Intellectual Property and the Internet/DMCA

The Digital Millennium Copyright Act (DMCA) is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures (commonly known as digital rights management or DRM) that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet. Passed on October 12, 1998 by a unanimous vote in the United States Senate and signed into law by President Bill Clinton on October 28, 1998, the DMCA amended Title 17 of the United States Code to extend the reach of copyright, while limiting the liability of the providers of on-line services for copyright infringement by their users.

On May 22, 2001, the European Union passed the Copyright Directive or EUCD, which addresses some of the same issues as the DMCA. The DMCA's principal innovation in the field of copyright, the exemption from direct and indirect liability of internet service providers and other intermediaries (Title II of the DMCA), was separately addressed, and largely followed, in Europe by means of the separate Electronic Commerce Directive. (Unlike U.S. federal laws and regulations, the execution of European Union directives usually requires separate legislation by or within each of the Union's member countries.)

Title I: WIPO Copyright and Performances and Phonograms Treaties Implementation Act
DMCA Title I, the WIPO Copyright and Performances and Phonograms Treaties Implementation Act, amends U.S. copyright law to comply with the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, adopted at the WIPO Diplomatic Conference in December 1996. The treaties have two major portions. One portion includes works covered by several treaties in U.S. copy prevention laws and gave the title its name. For further analysis of this portion of the Act and of cases under it, see WIPO Copyright and Performances and Phonograms Treaties Implementation Act.

The second portion is often known as the DMCA anti-circumvention provisions. These provisions changed the remedies for the circumvention of copy-prevention systems (also called "technical protection measures") and required that all analog video recorders have support for a specific form of copy prevention created by Macrovision (now Rovi Corporation) built in, giving Macrovision an effective monopoly on the analog video-recording copy-prevention market. However, section 1201(c) of the title clarified that the title does not change the underlying substantive copyright infringement rights, remedies, or defenses. The title contains other limitations and exemptions, including for research and reverse engineering in specified situations.

Title II: Online Copyright Infringement Liability Limitation Act
DMCA Title II, the Online Copyright Infringement Liability Limitation Act ("OCILLA"), creates a safe harbor for online service providers (OSPs, including ISPs) against copyright liability if they adhere to and qualify for certain prescribed safe harbor guidelines and promptly block access to allegedly infringing material (or remove such material from their systems) if they receive a notification claiming infringement from a copyright holder or the copyright holder's agent. OCILLA also includes a counternotification provision that offers OSPs a safe harbor from liability to their users upon notice from such users claiming that the material in question is not, in fact, infringing. OCILLA also provides for subpoenas to OSPs to provide their users' identity.

Title III: Computer Maintenance Competition Assurance Act
DMCA Title III modified section 117 of the copyright title so that those repairing computers could make certain temporary, limited copies while working on a computer. It reversed the precedent set in MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).

Title IV: Miscellaneous Provisions
DMCA Title IV contains an assortment of provisions:
 * Clarified and added to the duties of the Copyright Office.
 * Added ephemeral copy for broadcasters provisions, including certain statutory licenses.
 * Added provisions to facilitate distance education.
 * Added provisions to assist libraries with keeping phonorecords of sound recordings.
 * Added provisions relating to collective bargaining and the transfer of movie rights.

Title V: Vessel Hull Design Protection Act
DMCA Title V added sections 1301 through 1332 to add a sui generis protection for boat hull designs. Boat hull designs were not considered covered under copyright law because they are useful articles whose form cannot be cleanly separated from their function.

Anti-circumvention exemptions
In addition to the safe harbors and exemptions the statute explicitly provides, 17 U.S.C. 1201(a)(1) requires that the Librarian of Congress issue exemptions from the prohibition against circumvention of access-control technology. Exemptions are granted when it is shown that access-control technology has had a substantial adverse effect on the ability of people to make non-infringing uses of copyrighted works.

The exemption rules are revised every three years. Exemption proposals are submitted by the public to the Registrar of Copyrights, and after a process of hearings and public comments, the final rule is recommended by the Registrar and issued by the Librarian. Exemptions expire after three years and must be resubmitted for the next rulemaking cycle. Consequently, the exemptions issued in the prior rulemakings, in 2000, 2003 and 2006 are no longer valid.

The current administratively-created exemptions, issued in July 2010, are:


 * Motion pictures on DVDs that are lawfully made and acquired and that are protected by the Content Scrambling System when circumvention is accomplished solely in order to accomplish the incorporation of short portions of motion pictures into new works for the purpose of criticism or comment, and where the person engaging in circumvention believes and has reasonable grounds for believing that circumvention is necessary to fulfill the purpose of the use in the following instances:
 * Educational uses by college and university professors and by college and university film and media studies students;
 * Documentary filmmaking;
 * Noncommercial videos. (A new exemption in 2010, similar to a previous educational exemption.)
 * Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset. (A new exemption in 2010.)
 * Computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network. (Revised from a similar exemption approved in 2006.)
 * Video games accessible on personal computers and protected by technological protection measures that control access to lawfully obtained works, when circumvention is accomplished solely for the purpose of good faith testing for, investigating, or correcting security flaws or vulnerabilities, if:
 * The information derived from the security testing is used primarily to promote the security of the owner or operator of a computer, computer system, or computer network; and
 * The information derived from the security testing is used or maintained in a manner that does not facilitate copyright infringement or a violation of applicable law. (A new exemption in 2010.)
 * Computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete. A dongle shall be considered obsolete if it is no longer manufactured or if a replacement or repair is no longer reasonably available in the commercial marketplace. (A renewed exemption from 2006, based on a similar exemption approved in 2003.)
 * Literary works distributed in e-book format when all existing e-book editions of the work (including digital text editions made available by authorized entities) contain access controls that prevent the enabling either of the book’s read-aloud function or of screen readers that render the text into a specialized format. (A renewed exemption from 2006, based on a similar exemption approved in 2003.)

The Copyright Office approved two exemptions in 2000; four in 2003; six in 2006 and 2010. In 2000, the Office exempted (a) "Compilations consisting of lists of websites blocked by filtering software applications" (renewed in 2003 but not renewed in 2006); and (b) "Literary works, including computer programs and databases, protected by access control mechanisms that fail to permit access because of malfunction, damage, or obsoleteness." (revised and limited in 2003 and again in 2006). In 2003, the 2000 "literary works including computer programs" exemption was limited to "Computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete" and this exemption was renewed in both 2006 and 2010. The 2003 exemption for text readers of ebooks was renewed in both 2006 and 2010. The 2003 exemption for obsolete software and video game formats was renewed in 2006 but was not renewed in 2010. The 2000 filtering exemption was revised and renewed in 2003, but was not renewed in 2006. The 2006 exemption for sound recordings allowed after security flaws were found in a copy protection system on some Sony CDs was not renewed in 2010. An exemption covering the audiovisual works included in the educational library of a college or university’s film or media studies department was not renewed in 2010. This exemption was replaced with an exemption on DVDs protected by the Content Scrambling System when circumvention is for the purpose of criticism or comment using short sections, for educational, documentary or non-profit use. The 2006 exemption for wireless handsets connecting to wireless networks was revised in 2010 to specify used handsets and require authorization from the wireless network operator. Another exemption for wireless handsets was introduced in 2010 specific to interoperability software on the phone itself.

Linking to infringing content
The law is currently unsettled with regard to websites that contain links to infringing material; however, there have been a few lower-court decisions which have ruled against linking in some narrowly prescribed circumstances. One is when the owner of a website has already been issued an injunction against posting infringing material on their website and then links to the same material in an attempt to circumvent the injunction. Another area involves linking to software or devices which are designed to circumvent DRM (digital rights management) devices, or links from websites whose sole purpose is to circumvent copyright protection by linking to copyrighted material.

There have been no cases in the US where a website owner has been found liable for linking to copyrighted material outside of the above narrow circumstances.

Edelman v. N2H2
In July 2002, American Civil Liberties Union filed a lawsuit on the behalf of Benjamin Edelman, a computer researcher at Berkman Center for Internet and Society, seeking a Declaratory judgment to affirm his first amendment rights when reverse engineering the censorware product of defendant N2H2 in case he intended to publish the finding. N2H2 filed a motion to dismiss, which the court granted.

RealNetworks, Inc. v. DVD Copy Control Association, Inc.
In August 2009, the DVD Copy Control Association won a lawsuit against RealNetworks for violating copyright law in selling its RealDVD software, allowing users to copy DVDs and store them on a harddrive. The DVD Copy Control Association claimed that Real violated the DMCA by circumventing anti-piracy measures ARccOS Protection and RipGuard, as well as breaking Real's licensing agreement with the MPAA's Content Scrambling System.

Viacom Inc. v. YouTube, Google Inc.
On March 13, 2007, Viacom filed a lawsuit against YouTube and its corporate parent Google for copyright infringement seeking more than $1 billion in damages. The complaint was filed in the U.S. District Court for the Southern District of New York. Viacom claims the popular video-sharing site was engaging in "massive intentional copyright infringement" for making available a contended 160,000 unauthorized clips of Viacom's entertainment programming. Google lawyers say they are relying on the 1998 Digital Millennium Copyright Act to shield them from liability.

On June 23, 2010, U.S. District Judge Louis Stanton granted summary judgment in favor of YouTube. The court held that YouTube is protected by the safe harbor of the DMCA. Viacom has said that it will appeal before the U.S. Court of Appeals for the Second Circuit as soon as possible.

IO Group, Inc. v. Veoh Networks, Inc.
On June 23, 2006 IO Group, Inc. filed a complaint against Veoh Networks, Inc. in the U.S. District Court for California's Northern District. IO Group alleged that Veoh was responsible for copyright infringement by allowing videos owned by Io Group to be accessed through Veoh's online service without permission over 40,000 times between the dates June 1 and June 22.

Veoh is a Flash video site relying on user contributed content. IO Group argued that since Veoh transcoded user uploaded videos to Flash format it became a direct infringer and the materials were under their direct control, thereby disqualifying them for DMCA safe harbor protection.

The ruling judge disagreed with the argument, stating that "Veoh has simply established a system whereby software automatically processes user-submitted content and recasts it in a format that is readily accessible to its users. Veoh preselects the software parameters for the process from a range of default values set by the thirdparty software... But Veoh does not itself actively participate or supervise the uploading of files. Nor does it preview or select the files before the upload is completed. Instead, video files are uploaded through an automated process which is initiated entirely at the volition of Veoh's users." The Court has granted the Veoh's motion for summary judgment, on the basis of the DMCA, holding that the defendant's video-sharing web site complied and was entitled to the protection of the statute's "safe harbor" provision. Even though Veoh won the court case, it blamed the litigation as one of the causes of its preparing to file Chapter 7 bankruptcy and its subsequent sale to Qlipso.

Vernor v. Autodesk, Inc.
After numerous DMCA takedown notices in response to his eBay listings, Timothy S. Vernor sued Autodesk in August 2007 alleging that Autodesk abused the DMCA and disrupted his right to sell used software he bought at a garage sale. In May 2008, a federal district judge in Washington State dismissed Autodesk's argument that the software's license agreement preempted the seller from his rights under the first-sale doctrine. In September 2010, the US Court of Appeals for the Ninth Circuit reversed, holding that "a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions."

Lenz v. Universal Music Corp.
In 2007, Stephanie Lenz, a writer and editor from Gallitzin, Pennsylvania made a home video of her 13-month-old son dancing to "Let's Go Crazy" and posted a 29-second video on the video-sharing site YouTube. Four months after the video was originally uploaded, Universal Music Group, which owned the copyrights to the song, ordered YouTube to remove the video enforcing the Digital Millennium Copyright Act.

Lenz notified YouTube immediately that her video was within the scope of fair use, and demanded that it be restored. YouTube complied after six weeks—not two weeks, as required by the Digital Millennium Copyright Act—to see whether Universal planned to sue Lenz for infringement. Lenz then sued Universal Music in California for her legal costs, claiming the music company had acted in bad faith by ordering removal of a video that represented fair use of the song.

In August 2008, U.S. District Judge Jeremy Fogel of San Jose, California ruled that copyright holders cannot order a deletion of an online file without determining whether that posting reflected "fair use" of the copyrighted material.

On February 25, 2010, Judge Fogel issued a ruling rejecting several of Universal's affirmative defenses, including the defense that Lenz suffered no damages.

Flava Works Inc. v. Gunter
In the case of Flava Works Inc. v. Gunter the court denied the defentant safe harbour protection under DMCA. The court found that the defentant had knowledge of its users infringing activity and also failed to prevent future infringing activity. As such the plaintiff's motion for preliminary injunction was granted.

Takedown Notice
The DMCA has been criticized for making it too hard for copyright owners to protect their rights. Owners of "community based" infringing websites need only take down infringing content to avoid all liability. This has led to the business model of encouraging anonymous individuals to upload copyright violations while the site owners profit from advertising or a sales percentage on pirated eBooks.

Google asserted misuse of the DMCA in a filing concerning New Zealand's copyright act, quoting results from a 2005 study by Californian academics Laura Quilter and Jennifer Urban based on data from the Chilling Effects clearinghouse. Takedown notices targeting a competing business made up over half (57%) of the notices Google has received, the company said, and more than one-third (37%), "were not valid copyright claims."

Effect on Analog Video Equipment
Analog Copy Protection (ACP), the encryption technology created by Rovi Corporation (Formerly Macrovision), is designed to thwart users' attempts to reproduce content via analog cables. When a DVD is played through an analog video cable and recorded using a VCR, Rovi’s ACP technology will distort the copy partially or completely.

The technology works by adding additional lines to the video signal. In the NTSC video standard, blank lines (vertical blanking intervals) that the user cannot see are used for functions like closed captioning. Rovi Corporation uses these blank lines to implement its ACP technology.

The implementation of ACP has been ill-regarded by some video enthusiasts. Many claim that the technology has led to signal issues with VCRs and analog video equipment. Some VCRs misread the encryption used to prevent copying, distorting the video image regardless of whether the recording is original or a copy.

The DMCA has been criticized for forcing all producers of analog video equipment to support the proprietary copy protection technology of Rovi Corporation, a commercial firm. The producers of video equipment are forced by law to support and implement the corporation's proprietary technology. This benefits Rovi Corporation financially, whereas those forced to implement it receive neither profit nor receive compensation.

Additionally, some criticize the implementation of ACP as a violation of their fair use rights. A recently developed TV-streaming product called the Slingbox uses analog signals to convey video from television to a mobile device. However, the encryption used by ACP blocks analog transmission, rendering the Slingbox unusable. Additionally ACP blocks the use of recording for educational purposes. On one or more accounts, students have not been able to cite and record cable sources properly due to ACP restrictions.

Effect on research
The DMCA has had an impact on the worldwide cryptography research community, since an argument can be made that any cryptanalytic research violates, or might violate, the DMCA. The arrest of Russian programmer Dmitry Sklyarov in 2001, for alleged infringement of the DMCA, was a highly publicized example of the law's use to prevent or penalize development of anti-DRM measures. While working for ElcomSoft in Russia, he developed The Advanced eBook Processor, a software application allowing users to strip usage restriction information from restricted e-books, an activity legal in both Russia and the United States. Paradoxically, under the DMCA, it is not legal in the United States to provide such a tool. Sklyarov was arrested in the United States after presenting a speech at DEF CON and subsequently spent nearly a month in jail. The DMCA has also been cited as chilling to legitimate users, such as students of cryptanalysis (including, in a well-known instance, Professor Edward Felten and students at Princeton), and security consultants such as Niels Ferguson, who has declined to publish information about vulnerabilities he discovered in an Intel secure-computing scheme because of his concern about being arrested under the DMCA when he travels to the US.

Effect on innovation and competition
In at least one court case, the DMCA has been used by Open Source software projects to defend against conversion of software (i.e. license violations) that involved removal of copyright notices. This defense can be used even without timely copyright registration, and can generate attorney fee awards, which together make it a useful strategy for Open Source organizations.

Reform and opposition
There are efforts in Congress to modify the Act. Rick Boucher, a Democratic congressman from Virginia, is leading one of these efforts by introducing the Digital Media Consumers' Rights Act (DMCRA).

A prominent bill related to the DMCA is the Consumer Broadband and Digital Television Promotion Act (CBDTPA), known in early drafts as the Security Systems and Standards Certification Act (SSSCA). This bill, if it had passed, would have dealt with the devices used to access digital content and would have been even more restrictive than the DMCA.

On the tenth anniversary of the DMCA, the Electronic Frontier Foundation documented harmful consequences of the anti-circumvention provisions. They document that the DMCA:


 * 1) stifles free expression, such as in its use against Russian programmer Dmitry Sklyarov, Princeton Professor Edward Felten, and journalists;
 * 2) jeopardizes fair use;
 * 3) impedes competition, such as blocking aftermarket competition in toner cartridges, garage door openers, and enforcing walled gardens around the iPod; and
 * 4) interferes with computer intrusion laws.