IT property rights and the Xbox-Modding case

According to a Wired Magazine article by David Kravets, federal prosecutors have dropped their prosecution of the first case involving the DMCA and Xbox-modding on Thursday, “based on fairness and justice.” This is not to say that the US courts considered what was done to be legal, but that the methods used to investigate were inappropriate.

This case offers me an opportunity to discuss my own history and feelings on the matter.

In the late 1980's I worked at a video game store. As a person with both hardware and software experience, part of my work included repairing and/or upgrading hardware for customers. This was a bit unusual as I was not a gamer myself, and even to this day I have never owned a game console or have computer games at home. I wished I enjoyed games as the game market was lucrative for software authors like myself, but I quickly learned you had to enjoy playing games before you could author good ones.

This video game store still provided me an opportunity to be paid making use of some of the skills I had.

One thing owners of the original Nintendo Entertainment System (NES) often wanted was a modification of the console that would allow them to purchase or import themselves games that were released in other regions of the world, but not North America. This modification involved removing a chip from the motherboard of the NES, and jumping two of the pins with a wire.

We made clear to customers that this would void their warranty, but nobody ever considered that there could ever be any other opposition to this modification. It allowed owners of hardware to run additional lawfully acquired software on their own hardware. If anything, we questioned the morality and legality of Nintendo adding in this chip which created barriers to free trade.

Fast forward almost a decade to the mid-1990's, and we have some novel legal theories coming from a few countries, primarily the United States. They claim that by adding legal protection to technical measures added to hardware without the informed consent of the owner will somehow help in the fight against copyright infringement.

A few devotees to this cause propose a law in the USA (NII Copyright Protection Act of 1995 : S. 1284 and H.R. 2441), and after this failed this brought this concept to WIPO. While the legislative history indicates that the devotees lost most of what they were asking for in 1996, this has not stopped them for pushing forward with their goal. They know that politicians and the general public have a short attention span, and they have a critically important weapon on their side: when they claim that technology does one thing, less technically sophisticated people don't question what the ulterior motives or unintended consequences might be.

I have documented in many other places why I believe that such technical measures can not help in the fight against copyright infringement. If anything, these measures create additional incentives for infringement.

Even if these technical measures did help, I do not believe the ends justify the means.

Analogies are imperfect, but they are critical for understanding widely misunderstood issues like this one.

Imagine if insurance fraud was rampant, with the analysts claiming that a third of all claims of theft from individual residences was fraudulent. A proposal was put forward that suggested that in order to reduce insurance fraud that home owners would no longer be allowed to posses or manage the keys to their home. The home builders would manage the keys, and distribute them only to authorized security companies who would monitor and manage all the coming and goings from peoples homes. The security companies would be free to use whatever means they felt appropriately to protect the interests of the insurance companies (surveillance, pat downs, Backscatter X-rays, etc), and ensure that no fraud could occur.

I suspect that if this was being proposed, few would have any sympathy for the position of the insurance companies or the home builders. It would be seen as a clear attack not only on the property rights of home owners, but also their privacy and nearly every other right protected by the Canadian charter or the UN declaration of human rights.

Nobody would concern themselves with the insurance fraud statistics, and nobody would believe for a second that the ends justified the means no matter how much money was being lost in the insurance sector.

The interesting question for me has always been: why are our information technology property rights so disrespected compared to the rights of home owners and other property owners?

I have felt for a long time that the problem is a lack of understanding of technology. It is as if a mental block appears as soon as the word "digital" is used in a conversation, and people switch sides of a property rights conversation based solely on the use of the word "digital".

People believe that when we talk about "digital locks" in the context of copyright we are talking about an analogy where locks are used to protect the rights of the owners (in this case copyright holders). It requires an understanding of the underlying technology to recognize that with these digital locks there are two locks not one (one on content, one on devices) and that in both cases it is someone other than the owner that manages the keys.

So back to the XBox-modding case.

While the person being prosecuted in this case seems to have also infringed the copyright of various games, I consider the copyright question to be entirely separate. While I believe that copyright should be modernized to carve out private activities, distributing or knowingly accepting unlawfully distributed software is something I agree should be illegal and deserves to be prosecuted. I believe that the regular rules of law and evidence should be applied, as there is no justification to bypass the normal accountability and transparency of the legal system for this type of offence.

I consider the question of IT property rights to be entirely separate from the copyright question. I believe the infringement rate is much lower than many lobbyists claim. Even if I believed that the majority of uses of copyrighted works were infringement, I would still not believe that the ends justified the means.

I believe that the rights of technology owners must be protected. Protecting property rights includes protecting the rights of owners to manage the keys, not an unauthorized third party. If a console manufacturer wishes to manage the keys for whatever business purposes, then they must retain ownership and use accountable, transparent and adequately regulated rental-like agreements with gamers who would posses and enjoy the consoles. If the manufacturer wishes to sell the hardware rather than rent, then they must be legally required to hand over keys to the new owner.

I consider what the game console companies are doing today to be immoral, and I believe should be made illegal. I don't blame the companies for the current problem, as most companies will try to get away with whatever the law allows them to get away with. I do however hold politicians and policy makers responsible for abrogating their responsibility to protect property rights. As only one example, bill C-32's technical measures wording must be clearly rejected by anyone who has the most basic respect for tangible property rights.

See also: Protecting property rights in a digital world