Part 14 (1/2)
The war would be fought out on the hardware (and software) level, with the manufacturer of the platform constantly seeking to make the competing products incompatible, to bad-mouth their quality, and to use fear, uncertainty, and doubt to stop consumers from switching. (Apple's actual words were: ”When we update our iPod software from time to time, it is highly likely that Real's Harmony technology will cease to work with current and future iPods.”) Meanwhile the compet.i.tors would race to untangle the knots as fast as the platform manufacturer could tie them. If the consumers got irritated enough they could give up their sunk costs and switch to another product altogether.
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All of this seems fine, even if it represents the kind of socially wasteful arms race that led critics of capitalism to prophesy its inevitable doom. Compet.i.tion is good and compet.i.tion will often require interoperability. But what do we mean by compet.i.tion? Is it compet.i.tion if I a.s.sa.s.sinate your employees or poison the food in your restaurant? If I trespa.s.s on your land in order to sell a competing product? If I break into your safe to steal your trade secrets, use my monopoly position in the market to impose resale price agreements, or violate your patent? It is the law that draws the line between compet.i.tion and theft, between virtuous compet.i.tive imitation and illicit ”piracy.”
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Sometimes we need to give innovators property rights that allow them to prevent second-comers from free riding on their efforts.
We have to do so because it is necessary to encourage future innovation. On the other hand, sometimes we not only allow the second-comer to free ride, we positively encourage it, believing that this is an integral part of compet.i.tion and that there are adequate incentives to encourage innovation without the state stepping in. Intellectual property policy, indeed a large part of the policy behind all property rights, is about drawing the line between the two situations. Too far in one direction and innovation suffers because potential investors realize good ideas will immediately be copied. Too far in the other direction and monopolies hurt both compet.i.tion and future innovation.
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Imagine you are the first person to invest in getting the public to eat burritos for breakfast, or to place a petrol station at a certain crossroads, or to clip papers together with a folded bit of wire. In each case we give you some property rights. The fast-food vendor may own a trademarked phrase or jingle that the public learns to a.s.sociate with his product. Since the patent office issued a patent for the sealed and crimped ”peanut b.u.t.ter and jelly” sandwich I described at the beginning of the book, even a patent is not out of the question if your disgusting concoction is sufficiently novel and non.o.bvious. But we should not allow you to have a patent over all burritos, or burritos for breakfast, still less over the idea of fast food. As for the paper clip maker, there might be a trademark over the particular paper clip, but the idea of folding wire to secure paper stays in the public domain. The owner of the petrol station gets physical owners.h.i.+p of the land, but cannot stop a second-comer from setting up shop across the road, even if the first-comer's labor, capital, and effort proved that the location is a good one. We positively encourage follow-on imitation in those cases.
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Now how about the case in point? What does Apple get in the way of property rights? Think back to my description of the intellectual property system in Chapter 1. They can get patents over those aspects of the iPod--both hardware and software--that are sufficiently innovative. Patents are what we use to protect inventions. They also get a copyright over the various pieces of software involved. That protects them only against someone who copies their code, not someone who writes new software to do the same thing. Copyrights are what we use to protect original expression. They get rights under trademark law over the name and perhaps parts of the design of the product--maybe the distinctive look of the iPod--though that is a bit more complex.
All of these rights, plus being the first to break into the market in a big way, the brilliance of the design, and the tight integration between the hardware and the service, produce a formidable compet.i.tive advantage. The iPod is a very good product.
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Now if a compet.i.tor infringes any of Apple's rights, for example by making a literal copy of the code, using their trademark in a way the law does not allow, or infringing on one of their patents, then Apple can shut them down and extract hefty damages. Quite right, too. But should they be able to prevent someone from making an interoperable product, provided they do not violate any of these existing rights in the process? Laws like the DMCA make that question more complicated.
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Nowadays, there is software in many, many more products than you would imagine. Your watch, your phone, your printer, your thermostat, your garage door opener, your refrigerator, your microwave, your television--the odds are that if you bought them in the last ten years, they have some software component. In the 1970s the courts and Congress had concluded that software could be copyrighted as original expression, like a song or a novel, as well as being patented when it was novel, non.o.bvious, and useful. Frequently, different aspects of the same program will be covered by copyright and by patent. But software is a machine made of words, the machine of the digital age. That fact already causes some problems for our compet.i.tion policy. Will the exceptions and limitations designed to deal with a copyright over a novel work adequately when they are applied to Microsoft Windows? That issue was already unclear. With the DMCA, we have added another crucial problem. Where there is copyrighted software there can be digital fences around it. If the copyright owner can forbid people to cut these fences to gain access to the software, then it can effectively enlarge its monopoly, capture tied services, and prohibit generic compet.i.tion.
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It was just this line of thought that led some other companies to do more than merely make threatening noises about the DMCA.
Lexmark makes printers. But it also makes lots of money off the replacement ink or toner cartridges for those printers. In some cases, in fact, that is where printer companies make the majority of their profits. As a result, they are not exactly keen on generic replacements. Chamberlain makes garage door opener systems. But they also sell replacements for the controllers--the little devices that you use to trigger the door.
Lawyers from both of those firms looked at the DMCA and saw a chance to do something most companies would love to do; to make generic compet.i.tion illegal. Lexmark designed their printer program so that it would not accept a toner cartridge unless it received the correct ”checksum” or validation number. So far, this looks no different from the razor manufacturer trying to make it difficult to manufacture a compatible replacement blade.
Generic compet.i.tors now had to embed chips in their printer cartridges which would produce the correct code, otherwise they would not work in Lexmark printers.
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Static Control Components is a North Carolina company that manufactures chips whose main function is to send the correct code to the printer program. With this chip implanted in them, generic cartridges would work in Lexmark printers. Lexmark's response could have been to change their program, rendering the chip obsolete, just as Apple could change the iTunes software to lock out Real Music's Rhapsody. Doing so would have been quite within their rights. Indeed it is a standard part of the interoperability wars. Instead, Lexmark sued Static Controls, claiming, among other things, a violation of the DMCA.16 Like Apple in the press release I quoted earlier, Lexmark clearly saw this as a kind of digital breaking and entering. This was their printer, their printer program, their market for replacement cartridges. Static was just helping a bunch of cheats camouflage their generic cartridges as authentic Lexmark cartridges.
Translated into the legal language of the DMCA the claim is a little different, but still recognizable. Static was ”trafficking” in a device that allowed the ”circ.u.mvention of a technical protection measure” used to prevent ”access to a copyrighted work”--namely the computer program inside the printer. That is behavior that the DMCA forbids.
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The garage door company, Chamberlain--who also claimed to be concerned about the security of their garage doors--made a similar argument. In order to get the garage door to open, the generic replacement opener had to provide the right code to the program in the actual motor system. That program is copyrighted.
The code controls ”access” to it. Suddenly, the manufacturers of generic printer cartridges and garage door openers start to look rather like Jon Johansen.
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Surely the courts did not accept this argument? Bizarrely enough, some of them did--at least at first. But perhaps it was not so bizarre. The DMCA was indeed a radical new law. It did s.h.i.+ft the boundaries of power between intellectual property owners and others. And intellectual property rights are always about restraining compet.i.tion, defining what is legitimate and what is not--that is what they do. There was a respectable argument that these devices did in fact violate the DMCA. In fact, it was respectable enough to convince a federal judge. The district court judge in the Lexmark case concluded that Lexmark was likely to win on both the DMCA claim and on a more traditional copyright claim and issued an injunction against Static Control. In Skylink, the case involving garage door openers, by contrast, the district court held that the universal garage door opener did not violate the DMCA. Both cases were appealed and both appeals courts sided with the generic manufacturers, saying that the DMCA did not prohibit this kind of access--merely making a computer program work the way it was supposed to.
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The U.S. Court of Appeals for the Federal Circuit (CAFC) heard the Skylink appeal. In a remarkably far-reaching decision, the court effectively took many of the positions that Mr. Corley's lawyers had argued for in the DeCSS case, but they did so not to protect speech, but to protect compet.i.tion. In fact, they implied that taking Chamberlain's side in the case would silently overrule the ant.i.trust statutes. They also interpreted the new right created by the DMCA so as to add an implicit limitation. In their construction, merely gaining access is not illegal; only gaining access for the purpose of violating the copyright holders' rights violates the statute. The Reimerdes court had been willing to accept that the new access right allows a copyright holder to prohibit ”fair uses as well as foul.” When Chamberlain made the same argument as to their garage door opener program, the CAFC was incredulous.
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Such an ent.i.tlement [as the one Chamberlain claims] would go far beyond the idea that the DMCA allows copyright owner to prohibit ”fair uses . . . as well as foul.” Reimerdes, 111 F.
Supp. 2d at 304. Chamberlain's proposed construction would allow copyright owners to prohibit exclusively fair uses even in the absence of any feared foul use. It would, therefore, allow any copyright owner, through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work--or even selected copies of that copyrighted work.17 115
There are multiple ironies here. The CAFC rarely meets an intellectual property right it does not like. It has presided over a twenty-year expansion of American patent law that many scholars find indefensible. But when (for dubious jurisdictional reasons) it sorties beyond its traditional ambit of patent law, it is stunned by the potential expansiveness of the DMCA. Then there is the comparison with the Reimerdes case. How interesting that the First Amendment and concerns about free expression have comparatively little bite when applied to the DMCA, but ant.i.trust and concerns about compet.i.tion require that we curtail it. After all, the heart of Mr. Johansen's argument was that he had to write the DeCSS program in order to play his own DVDs on his own computer--to get access to his own DVDs, just as the purchaser of a replacement garage door control is getting access to the program that operates his own garage door. Indeed, Mr.
Johansen's criticism of CSS was that it allowed the movie companies, ”through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work.” Mr. Corley echoed those claims.
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Of course, the situations are not identical. The key limitation in Skylink is that the court saw no threat of ”foul use.” The Reimerdes court could see little else. On the other hand, the rulings are not easily reconciled. The Skylink court cannot imagine that Congress would want to give the copyright holder a new ”property” right to prevent access unconnected to any underlying copyright violation.