The double-standard: technology property rights infringement vs. copyright infringement.

Last week I had a letter to the Hill Times editor published which discussed the anti-competitive nature of the technological measures aspects of bill C-11.

I received the following question via twitter:

Read your letter in HillTimes. You really think Netflix should have no say how they want their content distributed?

My short twitter-length answer was:

There are infringing and non-infringing ways to do that http://c11.ca/brief - Businesses built on infringement not legit

Before I offer a longer comment on the question, I want to publish the full text of the letter I wrote to the Hill Times.

I noted with interest the Wire Report article indicating that, "Netflix Inc. says it does not have plans to develop apps that support Research In Motion Ltd.'s (RIM) Blackberry devices or Playbook tablet".

While Netflix may not have the resources to write the software themselves, it is the federal government’s Bill C-11 which will disallow any third party from developing their own compatible application. The market share for RIM technology is higher in Canada than in other markets, meaning that it is far more likely to find a Canadian company or possibly even a hobbiest who wanted to make the Netflix service work with the devices of their choosing.

Unfortunately, Bill C-11 disallows a Canadian RIM supporter to develop an application compatible with the Netflix platform since doing so—even for perfectly lawful purposes that benefits Netflix and RIM—would involve circumventing a so-called “technological protection measure.”

While these technological measures allege to reduce copyright infringement and improve revenues to copyright holders, this has never been proven. There is considerable evidence that suggests misunderstood and misapplied technological measures have induced copyright infringement and reduced revenues to copyright holders.

This anti-competitive tie between Netflix and a few chosen brands of viewing technology that is protected by Bill C-11 will either discourage RIM owners from signing up to Netflix, or will discourage Netflix customers from purchasing RIM hardware. Given the market share of RIM in Canada is already said to be “tenuous,” and Netflix is growing, it may be that an increasing amount of copyrighted content not being allowed by Bill C-11 to be accessed by RIM owners on their chosen devices will be a very large nail in RIM’s coffin.

Peter Braid, the Conservative MP for the Kitchener-Waterloo, Ont., riding where RIM has its headquarters, is a member of the House committee studying Bill C-11. I hope he realizes the damage he is doing to this important business in his riding as he continues his support for the anti-competitive impacts of technological measures in his government’s bill.

Russell McOrmond
Ottawa, Ont.
(The author is an internet consultant, software author, a witness at the legislative committee, and host of c11.ca.)

The technological measures aspects of bill C-11 affect the rights of a number of different classes of owners, including copyright holders, owners of tangible media, software authors and hardware/device owners. My brief focused on the rights of technology owners, and those who infringe, induce infringements and enable infringements of the rights of technology owners.

Just as there are copyright infringing and non-infringing ways for an audience to acquire and use a copyrighted work, there are infringing and non-infringing way for a copyright holder and/or a content distribution company to have a say in "how they want their content distributed".

I'll use Netflix as an example of infringing and non-infringing content distribution platforms.

Netflix plans to make deals with cable companies to distribute content. When the cable companies rent set-top boxes to clients where it is the cable company that is in control of the devices they maintain ownership over, that is an example of a non-infringing scenario. In this case the owner of the hardware is the cable company, and any technological protection measures applied are applied by the owner in order to protect the rights and interests of the owner. These owner-applied technological measures should receive strong legal protection, and modernization of provincial property law to do this would be very beneficial.

If NetFlix wants to distribute to devices that are owned by individual citizens, that is an entirely different marketplace.

In that case is must still be the owner of the device that applies any technological measure, and it is an infringement of the owners property rights if someone other than the owner applies a technological measure. Any country that respects property rights should protect the owners right to remove any technological measure applied by any previous owner (including the manufacturer).

It is an inducement of infringement to encode content such that it is only available on devices where the owners property rights have been infringed. Copyright holders should not be allowed to encode their content in a way that induces infringement any more than an organization like ISOHunt or PirateBay should be able to induce others to infringe copyright. We have secondary liability (including enabler provisions in C-11) for copyright infringement, and it appears we need to modernize our property laws to include secondary liability for infringement of technology property rights.

From a competitive standpoint the issue is quite simple: copyright holders should have no more say over what brands of digital technology I purchase than book authors had over what brands of eyeglasses I wore. If they are uncomfortable making their content available in a market where citizens own and control their own technology then it is their choice to not make their content available in that market. It simply wrong, immoral, and should be clearly illegal for them to abuse technological measures applied to content in order to induce infringements of technology property rights. As has been said before, it is not legitimate to build a business on top of infringing someone elses rights.

Why is it that some people think it is legitimate to say "let the market decide" when it comes to infringing IT property rights, and yet these same people find the suggestion of "let the market decide" when it comes to infringing copyright to be offensive. If it doesn't matter if a content distribution system infringes IT property rights, why should it matter if a content distribution system infringes copyright? Why the double standard?

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As an aside...

Since we're talking about jobs in Peter Braid's riding, I feel it's worth pointing out that Kaleidescape has a development office in Waterloo.