DRM Ruling Could Spell Trouble for DVD, Blu-ray Copy Protection

12 Aug, 2010 By: Chris Tribbey

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A July federal appeals court ruling that has nothing to do with home entertainment could have far-reaching implications for the entire industry, potentially allowing consumers to break content copy protection legally, as long as it’s done for personal use.

The ruling out of the U.S. Fifth Circuit Court of Appeals in New Orleans dealt with a 2004 case between MGE UPS Systems, a company that manufactures “uninterruptible power supply” (UPS) devices that are used to keep power going for various devices during outages, and Power Maintenance International (PMI), a General Electric-owned company that subcontracted with MGE to perform software service on MGE machines.

PMI employees obtained software to manage MGE’s UPSs without the company’s permission and allegedly circumvented MGE’s security features 428 times during a two-year period, according to court documents. MGE sued PMI, and a district court ruled in MGE’s favor, awarding the company more than $4.6 million in damages for copyright infringement, misappropriation of trade secrets and unfair business practices.

However, the lower court dismissed MGE’s claim that the software security violations were a violation of the Digital Millennium Copyright Act (DMCA), agreeing with PMI that breaking MGE’s security features “does not actually prevent copying of MGE’s software, but merely prevents access to the software.” MGE appealed the ruling to the Fifth Circuit Court of Appeals, which agreed with the lower court July 20.

“MGE advocates too broad a definition of ‘access;’ their interpretation would permit liability … for accessing a work simply to view it or to use it within the purview of ‘fair use’ permitted under the Copyright Act,” Judge Emilio M. Garza wrote in his ruling. “Merely bypassing a technological protection that restricts a user from viewing or using a work is insufficient to trigger the DMCA’s anti-circumvention provision.

“The DMCA prohibits only forms of access that would violate or impinge on the protections that the Copyright Act otherwise affords copyright owners. … Without showing a link between ‘access’ and ‘protection’ of the copyrighted work, the DMCA’s anti-circumvention provision does not apply.

“The owner’s technological measure must protect the copyrighted material against an infringement of a right that the Copyright Act protects, not from mere use or viewing.”

That opinion — that simple circumvention of copy protection isn’t a violation of the DMCA, as long as the copy protection is broken for “mere use or viewing” —  could have implications for the home entertainment industry’s use of copy protection on disc and online.

“It’s something to keep an eye on,” said Mike McGuire, VP of media research for Gartner Research. “It’s going to be interesting to see how it turns out. With [Advanced Access Content System] and Blu-ray, they already allow for a Managed Copy of the disc, but what they don’t allow is fair use copying. This could make it easier to get excerpts. It’s really going to depend on how that content is used.”

He said someone defending himself or herself against copyright violation accusations could one day use the ruling, depending on what the copyrighted content was used for. He offered the example of someone posting a video diary that includes copyrighted material where the user broke DRM to get it.

McGuire also pointed to things like digital copies and UltraViolet, which will allow consumers to access their content in a digital “cloud” environment and move it to various devices, as signs that the movie industry is ahead of the ruling in some ways.

“You saw it in music, where [Digital Rights Management caused] more problems than it was worth,” he said. “This ruling confirms earlier decisions by the movie industry to avoid what happened to the music industry: Worry less about locking down everything, and make legal copies available in as many ways as possible.”

For software that circumvents copy protection on discs, like RealDVD, the ruling could have huge implications in the future. RealDVD, which enabled the duplication of copy-protected DVDs, was on the losing end of a legal battle in August 2009, when a judge ruled that the software allowed users to engage in copyright infringement.

In March, RealDVD parent Real Networks agreed to pay the studios $4.5 million in fees associated with the case.

“Real probably would not have settled had this ruling occurred earlier,” said Richard Doherty, director of research for The Envisioneering Group. “Would Real’s product have been legal? Hollywood might not have spent so much money trying to challenge them as they did.

“The ruling will likely upset interpretations of DMCA for many months, maybe even years.”

The DVD Copy Control Association and the Motion Picture Association of America did not return requests for comment. RealDVD creator Real Networks declined to comment on the ruling, with a spokeswoman noting that RealDVD was “essentially out of business.”

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