Copyright and Intellectual Property Law in the Digital Age
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6(P/lO / 71-- \C-...lt2---t.tO\l-SeJ- COPYRIGHT AND INTELLECTUAL PROPERTY LAW IN THE DIGITAL AGE An Interactive Qualifying Project Report submitted to the Faculty of the WORCESTER POLYTECHNIC INSTITUTE in partial fulfillment of the requirements for the Degree of Bachelor of Science Geoffrey P. Caton Date: August 23, 2006 Professor Kent J. Ris Abstract The effects of recent technological developments upon intellectual property law are analyzed. Discusses Digital Rights Management, Licensing Agreements, and Fair Use. Includes a summary of recent legal developments and pending legislation, as well as a commentary and critique of the status quo. 2 Table of Contents Abstract 2 Introduction 4 Digital Rights Management 5 Licensing and Fair Use 15 Current and Pending Legislation 23 Current Legislation 23 The Digital Millennium Copyright Act 23 No Electronic Theft Act 25 Pending Legislation 26 Pirate Act 26 Digital Media Consumers' Rights Act 27 BALANCE Ac t 29 Commentary and Conclusions 31 Bibliography 41 3 Introduction Intellectual property law was once a quiet, mundane corner of the law, disregarded by everyone but a small cadre of lawyers. What was permitted by law and what was not was reasonably well-understood, and small transgressions were usually forgiven because of the low stakes. This lasted up until the early 1970's, when a new wave of electronics suddenly made copyright law a big deal. The advent of the personal computer made unforeseen contingencies a critical concern, and the dawn of the Internet meant that small transgressions were happening on an unprecedented scale. Suddenly on center stage, copyright and intellectual property law went through radical changes driven by the rapid advance of technology. To this day, the law is still trying to reconcile the rights of copyright holders with those of media consumers, and the balance of power has swung both ways within the past thirty years. This paper examines some of the unique outcroppings of modern intellectual property law, such as Digital Rights Management and unusual media licensing arrangements. Viewed through the lens of recent and pending legislation, an attempt to resolve the issues at hand is made in a commentary and critique. 4 Digital Rights Management The advent of digital computers allowed the perfect, systematic reproduction of any electronically encoded information. This created a unique and unprecedented dilemma for anyone attempting to make a profit from such creations: after some third party obtained said work, by legitimate or illegitimate means, it could be freely replicated and distributed without the author's consent. Unlike the manufacturer of tangible items, the creator of these incorporeal works could be forever deprived of income from their efforts. Legally they are on solid ground, since copyright law regards these as 'protected works,' but the sheer ease of infringing upon a copyright makes vigorous enforcement of intellectual property rights a monumental task. Recognizing the issue, Congress formed a commission to consider the problem. The National Commission on New Technological Uses of Copyrighted Works (CONTU) was established in 1974, and issued its final report in 1978. At this point, the debate was in full swing. Without waiting for CONTU's conclusion, Congress revised copyright law for the first time since 1909 with the Copyright Act of 1976. This greatly expanded the scope of copyright law by adapting to modern technologies yet unimagined in 1909, such as Xerox machines and widely available audiovisual equipment. It also codified within US law the agreements made under the 1971 Berne Convention Treaty. 5 Although he did not enjoy the prominence that he does today, 1976 marked Bill Gates' famous letter to computer hobbyists: "As the majority of hobbyists must be aware, most of you steal your software. Hardware must be paid for, but software is something to share. Who cares if the people who worked on it get paid? ... Is this fair?l ff Five years later, Microsoft rose to prominence because of its PC-DOS software distribution deal with IBM. Seeing no profit in operating systems, IBM awarded the contract that would bundle the 2 product with their first generation of home computers . IBM PCs quickly revolutionized the computing market, and when Compaq managed to build a compatible system, software vendors found themselves in a burgeoning market. Casual software piracy, which had remained constant since 1976, was now a serious problem for the multimillion dollar industry. Almost immediately, copy protection schemes emerged to prevent widespread copying. There was (and is) a wide array of systems, varying in complexity and effectiveness, with no strong correlation between the two. Initial techniques utilized the idiosyncrasies of the media involved. A method still in use today intentionally creates defective spots on the floppy disk (or CD, or DVD.) These spots faulty sectors - are a natural result of large-scale manufacturing processes, so hardware and copy mechanisms compensate by checking 1 Steven Levy. Hackers: Heroes of the Computer Revolution 2 Ibid. 6 for errors and routing around them. However, software protected in this manner makes a point of checking for the deliberately ruined portions, knowing that a copy will have them corrected. Without the faults, the software refuses to run. This technique is easily defeated by forcing software to make a perfect, 1:1 copy of the original media, faults and all, but is still effective against the average user who is unaware of this. Other techniques were considerably less subtle. A method which has fallen out of favor requires the user to 'prove' they own the software by entering an arbitrary word or number from the manual 3 every time the software runs . In addition to hassling legitimate users (especially legitimate users who've lost their manual,) this makes a 'cracked' copy without this measure more useful than an original copy. The most common technique today uses a CD key. This is a garbled string of letters and numbers provided with software, and entered upon installation. The setup program interprets the key (by some sort of decryption algorithm) and will not continue the installation process if the key is invalid. This method also varies in degrees of sophistication. Some software will accept any valid S key4, others pair keys to specific production batches , and some will only have one valid key for a given CD. However, once the code for 3 id Software. Spear of Destiny WOM Games. Snood 5 Microsoft. Windows 98 Second Edition 7 generating CD keys is cracked, the compromised software cannot be disabled - the cat is out of the bag. A truly drastic measure reserved exclusively for expensive software packages requires online registration. This method, most prominently used for Microsoft Windows XP and Office XP, will not allow a user to use the software without 'activating' it. This is similar to the CD key, except a user has to check the key against an online database, or call it in to the manufacturer, for the installation to work. This prevents the same key from being used repeatedly, since the manufacturer can refuse to authorize it. A number of drawbacks are associated with this measure, the first being fallibility - if the authorization system is unavailable, users will be unable to use their software. Also, large companies tend to install software on large numbers of computers by automated methods, which makes entering a unique CD key for each computer a massive logistical challenge. The solution to this problem further complicates matters: the manufacturer will often provide one 'magic bullet' key good for a countless number of installations. These keys, once made public, permit the widespread piracy the system was intended to curtail. Although intrusive new measures like product activation are certainly copy protection measures, they are generally associated with a broader category: digital rights management, or DRM, for short. DRM is an umbrella term used to describe not only copy protection, but similar mechanisms for other forms of media. Software grew up with the problem of piracy, but music and video did not have to deal with it until recently. As a result, 8 their DRM is not as tightly integrated into the format. Because their respective industries were well-established long before copyright infringement became a serious worry, they tend to rely upon legislation and litigation rather than fundamentally changing their business by emulating the software industry. The motion picture industry set the stage for modern copyright debates with the birth of the VCR, and the court battles that ensued. Prior to the introduction of audio and video cassettes, copyright infringement was a non-issue. The only common medium that could easily be copied was the written word, by manually xerographing each page. For the time and money invested in this process, it was smarter to simply buy the real thing. Tape decks and VCRs, on the other hand, were commonly available and largely automated. The motion picture industry's initial reaction was to quash the technology entirely, as seen in the landmark 1984 case Sony of America v. Universal City Studios. Sony v. Universal - widely known as "the Betamax case" established home recording as a legitimate activity, and expanded fair use to encompass many of the VCR's new capabilities. The movie industry adapted, and the home video market became a significant new market for them to explore. However, home users still had the ability to copy protected works, so the industry turned to technological solutions. Copy protection measures for videotape were not particularly effective. Although technologies like Automatic Gain Control could foil the casual user, it could be bypassed with minimal knowledge of electronics. In addition, the poor quality of copied video 9 discouraged widespread piracy. Since DVDs, the next generation of home video, would be capable of perfect copies, the industry built DRM in from the ground up.