©opyBites: Copyright Law Blog

French DRM Law Stirring Controversey

BoingBoing: "A French proposal to change the way DRM is protected under law has been hijacked by entertainment companies and DRM vendors, and now promises to be one of the worst DRM laws in the world," writes Cory Doctorow at boingboing.com. The post also contains detailed commentary by EUCD.info's Jérémie Zimmermann describing and opposing the proposed revisions of the French copyright law.

Links:

• Boingboing's "French DRM law gets ugly".
  
• EUCD.info's English Blog

Rep. Lamar S. Smith Speaks on DMCA at Cato Institute

At a recent conference on the DMCA at the Cato Institute, Rep. Lamar S. Smith (R-Texas) claimed that the DMCA had been successful in spite of people blaming it for "everything under the sun." Further, where DRM has gone too far, Rep. Smith stated a belief that the marketplace will act as a corrective to such abuses.

This position has provoked a response by William Patry who feels that the DMCA "is a very big impediment to the marketplace approach Congressman Smith rightly favors[:]"

Respectfully, I think a fundamental point is being overlooked: the DMCA is legislation, with both civil and criminal penalties; failure to comply with its provisions is not played out in the marketplace, but in the courts, while the threat of things being playing out in the courts has a very significant impact on how things work out in the marketplace, not naturally, but artifically because of the force of the statute. The PERFORM Act, introduced this week adds to the marketplace distortion (in the economics sense of that term) by proposing to amend Section 114(d)(2)(C)(vi) to require that webcasters use DRMs, irrespective of whether the format already includes the DRM .

Links:

• Cato Conference: Copyright Controversies - Freedom, Property, Content Creation, and the DMCA (Real Video, Real Audio, and MP3 Podcasts covering the Speaker's comments are available here.)
  
• Commentary on Rep. Smith, DMCA, and the marketplace by William Patry.
  
• BNA Article: "DMCA Has Been a 'Success,' Smith Tells Copyright Community (Subscription Required)

Secret Code in DaVinci Case

The New York Times:

Justice Peter Smith's 71-page ruling in the recent "Da Vinci Code" copyright case here is notable for many things: the judge's occasional forays into literary criticism, his snippy remarks about witnesses on both sides, and his fluent knowledge not only of copyright law but also of more esoteric topics like the history of the Knights Templar.

But there is more to it than that. Embedded in the first 13½ pages of the ruling is Justice Smith's very own secret code, one that when partly solved reveals its name: the Smithy Code.

(Click Here For More)

Other: Justice Peter Smith's Opinion

Sima Products Enjoined Under DMCA

Macrovision v. Sima Products Corporation (S.D.N.Y. April 20, 2006)

Highlights from the Opinion:

Plaintiff Macrovision sought a preliminary injunction to prevent Defendant Sima Products Corporation from selling certain “video enhancer” products, which may be used to circumvent Macrovision's Digital Versatile Disc (DVD) copy protection technology.

* * *

Sima manufactures, markets, and sells several hardware products, most under the monikers “CopyThis!” and “GoDVD,” that eliminate Macrovision's [Analog Copy Protection (“ACP”)] from an analog signal. The consumer can then make a suitable recording of the analog signal on videotape or other recording device.

* * *

The ACP removal function is effectuated by a single chip, often the SA7114 or a similar chip manufactured by Philips. Macrovision contends, and Sima does not dispute, that the devices could be fitted with an alternate chip manufactured by Philips, that, under license from Macrovision, recognizes the ACP and does not allow for its circumvention.

* * *

Sima argues that it does not violate [the Digital Millennium Copyright Act of 1998 (“DMCA”)] because the “primary purpose” of its devices is not circumvention. However, on this record, Sima's argument is not persuasive. Though some of the devices have some auxiliary functions, it has not been argued that it is necessary for the device to be able to circumvent Macrovision's ACP in order to perform these functions. Sima has not argued that using the Macrovision-licensed Philips chips would prevent the devices from performing the auxiliary functions or facilitating the copying of non-protected works, such as home videos. The devices therefore have “only limited commercially significant purpose or use other than to circumvent” the ACP. Sima markets its products “for use in circumventing a technological measure that effectively controls access to a work protected” under the DMCA. On its own website, Sima touts the devices' capability of circumventing copy protection on copyrighted works. And Sima's defense that it only intends to enable “fair use” copying of copyrighted works is no defense at all as stated above, the DMCA provides no exception to its prohibition of the manufacture of these devices.

* * *

Furthermore, Sima cites no authority, and this Court is aware of none, for the proposition that “fair use” includes the making of a backup copy.

* * *

Injunctive relief is appropriate in this instance. Macrovision has made a clear showing that it is likely to succeed on the merits. Sima has not stated that it intends to stop selling the contested devices in the absence of an injunction, so it is likely that future violations will continue. Macrovision lacks an adequate remedy at law, because its business model rests upon its being able to prevent the copying of copyrighted works. If it is unable to prevent the circumvention of its technology, its business goodwill will likely be eroded, and the damages flowing therefrom extremely difficult to quantify.

Holding: “Sima is hereby preliminarily enjoined from selling the CT-1, CT-Q1, CT-100, CT-2, CT-200, SCC, and SCC-2 products, and any other products that circumvent Macrovision's copyright protection technologies in violation of the DMCA, conditioned upon Macrovision posting a bond in the amount of $100,000[.]”

April Litigation Brings May Frustration

Columbia Pictures Industries, Inc. v. May (E.D. Wis. April 24, 2006)

“On August 20, 2005, Columbia Pictures Industries, Inc., Paramount Pictures Corporation, and Warner Brothers Entertainment Inc. served a summons and an amended complaint on Chris May.” May never responded to the Plaintiffs' Amended Complaint, so the Plaintiffs ended up getting a default judgement. The only question here for the court to consider was damages, as “upon an entry of default, the allegations of a complaint are taken as true regarding liability, but allegations pertaining to damages typically are not.” Based on the evidence provided by the Plaintiffs, the court concluded the plaintiffs had submitted enough documentary evidence to avoid an evidentiary hearing. Further, the court found the evidence to sufficient to authorize damages above the normal limit in Section 504 of the Copyright Act due to May’s infringement being willful:

The evidence indicates that May's actions were willful. He knew that the material he made available via his website was copyrighted and was being disseminated without authorization. Furthermore, given the massive online piracy that May apparently orchestrated, and the harsh effects illegal downloads have on the motion picture industry, the Court deems the Plaintiffs' request for $35,000.00 in statutory damages a suitable award.

Holding: Chris May must pay $35,000 to the Plaintiffs and is essentially enjoined from any further infringement against the Plaintiffs.

Highlights of Witness Testimony at Senate Hearing

Highlights from testimony provided at the Senate Committee on the Judiciary's hearing on "Parity, Platforms and Protection: The Future of the Music Industry in the Digital Radio Revolution:"

Anita Baker - Performing Artist

I hope this Committee considers -- and supports -- legislation that recognizes that the folks who bring music to life need some consistency. We need to know, as these technologies develop with the mind-blowing ability to stockpile music, build huge libraries and/or make it all portable, -- that the people who create music are fairly compensated and with some logic and sense.

* * *

So I hope this Committee understands that I support radio and listeners being able to do this. I’ve spoken with EMI and Blue Note – two of the companies that work with me – and they have promised me they support this too. I just happen to think that when a radio station is acting like a download service that the artist should be paid appropriately.

* * *

I am also glad to be able to say that many of my fellow artists groups like the National Academy of Recording Arts and Sciences, the Rhythm and Blues Foundation, AFM, AFTRA, the Recording Artist Coalition, and the Songwriters Guild support my view.

Todd Rundgren - Lead Singer, The New Cars

. . . across the board fee structures like those proposed discourage the exposure of new talent in deference to audience favorites as broadcasters try to recover those fees. And worst of all, syndicated radio, the majors partner in neglect, does not deserve exemption for the abysmal quality of product they deliver. The fantasy that this type of legislation helps music or musicians should be summarily exposed for what it is: yet another futile attempt to turn back the clock to the days when they were the sole gatekeepers to an artist’s future.

Victoria Shaw - Songwriter

[W]hether we are operating in the physical world or in that bright digital future, one truism remains: artists, composers, record labels, and everyone involved in making music, depend on sales to survive. In the digital world, those sales are made through download services like iTunes and Napster. The licenses required by these services to allow people to purchase our music is what will sustain us as we move further away from the physical world of tapes and CDs.
Yet, it is precisely those licenses – and those sales – that are being threatened by the new offerings of radio platforms. By allowing listeners to record broadcasts and build up entire jukeboxes of music on portable devices, radio services are becoming download services – but without paying the download license.

Edgar Bronfman - Chairman and CEO, Warner Music Group

[T]he growth of these digital services and the extension of these extraordinary benefits to consumers must rely on a key principle: “parity.” With parity across all the platforms on which digital music is delivered will come a level playing field among multiple technologies and players as will all the attendant consumer and artist benefits of true competition. Without parity, one technology—or certain companies—are unfairly favored... competition evaporates... and the entire digital music ecosystem is in peril—and with it, the potential economic benefits of a once again healthy and growing music industry.

Gary Parsons - Chairman of the Board, XM Satellite Radio

As an initial matter, we strongly reject the music industry’s efforts to roll back the longestablished ability of consumers to record off the radio for personal use. We are particularly disappointed that the head of the RIAA has sought to vilify our law-abiding customers in testimony before the House Judiciary Committee, when he accused home tapers using new technology of “boldly engag[ing] in piracy with little fear of prosecution.” XM listeners are avid music fans and some of the music industry’s best customers, not pirates. And XM, and the consumer electronics manufacturers that build our new products in compliance with the AHRA, are not pirates either. Recording content off of satellite radio is not the same as downloading music and has nothing to do with piracy[.]

Bruce T. Reese - CEO and President, Bonneville International Corp.

NAB remains concerned that developing and implementing a technical system to provide copy protection for digital radio not have a negative impact on the digital radio transition. Reaching a final consensus on the digital television (DTV) broadcast flag mechanism, for example, entailed many years of intense negotiations by scores of participants from a wide array of industry sectors.

* * *

NAB has expressed its willingness to participate in developing and forging a consensus on a digital radio copy protection system so long as it would not interrupt the digital roll-out or create uncertainty that would lead to a slow down of adoption rates by manufacturers, consumers or even broadcasters.

* * *

Given these on-going discussions, NAB does not believe that legislation mandating any particular system of digital radio copy protection is necessary at this time.

* * *

(Reese also lobbied for Copyright reforms favorable to radio broadcasters with regard to internet audio streaming.)

N. Mark Lam - Chairman and CEO, Live365

Live365 and DiMA urge the Committee to accomplish the following:

(a) Legislate royalty parity and programming parity among all digital radio services, so that government is not picking winners and losers when broadcast, cable, satellite and Internet radio compete.
(b) Protect recording artists and copyright owners from radio services that promote and profit from consumer recording of their programming, and thereby exploit their performance license to engage in a more lucrative distribution business.
(c) Resolve the longstanding dispute over the meaning of “interactive service” so that consumers, online radio services and recording artists can maximize the benefits of blending Internet technology and radio programming.

The Honorable Patrick Leahy - Ranking Member, Senate Judiciary Committee

The statutory license in Section 114 is complicated. Nobody would deny that. Maybe it is too complicated, and maybe it is outdated. Maybe we in Congress should take a new approach to this whole situation. Congress has legislated in a piecemeal fashion, trying to work reasonable and effective changes to the licensing scheme when new technologies have changed the music marketplace. Maybe it is time for all of us, both those of us up here on the dais and those of you at the witness table, to step back and try to consider music licensing from its first principles. Maybe we should primarily focus not on the technologies that are delivering music today, but on the rights at stake. Maybe then we can produce a licensing scheme that has a real foundation in the rights of creators and the interests of consumers. Maybe then the purposes of the Copyright Act, and of this Committee, will be better realized in the marketplace for music.

Cato Copyright Event

Copyright Controversies: Freedom, Property, Content Creation, and the DMCA
Wednesday, April 26, 2006
F. A. Hayek Auditorium
Cato Institute
1000 Massachusetts Ave., N.W.
Washington, D.C.

There are substantial debates under way about intellectual property, and copyright in particular. Is intellectual property founded in a natural right to ownership of information? Is it a utilitarian tool to give incentive to creation? Or is it a counterproductive monopoly on ideas? The advance of technology has changed the creative process in many ways. Is copyright consistent with new modes of creation? Finally, there are questions about how copyright laws are enforced. The Digital Millennium Copyright Act amended the law to accommodate the advance of the Internet, but it remains highly controversial in some circles. There are differences of opinion among thoughtful people on all these issues. Join us at a conference designed to expose the issues and raise the question: What should we think of copyright?

(Click Here For More)

New Bill Seeks Compensation From Satellite Radio

The Hollywood Reporter:

A bipartisan group of lawmakers introduced legislation that would require satellite radio companies to compensate the music industry for downloads, industry and congressional sources said.

* * *

The PERFORM Act, or the Platform Equality and Remedies for Rights Holders in Music Act of 2006, would require satellite, cable and Internet broadcasters to pay fair market value for the performance of digital music. The bill also would require the use of readily available and cost-effective technological means to prevent music theft.

(Click Here For More)

Other: Senate Committee on the Judiciary notice of hearing on "Parity, Platforms and Protection: The Future of the Music Industry in the Digital Radio Revolution."

"French Legislation Tackles Copyright"

EContentMag.com:

The French minister of culture, Renaud Donnedieu de Vabres, has a growing controversy on his hands: the DADVSI law on copyright in the digital age. The most contentious aspect of the DADVSI law is the attempt to curb illegal downloading of music and movies via P2P programs through the use of Digital Rights Management (DRM). This has caused uproar among the Internet-using public and divided the governing political party representatives in the national assembly.

(Click Here For More)

Conversion of Intangible Intellectual Property and Copyright Preemption

Meridian Project Systems, Inc. v. Hardin Construction Company, LLC (E.D. Cal. April 21, 2006)

(Note: This summary only addresses issues of copyright law present in this case. Other areas of law were presented and discussed in the opinion, but those aspects of the case have been omitted in the summary below for purposes of clarification.)

Defendants filed a motion to dismiss claiming that federal copyright law preempted plaintiff Meridian’s “claim for relief upon the conversion of ‘concepts, logic, processes, features, and functions of [a software program[ to the extent not covered by its copyrights.’” Merdian, however, argued “that those elements of expression within a copyrighted work that are not protected by copyright, do not fall within the ‘general subject matter of copyright’ and that therefore, a claim of conversion as to such elements is not preempted by the Act.”

Since the 9th Circuit has not ruled on this particular issue, the district court considered the holdings of other courts before making its ruling:

[The Seventh Circuit has maintained] that the purpose of copyright preemption is to prevent states from giving works of authorship protection beyond those protections granted by the Copyright Act. The court noted that one of the functions of copyright preemption is to prevent states from giving protection to “works of authorship that Congress has decided should be in the public domain.” The Seventh Circuit found that this goal can only be accomplished if the general subject matter of copyright is interpreted broadly. The court finds the Seventh Circuit's rationale compelling.

* * *

Further, the Northern District of California recently addressed the issue in a similar case involving a claim of conversion of intellectual property in software. In Firoozye, the court found that those noncopyrightable elements that are part of a copyrighted computer software program fall within the general subject matter of copyright because the subject matter of copyright is broader than the scope of copyright protection. The court then went on to address whether the plaintiff's conversion claims were equivalent to the rights protected by copyright. The court noted that, although a claim for the conversion of tangible property adds the extra element of “wrongful possession” sufficient to bring a conversion claim outside the scope of copyright preemption, conversion claims with respect to intellectual property arise from the reproduction, copying and misuse of a work. The court held that such rights are “clearly equivalent to [those of] a copyright claim.”

Holding: “The court agrees with the analysis of the Northern District in Firoozye.” Consequently, the defendants motion to dismiss on Meridian’s claim for the conversion of intangible intellectual property was granted.