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[dvd-discuss] Editorial in Electronic Design 3Dec2001 Issue.

Below is a copy of the editorial in this weeks Electronic Design. I'll be composing my response after sending this off to [dvd-discuss]

If the text comes out mangled below here's the URL


Almost forgot the Author is David Bursky Editor in Chief dbursky@penton.com

Have at it!

Trade Secrets Under
Attack: DVDs
Now, Is IP Next?

California’s 6th District Court of
Appeals recently overruled
trade-secret laws, giving freespeech
advocates a major victory. Of
course, the court’s decision will be
appealed. In the meantime, information
can be posted on Web sites and
newsgroups detailing the scrambling
schemes used by the DVD industry.
This information will enable savvy
individuals to crack security codes and
access unencrypted digital files on the
DVD. Once the decrypted files are
accessed, perfect copies of the disk’s
digitized contents can be made. Naturally,
the specter of such unfettered theft
has the entertainment industry up in
arms. Consumers (and pirates) could
make unlimited copies of the content
with no degradation, and significantly
lower the potential revenue for each
DVD release.
The scrambling algorithms used by
DVD systems are based on standard
encryption technology, and treated as
trade secrets. However, trade secrets
don’t receive the same protection
under the law as do patents, and there
may be no legal protection if no
patents are being violated. So the
“crackers” are within their rights to
publish those secrets on their Web sites.
But should being within their rights
allow them to disrupt the economics of
major media corporations?
The court’s decision is a prime example
of both the best and the worst of
our legal system. At its best, the legal
system protects the rights of individuals
to work with publicly available
information, reverse-engineer, and
then tell the world what they have
found. But at its worst, the system may
not protect the content providers who
invest billions of dollars to create
entertaining movies and music.
When the court eliminated the ability
to use trade secrets to protect content
(a form of intellectual property), it
overlooked the intimate link between
the scrambling and the content. This
notable oversight shows how a court’s
lack of technology knowledge can negatively
impact industry-critical judicial
Many aspects of intellectual property
(IP) in the electronics industry mimic
the dilemma in the entertainment
industry. The electronics industry also
is heavily leveraged with IP. Some is
patented, and some IP is classified as
trade secrets. This is especially true in
the semiconductor sector, which treats
a wide range of its manufacturing
flow—from process formulas to circuit
design libraries and design tools—as
closely guarded trade secrets.
The court ruling could thus open
such trade secrets to exposure. Therefore,
many leading companies could
see their market shares eroded by firms
that spend only a fraction of what the
leaders spend on product development.
Clearly, IP protection is imperative.
It’s at the vanguard of advances in
semiconductors and the tools used to
design them. In a very real sense, protecting
IP is akin to safeguarding the
future of the electronics industry. But
what can and what should we do to
protect that IP? Let me hear from you.