Anti-Circumvention and Copyright Protection: Universal Studios vs. Reimerdes

The 1998 enactment of the Digital Millennium Copyright Act (DMCA) represents the most comprehensive reform of the United States copyright law in more than 20 years.  The DMCA was designed to update U.S. copyright laws for the digital age in preparation for the ratification of the World Intellectual Property Organization (WIPO) treaties.

Key among the topics included in the DMCA are provisions concerning the circumvention of copyright protection systems, fair use in a digital environment and online service provider liability (including details on safe harbors and “notice and takedown” provisions).

The DMCA is divided into five titles.  Title 1, the “WIPO Copyright and Performances and Phonograms Treaties Implementation Act of 1998,” implements two WIPO treaties by making technical amendments to U.S. law and by adding a new Chapter 12 to the Copyright Act that addresses copyright protection and management systems.

Section 1201 prohibits users from circumventing a “technological measure that effectively controls access to a work protected under this title.”  Section 1201 also prevents the sale of devices that circumvent technological measures that control access to a work or that protect the rights of a copyright owner. 

Prohibited devices include devices that:

• are primarily designed or produced to circumvent
• have only a limited commercially significant purpose or use other than to circumvent, or
• are marketed for use in circumventing

Section 1201 divides technological measures into two categories:  measures that prevent unauthorized access to a copyrighted work and measures that prevent unauthorized copying of a copyrighted work.  Making or selling devices or services that are used to circumvent either category of technological measures are prohibited, as is the act of circumventing access control devices.  However, the act of circumventing copy control devices is not prohibited.  This distinction was intended to preserve the public’s ability to make fair use of copyrighted works.

New §1202 addresses copyright management information.  Section 1202(a) prohibits any person from knowingly and with the intent to infringe, providing false copyright management information, or distributing or importing for distribution false copyright management information.

Section 1202(b) bars:

• the intentional removal or alteration of copyright management information,
• the distribution or importation for distribution of copyright management information knowing same to have been removed or altered, or
• the distribution, importation for distribution, or public performance of works knowing that the copyright management information has been removed or altered.

The term “copyright information management” is defined as the title, copyright notice, name of the author, terms and conditions for use of the work, and other specified information. An exemption is provided for law enforcement, intelligence and other government activities.

Section 1203 specifies civil remedies.  These include injunctions, impoundment, damages, costs, attorney's fees at the court's discretion, and certain other remedial measures.  Damages are both actual damages and the violator’s profits, or statutory damages.  Damages may be trebled in cases where the defendant has violated §1201 or §1202 in the three-year period following a judgment against the defendant for a previous violation.

Section 1204 specifies criminal penalties.  Under that section, any person who violates §1201 or §1202 “willfully and for purposes of commercial advantage or private financial gain" is subject to a fine of up to $500,000 or five years in prison for the first offense and a fine of up to $1,000,000 or 10 years in prison for any subsequent offense.

The DMCA and DVDs

The primary case involving DMCA and the DVD format was Universal City Studios, Inc. v. Reimerdes.  Plaintiffs were eight major motion picture studios that distributed movies in DVD format.  DVD disks are subject to an industrywide copy protection scheme known as the Content Scramble Systems (CSS), an encryption-based security and authentication system that requires the use of appropriately configured hardware such as a DVD player to decrypt, unscramble and play back motion pictures on DVDs.  In September 1999, Jon Johansen, a 15-year-old Norwegian citizen reverse-engineered CSS and discovered its encryption algorithm.  He and two cohorts used this information to created DeCSS, a program capable of decrypting or “ripping” encrypted DVDs.  He then posted the executable code for DeCSS on his personal Web site.

Defendants Shawn Reimerdes and Eric Corley were involved with the operation of Web sites in the United States on which the DeCSS was posted.  Reimerdes was the technical contact for the Web site dvd-copy.com; Corley owned 2600 Magazine – The Hacker’s Quarterly and a related Web site on which the DeCSS program was made available.  The plaintiffs sued under Section 1201(a)(2) of the DCMA, which prohibits the unauthorized offering of products to circumvent technological measures that effectively control access to copyrighted works.  A preliminary injunction was issued in 2000.

Following the issuance of the preliminary injunction, the defendants removed DeCSS from their Web sites, but Corley and the 2600.com site continued to support links to other sites that offered DeCSS for download.  Defendants argued that their conduct fell within one of the DCMA safe harbor provisions and, further, was protected by the First Amendment.  The court disagreed.  With respect to the safe harbor provisions, the court held that the section only protected defendants from liability for copyright infringement.  Claims under Section 1201(a)(2) were directed to unlawful circumvention products, not copyright infringement.  Therefore, the court concluded, the safe harbor did not apply. 

The Court applied a similar analysis to defendant’s fair use argument, holding that the fair use defense did not apply to anticircumvention claims under §1201(a)(2).  The Court also rejected defendant’s First Amendment arguments.

The district court issued its findings of facts and conclusions of law in this case on August 17, 2000.  The judge held, among other things, that: (1) posting decryption software violated the DMCA provision prohibiting trafficking in technology that circumvented measures controlling access to copyrighted works; (2) posting links to other Web sites offering decryption software violated the DMCA; (3) DMCA antitracking provisions are content-neutral as applied to computer programs; (4) the DMCA did not violate the First Amendment as applied to defendants and decryption software; (5) plaintiffs were entitled to the injunction against defendants regarding the posting of decryption software or hyperlinking to other Web sites that made such software available.

This case was appealed to Second Circuit in 2001.  The ACLU and other interested third parties filed amicus briefs criticizing the district court’s rejection of the First Amendment arguments.  In contrast, the National Football League, ASCAP and the Screen Actors Guild filed amicus briefs urging the appeals court to uphold the ruling or risk rampant spreading of pirated works on the Internet.

On November 28, 2001, the U.S. Court of Appeals for the Second Circuit affirmed the district court order that had prohibited the publishing or linking of the DeCSS computer program.  The Second Circuit also upheld the constitutionality of the anticircumvention and antitrafficking provisions of the DMCA.  Considering constitutional issues of first impression, the appellate court agreed with the district court that computer code is speech and is entitled to protection under the First Amendment, but that such speech is limited because computer code contains both “nonspeech and speech elements, i.e., function and expressive elements.”  The court found that the DMCA is concerned only with the “nonspeech” element of computer code, and is therefore, content-neutral regulation.  On that basis, it passes constitutional muster because it services a substantial governmental interest unrelated to the suppression of free expression and does not “burden substantially more speech than is necessary to further that interest.”

On January 12, 2002, the defendant (2600 Magazine) requested that the full Second Circuit reconsider the earlier decision and on May 20, 2002, that request was denied.  Finally, on July 3, 2002, the Electronic Frontier Foundation, a not-for-profit organization that is involved with First Amendment rights on the Internet and that had been funding the lawsuit on behalf of the defendants pulled the plug.  Its press release stated that other cases in the future “. . . will provide a better foundation for the Supreme Court to act on the problems created by the Digital Millennium Copyright Act.”