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The commercial success of Apple’s iPhone has led, perhaps predictably, to the emergence of an interesting legal question, a question that itself may have significant commercial implications. That is, what is the legal status under the Digital Millennium Copyright Act of efforts to “unlock” cellular phones so that they can be used on multiple wireless networks? 1 For reasons that are explored below, the legal framework governing the unlocking of wireless handsets for personal, noncommercial use is different from and in many ways more well-defined than that governing efforts to unlock phones on a commercial basis. While unlocking a phone for personal use enjoys a clear exemption from liability under the DMCA, unlocking for commercial purposes has no such explicit safe harbor. That said, there are reasons to believe that courts might find that the commercial unlocking of cell phones does not run afoul of the DMCA, either. U.S., CELL PHONE LOCKING In contrast to Europe and Asia, in the United States the vast majority of cell phones are bought from the four major wireless carriers (Verizon, Sprint, T-Mobile and AT&T), rather than from independent vendors. The reason for the carriers’ dominance in hardware sales is easy to identify: they steeply discount the price of phones, and recoup their discount through subscription fees. The phones the U.S. carriers sell, however, are generally “locked” so that they can only be used on the seller’s network. The technique used to lock handsets varies depending on the type of network and hardware at issue, but in general the locks are simply a piece of software that prevents a user from accessing and altering the underlying code that operates the mobile phones and that ties the phone to a specific network. An unlocked phone would have the advantage not just of offering the choice in the United States between carriers, but also of operability, without substantial roaming fees, on compatible networks in Europe, Asia and Canada. While as an initial matter the four major U.S. carriers allow on their networks only phones they have sold, it is worth noting that certain carriers appear to have tolerated at least some minimal level of unlocking. Both AT&T and T-Mobile, for instance, appear to have a policy of unlocking their customers’ phones upon request, as long as the customer has owned the phone for a specified period of time. 2 This, however, seems not to be an option that customers have widely availed themselves of, perhaps out of a lack of awareness that it exists. 3 DIGITAL MILLENNIUM COPYRIGHT ACT Section 1201(a) of the DMCA prohibits two distinct acts. Section 1201(a)(1) states that “no person shall circumvent a technological measure that effectively controls access to a work protected under this title.” 4 Section 1201(a)(2) states that
[n]o person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that . . . is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title . . . . 5
At first glance, it is not obvious what �1201(a) has to do with cell phones, but the connection is suggested by Lexmark Int’l, Inc. v. Static Control Components, Inc. 6 and The Chamberlain Group, Inc. v. Skylink Techs., Inc. 7 Lexmark and Chamberlain both involved attempts by manufacturers of utilitarian objects (printers in Lexmark and garage door openers in Chamberlain) to use �1201(a)’s prohibition on the circumvention of access controls to prevent spare parts manufacturers from circumventing “authentication codes” that allowed only authorized replacement parts to interact with their host device. In both cases, if the proper authentication code was not conveyed by the replacement part, the underlying program that governed the functioning of the device would not work. Since, according to the plaintiffs, the underlying program was a copyrighted work, the circumvention of the authentication code constituted a violation of �1201(a). Both the Lexmark and Chamberlain courts rejected plaintiffs’ attempts to invoke �1201(a) in this context. The Lexmark court did so through two routes, both of which bear relevance to the issue of unlocking cell phones. First, it examined the nature of the underlying object being protected. Section 1201(a) was properly invoked, the court ruled, where the circumvented access control protected computer programs that themselves were “conduit[s] to protectable expression,” such as a song or a video game. 8 However, where the circumvented access control protected computer programs that governed the functioning of a utilitarian object, �1201(a) did not properly apply. 9 Second, the court refused to find the DMCA applicable because, while the access code may have prevented the printer from functioning with a replacement part, it did not restrict access to the actual program over which copyright was claimed. The program that operated the printer could be copied or read, for instance, notwithstanding the lock. The court thus concluded that the lock “did not control access” to a work protected under Title 17 of the United States Code. 10 This approach accords well with the intended focus of the DMCA. Indeed, Lexmark and Chamberlain struck many observers as attempts to put �1201(a) to uses for which it was not intended. As Professor Jane Ginsburg put it:
Now, what have printer cartridges and garage doors to do with copyright? Nothing, except, emphasized the plaintiffs, that computer programs control the functioning of these devices, and computer programs are copyrighted works. The extraordinary consequences of plaintiffs’ reasoning is that any useful object whose workings are controlled by computer programs — and today, that means an endless variety of consumer and industrial goods — can come within the scope of �1201 if the object’s producer makes access to those programs subject to an authentication sequence. As a policy matter, this result is inconceivable. 11
After Lexmark and Chamberlain, the prospect of using �1201(a) to regulate the functioning of utilitarian objects, cell phones in particular, also caught the Copyright Office’s attention. 17 U.S.C. �1201(a)(1)(C) directs the Librarian of Congress, together with the Registrar of Copyrights, to review the functioning of �1201(a) every three years and to grant a moratorium on the application of its provisions in certain circumstances where the circumvention prohibition is thought to have an adverse impact on non-infringing uses of copyrighted works. Thus, in the most recent triennial rulemaking concluded in November 2006, the Copyright Office exempted from the circumvention prohibition the following:
Computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network. 12
The Copyright Office therefore made clear that �1201(a) may not be used to bar consumers from altering the software in their own phones to make them compatible with a range of wireless networks. The Copyright Office supported this conclusion with reasoning that echoed the Lexmark court’s attention to the underlying object of circumvention:
[T]here has been no argument or suggestion that a consumer desiring to switch a lawfully purchased mobile handset from one network carrier to another is engaging in copyright infringement or in activity that in any way implicates copyright infringement or the interests of the copyright owner. The underlying activity sought to be performed by the owner of the handset is to allow the handset to do what it was manufactured to do — lawfully connect to any carrier. This is a noninfringing activity by the user . . . .Indeed, there does not appear to be any concern about protecting access to the copyrighted work itself. The purpose of the software lock appears to be limited to restricting the owner’s use of the mobile handset to support a business model, rather than to protect access to a copyrighted work itself. 13
Importantly, though, the Copyright Office’s statutory authority to suspend the application of �1201(a) only extends to �1201(a)(1), governing the act of circumventing. It does not extend to the suspension of �1201(a)(2), which by its terms purports to prohibit the manufacture, sale or other trafficking of any product or service that is primarily designed to circumvent a technological protection. As a practical matter, then, the statute appears to only provide a circumvention right to phone owners who are technologically savvy enough to unlock their own phones. It does not obviously provide room for commercial actors to unlock cell phones in exchange for a fee. IMPLICATIONSOf the Copyright Office’s Rulemaking for Commercial Unlocking. It is not clear that this is the last word on how the statute should be interpreted, however. For one thing, taking the view that �1201(a), read as a whole, does not allow commercial services to unlock phones seems to require also taking the view that Congress was playing a fairly clever game in structuring that section. Section 1201(a)(1)(C) — the provision that orders the Copyright Office to undertake its triennial review of �1201(a)’s functioning — orders the Office to “make the determination . . . of whether persons who are users of a copyrighted work are, or are likely to be . . . , adversely affected by the prohibition under subparagraph (A) in their ability to make noninfringing uses” of that work. 14 Thus, the apparent purpose of �1201(a)(1)(C) is to limit �1201(a)’s interference with noninfringing uses. But it would be odd indeed if Congress intended to restrict, through practical means, the ability to engage in noninfringing uses only to those with the substantial technological sophistication that will almost certainly be required to take advantage of any triennial exemption granted under �1201(a)(1)(C). As Professor Ginsburg argues, “[u]nless the court [hearing a claim against a commercial unlocker] attributed to Congress the cynical motive of declaring a noninfringing-use-preserving policy while deliberately withholding the practical means to achieve it, the court should give effect to the announced objective” and allow circumvention devices or services for �1201(a)(1)(C)-listed works. 15 Beyond the logic of the statute, though, there is the issue of what place the Copyright Office’s rulemaking under �1201(a)(1)(C) should have in any litigation involving commercial unlocking. In its triennial rulemaking process, the Copyright Office was presented with a request for an exemption for unlocking cell phones, a request that it deemed meritorious. It therefore granted the exemption to the extent of its statutory authority. But it does not obviously follow from the fact that there are limits on that statutory authority, i.e., the fact that the Copyright Office’s power to declare exemptions does not extend to �1201(a)(2), that precedent such as Lexmark should be discarded. A court could still feel free, as the Lexmark court did, to say as an initial matter that �1201(a) does not apply where the ultimate thing being protected is a utilitarian object rather than an expressive work. Indeed it would seem unusual to conclude from the fact that the Copyright Office had limits on the reach of its authority that those limits should bind a court hearing a commercial unlocking dispute as well. CONCLUSION The Copyright Office appeared to approach the issue of �1201(a)’s applicability to cell phone unlocking in much the same way that the Lexmark court handled the issue of printer interoperability, with a general sense that the statute was not intended to, in essence, protect a business model rather than copyrighted material. This generally appears to be in keeping with the purposes of the DMCA. Thus, despite the fact that neither the DMCA nor the rule-making thereunder contains a specific exemption for commercial unlocking of cell phones, a court could well nevertheless find that that activity is not prohibited. Henry A. Lanman is of counsel at Trachtenberg Rodes & Friedberg. ENDNOTES: 1. Depending on how the unlocking is done, various contractual issues arising under end user agreements with the hardware manufacturer or the wireless network may be implicated as well. This article addresses only the issues arising under the DMCA. 2. Wu, Tim, “Wireless Carterfone.” International Journal of Communication, Vol. 1, p. 389, at 401; see also Recommendation of the Register of Copyrights in RM 2005-11: Rulemaking on Exemptions from Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies (“Rulemaking”) at 49 (available at http://www.copyright.gov/1201/docs/1201_recommendation.pdf). 3. Wu, id. 4. 17 U.S.C. �1201(a)(1). 5. 17 U.S.C. �1201(a)(2). It is worth noting that 17 U.S.C. �1203(a) provides that “[a]ny person injured by a violation of section 1201 or 1202 may bring a civil action in an appropriate United States district court for such violation.” Thus to the extent a network carrier believed it was harmed by unlocking cell phones, it would appear to have standing to bring a claim for damages, notwithstanding the likely fact that the hardware manufacturer rather than the carrier held whatever intellectual property rights existed in the phone’s software. See TracFone Wireless, Inc. v. Sol Wireless Group, Inc., No. 05-23279-CIV (S.D.Fla. Feb. 28, 2006). 6. 387 F.3d 522 (6th Cir. 2004). 7. 381 F.3d 1178 (Fed. Cir. 2004). 8. 387 F.2d at 548. 9. Id. 10. 387 F.2d at 546-7. 11. Ginsburg, Jane. “The Pros and Cons of Strengthening Intellectual Property Protection: Technological Protection Measures and Section 1201 of the U.S. Copyright Act.” Public Law & Legal Theory Working Paper Group, Paper Number 07-137 at 4 (available at http://ssrn.com/abstract=960724). 12. Rulemaking at 2. 13. Rulemaking at 50-51. Neither phone manufacturers nor the wireless networks themselves chose to argue otherwise during the Copyright Office’s rulemaking proceeding. Id. at 42. 14. 17 U.S.C. �1201(a)(1)(C). 15. Ginsburg, supra n. 11, at 18.

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