The Consumer Project on Technology
The Consumer Project on Technology (CPTech) is one of the organisations that deal with DRM issues globally. CPTech, a Washington-based non-profit organisation, focuses among others on issues such as intellectual property rights, electronic commerce and competition policy. CPTech operates globally. Accredited at WIPO, the Consumer Project on Technology is actively involved in IP legislatory processes at the international level, including the negotiations about the WIPO Broadcaster Treaty and the establishment of a Development Agenda for WIPO. CPTech is also a driving force behind the Transatlantic Consumer Dialogue (TACD).

CPTech's comments on the INDICARE State of the Art Report (SOAR)
Consumer concerns in Europe have been adequately highlighted in the SOAR and CPTech supports the conclusion of Chapter 3 on consumer concerns (cf. Helberger et al. 2004, pp. 19-43). The INDICARE report demonstrates that interests and concerns of consumers are insufficiently considered in the context of DRM-protected digital content. We would like to see, however, more considerations for consumer concerns internationally and more specifically for the weakest consumers such as consumers in developing countries. Also, an overview of international aspects of DRM and the potential impact of DRMs technologies on developing countries would be useful.

The following paragraphs will pinpoint some pressing issues in this context, paying particular attention to the matter of DRM and developing countries, but also jurisdiction issues and the role of governments and international organisations.

CPTech's opinion on pressing issues
DRM – an international discussion
DRM is being discussed in various international fora from industry led “dialogues” to intergovernmental bodies. Examples are WIPO, but also the American National Standards Institute (ANSI) the International Telecommunications Union, ITU-R Working Party 6M. Some organisations active in this field are, apart from CPTech, the Electronic Frontier Foundation (www.eff.org), the Union for the Public Domain (www.public-domain.org), the Open Knowledge Forum (www.okfn.org), IP Justice (www.ipjustice.org), Alternative Law Forum (Bangalore) (www.altlawforum.org) and the Canadian Internet Policy & Public Interest Clinic. European and US-based consumer groups such as the members of the TransAtlantic Consumer Dialogue (TACD.org) are also discussing DRMs and putting forward their concerns.

DRM – uncertainties and concerns of consumers at the international level
Consumers have expectations about how they are able to access and use content whether the content is local or global. Consumer expectations are based on practices, on how they acquire content with or without authorization (such as what has been possible so far on the Internet). Consumers sometimes feel entitled to make personal copies but often concede that some form of payment must be made. While these expectations are often shaped by the legal framework in which consumers reside, increasingly DRM technologies are limiting or excluding consumers' rights where there is no legal requirement to do so. Technologies that restrict access and use are not welcomed by consumers locally and internationally. Since many internet transactions of information goods are cross-border, it is necessary to 1) clarify existing rules and 2) examine their impact on the dissemination of information goods and innovation.

Public domain materials are a good example of documents that for most consumers are available without requiring any authorization (at least in some jurisdictions like the US). Consumers/users are not certain about the legal status of DRMs that might be used to deliver public domain materials. In some jurisdictions, it is lawful to circumvent DRMs that lock content not subject to copyright and since there are no uniform positions by rights holders or DRM providers on this issue, it creates uncertainty for consumers.

Another example is the issue of exceptions and limitations to anti-circumvention provisions: there is no harmonization among the exceptions or limitations. Consumers in different countries have different legal abilities to access and use content. Therefore a large class of users (consumers, educators, librarians, visually impaired people etc) have to accept “uncertainty” and in some cases confusing and contradictory rules to accommodate the requirements of right holders or DRM providers. If DRMs are applied indiscriminately at the international level or in a future broadcasting treaty, consumers will not only lose some of the current freedoms of access and use of content they currently enjoy, but will also experience further restrictions on the scope of limitations and exceptions. Furthermore, in the case of abuse of DRM technologies, consumers do not have access to international legal mechanisms for recourse.

The use of DRMs also raises privacy issues that seem difficult to solve at the national level. The technologies that facilitate the gathering of consumers' personal information by rights holders and DRM providers are difficult to monitor outside of one's own jurisdiction. In some jurisdictions but not others, consumers are permitted to circumvent technologies to prevent collection or dissemination of personal data.

DRM and developing countries
Regarding specific threats to developing country consumers, the Canadian Internet Policy and Public Interest Clinic (CIPPIC) paper on TPMs and developing countries says it best: “It is no secret that DRM and anti-circumvention laws have proved dangerous to the developed world. These harms are well-documented in Canada, the United States and elsewhere” (CIPPIC 2005). DRM is dangerous to developing nations for these same reasons.

However, there are also reasons why DRM is even more dangerous to developing nations. By releasing content using DRM, foreign rights-holders may attempt to trump local copyright law and exceptions through unfair contract terms. In other words, because DRM permits consumers to access and play content pursuant to automatically-enforced license terms, contract law governs the relationship, not copyright law. Foreign rights-holders thereby bypass developing nations’ copyright laws. By locking-up content in DRM, foreign rights-holders will prevent people in developing nations from accessing and using copyright works in ways that those nations’ laws may allow, even for free. DRM may also prevent legal re-sale of copyright protected goods, particularly through the use of region-coding which has never proved positive for developing regions.

Further, to the extent that, like Canada and unlike the United States, developing nations are net importers of cultural products protected by copyright, DRM and anti-circumvention laws will aggravate the cultural deficit that may already exist in those countries. DRM and stronger copyright laws will have a net negative cultural and economic impact in developing nations because royalty payments to foreign rights-holders, particularly those in the United States, may increase as a result.

Finally, DRM and anti-circumvention laws could have a significant negative effect on the innovation agendas of developing nations. Developing nations depend on a technological and legal environment that fosters innovation. The American experience with DRM has shown that copyright owners inappropriately use DRM technology and anti-circumvention laws to stifle competition and create artificial monopolies. These inappropriate uses of technology and law favor bigger, established market players and artificially increase the market risk faced by smaller companies and new entrants to the markets.

Jurisdiction issues cross-border
DRMs are used to protect and deliver content on a cross-border basis. There are many legal questions that have not been answered and that need to be answered before DRMs become the international norm for protecting content.

For example: which jurisdiction and what law applies to the protection of the DRM and the content in the context of a cross-border dispute? Which country's anti-circumvention law applies to the protection or the circumvention of the DRM? The country of origin or destination? Which law applies to the use of the content protected by the DRM? Which national law would apply to the agreement regarding the delivery of the content via the DRM?

The country's law and jurisdiction may apply for acts of circumvention and for distribution (but personal jurisdiction is difficult to get if it's a foreign distributor). For online access and use, international principles are still evolving (see the Hague Project).

The question of jurisdiction is also raised in contracts. To date, there is no international agreement on which law should apply if there is no agreement between the parties of the contract. In the EU, (the Ecommerce directive) it's a “country of origin rule”. In the US, each State has a choice of law principles that vary.

Again, consumers/users have no clear indication of where they stand legally which depends on where they are, where the content they want to access or use is... and how it is delivered.

In the US, we have seen some of the impact of this lack of clarity on makers and distributors of circumvention tools. For instance, non US cryptographers and security researchers have refused to post details of vulnerabilities they've found in security technologies out of fear that they would be breaking the law in the US, and might be arrested if they visited. For example, although Dmitry Sklyarov's computer program was legal in Russia, where he wrote it, according to the US Government, it was an illegal circumvention tool under US law.

Role of governments and international organizations
Right holders and DRM providers strongly believe that governments should not be involved in setting standards (for interoperability for example). However, they ask governments to ensure compliance with their private solutions and especially international solutions (the WIPO internet treaties for example were created to help industries threatened by piracy). Governments should also consider how they could cooperate at WIPO or any other international body such as UNESCO or ITU to protect “content and technologies” and “access and use”.

DRM and anti-circumvention technologies have had negative impacts such as chilling academic research, stifling of innovation and increased anti-competitive and monopolistic practices. Moreover, libraries and educational institutions have found it more and more difficult to provide their services. Consumers have less choice, face increased costs for consumer goods and have expressed concerns for their personal use rights as well as privacy protection.

Today WIPO and other international bodies are examining DRMs and providing issue papers or requesting comments. For WIPO's credibility as a United Nations' agency, it is important to promote an implementation of the internet treaties that would be consistent with the development agenda goals. DRMs are controversial in the developed world and are seen as a threat to development for many developing countries. The rights holders from the North can disregard local copyright law exceptions and limitations using unfair contract terms. They can limit access or curb second hand sale or legal re-sale of copyrighted goods (which is important for developing countries). In addition, since many developing countries are mostly importers of cultural and educational goods, the increase cost will slow development efforts to increase access to cultural and educational materials. The innovation agendas of many developing countries are threatened by the negative effects of abusive DRM technologies.

WIPO can and should play an important role in ensuring that DRMs are deployed in a way that is consistent with the promotion of the arts and sciences, taking into account the rights holders and users. A fundamental task for WIPO is to make available to the member states the different choices available for implementation of treaties and their effects and potential effects.

Another important task is to deal with the disparities among exceptions and limitations at the international level. An examination of the crisis created by DRM technologies for consumers, libraries, educators, visually impaired and rights holders is necessary before new treaties containing such provisions are drafted. The impact of DRM technologies on local production of informational, cultural and educational goods for developing countries should also be examined closely.

Finally, as it is the case in the US and the EU, where there is a periodical review of implementing legislation for the so-called Internet treaties, an international body such as WIPO and/or UNESCO must collect data and review the extent to which DRMs are used cross-border and their effects on legitimate uses of information goods and innovation worldwide.

Summing up
CPTech strongly endorses the comment in the INDICARE report "currently costs seem to outweigh the benefits of DRM from a consumer point of view. Many arguments in favour of DRM either do not bear a closer examination or need time and further development until they become valid" (p. 101).

International bodies such as WIPO and its member states must 1) look for global solutions that will not harm developed and developing country consumers/users of digital goods and services and 2) set preconditions of minimum rights for consumers before granting legal protection to DRMs. To this end, CPTech would like to see more attention being paid – in an international context – to the following issues:

(1) The ensuring of access to and use of content.
(2) Respecting privacy rights.
(3) Interoperability.
(4) Transparency.
(5) Security, and that DRM software should not hamper the normal functioning of consumers computing equipment.
(6) Measures against anti-competitive behaviour.
(7) Clearly defined and enforceable rights for consumers, such as the right to private copy, the right to fair commercial practices, the right to be informed and refunded for faulty products, the right to privacy and data protection and the right to free speech or the local equivalent.

An appropriate framework for dealing with these issues could be the Development Agenda, which was proposed by Argentina and Brazil and on which establishment the WIPO General Assembly agreed on October 4, 2004. The Agenda calls on WIPO to focus more on the needs of developing countries.

Bottom line
It is timely and necessary for WIPO and its member states to take concrete steps to ensure that DRM technologies do not trump national sovereignty and countries' social and economic goals.

Acknowledgements
I would like to thank Gwen Hinze, Cory Doctorow, Michelle Childs and David Fewer for their help.

Sources

About the author: Dr. Manon Ress is Director Information Society Projects at CPTech. Contact: manon.ress@cptech.org

Status: first posted 29/04/05; licensed under Creative Commons
URL: http://www.indicare.org/tiki-read_article.php?articleId=97