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Re: [dvd-discuss] Re: TurboTax for free?

On 7 Jan 2003 at 15:49, John Zulauf wrote:

Date sent:      	Tue, 07 Jan 2003 15:49:43 -0700
From:           	"John Zulauf" <johnzu@ia.nsc.com>
To:             	dvd-discuss@eon.law.harvard.edu
Subject:        	Re: [dvd-discuss] Re: TurboTax for free?
Send reply to:  	dvd-discuss@eon.law.harvard.edu

> There seem to be a few differences, though I'm not sure they are
> entirely compelling.  First a disclaimer.  
> There is clearly a difference between that which is ethical and that
> which is legal.  Ethically, one should respect the intent of the company
> and not attempt to bypass the key. 

I will agree that there is a difference between ethics and legality but this is 
not a question of ethics. Legally the received CD is a gift given without 
consideration. It is the personal property of the recipient. The sender knows 
this or should since they can afford to have enough lawyers on the payroll and 
if they can't there's always the public library. THerefore, the ethics are 
those involving a gift and not those involving intellectual property. The 
intention of the company is irrelevant. So what ethical consideration does one 
have to give to a corporation that put the imposition of considering an ethical 
question on me by mailing me something that I did not ask for, may not 
want...having given me this gift, they have no say about what I do with it-or 
should have no say. If I choose to crack the code on this gift, that's their 
problem because they gave it to me.

> If one objects to the p-spam of
> being sent CD's and wishes to protest, then civil disobedience options
> are open.  Bypassing the key, and then sending a open letter to the
> software company stating that this is a truly bad idea given the ease of
> the "crack".  The more daring might post details or write a paper on the
> "security hole" in the TurboTax key mechanism.  Those living abroad (and
> never planning to visiting the US) might even write a key-crack tool (ah
> to be in Russia in winter -- brrrrr.). Certainly someone was employed to
> create the authorization system, and those trusting it (and/or paying
> for it) it's security should be informed of it's weakness.  Certainly
> Adobe gave up on the ill-fated "fonts on demand" CD's which were cracked
> wholesale (See **0) after the public disclosure of how to unlock every
> font on that doomed disk.  Surprisingly, most folk still paid for fonts
> until MS starting packing so many into Windows free that the average DTP
> user had more than they needed. 

I think all of this simply demonstrates the stupidity of allowing access 
schemes to create quasi licenses for intellectual property. Personal property 
is personal property-no restrictions on use (other than copyright). Licensed 
intellectual property is licensed intellectual property-restrictions apply. 
Access schemes allow companies to have the advantages of both with no 
disadvantages (for them) but only disadvantages to the public. Remember that 
all of this is shrinkwrap licensing is just an attempt to make it more 
> Cracking the software and using it to do your taxes doesn't qualify as
> "civil disobedience" regardless.  To those who think "free stuff ==
> civil disobedience" let me say, 
>    "pppphhhhhhhhttttttt!!!!"

Still the question is "what restrictions does one have upon ones personal 
property?" IN this case a CD received in the mail. Actually, it is civil 
disobedience if enough people do it to demonstrate the stupidity of shrinkwrap 
licenses and mass mailing distributions that pervert the boundary between 
personal property and licensed intellectual property.

> Onto the legal distinctions:
> (1) You have not been sent a functioning copy of TurboTax, you have been
> sent a functioning copy of their installer.  You are free to use that
> installer as much as you want.  You can order a key and the installer
> will then create (from the data it has on disk) a functioning copy of
> TurboTax.  You can type in a bogus key and (with all the pleasure of
> watching the microwave oven) enjoy the pleasure of it's "error" and "did
> not install" message, you can do this to your heart's content -- they
> sent you the disk, it's free.

So what happens when your cracking program gets a valid key?

> If you were mailed a DVD, it would work on any DVD player other DVD's
> work on (region coding aside).
> (2) You probably cannot install TurboTax (even if someone sent you a
> valid key) without agreeing to the EULA.  I would be quite shocked if
> the EULA doesn't include some language requiring you to assert that you
> are in possession of a legal acquire right-to-use.  Given that  the
> software you were sent does require an additional transaction, the
> recent EULA voiding case probably doesn't apply.  The free polycarbonate
> disk doesn't look or feel like a sale, as clearly it is noted that you
> need an additional transaction to use the product.

Irrelevant....the disk is personal property and one need not license one's own 
personal property or even have permission to access it.

> DVD's don't have a EULA, except to say "private home use" (See **1) 
> (3) The TPM protecting TurboTax on the disk is clearly pre-first-sale,
> CSS is clearly post-sale.  (What they have in common is that they both
> show that access and copy controls are orthogonal, the TurboTax is key
> protected, but infinitely copiable, as is the DVD)
> (4) There is no "reasonable person" expectation that a free CD with
> "instructions say that to access it I need to have internet access and a
> credit card".  You yourself stated: "Obviously this is a protected
> program, with the intention that I pay them before it is unlocked."

Does the reasonable person understand that legally the CD is now personal 
property? And if the reasonable person assumes otherwise, then they will be 
faced with dealing with every unsolicited piece of "junk contract" (copyleft on 
that phrase) received in the mail? If so the the reasonable person may ask why 
they need internet access...or why they should be required to deal with these 
junk contracts without any consideration or compensation?

> The "reasonable person" assumption for a DVD is that if you stick it
> into a DVD player it will play, without having to spend $29.99 for a
> key.  This is of course why Judge Kaplan is just flat wrong about CSS,
> but that's an old argument.  CSS isn't DivX, and never was -- it doesn't
> protect any *valid* right of a copyright holder. The Paramount case got
> rid of the notion of the right of a copyright holder to control the
> choice of the projector (player).
> Finally (and not related to the DVD vs. TurboTax difference.  This is
> comparable to those hideous "1,500 credit advance" checks.  The are
> perfectly cashable, but entail certain contractual obligations if you
> do.  This disk is a functional equivalent, use of it is bound up in
> contract language that you can't just read and pretend doesn't exist. 

Not so. The credit advance checks require additional actions outside the 
privacy of the home. The checks are an offer for a contract. How is the the 
physical medium that contains EVERYTHING and is received in the mail an offer 
for a contract? For the checks you sign and cash and the money is moved from 
one bank account to another with checks and balances. The latter are lacking 
here. Can TurboTax PROVE i've entered into a contract with them? 

> Now if they screwed up the contract (i.e. EULA doesn't require you to
> only use the software with your valid key) then that's different.  To
> bad the lawyers for those $1,500 credit advance check never screw up.
> .002
> "I'm shocked, shocked to find warez crackers read this website." 
>  -- any of a list of web admins we could name
> Footnotes:
> **0 The irony of Adobe not learning that lesson (listen to the ranting
> of their CEO sometime) and trying again with the equally ill-fated eBook
> DRM's... ah well.  Without making individually keyed copies( see **10),
> this will never work.  Even with individually key content, the content
> once accessed cannot be assumed to be controlled.
> **1 The "private home use" message is utterly redundant since owning a
> copy of a work (book, play, or recording) has never granted a
> performance right.
> **10 Note these "piracy machines" ... (cool and only $1,575 US)
> http://www.mediasolutionse.com/Merchant2/merchant.mv?Screen=PROD&Store_Code=MS&P
> roduct_Code=62701&Category_Code=CDD
> http://makeashorterlink.com/?O2EF32FF2
> are also the perfect factory for individualized encrypted content
> delivery (note I said delivery, not post delivery control).
> The CD-R robots are what the RIAA should worry about, both from an
> infringing copies and disintermediation standpoint.  A mere 1600USD
> closes the publishers out of the loop entirely. This at a cost well
> within the budget of a studio, music store, or locally successful band
> (as long as they still have their day jobs).  Imagine what mandatory
> licensing and kiosks with these devices would do to the average RIAA
> member's business model.
> So what does it cost a DIY publisher to make a CD?
> Blank media   	$.29
> CD ink        	$.10
> Jewel case    	$.09
> 1 page insert	$.30	photo paper and ink
> labor printer	$.04	2min/25 disk batch at $30/hour
> labor stuffing  $.025   1min/4disks at $6/hour
> depreciation    $.015   see below
> ===================================
> total		$.82
> Depreciation assumptions: purchase price $1600, $400 3yr extended
> warranty, fully utilized 10hour/day, 200disk/day, 210day/year 42000
> disk/year, 3years 126000 total)  To be fair, a hobbyist who produces a
> 1,000 disks sees a depreciation cost many times higher ($1.60/disk).  A
> more typical number for a studio, music store, or coop would be 1/10
> utilization $.15/disk over 3 years (1/2 day/week) changing the cost
> total to $.975/disk
> None of this includes the economies of scale (wholesale pricing on
> supplies, automated stuffing/wrapping machines) that "real publishers"
> face. Assuming the $1.50/album royalty -- $2.72 cost, 17.99 retail, 30%
> to the channel, we have 3630% gross margin for the record companies(at
> least, given that most of the royalties are paid back to the record
> company for profit center services like studios etc.).  No wonder they
> can afford so many legislators.