Entertainment Software Assoc: We’re For Tech Neutral Copyright (Except When We’re Against It)

One of the most frequently cited concerns with Bill C-11’s digital lock rules is that they create a two-tier legal framework that is technologically non-neutral. Where content does not have a lock or is in non-digital form, the usual copyright balance applies including fair dealing and consumer exceptions. However, with Bill C-11, once there is a digital lock included with the content, the balance disappears since the fair dealing and consumer exceptions can be overriden. A description of the situation:

The Bill also favours digital lock business models for the sale and delivery of content  over unlocked means of dissemination. In the traditional model, copyright holders control the  exclusive right to reproduce content onto CDs or DVDs. Once an unlocked copy is created, rights holders cannot control the application of copyright exceptions such as fair dealing. But the Bill creates a different situation simply because a copy of digital content is delivered with a digital lock. This is an economically inefficient interpretation of an Act that is meant to fairly balance the interests of rights holders and users to further the interests of society as a whole.

While consumer groups have been making this case against technological non-neutral copyright for months (and Charlie Angus raised precisely this point in the House of Commons yesterday expressing concern about a “two-tier set of rights”), the above quote is a slightly modified version of arguments by the Entertainment Software Association of Canada, one of the lead proponents of the digital lock rules.

Next month, the Supreme Court of Canada is scheduled to a hear a case between the ESAC and SOCAN over whether downloading a video game is a “communication to the public” under Section 3(1)(f) of the Copyright Act of the music embedded in the game. The ESAC, which finds itself in the role of user of music in this case, argues it is not and expresses concern that to take the alternate approach would “create an extra layer of rights that only applies to the distribution of copies of works.”

The group’s factum to the court addresses the policy issues with a characterization nearly identical to the public concern over digital locks:

The Decision also favours traditional business models for the sale and delivery of content  over modern means of dissemination. In the traditional model, copyright holders control the  exclusive right to reproduce content onto CDs or DVDs. Once a physical copy is created, rights holders cannot control the delivery of such copies or charge fees for delivery of content by mail or through stores. But the Decision creates a different situation simply because a copy of digital content is delivered over the Internet as a download rather than in physical form. This is an economically inefficient interpretation of an Act that is meant to fairly balance the interests of rights holders and users to further the interests of society as a whole.

In other words, the ESAC supports a two-tier legal framework when it comes to imposing digital locks on its customers, but argues against a two-tier framework if it means its members face of the prospect of increased copyright payments. The answer in both cases is technology neutrality. The ESAC is right that copyright policy should not penalize users by virtue of the means of distribution of the content. Yet the same argument arises in the context of digital locks, where technological neutrality means ensuring that users are not penalized by the inclusion of a digital lock within the distribution of the content such that their rights are lost in the process.

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  1. James Gannon says:

    I would be in much better shape if I started every morning with a stretch like this.

  2. James Plotkin says:

    Great article. Thanks Prof. Geist.

  3. Pot calling the kettle black…

  4. Oh I don’t know. Seems pretty much on the money to me James.

    A stretch is what I’d call it when one uses the legal distinction between access control locks and copy control locks to argue that fair use is protected because legal restrictions only apply to copy control locks, without acknowledging that most of the time these are one and the same. Any distinction between the two is a legal fallacy.

    Amongst others.

    As such, I’d say you are a man in exceedingly good shape. 😉

  5. It’s Time To Revamp Copyright — A New Social Contract Is Needed
    It’s about time and for sooo many reasons. A ‘new deal’ – yeah, that’s the ticket.

    And we also need to have ‘carriers’ be only carriers.

  6. What’s this…an unintended implication?!?!?! This never happens with overly strict, poorly designed legislation. The DMCA proves that beyond any doubt.

    It’s a classic case of “Be careful what you wish for…you just might get it”. Groups like this go in all half cocked, without really understanding all the implications and now they’re going to get their proverbial a$$ bit by the very legislation they claim they need to stop people from “cheating at games”. LOL If C-11 passes unchanged, at least I’ll be able to laugh at ESAC.

  7. The law of unintended consequences …
    The media industry certainly tries to use (or abuse) the legislative field to their advantage but, in my opinion, in a manner that speaks to their annual stock holders report rather than to the long term viability of their businesses.

    Warnings from the often maligned ‘free culture’ of unintended consequences gets conveniently filed in the radical round bin. Perhaps some purview of recent history would be in order …

    “One final sobering example is the case of the Exxon Valdez oil spill in 1989. Afterward, many coastal states enacted laws placing unlimited liability on tanker operators. As a result, the Royal Dutch/Shell group, one of the world’s biggest oil companies, began hiring independent ships to deliver oil to the United States instead of using its own forty-six-tanker fleet. Oil specialists fretted that other reputable shippers would flee as well rather than face such unquantifiable risk, leaving the field to fly-by-night tanker operators with leaky ships and iffy insurance. Thus, the probability of spills probably increased and the likelihood of collecting damages probably decreased as a consequence of the new laws.”

  8. Two Tier Rights
    Surely by now we’re all well used to two-tier legal systems of all description.

  9. DRM cartel through daisy chains
    Hello Again,

    Had an idea I needed to share with you all. Very profitable.

    If we create a number of DRM service providers: and layer them over our media, we can add additional service charges and hidden fees. We can also fix prices and share personal information.

    -Industry Association of America

  10. George Geczy says:

    ESAC’s position on the digital lock (TPM) provisions of the various copyright bills really doesn’t make sense, and I wish they’d notice that they could a lot more good by easing up their stand and supporting circumventing TPM’s for legal uses. Publicly they’ve made examples of console “Mod chips” as circumvention devices that cost the industry money, but the amount of revenue lost by all mod chip owners combined is so small as to be a rounding error on the total video game sales figures. Gabe Newell, the head of the largest PC game distribution platform (steam) has publicly mused that piracy can be much better fought using quality products with quality consumer support than with restrictive DRM.

    The ESA does good work in many areas, but their focus on protecting DRM and preventing otherwise legal fair uses puts them out of touch with video game consumers and also with many Canadian video game developers like myself that understand that attacking our customers is not an effective strategy.

  11. One of my favorite musings on this topic is that of the game Bioshock by 2K software. Originally it had incredibly restrictive DRM that they claimed was unbreakable. Within hours of the game being released a crack surfaced on the Internet. Good thing too, the DRM mechanism was so buggy and caused so many issues with both the game AND Windows that it made it unplayable for many. The cracked version was actually stable and ran very well and it was reported upon and written about all over the industry news and countless blogs and forums on the Internet. In this case, I would argue the DRM and the incredibly bad reputation it garnered 2K cost them way in potential sales than it saved them in stopped piracy. I know I didn’t buy the game, and it was solely because of the DRM. I waited for a more open version to be released on Steam…and by then it was super cheap.

    They want DRM so they can try to kill second-hand sales. The right of first sale…yet another right C-11 potentially kills in the presence of a digital lock. They lose VASTLY more sales due to the second-hand trade than they do due to piracy…especially at the console level.

  12. @George Gaczy
    “ESAC’s position on the digital lock (TPM) provisions of the various copyright bills really doesn’t make sense”

    It makes sense if you look at it from the point of their “actual” objective, and that is to stem the second-hand sales market…a far larger threat to their business than piracy.

    Legal protection of digital locks will never stop piracy, but it could potentially take a lot of business away from business models relying on second-hand sales…such as EB.

  13. I still have a sympathetic sore groin
    from James Gannon’s comparison of Digital locks and speeding. James is a yoga master of copyright interpretation.

  14. “It’s just business”. Don’t look too much into it, it doesn’t need to make sense. It just has to be “in the best interest of the shareholders”.

  15. software
    This is a good article.

    Elite Art & Craft Factory

  16. Bwaahh haaa haaa! We’ve got you now!
    China no have digital lock rule, because China need engineers free to take American tech apart, figure out how it works, and then use knowledge to build new and better tech. Commercial research needs people to analyse existing machines, to understand how to take the next step of development. We are happy this will be illegal in Canada and the USA.

    Making reverse-engineering a crime will put your pathetic countries far behind our research. You will be unable to pool your knowledge, because it’s a crime to experiment on anything, and because you in big crazy patent wars with each other, and destroy any chance of new development.

    Canada and America stupid and self-destructive.
    China smart and practical.

    Bye-Bye, North American economy. Bye Bye.

    Hu Jintao

  17. Lockheed Martin says:

    Software maintenance — suckers!
    Sorry, suckers.
    The Lockheed Martin F35 includes software that is locked out from anyone updating it except Lockheed Martin. The US Armed Forces cannot update it, nor any foreign country’s armed forces; even if they need to and even if Lockheed gets into trouble and can or will no longer honour its maintenance commitments.
    Once the software proves buggy or obsolete, don’t try to upgrade the software yourself, or we’ll invoke your very own digital lock restrictions and make sure those responsible for trying to keep CAF aircraft flying will go to jail for a long time.

    In other words, you can’t make a move without us.

    The UK, however, was smart enough to retain “the ability to successfully operate, upgrade, employ, and maintain the Joint Strike Fighter such that the UK retains operational sovereignty over the aircraft, including , access to software source code. See:

    Sorry, Canada. No such luck for you. If you try to maintain it yourself, you go to prison under your own digital lock laws.