The Public Domain Part 14

The war would be fought out on the hardware (and software) level, with the manufacturer of the platform constantly seeking to make the competing products incompatible, to bad-mouth their quality, and to use fear, uncertainty, and doubt to stop consumers from switching. (Apple's actual words were: "When we update our iPod software from time to time, it is highly likely that Real's Harmony technology will cease to work with current and future iPods.") Meanwhile the compet.i.tors would race to untangle the knots as fast as the platform manufacturer could tie them. If the consumers got irritated enough they could give up their sunk costs and switch to another product altogether.

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All of this seems fine, even if it represents the kind of socially wasteful arms race that led critics of capitalism to prophesy its inevitable doom. Compet.i.tion is good and compet.i.tion will often require interoperability. But what do we mean by compet.i.tion? Is it compet.i.tion if I a.s.sa.s.sinate your employees or poison the food in your restaurant? If I trespa.s.s on your land in order to sell a competing product? If I break into your safe to steal your trade secrets, use my monopoly position in the market to impose resale price agreements, or violate your patent? It is the law that draws the line between compet.i.tion and theft, between virtuous compet.i.tive imitation and illicit "piracy."

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Sometimes we need to give innovators property rights that allow them to prevent second-comers from free riding on their efforts.

We have to do so because it is necessary to encourage future innovation. On the other hand, sometimes we not only allow the second-comer to free ride, we positively encourage it, believing that this is an integral part of compet.i.tion and that there are adequate incentives to encourage innovation without the state stepping in. Intellectual property policy, indeed a large part of the policy behind all property rights, is about drawing the line between the two situations. Too far in one direction and innovation suffers because potential investors realize good ideas will immediately be copied. Too far in the other direction and monopolies hurt both compet.i.tion and future innovation.

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Imagine you are the first person to invest in getting the public to eat burritos for breakfast, or to place a petrol station at a certain crossroads, or to clip papers together with a folded bit of wire. In each case we give you some property rights. The fast-food vendor may own a trademarked phrase or jingle that the public learns to a.s.sociate with his product. Since the patent office issued a patent for the sealed and crimped "peanut b.u.t.ter and jelly" sandwich I described at the beginning of the book, even a patent is not out of the question if your disgusting concoction is sufficiently novel and non.o.bvious. But we should not allow you to have a patent over all burritos, or burritos for breakfast, still less over the idea of fast food. As for the paper clip maker, there might be a trademark over the particular paper clip, but the idea of folding wire to secure paper stays in the public domain. The owner of the petrol station gets physical ownership of the land, but cannot stop a second-comer from setting up shop across the road, even if the first-comer's labor, capital, and effort proved that the location is a good one. We positively encourage follow-on imitation in those cases.

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Now how about the case in point? What does Apple get in the way of property rights? Think back to my description of the intellectual property system in Chapter 1. They can get patents over those aspects of the iPod--both hardware and software--that are sufficiently innovative. Patents are what we use to protect inventions. They also get a copyright over the various pieces of software involved. That protects them only against someone who copies their code, not someone who writes new software to do the same thing. Copyrights are what we use to protect original expression. They get rights under trademark law over the name and perhaps parts of the design of the product--maybe the distinctive look of the iPod--though that is a bit more complex.

All of these rights, plus being the first to break into the market in a big way, the brilliance of the design, and the tight integration between the hardware and the service, produce a formidable compet.i.tive advantage. The iPod is a very good product.

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Now if a compet.i.tor infringes any of Apple's rights, for example by making a literal copy of the code, using their trademark in a way the law does not allow, or infringing on one of their patents, then Apple can shut them down and extract hefty damages. Quite right, too. But should they be able to prevent someone from making an interoperable product, provided they do not violate any of these existing rights in the process? Laws like the DMCA make that question more complicated.

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Nowadays, there is software in many, many more products than you would imagine. Your watch, your phone, your printer, your thermostat, your garage door opener, your refrigerator, your microwave, your television--the odds are that if you bought them in the last ten years, they have some software component. In the 1970s the courts and Congress had concluded that software could be copyrighted as original expression, like a song or a novel, as well as being patented when it was novel, non.o.bvious, and useful. Frequently, different aspects of the same program will be covered by copyright and by patent. But software is a machine made of words, the machine of the digital age. That fact already causes some problems for our compet.i.tion policy. Will the exceptions and limitations designed to deal with a copyright over a novel work adequately when they are applied to Microsoft Windows? That issue was already unclear. With the DMCA, we have added another crucial problem. Where there is copyrighted software there can be digital fences around it. If the copyright owner can forbid people to cut these fences to gain access to the software, then it can effectively enlarge its monopoly, capture tied services, and prohibit generic compet.i.tion.

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It was just this line of thought that led some other companies to do more than merely make threatening noises about the DMCA.

Lexmark makes printers. But it also makes lots of money off the replacement ink or toner cartridges for those printers. In some cases, in fact, that is where printer companies make the majority of their profits. As a result, they are not exactly keen on generic replacements. Chamberlain makes garage door opener systems. But they also sell replacements for the controllers--the little devices that you use to trigger the door.

Lawyers from both of those firms looked at the DMCA and saw a chance to do something most companies would love to do; to make generic compet.i.tion illegal. Lexmark designed their printer program so that it would not accept a toner cartridge unless it received the correct "checksum" or validation number. So far, this looks no different from the razor manufacturer trying to make it difficult to manufacture a compatible replacement blade.

Generic compet.i.tors now had to embed chips in their printer cartridges which would produce the correct code, otherwise they would not work in Lexmark printers.

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Static Control Components is a North Carolina company that manufactures chips whose main function is to send the correct code to the printer program. With this chip implanted in them, generic cartridges would work in Lexmark printers. Lexmark's response could have been to change their program, rendering the chip obsolete, just as Apple could change the iTunes software to lock out Real Music's Rhapsody. Doing so would have been quite within their rights. Indeed it is a standard part of the interoperability wars. Instead, Lexmark sued Static Controls, claiming, among other things, a violation of the DMCA.16 Like Apple in the press release I quoted earlier, Lexmark clearly saw this as a kind of digital breaking and entering. This was their printer, their printer program, their market for replacement cartridges. Static was just helping a bunch of cheats camouflage their generic cartridges as authentic Lexmark cartridges.

Translated into the legal language of the DMCA the claim is a little different, but still recognizable. Static was "trafficking" in a device that allowed the "circ.u.mvention of a technical protection measure" used to prevent "access to a copyrighted work"--namely the computer program inside the printer. That is behavior that the DMCA forbids.

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The garage door company, Chamberlain--who also claimed to be concerned about the security of their garage doors--made a similar argument. In order to get the garage door to open, the generic replacement opener had to provide the right code to the program in the actual motor system. That program is copyrighted.

The code controls "access" to it. Suddenly, the manufacturers of generic printer cartridges and garage door openers start to look rather like Jon Johansen.

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Surely the courts did not accept this argument? Bizarrely enough, some of them did--at least at first. But perhaps it was not so bizarre. The DMCA was indeed a radical new law. It did shift the boundaries of power between intellectual property owners and others. And intellectual property rights are always about restraining compet.i.tion, defining what is legitimate and what is not--that is what they do. There was a respectable argument that these devices did in fact violate the DMCA. In fact, it was respectable enough to convince a federal judge. The district court judge in the Lexmark case concluded that Lexmark was likely to win on both the DMCA claim and on a more traditional copyright claim and issued an injunction against Static Control. In Skylink, the case involving garage door openers, by contrast, the district court held that the universal garage door opener did not violate the DMCA. Both cases were appealed and both appeals courts sided with the generic manufacturers, saying that the DMCA did not prohibit this kind of access--merely making a computer program work the way it was supposed to.

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The U.S. Court of Appeals for the Federal Circuit (CAFC) heard the Skylink appeal. In a remarkably far-reaching decision, the court effectively took many of the positions that Mr. Corley's lawyers had argued for in the DeCSS case, but they did so not to protect speech, but to protect compet.i.tion. In fact, they implied that taking Chamberlain's side in the case would silently overrule the ant.i.trust statutes. They also interpreted the new right created by the DMCA so as to add an implicit limitation. In their construction, merely gaining access is not illegal; only gaining access for the purpose of violating the copyright holders' rights violates the statute. The Reimerdes court had been willing to accept that the new access right allows a copyright holder to prohibit "fair uses as well as foul." When Chamberlain made the same argument as to their garage door opener program, the CAFC was incredulous.

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Such an ent.i.tlement [as the one Chamberlain claims] would go far beyond the idea that the DMCA allows copyright owner to prohibit "fair uses . . . as well as foul." Reimerdes, 111 F.

Supp. 2d at 304. Chamberlain's proposed construction would allow copyright owners to prohibit exclusively fair uses even in the absence of any feared foul use. It would, therefore, allow any copyright owner, through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work--or even selected copies of that copyrighted work.17 115

There are multiple ironies here. The CAFC rarely meets an intellectual property right it does not like. It has presided over a twenty-year expansion of American patent law that many scholars find indefensible. But when (for dubious jurisdictional reasons) it sorties beyond its traditional ambit of patent law, it is stunned by the potential expansiveness of the DMCA. Then there is the comparison with the Reimerdes case. How interesting that the First Amendment and concerns about free expression have comparatively little bite when applied to the DMCA, but ant.i.trust and concerns about compet.i.tion require that we curtail it. After all, the heart of Mr. Johansen's argument was that he had to write the DeCSS program in order to play his own DVDs on his own computer--to get access to his own DVDs, just as the purchaser of a replacement garage door control is getting access to the program that operates his own garage door. Indeed, Mr.

Johansen's criticism of CSS was that it allowed the movie companies, "through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work." Mr. Corley echoed those claims.

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Of course, the situations are not identical. The key limitation in Skylink is that the court saw no threat of "foul use." The Reimerdes court could see little else. On the other hand, the rulings are not easily reconciled. The Skylink court cannot imagine that Congress would want to give the copyright holder a new "property" right to prevent access unconnected to any underlying copyright violation.

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As we have seen, Congress chose to create new causes of action for circ.u.mvention and for trafficking in circ.u.mvention devices. Congress did not choose to create new property rights.

. . . Were we to interpret Congress's words in a way that eliminated all balance and granted copyright owners carte blanche authority to preclude all use, Congressional intent would remain unrealized.

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Yet, arguably, that is exactly what the Reimerdes decision does, precisely because it focuses on enabling access alone, not access for the purpose of violating one of the rights of the copyright holder. The Reimerdes court saw a violation of the law just in cutting the wire or making a wire cutter. The Skylink court focused on whether the person cutting the wire was going to trespa.s.s once the cutting was done. In effect, the two courts disagree on which of the options offered to the legislature in the Farmers' Tale was actually enacted by Congress. Which court is correct? The Skylink decision strikes me as sensible. It also makes the statute const.i.tutionally much more defensible--something that the Skylink court does not consider.

But in the process, it has to rewrite the DMCA substantially.

One should not presume that it will be this interpretation that will triumph.

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SUMMING UP: EXAGGERATIONS, HALF-TRUTHS, AND BIPOLAR DISORDERS IN TECHNOLOGY POLICY 120

Let me return to the question with which I began the chapter.

For many critics of contemporary intellectual property law, the DMCA is the very embodiment of all that is wrong. (I still cherish a friend's account of British protesters outside the American Emba.s.sy in London singing "D-M-C-A" to the tune of the Village People's "YMCA" and holding up signs calling for the law's repeal--to the great confusion of the diplomatic personnel.) The critics conjure up a digital apocalypse--a world of perfect control achieved through legally backed digital fences, in which both speech and compet.i.tion suffer, and where citizens lose privacy, the privilege of fair use, and the right to criticize popular culture rather than simply consume it. In their view, the legal disaster is only exacerbated by b.u.mbling judges who do not understand the technology and who are easily fooled by the doom-laden rhetoric of the content companies. The DMCA's supporters, on the other hand, think criticisms of the DMCA are overblown, that the dark tales of digital control are either paranoid delusions or tendentious exaggerations, and that far from being excessive, the DMCA's provisions are not sufficient to control an epidemic of illicit copying. More draconian intervention is needed. As for fair use, as I pointed out before, many of the DMCA's supporters do not think fair use is that important economically or culturally speaking. At best it is a "loophole" that copyright owners should have the right to close; certainly not an affirmative right of the public or a reserved limitation on the original property grant from the state.

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Who is right? Obviously, I disagree profoundly with the DMCA's supporters. I wrote this book partly to explain--using Jefferson and Macaulay and the Sony case--what was wrong with their logic.

It would be both convenient and predictable for me to claim that the DMCA is the intellectual property incarnation of the Antichrist. But it would not be true. In fact, I would not even put the DMCA in the top three of bad intellectual property initiatives worldwide. And many of the fears conjured up about it are indeed overblown.

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Of course, the critics have a point. The DMCA is a very badly drafted law. As I have tried to show here, its key provisions were probably unnecessary and are, in my view, unconst.i.tutional.

If coupled with a number of other legal "innovations" favored by the content industry, the DMCA could play a very destructive role. In general, in fact, the Farmers' Tale is fairly accurate in describing both the origins of and the threats posed by the DMCA. Yet the single largest of those threats--the idea that the DMCA could be used to fence off large portions of the public domain and to make the fair use provisions of the Copyright Act essentially irrelevant--is still largely a threat rather than a reality. In some cases, fair use rights are curtailed. But for most citizens and for the majority of media, the DMCA has had relatively little effect. Digital rights management (DRM) certainly exists; indeed it is all around us. You can see that every time you try to play a DVD bought in another part of the world, open an Adobe eBook, or copy a song you have downloaded from iTunes. But so far, the world of legally backed digital rights management has not brought about the worst of the dystopian consequences that some people, including me, feared might result.

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In many cases, citizens simply reject digital rights management.

They will not buy products that use it. Attempts to introduce it into music CDs, for example, have been a resounding failure. In other cases, DRM has not been used in ways that the critics feared. There are genuine scandals, of course--cryptography research has been chilled, the DMCA has been turned to anticompet.i.tive ends, and so on. It is also troubling to see federal judges issuing injunctions not only against banned material but also against those who link to the banned material.

Somehow the blithe rea.s.surance that this is consistent with the First Amendment fails to comfort one. But many of the evils prophesied for the DMCA remain as just that: prophecies.

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There are also entries on the positive side of the ledger. The "safe-harbors" that the DMCA gave Internet service providers and search services have been a vital and positive force in the development of the Internet. It may even be true that in some cases, such as iTunes, the DMCA did what its backers claimed it would--encourage new provision of digital content by rea.s.suring the record companies that they could put their music online surrounded by legally backed digital rights management.

(Notably, however, the trend is now going the other way.

Companies are coming to realize that many consumers prefer, and will pay more for, unprotected MP3 files.) 125

Of course, depending on your view of the music industry, that might seem like a mixed blessing. One might also wonder if the same consumer benefits might have been produced with a much less restrictive law. But with the exception of a few important areas--such as cryptography research, where its effects are reported to be severe--I would have to say that the criticisms focus too much on the DMCA, to the exclusion of the rest of the intellectual property landscape. Yes, the DMCA offers enormous potential for abuse, particularly in conjunction with some other developments in intellectual property that I will discuss later, but much of the abuse has not yet happened. Yet even if it never did happen, the DMCA has important lessons to teach us.

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In this section I have tried to show how legal rules--particularly intellectual property rules--define the boundaries of legitimate compet.i.tion. We used to a.s.sume that this was princ.i.p.ally the function of patent and trademark law, less so of copyright. Of course, copyright would affect compet.i.tion in publishing and in the TV and movie industries, but it hardly seemed central to compet.i.tion policy in general.

But once courts and legislatures accepted that software is copyrightable, that a.s.sessment changed. The levers and cogs of the machines of the modern economy are forged out of ones and zeros instead of steel and bra.s.s. In that situation, copyright is central to the compet.i.tion policy of a high-tech economy.

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As the Apple case shows, our moral intuitions about compet.i.tion are going to be cloudier in the world of digital content and cybers.p.a.ce. The same is true of the law. Even in the material world it can be hard to draw the line between the legitimate and ruthless pursuit of commercial advantage and various forms of unfair compet.i.tion, ant.i.trust violations, and so on. But in the immaterial world, the boundaries are even harder to draw. Is this the digital equivalent of trespa.s.s or legitimate pa.s.sage on a public road that runs through your property? As I pointed out earlier, the constant a.n.a.logies to physical property are likely to conceal as much as they reveal. Is this virtuous compet.i.tive imitation or illicit copying? We have strong, and by no means coherent, moral and legal intuitions about the answers to such questions. And our legal structure often gives us the raw material to make a very good case for both sides of the argument.

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Into this already troubled situation, with a set of rules designed for original expression in novels and poems being applied to machines made of computer code, we add the DMCA and its new rights of uncertain extent. Copyright had a well- developed set of exceptions to deal with anticompet.i.tive behavior. Where the existing exceptions did not function, courts tended to turn to fair use as the universal method for patching the system up--the duct tape of the copyright system. Without an evolving idea of fair use, copyright would overshoot its bounds as it was applied to new technologies and new economic conditions. Indeed that was the point of the Sony Axiom. The DMCA threw this system into disarray, into a war of competing metaphors.

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The Skylink court sees monopolists being handed carte blanche to abolish the restraints on their monopolies. Compet.i.tion policy demands that we construe the DMCA narrowly. The Reimerdes court sees a virus masquerading as speech, a digital pandemic that must be stopped at all costs by a draconian program of electronic public health. Each proceeds to construe the statute around the reality they have created. It is by no means certain which metaphor will win the day, still less which resolution will triumph in other countries that have pa.s.sed versions of the DMCA. International att.i.tudes toward speech, compet.i.tion, and the necessary exceptions in a copyright system vary widely. Yet backed by the story of the Internet Threat, the content companies are already saying that we need to go further both nationally and internationally--introducing more technology mandates, requiring computers to have hardware that will only play approved copyrighted versions, allowing content companies to hack into private computers in search of material they think is theirs, and so on. Remember the suggestion from the beginning of the chapter, that all cars be a.s.sumed to be getaway vehicles for the felonious filchers of vegetables, and thus that they should be fitted with radio beacons, have the size of their cargo s.p.a.ce reduced, and so on? The Farmers' Tale continues to evolve.