27 October 2000
Courtesy of Cryptome.

Excerpted from full rule: http://cryptome.org/dmca102700.txt

3. Audiovisual Works on Digital Versatile Discs (DVDs)

    More comments and testimony were submitted on the subject of motion
pictures on digital versatile discs (DVDs) and the technological
measures employed on DVDs, primarily Content Scrambling System
(``CSS''), than on any other subject in this rulemaking. DVDs are
digital media, similar to compact discs but with greater capacity, on
which motion pictures and other audiovisual and other works may be
stored. DVDs have recently become a

[[Page 64568]]

major medium, although not yet the predominant medium, for the
distribution of motion pictures in the ``home video'' market. CSS is an
encryption system used on most commercially distributed DVDs of motion
pictures. DVDs with CSS may be viewed only on equipment licensed by the
DVD Copy Control Association (DVD CCA). PH25. The terms of the DVD CCA
license permits licensed devices to decrypt and play--but not to copy--
the films. For a more complete discussion of DVDs and CSS, see
Universal City Studios, Inc. v. Reimerdes, 111 F. Supp.2d 294 (S.D.N.Y.
2000), 55 U.S.P.Q.2d 1873 (S.D.N.Y. 2000).
    Proponents of an exemption for motion pictures on DVDs raised four
general arguments. First, they asserted that CSS represents a merger of
access and use controls,\12\ such that one of those two control
functions of the technology cannot be circumvented without also
circumventing the other. PH11. Since Congress prohibited only the
conduct of circumventing access measures and declined to enact a
comparable prohibition against circumvention of measures that protect
the rights of the copyright owner under Sec. 1201(b), they argued that
a merger of controls exceeds the scope of the congressional grant. In
this view, the merger of access and use controls would effectively
bootstrap the legal prohibition against circumvention of access
controls to include copy controls and thereby prevents a user from
making otherwise noninfringing uses of lawfully acquired copies, such
as excerpting parts of the material on a DVD for a film class, which
might be a fair use.

    \12\ In this discussion, the term ``use controls'' is used as a
shorthand term for technological measures that effectively protect
rights of copyright owners under title 17 (e.g., copy controls)--the
controls that are the subject of the prohibition against certain
technologies, products, services, devices and components found in
section 1201(b)(1).

    While this is a significant concern, there are a number of
considerations to be balanced. From the comments and testimony
presented, it is clear that, at present, most works available in DVD
format are also available in analog format (VHS tape) as well. R123, T
Marks, 5/19/00, p. 301. When distributed in analog formats--formats in
which distribution is likely to continue for the foreseeable future--
these works are not protected by any technological measures controlling
access. WS Sorkin, p. 5. Therefore, any harm caused by the existence of
access control measures used in DVDs can be avoided by obtaining a copy
of the work in analog format. See House Manager's Report, at 7 (``in
assessing the impact of the prohibition on the ability to make
noninfringing uses, the Secretary should take into consideration the
availability of works in the particular class in other formats that are
not subject to technological protections.'').\13\

    \13\ Perhaps the best case for actual harm in this context was
made with respect to matter that is available along with the motion
picture in DVD format but not available in videotape format, such as
outtakes, interviews with actors and directors, additional language
features, etc. See C204, p. 4. However, this ancillary material
traditionally has not been available in copies for distribution to
the general public, and it appears that it is only with the advent
of the DVD format that motion picture producers have been willing or
able to include such material along with copies of the motion
pictures themselves. Because of this and because motion picture
producers are generally unwilling to release their works in DVD
format unless they are protected by access control measures, it
cannot be said that enforcing section 1201(a)(1) would, in the words
of the Commerce Committee, result ``in less access, rather than
more, to copyrighted materials that are important to education,
scholarship, and other socially vital endeavors.'' See Commerce
Comm. Report, at 35. Thus, it appears that the availability of
access control measures has resulted in greater availability of
these materials.

    Thus far, no proponents of this argument for an exemption have come
forward with evidence of any substantial or concrete harm. Aside from
broad concerns, there have been very few specific problems alleged. The
allegations of harm raised were generally hypothetical in nature,
involved relatively insignificant uses, or involved circumstances in
which the noninfringing nature of the desired use was questionable
(e.g., backup copies of the DVD) or unclear. T Robin Gross, 5/19/00,
pp. 314-15. This failure to demonstrate actual harm in the years since
the implementation of the CSS measures tends to undermine the fears of
proponents of an exemption.
    Similarly, in all of the comments and testimony on this issue, no
explanation has been offered of the technological necessity for
circumventing the access controls associated with DVDs in order to
circumvent the copy controls. If the copy control aspects of CSS may be
circumvented without circumventing its access controls, this is clearly
not a violation of Section 1201(a)(1)(A). There was no showing that
copy or use controls could not be circumvented without violating
Section 1201(a)(1). In contrast, there was specific testimony that an
analog output copy control on DVD players, Macrovision, could be
circumvented by an individual without circumventing the CSS protection
measures and without violating section 1201(a)(1). T Marks, 5/19/00,
pp.345-46. It would appear that circumvention of the Macrovision
control, conduct not prohibited by any of the provisions of section
1201, would enable many of the noninfringing uses alleged to be
prevented. If in a subsequent rulemaking proceeding one could show that
a particular ``copy'' or ``use'' control could not in fact be
circumvented on a legitimately acquired copy without also circumventing
the access measure, one might meet the required burden on this issue.
    The merger of technological measures that protect access and
copying does not appear to have been anticipated by Congress.\14\
Congress did create a distinction between the conduct of circumvention
of access controls and the conduct of circumvention of use controls by
prohibiting the former while permitting the latter, but neither the
language of section 1201 nor the legislative history addresses the
possibility of access controls that also restrict use. It is unclear
how a court might address this issue. It would be helpful if Congress
were to clarify its intent, since the implementation of merged
technological measures arguably would undermine Congress's decision to
offer disparate treatment for access controls and use controls in
section 1201.

    \14\ However, CSS was already in development in 1998 when the
DMCA was enacted. It cannot be presumed that the drafters of section
1201(a) were unaware of CSS. If CSS does involve a merger of access
controls and copy controls, it is conceivable that the drafters of
section 1201(a)(1) were aware of that. And it is quite possible that
they anticipated that CSS would be a ``technological measure that
effectively controls access to a work.''

    At present, on the current record, it would be imprudent to venture
too far on this issue in the absence of congressional guidance. The
issue of merged access and use measures may become a significant
problem. The Copyright Office intends to monitor this issue during the
next three years and hopes to have the benefit of a clearer record and
guidance from Congress at the time of the next rulemaking proceeding.
    Another argument raised in the comments and testimony regarding
DVDs is that users of Linux and other operating systems who own
computers with DVD drives and who purchase legitimate copies of
audiovisual works on DVDs should be able to view these works. Many
Linux users have complained that they are unable to view the works on
their computers because a licensed player has not yet been developed
for the Linux OS platform. R56, PH11, PH3. While this situation created
frustration for legitimate users,

[[Page 64569]]

the problem requires balancing of other considerations.
    The reasonable availability of alternate operating systems (dual
bootable) or dedicated players for televisions suggests that the
problem is one of preference and inconvenience, and leads to the
conclusion that an exemption is not warranted. T Metalitz, 5/19/00, pp.
298-99. Moreover, with the rapidly growing market of Linux users, it is
commercially viable to create a player for this particular operating
system. T Metalitz, 5/19/00, pp. 297-98. DVD CSS has expressed its
willingness to license such players, and in fact has licensed such
players. PH25. There is evidence that Linux players are currently being
developed (Sigma Designs and Intervideo) and should be available in the
near future. It appears likely that the market place will soon resolve
this particular concern. PH123 (MPAA).
    While it does not appear that Congress anticipated that persons who
legitimately acquired copies of works should be denied the ability to
access these works, there is no unqualified right to access works on
any particular machine or device of the user's choosing. There are also
commercially available options for owners of DVD ROM drives and
legitimate DVD discs. Given the market alternatives, an exemption to
benefit individuals who wish to play their DVDs on computers using the
Linux operating system does not appear to be warranted.
    It appears from the comments and testimony presented in this
proceeding that the motion picture industry relied on CSS in order to
make motion pictures available in digital format. R123. An exemption
for motion pictures on DVDs would lead to a decreased incentive to
distribute these works on this very popular new medium. It appears that
technological measures on DVDs have increased the availability of
audiovisual works to the general public, even though some portions of
the public have been inconvenienced.
    A third argument raised relating to DVDs was the asserted need to
reverse engineer DVDs in order to allow them to be interoperable with
other devices or operating systems. C10, C18, C221. While there has
been limited judicial recognition of a right to reverse engineer for
purposes of interoperability of computer programs in the video game
industry, see Sega Enterprises, Inc. v. Accolade, Inc., 977 F.2d 1510
(9th Cir. 1992); Sony Computer Entertainment, Inc. v. Connectix, 203
F.3d 596 (9th Cir. 2000), this rulemaking proceeding is not an
appropriate forum in which to extend the recognition of such a right
beyond the scope recognized thus far by the courts or by Congress in
section 1201(f). In section 1201 itself, Congress addressed the issue
of reverse engineering with respect to computer programs that are
reverse engineered for the purpose of interoperability under certain
circumstances to the ``extent any such acts of identification and
analysis do not constitute infringement under this title.'' One court
has rejected the applicability of section 1201(f) to reverse
engineering of DVDs. Universal City Studios, Inc. v. Reimerdes, 82
F.Supp.2d 211, 217-18 (S.D.N.Y. 2000); see also Universal City Studios,
Inc. v. Reimerdes, 111 F. Supp.2d 294 (S.D.N.Y. 2000), 55 U.S.P.Q.2d
1873 (S.D.N.Y. 2000). That decision is on appeal. If subsequent
developments in that case or future cases lead to judicial recognition
that section 1201(f) does apply to a case such as this, then presumably
there would be no need to fashion an exemption pursuant to section
1201(a)(1)(C). If, as the Reimerdes court has held, section 1201(f)
does not apply in such a situation, an agency fashioning exemptions
pursuant to section 1201(a)(1)(C) should proceed with caution before
creating an exemption to accommodate reverse engineering that goes
beyond the scope of a related exemption enacted by Congress expressly
for the purpose of reverse engineering in another subsection of the
same section of the DMCA. In any event, a more compelling case must be
made before an exemption for reverse engineering of DVDs could be
justified pursuant to section 1201(a)(1)(C).
    The final argument in support of an exemption for audiovisual works
on DVDs was based on the motion picture industry's use of region coding
as an access control measure. Proponents of an exemption argued that
region coding prevents legitimate users from playing foreign films on
DVDs which were purchased abroad on their machines that are encoded to
play only DVDs with region coding for the region that includes the
United States. C133, C231, C234, R92, PH11. There was also some showing
that foreign releases of American and foreign motion pictures may
contain content that is not available on the American releases and that
circumvention may be necessary in order to access this material. T
Gross, 5/19/00, p. 314.
    While the use of region coding may restrict unqualified access to
all movies, the comments and testimony presented on this issue did not
demonstrate that this restriction rises to the level of a substantial
adverse effect. The problem appears to be confined to a relatively
small number of users. The region coding also seems to result in
inconvenience rather than actual or likely harm, because there are
numerous options available to individuals seeking access to this
foreign content (PAL converters to view foreign videotapes, limited
reset of region code option on DVD players, or purchase of players set
to different codes). Since the region coding of audiovisual works on
DVDs serves legitimate purposes as an access control,\15\ and since
this coding encourages the distribution and availability of digital
audiovisual works, on balance, the benefit to the public exceeds the de
minimis harm alleged at this time. If, at some time in the future,
material is available only in digital format protected by region codes
and the availability of alternative players is restricted, a more
compelling case for an exemption might be made.

    \15\ Among other purposes, it prevents the marketing of DVDs of
a motion picture in a region of the world where the motion picture
has not yet been released in theatres, or is still being exhibited
in theatres. See PH12, pp. 3-4.

    Consideration of the factors enumerated in subsection 1201(a)(1)(C)
supports the conclusion that no exemption is warranted for this
proposed class. The release of audiovisual works on DVDs was predicated
on the ability to limit piracy through the use of technological access
control measures. R123. These works are widely available in digital
format and are also readily available in analog format. R123 and WS
Sorkin, p. 5. The digital release of motion pictures has benefitted the
public by providing better quality and enhanced features on DVDs. While
Linux users represent a significant and growing segment of the
population and while these users have experienced inconveniences, the
market is likely to remedy this problem soon. PH25. See the discussion
of the Linux players being developed by Sigma Designs and Intervideo,
above. Moreover, there are commercially reasonable alternatives
available to these users. R123. The restrictions on DVDs are presently
offset by the overall benefit to the public resulting from digital
release of audiovisual works. Therefore, at present the existence of
technological measures that control access to motion pictures on DVDs
has not had a significant adverse impact on the availability of those
works to the public at large.
    On the question of the availability for use of works for nonprofit
archival, preservation, and educational purposes, there was minimal
evidence presented that these uses have been or are likely to be
adversely affected during the

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ensuing three year period. As stated above, facts relating to the issue
of the existence of merged access and use controls may be presented in
the next triennial rulemaking proceeding to determine whether the
prohibition on circumvention of access controls is being employed in
such a manner that it also restricts noninfringing uses.
    The impact that the prohibition on the circumvention of
technological measures applied to copyrighted works has had or is
likely to have on criticism, comment news reporting, teaching,
scholarship, or research is uncertain. At present, the concerns
expressed were speculative and the examples of the prohibition's likely
adverse effects were minimal. At this time it appears likely that these
concerns will be tempered by the market. If the market does not
effectively resolve problems and sufficient evidence of substantial
adverse effects are presented in the next triennial rulemaking
proceeding, the Register will re-assess the need for an exemption.
    At this time it appears clear from the evidence that the
circumvention of technological protection measures would be likely to
have an adverse effect on the availability of digital works on DVDs to
the public. The music industry's reluctance to distribute works on DVDs
as a consequence of circumvention of CSS is a specific example of the
potential effect on availability: ``In fact, it was the very hack of
CSS that caused a delay in introduction of DVD audio into the
marketplace.'' T Sherman, 5/3/2000, p. 18. Since the circumvention of
technological access control measures will delay the availability of
``use-facilitating'' digital formats that will benefit the public and
that are proving to be popular with the public, the promulgation of an
exemption must be carefully considered after a balancing of all the
foregoing considerations. At present, the evidence weighs against an
exemption for audiovisual works on DVDs.