Anticircumvention Exemptions Sought from Copyright Office

Mobile phone resellers won the unlocking exemption in the office’s 2006 rulemaking (WID Nov 28/06 p2), but exemptions expire in three years unless parties can justify renewal. ReCellular, Flipswap and the Colorado-based Wireless Alliance, which recycle phones for resale, requested the same exemption this time but asked for it to apply “regardless of commercial motive,” to respond to court rulings against resellers since 2006.

Demand for unlocking rose with the release of the iPhone exclusively through AT&T in the U.S., after being popular first among business travelers who wanted to use handsets abroad, the filing said. Carriers don’t have a business reason to oppose unlocking, since their customers sign term contracts with early termination fees that guarantee any device subsidy will be covered, it said. Renewing and expanding the unlocking exemption would be in line with the FCC’s pressure against early-termination fees and state legal actions against carriers over phone locking, the filing said.

Each year, U.S. users throw away more than 150 million mobile phones, which by some estimates create 65,000 tons of “toxic trash,” the filing said. ReCellular finds new uses, mostly resale abroad, for more than 60 percent of the 75,000 phones it collects weekly. Without the exemption, several million more phones could go to landfills, the filing said.

The resellers are especially worried about successful litigation by TracFone, a prepaid wireless provider, since the exemption went into effect. Federal courts in Florida have ruled that the “sole” purpose of unlocking a phone must be lawfully connecting it to a network, and courts in Florida and Texas have awarded damages to TracFone based on violation of section 1201 of the Copyright Act, the companies said. TracFone could bring claims against bulk resellers -- as opposed to companies that recycle and resell old phones -- other than under section 1201, the filing said: “Given the disparity in resources between individual customers and small recyclers … and the multi-billion dollar telecommunications carriers … even a low level of legal uncertainty would have a substantial chilling effect on unlocking activities.”

A New Approach to Fair Use: Case Law Optional

In its filing for exemptions for jailbreaking and DVD compilations, the Electronic Frontier Foundation asked the Copyright Office to set exemptions even when there’s no case law directly in support. “Because Congress has left fair use for the courts to develop on a case-by-case basis, there are always many activities on which the courts have not yet passed.” The office will actually help the judicial process by giving courts a chance to review circumventions approved by the office, the filing said. By making “best guesses” on what a court may find infringing, the office may usurp the judiciary by preventing defendants from raising the fair-use argument against a section 1201 claim.

Jailbreaking involves no copyright interest, the group said. Apple requires a 30 percent cut from independent software developers who want to sell applications for the iPhone, which is purely “a business model decision,” the filing said. Apple shields itself from competition in “critical areas” by not allowing any third-party applications that offer similar functionality to the iPhone’s own applications. The only way to run non-native applications on the iPhone is decrypting and modifying the firmware, which Apple is likely to say violates section 1201, the filing said.

Users won’t necessarily violate their service agreements by jailbreaking phones, the group said: A user could simply add new software to an iPhone, not modify its existing programs. But even an “adaptation” of a phone’s existing software is legitimate under federal law, as long as the new use doesn’t “harm the interests of the copyright proprietor.” Modification likely counts as fair use in any case, because jailbreaking is a private, noncommercial use that’s likely to actually increase demand for devices such as the iPhone, the group said.

The explosion of “video remixes” on YouTube that transform the underlying clips shows the need for an exemption for DVD compilations, the group said. Users who want to respect the law must put up with the lower video quality that results from copying DVDs without cracking their CSS protection, such as by using the analog hole, the filing said. Everyone else simply uses DVD rippers that crack CSS - - a weak protection technology that’s easy to circumvent -- and imperil users, the group said. The “vidding” community, which pairs music with video clips for commentary, heavily relies on direct ripping of DVDs, and doesn’t understand the legal distinctions between ripping and, say, the safer but more expensive process of screen-capture, the group said. It’s especially counterintuitive for users that it may be less perilous to simply download an illegally posted video through BitTorrent, it said.

Copyright owners can’t show that remixers in general are harming the market for the original content -- they should have to go to court to knock down a fair-use claim, the filing said. The practice of some media companies sending thousands of DMCA takedown notices at a time to Web hosts often means that some remix creators are “mistakenly caught in the takedown notice driftnet” even when their work is clearly fair use, the group said.