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?

In the first part of my invited talk at Usenix Security, I argued that as the inability of DRM technology to stop peer-to-peer infringement becomes increasingly obvious to everybody, the rationale for DRM is shifting. The new argument for DRM-bolstering laws is that DRM enables price discrimination and platform lock-in, which are almost always good for vendors, and sometimes good for society as a whole. The new arguments have no real connection to copyright enforcement so (I predict) the DRM policy debate will come unmoored from copyright.

The second trend I identified in the talk was toward the use of DRM-like technologies on traditional physical products. A good example is the use of cryptographic lockout codes in computer printers and their toner cartridges. Printer manufacturers want to sell printers at a low price and compensate by charging more for toner cartridges. To do this, they want to stop consumers from buying cheap third-party toner cartridges. So some printer makers have their printers do a cryptographic handshake with a chip in their cartridges, and they lock out third-party cartridges by programming the printers not to operate with cartridges that can’t do the secret handshake.

Doing this requires having some minimal level of computing functionality in both devices (e.g., the printer and cartridge). Moore’s Law is driving the size and price of that functionality to zero, so it will become economical to put secret-handshake functions into more and more products. Just as traditional DRM operates by limiting and controlling interoperation (i.e., compatibility) between digital products, these technologies will limit and control interoperation between ordinary products. We can call this Property Rights Management, or PRM.

(Unfortunately, I didn’t coin this term until after the talk. During the actual talk I used the awkward “DRM-like technologies”.)

Where can PRM technologies be deployed? I gave three examples where they’ll be feasible before too many more years. (1) A pen may refuse to dispense ink unless it’s being used with licensed paper. The pen would handshake with the paper by short-range RFID or through physical contact. (2) A shoe may refuse to provide some features, such as high-tech cushioning of the sole, unless used with licensed shoelaces. Again, this could be done by short-range RFID or physical contact. (3) The scratchy side of a velcro connector may refuse to stick to the fuzzy size unless the fuzzy side is licensed. The scratchy side of velcro has little hooks to grab loops on the fuzzy side; the hooks may refuse to function unless the license is in order. For example, Apple could put PRMed scratchy-velcro onto the iPod, in the hope of extracting license fees from companies that make fuzzy-velcro for the iPod to stick to.

[UPDATE (August 16): I missed an obvious PRM example: razors and blades. The razor would refuse to grip the blade unless the blade knew the secret handshake.]

Will these things actually happen? I can’t say for sure. I chose these examples to illustrate how far PRM micht go. The examples will be feasible to implement, eventually. Whether PRM gets used in these particular markets depends on market conditions and business decisions by the vendors. What we can say, I think, is that as PRM becomes practical in more product areas, its use will widen and we’ll face policy decisions about how to treat it.

To sum up thus far, the arguments for DRM are disconnecting from copyright, and the mechanisms of DRM are starting to disconnect from copyright in the form of Property Rights Management. Where does this leave the public policy debates? That will be the topic of the next (and final) installment.