Today I want to wrap up the recap of my invited talk at Usenix Security. Previously (1; 2) I explained how advocates of DRM-bolstering laws are starting to switch to arguments based on price discrimination and platform lock-in, and how technology is starting to enable the use of DRM-like technologies, which I dubbed Property Rights Management or PRM, on everyday goods. Today I want to speculate on how the policy argument over PRM might unfold, and how it might differ from today’s debate over copyright-oriented DRM.
As with the DRM debate, the policy debate about PRM shouldn’t be (directly) about whether PRM is good or bad, but should instead be about whether the law should bolster PRM by requiring, subsidizing, or legally privileging it; or hinder PRM by banning or regulating it; or maintain a neutral policy that lets companies build PRM products and others to study and use them as they see fit.
What might a PRM-bolstering law look like? One guess is that it will extend the DMCA to PRM scenarios where no copyrighted work is at issue. Courts have generally read the DMCA as not extending to such scenarios (as in the Skylink and Static Control cases), but Congress could change that. The result would be a general ban on circumventing anti-interoperability technology or trafficking in circumvention tools. This would have side effects even worse than the DMCA’s, but Congress seemed to underestimate the DMCA’s side effects when debating it, so we can’t rule out a similar Congressional mistake again.
The most important feature of the PRM policy argument is that it won’t be about copyright. So fair use arguments are off the table, which should clarify the debate all around – arguments about DRM and fair use often devolve into legal hairsplitting or focus too much on the less interesting fair use scenarios. Instead of fair use we’ll have the simpler intuition that people should be able to use their stuff as they see fit.
We can expect the public to be more skeptical about PRM than DRM. Users who sympathize with anti-infringement efforts will not accept so easily the desire of ordinary manufacturers to price discriminate or lock in customers. People distrust DRM because of its side-effects. With PRM they may also reject its stated goals.
So the advocates of PRM-bolstering laws will have to change the argument. Perhaps they’ll come up with some kind of story about trademark infringement – we want to make your fancy-brand watch reject third-party watchbands to protect you against watchband counterfeiters. Or perhaps they’ll try a safety argument – as responsible automakers, we want to protect you from the risks of unlicensed tires.
Our best hope for sane policy in this area is that policymakers will have learned from the mistakes of DRM policy. That’s not too much to ask, is it?
Another PRM example from the distant past: Ma Bell trying to control the equipment that could be attached to a local loop. Remember Carterphone? The wars over attaching modems directly to the local loop?
Trumped-up, either way. The police have been bought by special interests (read: the rich).
USA Today has a story about the cell phone purchases. The government/prosecutor alleged terrorism charges, not unlocking charges.
Eric, what law covers buying ‘locked’ cellphones with an intent to unlock and resell them? I assume the phone in question is marketed as some sort of prepaid or pay-as-you-go phone. I further assume that the ‘unlocking’ involves changing the ID of the phone such that it may be used with a traditional monthly billing carrier, which would be paid for properly. If these walmart phones can be purchased over the counter without any service contract, what is to stop someone from using any the phone in any lawful way they please? Or perhaps not using it at all?
This reminds me of that internet appliance that was priced and sold below cost and without a contract, but only worked with the manufacturers’ dial-up internet service. People installed generic linux on the device and sell them on eBay by the hundreds. The manufacturer pulled the device from the markert, but I don’t remember any legal challenges.
There’s a very good example of PRM in the news right now: The three fellows in Michigan who were caught buying large quantities of locked cellphones at a Wal-Mart. Originally held on terrorism charges, they’re now being held for counterfieting and money laundering after it became obvious that they weren’t terrorists.
Apparently, buying a locked cellphone with the intent to unlock and resell it is now illegal in the US. It’s understandable that the companies selling these phones are irate that their “give away the razors, make it up on the blades” business model is so easily circumvented. It’s sad though that they can get law enforcement authorities to buy into their argument that this is illegal.
And vice versa, certifying my parts for equipment beyond my control.
Dan, as you already point out yourself, part of the issue with stated parts/material discrimination is that vendors are, arguably for at least in part legitimate reasons, unwilling to warrant their products when operating with “knock-off” parts.
With parts conforming to standards, or where standard conformance is verifiable/gradable, there is little excuse as it becomes an issue of the equipment or parts vendor misrepresenting standards compliance. If let’s say the vendor is willing to operate their parts beyond standard specs, they arguably have to advertise “standard” performance/features with standard parts, and state that standard exceeding performance/features is only obtained with original vendor parts.
With proprietary designs where standards don’t exist or are not plausibly applicable, e.g. with printer cartridges and inks, it becomes more murky.
But none of this is fundamentally a “rights” issue, even with the legal warranty aspects. Frankly, as a designer and manufacturer of complex equipment I would be very careful with certifying my equipment for parts over which I have no control.
As a Congress watcher, I suspect that Congress won’t be too keen on any arguments based on price discrimination from those wishing legal protection/privilege etc. for PRM, or from those wishing to ban it. The airline industry provides us with a good example we can draw from. It is a highly visible price discriminating industry. The public, in general, hate that an identical product costs more for one customer than another. (It doesn’t hurt that government fairs a generally set and completely refundable, but I digress.) The business travelers lobby has also argued to Congress that the airline pricing models unfairly hurt consumers. While the airlines argue that it is the foundation of their business model. Despite this sentiment Congress has neither moved against it nor enshrined it. It has just let the market continue.
With price discrimination off the table, that leaves the “protecting markets” argument. These arguments usually illicit a pretty negative visceral reaction, but a large part of where you stand on these arguments depends on where you sit. If your district/state has a major industry who’s business model is dependent on PRM, then the market perspective is often replaced by a “save jobs” one. That said, I don’t know of any business that starts off by saying it needs Congressional protection to start a new business model, that usually only happens when foreign or domestic competition comes knocking.
However they didn’t just obey this restriction and when old movies began to be re-released, ones that hadn’t been in the cinemas for years, they still region encoded them. The reason why they did this is obvious they wanted to keep their markets separate as they always had, been able to charge more in one region than in another and they didn’t have to worry about the cheaper DVDs been bought in a different region working in the region where the DVDs are more expensive.
Traveling to Poland for each summer for the past six years, I have noticed that several movies are give-aways in magazines. The seem to be good quality, I recall that one was Elizabeth, and I believe Chicago was another one. The magazines weren’t especially pricey–maybe 4 or 5 dollars or so.
I probably should have clarified the wrong ink being used screwing up printers is a current problem and it is already tying up returns departments, it will only get worse with fancier inks. I don’t know what it is like where you are but i used to work in a service station and there used to be people who accidentally fill up there petrol tanks with diesel (and vice vera) from time to time. And the new unleaded (back then) tanks and hoses were keyed to be smaller than the old leaded hoses so that you physically could not put a leaded hose into an unleaded tank, so i guess it was a significant enough problem.
As to will people want these new printers I don’t know but I look at the whole Blue-ray versus HD-DVD battle which are both based around blue lasers. This new technology needs new manufactuing plants for every part of the process. However current DVD’s have the ability to be dual layer, it is possible to add extra layers to DVD’s to start hitting the same capacity of these “new” DVD’s, I read a patent some one had can go as far as 50 layers and you can reuse the existing infrastructure that is there already. You can use the lasers that are there already and the blank disk maufacturers don’t have to change much either.
So why is no-one pursuing this, it comes down to the original CD patent that philips filed way back in the 80s. The patent was exclusive and for every CD sold, blank or recorded, they made money (I used to work for a philips subsidiary so i think i used tosee dude come out from money fights). Philips patent ran out around 2000 and every body is trying to recapture that golden goose so that is why the playing field is as it is to who will win the HD-DVD versus Blu-Ray battle. Which ever one is successful the theory is to the victor will go the spoils.
Getting back to printers sure they are not there right now. But currently it takes 10s of seconds to print a photo image, the dudes that can print in 1 will look a lot more sexy, not to the early adopters but to the plebes, which is ultimately where the real money is. Then think about the way apple just stopped selling the iPod mini the day the nanos came out. They stopped selling a successful product at the top of its game, why? You know why? Cause they knew it would force those punters that wanted minis to buy nanos and they had already worked hard to gain that captive market. It won;t happen with the first generation of printers that do this, or even the second but eventually they’ll probably be the only choice. These guys are willing to wait.
So, if a printer company wants to do the kind of lock-in you describe, it can do it using technology – it doesn’t need a law to support it. The printer can say on it “using non-genuine cartridges will invalidate your warranty” and detect when a non-genuine cartridge has been used, and if a customer returns a printer with blocked heads, the printer manufacturer can turn round and say “the black box shows you broke the terms of the warranty”. If I fill up my car’s diesel tank with petrol, and the injectors get clogged, I don’t expect the manufacturer to honour the warranty on those injectors.
The point is, though: there are many millions of people who don’t need and don’t want a printer with the micro-scale heads you describe. All most people want is a printer that gives acceptable quality, has a large ink/toner reservoir, and for which the cartridges or cheap (and can be refilled easily).
The problem is, such printers are not at present available. I would expect that in a world where printer/cartridge PRM like you describe becomes ubiquitous, there would be a significant market for a simple device without the lock-in. Hell, it’d be worth a cheap refill cartridge manufacturer making its own cheap simple printers (perhaps some of HP or Epson’s patents from the 80s have expired?)
I think we have seem how the PRM technologies will play out already. Region Coding on DVD’s have been used and abused by the big companies already. They got it justifiably in by arguing that a movie could be released on DVD in the states but may not have finished it theater run in another country so region coding would be a good way to stop US bought DVD’s been brought into a country that still has the movie in the theaters. As an argument that seems very reasonable, and if the media producing companies just held to this rule every thing would have been fine.
However they didn’t just obey this restriction and when old movies began to be re-released, ones that hadn’t been in the cinemas for years, they still region encoded them. The reason why they did this is obvious they wanted to keep their markets separate as they always had, been able to charge more in one region than in another and they didn’t have to worry about the cheaper DVDs been bought in a different region working in the region where the DVDs are more expensive. This became a pain to people like me who have moved around into 3 different coding regions and wasn’t too sure about buying a movie in one place if it wouldn’t work in another.
It eventually worked out with the engineering codes been leaked or released that allowed DVD players to unlocked the region encoding so the big companies will try to make sure it doesn’t happen again and learn at least for the DVD example.
To return to an printer/cartridge example, there is a legitimate reason for limited 3rd party toner been used. As printers and there painting elements get smaller, with the resolution increases the amount of ink spat at a page gets smaller and the chemical properties of the ink need to change. There will come a point that some ink properties will be too “big” for the printer heads, they’ll be designed for passing a high viscous liquid and a mom and pop store toner will be like passing molasses, there are eventually going to clog up the printing head. Once they get clogged up more than likely the consumer will try and return the printer to the manufacture and say its broken (it is as well). And the whole returns part of that company is bogged down handling broken printers that have been using the wrong ink.
However if you could set up an environment where you can completely control the ink that is sent to the printer then you limit the returned broken printers to legitimate problems and you justified locking up the printer/ink arrangement as a quality assurance problem. You go to congress or who ever is making the rules, say that you need PRM laws so that you can control your QA flow and it is (justifiably) passed.
Now once the printer companies have that PRM control and lock in on cartridges do you think they are going to sell them cheap, of course not. Knocking out the mom and pop 3rd party toner suppliers will open up their revenue streams no end.
Though this is a “gray” area, I would advocate that that PRM technologies not receive any legal sanction. Furthermore, while we hate laws that restrict our freedoms, I would even advocate laws that would discourage the use of PRM technologies.
Several years ago I had an Iomega tape drive. It failed. A Seagate tape drive was available. The product literature for both Iomega and Seagate said they both used the same tape format and the same cartridge drive. Guess what – the Seagate and Iomega tapes were not interoperable. While their literature touted their products they conviently failed to disclose this fact. Today, we are installing a new shower in our house because the old one failed. Guess what – the old shower is of a non-standard dimension which means added remodeling costs.
The use of PRM technologies on the surface would appear to enhance a company’s revenue stream. Additionally the pro-PRM arguments appear, on the surface, to be reasonable. But based on the aggravation on getting a simple repair done (replacing a tape drive), I find the pro PRM point of view to be quite shallow, inhibiting, and disingenuous. Additionally few people even discuss the logistical, inventory, manufacturing, and costs of keeping proprietary products in stock. This is an indirect and unnecessary cost to society. Furthermore, based on the concept of enhancing productivity, promoting commercial enterprise, fostering innovation, and enhancing the public good; the use of “standard” products is a must.
I guess we agree that “Restricted” products are of less value to the consumer than similar unrestricted products. The only way to make them competative in an open market is to lower the price for a “razor and blades” model. A cartel or monopoly can eliminate unrestricted products from a market.
I think that the current interpretation of the DMCA by the courts with respect to non-copyright protection is sufficient to keep the market “honest”. Legislative support for PRM is very bad for the free market.
Wake me up when you find a bill that has made it to the floor that meets this “Super DMCA” criteria.
Brian has an interesting idea: we call it an antitrust violation. Instead of “the best products will win because consumers support them” in this case “Company 1’s products win because of lock-in tactics.” This encourages company’s to spend more time developing PRM and less developing good products, and that’s bad for innovation and the economy. America is no longer the hi-tech god it once was, and if PRM was legally supported it would seriously hurt technological development. For example, let’s say a new company comes along making flash memory that can read and write much faster than any previous version and can be make at the same cost/storage space ratio as a conventional harddrive. It’s a great technology, but it’s worthless because all the major computer companies cap off the speed of USB storage drives that aren’t made by themselves or a preferred provider. Everyone loses.
The PRM will probably be more subtle than a straight 0/1 to working.
How about a new optical drive by Acme Disc Drive. It will store 50GB and read & write at 100x as long as you are using 100% licensed media. However, when you buy Generic Co.’s disks (which are physically identical to licensed disks) the drive reads the manufacturer id and adjusts the drive performance so that your storage is 40GB or the read/write speed is 50x or both.
HP already does this to an extent with their laser printers.
I think your “maintain a neutral policy that lets companies build PRM products and others to study and use them as they see fit” is probably the fairest attitude, though it will surely be difficult to keep that neutrality in the face of lobbying. We should have a situation where if people want to buy locked-in products, that’s up to them, but there’s nothing the companies can do if people get round the lock-in and make such details freely available.
Taking an old chestnut of a physical example: razor blades. The way a razor-blade attaches to the razor itself is the ‘PRM’, if you like. If I can make (and sell) a cheap single blade which fits an expensive Gillette razor designed for a 4-blade expensive behemoth, without infringing some novel patented attachment method, there should be nothing Gillette can do to stop me. After all, if the Gillette blades are so superior, no-one will want to buy my cheap replacement… right?
Extending that to printer cartridges, there should be nothing legally to stop companies making and selling whatever replacement cartridges they want. Again, to persuade people to buy the manufacturer’s own cartridges, they’ll have to offer something attractive. If it means that the printers have to become more expensive in the first place to counteract the loss of revenue from cartridges, then so be it.
And if companies want to make PRM’d printers that – supposedly – only take their own cartridges, then that’s up to them, but I’m pretty sure there’ll be plenty of competitors stepping in with non-PRM’d printers. And if a company finds a way round the PRM on the PRM’d printers, then, again, that’s the PRM printer company’s loss.
However, for all this policy neutrality, there is a crucial policy element which must be in place. Anything paid for with public money – government software, technology, library material, equipment and so on – MUST be entirely free from proprietary formats, PRM, DRM and any other architectures of control. The market can do what it wants, but all publicly funded undertakings must be publicly owned, and/or open-source where appropriate. If that means that lots of companies don’t want to deal with government contracts, then let them withdraw. Others will take their place.
In the UK we have the National Health Service spending billions of pounds on MS software. We have schools paying vast sums in software licenses to get locked in to proprietary systems. We have publicly-funded libraries unable to archive material because of DRM. I’m not prepared, as a taxpayer, to pay for this.
The insanity is in companies abusing TPMs to control published IP.
If you consider a clear demarcation between private IP and published IP, and that only the producer owns the former and only the public owns the latter, then this also demonstrates where TPMs can be used or abused.
For example, a TPM ensuring that an unreleased movie could only be previewed by a restricted circulation within the organisation (and its contracted agents), might be considered a ‘good’ use.
However, a TPM applied to a published movie, attempting to control what the (uncontractable) public may or may not do with the movie, constitutes a clear ABUSE.