Have you or a loved one lost a beloved e-book in the past year? If so, you may be entitled to compensation. In July 2019, Microsoft began deleting its repository of e-books and halted sales from its e-library, thereby eliminating any downloads on all of its customers’ electronic devices. The purpose was to prevent tech-savvy users from illicitly reproducing and distributing digitally downloaded works, ultimately to protect the rights of copyright owners. While customers received refunds for the content they lost, many wondered how it was possible that their downloads were no longer accessible.

Companies are able to restrict access to certain works using a technology called digital rights management (DRM). Most manufacturers install DRM on electronic devices and digital media in order to prevent users from illicitly copying or distributing copyrighted material that they purchase. This is not limited to works of literature—manufacturers of DVDs, video games and even phone apps use DRM. Although the objective was initially to limit copyright infringement, the technology has been met with frequent criticism.

Some consumers complain that they expected to buy permanent copies of certain works, some of which may be academic textbooks with their personal notes in the margins. Similarly, DRM limits access to literature for low-income individuals, especially in the midst of a pandemic that has further exacerbated the digital divide. At a macro level, some experts argue that DRM is inherently anticompetitive in that it completely eliminates users’ freedom to choose the devices on which they use purchased media.

DRM clearly serves its intended purpose of protecting copyrighted works from reproduction, distribution and/or alteration. However, companies that use the technology are also forced to reckon with balancing the rights of the users. Here, we take a brief look at the technology behind DRM and the legal landscape that allows it to flourish.

How Does DRM Work?

Given that the most fundamental step in pirating a copyrighted work is to first obtain a copy, the most prominent function of DRM is preventing access to the work. Some forms of DRM take one or more different approaches, but the two general methods of access control involve administering levels of permission and protecting works from direct copying.

In terms of limiting permission, many software purchasers have had experience with licenses, keys and authentication codes. For instance, if you have been prompted to search the back of a Microsoft Office installation package for an activation key, that is a version of permission management. Other copyright owners will attempt to authenticate the users themselves. Many music aficionados will be unable to play songs purchased on an older version of iTunes if they cannot remember the password that was used to identify them as the initial purchaser. However, more advanced forms of DRM—fingerprint authentication and face recognition—are quite common now.

Some more restrictive measures are more specific to the technology used to access the content than the users themselves, such as Internet Protocol (IP) address verification. Due to certain copyright licenses, many DVDs in the 2000s were manufactured in such a way that they would only function on technology that was sold in the same region; i.e., American DVDs would only work on American DVD players. Yet this DRM still exists in some form. Almost all streaming platforms will verify a user’s IP address before displaying content. For example, the hit comedy “It’s Always Sunny in Philadelphia” is only available to Netflix subscribers in the United Kingdom. In other instances, permission management takes the form of particularized hardware. For instance, a video game manufactured by Microsoft is likely to require an Xbox or a Microsoft PC for use.

Copy protection, the other form of access control, may not prevent users from accessing copyrighted works, but it eliminates the possibility of reproducing and distributing them. The most prevalent type of copy protection is encryption, which consists of a code that either limits users to enjoying their content on a specified number of devices or prevents them from copying the content at all. Most forms of encryption are hidden from the users, so they are unaware that the technology has been “mounted” on their devices. Some manufacturers place simple fingerprints or watermarks on copyrighted works in order to determine which are the original works. However, this is often seen as inefficient because some users may not be deterred from watching an illegally copied movie with a watermark constantly in the background.

This is why companies like Microsoft have taken more drastic measures like deleting their entire libraries of content and removing downloaded copies from users’ devices. It significantly reduces the risk of liability, but the users who rightfully paid to access those works are at a minimum inconvenienced and at worst only receive a temporary license to the content, not the purchase they were promised when they were originally presented with the “Buy Now” button. In this context, the correlation between the rights of the copyright holder and the rights of the user are at odds.

The Legal Landscape

DRM was established to prevent infringement of the exclusive rights that accompany valid copyrights, including the rights to distribute, reproduce, display, perform and create derivative works. Whether the copyright protects an e-book, music album, movie or computer program, the primary purpose is to ensure that the copyright holder retains control.

Under the Copyright Act, the owner of a copyright has the exclusive rights to reproduce copies of a work and to distribute copies to the public “by sale or other transfer of ownership, or by rental, lease, or lending.” Unauthorized copying constitutes an infringement of those two exclusive rights. Given the ease by which users can share content in the Digital Age, DRM provides a surefire safeguard against this practice. The same goes for the rights to display and perform copyrighted works. For instance, DRM may prevent a user from projecting a copy of a DVD they purchased on a screen in a public park. Furthermore, DRM gives copyright owners control over who can create derivative works based on their content. Without proper copy protection or permission management techniques, you could take a song directly from Spotify and copy it into your own musical production like a “sample.”

In 1998, when Congress passed the Digital Millennium Copyright Act (DMCA), it included a provision that prohibited technology used to circumvent DRM and other tools that restrict access to copyrighted media. Section 1201 of the DMCA imposes liability on both individual acts of circumvention and organizations that manufacture or offer devices that circumvent. Libraries, educational institutions and law enforcement officials, as well as entities that reverse engineer computer programs to determine interoperability, fall under certain exceptions to §1201.The Library of Congress regularly updates this list of exemptions, and the exemptions themselves are valid for three years. For instance, an exception for cell phone “jailbreaking” (allowing you to unlock the code that would otherwise prevent you from using that phone you fully paid for if you switched carriers) was added in 2010. Section 1204 addresses criminal sanctions for willful and financially profitable circumvention, but most copyright owners will likely seek civil redress under §1203. As a result, these anti-circumvention technology provisions have allowed DRM to flourish.

These statutory provisions have played a major role in the protection of videogame copyrights. For example, in 2010, the Ninth Circuit Court of Appeals addressed a small company’s technology that automated several levels of the popular videogame World of Warcraft. The court held that the defendant company was liable for contributory copyright infringement because it trafficked in technology that was, at least in part, marketed to circumvent technological measures that controlled access to copyrighted parts of the videogame. MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 954 (9th Cir. 2010).

Interestingly, the Ninth Circuit does not require that plaintiffs demonstrate a nexus between the circumvention technology and actual infringement, whereas the Federal Circuit does. MDY Indus., LLC, 629 F.3d 928 at 950; Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1203 (Fed. Cir. 2004). As a result, the Ninth Circuit and other courts that follow its precedent cases appear to have created an extra exclusive right of copyright owners to control access to their works. This monopolization of access has been at the center of the controversy surrounding DRM and copyright law.

The Fight Against DRM

If you purchased a CD version of Yankee Hotel Foxtrot by rock band Wilco in 2002, you could listen to it using multiple devices, including computers with any operating system, stereo systems with a CD player function and portable Walkman devices. There were no limits. Vendors could not instantaneously take back your CD. Now with DRM, many users see this immediate confiscation as an encroachment on their licenses to enjoy copyrighted content.

When users are presented with a “Buy Now” button for copyrighted content like music or e-books, they are under the impression that they are purchasing that media for infinite use across multiple platforms. That is a major selling point of digital content, much like it is for physical books or vinyl records. However, when companies remove that content, users feel that they are not getting what they were promised. This bait-and-switch view of DRM is not outrageous—companies are essentially using the technology as a loophole for reconfiguring their terms of use.

Although copyright owners receive somewhat of a financial benefit from limiting access to their works, a countervailing concern is that the companies are controlling devices from a distance and limiting user access. Many critics believe that confiscating users’ rightfully purchased content amounts to an Orwellian level of control and that, in fact, big tech companies rather than copyright owners are the primary beneficiaries. They believe that companies like Amazon and Microsoft use DRM to keep consumers from enjoying content on multiple platforms, which amounts to anticompetitive practice. Some have even called for the FTC to regulate this practice of big tech companies under antitrust laws.

More importantly, in the context of the COVID-19 pandemic, access to digital content is often essential. For instance, students without immediate access to physical copies of books rely on e-books for their classes, and companies that remove copies of textbooks from these students’ e-libraries are directly affecting the quality of their education. While some companies are providing refunds for copies they confiscate, a $25 Microsoft credit for an academic textbook with extensive notes in the margins does little to compensate for what has been lost. This is also a major concern for individuals who are visually impaired and require assistive technology to access certain media (although Section 121 of the Copyright Act, which allows for special access to works intended for the blind or visually impaired, may provide some relief).

Many critics have also expressed a concern for user privacy. Several companies utilize DRM that not only controls user access, but also tracks consumer information such as which content has been purchased, how frequently the content has been used, and how much a user has progressed through certain content. Some even track a user’s location when content is accessed. When users have little to no choice in how their own information is tracked or used, DRM constitutes a possible invasion of privacy.

There is an argument that individuals can claim a right to access certain copyrighted works under the fair use doctrine, but that does not necessarily prevent companies from utilizing DRM. First, as noted above, some courts do not require a logical connection or “nexus” between infringement of an exclusive right and the circumvention technology at issue. Since fair use is a defense against a claim of infringement, it may not apply if a court finds that some circumvention technology is infringing on a particular right. Secondly, the fair use defense is dependent on a court’s analysis of four statutory factors. Therefore, even if such cases were to reach judges, the verdicts would depend entirely on the facts specific to each case. More importantly, on a macro level, the uncertainty surrounding fair use may affect business investments in this technology.

Conclusion

While DRM serves its primary objective of protecting copyrighted content from illicit reproduction and distribution, there is a strong argument that this misrepresents tech companies’ hidden agenda to micromanage their users. When companies like Microsoft resort to measures like deleting entire libraries of e-books, it creates a broader problem of preventing access to rightfully purchased content, especially now in the context of remote learning. Furthermore, critical concerns about DRM use as an invasion of privacy and anticompetitive effects on the digital media market have yet to be addressed on a federal level.

Although circumvention technology is more vehemently prohibited in the Ninth Circuit and courts that follow its precedent case of MDY v. Blizzard, that is not necessarily the case in the Federal Circuit and courts that follow the Chamberlain precedent. As a result, some jurisdictions may elicit different results in cases litigating DRM. It is also worth noting that the Visual Artists Rights Act (VARA) may provide some protection for visual artists’ control over the authenticity of their works, but its protections are limited to moral rights. Regardless, with recent forum complaints from Google to GitHub (a Microsoft subsidiary) and a §1201 case on the spring 2021 Supreme Court docket, it is worth following the evolution of the characterization of DRM and other such anti-circumvention technologies.

If you have questions about DRM as a user, or as a copyright owner seeking to combat infringement of your work, feel free to contact Lutzker & Lutzker for analysis tailored to your specific situation.