BC Law IPTF Blog

One of the most potent areas for innovation has always been interoperability with existing inventions. As a small example, in the ‘80s some enterprising entrepreneur came up with a cup holder which could fit next to the driver’s seat in most cars.

Theoretically, such an invention benefits everyone. Consumers get an improved product: a car with a cupholder. The entrepreneur exploits a previously unoccupied market niche – creating new value. And, the owners of the existing technology, in this case, the car manufacturers, sell more cars because their product has been enhanced.

The owner of the already existing technology, however, is not always welcoming of interoperable products. Sometimes a manufacturer bundles a proprietary technology with a previously existing technology in order to control not one but two markets. In such a case, the manufacturer is not very happy when an enterprising inventor creates an interoperable technology – and jumps in on his or her game.

Let me give a famous example. In Lexmark Intern. v. Static Control Components, Lexmark, a computer printer manufacturer, designed its printers so that only Lexmark’s printer cartridges could be used with its printers. 387 F.3d 522 (6th Cir. 2004). Then, Lexmark sold the printer cartridges for high prices. In order to use a Lexmark printer, the consumer had to pay for one of Lexmark’s high-priced printer cartridges. In this way, Lexmark leveraged control of the printer market into control of the printer cartridge market.

Not surprisingly, some bright entrepreneurs (the people at Static Control Components (SCC)) figured out how to make other printer cartridges interoperable with Lexmark’s printers. SCC was then able to satisfy a huge demand among consumers for cheaper (and probably better) printer cartridges that worked with Lexmark’s printers. To make the printer cartridges interoperable, SCC figured out how to program a printer cartridge so it could electronically ‘talk’ with the printer and convince the printer that the printer cartridge was one of Lexmark’s printer cartridges. This process involved reverse engineering and copying some of Lexmark’s copyrighted computer code.

Lexmark promptly sued for copyright infringement and for violation of the Digital Millenium Copyright Act’s (DMCA) anti-circumvention provisions. Lexmark lost on both counts. The court held that SCC had copied only purely functional elements of the copyrighted code. Lexmark also lost on the DMCA charges. Here, the court held that the code did not prevent access to a copyrighted work. The code itself was the copyrighted work. Furthermore, since SCC only took the functional elements from the code, they did not infringe. As a result, the court held that SCC did not circumvent an electronic lock to infringe copyrighted material.

I think the court’s decision in Lexmark was the right decision. Once again, consumers got an improved product: cheaper printer cartridges. SCC profited from entering a new market. Lexmark obviously didn’t approve of SCC’s innovation, but it’s possible in the long run that Lexmark sold more printers.

Courts, however, have not always been so good about protecting the new products that come out of interoperability innovation. The problem at least partly rests in trying to interpret the DMCA.

Essentially, the DMCA makes it illegal to circumvent an electronic lock which protects access to a copyrighted work. The statute was drafted primarily to prevent hackers from circumventing codes and disseminating copyrighted information (such as movies) on the internet. But, as many commentators have noted, the wording in the DMCA is very broad. Technically, a burglar would commit a prima facie violation of the DMCA by disarming a burglar alarm to a house which had copyrighted books inside. Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178, 1201 (Fed. Cir. 2004).

The Federal Circuit’s opinion in Chamberlain improved interpretation of the DMCA by insisting that there must be a “reasonable relation” between the electronic lock and the copyrighted material. (For example, in the house and burglar example, obviously the lock isn’t there to protect the books!) Courts, however, are still not always coming to good conclusions in interpreting the DMCA.

The Eighth Circuit’s opinion in Davidson & Associates v. Jung is a good example. 422 F.3d 630 (8th Cir. 2005). In that case, Blizzard Entertainment, Inc., creators of the popular game, “World of Warcraft,” created a network through which players across the country could play Blizzard’s game. Jung and others, avid players of the game, found battle.net less than satisfactory, so they decided to make their own network through which to play the game. They soon succeeded in making “bnetd.org”, a network which was interoperable with Blizzard’s game. The new network became quite popular in its own right, and Blizzard sued under the DMCA.

The Eighth Circuit decided in favor of Blizzard that Jung and the other defendants had violated the DMCA by circumventing an electronic lock with access to copyrighted material. This does not seem to be the right conclusion for several reasons. First of all, the defendants (basically) did not copy any copyrighted information except for functional elements of the code (like Lexmark). Secondly, the only consumers who could have access to the new network were those who had a copy of Blizzard’s game CD. The new network did not screen for pirated copies of the game CD, but this was hardly the defendants’ fault because the defendants had no copy of the registration list for the game CDs.

Rather, the defendants created an new, interoperable product –an improved product for consumers. This kind of innovation should be encouraged, not made illegal by the DMCA.

This entry was posted on Sunday, September 24th, 2006 at 8:29 pm and is filed under IP, Copyright. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.