Business Strategies in Digital Rights Management Eric Baron University of Connecticut School of Law May 2007.

Business Strategies inDigital Rights Management

Eric BaronUniversity of Connecticut

School of Law

May 2007

E. Baron Business Strategies in DRM 2

Introduction to DRM Growth of Digital Content and Internet

– Perfect copies– Widespread distribution

WIPO Copyright Treaty of 1996– Article 11: Adequate protection against

circumvention of effective technical protection measures (TPMs)

– Article 12: Adequate remedies against alteration or removal of rights management information (RMI)

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U.S. – DMCA of 1998

17 U.S.C. §1201 – TPM – Proscribes circumvention

17 U.S.C. §1202 – CMI – Proscribes removal or alteration

17 U.S.C. §1203 – Private Right of Action 17 U.S.C. §1204 – Criminal Offense

• 5 years / $500K (first offense)

• 10 years / $1M (subsequent offenses)

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EU Copyright Directive

Each Member State to implement laws Article 6 – TPM

– Tools and acts of circumvention

Article 7 – RMI– Removal or alteration

Country Specific Differences– Varying exceptions– Labeling requirement (Germany)

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DRM Options Contract Based

– EULAs and Technology Licensing

Technology Based– TPM: Restrictions

• Basic Access Controls

• Rights Expression Language

• Secure Containers

– RMI/CMI: Identifiers• Watermarks

• Fingerprinting

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Access Restriction Example

Content locked at source Unlocked by user with proper credentials

Content

Internet

ID = 1234Description=------------------------------------------------------------------------------------------------------------------Rules =

User

Portable Device

Software "Player"

Remuneration

Superdistrib

utio

n

Content Provider

Content

Rules =Description=ID = 1234

EventEventEvent

Source: Cunard et al.,Current Developments in the Field of Digital Rights Management,WIPO SCCR 10/2 Rev, p 38 (2004).

Watermark Identifier Example

Source identifier– Added to digital content– Can be visible or encoded– Extracted by a monitoring / analysis application

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WatermarkEncoder

RenderingApplication

WatermarkDecoder

Watermark Data (File ID)

File File with WM

File ID

Distri-bution

Source: Cunard et al.,Current Developments in the Field of Digital Rights Management,WIPO SCCR 10/2 Rev, p 28 (2004).

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CMI: What’s really necessary?

US case law says:– © notice next to original images is not good

enough. Kelly v. Arriba Soft Corp.– A trademark does not qualify as CMI.

IQ Group Ltd. v. Weisner Publishers LLC.– Placing an author's name and copyright notice

electronically on a digital photo is sufficient. McClatchey v. Associated Press.

– BUT: Only District Court cases.

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Possible Identifier Regimes Levy System

– Levies paid by those who produce products that are enhanced adaptation of © works via file swapping systems.

Tax and Royalty System– Government tax ISP access, and tax paid to ©

holders based on access of works.

Digital Retailers Model– ISPs monitor and bill based on download of ©

works.

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RMI/CMI with User Identifier

Add user identifier to digital content upon purchase or access event.

Monitor peer-to-peer sites for unauthorized copies.

Watermark Data (User ID)

File File with WM

User

TransactionWatermarkEncoder

Distri-bution

Source: Cunard et al.,Current Developments in the Field of Digital Rights Management,WIPO SCCR 10/2 Rev, p 29 (2004).

DRM in Action

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E. Baron Business Strategies in DRM 12

DRM Criticisms

Not Fully Effective– Analog Hole– Protection schemes are broken

Component compatibility Privacy Creation of security loopholes

DRM Criticisms (cont.)

Fair Use / Exceptions Public access rights

– Physically impaired

Bootstrapping– TPM on products not traditionally covered by

©.

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Business Strategies

1. Select a preferred format of distribution.

2. Consider a blended approach of contract plus technology based DRM.

3. Using simple RMI/CMI may be good enough, especially for small businesses.

4. Consider identifiers instead of TPM.

5. Partner with an established company for packaged solutions, particularly for TPM.

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Business Strategies (cont.)

6. Consider a tiered TPM, RMI/CMI, and/or DRM-free approach.

7. For contract-based DRM, review potential enforceability issues in countries of distribution.

8. Examine potential patent infringement issues when creating “home grown” DRM solutions.

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Business Strategies (cont.)

9. Consider adding a user identifier to digital content upon purchase.

10. Avoid bootstrapping non-copyrightable works with TPMs.