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Digital rights management aims to stop piracy in its tracks

|Written By Julius Melnitzer

Digital rights management - sometimes called digital restrictions manageament - has become an integral feature of new digital marketing initiatives that promise to shape how content is monetized. Fortunately for lawyers, the concept is fraught with controversy.

DRM issues have arisen most notably in the debate about anti-circumvention legislation. But DRM is not simply about anti-circumvention legislation, which is only the latest layer of protection devised for copyright holders. Copyright law, contract law in the form of rights grants and legal permissions, and technical protection measures (TPM) are all components of a complete DRM package.

“Lawyers will have to be knowledgeable about the whole suite of protections if they’re going to help their clients bring these new distribution models to market,” says Mark Hayes of Blake Cassels & Graydon LLP’s Toronto office.

All this arises from the fact traditional sale and licensing techniques used to commercialize music, TV shows, and cinema are not the preferred business model for digital products. It’s outmoded, so creators and distributors are looking for ways to attach different kinds of limited rights to their digital products.

“DRM is already used in broadcast signals, internet encryption, and e-commerce,” says Barry Sookman of McCarthy Tétrault LLP. “By providing protection from copying, DRM allows publishers to make their works available in diverse ways to different people. It makes possible the concept of selling the same thing to everybody or different products to individuals. It provides diversification for consumers who will pay less for the uses in which they are truly interested.”

With the appropriate protection, content distributors can determine what kind of customer sharing is the most profitable and then monetize that sharing with pay per view, subscriptions, advertising, or other revenue-generating approaches. TPMs can control who can access content, when users can access it, and for what purposes they can use it.

But unless they can be sure that the limits of their licences will not be breached, tremendous risk exists for rights holders in an environment where the ubiquity and ease of use of copying technology and digital transmission means that a single act of unauthorized reproduction can proliferate globally in seconds.

“You have to think about DRM as a process where copyright holders try to stop piracy at the point of access where someone cracks TPM and makes content public,” Sookman says. “It’s an attempt to ensure that pirates don’t completely emasculate copyright holders.”

Not even the most ardent opponents of anti-circumvention legislation challenge the rights of copyright holders.

“Nobody argues that we should prohibit the use of TPMs,” Hayes says. “The issue is how much of the state’s power should be placed behind the technology through enabling legislation.”

In other words, the debate is about whether Canadian law should mandate sanctions against TPM circumvention, or “hacking,” as it is commonly known. When Bill C-60, the Liberal’s proposed copyright reform legislation, died on the order paper with the demise of Paul Martin’s government, the debate jump-started with vigour.

Opponents of anti-circumvention legislation point out that it can exceed the boundaries of copyright protection altogether.

“We’ve seen TPM legal rules applied in the U.S. in many ways that have nothing to do with copyright,” says Professor Michael Geist, who holds the Canadian research chair in internet and e-commerce law at the University of Ottawa’s law school. “The phenomenon has been described as ‘para-copyright,’ as in something that is ‘above’ copyright.”

The Electronic Frontier Foundation, a U.S. non-profit group dedicated to “protecting digital rights,” has published a lengthy paper entitled “Unintended Consequences: Seven Years under the DMCA.” The DMCA, the Digital Millennium Copyright Act, is the anti-circumvention legislation that currently exists in the U.S.

Among other things, the foundation maintains that the DMCA has chilled free expression and scientific research, jeopardized fair use, impeded competition and innovation, and interfered with computer-intrusion laws.

Otherwise, the DRM debate affects lawyers and their clients by raising serious issues in various areas of the law, notably competition, constitutional, consumer, and privacy law.

Competition issues arise because DRM can be seen as a form of market control intended to keep competitors at bay. The foundation says many copyright owners have used the legislation to hinder legitimate competitors.

“The DMCA has been to used to block after-market competition in laser printer toner cartridges, garage-door openers, and computer maintenance services,” says Jason Schultz, a foundation staff attorney. “Apple invoked the DMCA to chill RealNetworks’ efforts to sell music downloads to iPod owners. It’s all contributed to a dramatic drop-off in digital music and video player software innovation, because the DMCA has made the risks for companies developing media electronics so high that they simply won’t take them anymore.”

Schultz points to the growth and development of features for digital cameras and cellphones in the last few years. “But if you look at the iPod, nothing much has happened, except it has become smaller and slicker. You can’t do much with it that you couldn’t do when it first came out.”

Constitutional law also comes into play because federal anti-circumvention legislation that is not clearly restricted to copyright issues may infringe on the provinces’ jurisdiction over property and civil rights. And DRM legislation can affect consumer law because it will create new relationships between consumers and distributors.

Finally, because many TPMs utilize identification technologies to monitor the activities of individual consumers who access works, DRM engages privacy legislation.

“DRM amounts to nothing more than a legal hack and the acronym should stand for ‘digital routine monitoring,’” says Professor Ian Kerr, who holds the Canada research chair in ethics law and technology at Ottawa’s law school. “If TPM is a virtual fence, DRM is a virtual surveillance system. Surveillance features are crucial to the technological enforcement of the licensing component and enable automated collection and exchange of various kinds of information about particular users, their habits, and their individual use of digital material.”

Kerr believes that any law protecting surveillance technologies used to enforce copyright should also contain express provisions that protect against the piracy of personal information.

In Canada, privacy commissioners have expressed concern over the impact of DRM on privacy, including that many corporations view personal information as a corporate asset that can be sold or licensed.

“Rights holders are going to have to be very careful implementing DRM systems, especially where the technology involves the use of personal information,” Hayes says.

To be sure, the extent to which any of these problems will arise ultimately depends on the form new legislation will take. The Conservative government has not tabled a draft bill, but there are strong indications they will provide more robust protection against DRM circumvention than the Liberals did.

“Bill C-60 at least linked copyright infringement with anti-circumvention legislation,” says Geist. “The sense is that the Conservatives will remove that link, simply make anti-circumvention an offence, and create a series of exceptions from culpability.” Geist’s concern, however, is that the legislation will need to create “dozens of exceptions” to avoid the unintended consequences already seen in the U.S.

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