Philips’ PC, TV Import Ban Would Decimate HDCP Market, MPA Warns ITC

Philips’ requested import ban would exclude “a wide range of digital video-capable electronics,” including tablets, computers and smart TVs, that incorporate High-bandwidth Digital Content Protection, said MPA. HDCP is the technology “copyright owners depend on to protect audiovisual content at a critical stage of its distribution -- in a user’s home source device after it has been decrypted but before it is displayed on a video display device,” it said. Otherwise, unencrypted copyrighted content can be “illegally misappropriated with a few clicks,” the association said. No alternatives exist in the market “that protect content at this critical stage of its distribution,” it said.

Without HDCP, the U.S. content industry would face “even more detrimental economic consequences from rampant piracy” that costs creators at least $29 billion annually in revenue losses, said MPA. “Any remedial order preventing the use of HDCP, without viable alternatives, would thus interfere with Congress’ long-standing policies” under Chapter 12 of the Digital Millennium Copyright Act, decreeing circumvention of content protection systems a crime, it said.

The accused PCs and smart TVs with HDCP “are widely used in the U.S. and globally to provide secure delivery of entertainment, web-browsing, streaming video, and gaming,” said MPA. Once the content is decrypted, it becomes “highly vulnerable to unauthorized use in the absence of content security technology,” it said. “HDCP protects content flowing from a streaming device, game console, Blu-ray player, or set-top box on an HDMI cable to a television display. Billions of devices implement HDCP, which must be implemented in both a user’s source device and video display device to function properly.”

Contrary to Philips’ assertions that banning the accused goods would raise no public interest alarms, excluding the products that incorporate HDCP “will directly hinder copyright owners’ ability to protect against piracy,” said MPA. The ITC “must consider whether a private dispute” between Philips and the proposed respondents “provides a basis for remedial orders limiting every copyright owner’s ability to protect against unauthorized use or piracy.” MPA disagrees with Philips that authorizing an ALJ to open a public interest inquiry would be an unnecessary waste of resources. Philips didn’t respond to questions.

Philips’ Sept. 18 complaint conceded that piracy “is a wide-spread problem, with pirate sites trafficking in infringing copies and streams, often supported by advertising and malware,” said MPA. “The requested relief will only compound this problem by undermining the security of legitimate distribution channels and making copyright infringement more difficult to combat.” Excluding huge swaths of HDCP-enabled goods “would harm U.S. consumers’ access to secure devices to view high-quality, digital content from legitimate sources,” it said.

MPA fears the result will be to give consumers “incentives to transition away from lawful HDCP-protected sources to infringing sources,” it said. “Disabling HDCP technologies would flood the market with devices that do not support content playback.” That would frustrate consumers, “creating unnatural market pressure on service and content providers to distribute content without these protections or to significantly limit the ability of U.S. consumers to view their content,” it said. “In the interim, exclusion would also deny consumer access to some of the MPA members’ content because members rely on HDCP to deliver some of their most valuable content to consumers.”