A busy week for the courts

ACRA v. Lexmark

We have encountered Lexmark before; that company has attempted to use the DMCA to shut down alternative manufacturers of alternative ink cartridges for its printers. That attempt failed, but the company appears to have found another, stronger way of protecting itself from competition: the shrink-wrap patent license.

In this case, the Arizona Cartridge Remanufacturers Association (ACRA) took Lexmark to court, challenging Lexmark's "prebate" offering. This marketing scheme involves "reduced price" cartridges which are explicitly marked, on the box, as being "single use only." Customers are supposed to return empty cartridges to Lexmark, and they are prohibited from giving the cartridges to other remanufacturers. ACRA alleged that the labeling on the box was deceptive, since it was not actually binding upon customers. ACRA failed to convinced the US 9th Circuit Court of Appeals, however; on August 30, it reaffirmed a lower-court decision [PDF] in Lexmark's favor.

The two things which come out of this ruling are: (1) patents can be used to impose post-sale restrictions on customers, and (2) labeling on a package can be a valid shrink-wrap patent license. So anybody who disposes of a used Lexmark cartridge in a non-approved manner becomes a patent infringer - and remanufacturers which accept those cartridges are inducing infringement.

It is not hard to see where this sort of logic can go. If a product contains technology subject to a patent, that patent can be used to impose no end of post-sale conditions. In the current climate, obtaining a patent which can cover any given product will not be an especially challenging task. Those patents could be used in interesting new ways. It is already annoying to buy a laptop with a "designed for Windows" sticker attached to the case with 1000-year glue. How fun would it be if the sticker read "designed for Windows only" - and have it be enforceable?

Many of us use free software because it gives us greater control over our systems. The growing power granted to those who hold intellectual property rights threatens to take the control away. Increasingly, we do not truly own the hardware we thought we had purchased; we simply hold a set of limited rights to use that hardware in specific ways which do not threaten the manufacturers' interests. That does not seem like the path to freedom.

Universal Music Australia Pty Ltd v Sharman License Holdings Ltd

In Australia, a large number of media companies took Sharman License Holdings to court, alleging several copyright-related violations. Sharman, the distributor of Kazaa, does not have entirely clean hands - nobody disputes that many people use Kazaa to engage in copyright infringement. In its defense, Sharman argued that it had no control over the behavior of Kazaa users, that it had warned them about infringing copyrights, and that the license agreement for the software prohibited its use to make unauthorized copies of copyrighted materials.

The judge actually bought that argument - to an extent. The ruling in this case clears the defendants of many charges of copyright infringement. The judge did find, however, that the defendants had "authorized" users to infringe copyrights, and that this act violated Australian copyright law.

The defendants will now have to pay damages. Kazaa will be allowed to continue to exist, but a new version must be released within two months with filters designed to block infringing uses. In particular, the software will have to accept a list (provided by publishers) of claimed works, and block attempts to trade files which match entries in the lists. It is not hard to imagine that file traders will respond to the keyword matching in the same way spammers have; expect to see some creative spellings attached to music files in the near future.

The judge seemed to have a real interest in not shutting down peer-to-peer communications altogether, and mandated that the filtering be imposed "... without unnecessarily intruding on others' freedom of speech and communication." The fact is, however, that this is yet another ruling holding software developers responsible for the acts of certain of their users. Manufacturers of cutlery, automobiles, and firearms are not held to such standards, but people who innovate in the software area do so at their own risk. Thus far, most of the legal firepower has been aimed at commercial file sharing operations, but that does not mean that pure free software projects are immune to this sort of attack.

Blizzard v. bnetd

One free software project which has been subject to this sort of attack is bnetd, last mentioned here two weeks ago. The Eighth Circuit Court of Appeals has now issued its ruling in this case [PDF], and the news is not good: bnetd lost on all counts. The logic remains unchanged from the prior court's ruling; for example:

The idea that free software has fewer rights because it has "limited commercial purpose" is chilling, to say the least. In any case, the interoperability exception to the DMCA has been shown to mean little, once again.