A possible setback for DRM in Europe

It's amazing how much the computing power of video game consoles has changed over time. For example, the Nintendo Wii, launched in 2006, features a 729 MHz CPU and 88 MB of RAM, which is quite a step up from the consoles of the 1980s. In fact, the Wii has enough power to browse the web, listen to music, and to handle most other general purpose tasks on a modern Linux distribution. That isn't just theoretical either, it is actually something that you can do. That is, it's something you can do if laws don't prohibit circumventing the DRM of the device; a recent ruling in Europe's Supreme Court involving Nintendo and an Italian company may directly affect that in the European Union (EU).

Thirteen years ago, in Directive 2001/29, the EU required its 28 member-states, including Italy (where this case originated), to pass legislation that, among other things, "provide[s] adequate legal protection against the circumvention of any effective technological measures". This includes prohibiting:

However, a recent ruling by the European Court of Justice (ECJ) — the EU's Supreme Court — may have dramatically weakened the anti-circumvention prohibition. The ECJ adjudicated a dispute between the video game behemoth Nintendo and PC Box, which is a small Italian company. PC Box markets jailbreaking tools for the Wii console and DS, a dual-screen portable handheld gaming system also from Nintendo, which are both capable of running Linux. PC Box sold Wii and DS systems with hardware modifications that allowed the execution of arbitrary code, and added homebrew video games pre-installed onto the system. The modifications broke the DRM on the consoles. Nintendo, less than happy with this, sued in Italy; the case was heard by the Tribunale di Milano (the Milan District Court, a lower court in Italy).

That court decided it best to refer the case to the ECJ to answer two questions that were dense, impenetrable, and filled with legalese. Those questions were essentially:

1. Does the anti-circumvention provision also cover video game consoles which include access control hardware, deliberately made not to be interoperable with anything else, which checks to see if video games inserted into the console include a signature that allows them to be played on the console?
2. How, if at all, are "the scope, the nature and the importance of the use of devices, products or components capable of circumventing those effective technological measures, such as PC Box equipment [...] relevant" to whether or not they fall afoul of the legal prohibition?

The court's answers were: Yes and Very, respectively.

With regard to the first, the court noted that the anti-circumvention clauses catch a lot of activity and devices: "the concept of 'effective technological measures' is defined broadly". Those devices include combining lock-out chips on game consoles with a requirement that authorized games must contain authorization code that satisfies those chips.

While a first glance reading through the court's answer to the second question might seem to appeal to DRM-supporters, the last sentence of paragraph 38 is key to an opening for reducing the scope of DRM:

That last phrase is crucial: "how often they are used for purposes which do not infringe copyright." That's the Achilles heel for Nintendo when the case goes back to Italy's courts. Applying the standard in paragraph 38 to this case, the ECJ is saying that it's up to the Italian court to decide whether or not there's a feasible alternative to DRM-circumvention (in the form of PC Box's hardware modding) for enabling the product PC Box claims to be marketing: homebrew game playing and audio/video playback on Nintendo's Wii and DS systems. If there isn't a feasible alternative, and the alleged PC Box product is, in fact, often used for non-infringing purposes, then Nintendo's case could fall apart.

But the Interactive Software Federation of Europe (ISFE) was upbeat about the ruling. Essentially, its argument is that any DRM-circumvention device on video game consoles can't have any commercially significant use besides allowing the playing of infringing copies of games: "ISFE is confident that the application of the test of proportionality set out by the CJEU will enable the Milan Court to determine that the sale of circumvention devices is unlawful".

But that's simply not true. There are significant applications for repurposing video game console hardware for general-purpose computing. The National Center for Supercomputing Applications made a supercomputer by clustering Sony PlayStation 2s in 2003. Two years ago, the United States Department of Defense (DoD) clustered over 1,700 PlayStation 3s to make a powerful Linux-based supercomputer; it was so powerful that the Air Force Research Laboratory, which made the cluster, called it "the fastest interactive computer system in the entire DoD, capable of executing 500 trillion floating point operations per second." This technical achievement was also a great financial success:

There are also substantial applications for individual users and small businesses, particularly, as desktop computing solutions. Sony's PlayStation 4 features an eight-core 64-bit CPU, a dedicated GPU, 8 GB of GDDR5 RAM, WiFi, and USB 3.0 ports. That's much more powerful and also much cheaper than my relatively new laptop. Throw in a cheap monitor, keyboard, and mouse, and you could potentially have an affordable and powerful desktop computer ... if it was legal to break Sony's DRM.

Those are some of the reasons to be skeptical of the ISFE's argument. Another reason is the anxious reaction from some highly-respected lawyers in copyright law who have decades of experience. In an article titled "Does the CJEU ruling in Nintendo and Others v PC Box Srl raise serious implications for device manufacturers?", three experienced lawyers with the multinational law firm Osborne Clarke note: "The CJEU has effectively said that Nintendo may use TPMs [trusted platform modules] to prevent illegal use of videogames but not to prevent other, non-infringing, uses of the consoles." They list some of their concerns about the effects of the ruling, in particular, they find it "worrying that device manufacturers potentially have no control over what their devices are used for".

It's important to emphasize that the European Court of Justice's ruling has already set a strong precedent for the entire EU when it comes to DRM anti-circumvention law. The ECJ is the EU's top court when it comes to interpreting Directives, such as the ones that deal with DRM. No lower courts can go against the ECJ's ruling.

The Milan District Court is a lower court, but its ruling will eventually provide an example throughout the EU of how the ECJ's test for permissible DRM circumvention can be applied. Any other court anywhere in the EU dealing with a similar issue will likely look at how the Milan District Court has grappled with the issue, although it won't be bound by the ruling.

Looking at the ECJ's ruling and at Osborne Clarke's reaction, there is a good chance that Nintendo will lose this case. Hardware hackers and open-source enthusiasts residing in Europe who want to repurpose the latest video game console hardware for fun and/or profit should keep their eyes on the Milan District Court, as it will rule on the case — at a date yet to be determined. Don't be surprised if Nintendo comes out losing in a big way, so stay tuned as we watch this case unfold.