1. 1 CPTWG MEETING #92 October 26, 2005 Legislative/Regulatory Update CPTWG MEETING #92 October 26, 2005 Legislative/Regulatory Update Jim Burger jburger@dowlohnes.com jburger@dowlohnes.com

2. 2 OverviewOverview n Legislature u Senate Judiciary Oversight Committee u Broadcast Flag/Digital Audio Broadcast? n Other developments u StorageTek v. CHE n Legislature u Senate Judiciary Oversight Committee u Broadcast Flag/Digital Audio Broadcast? n Other developments u StorageTek v. CHE

3. 3 Senate Judiciary Hearings n Asked for Recommendations from Industry for Congressional Action post-Grokster n Chairman Spector Expressed Preference for Legislative Rather than Judicial Solutions n However, Witness Disagreed: No New Legislation Needed n Feinstein Seemed Frustrated, Repeatedly Asked U.S. Attorney for CD CA What Tools Needed To Stop Widespread Piracy n Asked for Recommendations from Industry for Congressional Action post-Grokster n Chairman Spector Expressed Preference for Legislative Rather than Judicial Solutions n However, Witness Disagreed: No New Legislation Needed n Feinstein Seemed Frustrated, Repeatedly Asked U.S. Attorney for CD CA What Tools Needed To Stop Widespread Piracy

4. 4 Spector Concluded Saying: n n “So we will continue to study them and at least in the short term I think we will carry out the wishes of those who wish us to do nothing – which we are very good at … until Senator Feinstein tells us precisely what to do” n n “So we will continue to study them and at least in the short term I think we will carry out the wishes of those who wish us to do nothing – which we are very good at … until Senator Feinstein tells us precisely what to do”

5. 5 Broadcast Flag/Digital Audio Broadcast n Earlier This Year DC Circuit Found FCC Didn’t Have Jurisdiction to Implement Broadcast Flag n Many Rumors of Legislation to Delegate Authority to FCC for Flag, for More? n Also, Reportedly RIAA Asking for Delegation to FCC for Encrypting Digital Audio Broadcast and Digital Satellite Radio n Earlier This Year DC Circuit Found FCC Didn’t Have Jurisdiction to Implement Broadcast Flag n Many Rumors of Legislation to Delegate Authority to FCC for Flag, for More? n Also, Reportedly RIAA Asking for Delegation to FCC for Encrypting Digital Audio Broadcast and Digital Satellite Radio

6. 6 StorageTek v. CHE – Background n Federal Circuit Court of Appeals Decision n Found CHE not guilty of DMCA because it did not violate copyright or facilitate copyright infringement n Relied on Chamberlain v. Skylink (garage door opener case): “[Congress] chose to create new causes of action for circumvention and for trafficking in circumvention devices. Congress did not create new property rights.” n Federal Circuit Court of Appeals Decision n Found CHE not guilty of DMCA because it did not violate copyright or facilitate copyright infringement n Relied on Chamberlain v. Skylink (garage door opener case): “[Congress] chose to create new causes of action for circumvention and for trafficking in circumvention devices. Congress did not create new property rights.”

7. 7 n StorageTek File Petition for Rehearing En Banc n Argued that Improper for Court to Require Copyright Violation to Find 1201(a)(1) DMCA Violation u Both text and statutory construction confirm u No need for required rulemaking to determine exemptions from DMCA for noninfringing uses u Majority opinion would render 1201(a)(2) duplicative of 1201(b) explicitly tied to infringement u Noted that Universal v. Corley cited by the court explicitly rejected infringement as an element of 1201(a) n StorageTek File Petition for Rehearing En Banc n Argued that Improper for Court to Require Copyright Violation to Find 1201(a)(1) DMCA Violation u Both text and statutory construction confirm u No need for required rulemaking to determine exemptions from DMCA for noninfringing uses u Majority opinion would render 1201(a)(2) duplicative of 1201(b) explicitly tied to infringement u Noted that Universal v. Corley cited by the court explicitly rejected infringement as an element of 1201(a) StorageTek v. CHE - Petition

8. 8 StorageTek v. CHE - Amici n MPAA, RIAA and Others Filed Amici Brief Supporting the Petition n Also Argued Wrongly Decided u Also points to statutory exemption process u Render that process senseless u Would make any infringement defense a defense to circumvention liability u Congress did not import certain defenses, including fair use, instead provided specific defenses, e.g., reverse engineering u Distinguished Chamberlain “accused device that enables only uses that copyright law explicitly authorizes n MPAA, RIAA and Others Filed Amici Brief Supporting the Petition n Also Argued Wrongly Decided u Also points to statutory exemption process u Render that process senseless u Would make any infringement defense a defense to circumvention liability u Congress did not import certain defenses, including fair use, instead provided specific defenses, e.g., reverse engineering u Distinguished Chamberlain “accused device that enables only uses that copyright law explicitly authorizes