By Dugie Standeford for Intellectual Property Watch
LONDON – Increasing consumer demand for accessing online content anytime, anywhere is politicizing copyright, speakers said last week at the Digital Hollywood Europe conference here. Frustration over restrictive and incompatible digital rights management (DRM) systems and consumer electronics devices has risen to the point where governments are beginning to intervene.

Two key issues in the current copyright debate are the need for and the form of DRM, and the question of whether interoperability of technology should be guaranteed via voluntary industry standards or regulation. While industry scrambles to agree on interoperable standards, France’s recent adoption of a controversial measure on authors’ and related rights is the first step in what may become a global effort to legislate interoperability, experts said.

DRM is seen as a “lockbox” today but that view is totally backwards, said Cinea General Manager Robert Schumann, whose company furnishes anti-piracy services to movie studios. Copyright owners do not want their content to be inaccessible, he said – they just want to get paid if someone watches or listens to it. One way to make copyright protection measures more palatable to consumers might be to create “DRM lite” systems that give them a more seamless interaction with content, he said.

One idea under consideration by industry is the use of “forensic watermarking.” DRM can always be circumvented, so the challenge is to make content secure enough to stay one step ahead of the pirates, said Steve Oetegenn, executive vice-president of Verimatrix, which provides encryption and other programmes. Embedding movies with identifiers that cannot be seen with the human eye, for example, allows content streamed in real-time to be tracked by an Internet service provider to its last legal owner.

Unlike DRM, watermarking is “a real deterrent,” Oetegenn said, but its deployment is being hampered by a lack of awareness on the part of operators and content-owner disinterest. The recording industry is not convinced it is a viable alternative to DRM, said Paul Jessop, the Recording Industry Association of America’s acting chief technology officer. The argument that “I left my iPod in my desk over lunch” and someone copied the songs is, after all, quite reasonable, he said.

Schumann believes watermarking will prove to be “DRM lite.” In ten years, today’s “heavy” DRM will fail because of its unmanageability, and content owners will shift to a less restrictive scheme consumers can live with.

Interoperability: the “Word du Jour”

Other content protection solutions also are in use or under development, but increasingly the debate revolves around interoperability – of DRM systems as well as of devices. It is the “word du jour,” said James Bouras, special counsel to the Victor Company of Japan. It means different things to different people but it recently has stirred controversy in Europe and elsewhere in the specific context of compatibility of music download services and portable media players that store downloaded tracks, he said.

The music industry has been hard-hit by the lack of interoperability, said Jo Oliver, senior legal adviser to the International Federation of the Phonographic Industry. Consumers blame record labels, whose goal is for DRM to be “invisible” to users. Interoperability has also become a policy issue, as governments pick up on consumer fury and consider regulation, she said. Content owners oppose regulation and, instead, are cooperating in several initiatives aimed at developing voluntary interoperability standards, she said. However, she added, the “800-pound gorillas” Apple and Microsoft are not even at the table.

Regulatory Rumblings

France has taken the lead in mandating interoperability. Its revised copyright act, which adopts into national law the European Union Copyright Directive, requires access to DRM information such as source code that is “essential for interoperability,” although the term is not defined, said Paris attorney Gerald Bigle.

DRM owners cannot refuse to divulge their codes unless they believe doing so would affect the security or efficiency of the technical protection scheme, Bigle said. Following accusations by Apple that the provision amounted to “state -sponsored piracy,” it was amended to create a new regulatory body to mediate refusals by DRM owners to comply with requests for source code information

The French law is not yet in place, but other European governments are watching, Bouras said. The interoperability issue is being actively considered in Switzerland, where the Parliament is seeking to overhaul copyright laws. Denmark may introduce its own law next year. There are “vague reports” that Poland is eyeing an interoperability provision, and “a lot of noise” in several other countries as well, including the United Kingdom and Germany, he said.

Although this is not simply an “Apple issue,” it will “explode” if, as is rumoured, Apple seals a deal for the exclusive right to sell Beatles songs on iPods, Bouras said. However, governmental attempts at regulation are, for now, confined to Europe. There is “no chance” regulation will happen in the United States although class-action lawsuits there are likely, he said.

Those who license and exploit technology must be aware that there are political aspects, said Jorgen Blomqvist, director of WIPO’s copyright law division. Lawmakers are paying attention because consumers are, he said. Today’s political discussion could change the traditional copyright law balance because of growing opposition to ever-narrower limitations and exceptions to copyright infringement.

Interoperability Future “Cloudy”

The future of DRM interoperability is “simply too difficult to call,” Dow Lohnes IP attorney James Burger said later. Burger, who moderated several panels at Digital Hollywood Europe, sees four possible scenarios: Government regulation, standards-based interoperability among DRMs, a few dominant DRMs with complex or no interoperability among them, and “no DRM as we know it.”

Regulation is “heads and shoulders the worst universe,” Burger said. Governments are not good at regulating technology, and government employees “are just not a good substitute for the market.”

Burger prefers standards-based interoperability that lets “a thousand DRM flowers bloom but creates a mechanism permitting consumers to reasonably enjoy the entertainment provided by the bundle of digital bits they purchased.” A good DRM system would be one based on standards that would allow different content protection systems to work together, he said. The problem with “achieving this nirvana” are the many roadblocks that could derail the effort, not least of which is the fact that content owners’ interests vary widely from those of service providers, consumers and device makers.

Ending up with a few dominant DRM providers is also possible, Burger said. In that case, market and competition authority pressure would likely prevent the situation from being a disaster by forcing the surviving DRMs to become more open, he said.

DRM is not likely to disappear, Burger said. Use of forensic watermarking to focus on those who illegally distribute content, rather than as a deterrent to consumer access to the content, could result in “DRM lite,” he said, but it also raises privacy and other concerns about the consumer-content provider relationship. Allowing consumers to pay a monthly lump-sum fee for all the content they can consumer would also reduce the need for DRM, but poses practical difficulties.

“I usually have definite ideas about where technology will wind up,” Burger said. In this case, he added, “my crystal ball is quite cloudy.”

Dugie Standeford may be reached at info@ip-watch.ch.