EFF Prepared Testimony at Copyright Office section 1201 rule-making hearings presented by EFF Staff Attorney, Gwen Hinze

May 14, Panel 3 - Sound recordings on copy-protected audio CDs

On behalf of the Electronic Frontier Foundation, I'd like to thank you for the opportunity to testify at today's hearing in support of the exemption proposed by EFF.

EFF has requested an exemption for sound recordings released on audio CDs that are protected by technological protection measures that malfunction, so as to prevent access on certain playback devices. The proposed exemption would allow consumers to play music that they have legitimately acquired, without fear of legal liability under section 1201. The exemption is effectively identical in scope to the second exemption that was granted by the Librarian in 2000 for literary works that are subject to access control measures that prevent access due to malfunction, damage or obsolescence.

The idiosyncratic and varying nature of the reported malfunctions of various copy-protected CDs - working on some PC's and not other Operating Systems - suggests that these copy-control technological protection measures were intended to prevent unauthorized reproduction, but were not designed to prevent playback of music. However, irrespective of the intent, the practical effect of these malfunctioning copy control measures has been to prevent consumers from accessing protected music. The inability to access or play the music is due to a technological protection measure failing to work in the way it was intended to work.

EFF is seeking a narrow exemption that would permit consumers to take the steps necessary to play music that they have legitimately purchased, on the consumer playback devices they own. This is clearly a noninfringing use. Playback is a private performance, and does not implicate any of the exclusive rights granted to copyright owners under section 106 of the Copyright statute. The proposed exemption is narrow. It is limited to restoring playability and would not authorize copying of affected music

In the Joint Reply Comments filed with the Copyright Office, the Recording Industry Association of America and the various other joint commenters have opposed this exemption on three main grounds.

First, they have argued that the proposed exemption is outside the scope of this rule-making process because the copy protection technology at issue is not a technological protection measure that effectively controls access to a work protected under title 17, for the purposes of section 1201(a)(1) and 1201(a)(3)(B) of the Copyright statute. EFF does not dispute this. As we noted in the comments filed in December 2002, based on what information we have about the nature and operation of these measures, it does not appear that they require application of information, a process or a treatment with the authority of a copyright owner to play, when they play. And when they don't play, it doesn't appear to be due to a failure to apply a particular process, information or treatment, that would correct the malfunction. The blocking of access here is due to the malfunctioning of these copy protection controls and it appears to be unintentional.

However, as demonstrated by the legal debate over the status of the Content Scramble System in relation to Digital Versatile Disks over the last 5 years, a technological protection measure can control both access to, and use or copying of, a copyrighted work. There is uncertainty within the legal community as to whether malfunctioning copy control technological protection measures that inadvertently prevent playback of CD content should be characterized as effective access control measures for the purposes of section 1201(a)(3)(B). The legal uncertainty is exacerbated by the lack of public information about how these technologies work.

In the meantime, however, consumers who find that they have purchased copy-protected CDs that do not play in their playback devices are left in a legal no-man's land. Whether or not a malfunctioning copy protection technological measure is deemed to fall within the technical definition of "effectively controlling access" in section 1201(a)(3)(B), the end result is exactly the same for consumers. Where the copy protection technology malfunctions, it often blocks access completely and consumers are not able to play music that they have lawfully acquired. However, given the doubt that surrounds the scope of the prohibition in section 1201(a)(1), consumer can not be sure whether they are breaking the law, and potentially putting themselves at risk of significant legal liability, if they try to circumvent the malfunctioning copy protection technology to make the CD playable.

If the Register were to clarify in its rule-making that malfunctioning copy controls are not access controls for the purposes of section 1201, then EFF agrees that the proposed exemption would not be required. However, in the absence of a clear statement about the scope of section 1201(a)(1), or an exemption, consumers have no guidance or predictability as to what behavior is lawful, when they try to make a common noninfringing use of music they've purchased.

There is, in addition, a consequent chilling effect on manufacturers and software vendors who might otherwise develop devices or software drivers for current drives, that would be capable of playing these non-redbook audio CDs. For instance, in the absence of a clear statement or an exemption, Apple may be less inclined to release a software update that would permit Mac users to play these types of disks on their computers' CD-ROM drive.

The second main argument made by opponents of this exemption is that EFF has not met its burden of proof of showing harm amounting to a "substantial adverse impact". In particular, the Joint Commenters claim that we have not provided evidence of the number of copy-protected CDs in circulation in the United States, and evidence as to the frequency of actual failures of these discs on particular types of devices.

I have several comments in response.

First, it is not at all clear what is necessary to meet the standard of proof to show "substantial adverse impact." However, EFF does not agree with the joint commenters' assertion that this requires us to produce exhaustive figures for the number of copy-protected CDs released in the United States, and the failure rate of that technology in particular devices. If the Copyright Register and Librarian of Congress were to endorse that as the standard required for "substantial adverse impact," we believe it would raise serious concerns about the equity of this proceeding and the ability of consumers to participate meaningfully in this process. It would certainly threaten to undermine Congress' intent to provide a fail-safe mechanism to protect consumers' noninfringing uses of copyrighted works.

First of all, consumers' experience of identifying a copy-protected CD is much like playing a game of Battleship. Since copy-protected CDs are often not labeled, consumers do not know whether any CD they purchase is copy-protected until they insert it into their computer CD-ROM drive, or car CD/MP3 stereo or DVD player, and then experience a malfunction. In the present exemption, the only parties in a position to obtain comprehensive information on the number of copy-protected CDs released in the United States are those opposing the exemption, including the RIAA and its member record labels. However, they have chosen not to disclose that information in response to the information that EFF has provided, even though it could presumably be used to prove that the exemption is unwarranted, if the number of copy protected CDs actually in circulation is "de minimis" as they have suggested.

It is also not possible to provide information as to the frequency and type of malfunction of these copy protection measures on particular types of playback devices. As the 48 consumer comments filed with the Copyright Office in this proceeding illustrate, the range of failures that users have experienced vary dramatically. In some cases people are able to play one particular song, of a small segment of it, or not play anything at all. In the case of some computer CD players, people experience a complete operating system crash. Given the variation amongst the different types of failure responses, and the fact that it seems to be a matter of operating system by operating system, drive by drive, it is very difficult to predict or quantitatively assess the frequency and types of failure.

Secondly and more importantly, EFF considers that the information currently on the record is sufficient to establish substantial adverse impact. At a qualitative level, there is a substantial adverse impact on the consumer. Consumers use' is noninfringing use of lawfully acquired material when copy-protection technology malfunctions, and they are entirely prevented from playing back something they have lawfully acquired. The nature of the harm experienced here is absolute, if there's no playback. It's not merely an inconvenience. The consumer receives nothing; no benefit for their bargain.

Qualitatively speaking, evidence on the record indicates that a number of copy-protected CDs have currently been released in the United States. EFF identified titles of four verified copy-protected CDs in our December 2002 comments. However, based on news reports and consumers' experiences, the actual number of affected titles may be much higher.

News reports indicate that covert trials of unlabeled copy-protected CDs have been taking place in the United States since 2001. My colleague Ren Bucholz is displaying a slide with excerpts from these news reports. In July 2001, Macrovision reportedly made a test release in the United States, including one title that had sold almost 100,000 units [1]. This followed a report in May 2001, which quoted Marc Tokayer, the CEO of Macrovision partner TTR Audio, as stating that Macrovision and a major or several major record labels had released copy-protected CDs in California. In February 2002, technology company Midbar - which is now owned by Macrovision - announced that it had released 10 million CDs in the United States and Europe. And last month, Macrovision announced its technology had been used on over 100 million CDs worldwide, including in the United States.

The record industry has officially acknowledged the existence of 2 copy-protected CDs in the US market. Yet we know from first-hand experience that this is incomplete. One of EFF's staffers purchased a CD by the group called "The Donnas" only to discover that it was copy-protected. That disk has not been acknowledged by Atlantic Records as being copy-protected, but if you look very closely, you can see a tiny logo at the bottom of the disk case, which appears to be a copy protection logo. It's on the packaging, not on the disk itself. The disk itself actually says that it will play on various computer formats, including Mac OS players. In fact, it wasn't able to be played at all on the Mac OS drive in question, which is why the EFF staffer worked out that it was copy-protected and found the logo.

This seems to match the experience of hundreds of consumers in online fora who have identified what appear to be copy-protected CDs - who have experienced and identified CDS that are not capable of playing on various devices. It is fair to assume from these experiences, and those of the 48 consumer commenters who filed comments in this proceeding, that the number of copy-protected CDs in the US market may be much higher than has been officially acknowledged by the record industry, and that the number of these disks will increase in the next 3 years.

Third, increasing volumes of copy-protecting releases will have a substantial and adverse impact on consumers' ability to make noninfringing uses of works within the next three years. First, record label and technology company statements indicate that there are a significant number of copy-protected CDs that will be released in the United States this year. Second, because of the move toward modern, multi-format disk players as primary playback devices, such as DVD/mp3/CD players and X- Box game consoles. Combined multi-format playback devices of these types have much more vulnerability to the current copy-protection technologies because the technologies appear to work by exploiting differences between audio CD players and these types of multi-format players, as discussed in the report that is cited in EFF's December 2002 comments, a research report by Princeton researcher John Alexander Halderman. And as our December comments point out there has been a distinct move by consumers to adopt multi-format devices such as combined DVD and MP3/ CD players. MSNBC reported last year that sales of stand- alone home CD players were down 48.1% in 2002.

Ren is showing a slide with excerpts from recent news reports about the expected influx of millions of copy-protected CDs into the US market in coming months. In late March 2003, news reports indicated that the BMG subsidiary, Arista Records, would be releasing SunnComm copy-protected CDs in the United States later this year. In November 2002, the LA Times quoted EMI Recorded Music vice president David Munns as saying that the 2002 holiday season would be the last without widespread use of copy-protection technology on new releases. And technology company SunnComm stated that it had already installed anti-copying gear in a Bertelsmann subsidiary's North Carolina CD manufacturing plant and that a sizeable proportion of this subsidiary's [Sonopress'] releases will be copy protected by the end of 2003.

The third main argument made by our opponents is that this exemption is premised on an incorrect assumption that consumers are entitled to play copy-protected music on any device capable of using CDs as a data storage format. On page 19 of the joint comments, our opponents argue that "Neither the Copyright Act nor the DMCA was ever intended to require, or to confer upon users a right of, complete compatibility among all devices in all media" . They then claim that the existence of playback devices that can play copy-protected music removes any need for this exemption.

I'd like to make several comments in response to that.

First, I'd like to emphasize that the nature of the exemption sought here is for the noninfringing use of playing lawfully acquired sound recordings. Private performance is not one of the exclusive rights granted to copyright owners under section 106 of the Copyright statute. Our opponents' argument about compatibility proceeds on the assumption that copyright owners are entitled to control playback of a copyrighted work on a user's player device. However, there is nothing in the legislative history of the DMCA that indicates that Congress intended to grant additional rights to copyright owners beyond those listed in section 106. EFF submits that any opposition to this exemption which is premised on copyright owners' claim to control rights beyond those granted in section 106 should be treated with caution.

Second, contrary to our opponents' claim, what is sought here, is not a right of compatibility amongst all devices in all media. Instead, the requested exemption would allow consumers to make a noninfringing use of media they've lawfully acquired on devices that they currently own, and that they would reasonably expect would be able to play that media, based on over 15 years of experience with the CD format. After all, consumers are putting what appear to be CDs into devices that previously have played audio CDs. They're not trying to put them into toasters.

It is certainly true that Congress did not intend to mandate manufacturers to design devices to detect and respond to technological protection measures that were implemented by copyright owners. That is reflected in section 1201( c)(3). However, nothing in the Congressional record indicates that Congress intended to grant copyright owners the right to control consumers' noninfringing private performances of lawfully acquired content, on devices they already own.

Finally, the existence of some players that can play these disks is not a sufficient argument for declining to grant this exemption. Consumers seeking to make noninfringing uses of works they've lawfully acquired should not be put to the expense of having to purchase an additional player to play protected music. As I previously noted, the stock of players which can actually play these types of disks is diminishing as consumers are moving towards more modern, multi-format players. Such as DVD/ MP3/ CD players and X-Box game consoles. Therefore, the existence of alternative players that consumers can currently purchase, but may not be able to easily acquire in three years' time, as these devices are phased out, does not protect consumers' ability to make noninfringing use of these works within the next three year period.

Finally, in considering the balance of harms involved in granting this exemption, I'd like to emphasize that the exemption does not increase the risk of widespread copyright infringement. First, the exemption is limited to noninfringing playback of protected music. Second, as section 1201(a)(1)(D) makes clear, any exemption granted by the Librarian of Congress extends only to noninfringing behavior. The exemption would allow consumers to take steps to restore playability, but would not authorize otherwise infringing reproduction. If any consumer were to step beyond the bounds of the exemption, and for instance, make an unauthorized reproduction or distribution of work on a protected music CD, copyright owners would continue to have the right to bring an action for infringement, and would continue to have the full set of rights currently available to them under Copyright law.

Thank you.