The Digital Millennium Copyright Act (DMCA)[1] was first issued in 1998 and is used to prevent the evasion of technological measures that protect copyrighted works against unauthorized access.[2]  Cell phone providers have taken advantage of the DMCA to guard against user access to their firmware, which is protected under copyright, in cellular phones.[3]  Software locks are installed to prevent access and the DMCA gives cell phone providers the ability to pursue legal action against those that try to circumvent such locks.[4]  This has all changed since the latest exemptions to the DMCA have been enacted. 

            There is a provision[5] within the DMCA that allows the Register of Copyrights to make recommendations to the Librarian of Congress.  The Librarian of Congress then has authority to create three year exemptions to the DMCA on certain types of copyrighted sources.[6]  The DMCA, in 17 U.S.C. §1201(a)(1)(C)(i)-(v) sets out the various criteria for making such determinations.[7]  The factors include:

 

(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.

 

Recently, in November of 2006 the Copyright Office and the Library of Congress collaborated and issued six new exemptions to the DMCA.  These exemptions allow the non-infringing use of six new classes of works to be permitted during the next three years.[8]

 

The six new exceptions are as follows[9]:

1.      Audiovisual works included in the educational library of a college or university’s film or media studies department, when circumvention is accomplished for the purpose of making compilations of portions of those works for educational use in the classroom by media studies or film professors.

 

2.      Computer programs and video games distributed in formats that have become obsolete and that require the original media or hardware as a condition of access, when circumvention is accomplished for the purpose of preservation or archival reproduction of published digital works by a library or archive. A format shall be considered obsolete if the machine or system necessary to render perceptible a work stored in that format is no longer manufactured or is no longer reasonably available in the commercial marketplace.

 

3.      Computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete. A dongle shall be considered obsolete if it is no longer manufactured or if a replacement or repair is no longer reasonably available in the commercial marketplace.

 

4.      Literary works distributed in ebook format when all existing ebook editions of the work (including digital text editions made available by authorized entities) contain access controls that prevent the enabling either of the book’s read-aloud function or of screen readers that render the text into a specialized format.

 

5.      Computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network.

 

6.      Sound recordings, and audiovisual works associated with those sound recordings, distributed in compact disc format and protected by technological protection measures that control access to lawfully purchased works and create or exploit security flaws or vulnerabilities that compromise the security of personal computers, when circumvention is accomplished solely for the purpose of good faith testing, investigating, or correcting such security flaws or vulnerabilities.

 

The fifth new exemption is what is of interest for cell phone users and providers. Essentially, this exemption permits anyone who owns their cell phone to “unlock” it.[10]  The Copyright Office determined that the software used to “lock” cellular service provider’s firmware was being used less for the purpose of protecting copyrighted work and more to restrict the phone’s owner from switching service providers.[11]

            When a cell phone manufacture makes a cell phone it is a blank slate.  Once sold to a cellular phone provider it is then programmed with firmware and software to lock the phone.[12]  Such locks prevent the owner of the phone to switch phone carriers.  The phone also becomes country specific and restricting use for international travelers.[13]  The newly enacted exemption does not prevent cellular providers from continuing to lock cell phones sold to customers, but it does allow customers to legally unlock their cell phones on their own.[14]  By having this ability, users do not have to choose between violating the DMCA and purchasing a new cell phone.[15]

            The benefits that can be gleaned from the use of unlocked phone are several.  Unlocked cell phones create flexibility.[16]  By having an unlocked phone users are able to transfer their business from one carrier to another without much difficulty.[17]  A contract with a new carrier is not necessary as long as the user’s phone is compatible with the new carrier’s technology.[18]  Consumers that are unhappy with their service provider are not bound by contracts and can actually follow through with threats to switch providers without being charged.

            Customers also have the ability to choose a phone that their carrier may not supply.[19]  Many U.S. models are less reliable and lack the positive reviews of their European equivalents.[20]  Unlocked phones can benefit international travelers by permitting them to switch to other carriers while out of the country of purchase local airtime while traveling.[21]

Since the implementation of the exemption one cellular provider, Tracfone, has filed suit against the Librarian of Congress and the Register of Copyrights in the United States District Court of the Southern District of Florida.[22]  Tracfone alleges three separate counts in their complaint asking for relief to prevent the implementation of the new DMCA exemption regarding cell phone protections.[23]  Count one alleges a violation of the Administrative Procedure Act based on the following: not providing Tracfone adequate notice and opportunity to comment on the Exemption; having acted in a manner that is arbitrary and capricious, an abuse of discretion and otherwise not in accordance with law on the part of the Register; and the Register taking these actions against Tracfone without factual or legal basis.[24]

The second alleged count claims a violation of Tracfone’s Fifth Amendment Due Process rights by not being provided with adequate notice and opportunity to comment on the exemption.[25]  Further, Tracefone alleges such violations based on the Register acting in a manner that is arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with law, as well as, the Register taking such actions against Tracfone without factual or legal basis. Tracfone also alleges that the Librarian has issued, published or otherwise enacted the Exemption despite the Register’s failure to promulgate the Exemption in accordance with due process of law.[26]

Lastly, Tracfone alleges a violation of the separation of powers.  Tracfone states that DMCA’s delegation of rulemaking authority to the Library of Congress and the Copyright Office is an unconstitutional intra-branch delegation of Congress’ legislative responsibilities.[27]

Tracfone, a pre-paid wireless phone company, is so against the new exemption because it undercuts the primary business of the company.  In its complaint Tracfone states that according to its business model, they sell cellular phones at a reduced rate and subsidize the cost differential though customer purchases of additional airtime minutes from Tracfone in order to use the cellular handsets.[28]

By implementing the exemption to the DMCA, customers are able to purchase a cellular phone at a reduced price from Tracfone and legally unlock them and switch to a different carrier.  Since Tracfone uses prepayment options to attract customers it does not require contracts, in turn without the DMCA there is no way of binding customers to their service provisions.  Tracfone also alleges it has promoted sales of cellular phones on the black market at mark up prices, while Tracefone is left with no way to recuperate from its initial investment.[29]

            Some, like Jayne Wallace of Virgin Mobile, the second largest prepaid cellular provider in the United States, believe that the exemption “…could end up hurting consumers if prepaid wireless service becomes less affordable.”[30]  While others in the blog-o-sphere suggest that Tracfone, and other pre-paid wireless providers, have a flimsy business model that relies too heavily on special legal protections.[31]  Other bloggers have directly linked the use of DMCA by such cell phone providers as a blatant block to competition.[32]

            So what is left to do is see how the U.S. District Court handles the pending lawsuit.  The Court may find that the threats of piracy are real and repeal the exemption. They may instead, take a more competitive perspective and challenge such phone providers to be more creative in finding ways to protect their business.

 

Links for further information:

 

Cases:

1. Lexmark International, INC. v. Static Control Components, INC., 387 F.3d 522 (6^th Cir. Ky., 2004).

http://patentlaw.typepad.com/patent/2004/10/dmca_weakened_a.html

 

2. Chamberlain Group, INC. v. Skylink Techs., INC., 381 F.3d 1178 (Fed. Cir., 2004).

http://patentlaw.typepad.com/patent/2004/08/federal_circuit_12.html

 

Articles:

1. Toplawyernews.com - http://www.toplawyernews.com/TopLegalNews/id_39196/

2. PC Magazine –

-         http://www.pcmag.com/article2/0,1895,2064707,00.asp

-         http://www.pcmag.com/article2/0,1895,2069318,00.asp

3. Tech News World - http://www.technewsworld.com/story/55590.html

4. The Travel Insider - http://www.thetravelinsider.info/roadwarriorcontent/ unlockingfaq.htm#1

5. PC Today - http://www.pctoday.com/Editorial/article.asp?article=articles/2007/

t0503/07t03/07t03.asp&guid=

6. Consumeraffairs.com - http://www.consumeraffairs.com/news04/2006/11/

unlocked_cells.html

7. Wireless Week - http://www.wirelessweek.com/article/CA6398022.html

8. USA Today - http://www.usatoday.com/money/industries/telecom/2006-12-07-prepaid-phone-prices_x.htm

9. Electronic Frontier Foundation - http://www.eff.org/deeplinks/archives/005021.php

10. Ars Technica - http://arstechnica.com/news.ars/post/20061124-8280.html

 

Blogs:

1. TechDirt:

-         http://www.techdirt.com/articles/20050928/1018251_F.shtml

-         http://www.techdirt.com/articles/20061204/112525.shtml

2. Concurring Opinions:

-         http://www.concurringopinions.com/archives/2006/12/copyright_as_pr_1.html

3. Yahoo Tech:

- http://tech.yahoo.com/blogs/null/8327