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Setting the Record Straight: 32 Questions and Answers on C-32's Digital Lock Provisions, Part Five

By Michael Geist

The first four posts on the 32 Questions and Answers on Bill C-32's digital lock provisions focused first on general issues in the bill, second on C-32's circumvention exceptions, third on the missing exceptions, and fourth on consumer-focused provisions in the bill.  This fifth post focuses on business considerations.  For those that want it all in a single package, I've posted the full series as PDF download.

Business Considerations

This section features answers to the following questions:

• Isn't this just a matter of consumer choice?  If consumers don't want products with digital locks, no one is forcing them to purchase them?
• Won't the digital lock provisions help bring new businesses to Canada like Hulu.com?
• Are the concerns associated with digital lock provisions in the United States legitimate? What issues have arisen in the U.S. under the DMCA?
• If these digital lock provisions are too restrictive, what compromises are available?

Isn't this just a matter of consumer choice?  If consumers don't want products with digital locks, no one is forcing them to purchase them?

Of course it is true that no one is forcing a parent to buy an educational or entertainment DVD for their children or for music lovers to purchase CDs.  However, it is not strictly a matter of consumer choice.  For example, I recently spoke at the Canadian Federation of Students annual meeting and was advised by several student leaders that faculties on their campuses were moving to require students to purchase electronic editions of course textbooks.  Students in these programs were not faced with a consumer choice of declining to purchase.  Rather, enrollment in the program mandated the purchase of digitally locked books.  Given the emergence of the Amazon Kindle and Apple iPad, the move toward e-books on university campuses across the country will only increase.  These students do not have the option of declining to purchase items with digital locks.

Won't the digital lock provisions help bring new businesses to Canada like Hulu.com?

There is no real evidence to suggest that the anti-circumvention rules found in C-32 will make Canada a more attractive place for digital investments.  The delays associated with Hulu.com or Spotify have little to do with Canadian copyright law.  Rather, they are licence related as the delays in obtaining Canadian licences from rights holders (in the case of Spotify) or the decision of U.S. broadcasters to sell the Internet licenses to Canadian broadcasters (in the case of Hulu.com) are the primary source of delays.  In fact, there have been repeated rumours that Hulu will launch shortly in Canada.  Spotify has indicated that it wants to enter the U.S. and Canadian market simultaneously.

Moreover, even the architect of the DMCA has admitted that it has been a failure.  Bruce Lehman, told a McGill audience in 2007 that "our Clinton administration policies didn't work out very well" and "our attempts at copyright control have not been successful."

Are the concerns associated with digital lock provisions in the United States legitimate? What issues have arisen in the U.S. under the DMCA?

The concerns associated with anti-circumvention legislation such as that found in the U.S. DMCA are borne out by 12 years of experience under those rules in the U.S.  Perhaps the most obvious problem has been the use of these legal provisions in cases that have nothing to do with copyright.  The U.S. has been home to a litany of cases involving the DMCA and garage door openers (which involved Canadian-based Skylink), printer cartridge refills, hardware backups, and cell phones.  None of these cases involved attempts to stop copyright infringement.  Rather, they were fundamentally about exerting greater market control by thwarting potential competitors and reducing innovation. 

For example, in the Skylink case, Chamberlain, a competitor in the garage door opener market, tried to stop Skylink from offering a universal garage door remote control.  Chamberlain argued that Skylink needed to circumvent its TPM in order for its remote to function and that this constituted a violation of the DMCA.  While some of the cases have ultimately been dismissed (including, after several appeals, the Skylink case), the mere threat of a lawsuit is frequently enough to dissuade many companies from entering the market or from developing an innovative new product. 

For more on the U.S. experience, see the EFF report: Unintended Consequences: Twelve Years Under the DMCA.

If these digital lock provisions are too restrictive, what compromises are available?

The prior 31 questions identify many necessary reforms to C-32.  As I have noted elsewhere, a starting position should be clarification that it is not an infringing act to circumvent for lawful purposes.  This simple provision would allow the law to target large scale infringement but preserve user rights already contained in the law.  Moreover, lawmakers should consider dropping the ban on the distribution or marketing of devices that can be used to circumvent.  If it is acknowledged that there are legitimate reasons for circumventing a digital lock, Canadians should be able to legally acquire the tools they need to do so.

The prior discussion has also identified a range of additional compromise reforms.  These include:

• the identification of "qualified circumventers" to allow Canadians without technical expertise to exercise their rights
• the removal of the lock requirements for digital lessons and digital inter-library loans
• the establishment of an impartial review process for new circumvention rights
• the extension of the encryption research exception to all research
• fixing the privacy and perceptual disability exceptions so that circumvention devices can be lawfully obtained
• extension of the interoperability exception
• a requirement on rights holders to unlock locked content in appropriate circumstances
• exclude non-infringing access controls from their anti-circumvention legislation
• establish a new exception for personal use
• establish a new exception for preservation of digital materials
• establish a new exception for the protection of minors
• establish a new exception for filtering software
• establish a new exception for obsolete or broken locks
• establish a new exception for court cases, laws, and government documents
• establish a new exception for public domain works
• remove the lock requirements on the time shifting, format shifting, and backup copy provisions
• require businesses that use TPMs to include a prominent warning on their packaging

Specific legislative language related to these recommendations will be posted tomorrow.

Full post as published by Michael Geist on June 14, 2010 (boomark / email).