1. DMCA & US Laws Impact
on Global Commerce

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Digital Millennium Copyright Act
 Two purposes of ACT
 First, to bring USA into compliance with
international IP Law related treaties (e.g., WTO)
 Second , extend / augment US copyright law
 Three areas of new laws under DMCA
 “safe harbor” for ISPs”
 Protection of Digital Rights Management
(limitations on number of copies allowed)
 Circumvention of Copy Protection Prohibited

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DMCA is US only Law, but …
 The restrictions on cracking copy protection
affect more than USA citizens and companies
 Can apply to ANY firm worldwide that does
business within the USA (can be fined in USA)
 Apply to ANY individual within USA (even just on
temporary travel) for acts even outside USA
 Loss of US Market Sales for Software reduce
incentives to produce new innovations
 Costs / risk of creation of Software increase

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Example of DMCA Global Impact
 Software developer creates code that can
crack encryption, and distributes it free on the
internet for anyone to download
 This is illegal distribution of code which enables or
encourages others to break encryption, so criminal
offense in USA under the “new” DMCA laws
 Foreign citizen not subject to USA laws while
outside USA for actions committed outside USA
 But, while traveling to USA for a conference, he is
arrested for violation of DCMA while on US soil.

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Academic Researchers Giving
Up
 Some academic researchers in the USA as
well as outside the USA are giving up on
researching encryption breaking algorithms
 Risk of criminal sanctions for academic research
 Difficulty of publication, as journals might also be
subject to government penalties and even criminal
offenses for the officers and directors of journals
 Difficulty of any potential future commercialization
 Encryption breaking research still ongoing for
secret military applications, but limited

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Objections to DMCA in USA
 Restricts Free Speech – First Ammendment
 Restricts Innovation and Research
 Inconsistent with public policy goals of copyright
 Criminalizes relatively “innocent” behavior
 Eliminates some aspects of Fair Use Defense
 Parody and Satire
 Academic research or educational usage
 Software compatibility and modifications

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Privatization of Information
 Information which was previously not able to
be copy protected might be able to be
protected via encryption under DMCA rights
 Provide limited access to data via screen only
 Encrypt database to prevent easy access to data
 Increase cost of replication of data which would
otherwise not be copy protected
 Underlying data not visible or displayed may
be protected via encryption using DMCA

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Restrictions on Global Commerce
 Provides protections under US law never
anticipated in original copyright or patent law
 Global businesses have offices in USA, so subject
to application of US laws for their firms actions
 Restricts competition more than copyright or
patent, and US laws being effectively exported
 Proprietary game maker for game consoles
sues emulation software maker for iMAC.
 Seeking $25k USD per unit for DMCA violation

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DMCA and Entertainment
 Criminal offense to break any form of copy
protection, so can not copy movie on DVD
 This would include making copy for iPod
 Making backup of DVD impossible
 Even makes illegal backing up software which
previously was expressly permitted by law
 Future digital rights management and digital
watermark identification issues

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DCMA and Product Innovations
 Computer printer used chip in toner
cartridges which enabled printer to use toner
 Both toner chip and printer chip have encrypted
code within them to restrict ability to copy code
 Violation of DMCA claimed for producer of
compatible toner cartridge due to otherwise legal
reverse engineering of products
 Internet access and validation plus chip
encryption as new form of product protection

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Beyond DMCA: USA Regulations
 USA is the dominant hosting country for
internet based businesses and sites
 All dot.com names are USA names
 US names include .com, .us, .bis, .org, .gov, .edu,
and almost any other name not assigned to
another country to manage domain names
 USA laws apply to any disputes involving
legality of domain names and rights
 Domain management outsourced to private firm

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Much of “Cyberlaw” is US Based
 Domain names under US laws jurisdiction
 Many websites for ecommerce hosted in US
 Even for businesses not owned by US companies
 Most of litigation in cyberspace over
intellectual property rights has taken place
within the USA over the past 20 years
 Easier defenses for firms infringing others rights
 Less formal government controls on internet under
US law than under laws of many other countries

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Cyberspace Trademark Problems
 Same name registered in different states; markets don’t overlap
 Then, one firm goes online, and takes other firm’s customers
 E-Commerce is global in reach – so who has jurisdiction?
 National registration of Trademarks in USA
 Interstate commerce regulation clause of the consitution
 Might not overrule states rights for “local” brand issues
 Domain names and Trademark issues
 Cyber Squatting and Cyberspace Blackmail
 Increasing importance of National Trademark registration,
and potentially international issues, although limited to USA
in disputes over Domain name registrations for .com names