Does Congress Mean to Enforce Particular Business Models with Copyright Law?

At a hearing on unlocking phones, some suggest that Congress added laws against circumventing access controls not just to fight piracy, but in order to protect particular business models. Businesses use this argument to justify using copyright law to criminalize activities that don't actually infringe copyright.


Up until last year, unlocking a cell phone so that it could be used with a different carrier was perfectly legal. That changed when the Librarian of Congress decided no longer to include it in a list of exceptions to the Digital Millennium Copyright Act (DMCA), which forbids the circumvention of technology that controls access to copyrighted works. The Librarian's decision has sparked a great deal of controversy, and lead to several proposed bills that would once again make it legal to unlock cell phones. In a hearing before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet last Thursday, Congress heard testimony about one of these bills, and about the practice of unlocking phones.

Subcommittee Vice Chairman Tom Marino began the hearing by framing the considerations on each side in terms of their effect on the market and existing business models, pitting the promise of a more competitive marketplace that phone unlocking allows against the ability of carriers to recover the cost of subsidizing phones.

The focus is telling, because this was the primary positive argument presented for criminalizing the unlocking of cell phones – to protect a particular existing business model. Notably absent was the claim that unlocking cell phones in any way facilitated copyright infringement. 

Representative Zoe Lofgren commented on this, stating that, “It's not Congress' role to tell people the business model they should use,” and that using criminal law to enforce a private contract is “just a misuse of the law.”

One of the witnesses, however, had a very different tone. Stephen Metalitz, an attorney who has regularly represented large copyright holders on DMCA issues, claimed that Congress had intended not only to fight piracy, but to protect specific business models when it enacted the DMCA, and he cited the business models that have emerged since the DMCA was enacted. (Check out the 1:42-1:47 mark of the full hearing video)

Is he right? Was the DMCA drafted in order to expand the ability of businesses to use criminal law to protect their business models?

The answer is no. Section 1201, the anti-circumvention portion of the DMCA, specifically states that it is meant to have no effect on rights, limitations, or defenses to copyright infringement, including fair use. (See Section 1201(c) available here

What's more, the standard the Copyright Office uses in deciding which activities should be exempt is a simple two-part test:

  1. Does the activity infringe copyright, and
  2. Is the activity adversely affected by the DMCA?

If the process for deciding on exceptions were perfectly effective, every activity that didn't infringe copyright but that was threatened by the DMCA would be exempt. This legal design shows no intent by Congress to outlaw activities that would otherwise be non-infringing.

Unfortunately, businesses don't want you to unlock phones without their permission, and they can use the threat of prosecution under the DMCA to enforce rights they don't have. The process for deciding on exception is complicated, and each activity is assumed to be illegal unless someone can compile sufficient evidence to prove that it shouldn't be. Even activities that have previously been exempted, such as cell phone unlocking, have to be re-approved every three years de novo (meaning it is, once again, assumed to be illegal until proven otherwise).

Inevitably, that means that many non-infringing activities won't be exempt, simply for the lack of resources needed to prove that they should be. Moreover, the uncertainty of a de novo triennial review may prevent programmers and other innovators from creating new goods and services out of fear that their services may be outlawed by the next review.

What Metalitz is doing is seizing upon flaws in the application of the law to support the idea that Congress intended to create and enforce the specific business models that have emerged since the law was passed.

Of course, as Representative Lofgren claimed, it's inappropriate for Congress to try to enforce specific business models, and the only way to permanently protect non-infringing activities such as cell phone unlocking is by reforming Section 1201.

Image by flickr user izqrdo.

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