DMCA - a shield not a sword

[george]

Lexmark failed in its attempt to use the Digital Millennium Copyright Act to prevent others from making knock-off ink cartriges in the federal courts of appeal.

"We should make clear that in the future companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves just by tweaking the facts of this case," wrote (.pdf) Judge Gilbert Merritt of the 6th U.S. Circuit Court of Appeals in Cincinnati. "Congress did not intend to allow the DMCA to be used offensively in this manner, but rather only sought to reach those who circumvented protective measures 'for the purpose' of pirating works protected by the copyright statute."

See: wired.com

[eric_stasik]

I think the decision was both good and bad.

According to my reading of the DMCA, Lexmark was right on the money. The DMCA prohibits reverse engineering to gain access to a copyrighted work. What Lexmark did was to copyright some of the driver software and then encrypt it.

I think it was Static Control Components who broke the encryption in order to copy the driver software.

According to the DMCA, this was/is/should be illegal.

Clearly, Lexmark was tring to protect their cartridges - copyrighting the driver software was simply a proxy for doing this.

It was a clever attempt and Lexmark's IP department should be given full marks for pushing the envelop of the law and using every tool at their disposal to protect their business.

Personally, I don't think copyright should be used in this way - as a proxy to protect an article of manufacture - and this is what the court said.

But when you read the law itself, it seemed to me clearly allow Lexmark's "trick" so I think the court made an error as a matter of law.

So I agree with what the court did, but I disagree with the way they did it.

The DMCA needs to be re-written by the US Congress and not by activist judges who ignore the law as written.

Hopefully the judges appointed by President Kerry will be more faithful.

Just my (hopeful) opinion.

/eric stasik

[JimIvey]

I'll go ahead and admit some ignorance with respect to this case.  What exactly was claimed to be copied?

I understand that the DMCA was intended to prevent circumvention of anti-copying code on DVDs, among other things.  But suppose Sony had code in their players that would only allow playback of Sony movies (and perhaps Disney, aren't they related?).  Circumventing anti-copy logic is one thing -- it allows wholesale reproduction of a copyrighted work.  Circumventing anti-playback seems entirely different.  I don't see how the copyright owner's interest is involved in limiting a player to specific DVDs.

Getting back to Lexmark, whatever the DMCA had to say about their facts, they were running afoul of antitrust law, in my opinion.  Their facts seem far too close to those of the famous Xerox case to avoid liability under the Sherman Act.

FYI, the Xerox case involved a requirement to use Xerox brand paper in all photocopying machines.  It was determined to be an illegal "tying" arrangement in which a near monopoly in photocopiers (at the time) was being used to get a second monopoly (or at least an unfair advantage) in paper.  That would be like including undocumented system calls in your operating system to give an advantage to your office suite and other software applications -- but nobody would do that, right?

Anyway, I'd be curious to hear exactly what copying took place according to Lexmark.  Mr. Stasik mentioned driver software.  Did the competitor require a different driver to be installed, and Lexmark considered the driver copied from theirs?  Or was there some driver software actually inside the cartridges?

Thanks!

P.S.  Some clarification regarding the sword and shield analogy would also be helpful to me.  While I understand what those are, I don't think I understand the difference.  I suppose it's like "defensive" missiles are a shield.  I guess I don't see it that way.

Thanks again.

[clarklawyer]

I take issue with characterizing of the 6th circuit justices
as activists.

I agree that the DMCA could be interpreted to cover the behavior
of SCC, but the question is whether that interpretation is
what Congress intended.  There are plenty of places in the
statute where the courts cannot rely on clear words by Congress.
As examples I'll point out the phrase "effectively controls
access" in the statute.  I don't think there is any doubt that
Congress intended that to apply to things like CSS for DVDs, but
it's not clear that Congress intended those words to apply to
the facts of this case.

As a second example I'll point out that it's extremely unclear
what the scope of the exceptions for interoperability is.  But
regardless of whether the trial court was right about how the
exception was to apply, it seems clear to me that the trial courts finding
that SCC did not provide any program to interoperate with
was clearly erroneous.

I think "activist" ought to be reserved for those situations
where the court ignores clear words in the statutes or the
legislative history or otherwise clearly contravenes Congressional
intent, or for those situations where a court simply invents
law where the law was otherwise clear.  I don't see that here.

Also the 6th circuit did not decide the case.  Rather they
decided whether on the record Lexmark had established that
they a high enough probability of success to support a
preliminary injunction before trial.   What they decided was
that the trial court made errors of law and fact and that
the if an injunction is going to issue, the correct law ought
to be applied.

I could make the similar comments about the courts disposition
of the straight copyright issues in the case, but I won't bother
because I believe that the trial court simply got those things
wrong.

[clarklawyer]

Mr. Ivey,

I agree with you about the sword/shield.  I see Lexmark using
a shield the same way as CSS on DVDs is a shield.

As for what was copied, Lexmark includes a 50+ byte program
that drove some mechanical things in the printer.  The 50 byte program
was also used as a checksum.  The court found that the program
was constrained by a few things 1) the very small set of instructions
supported by program interpreter.  2) The required functionality
3) the need keep the checksum unchanged. 4) the program size 5) efficiency concerns


For reasons 1-5 the court concluded that the driver program
which SCC copied into its cartridges was not copyright protectable.

The DMCA issue had to do with accessing the software in the printer.
There was no claim that any copying was going on just access
to something that the court decide was not effectively
controlled by a technological measure because no effort was
made to prevent access to the printers code other than by
the limited method of going through the ink cartridge.

The 6th circuit also looked at the interoperability defense
and discussed possible fair use theories just for the purpose
of showing the trial court where its errors were.

[eric_stasik]

Mr. Clark,

Thank you for your thoughtful and instructive comments.

I don't agree, of course, that the 6th circuit properly executed their duties. The DMCA as intended is good law. As written it is not. I imagine we agree at least on the latter point.

All the 6th circuit has done, in my opinion, is delay and impede necessary legislative action to write a better law.

Mr. Ivey, I don't think there are too many parallels to the Xerox case. The cartridge is not a commodity, like paper or service. There are technical reasons why a particular cartridge is required to be used with a particular printer.

That Lexmark uses patents and copyrights to prevent others from making replacement cartridges is, of course, a different issue. As I understand it, anti-trade laws recognize that patents confer a monolopy and as long as the patent holder does not try to extend her monopoly beyond her patent right, there is usually no anti-trust issue involved.

If Lexmark, or HP, has an essential patent on their ink-jet cartridge it seems to me perfectly proper that they enforce them.

Perhaps Lexmak's MISUSE of the DMCA could incur the wrath of the Justice Department, but until it was decided by the 6th circuit that it was, Lexmark seemed to me to simply be following the letter of the law.

Thanks again to both of you for a good discussion.  

Regards,

eric stasik

[JimIvey]

For reasons 1-5 the court concluded that the driver program
which SCC copied into its cartridges was not copyright protectable.

So, the cartidge itself includes some intelligence -- clever and interesting.  

The cartridge is not a commodity, like paper or service. There are technical reasons why a particular cartridge is required to be used with a particular printer.

I'll have to respectfully disagree.  Ink cartidges are a commodity.  Just as there are many form factors of copy paper (letter, A4, cardstock, etc.), there are many formfactors of cartridges -- yet cartridges are routinely available from many vendors and, many purchasers including myself care only about form factor and price.

As I understand it, anti-trade laws recognize that patents confer a monolopy and as long as the patent holder does not try to extend her monopoly beyond her patent right, there is usually no anti-trust issue involved.

First, I didn't hear that patents were involved in this case -- only DMCA.  I don't beleive the DMCA was intended to be an alternative to patents.

Second, the rights of a patentholder are not supreme.  There is such a thing as patent misuse and, while patent law and antitrust law are at odds with one another, it's not entirely clear that patent law trumps antitrust law.  

It's an interesting case -- bringing up a number of challenging issues.  For what it's worth, these sorts of complex issues tend to come up when people get creative in interpreting a particular law -- like hammering a square peg into a round whole.

Regards.

[clarklawyer]

I believe that Lexmark does have some patents involved in
the fight with Static Controls, but apparently no patent
issues were before the 6th circuit

The issues that were involved were the DMCA along with some
copyright issues.

IMO the 6th circuits handling of the copyright issues is as
interesting as the DMCA questions.  You can access the text
of the decision via a link on www.ipo.org.

[eric_stasik]

Mr. Ivey,

You wrote

"Ink cartidges are a commodity.  Just as there are many form factors of copy paper (letter, A4, cardstock, etc.), there are many formfactors of cartridges -- yet cartridges are routinely available from many vendors and, many purchasers including myself care only about form factor and price."

This is exactly what HP and Lexmark must avoid. If ink jet cartridges become a commodity, then their entire business model falls apart.

By purposefully designing patented (and copyrighted) technology into their ink-jet cartridges, HP and Lexmark can prevent them from becoming commodities and can charge high prices for ink.

It is the same approach that Gillette successfully uses in designing their razor blades - and frankly I am surprised that more companies do not do this.

It is hardly a new idea. Ironically, it was a socialist, King Camp Gillette, who came up with the concept in the late 19th century.  

Gillette, HP, and Lexmark have built massively profitable businesses using this basic approach and so can many others, if they just plan and think intelligently BEFORE rushing off to develop a product.

This is called "patent engineering" and it is what my consulting business is specificially directed to produce - IPR strategies that support business models.

It is not enough to simply file patents on inventions and hope you have what you need. This is not a strategy for business success, it is a strategy for making patent attorneys wealthy.

To be successful in business, you must decide a priori what inventions you need and then invest research money into developing - and then patenting - those specific inventions. Without an IPR strategy to guide how research money is used, a business is simply betting on luck.

It is all explained in my booklet "Practical Patent Strategies  Used by Successful Companies"

http://www.althosbooks.com/prpastusbysu.html

Using the concepts I discuss, you can improve your chances of business success many times.

Lexmark tried to use copyright to protect an article of manufacture, which I personally think is improper, but before the 6th circuit rewrote the law, it appeared perfectly acceptable within the 4 corners of the DMCA. As I said Lexmark's IP department should receive full marks for using every aspect of intellectual property law to protect their business.

As a final remark, being old enough to remember when dot matrix printers were state of the art, no one can say that this aforementioned strategy stifles innovation, or is bad for consumers. The fact that I have a quiet, fast, 1200 dpi color printer on my desk is an innovation that has brought substantial benefit to me and others.

And I try to keep this in mind when I pay 20 evros for a replacement ink jet cartridge......

Regards,

eric stasik

[clarklawyer]

Mr. Stasik,

Could you point to some speciific problems you see with the 6th circuits analysis?  

I simply cannot agree that Lexmark's actions were clearly within the DMCA.   The problem is that the DMCA contains a number of phrases that have to be interpreted and for which there is scant precedent.  IMO the 6th circuits opinion is consistent with previous decisions,  is consistent with what there is to glean from Congress' intent, and does not lead to what you seem to agree is an undesirable result when applied to this or previous DMCA cases.

In particular, I think the trial court completely messed up the analysis on the interoperability exception to the DMCA.   I believe that this provision was intended to prevent companies from using the DMCA plus copyright law as some kind of perpetual pseudo patent.  

But again the language determining when interoperability and the other exceptions apply leaves a lot of the decision about how the DMCA should be interpreted to be developed by the courts.   Hopefully the courts will develop precedent that follows legislative intent.  In this case neither of us believe that the DMCA was intended to support Lexmark's position.

Just one more point.  The quoted language Judge Merrit is from a concurring opinion and does not reflect that language the court used to vacate the injunction.   I still don't understand what he means by "offensive use" of the DMCA.

[JimIvey]

This is exactly what HP and Lexmark must avoid. If ink jet cartridges become a commodity, then their entire business model falls apart.

True enough, but intellectual property does not spring forth from necessity or desire in the business community.  The debate here isn't whether Lexmark wants to avoid having their cartridges become a commodity but whether they've successful accomplished that in the law.  

Maybe they'll prevail on the patent issues, assuming they're still active despite not being in the recent opinion of the 6th Circuit.  But I think it's rather dangerous to pre-suppose the legal conclusion that Lexmark's attempts at IP protection were successful simply because it's important to them and then back-fill the rationale for why their attempts met the requirements of law.

I understand and appreciate the IP strategy and importance you set forth.  However, whether a specific party has successfully protected their turf with enforceable IP ought to be determined by the then-prevailing law and not by how important a victory in court is to the party.

Perhaps my resistance to "importance to the client" as being a meaningful factor is based on personal experience.  I've had a prospect client -- just informed of a conflict of interest and a resulting declining of representation -- demand that I immediately divulge all confidences of the other client.  I explained that it was illegal for me to do so, but the declined client said, "but it's very important that we know what [your other client] is doing in this space."  The irony here is that this same client had just seconds before demanded immediate return of all disclosure documents and had hinted at possible litigation if I were to disclose any of their secrets.  While that's entirely proper (although unnecessarily heavy-handed on their part), the insistance that I then "spill the beans" on my other client was almost laughable -- except for the very stern expressions on the faces in the room.

In short, I have little, if any, sympathy for the rationale that anything is legal if important enough to someone.  It's just not true.

Regards.

[eric_stasik]

Mr. Ivey,
 
You wrote:

"In short, I have little, if any, sympathy for the rationale that anything is legal if important enough to someone.  It's just not true."

[eric_stasik]

Mr. Ivey,
 
You wrote:

"In short, I have little, if any, sympathy for the rationale that anything is legal if important enough to someone.  It's just not true."

And? This is not the basis of my argument, nor is it something that I, or any other law abiding person, could logically conclude.

But, on the other hand, it is very poor practice indeed to not use every LEGAL means available to accomplish important business goals.

As regards the DMCA, the intent of the US Congress was to make illegal defeating, or circumventing, technical measures used to protect access to copyrighted material.

So Lexmark installs a 50 byte copyrighted script into their cartridges, access to which was necessary in order for their cartridges to function with the built-in programming of Lexmark's printers. They protected this script with a simple access code. To my way of thinking, this was a logical and astute strategy employed by Lexmark's IP department. Not brilliant, mind you, but very much heads-up thinking.

Static control reverse engineers the protection to gain access to the copyrighted material so that their chips would operate with Lexmark's printers - violating the letter and the spirt of the DMCA.

Was it the intent of congress that copyright could be used to protect an atricle of manufacture? No.

Was it the intent of congress that circumventing technical protections to gain access to copyrighted material should be illegal? Yes.  

The problem in this case is that these intentions ended up in conflict with each other and the 6th circuit provided the clarity that congress itself did not.

Perhaps "judicual activism" is a too strong adjective, but in my opinion the judges effectively exercised legislative power not mandated to them under the US constitution. They drew a bright line where Congress - either intentionally or through simple incompetence - drew a fuzzy and contradictory line.

In my opinion the 6th circuit gave SCC a pass on what seemed to me a clear violation of the law as written by congress because SCC had the noble intention of manufacturing replacement chipsets for Lexmark cartridges.

If SCC had done EXACTLY the same thing because their interest lie in accessing the copyrighted material for its own sake, the 6th circut would probably have ruled differently.

I have little, if any, sympathy for the rationale that noble intentions justify the violation of law.

To my engineer's logic, actions, and not intentions, are what should trigger violations of the law.

Regards,

eric stasik