difficulties created by dual
ID of software as expressive work and uses to control access to a separate work
to place those works in a position Congress didn’t intend. Right of access wasn’t
considered only w/r/t piracy—it was specifically that Congress sought to create
online markets for © works.  That’s why
access had to be controlled v. what you intended to do with the work once you
had access.  [What would the Framers have
thought about cell phone unlocking and digital tractors?  Originalism is often unhelpful.]
Band: there’s a big difference b/t access to something you
paid for and access to something you didn’t pay for.  Congress did create some permanent exceptions,
but there wasn’t one for the testing of the VW for purposes of determining that
they were committing an enormous fraud on consumers around the world. No one is
stealing the VW to do the testing; they’re buying the VW and trying to figure
out how the software works, but much of that isn’t covered by the exemptions
that exist.  Yes, there are people who
take the risks, but many of them have decided it’s not worth it. If you’re at
an institution and you know there are colorable legal issues and you have
funders to please, people decide not to go there—it’s hard enough to get tenure
without that. Consumer protection issues, safety issues, many other things not
covered and to hope that rulemaking will continue to work for you every 3 years
is insufficient; we could make relatively simple narrowing changes to the DMCA.
Greene: Reiterate chilling effect. Public safety concerns: I
wasn’t suggesting that’s an equity for the CO to weigh; in fact, the inquiry
should be limited to whether the proposed use would constitute an infringement.
Making the point that by expanding the inquiry beyond infringement implicates
significant public policy concerns.  The
idea of access as a threshold—the industry is trying to have its cake and eat
it too.  Other industries can’t protect
their products w/© for the underlying work. At some point 46% of Americans engaged
in piracy; clearly it’s not working, yet the vast majority ended up buying more
digital products than those who didn’t. 
So we should rethink ithe value of limiting access; it doesn’t seem to
be doing what it was supposed to do.
Q: how prevalent is it for 1201 to be used for what you
might regard as anticompetitive purposes or to enforce 1201 against consumer
products?  We’ve heard about Chamberlain and
Lexmark, but those are older and Ps lost, but we’ve heard about chilling
Dow: What I see is largely anecdotal and in context of
rulemaking.  27 sought and 22 granted, so
the process is working.  To Panjwani: not
correct that access was not separate from infringement.  House report said: TPMs can be deployed not
only to prevent piracy but also to support new ways of disseminating and
safeguarding legitimate uses.  Purpose:
incentivize new business models.  Those
are the business models we’re engaged in. We have apps allowing you access to
our TV channels, watch on the go.  Access
is controlled through authentication.  [And
you wouldn’t sue someone for © infringement for unauthorized use?]
Panjwani: We assume that many people are law-abiding; if the
activity would be prevented by 1201, then much of the activity wouldn’t be out
there. We filed to clarify the legal ruling on 3D printers, which led to a
voluminous opposition by Stratsys. Another competitor just announced end of
life of one of its printers, which had lock-in to proprietary filament, showing
need for exemptions.
Pierre-Louis: 1201 succeeded in getting works online. [The
same way I succeeded in getting rain to fall the past week.]  Businesses like certainty. Invest more when they
know they can get a return. That’s been proven. [Except if you attended the
content industries’ presentations at the 512 hearings.]
Weissenberg: Tracfone filing: has used the DMCA to enforce
its anticompetitive lock-in many times.
Band: Trump thinks unpredictability is a virtue, but it’s
not good for clients.  After DMCA passed,
plain reading of 1201(a) showed it could be used anticompetitively.  Had to counsel clients that way.  Chamberlain allowed a change, but then
Blizzard v. MDY came by and rejected Chamberlain—now has to tell clients they
can’t compete in the aftermarket if they’re in the 9th Circuit.  Look at who is opposing exemptions to see its
anticompetitive use: market leaders in phones, 3D printers, auto

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