The Tethering Game

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What is it about copyright that seduces companies into making really stupid decisions? Okay, to be fair, companies can make stupid decisions about tethering all by themselves, but the Digital Millenium Copyright Act is helping.

Printer makers, garage-door-opener companies, and electronics manufacturers are busy installing useless ?handshake? code as an interface between the replaceable, disposable product (ink cartridge, remote control, battery) and the more durable host device. Soon we will see automobile companies limit the replacement market for batteries, filters, and tires by installing useless code or contractual restrictions on those who lease.

By using computer code as an ?access control device,? they can invoke the power of the 1998 Digital Millennium Copyright Act to stifle competition from generic competitors.

The tethering of secondary goods within the extra-copyright industries is yet another piece of evidence that the DMCA is among the stupidest laws every passed. It is by all measures a complete failure that has retarded innovation and done nothing to protect copyright holders. And it has punished consumers.

Sure, locking your customers in to your replacement products can make a lot of money for your company. But is it really worth consumer anger over higher replacement prices and lack of choice? Plus, what's the consumer to do if the company goes out of business?

Also getting in on the tethering trend are coffee makers and mp3 players. The whole article is really worth a read. Thanks to Boing Boing for the link.

NEXT: I Guess CNN's in Trouble

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  1. Not just the DMCA, but all of copyright law in the US now is severely screwed.

    I am a candidate for US Senate from Indiana. CLICK HERE to see my position paper on copyright reform.

    In short, I challenge you to find another candidate for Congress this year from any party that is more pro-consumer and pro-public domain than me.

  2. Hanah-

    Although I like your post, knowing how things are on this forum it’s going to get a bunch of complaints. People will accuse you of favoring regulation, hating business, or not wanting the market to decide. Here’s how you remedy it:

    Mention that obviously private companies have or should have the right to do this. And that you are not advocating a coercive remedy. All you’re doing is complaining about something and passing on information to inform consumers who can then freely make their own decisions about whether or not to buy from companies that do this.

    That little excerpt from the Libertarian Catechism is necessary any time you want to criticize a private business on this forum*. Otherwise you’ll be branded anti-market.

    *Criticism of private business may be acceptable if the owner donates money to Democrats.

  3. Thoreau: I thought of that, but figured let ’em complain. The market will probably sort out this problem eventually, and it’s critically important that people are aware of what’s going on so they can make well-informed choices.

    Actually, though, I might support well-crafted legislation that would codify fair use, since the blurriness of the concept is causing a huge number of problems. Such a law could include the right to make third-party replacement and supplementary parts for machines.

    On some issues, such as copyright, I take the more “classical liberal” approach (government needs to set up a system in which freedom can prosper) rather than the “anarcho-libertarian” approach (government will just make it worse, keep them out of it).

  4. thoreau-
    Snarkiness aside, Hanah is actually decrying regulation and asking for greater freedom. Anyone who thinks that getting rid of the DMCA is “favoring regulation” is a fool.

  5. Mo-

    True, but she criticized a business practice. I was only being half snarky. The fact is that when a business practice gets criticized on this forum the critic is almost always told “Let the market decide.” You yourself responded a couple weeks ago to one of those posts by observing that markets work better when individuals freely exchange information about businesses.

  6. I had thought the point of her post was to point out how the ‘regulation’, in this case the DMCA, some bad law by the feds, is leading to the company actions by providing what is essentially cover for their anti-competitive business practices. They are then using some minor additional changes to move their products under that protection, which would seem to definitely be an example of legislation meddling in the market by incentivizing one sort of behavior.

  7. I’m confused on this as to why it falls under copyright and not patent. From what I know about patent (which isn’t very much) the term significantly less than copyright (thanks to the continued lobbying). If I patent a code or even a design such that no other maker can provide replacement parts, that restriction on third parties only lasts so long; if I copyright a code or design the restriction lasts a lot longer.

    If someone can clear up my muddled mind on this I would be grateful.

  8. This does point to a legitimate concern. It is in the interests of corporations to take advantage of comsumers(and employees) for as long as they can get away with it. While the argument can be made that this sort of business practice is short-sighted, an equally strong argument can be made that businesses themselves are often short-sighted.

    I’m not advocating a regulated market. I am, however, suggesting that libertarians keep a weary eye on large coporations. They are no more our friends than the government.

  9. Hey why the hell not? It gives those of us who enjoy cracking such sequences something fun to do…

  10. What if you’re using a pirated part and the device fails? I’ve seen otherwise good, solid electronics fail on account of cheap replacement batteries added on by the reseller. The branded equipment gets blamed, though, damaging their reputation.

  11. Russ D,

    IANAL, but as I understand it, patents are meant to apply to inventions, which must be non-obvious, and novel. Also, you have to apply for a patent, which lasts only 20 years and may take anywhere from a month to a couple of years to obtain. Copyrights are (now) granted as soon as the idea, which is not necessarily an invention, is placed into some kind of physical medium. KentInDC (a somewhat regular poster on this forum) should be able to give you a much better explanation.

  12. Tethering would be all right with me if my device were still under warrantee. If using a generic ink refill voids my warrantee or service contract, I’d be a fool to get caught using one. Once I’m on the hook for the repair costs to my unit, any blocking code should expire or any circumvention of a lockout code should be legal.

    I bought a decent printer on ebay that accepts generic printer cartridges. I have no contractual obligation with the manufacturer to use his refill products, nor does he to support repair of the resold machine.

    Kevin

  13. I agree with Hanah; it gets murky quick.

    Did anybody else see the latest tantrum Jobs is throwing? Real Networks is apparently going to sell music over that net that’s playable on an iPod.

    If it wasn’t for iTunes, I might be lining up and having to talk to that snot nosed kid working the counter at Tower Records, and I’d have to overpay for a bunch of songs I don’t want, etc. The Real Networks people want to compete for my dollar, and that seems like a good Libertarian, Adam Smith, anti-Monopolistic thing to me, but, then again, I knew when I bought my iPod that if I wanted to buy music for it, I was going to have to buy it through Itunes, and in order to sell me music, Real Networks had to hack Apple’s proprietary Fairplay DRM.

    So the Libertarian side of that argument isn’t entirely obvious to me.

  14. Russ D,

    Copyrights last longer, more than fifty years, where patents only give you twenty years of protection. However, unlike copyrights, patents can be applied to processes. Imagine the lack of competition if a bank, for instance, had some kind of patent for the process of tracking account transactions. But there have been cases in which software companies have sought patent like protection for their software to cover a process.

    When they decided these issues way back when, and I think the landmark cases were all in the ’70’s and ’80’s, I think they would have saved us all a lot of grief if they had done this differently. Just because programs are comprised of text, doesn’t mean they should be protected like a written document, and just because you shouldn’t be able to protect the process you’re coding as if you invented it yourself, doesn’t mean you can only use the old definitions of intellectual property to protect software.

    The ideal situation, in my humble opinion, might be illustrated by looking at the way light behaves. Relative to gravity, a photon behaves as if it?s a particle, but relative to color, light behaves as if it’s a wave which doesn?t have mass at all. Applied to software, relative to the length of time that a program is protected, I think software should be protected more like it?s a patent, and relative to whether or not a process can be protected, I think software should be more like it?s copyrighted.

    But that’s just my humble opinion.

  15. Stephen,

    Real Networks had to hack Apple’s Fairplay DRM, which is proprietary, in order to make Harmony songs playable on an iPod. Maybe Real Networks, in the interest of competition, should be allowed to do that, and maybe they shouldn’t, but I agree, that’s an excellent example of what Hanah is talking about.

  16. Ken,

    Where I was going is along the lines of this (I admit its badly written): Why would anyone bother going through the rigarmarole of patenting anything when it’s all apparently covered under copyright, a much simpler process which covers a hell of a lot more time? Certainly a song is a process, the words and music are written down so you know exactly how to do it. Why should certain man-made “things” (songs, books) have more market protection over other man-made “things” (inventions, processes)? Mind you, my opinion is copyright lasts way too long, not that patents don’t last long enough. But I can’t be the first person to think of copyrighting a drug rather than merely patenting it; that would essentially eliminate the generic market.

  17. Russ D,

    I am by no means a master of this topic, but here?s a shot in the dark.

    Sure a score tells you how to play a piece of music, but it doesn’t tell you how to write a piece of music down so that it can be played. The process for showing people how to play a piece of music probably isn’t something that should be protectable because protecting that process would impact other people’s freedom of speech and freedom of the press.

    Music and literature are different from industrial processes that way. Let’s take the production of electricity as an example. While we want to encourage innovation, we don’t want to prohibit other people from exercising their freedom to enter the market for producing electricity, because that would impact other people’s property. You invented the process which makes electricity easily distributable, and you should benefit from that. But why shouldn’t I be able to use my property to produce electricity if that’s what I want to do?

    Intellectual property like software is different from either written word or industrial invention or process. The fair use questions Hanah is talking about really do need to be nailed down before we can effectively proceed in the marketplace.

    In the example I gave of the iPod, when I bought that item, it seemed to me that I could use it pretty much as I please; indeed, even Apple wouldn’t contend that I could resell my iPod if I wanted to. But what if one of the things I want to do with my iPod is buy music for it from someone other than Apple? Shouldn’t I be able to do that? It is my iPod.

    On the other hand, in order to get a song to play on an iPod from someplace other than iTunes, you have to contend with Apple’s proprietary Fairplay DRM. The only reason Apple was able to get record companies and artists to put there music up for sale in Apple’s store was because the music was protected by Fairplay. Having circumvented that, will songs downloaded by way of iTunes be sharable by way of Real Networks circumvention of Apple?s DRM? Could they become sharable in the future? Regardless, Apple surely has a right to defend its Fairplay DRM; Apple wrote it; it?s Apple?s intellectual property.

    So industrial invention and copyrights are different in regards to how they affect the rights of other people, not just in how they protect the owners of intellectual property. As Hanah is pointing out, the fair use rights of end users are yet to be adequately defined, and this is evidenced by the dilemma posed above regarding the iPod. Oh, and I don’t think the right side of the Apple/Real Networks controversy naturally flows from the basic tenets of libertarianism; there are valid libertarian arguments to be made for both Real Networks and Apple.

  18. The legal problem, as if anyone here cared, is an anti-trust problem referred to as “tie-ins”.

    Policing tie-ins, whether by private or public suit, is problematic. Tie-ins arise when one product is “tied” to another. ‘Member the Microsoft antitrust suit? That was a suit over tie-ins. Was the Explorer browser “tied in” to Windows operating system (which dominates the operating system market) so tightly, as to exclude competition in the browser market?

    The problems with using antitrust law to fight restraint of trade via tie-in are the usual anti-trust problems. Is the tied product (e.g. the browser) actually part of another market? Does the tying product (e.g. the operating system) have “market power” – in other words, can the manufacturer pretty much have its way thanks to a large market share, and barriers to entry that make it difficult for competetitors to enter the market? The fight, as always, centers on defining what the markets actually are, and what constitutes market power. Usually, one side or the other defines what constitutes market power, and it ineluctibly follows from that definition, whether the market power was abused or not.

    Replacement products usually don’t pose a tie-in problem. After all, if you have a Ford car, it’s logical that only Ford parts, or parts made on license under a Ford patent, will fit it. You could run into a problem though, if the manufacturer has market power, and the after-market product is in an accessories market where the proprietary product – the cell phone battery, the replacement car tires – are proprietary. Usually, a court looking to ensure that the after-market playing field is level, will look for intent, to see if there has been an effort to drive out competition. I would say that a certain cell phone company’s efforts to to control the after-market (such as power management settings that make non-proprietary after-market batteries catch fire) are an example of using proprietary technology, and abusing market power, to create an illegal tie-in.

    The most interesting recent tie-in problem I see right now is with the I-Pod. Apple is asserting that Real Networks “Harmony” software, which allows an I-Pod user to play music downloaded from sites other than Apple sites, is an example. Download Harmony, which is apparently a novel piece of software and does not incorporate any Apple code, and you can play songs from Real Network on the I-Pod. Apple is characterizing this as “illegal” – as if IBM could sue to try to keep private market programmers from creating software for their desktop computers.

    Apple certainly has market power within the portable digital music playing device market – now they are trying to force users to download only from Apple sites, by characterizing the after-market Harmony software as “illegal.”

    Sounds to me like we might have a good anti-trust case brewing here.

    While antitrust law has been misused by the government in the past, libertarians should consider that it holds an important role in ensuring that corporations cannot exclude competition in the markets, to the disadvantage of the consumer.

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