A Study on Application of the Anti- Circumvention Provision of the Digital Millennium Copyright Act

[논 문 ]

* Cho, Sung-Ja

≪차 례 ≫ Ⅰ. Trade Agreements as a weapon Appeals Courts decisions to enforce the US intellectual concerning the anti- property rights circumvention provision of the Ⅱ. The Digital Millennium DMCA Copyright Act Ⅳ. Suggestions for application to Ⅲ. Judicial criticisms to the Korea DMCA: by reviewing two US

Ⅰ. Trade Agreements as a weapon to enforce the US intellectual property rights

For political reasons rather than contents, the Korea-US Free Trade Agreement (KOR-US FTA, below) is becoming an issue again about

* Assistant Professor, Kangwon National University School of Law. 362東亞法學第 43 號

whether the United States of America (USA or US, below) and the Republic of Korea (Korea, below) each can pass the FTA deal previously concluded between the two countries in April 2, 2007. According to Susan Schwab, who is the US Trade Representative and has aggressively negotiated and concluded FTA deals with various countries including Korea, stated that the bilateral agreements serves as a blueprint for protecting and enforcing intellectual property rights of US 1) , which means that one of the main roles of the US trade representative is to enforce intellectual property law issues, including the enforcement of US copyright law. Then, would this mean that US trade agreements are a weapon to export the US laws including the DMCA to other countries? There is no doubt that the intellectual property became one of the most important export items for several large US companies. So, it is not surprising that Schwab and her predecessor, Rob Portman, made intellectual property protection a centerpiece of international trade discussions. 2) In June 2006, considering that the intellectual property issues are so important, Schwab created a new Intellectual Property Office within the Office of the U.S. Trade Representative (USTR, below), in order to prepare trade negotiations with China and Russia that were identified in the USTR’s 2006“ Special 301”Annual Review as countries where “rampant counterfeiting and piracy problems continue… indicating a critical need for stronger intellectual property protection.” However, some groups in the US think differently about these trends of

1) Brooks Boliek, Copyright Biz Keeps Eye on Russia, The Hollywood Reporter, November 21, 2006 ( http://www.allbusiness.com/services/motion-pictures/4810445-1.html ). 2) Dames K. Matthew, Trade Agreements as the New Copyright Law, Information Today Inc., March 1, 2007 (http://pqasb.pqarchiver.com/infotoday/access/1228651021.html?dids =122865102 1:1228651021:1228651021&FMT=ABS&FMTS=ABS:FT:PAGE&date=Mar%2FApr+ 2007&author=K+Matthew+Dames&pub=Online&edition=&startpage=16&desc=Trade+ Agreements+as+the+New+Copyright+Law). Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 363

USTR. For example, the American Association of Law Library (AALL, below) distributed a notice of warning to its members about the dangers of an increasing scope of international trade agreements and their influence on the US Copyright Act on June 18, 2003. In particular, concerning the US trade negotiations with Chile and Singapore that included the Digital Millennium Copyright Act (DMCA, below) and the Sony Bono Copyright Term Extension Act (CTEA) of 1998 3) , AALL’s Washington Office issued the following statement 4) :

The inclusion of the life + 70 copyright term and the strong version of the anti-circumvention rules not only impose a U.S.-centric version of copyright policy on our trading partners in the developing world, but also 'locks-in' bad copyright policies at the domestic level.… There are already a sufficient number of international copyright treaties and conventions that provide adequate standards for the protection of intellectual property. There is concern that expansive language in free-trade agreements may raise the level of copyright protection above and beyond the international standards under the Berne Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights annexed to the agreement establishing the World Trade Organization.

This article aims to provide a couple of suggestions for our application of the anti-circumvention provision of the DMCA, by introducing the criticisms of US Appeals Courts and Congress.

3) The Copyright Term Extension Act (CTEA) of 1998– alternatively known as the Sonny Bono Copyright Term Extension Act, Sonny Bono Act, or pejoratively as the Mickey Mouse Protection Act– extended copyright terms in the United States by 20 years. Before the Act (under the Copyright Act of 1976), copyright would last for the life of the author plus 50 years, or 75 years for a work of corporate authorship; the Act extended these terms to life of the author plus 70 years and for works of corporate authorship to 120 years after creation or 95 years after publication, whichever endpoint is earlier. The Act also affected copyright terms for copyrighted works published prior to January 1, 1978, also increasing their term of protection by 20 years, to a total of 95 years from publication. 4) Boliek, supra , p. 7. 364東亞法學第 43 號

In part 2, a brief introduction about the DMCA is presented. In part 3, two US Appeals Court decisions about the DMCA, particularly concerning the anti-circumvention provisions, will be introduced and analyzed. And, in the final part, a couple of suggestions are presented for the judicial and legislative application in Korea.

Ⅱ. The Digital Millennium Copyright Act

(1) Summary of the DMCA

The DMCA passed by a unanimous vote in the US Senate on October 8, 1998, and in the House on October 12, and was signed into law by President Bill Clinton on October 28, 1998. Going through excruciating negotiations and debates over four (4) years, the DMCA became a complex piece of legislation which required major changes in the US copyright law to address the digitally networked environment. According to the titles, the DMCA has five (5) purposes: (1) to implement the WIPO Internet Treaties; (2) to establish safe harbors for online service providers; (3) to permit temporary copies of program during the performance of computer maintenance; (4) to make miscellaneous amendments to then existing Copyright Act, including amendments which facilitate Internet broadcasting; and (5) to create sui generis protection for original boat hull designs. Specifically, the main initiative to enact the DMCA is to provide then existing US Copyright Act with a provision to implement the Copyright Treaty 5) and Performances and Phonograms Treaty 6) of the World

5) The WIPO Copyright Treaty was adopted in Geneva on December 20, 1996); entered into Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 365

Intellectual Property Organization (WIPO) 7) . Thus, Title I of the DMCA amends U.S. copyright law to comply with the above two treaties of WIPO. In particular, two major provisions in the WIPO treaties 8) required

force on March 6, 2002 when 30 states submitted the instruments of ratification or accession under Article 20 (Entry into force of the Treaty); the Republic of Korea acceded to this Treaty on March 24, 2004, thereby entering into force on June 24, 2004; Source: International Bureau of WIPO ( http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.html# P124_18388 ). 6) The WIPO Performances and Phonograms Treaty (WPPT) was adopted in Geneva on December 20, 1996); entered into force on March 20, 2002 when 30 states submitted the instruments of ratification or accession under Article 29 (Entry into force of the Treaty); Source: International Bureau of WIPO ( http://www.wipo.int/treaties/en/ip/wppt/trtdocs_ wo034.html ). 7) The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations. It is dedicated to developing a balanced and accessible international intellectual property (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest. WIPO was established by the WIPO Convention in 1967 with a mandate from its Member States to promote the protection of IP throughout the world through cooperation among states and in collaboration with other international organizations. Its headquarters are in Geneva, Switzerland. 8) WIPO Copyright Treaty and Performances and Phonograms Treaty each has two provisions concerning legal remedies against circumventing technological protection measures and tampering with copyright management information; that is, Articles 11 and 12 of the Copyright Treaty are respectively the same as Articles 18 and 19 of the Performances and Phonograms Treaty, as follows: Article 11 of the Copyright Treaty (Article 18 of the Performances and Phonograms Treaty; Obligations concerning Technological Measures) Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by performers or producers of phonograms in connection with the exercise of their rights under this Treaty and that restrict acts, in respect of their performances or phonograms, which are not authorized by the performers or the producers of phonograms concerned or permitted by law (emphasis added). Article 12 of the Copyright Treaty (Article 19 of the Performances and Phonograms Treaty; Obligations concerning Rights Management Information) (1) Contracting Parties shall provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing, or with respect to civil remedies having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by this Treaty: (i) to remove or alter any electronic rights management information without authority; (ii) to distribute, import for distribution, broadcast, communicate or make available to the public, without authority, performances, copies of fixed performances or phonograms knowing that electronic rights management information has been removed or altered without authority. (2) As used in this Article, “rights management information” means information which identifies the performer, the performance of the performer, the producer of the phonogram, the phonogram, the owner of any right in the performance or 366東亞法學第 43 號

contracting parties to provide legal remedies against circumventing technological protection measures and tampering with copyright management information. To comply with these provisions, the DMCA adds a new chapter, Chapter 12, to Title 17 of the United States Code.

The first key provision of the DMCA is the anti-circumvention provision of copyright protection systems under Article 1201, prohibiting unauthorized access to a work by circumventing a technological protection measure 9) put in place by the copyright owner where such protection measure otherwise effectively controls access to a copyrighted work. 10) Under the anti-circumvention provisions, it became immediately illegal to “manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof” designed to circumvent copyright protection or access-protection technology. The second key provision of the DMCA is to extend the reach of copyright, with limiting the liability of online service providers for copyright infringement by their users. The so-called safe harbor provision for Internet service providers prescribed the conditions for them to avoid liability when infringing materials passed through their systems by their users. The Act identified specific categories of events that might qualify for a privilege: transitory communications, system caching, hosting of subscribers’files, and technical infringements committed through the use of search engines and other information location tools. 11) Further, the

phonogram, or information about the terms and conditions of use of the performance or phonogram, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a fixed performance or a phonogram or appears in connection with the communication or making available of a fixed performance or a phonogram to the public (emphasis added). 9) Such measure is commonly known as Digital Rights Management or DRM. 10) 17 U.S.C. §1201. Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 367

DMCA has specific rules and conditions for non-profit institutions. All these categories, rules, and conditions intended to give Internet service providers opportunities to avoid liability through a series of means. 12)

(2) The anti-circumvention provision of the DMCA in KOR-US FTA

In terms of trade agreements (TA) with US, the DMCA has been exported to other countries. For example, in 2003, USA and Singapore signed a trade agreement, and one of the agreed terms was both nations’ commitment to prohibit bypassing of copy-protection technologies, such as those used in most DVDs, a small number of CDs and some computer software. 13) Also, Korea-US Free Trade Agreements (KOR-US FTA) contained most key provisions of the DMCA. In particular, Article 18.4 (Copyright and Related Rights) 14) of the US-KOR FTA requires Korea to adopt the anti-circumvention provision of the DMCA as follows:

7. (a) In order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that authors, performers, and producers of phonograms use in connection with the exercise of their rights and that restrict unauthorized acts in respect of their works, performances, and phonograms, each Party shall provide that any person who: (i) knowingly, or having reasonable grounds to know, circumvents

11) 17 U.S.C. §512. 12) United States Copyright Office, The Digital Millennium Copyright Act of 1998: Copyright Office Summary (December 1998), http://www.copyright.gov/legislation/dmca.pdf, at 8-14; A&M RECORDS, Inc. v. NAPSTER, INC., 239 F.3d 1004 (9th Cir. 2001), http://www.law.cornell.edu/copyright/cases/239_F3d_1004.htm . 13) ZDNet.co.uk, “Singapore signs up to US Copyright law”(2003) http://news.zdnet.co.uk/itmanagement/0,1000000308,2134371,00.htm. 14) Office of the United States Trade Representative, United States– Korea FTA Texts (http://www.ustr.gov/Trade_Agreements/Bilateral/Republic_of_Korea_FTA/Final_Text/Sect ion_Index.html) 368東亞法學第 43 號

without authority any effective technological measure that controls access to a protected work, performance, phonogram, or other subject matter; or (ii) manufactures, imports, distributes, offers to the public, provides, or otherwise traffics in devices, products, or components, or offers to the public or provides services, that: (A) are promoted, advertised, or marketed by that person, or by another person acting in concert with, and with the knowledge of, that person, for the purpose of circumvention of any effective technological measure; (B) have only a limited commercially significant purpose or use other than to circumvent any effective technological measure; or (C) are primarily designed, produced, or performed for the purpose of enabling or facilitating the circumvention of any effective technological measure, shall be liable and subject to the remedies set out in Article 18.10.13.13. 15)

Each Party shall provide for criminal procedures and penalties to be applied when any person, other than a nonprofit library, archive, educational institution, or public noncommercial broadcasting entity, is found to have engaged willfully and for purposes of commercial advantage or private financial gain in any of the foregoing activities. Such criminal procedures and penalties shall include the application to such activities of the remedies and authorities listed in subparagraphs (a), (b), and (e) of Article 18.10.27 as applicable to infringements, mutatis mutandis.

In short, under the KOR-US FTA, Korea should enact a law to prohibit the act of circumventing an access control by production and dissemination of technology, devices, or services intended to circumvent measures, without permission of copyright owners, along with criminal

15) In addition, each Party shall provide that any person who, unknowingly and without reasonable grounds to know, circumvents without authority any effective technological measure that controls access to a protected work, performance, phonogram, or other subject matter shall be liable and subject at least to the remedies set out in subparagraphs (a), (c), and (d) of Article 18.10.13 (original note in the FTA Text). Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 369

penalties to the violators to the act. Ⅲ. Judicial criticisms to the DMCA: by reviewing two decisions from the US Appeals Courts concerning the anti- circumvention provision of the DMCA

Since the enactment in 1998, the anti-circumvention provisions of the DMCA have generated strong reactions from various interest groups. On the other hand, the motion picture industry collected a huge profit from the successful sales of DVD. 16) Under the literal reading, the DMCA permitted the studios and their business partners in the consumer electronics industry to prevent the distribution of DeCSS, which is a software to enable the circumvention of the encryption system that protects movies distributed on DVDs. However, many technology experts argued that the DMCA chilled legitimate research into computer security and the development of innovative products. For example, in October 2002, Richard Clarke, then the head of the White House Office of Cyber Security, stated that the DMCA needed amendment to permit the security flaws in software since the law is misused as threats against academic researchers.17) Also, libraries and universities argued that the DMCA prevents lawful copying permitted under the copyright’s fair use doctrine or library exceptions. Among those controversies, two circuit courts issued decisions against the anti-circumvention provisions of the DMCA: the Chamberlain case

16) DVD sales in US exceeded US$12 billion (Chris Jones, Power to the People, Chicago Tribune, February 1, 2004, at C1). 17) Hiawatha Bray, Cyber Chief Speaks on Data Network Security, Boston Globe, Oct. 17, 2002, at C2 (“I think a lot of people didn’t realize that it would have this potential chilling effect on vulnerability research”). 370東亞法學第 43 號

involving universal garage door opener transmitter, and the Lexmark case involving printer toner cartridges. Each of these cases will be reviewed in more detail below.

1. Chamberlain Group, Inc. v. Skylink Techs., Inc. 18)

1) Facts and decision of the district court

Skylink developed a universal garage door opener transmitter that could activate Chamberlain garage door openers (GDOs, below). To do so, software in the Skylink transmitter circumvented a lockout code in a computer program embedded in the Chamberlain GDO that controlled operation of the GDO engine. Chamberlain sued Skylink, with alleging that the Skylink transmitter violated the DMCA because they circumvented a technological protection measure to obtain unauthorized access to the software embedded in the GDO. The district court granted summary judgment to Skylink on the grounds that Chamberlain had gained implicit authorization to its customers to circumvent the access controls in the garage door openers that they purchased. On appeal, Chamberlain argued that it had not given such authorization. Skylink asked to confirm the district court’s holding. Meanwhile, the Computer & Communications Industry Association filed an amicus brief with an alternative argument that the circumvention was permitted under the interoperability exception, 17 U.S.C. §1201 (f). 19)

18) Chamberlain Group , Inc. v. Skylink Techs., Inc. 381 F.3d 1178 (Fed. Cir. 2004). 19) §1201. Circumvention of Copyright Protection Systems (f) Reverse engineering.-- (1) Notwithstanding the provisions of subsection (a)(1)(A), a person who has lawfully obtained the right to use a copy of a computer program may circumvent a technological measure that effectively controls access to a particular portion of that program for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to the person Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 371

2) Reasoning of the Federal Circuit Court

The Federal Circuit Court agreed with the district court that the customers’circumvention was authorized, based on the grounds that §1201(a) is interpreted to prohibit circumvention only if it enables access that infringes or facilitates infringement (emphasis added), without citing the rationale of Skylink or its amici. The Federal Circuit Court’s analysis began to recognize that the DMCA does not create a new property right; rather, it provides property owners with new ways to secure their property. With reviewing the legislative history of the DMCA, the court concluded that the Congress’s objective in enacting the DMCA was not to change the balance of interests in the copyright law, but to preserve them in the new digital environment. Specifically, concerning the Congress’intent to the DMCA, the Federal Circuit stated:

Congress attempted to balance the legitimate interests of copyright owners with those of consumers of copyrighted products.… Were we

engaging in the circumvention, to the extent any such acts of identification and analysis do not constitute infringement under this title [17 U.S.C.A. S 1 et seq.]. (2) Notwithstanding the provisions of subsections (a)(2) and (b), a person may develop and employ technological means to circumvent a technological measure, or to circumvent protection afforded by a technological measure, in order to enable the identification and analysis under paragraph (1), or for the purpose of enabling interoperability of an independently created computer program with other programs, if such means are necessary to achieve such interoperability, to the extent that doing so does not constitute infringement under this title [17 U.S.C.A. S 1 et seq.]. (3) The information acquired through the acts permitted under paragraph (1), and the means permitted under paragraph (2), may be made available to others if the person referred to in paragraph (1) or (2), as the case may be, provides such information or means solely for the purpose of enabling interoperability of an independently created computer program with other programs, and to the extent that doing so does not constitute infringement under this title [17 U.S.C.A. S 1 et seq.] or violate applicable law other than this section. (4) For purposes of this subsection, the term "interoperability" means the ability of computer programs to exchange information, and of such programs mutually to use the information which has been exchanged. 372東亞法學第 43 號

to interpret Congress’s words in a way that eliminated all balance and granted copyright owners carte blanche authority to preclude all use, Congressional intent would remain unrealized. 20)

The Federal Circuit Court interpreted §1201(a) 21) of the DMCA to

20) 381 F.3d at 1203. 21) §1201. Circumvention of Copyright Protection Systems (a) Violations regarding circumvention of technological measures.-- (1) (A) No person shall circumvent a technological measure that effectively controls access to a work protected under this title. The prohibition contained in the preceding sentence shall take effect at the end of the 2-year period beginning on the date of the enactment of this chapter [17 U.S.C.A. S 1201 et seq.]. (B) The prohibition contained in subparagraph (A) shall not apply to persons who are users of a copyrighted work which is in a particular class of works, if such persons are, or are likely to be in the succeeding 3-year period, adversely affected by virtue of such prohibition in their ability to make noninfringing uses of that particular class of works under this title, as determined under subparagraph (C). (C) During the 2-year period described in subparagraph (A), and during each succeeding 3-year period, the Librarian of Congress, upon the recommendation of the Register of Copyrights, who shall consult with the Assistant Secretary for Communications and Information of the Department of Commerce and report and comment on his or her views in making such recommendation, shall make the determination in a rulemaking proceeding for purposes of subparagraph (B) of whether persons who are users of a copyrighted work are, or are likely to be in the succeeding 3-year period, adversely affected by the prohibition under subparagraph (A) in their ability to make noninfringing uses under this title of a particular class of copyrighted works. In conducting such rulemaking, the Librarian shall examine-- (i) the availability for use of copyrighted works; (ii) the availability for use of works for nonprofit archival, preservation, and educational purposes; (iii) the impact that the prohibition on the circumvention of technological measures applied to copyrighted works has on criticism, comment, news reporting, teaching, scholarship, or research; (iv) the effect of circumvention of technological measures on the market for or value of copyrighted works; and (v) such other factors as the Librarian considers appropriate. (D) The Librarian shall publish any class of copyrighted works for which the Librarian has determined, pursuant to the rulemaking conducted under subparagraph (C), that noninfringing uses by persons who are users of a copyrighted work are, or are likely to be, adversely affected, and the prohibition contained in subparagraph (A) shall not apply to such users with respect to such class of works for the ensuing 3-year period. (E) Neither the exception under subparagraph (B) from the applicability of the prohibition contained in subparagraph (A), nor any determination made in a rulemaking conducted under subparagraph (C), may be used as a defense in any action to enforce any Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 373

“prohibit only forms of access that bear a reasonable relationship to the protections that the Copyright Act otherwise affords copyright owners 22) .” The court saw that this is the“ only meaningful reading of the statute 23) .” Thus, the court held that trafficking in a circumvention device violates § 1201(a)(2) 24) only if the circumvention enables access that “infringes a right protected by the Copyright Act (emphasis added). 25) ”To prevail under§ 1201(a)(2), that is, to make his case a prima facie case, the court held that a plaintiff must prove the following six (6) elements: (i) ownership of a valid copyright on a work; (ii) effectively controlled by a technological measure, which has been circumvented; (iii) that third parties can now access; (iv) without authorization, in a manner that (v) infringes or facilitates infringing a right protected by the Copyright Act, because of a product that (vi) the defendant either① designed or produced primarily for circumvention;② made available despite only limited commercial significance other than circumvention; or③ marketed for use in

provision of this title other than this paragraph. (2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that-- (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title [17 U.S.C.A. S 1 et seq.]; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title. (3) As used in this subsection-- (A) to "circumvent a technological measure" means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner; and (B) a technological measure "effectively controls access to a work" if the measure, in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work. 22) 381 F.3d at 1202. 23) Id . at 1203. 24) See note 21, supra . 25) 381 F.3d at 1203. 374東亞法學第 43 號

circumvention of the controlling technological measure. 26) However, Chamberlain could not show “the critical nexus between access and protection 27) ”that the court asked to prove. Chamberlain “neither alleged copyright infringement nor explained how the access provided by the (Skylink) transmitter facilitates the infringement of any right the Copyright protects. 28) ” Also, the court made it clear that if §1201(a) is construed to allow copyright owners to use technological measures to block all access to their copyrighted works, the owners of a work protected by both copyright and a technological measure that effectively controls access to that work would possess unlimited rights to hold circumventions liable under §1201(a) merely for accessing that work , even if that access enabled only rights that the Copyright Act grants to the public (emphasis added). 29) Previously, though, regarding the anti-circumvention violation, the Second Circuit Court held in Universal City Studios, Inc. v. Corley 30) that §1201(c)(1) 31) did not provide a fair use defense to a circumvention

26) Id . at 1269-70 27) Id . at 1204. 28) Id. 29) Id . at 1259. 30) Universal City Studios, Inc. v. Corley , 273 F.3d 429 (2 nd Cir. 2001) 31) §1201. Circumvention of Copyright Protection Systems (c) Other rights, etc., not affected.-- (1) Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title [17 U.S.C.A. S 1 et seq.]. (2) Nothing in this section shall enlarge or diminish vicarious or contributory liability for copyright infringement in connection with any technology, product, service, device, component, or part thereof. (3) Nothing in this section shall require that the design of, or design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological measure, so long as such part or component, or the product in which such part or component is integrated, does not otherwise fall within the prohibitions of subsection (a)(2) or (b)(1). (4) Nothing in this section shall enlarge or diminish any rights of free speech or the press for activities using consumer electronics, telecommunications, or computing products. Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 375

violation. 32) In distinguishing Chamberlain from Corley, the Federal Circuit of Chamberlain focused on that the plaintiff in Corley provided evidence that the circumvention program at issue, DeCSS, allowed a user to circumvent the CSS protection system and view a copy a motion picture without authorization. However, in this Chamberlain case, Skylink’s products permit only lawful uses of the software embedded in the Chamberlain garage door opener (emphasis added). Though the Federal Circuit of Chamberlain stated that some language in the Corley holding might be understood to suggest that§ 1201(a) impose liability even if the access cannot facilitate infringement, the court concluded that “it is unlikely… that the Second Circuit meant to imply anything as drastic as wrestling the concept of‘ access’from its context within the meaning of the Copyright Act. 33) ” Further, the Federal Circuit of Chamberlain saw that in case of accepting the Chamberlain’s arguments, it“ would allow any manufacturer of any product to add a single copyrighted sentence or software fragment to its product, wrap the copyrighted material in a trivial ‘encryption’ scheme and thereby gain the right to restrict consumers’rights to use its products in conjunction with competing products (emphasis added).” 34) The court concluded that“ Chamberlain’s construction of the DMCA would allow virtually any company to attempt to leverage its sale into aftermarket monopolies– a practice that both the antitrust laws and the

32) Corley court interpreted that 17 U.S.C. §1201(c)(1) does not provide a fair use defense, but it is also notable that the provision plainly prescribes that“[n]othing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.”That is, the provision to prohibit circumvention cannot be construed to limit the rights and defenses provided under the Copyright Act in any way. Justice Souter explained this contradiction in his dissenting opinion in Reno v. American-Arab Anti-Discrimination Comm ., 525 U.S. 471, 509 (1999). 33) 381 F.3d at 1199. 34) Id . at 1261. 376東亞法學第 43 號

doctrine of copyright misuse normally prohibit. 35)

2. Lexmark v. Static Control Components 36)

Within a couple of months after this Chamberlain decision shocked the industries and related interest groups, Lexmark v. Static Control Components decision was issued from the Sixth Circuit. The panel opinion stayed within the Chamberlain umbrella, but it is notable how Judge Merritt went farther in his concurring opinion.

1) Facts and decision of the district court

A toner cartridge is a device that is inserted within a laser printer and contains the toner necessary for the printer to print. Lexmark manufactures two types of toner cartridges: a regular one that can be refilled by the printer owner or by a third party manufacturer; and a discounted one for its T-series printers which, pursuant to a licensing agreement, consumers agree to use only once and return to Lexmark for recycling. Then, Lexmark designed the software embedded in its printer – the printer engine program (PEP)– to permit the printer to operate only if it recognized an authentication sequence from the toner loading program (TLP, below) embedded in the toner cartridge. Lexmark’s software prevented users from employing less expensive toner cartridge with its printers. Static Control Components (SCC, below) with other manufacturers refill and sell Lexmark’s regular toner cartridges, and components for use in the remanufacturing of toner cartridges. By reverse engineering the Lexmark’s microchip, SCC developed a microchip that copies, and thereby

35) Id . at 1262. This point is also expanded in the amicus brief filed by Consumers Union. th 36) Lexmark v. Static Control Components , 2004 U.S. App. Lexis 22250 (6 Cir. Oct. 26, 2004). Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 377

circumvents, the authentication sequence that Lexmark uses in the T-series printers. This enables SCC to sell its Smartek microchip for use by third parties to sell replacement toner cartridges that are compatible with the T-series despite Lexmark’s intention to limit replacement toner cartridges to those it manufactures. That is, SCC’s Smartek chip contained a copy of the Lexmark TLP, which permitted the replacement toner cartridge to operate in conjunction with Lexmark printers. Lexmark filed a suit against SCC for infringing the copyright in the TLP as well as violating the DMCA by circumventing the technological measures that protected access to the TLP and the PEP. The district court held that Lexmark was likely to prevail on the merits of both claims, and entered a preliminary injunction order for Lexmark.

2) Reasoning of the Sixth Circuit Court

The Sixth Circuit reversed the district court’s decisions for both claims based on the copyright and the DMCA, specifically concerning the following points. First, Lexmark argued that the SCC Smartek chip was a device marketed to circumvent the technological measure that controlled access to the PEP. The district agreed to this Lexamrk’s argument since Lexmark’s authentication sequence effectively controls access to the Printer Engine Program because it controls the consumer’s ability to make use of the program. However, the Sixth Circuit held that there are other ways for the user to access the PEP:

Anyone who buys a Lexmark printer may read the literal code of the [PEP] directly from the printer memory, with or without the benefit of the authentication sequence, and data from the program may be translated into readable source code after which copies may be freely distributed. No security device, in other words, protects access to the 378東亞法學第 43 號

[PEP] and no security device accordingly must be circumvented to obtain access to that program code. 37) … Thus, Lexmark did not block another relevant form of “access”―the “ability to obtain”a copy of the work or to “make use of”the literal elements of the program (its code). Because the statute refers to “control[ing] access to a work protected under this title,”it does not naturally apply when the “work protected under this title”is otherwise accessible. [Just as one would not say that a lock on the back door of a house “controls access”to a house whose front door does not contain a lock and just as one would not say that a lock on any door of a house “controls access”to the house after its purchaser receives the key to the lock, it does not make sense to say that this provision of the DMCA applies to otherwise-readily-accessible copyrighted works.] 38)

Second, further to the first point, Lexmark argued that the courts in other DMCA cases adopted a “to make use of”definition of access. The Sixth Circuit distinguished these cases from the Lexmark case that in such cases as 321 Studios v MGM Studios 39) or Corley , copyright protection exists on two planes: in the literal code of the work and the audio or visual manifestation generated by the code’s execution. The court saw that in these cases, restricting the use of the code had the effect of preventing consumers from accessing the audio or visual manifestation of the work 40) . According to the court, in this Lexmark case, the PEP operates only on one plane― the literal elements of the program, whereby unlike the code underlying a video game or DVD, the execution of the PEP does not create protectable expression– just functional output. Thus, the Sixth Circuit held that restricting use of the PEP code does not prevent access to any protectable expression. 41)

37) Id . at 22258. 38) Id . at 22259. 39) 307 F. Supp.2d 1085 (N.D. Cal. 2004) 40) Id . at 1095. 41) 2004 U.S. App. Lexis, at 22271. Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 379

Third, concerning the interoperability exception under §1201(f) of the DMCA, the district court thought that the exception was available for achieving interoperability between an independently created programs and other programs. Since SCC copied the TLP, the district court held that it was not independently created, and thus SCC could not use the defense. However, the Sixth Circuit saw that there was evidence that the Smartek chip contained programs “independently created by SCC”in addition to a copy of the TLP. Thus, the court saw that the circumvention of the technological protection was necessary to allow these other programs to interoperate with the PEP. To this, Lexmark argued that these independently created programs had to exist before the reverse engineering of the TLP. The Sixth Circuit Court responded thereto that “nothing in the statute precludes simultaneous creation of an interoperability device and another program; it just must be‘ independently created.’ 42) Again, Lexmark argued thereto that “the technological means must be necessary or absolutely needed”to enable interoperability. The Sixth Circuit Court answered to the argument that “the statute is silent about the degree to which the technological means meant must be necessary, if indeed they are necessary at all 43) , for interoperability.” 44) Then, the court concluded that SCC did in fact need to copy the TLP to achieve interoperability with the PEP.

3) Judge Merritt’s Concurring opinion

Sided with the majority, Judge Merritt went farther to broaden the

42) Id . 43) However, §1201(f)(1) of the DMCA authorizes circumvention “for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability.”Also,§ 1201(f)(2) permits the development of technological means to circumvent, “if such means are necessary to achieve…… interoperability .” 44) 2004 U.S. App. Lexis, at 22271. 380東亞法學第 43 號

majority’s holding about the DMCA as follows:

We should make clear in the future companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves just by tweaking the facts of this case: by, for example, creating a [TLP] that is more complex and ‘creative’than the one here, or by cutting off other access to the [PEP]....The key question is the “purpose”of the circumvention technology 45) .

According to Judge Merritt, Lexmark interpreted the DMCA wrongly as imposing liability for any circumvention of a technological measure, regardless of the purpose of the circumvention (emphasis added). If the courts have to adopt such reading of the statute, Judge Merritt stated:

[M]anufacturers could potentially create monopolies for replacement parts imply by using similar, more creative, lock-out codes. Automobile manufacturers, for example, could control the entire market for replacement parts for their vehicles by including lock-out chips. 46)

Judge Merritt saw that such Lexmark’s reading is not right because it ignores “the main point of the DMCA– to prohibit the pirating of copyright protected works such as movies, music, and computer programs”, with concluding that to prevail, Lexmark must prove that the defendant (SCC) “circumvented protective measures ‘for the purpose’of pirating works protected by the copyright statute 47) .”This interpretation of the DMCA came above in the holding of Chamberlain by the Federal Circuit. Further, Judge Merritt added that Lexmark’s interpretation did not

45) Id. at 22273～ 4. 46) Id. at 22275. 47) Id . Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 381

follow the objectives of protecting the intellectual property in the US Constitution 48) – promoting the progress of science and useful arts:

[Lexmark’s reading ... would allow authors exclusive rights not only over their own expression, but also over whatever functional use they can make of that expression in manufactured goods. Giving authors monopolies over manufactured goods as well as their own creative expression will clearly not ‘promote the Progress of Science and the useful Arts,’but rather would stifle progress by stamping out competition from manufacturers who may be able to design better or less expensive replacement parts like toner cartridges. 49)

4) Meaning of the Chamberlain and Lexmark decisions

Chamberlain and Lexmark decisions are representative cases to show a major trend of the DMCA jurisprudence development. The Federal Circuit in the Chamberlain prevented the DMCA from being used to prevent legitimate competition in after-markets by requiring a nexus between the circumvention of access controls and infringement. The Lexmark court also agreed with the Chamberlain court that the DMCA liability should attach only to circumvention that facilitates infringement 50) . Also, for the other companies that think of filing similar actions under the DMCA to prevent competition from smaller firms, the judges of these two cases chose broad rationales that not only would dictate the correct outcome in these cases, but also influence the course of the litigation. 51)

48) U.S. Constitution, Art. I,§ 8, cl. 8: “Congress shall have the Power to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” 49) 2004 U.S. App. Lexis, at 22278. 50) Jonathan Band, A New Day for the DMCA: The Chamberlain and Lexmark Decisions, (http://www.policybandwidth.com/doc/JBand-DMCABNA_v1.pdf ) (Mr. Band is a partner in the Washington, D.C. office of Morrison & Foerster, LLP. He filed an amicus brief on behalf of the Computer & Communications Industry Association in Chamberlain v. Skylink). 51) Id . 382東亞法學第 43 號

By placing the burden of proving intent to infringe on plaintiffs, the judges permitted smaller defendants to escape the litigation through dispositive motions where the intent to infringe cannot be found. 52)

Ⅳ. Suggestions for application to Korea

1. Legislative reform efforts to the DMCA in US

From right after the enactment of the DMCA, a variety of criticisms and oppositions have been raised about the law within and outside US. One of the first criticisms on the DMCA was to force all companies producing analog video equipment to support the proprietary copy protection technology of a particular commercial firm, Macrovision. That is, the producers of video equipment were forced by law to support the Macrovision technology to the financial benefit of Macrovision whereas those who built the video equipment got nothing in compensation. Another ground to criticize the DMCA was to make it too easy for copyright owners to threaten website owners to take down infringing content and links even when they may not actually be infringing materials. When website owners receive a takedown notice, it is preferable and/or in their interest for them not to challenge it, even if it is not clear whether the alleged infringement is taking place, because the website will not be held liable if the alleged infringing content is taken down.53) However, one of the most frequent grounds to criticize the DMCA was that the DMCA undermines the traditional fair use rights of the public

52) Id. 53) Fred von Lohman, the Electronic Frontier Foundation senior IP attorney, said this as one problem of DMCA. Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 383

from the college student who photocopies a page from a library book or prints an article from a newspaper's Web site for use in writing a report, to the newspaper reporter excerpting materials from a document for a story, to the typical television viewer who records a broadcast program for viewing at a later time 54) With support of all criticisms, in February 2007, U.S. Representatives Rick Boucher (D-VA) and John Doolittle (R-CA) introduced the Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (FAIR USE ACT). The first portion of the bill is to encourage more innovation by making technology developers less liable for copyright infringement. 55) According to the Electronic Frontier Foundation, innovators "can be hit with statutory damages as high as $30,000 per work infringed. When it comes to mass-market products like the iPod or TiVo, damages could run into the trillions of dollars -- more than enough to bankrupt anyone from the smallest start-ups to the biggest companies." This bill would lessen the damages owed to copyright owners in the case of infringement. The second portion of the bill amends the Digital Millennium Copyright Act (DMCA), which criminalizes technologies that allow people to reproduce and distribute copyright information. The FAIR USE Act would curtail parts of the DMCA and make it legal to use such technologies in order to: ○ edit content and make backups for use in libraries ○ share files with other computers in your home ○ delete ads or“ objectionable content” ○ extract public domain content from a larger work ○ make content available for criticism, research and news reporting

54) Rick Boucher, Perspective; Time to rewrite the DMCA, cnet news (http://news.cnet.com/Time-to-rewrite-the-DMCA/2010-1071_3-825335.html) 55) Readable Laws, Bill Analysis H.R.1201: Fair Use Act of 2007 (http://readablelaws.org/index.php?title=HR.1201:FAIR_USE_Act_of_2007) 384東亞法學第 43 號

However, some critics are very skeptical about the proposal in not regarding it as a meaningful reform, rather only adding some narrow exceptions for consumers as follows 56) : ○ Make“ a compilation of audiovisual works”for classroom use, ○ Skip commercials and “objectionable content,” ○ Transmit files over a home network, ○ Access works in the public domain, and ○ Access works“ of substantial public interest solely for purposes of criticism, comment, news, reporting, scholarship, or research.”

Nevertheless, it can be said sure that there has been formed a consensus that the DMCA needs a meaningful reform.

2. Suggestions for application of the anti-circumvention provision of the DMCA

The anti-circumvention provision of the DMCA will be officially adopted by KOR-US FTA, though similar provisions were already included in the previous amendments to the Korean copyright law. Though natural, the DMCA, particularly the anti-circumvention provision, will be used to secure the profits and interests of US content industries. For the Korean courts to deal with the anti-circumvention provision in the future, and the Korean governments to handle further specific enforcements of KOR-US FTA, several points are worth noting. First, as shown above, even within the US, the application and interpretation of the DMCA are very controversial in some points. In the Chamberlain and Lexmark decisions, two federal appeals courts held that

56) Ars technica, FAIR USE Act analysis: DMCA reform left on the cutting room floor (http://arstechnica.com/tech-policy/news/2007/02/8942.ars). Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 385

the application and interpretation of the DMCA should have limitations in terms of public policy, and so should be subject to general copyright defenses. Also, other interest groups such as AALS and DMCA experts have raised concerns about the DMCA provisions to be included in the FTA negotiations without congressional supervision and oversight since it could disrupt worldwide intellectual property policies and WIPO. Thus, more cautious approach and strict scrutiny will be needed to apply and adopt many provisions of the DMCA to the Korean judicial system and governmental policy. Second, specifically, the above cited two US court decisions agreed the application of the DMCA to be subject to the fair use defense of the Copyright law. This matter was under great controversy from the beginning of the enactment process of the DMCA, but was not included in the DMCA under the influence of US content industries. However, the US courts cleared its position through some key cases that the DMCA does not create a new property right for the copyright owners, and should be subject to the traditional copyright limitations and defenses. This could be a good reference in applying the DMCA-analogue provisions in the Korean courts. Third, as explained above and in line with the above point, the FAIR USE ACT introduced by US Representative Rick Boucher (Democratic - Virginia) and John Dolittle (Republican– California) aims to protect the fair use rights of users of copyrighted material and thereby enabling consumers of digital media to use it in ways that enhance their personal convenience. 57) Though this legislation proposal does not look promising to

57) Rick Boucher, Reps. Boucher and Doolittle Introduce the FAIR USE Act of 2007 , The site of Congressman Rick Boucher, http://www.boucher.house.gov/index.php?option=com_ content&task=view&id= 1011&Itemid=75 . 386東亞法學第 43 號

enact due to some limits and weaknesses in itself, it is a sure sign that a reform effort to the DMCA has matured to a certain point. Thus, it is desirable that Korean courts and government consider and review those legislative trends of the US in applying and adopting the DMCA, and anti-circumvention provision.

Key Words: Digital Millennium Copyright Act (DMCA), Chamberlain, Lexmark, Fair use, US Copyright Act

투고일 : 2008. 12. 31. 심사일 : 2009. 01. 18. 게재확정일 : 2009. 02. 04. Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 387

References

1. Statutes

(1) U.S. Constitution (2) Digital Millennium Copyright Act (1998) (3) The Copyright Term Extension Act (CTEA) of 1998 (4) The WIPO Copyright Treaty (5) The WIPO Performances and Phonograms Treaty (WPPT)

2. Cases

(1) Chamberlain Group , Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004). (2) Universal City Studios, Inc. v. Corley , 273 F.3d 429 (2 nd Cir. 2001). (3) Lexmark v. Static Control Components, 2004 U.S. App. Lexis 22250 (6 th Cir. Oct. 26, 2004). (4) 321 Studios v MGM Studios , 307 F. Supp.2d 1085 (N.D. Cal. 2004)

3. Other sources

(1) Ars technica, FAIR USE Act analysis: DMCA reform left on the cutting room floor, February 28, 2007 (2) Brooks Boliek, Copyright Biz Keeps Eye on Russia, The Hollywood Reporter, November 21, 2006 (3) Chris Jones, Power to the People , Chicago Tribune, February 1, 2004. (4) Dames K. Matthew, Trade Agreements as the New Copyright Law , Information Today Inc., March 1, 2007 (5) Hiawatha Bray, Cyber Chief Speaks on Data Network Security , Boston Globe, Oct. 17, 2002. 388東亞法學第 43 號

(6) Jonathan Band, A New Day for the DMCA: The Chamberlain and Lexmark Decisions , the site of Morrison & Foerster. (7) Office of the United States Trade Representative, United States – Korea FTA Texts (8) Readable Laws, Bill Analysis - H.R.1201: Fair Use Act of 2007 (9) Rick Boucher, Reps. Boucher and Doolittle Introduce the FAIR USE Act of 2007 , The site of Congressman Rick Boucher. (10) United States Copyright Office, The Digital Millennium Copyright Act of 1998: Copyright Office Summary (December 1998). Cho, Sung-Ja： A Study on Application of the Anti-Circumvention Provision of the DMCA 389

<국문요약 >

조 성 자

호조치를 우회하는 것을 금지하고, 인터넷서비스제공자와 기타 서비스중개자 들에게 직, 간접적 책임을 면제해주는 조항을 포함하면서 논란의 쟁점이 되어 왔다. 한미자유무역협정에 공식적으로 포함된DMCA 의 중요조항들 중에서 도, 우회금지조항은 미국 연방 2 심법원들이 챔벌레인과 렉스마크 판례에서 공 익적인 측면에서 저작권법의 기존 제한조건들, 특히 공정사용조항의 한계 내 에서 적용되어야 한다고 판시하면서 새로운 전기를 맞고 있다. 이런 미국 사 법부의 판단은 입법에도 영향을 미쳐, 미국 하원의원인 바우처와 두리틀에 의 해‘ 공정사용법 ’ 으로 불리는 ‘2007 미국기업활성화를 위한 자유와 혁신법’ 으 로 입안, 제출되어 , DMCA 의 새로운 개혁으로 반영되고 있다 . 따라서 이런 미국 국내적인 비판적인 흐름들은 우회금지조항을 비롯한 새천년저작권법을

적용할 한국 사법부나 입법부에서 주목할 필요가 있다고 하겠다.