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The Shifting Intellectual Property Paradigm
by Drew Clark
The battle over two new copyright-related bills on Capitol Hill shows how dramatically the old paradigm for protecting intellectual property on the Internet has been abandoned.
One anti-piracy bill would exempt copyright holders from laws against hacking when they use technologies designed to halt the illegal distribution of their works on peer-to-peer (P2P) computer networks. The other, an anti-counterfeiting measure, has become embroiled in a conflict over the removal of a single word -- "physical."
At the centerpiece of the old paradigm was the 1998 Digital Millennium Copyright Act (DMCA), which in effect told copyright holders to put digital locks on content so the law could be used to arrest people who break the locks. Whether the content at issue was expensive business software packages or relatively cheap digital videodiscs, encryption was deemed the savior of copyright owners by keeping pirates from releasing digital copies over the Internet.
The law has enjoyed widespread support within the copyright, computing and Internet industries, but a new bill in Congress aimed at mandating copyright-protection technology has changed the dynamics. Now those industries are rethinking their strategies in an intellectual property world that continues to transform with the emergence of each new technology.
Shattered Consensus
In working toward enactment, software companies joined the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) to win the ability to protect their property from devices that circumvent digital locks. In exchange, they agreed to limit the liability of Internet service providers (ISPs) whose users illegally posted copyright material -- as long as the ISPs removed infringing material after reasonable notice.
That consensus was shattered earlier this year when Senate Commerce Committee Chairman Ernest (Fritz) Hollings, D-S.C., introduced a digital-rights management bill. The measure, S. 2048, would require technology companies to redesign their products according to government-mandated standards in an effort to stop users from engaging in copyright infringement.
Bogged down in bitter, inter-industry controversy, the Hollings bill is widely conceded to lack the momentum to secure passage. But the fight it started between information technology companies and Hollywood and the recording studios has bled into the battles over the other bills -- and undermined the support for tacking copyright abuses through the DMCA's framework.
Major software industry players like Microsoft and the Business Software Alliance support the DMCA because it is an example of legal rules enabling private technology standards. The law neither specifies nor mandates a particular type of encryption or digital-rights management software. Instead, its bar against circumventing copyright protections applies no matter what digital locks are used.
One key example of the DMCA in action is the DVD Content Scrambling System (CSS) -- itself evidence of Hollywood and the technology industry's ability to cooperate -- which keeps users from copying DVDs onto their computers. Although CSS has been cracked, Hollywood studios successfully sued to stop DeCSS, the decrypting program, from being made widely available on the Internet. About the only constituencies left unsatisfied were librarians and activists who claimed that DMCA eroded "fair use," and academics who protested its constraints on research.
An Invitation To Cyber Vigilantism?
But controversy over the mandatory approach of the Hollings bill -- and over the new bills aimed at counterfeiters and online pirates -- has re-engaged Internet service providers in the copyright debate. With the once-manageable burden of complying with demands that they remove infringing materials posted by their customers reaching new volumes, ISPs believe that the content community has reneged on its side of the DMCA bargain.
"We agree that the right balance was reached, for the most part, in the DMCA," Sarah Deutsch, vice president of Verizon Communications, said of a particular section of the law that permits the use of voluntary digital-rights management technologies so long as ISPs and content holders agree to them. But she added, "The content community never approached us" about using such technologies before "the Hollings bill was dropped and obliterated this compromise."
Both the anti-counterfeiting and anti-piracy bills could add new burdens or costs to ISPs' duties. The latter measure, for example, would limit copyright holders' criminal and civil liability under anti-hacking laws when the disable, block or interfere with the distribution of recordings, movies and digital books on P2P systems that are independent of ISPs but still run across them.
The bill, H.R. 5211, would not change anti-hacking laws but would create a "safe harbor" permitting electronic intrusion that could violate the law, so long as a copyright holder's actions do not cause more than $50 damage to a P2P user's computer.
"The bill would authorize thousands and thousands of copyright owners -- be they individuals, companies or even state governments -- to hack into any personal computer, at any time, without notice or permission to eliminate files they believe are objectionable," said Kevin McGuiness, executive director of NetCoalition, a group including AOL Time Warner, DoubleClick, Inktomi, Lycos, Verio and Yahoo. "It would create a new class on the Internet -- cyber vigilantes -- who would be unbound by existing federal and state laws."
P2P companies oppose the measure, with Streamcast Networks -- which provides the Morpheus file-trading software -- stating that "cyber warfare was declared by the Hollywood congressman," a reference to California Democrat Howard Berman. The measure represents an effort by recording companies to cloak the fact that existing "decoy" files used to combat online piracy "may run afoul of state and federal laws, leading to Congressman Berman introducing legislation that could legalize their illegal actions," Streamcast argues.
Getting 'Physical' Over Authentication
Berman's staff insists that it drafted the bill without input from the recording and movie industries, although both have been supportive of the effort. But for the MPAA, Berman's measure may not go far enough. Some of its member companies do not believe that the measure's language would cover online exchanges of digital movie files and are seeking to expand the bill.
Meanwhile, the software and movie industries are battling over a last-minute change to the anti-counterfeiting measure, S. 2395, authored by Sen. Joseph Biden, D-Del. As introduced, the bill would have made it illegal to "traffic in counterfeit labels, illicit physical authentication features, or counterfeit documentation or packaging." But with the deletion of the word "physical," the bill now would extend criminal penalties to altering a type of anti-piracy technology known as a digital watermark, for example.
"We are moving into a digital future, and a lot of products will come with digital authentication features," an MPAA lobbyist said. "There is no reason to limit it to physical authentication features."
The proposal again has ISPs worrying about its ramifications for their operations. "It is usually impossible to know on the face of any copyrighted work when any authentication features have been altered," said Jim Halpert, an attorney for the Digital Commerce Coalition, a group of ISPs and other tech players formed during the DMCA legislation. "It makes the question of liability of Internet intermediaries more complicated."
But the new battle lines are likely to continue to be drawn into the next Congress. "The battle that was out in the open with [Hollings'] digital-rights management bill has gone into stealth mode," a Senate Judiciary Committee source said. "It is being fought in these other fields."
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