This week the Federal Circuit court ruled that Chamberlain, a maker of garage door openers, cannot use the DMCA to stop Skylink, a competitor, from making universal remote controls that can operate Chamberlain openers. This upholds a lower court decision. (Click here for backstory.)

This is an important step in the legal system’s attempt to figure out what the DMCA means, and there has been much commentary in the blogosphere. Here is my take.

The heart of the decision is the court’s effort to figure out what exactly Congress intended when it passed the DMCA. Chamberlain’s argument was that the plain language of the DMCA gave it the right to sue anybody who made an interoperable remote control. The lower court ruled against Chamberlain, essentially because the outcome urged by Chamberlain would be ridiculous. (It would imply, for instance, that Chamberlain customers did not have the right to open their own garage doors without Chamberlain’s permission.) But the lower court had trouble finding a DMCA-based legal argument to support its conclusion. The appeals court now presents such an argument.

The court’s problem is how to resolve the tension between the parts of the DMCA that seem to uphold the traditional rights of users, such as fair use and interoperation, and the parts that seem to erode those rights. Previous courts have tried to ignore that tension, but this court faces it and tries to find a balance. The acknowledgement of this tension, and the court’s description of the very real harms of construing the DMCA too broadly, provide DMCA opponents with their favorite parts of the opinion.

For most of the opinion, before veering away at the last minute, the court seems to be heading toward a kind of reverse Sony rule. The original Sony rule, laid down by the Supreme Court in 1984, says that making and selling dual-use tools – tools that have both significant infringing uses and significant non-infringing uses – does not constitute contributory copyright infringement. (Selling tools that have only non-infringing uses is obviously lawful, and selling tools that have only infringing uses is contributory infringement.)

A reverse Sony rule would say that dual-use tools are DMCA violations, if they are circumvention tools (according to the DMCA’s definition). In flirting with the reverse Sony rule, the court hints that Congress, in passing the DMCA, meant to revise the Sony rule because of a perceived danger that future circumvention tools would tip the copyright balance too far against copyright owners. In other words, such a rule would say that the purpose of the DMCA anti-circumvention provisions was to reverse the Sony rule, but only for circumvention tools; the original Sony rule would still hold for non-circumvention tools.

In the end, the court backs away from the simple reverse-Sony interpretation of the DMCA, and makes a more limited finding that (1) tools whose only significant uses are non-infringing cannot violate the DMCA, and (2) in construing the DMCA, courts should balance the desire of Congress to protect the flanks of copyright owners’ rights, against users’ rights such as fair use and interoperation. In this case, the court said, the balancing test was easy, because Chamberlain’s rights as a copyright owner (e.g., the right to prevent infringing copying of Chamberlain’s software) were not at all threatened by Skylink’s behavior, so one side of the balancing scale was just empty. The court’s decision to leave us with a balancing test, rather than a more specific rule, seems motivated by caution, which seems like a wise approach in dealing with uncharted legal territory.

Of course, this entire exercise is predicated on the assumption that Congress had a clear idea what it meant to do in passing the DMCA. Based on what I have seen, that just isn’t the case. Many lawmakers have expressed surprise at some of the implications of the DMCA. Many seemed unaware that they were burdening research or altering the outlines of the Sony rule (and clearly some alteration in Sony took place). Many seemed to think, at the time, that the DMCA posed no threat to fair use. Partly this was caused by misunderstanding of the technology, and partly it was due to the tendency to write legislation by taking a weighted average of the positions of interest groups, rather than trying to construct a logically consistent statutory structure.

So the DMCA is still a mess. It still bans or burdens far too much legitimate activity. This court’s ruling has gone some distance toward resolving the inherent contradictions in the statute; but we still have a long, long way to go.

Big tech companies, including Intel and Sun Microsystems, and ISPs, including Verizon and SBC, will announce today that they have banded together to form the “Personal Technology Freedom Coalition,” to support Rep. Rick Boucher’s DMCRA bill (HR 107) to reform the DMCA, according to a Declan McCullagh story at news.com.

The Boucher bill would reform the DMCA to allow the distribution and use of circumvention technologies for non-infringing purposes. (As written, the DMCA bans even circumventions that don’t result in copyright infringement.) The bill would also create an exemption to the DMCA for legitimate research.

This bill has always been in the interests of technologists. The overbreadth of the DMCA has restrained both research and development of innovative, noninfringing uses of technology. The whole tech community – including users – would benefit from a narrowing of the DMCA.

So far, technology companies have been a bit shy about expressing their support for the Boucher bill, apparently out of a desire not to offend copyright maximalists. It’s good news that these companies are now willing to stand up for their interests and the interests of their customers.

I’m sure we’ll be hearing more about the Boucher bill in the coming weeks.

In his testimony at the House DMCA-reform hearing today, Jack Valenti quoted me, in support of a point he wanted to make. The quote comes from last year’s Berkeley DRM Conference, from my response to a question asked by Prof. Pam Samuelson. Here’s the relevant section from Mr. Valenti’s testimony (emphasis in original):

Keep in mind that, once copy protection is circumvented, there is no known technology that can limit the number of copies that can be produced from the original. In a recent symposium on the DMCA, Professor Samuelson of UC Berkeley posed the question: “whether it was possible to develop technologies that would allow…circumvention for fair uses without opening up the Pandora’s Box so that allowing these technologies means that you’re essentially repealing the anti-circumvention laws.”

The question was answered by the prominent computer scientist and outspoken opponent of the DMCA, Professor Ed Felton [sic] of Princeton: “I think this is one of the most important technical questions surrounding DRM – whether we know, whether we can figure out how to accommodate fair use and other lawful use without opening up a big loophole. The answer, I think, right now, is that we don’t know how to do that. Not effectively.”

Moreover, there is no known device that can distinguish between a “fair use” circumvention and an infringing one. Allowing copy protection measures to be circumvented will inevitably result in allowing anyone to make hundreds of copies – thousands – thereby devastating the home video market for movies. Some 40 percent of all revenues to the movie studios come from home video. If this marketplace decays, it will cripple the ability of copyright owners to retrieve their investment, and result in fewer and less interesting choices at the movie theater.

Here’s the full excerpt from the DRM Conference transcript:

Question from Prof. Pam Samuelson:

So yesterday when I was doing the tutorial, Alex Alben asked me a question which, because I’m not a technologist, I was not in a very good position to try to answer, but since there are several technologists on this panel who are interested in information flows. The question that was put to me was a question about whether it was possible to develop technologies that would allow circumvention for fair use or other non-infringing purposes. Is it possible to sort of think creatively about anti-circumvention laws that might allow some room for circumvention for fair uses without opening up the Pandora’s box so that allowing these technology means that you’ve essentially repealed the anti-circumvention laws.

[Other panelists’ answers omitted.]

Answer by Ed Felten:

I think this is one of the most important technical questions around DRM, whether we know, whether we can figure out how to accommodate fair use and other lawful use without opening up a big loophole. And the answer is, I think, right now, is that we don’t know how to do that. Not effectively. A lot of people would like to know whether we can do that or how we go about doing it, but it’s a big open question right now.

Let’s leave aside for now the flaws in Mr. Valenti’s argument, and focus just on his use of the quote. Note that he artfully excerpts segments from Prof. Samuelson’s question, to make it appear that she asked a different question than she really did. Also note that he removes an important part of my answer: the last sentence, where I talk about the technological relation between DRM and fair use as being a “big open question”.

Which brings us back to the bill being discussed today. If we want to answer the “big open question” I mentioned, we need to do more research. But the DMCA severely limits some of the key research that we would need to do. The Boucher-Doolittle bill would open the door to this research, by creating a research exemption to the DMCA. But that issue is apparently not up for discussion today.

[Note: This post is based on Mr. Valenti’s written testimony, of which I have a copy. I did not hear his live testimony. Seth Finkelstein reports that Mr. Valenti did use the quote in his oral testimony.]

Today a congressional committee will hold a hearing on the Boucher-Doolittle bill (H.R. 107), known as the DMCRA, that would reform the DMCA. The hearing will be webcast, starting at about 10:00 AM Eastern. Look here for a witness list and link to the webcast.

The DMCRA would do four main things: require labeling of copy-protected CDs; allow circumvention of DRM for non-infringing purposes; allow the distribution of DRM-circumvention tools that enable fair use; and create an exemption to the DMCA for legitimate research.

Based on the witness list and other hints I have gotten, it appears that the hearing will focus on the consumer provisions of the bill. There probably won’t be much discussion of the much-needed research exemption.

The U.S. Copyright Office has issued its report, creating exemptions to the DMCA’s anti-circumvention provisions for the next three years. The exemptions allow people to circumvent access control technologies under certain closely constrained conditions. The exemption rulemaking, which happens every three years, was created by Congress as a kind of safety valve, intended to keep the DMCA from stifling fair use too severely.

This time around, exemptions were granted for (1) access to the “block-lists” of censorware products, and (2) works protected by various types of broken or obsolete access control mechanisms.

My own exemption request, asking for exemptions for information security researchers, was denied as expected.

It is abundantly clear by now that the DMCA has had a chilling effect on legitimate research related to access control technologies. When researchers ask Washington for a solution to this problem, they have so far gotten a Catch-22 answer. When we ask Congress do to something, we are told to seek an exemption in the Copyright Office rulemaking. But when we petitioned the Copyright Office for an exemption in the 2000 rulemaking, we were told that the Copyright Office did not have the power to grant the kind of exemption we had requested.

So this time, I wrote an exemption request that was designed to end the Catch-22 – to entice the Copyright Office to either (a) grant an exemption for researchers, or (b) state flatly that Congress had not given it the power to grant any kind of useful research exemption. As I read the Copyright Office’s findings (see pages 14-15 of the short version, or pages 86-89 of the extended dance version; they designate my request as number 3), they have essentially said (b) – exemptions of the type I requested “cannot be considered.”