Digital Content Protection and Fair Use: What's the Use?

It was October of 2010, on a Saturday afternoon. Tom and Kelly sat down and ordered a recently released blockbuster smash hit from their digital cable television pay-per-view system. Halfway through the movie, Tom’s text-enabled wireless phone alerted him of a problem at his office. ‘‘Looks like they’re going to need me at work for a few hours. I’m really sorry. I’ve got to go. How about we record this on our PVR1 and watch it together later?’’ ‘‘No, Tom, we can’t do that. This is one of those ‘copy never’ movies, remember? It’s either watch it now, or pay for it all over again later.’’ ‘‘What a rip off! Well, let’s just hook up our old VCR. It won’t be as crisp as the digital PVR, but at least we’ll get something for our money.’’ ‘‘I hate to tell you this, Tom, but our VCR won’t work either. I tried the other day, but the television won’t allow ‘copy never’ digital programs to travel out of unprotected analog outputs. Looks like we just threw away our ten dollars.’’ * Ben graduated from the University of Colorado School of Law in May 2004, and currently works as an associate in the Intellectual Property group at the law firm of Faegre & Benson, LLP. The author would like to thank Andy Johnson and Phil Weiser for their insightful comments on various drafts of this paper. 1. PVR means personal video recorder. 426 J. ON TELECOMM. & HIGH TECH. L. [Vol. 3 ABSTRACT............................................................................................ 425 INTRODUCTION................................................................................... 426 I. BACKGROUND OF THE FAIR USE DOCTRINE........................... 429 A. Introduction to Copyright Law............................................ 429 B. Explanation of Selected Fair Use and First Sale Rights....... 430 1. Time-Shifting ................................................................ 431 2. Space-Shifting ................................................................ 432 3. Educational Use ............................................................. 433 4. Critical Use..................................................................... 433 5. First Sale Doctrine ......................................................... 434 C. Economic Rationale for the Fair Use Doctrine.................... 434 II. DIGITAL RIGHTS MANAGEMENT, ENCODING RULES, AND OTHER CONTENT PROTECTION MECHANISMS...................... 438 A. Anticircumvention and the DMCA..................................... 438 B. How Does Digital Rights Management Work? .................. 439 C. How Do the Encoding Rules Work? ................................... 440 D. How Does the Broadcast Flag Work?.................................. 442 III. DIGITAL CONTENT CONTROL AND FAIR USE......................... 443 A. Encrypted or Encoded Copyrighted Digital Goods Will No Longer Be ‘‘Public Goods’’ ............................................. 443 B. Gordon’s Market Failure Fair Use Test Is Not Met............ 444 C. Ku’s Creative Destruction Fair Use Test Is Not Met .......... 445 D. Non-Economic Fair Use Rationale...................................... 445 E. Old vs. New: How the Old Fair Use Rights Will Look Under A New Content Control Regime.............................. 448 1. Time-Shifting ................................................................ 448 2. Space-Shifting ................................................................ 448 3. Educational Use / Critical Use....................................... 449 4. First Sale Doctrine ......................................................... 449 F. Why Carry Fair Use Forward? Fair Use as Affirmative Defense, Not Cause of Action ............................................. 450 CONCLUSION....................................................................................... 451........................................................................................... 425 INTRODUCTION................................................................................... 426 I. BACKGROUND OF THE FAIR USE DOCTRINE........................... 429 A. Introduction to Copyright Law............................................ 429 B. Explanation of Selected Fair Use and First Sale Rights....... 430 1. Time-Shifting ................................................................ 431 2. Space-Shifting ................................................................ 432 3. Educational Use ............................................................. 433 4. Critical Use..................................................................... 433 5. First Sale Doctrine ......................................................... 434 C. Economic Rationale for the Fair Use Doctrine.................... 434 II. DIGITAL RIGHTS MANAGEMENT, ENCODING RULES, AND OTHER CONTENT PROTECTION MECHANISMS...................... 438 A. Anticircumvention and the DMCA..................................... 438 B. How Does Digital Rights Management Work? .................. 439 C. How Do the Encoding Rules Work? ................................... 440 D. How Does the Broadcast Flag Work?.................................. 442 III. DIGITAL CONTENT CONTROL AND FAIR USE......................... 443 A. Encrypted or Encoded Copyrighted Digital Goods Will No Longer Be ‘‘Public Goods’’ ............................................. 443 B. Gordon’s Market Failure Fair Use Test Is Not Met............ 444 C. Ku’s Creative Destruction Fair Use Test Is Not Met .......... 445 D. Non-Economic Fair Use Rationale...................................... 445 E. Old vs. New: How the Old Fair Use Rights Will Look Under A New Content Control Regime.............................. 448 1. Time-Shifting ................................................................ 448 2. Space-Shifting ................................................................ 448 3. Educational Use / Critical Use....................................... 449 4. First Sale Doctrine ......................................................... 449 F. Why Carry Fair Use Forward? Fair Use as Affirmative Defense, Not Cause of Action ............................................. 450 CONCLUSION....................................................................................... 451