Software, Computer and Music Companies Reach Agreement on Digital Copyright Issues

January 14, 2003. Three industry groups, the Recording Industry Association of America (RIAA), the Business Software Alliance (BSA), and the Computer Systems Policy Project (CSPP), reached an agreement regarding policies that they will advocate in the 108th Congress regarding digital copyright issues.

The agreement is compromise and truce between industries that previously advocated conflicting policies. One of the key provisions is that "Technical protection measures dictated by the government ... are not practical". This is a retreat by the music industry. Also, the movie industry is not a party to this agreement.

Another key provision is that "Legislation should not limit the use or effectiveness" of "unilateral technical protection measures that limit unauthorized access, copying or redistribution of products". Another key provision is support for "technical measures to limit illegal distribution of copyrighted works", subject to certain limitations.

The agreement also has only a two year term. It applies only to the 108th Congress, which began this month. These groups are free to diverge after that.

Parties to the Agreement. The agreement includes three of the largest industry sectors involved in the debate over copyright and digital content. However, many other affected industry sectors are not a party to this agreement, including consumer electronics producers, telecommunications providers, ISPs, broadcasters, movie companies, cable companies, or book, newspaper or magazine publishers. Also, interested non-commercial sectors, such as libraries, universities, and educators, are not a party to the agreement.

The member companies of the BSA include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, Cisco Systems, CNC/Mastercam, Dell, Entrust, HP, IBM, Intel, Internet Security Systems, Intuit, Macromedia, Microsoft, Network Associates, Novell, PeopleSoft, SeeBeyond, Sybase, and Symantec.

The member companies of the CSPP include Dell, Intel, HP, Motorola, NCR, IBM, EMC, and Unisys. The member companies of the RIAA include BMG, EMI Recorded Music, Sony Music Entertainment, Universal Music Group, and Warner Music Group.

Excerpts From Statement. The RIAA, BSA, and CSPP released a document that states the terms of the agreement. It states, in part:

"The undersigned organizations have therefore agreed upon a core set of principles that will govern our activities in the public and policy arenas during the 108th Congress. These principles are:"

"How companies satisfy consumer expectations is a business decision that should be driven by the dynamics of the marketplace, and should not be legislated or regulated."

"Technology and record companies support private and governmental enforcement actions against infringers."

"Technology and record companies have collaborated to develop, are using, and support the use of unilateral technical protection measures that limit unauthorized access, copying or redistribution of products without government-imposed requirements for the incorporation of specific functionality in a computer or other device. Legislation should not limit the use or effectiveness of such measures. Technology and record companies agree that product labeling should endeavor to clearly inform consumers of the playability of content on devices they might own or use."

"Technology and record companies support technical measures to limit illegal distribution of copyrighted works, subject to requirements that the measures be designed to be reasonable, are not destructive to networks, individual users’ data or equipment, and do not violate individuals’ legal rights to privacy or similar legally protected interests of individuals."

"Technology and record companies believe that technical protection measures dictated by the government (legislation or regulations mandating how these technologies should be designed, function and deployed, and what devices must do to respond to them) are not practical. The imposition of technical mandates is not the best way to serve the long-term interests of record companies, technology companies, and consumers. Technology can play an important role in providing safeguards against theft and piracy. The role of government, if needed at all, should be limited to enforcing compliance with voluntarily developed functional specifications reflecting consensus among affected interests. If government pursues the imposition of technical mandates, technology and record companies may act to ensure such rules neither prejudice nor ignore their interests."

Comments by the Parties. Ken Kay, Executive Director of CSPP, stated in a release that "This agreement represents a sea change in the debate over protecting digital content ... These principles ensure the future of the digital age for consumers and should serve as the blueprint for collaboration on piracy issues between the content and technology industries."

Robert Holleyman, P/CEO of the BSA, said in the same release that "This is a landmark agreement because it shows that a broad cross-section of companies have come to the conclusion that government mandated technology protection measures simply won't work. The technology industry -- more than anyone -- knows this. And today's agreement shows that the companies that are hard hit by Internet piracy understand this."

Hilary Rosen, Ch/CEO of the RIAA, said, "This agreement keeps RIAA's focus on the tasks at hand and minimizes the distracting public rhetoric and needless legislative battles. It follows what I have always believed -- that our industries need to work together for the consumer to benefit and for our respective businesses to grow."

House CIIP Subcommittee. Several members of the House Judiciary Committee's Subcommittee on Courts, Internet and Intellectual Property Subcommittee (CIIP) commented on the agreement. This Subcommittee will have primary jurisdiction in the House over most bills pertaining to subject matter of this agreement.

Rep. Zoe Lofgren (D-CA), who represents a Silicon Valley district, said in a release that "In their statement, the recording industry seems to have recognized that shortsighted technological mandates called for by the Hollings bill are now dead. However, it also appears that the parties to the agreement did not involve consumer or fair use advocates. Without providing for the legal rights of consumers any such agreement falls short and omits an essential concerned group -- the consumers themselves."

Rep. Lofgren introduced the Digital Choice and Freedom Act of 2002 late in the 107th Congress. It would broadly expand the rights of persons who lawfully acquire digital copies of copyrighted works, while diminishing the rights of copyright holders. The bill does five things. First, the bill adds a reference to "analog or digital transmissions" to § 107 (the fair use section) of the Copyright Act. Second, the bill creates a new § 123 in the Copyright Act that limits the basic exclusive rights of § 106. This new section allows copying of lawfully obtained copies for storage, or for use on a preferred digital media device. Third, the bill limits the enforceability of non-negotiable license terms. Fourth, the bill expands the § 109 right of sale to digital works. Fifth, the bill limits the anti circumvention provisions of the DMCA. See, story titled "Rep. Lofgren Introduces Digital Fair Use Bill", October 2, 2002.

Rep. Howard Berman (D-CA) stated in a release that "It's a very good sign that the recording industry and elements of the technology sector have come together to release joint policy principles for the 108th Congress ... I have long noted that copyright and technology creators have a symbiotic relationship, and have lamented the growing rift between the two communities. It is only natural that the RIAA, BSA, and CSPP would recognize that their shared interests outweigh any divisions. I hope the rest of the creative and technological communities get on board with a unifying message, and thus we can ‘tone-down’ the divisive rhetoric that has otherwise predominated many copyright and technology debates."

Rep. Berman (at right) was the ranking Democrat on the CIIP Subcommittee in the 107th Congress. He represents a Southern California district which is home to many people who work in the music industry.

On July 25, 2002, Rep. Berman introduced HR 5211 (107th), a bill to legalize self help technologies to disable peer to peer (P2P) piracy. See also, stories titled "Rep. Berman Introduces Bill to Legalize Self Help Technologies to Disable P2P Piracy" and "News Analysis: The Berman Bill", in TLJ Daily E-Mail Alert No. 478, July 26, 2002.

The industry agreement just announced appears to offer qualified support for Rep. Berman's proposal. The agreement supports "technical measures to limit illegal distribution of copyrighted works, subject to requirements that the measures be designed to be reasonable, are not destructive to networks, individual users' data or equipment, and do not violate individuals' legal rights to privacy or similar legally protected interests of individuals."

Rep. Bob Goodlatte (R-VA) said in a release that "Today's announcement by RIAA, BSA and CSPP is significant in that it recognizes that technology companies and content providers need one another. Technology is only as good as the content supplied by it and content providers need the technology to access new markets. In collaborating and acknowledging that they have a common interest, which is to best serve the consumer, technology companies and content providers will make greater strides in combating rampant digital copyright piracy."

Rep. Rick Boucher (D-VA) (at right) said in a release that "The agreement ... by the Recording Industry Association of America, the Business Software Alliance, and the Computer Systems Policy Project does not in any way diminish the need for or the prospects for the passage of H.R. 107, the Digital Media Consumers' Rights Act of 2003. Intel, the only supporter of HR 107 which is part of an organization participating in the agreement, has reaffirmed its strong support for the passage of H.R. 107 and has indicated that the agreed-upon statement of principles is not inconsistent with strong support for the enactment of H.R. 107 and the affirmance of fair use rights for the purchasers of digital media."

He continued that "The absence of organizations which are critical to the issues surrounding the fair use debate must be considered when characterizing the significance of this agreement. For example, the Motion Picture Association of America remains the moving party in support of technology mandates. The Consumer Electronics Association and other technology companies such as Sun Microsystems, Gateway and Verizon, are also not part of the agreement and these entities consistently have been in the forefront of promoting fair use rights for digital consumers."

Rep. Boucher is perhaps the most adamant advocate of fair use rights, and harshest critic of the DMCA's anti-circumvention provisions, on the CIIP Subcommittee. On January 7, 2003, Rep. Boucher introduced HR 107 [10 pages in PDF], the "Digital Media Consumers' Rights Act of 2003". This is essentially the same bill as HR 5544 (107th), a bill by the same title that he introduced late in the 107th Congress. See, TLJ story titled "Reps. Boucher and Doolittle Introduce Digital Media Consumer Rights Act", October 3, 2002. See, also story titled "Reps. Boucher and Doolittle Introduce Digital Fair Use Bill", in TLJ Daily E-Mail Alert No. 582, January 14, 2003.

The bill would do several things. First, it would require that certain information be placed on the labels of music discs, and that a violation would constitute an unfair or deceptive trade practice within the meaning of the Federal Trade Commission Act. The BSA/CSPP/RIAA appears to have conceded ground on this issue. The agreement states that "Technology and record companies agree that product labeling should endeavor to clearly inform consumers of the playability of content on devices they might own or use."

Second, and more importantly, HR 107 would roll back the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). Specifically, it would create fair use exceptions to the bans on circumvention of technological measures to protect copyrighted works. It would also provide an exception for scientific research into technological protection measures. The industry agreement opposes these proposals.

Rep. John Conyers (D-MI), the ranking Democrat on the House Judiciary Committee, stated in a release that "It is long past time for a solution to the problem of Internet shoplifting, and I commend the content and high-tech industries for trying to work out the digital piracy problem through marketplace negotiations. For too long, too many artists and creators have had the fruits of their labor stolen over the Internet. Rampant piracy is threatening the financial viability of our recording and movie industries, and will no doubt continue as a critical priority for Congress. My colleagues and I will be monitoring these negotiations very closely, and I am prepared to press for legislative action should the negotiations break down."

Senate. Sen. Patrick Leahy (D-VT), the soon to be ranking Democrat on the Senate Judiciary Committee, stated in a release that "The success of the music industry and of computer software and hardware firms stems from the same source, their intellectual property. They need to work together, not at cross-purposes. Joining forces is good news for both industries. This new alliance can be constructive and productive. It can help find effective solutions, and it can improve enforcement to protect intellectual property and to combat piracy.”

Back on March 21, 2002, Sen. Ernest Hollings (D-SC) (at right) introduced S 2048 (107th), the Consumer Broadband and Digital Television Promotion Act. The bill would require software and electronic equipment makers to build copy protection technology into their products. It has long been opposed by technology companies, but supported by content companies. See, story titled "Sen. Hollings Introduces Copy Protection Bill" in TLJ Daily E-Mail Alert No. 394, March 23, 2002.

Last March RIAA Ch/CEO Hillary Rosen praised Sen. Hollings for introducing the bill. Now, her group has agreed that "Technology and record companies believe that technical protection measures dictated by the government (legislation or regulations mandating how these technologies should be designed, function and deployed, and what devices must do to respond to them) are not practical. The imposition of technical mandates is not the best way to serve the long-term interests of record companies ..." (Parentheses in original.)