Digital Rights Management
Reading Assignment by Stefan Richter
Digital Rights Management is mainly a Copyright Law topic. If you have not taken a class in Copyright Law and want to get a quick        overview about the basic principles, take a look at Terry J. Carroll‘s Copyright F.A.Q. website.

Please read the following statutory provisions of the Copyright Act if you are not familiar with them:

    17 U.S.C. § 102      (Subject matter of copyright: In general)
    17 U.S.C. § 106      (The author‘s exclusive rights in copyrighted works)
    17 U.S.C. § 107      (Limitations on exclusive rights: Fair use)
    17 U.S.C. § 117      (Limitations on exclusive rights: Computer programs)
    17 U.S.C. § 1201    (Circumvention of copyright protection systems; please read subsections (a) - (c) and skim through the rest)
    17 U.S.C. § 1202    (Integrity of copyright management information; only read subsections (a) and (b))
    17 U.S.C. § 1204    (Criminal offenses and penalties)

DRM comes in several different technical shapes. Please read the Wikipedia-article about Digital Rights Management for the technical background. You will also get a first idea of critical aspects there. This entry addresses software-based DRM in the first place. But DRM can also be applied to TV-broadcasting: Please read the Wikipedia-article about Broadcast Flags.

§ 1201 of the Copyright Act (amended in 1998 by the Digital Millennium Copyright Act, DMCA) prohibits circumvention of access-control systems [§ 1201(a)(1)(A)] but allows circumvention of rights-control systems [cf. § 1201(b)]. However, it prohibits manufacturing and trafficing of technologies for both purposes, circumvention of access-control systems [§ 1201(a)(2)] and circumvention of rights-control systems [§ 1201(b)]. Thus, it primarily protects DRM-systems against circumvention by prohibiting the distribution of tools consumers need for that purpose. Read Universal v. Corley which can be considered the most introductive DMCA-case. 

➮How much room remains for fair use (§ 107) according to that judgement? Do you think that statutory rear cover is necessary in order to provide effective copyright protection by DRM-systems? If yes, can you think of an interpretation of § 1201 that allows fair use without jeopardizing the effectiveness of the DRM-systems? 

➮The court held that there is no right to make fair use of digital works in the best quality available. Can you think of uses that would be considered fair under § 107 and that cannot be made without using high-quality original material?

Take a look at the Hymn Project‘s website. They offer a software that allows you to decrypt the songs you bought in Apple‘s iTunes Store and then play it on any device and copy it freely. 
➮Do you think this violates § 1201? Are there arguments against violation?

§ 1204 of the Copyright Act exposes violators of §§ 1201, 1202 to criminal liability if they acted willfully and for purposes of commercial advantage or private financial gain. In a famous case of criminal prosecution, the russian programmer Dmitry Skylarov and his employer, the software developer ElcommSoft, were accused for violation of §§ 1201, 1204 of the Copyright Act by circumventing Adobe‘s eBook DRM-system. The charge was acquitted by the jury because there was no evidence of willful violation of § 1201, but Skylarov spent several weeks in jail. Please read this article. If you are interested in further information about the case, you can find it here (optional). How the DMCA can bar science‘s way is shown by Benjamin Edelman‘s struggle for legal rear cover for the research he pursues.
➮Is the threat of prosecution necessary for effective protection of DRM-systems or would civil liability be enough?

There are several non-profit organizations that argue against DRM and it‘s further dissemination and legal enforcement. Read the following list of TOP 10 arguments against DRM. Pay special attention to arguments 4 - 6. 
➮Do they convince you?

DRM changes the way we (can) use digital media and restricts many kinds of uses we are used to today. Many commentators argue that DRM will not only prevent piracy, but especially impede legitimate fair use. This article by Timothy B. Lee will introduce the most important consequences of DRM and address the legal issues involved. Pay special attention to his analysis of DRM‘s implications on fair use and the social and cultural benefits Copyright Law wants to create by limiting the copyright owner‘s rights.
➮Do you think that those kinds of fair use he addresses on pages 6/7 are negatively affected by DRM?

For the opposite point of view, read the following list of arguments for the dissemination and legal protection of DRM-systems. The article by Christopher D. Kruger analyzes the legal purpose of fair use and comes to the conclusion that fair use is only necessary due to market failure. He argues that DRM reduces transaction costs and thereby eliminates the market failure which justifies fair use. However, he acknowledges, that this only applies to those kinds of uses that were privileged by fair use because negotiating for a license was prohibitively expensive, and that all other kinds of fair use like parody, criticism or citation are justified under social or political aspects. Thus, the improvement of market efficiency that DRM may cause does not supersede these forms of fair use. 
➮Do you think that these forms of fair use are not significantly harmed by the application of DRM (according to the 2nd Circuit, there is no right for best-qualitiy fair use)? 
➮If you think they are harmed, how should the law be changed?
➮Do the Broadcast Flags the FCC tries to establish allow a sufficiently sophisticated degree of price discrimination that justifies the complete abandonment of fair use?

The foregoing articles did not address the First Sale Dotrine which is not Fair Use but related to it. The First Sale Doctrine‘s statutory anchor is § 109 of the Copyright Act, which allows the lawful owner of a particular copy or a phonorecord to resell or otherwise dispose the possession of it. DRM systems are able to impede this: Especially if content has been distributed online without selling a physical medium but with the restriction that the file can only be played in a certified and registered player like iTunes or the Windows Media Player (and affiliated devices), transferring the file to another user without circumventing the DRM-system is not possible. Please read the paragraph about price discrimination in R. Anthony Reese‘s article on pages 625-627.
➮Do you think a statutory duty for content distributors to enable their customers to transfer their files to others would be beneficial?

A further problem is that DRM allows content distributors even to restrict the use of content that is in the public domain, either because it cannot be protected under copyright law, or because the copyright has expired. That means that the original (former) copyright owner can keep the work “digitally captive” if it is prohibited to circumvent copy-protection mechanisms. This would encumber cultural progress. The improvement of market efficiency would not solve this problem.
➭Do you agree with the court in Universal v. Corley that these concerns are premature and can therefore not constitute a violation of the Copyright Clause in Article 1 § 8 cl.8 of the Constitution?

One frequently articulated concern is that the use-control opportunities DRM provides will lead to a predominace of pay-per-use distribution of media and displace the distribution of copies that may be used an unlimited number of times. Due to the fact that most DRM-protected pay-per-use offers limit the use to a particular technical environment which is registered for the particular user, the opportunities to switch to another source for the same work decrease. Some concerns go even further: Read Richard Stallman‘s “The Right to Read”.
➮Is the scenario he draws down-to-earth or will an intact market abandon the risk that it will come that far? Can studying perhaps even become cheaper if market failure is healed by DRM?

Christopher D. Kruger pointed out that DRM can only heal market failure if consumers are well informed about the restrictions that apply to the content they are offered. 
➮Do you think that the content distributors you know (and maybe use) give you sufficiently perspicuous and complete information about the legal and technical restrictions that apply to the content they offer?
➮Take a test (absolutely optional) and go to the website of your favorite music download service. Try to find out what restrictions apply (you can find the Apple iTunes Store terms of use here). Try to find out to which mobile devices your files can be transferred. Do you see clear? How much time did you spend?

Many scholars criticize the changes the Digital Millennium Copyright Act introduced and they suggest additional changes of the law in order to readjust the balance between the copyright owner‘s interest in protection of their rights and the public‘s interest in fair use. The ideas are manifold and cannot be presented here. Instead, please think about the two following alternative suggestions

➮Are these proposals reasonable? What are the problems?

At the end of this reading: What is your point of view? 
1. Do you think that the law should remain as it is? 
2. Should the DMCA be abolished? Modified?
3. Is one of the two proposals introduced above better than 1. or 2.?

➥ Back to the syllabus
The Electronic Frontier Foundation suggests to found a collective society that all copyright holders can join. This society would permit consumers to copy and share files freely and without any legal threats. In return, consumers would have to pay a small monthly fee (they suggest $ 5) which allows them to participate in file-sharing – a kind of media flat-rate. The fact that file-sharing is already extremely popular today (files are shared anyway) and would then even increase in popularity would be a strong incentive for artists to join and thereby guarantee a large variety of legalized content. Consumers, in return, would have a strong incentive to legalize their download if the fee is reasonable and would allow them to buy legality cheaply. The revenues from the fees would be divided between artists and rightholders depending on the download-popularity of their works.
You can find the text here, if you are interested - optional.
Jacqueline D. Lipton argues that the current anti-circumvention provisions in the DMCA should be maintained, but that fair use should be acknowledged a positive legal right to access and use protected works  instead of being a mere defense against liability for copyright infringement. As rights have little value if they are unenforceable, she suggests to establish an administrative agency and an administrative complaint mechanism that allows individual users to obtain particular fair uses of certain works. This would allow to adjust the demanded fair use to the individual needs of the consumer without being bound to pre-tailored categories of works or fair uses like the exemptions the DMCA provides in § 1201(a)(1)(C).
If you want to read the article (optional), you can download it here (links at the bottom of the page).