Digital Rights Management

Frederic Haber, General Counsel for the Copyright Clearance Center, led a lunchtime discussion on November 4th, at the Berkman Center. The topic was Digital Rights Management. The following is a summary of the discussion.

Frederic Haber: What is DRM? Are rights content? Works? Is a digital work different? Is it management of digital rights? Is it digital management of rights? Digital creates new opportunities and risks, but increases intensity and extent, not types of risks. Every rightsholder has different needs and perceives different things.

Most people focus on Sect. 1201 of the DMCA, but CCC thinks about 1202, which requires protection of the copyright management information. The language about what copyright mgmt info is is very general.

CCC started 25 years ago in photocopy licensing. Have been managing info digitally nearly the entire time. Have been managing digital rights for about five years.

CCC was created by publishers, authors and users at the suggestion of Congress. It's the only org. of its kind with users on its board. It has direct contracts with 10K users and works indirectly wtih hundreds of thousands more; $110 million in revenues last year.

CCC is heavily customer service oriented; I am the only person practicing copyright law. Cool technology is no subsitute for intimate knowledge of copyright practices, the needs of rightsholders and users, and good customer service.

Rights are complicated; they are infinitely divisible. Potentially can be many rightsholders for what seems like a single item, and many users. All have to be managed simultaneously. Some uses should be paid for, others not.

A good definition: DRM systems are “Databases that streamline complex relationships among rights, works and parties”

Rightsholders see DRM as a controlled way to exploit their work which does not affect quality, or could possibly improve it. Users see DRM as handcuffs.

How does it work? It addresses standard issues: DRM automates access, use, tracking, payment, reporting. The coding system would trigger the process when read. It can carry any info the rightsholder or user is interested in.

Eric Saltzman, Berkman Fellow: How do you embed the codes?

FH: We're mostly talking about digital works - it goes in the header.

ES: People don't get rid of them because of good faith and the statute?

FH: Of course it can be carved up, slicing out the metadata is possible, but it's illegal now.

ES: Can you describe a set of circumstances?

FH: CCC collected $110 mil. last year on the honor system. You can't stop anyone from doing anything.

ES: The rightsholder embeds things.

FH: It's not our job, but we've designed a product to help them do that (Rightslink).

ES: Enforcement is not your job? Even a good faith issue - your customer disagrees with fair use.

FH: We don't take a position but have coordinated lawsuits for several plaintiffs with one claim, helped them get a lawyer.

ES: But you have no opinion on right or wrong.

FH: We're not going to encourage anyone to sue Harvard. Basic DRM features - you can have lots of business models, rapid licensing. It allows for price discrimination through metadata, allows tracking, confidentiality of licensed uses (we only share aggregated data).

It's not all about technology. DRM companies wanted to be lockboxes, but it didn't work; tech is necessary for DRM but does not have to be burdensome or intrusive.

ES: Would I be required to contact the rightsholder?

FH: We're an advocate for users; we tell the rightsholder you have to let people use the work, and we'll help you collect what money you can.

ES: Who makes the deal?

FH: If it's a unique deal, you want to go one on one with the rightsholder but otherwise it should be mechanical, like in the future, product placement fees in movies will be automated.

ES: Who's writing the software?

FH: So far us; we made it as flexible as possible for individual rightsholders, trying to show that licensing works.

Professor Terry Fisher: The context into which this fits is two broad trends: intensification of rightsholder entitlements, and proliferation of mechanisms for deals between rightsholder and user, like CCC, including technology in some way. People who are troubled by DRM are troubled by three things: 1, tech intermediaries cannot account for nuances of safe harbors. Cannot manage the idiosyncracies, and so impede fair use. They're too crude. 2, We have created and preserved safe harbors because otherwise transaction costs would freeze the system - if we require people to pay, teachers and parodists would just not engage. DRM makes costs lower, and safe harbors will shrink. 3, Cultural: increasing granularity of cultural activities - unhappiness at a world of micropayments. As you engage as a consumer or producer, you are constantly incurring costs - one's daily activities are microcostly.

FH: Plenty of people at CCC think this may not be the best thing for the future. When society comes around to appropriate things, these tools will work. It can be used in favor of users. People believe that tech is the be-all, end-all, and users resist that. Lockbox DRM is falling by the wayside. Rightsholders feel that they are losing business. If micropayments add up to $10 a month, is that such a terrible thing? If it's $150, exercise your rights as a consumer and drive prices down.

Transactions are more efficient and squeeze fair use. Fair use has not been protected by those who benefit from it. If you squeeze fair use until it's just being compared with transaction costs it'll go away.

TF: Intriguing - I am sympathetic with the desire to focus on aggregate costs. There's a group of scholars and others for whom that's not the issue. It's how you relate to the cultural environment.

FH: I understand. But few go to libraries, instead they pay $9 for a movie to experience culture. In your model, it's cheaper to see a movie. It's a terrible thing to imagine society where you pay to do everything. Shouldn't forget that we're doing it now with almost everything. Some stuff is still free, or seems to be. These hailstones would turn into a mist with micropayments. I'd like a sunny day but we think culture should earn money. Putting DRM into MS Word is a problem waiting to happen.

Diane Cabell, Berkman Clinical Director: Reminds me of the pioneers - take advantage of space and use it for a common purpose. Knowledge should have been free. We don't meet in physical space like we used to.

FH: What's happening today? A lot of hype. Beginning steps, grudgingly accepted. People are forcing DRM on users because they can. Neither rightsholder nor user demand has developed. Every rightsholder is a user at some point, and vice versa - they'll have to come to a draw at some point. No one is interested in tying everything up.

Open access for scholarly publishing - one can self-archive, post the necessary data someplace, and compete with journals which are too expensive. CCC model will still be necessary - free is as free does. You have to accommodate needs even if money is not the medium. Rightsholders think if management is difficult, they'll lose business.

No standard has emerged. No DRM provider has done more than one field (CCC just does text). DRM companies fail at an alarming rate. Microsoft got involved by buying up failing companies.

What will the future bring? DRM can allow mixing, ID, authorization, licensing of materials at a granular level. Allow monetization of all kinds of content - could foster new businesses. Not necessarily the death of fair use - could be its salvation if society decides it should be. When we issue licenses we do not discuss fair use. It's not a question for a lawyer but for a business person, whether it's worth buying a license.

DC: how does the money get collected?

FH: We don't set prices - every rightsholder sets whatever price he wants. We allow price discrimination between markets, lower for academia, etc.

TF: You don't allow them to pick individuals though.

FH: Not at present. It's complicated at our current level. In theory you could distinguish among industries, etc.

Ivan Reidel, HLS Student: How do you manage it?

FH: We give them blanks to fill in. It's a quasi-intelligent system. Requires huge human intervention. Technology can't really accommodate individuals.

IR: How do you manage millions of users?

FH: The vast majority of our employees are talking to rightsholders, intermediaries, users, other organizations like ours.

Lewis Hyde, Berkman Fellow: Your system attaches code to digital text which is secured by Sect. 1202 of the DMCA - could it announce status like Public Domain?

FH: Yes

LH: Could Creative Commons info be embedded?

FH: In our terms, they would come to us as a rightsholder - systems are complementary. We could manage the CC data the same way as regular copyright data.