Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies, 65260-65279 [2012-26308]

Agencies

• Library of Congress
• Copyright Office

[Federal Register Volume 77, Number 208 (Friday, October 26, 2012)]
[Rules and Regulations]
[Pages 65260-65279]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-26308]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. 2011-7]


Exemption to Prohibition on Circumvention of Copyright Protection 
Systems for Access Control Technologies

AGENCY: Copyright Office, Library of Congress.

ACTION: Final rule.

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SUMMARY: Having duly considered and accepted the Recommendation of the 
Register of Copyrights that the prohibition against circumvention of 
technological measures that effectively control access to copyrighted 
works shall not apply to persons who engage in noninfringing uses of 
certain classes of copyrighted works, the Librarian of Congress is 
exercising his authority to publish a new rule designating classes of 
copyrighted works that shall be subject to statutory exemption.

DATES: Effective Date: October 28, 2012.

FOR FURTHER INFORMATION CONTACT: Jacqueline C. Charlesworth, Senior 
Counsel to the Register of Copyrights, Office of the Register of 
Copyrights, by email at jcharlesworth@loc.gov; Christopher S. Reed, 
Senior Advisor for Policy & Special Projects, Office of the Register of 
Copyrights, by email at creed@loc.gov; or call the U.S. Copyright 
Office by phone at 202-707-8350.

SUPPLEMENTARY INFORMATION: The Librarian of Congress, upon the 
recommendation of the Register of Copyrights, has determined that the 
prohibition against circumvention of technological measures that 
effectively control access to copyrighted works shall not apply to 
persons who engage in noninfringing uses of certain classes of works. 
This rulemaking is the culmination of a proceeding initiated by the 
Register on September 29, 2011. A more comprehensive statement of the 
background and legal requirements of the rulemaking, a discussion of 
the record, and the Register's analysis are set forth in the Register's 
Recommendation, which was transmitted to the Librarian on October 12, 
2012. A copy of the Recommendation may be found at www.copyright.gov/1201/. This notice summarizes the Register's Recommendation, announces 
the Librarian's determination, and publishes the regulatory text 
codifying the exempted classes of works.

I. Background

A. Statutory Requirements

    The Digital Millennium Copyright Act (``DMCA'') was enacted to 
implement certain provisions of the WIPO Copyright Treaty and WIPO 
Performances and Phonograms Treaty. It established a wide range of 
rules for the digital marketplace that govern not only copyright 
owners, but also consumers, manufacturers, distributors, libraries, 
educators, and online service providers.
    Chapter 12 of Title 17 of the United States Code prohibits the 
circumvention of certain technological measures employed by or on 
behalf of copyright owners to protect their works (``technological 
measures'' or ``access controls''). Specifically, Section 1201(a)(1)(A) 
provides, in part, that ``[n]o person shall circumvent a technological 
measure that effectively controls access to a work protected'' by the 
Copyright Act. In order to ensure that the public will have the 
continued ability to engage in noninfringing uses of copyrighted works, 
however, subparagraph (B) limits this prohibition. It provides that the 
prohibition shall not apply to persons who are users of a copyrighted 
work in a particular class of works if such persons are, or in the

[[Page 65261]]

succeeding three-year period are likely to be, adversely affected by 
virtue of the prohibition in their ability to make noninfringing uses 
of such works, as determined in this rulemaking proceeding.
    The proceeding is conducted by the Register of Copyrights, who is 
to provide notice of the proceeding, seek comments from the public, 
consult with the Assistant Secretary for Communications and Information 
of the Department of Commerce, and recommend final regulations to the 
Librarian of Congress. According to Section 1201(a)(1)(D), the 
resulting regulations, which are issued by the Librarian of Congress, 
announce ``any class of copyrighted works for which the Librarian has 
determined, pursuant to the rulemaking * * * that noninfringing uses by 
persons who are users of a copyrighted work are, or are likely to be, 
adversely affected, and the prohibition contained in subparagraph (A) 
shall not apply to such users with respect to such class of works for 
the ensuing 3-year period.''
    The primary responsibility of the Register and the Librarian in 
this rulemaking proceeding is to assess whether the implementation of 
access control measures is diminishing the ability of individuals to 
use copyrighted works in ways that are not infringing and to designate 
any classes of works with respect to which users have been adversely 
affected in their ability to make such noninfringing uses. Congress 
intended that the Register solicit input that would enable 
consideration of a broad range of current or likely future adverse 
impacts. Section 1201(a)(1)(C) directs that the rulemaking proceeding 
examine: (1) The availability for use of copyrighted works; (2) the 
availability for use of works for nonprofit archival, preservation, and 
educational purposes; (3) the impact that the prohibition on the 
circumvention of technological measures applied to copyrighted works 
has on criticism, comment, news reporting, teaching, scholarship, or 
research; (4) the effect of circumvention of technological measures on 
the market for or value of copyrighted works; and (5) such other 
factors as the Librarian considers appropriate. These statutory factors 
require the Register and Librarian to balance carefully the 
availability of copyrighted works for use, the effect of the 
prohibition on particular uses, and the effect of circumvention on 
copyrighted works.

B. The Rulemaking Process

    In examining the factors set forth in Section 1201(a)(1)(C), the 
focus is on whether the implementation of technological measures has an 
adverse impact on the ability of users to make lawful uses of 
copyrighted works. The statutory prohibition on circumvention is 
presumed to apply to any and all kinds of works unless, and until, the 
criteria have been met for a particular class.
    In each rulemaking proceeding, the Register and Librarian review 
the proposed classes de novo. The fact that a class previously has been 
designated creates no presumption that redesignation is appropriate. 
While in some cases earlier legal analysis by the Register may be 
relevant to analyzing a proposed exemption, the proponent of a class 
must still make a persuasive factual showing with respect to the three-
year period currently under consideration. When a class has been 
previously designated, however, evidence relating to the costs, 
benefits, and marketplace effects ensuing from the earlier designation 
may be relevant in assessing whether a similar class should be 
designated for the subsequent period.
    Proponents of an exemption for a class of works bear the burden of 
demonstrating that the exemption is warranted. In order to establish a 
prima facie case for designation of a particular class of works, the 
proponent must show that: (1) Uses affected by the prohibition on 
circumvention are or are likely to be noninfringing; and (2) as a 
result of a technological measure controlling access to a copyrighted 
work, the prohibition is causing, or in the next three years is likely 
to cause, a substantial adverse impact on those uses.
    There are several types of noninfringing uses that could be 
affected by the prohibition of Section 1201(a)(1), including fair use 
and the use of public domain works, among others. A proponent must show 
that the proposed use is or is likely noninfringing. It is not 
sufficient that the use could be noninfringing, as the Register does 
not apply a ``rule of doubt'' when it is unclear whether a proposed use 
is likely to be fair or otherwise noninfringing.
    A proponent may not rely on speculation to support a proposed 
class, but instead must show by a preponderance of evidence that the 
alleged harm to noninfringing uses is more likely than not to occur 
during the next three years. The harm must be distinct and measurable, 
and more than de minimis. The Register and Librarian will, when 
appropriate, consider whether alternatives exist to accomplish the 
proposed noninfringing uses. The mere fact that a particular medium or 
technology may be more convenient for noninfringing uses than other 
formats is generally insufficient to support an exemption. If 
sufficient alternatives exist, there is no substantial adverse impact 
or adequate basis to designate the class.

C. Defining a Class

    The starting point in defining a ``particular class'' of works to 
be designated as a result of the rulemaking is one of the categories of 
works set forth in Section 102 of the Copyright Act, such as literary 
works, musical works, or sound recordings. Those categories are only a 
starting point, however; a ``class'' will generally constitute some 
subset of a Section 102 category. The determination of the appropriate 
scope of a class of works recommended for exemption will also depend on 
the evidentiary record and take into account the adverse impact on 
noninfringing uses, as well as the market for and value of the 
copyrighted works.
    While beginning with a category of works identified in Section 102, 
or a subcategory thereof, the description of the ``particular class'' 
ordinarily will be refined with reference to other factors so that the 
scope of the class is proportionate to the scope of harm to 
noninfringing uses. For example, a class might be refined in part by 
reference to the medium on which the works are distributed, or to the 
access control measures applied to the works. The description of a 
class of works may also be refined, in appropriate cases, by reference 
to the type of user who may take advantage of the exemption or the type 
of use that may be made pursuant to the designation. The class must be 
properly tailored to address not only the demonstrated harm, but also 
to limit the adverse consequences that may result from the exemption to 
the prohibition on circumvention. In every case, the contours of a 
class will depend on the factual record established in the rulemaking 
proceeding.

II. History of the Proceeding

A. Solicitation of Public Comments and Hearings

    This is the fifth triennial rulemaking proceeding pursuant to 
Section 1201(a)(1)(C). The Register initiated the rulemaking on 
September 29, 2011 (76 FR 60398) with publication of a Notice of 
Inquiry (``NOI''). The NOI requested written comments from all 
interested parties, including representatives of copyright owners, 
educational institutions, libraries and archives, scholars, 
researchers, and members of

[[Page 65262]]

the public, concerning whether noninfringing uses of certain classes of 
works are, or are likely to be, adversely affected by the prohibition 
against circumvention of measures that control access to copyrighted 
works.
    During the initial comment period that ended on December 1, 2011, 
the Copyright Office received 22 comments, all of which were posted on 
the Office's Web site. Based on these comments, the Register identified 
proposed exemptions for the upcoming period. Because some of the 
initial comments contained similar or overlapping proposals, the 
Copyright Office organized the proposals into ten proposed classes of 
works, and set forth and summarized each class in a Notice of Proposed 
Rulemaking (``NPRM'') published on December 20, 2011 (76 FR 78866).
    The NPRM did not present the initial classes in the form of a 
proposed rule, but merely as ``a starting point for further 
consideration.'' The NPRM asked interested parties to submit additional 
comments and reply comments providing support, opposition, 
clarification, or correction regarding the proposed classes of works, 
and to provide factual and/or legal arguments in support of their 
positions. The Copyright Office received a total of 674 comments before 
the comment period closed on February 10, 2012. The Office also 
received 18 reply comments before the reply comment period closed on 
March 2, 2012.
    On March 15, 2012, the Register published a Notice indicating that 
public hearings would be conducted at the University of California, 
UCLA School of Law, in California, and at the Library of Congress in 
Washington, DC, in May and June 2012 to consider the proposed 
exemptions. Requests to testify were due April 2, 2012. Public hearings 
were held on five separate days: at the Library of Congress on May 11, 
2012; at University of California, Los Angeles, School of Law on May 
17, 2012; and at the Library of Congress on May 31, June 4, and June 5, 
2012. Witnesses representing proponents and opponents of proposed 
classes of works offered testimony and answered questions from 
Copyright Office staff.
    Following the hearings, the Copyright Office sent follow-up 
questions pertaining to certain issues to witnesses who had testified. 
The purpose of these written inquiries was to clarify for the record 
certain statements made during the hearings and to elicit further 
responses to questions raised at the hearings.

B. Consultation With the Assistant Secretary for Communications and 
Information

    As contemplated by Congress, the Register also sought input from 
the Assistant Secretary for Communications and Information of the 
Department of Commerce, who oversees the National Telecommunications 
and Information Administration (``NTIA''). NTIA staff were briefed on 
the rulemaking process and informed of developments through a series of 
meetings and telephone conferences. They also were in attendance at 
many of the hearings.
    NTIA formally communicated its views on the proposed classes in a 
letter delivered to the Register on September 21, 2012.

III. The Designated Classes

    Upon the recommendation of the Register of Copyrights, the 
Librarian has determined that the following classes of works shall be 
exempt from the prohibition against circumvention of technological 
measures set forth in Section 1201(a)(1)(A):

A. Literary Works Distributed Electronically--Assistive Technologies

    Literary works, distributed electronically, that are protected 
by technological measures which either prevent the enabling of read-
aloud functionality or interfere with screen readers or other 
applications or assistive technologies, (i) when a copy of such a 
work is lawfully obtained by a blind or other person with a 
disability, as such a person is defined in 17 U.S.C. 121; provided, 
however, the rights owner is remunerated, as appropriate, for the 
price of the mainstream copy of the work as made available to the 
general public through customary channels; or (ii) when such work is 
a nondramatic literary work, lawfully obtained and used by an 
authorized entity pursuant to 17 U.S.C. 121.

    This exemption is a modification of the proponents' proposal. It 
permits the circumvention of literary works that are distributed 
electronically to allow blind and other persons with disabilities to 
obtain books through the open market and use screen readers and other 
assistive technologies to read them, regardless of whether an 
accessible copy may be available for purchase, but provided the author, 
publisher, or other rights owner receives remuneration, as appropriate. 
It also permits authorized entities operating under Section 121 to use 
such works and ensures that such use conforms to the provisions and 
safeguards of that section.
    Proponents American Council of the Blind and American Foundation 
for the Blind, supported by The Samuelson-Glushko Technology Law & 
Policy Clinic at the University of Colorado Law School, sought an 
exemption to access literary works that are distributed 
electronically--i.e., ebooks--that are legally obtained by individuals 
who are blind or print disabled but cannot be used with screen readers 
or other assistive technologies. In 2006 and 2010, the Librarian 
designated a class consisting of ``[l]iterary works distributed in 
ebook format when all existing ebook editions of the work (including 
digital text editions made available by authorized entities) contain 
access controls that prevent the enabling either of the book's read-
aloud function or of screen readers that render the text into a 
specialized format.'' See 37 CFR 201.40(b)(6). In this proceeding, 
proponents sought to eliminate the requirement that all existing ebook 
editions contain access controls, but at the same time proposed to 
limit the exemption to individuals with print disabilities as defined 
by Section 121 of the Copyright Act and to authorized entities under 
Section 121 distributing works exclusively to such persons.
    Proponents asserted that the exception is necessary because 
technological measures to control access to copyrighted works have been 
developed and deployed in ways that prevent access to ebooks by people 
who are blind or visually impaired. Proponents explained that, despite 
the rapid growth of the ebook market, most ebook titles remain 
inaccessible due to fragmentation within the industry and differing 
technical standards and accessibility capabilities across platforms. 
Although precise figures remain elusive, press accounts cited by the 
proponents suggest that only a fraction of the publicly available 
ebooks are accessible; proponents estimated that there are 
approximately 1.8 million inaccessible ebook titles. Proponents cited 
an example, The Mill River Recluse by Darcie Chan, ebook editions of 
which are available in each of the three major ebook stores. Only the 
iBookstore edition is accessible, however. An individual with a print 
disability would thus be required to have an iPhone, iPad, or other 
Apple device in order to access the book.
    Joint Creators and Copyright Owners, consisting of the Association 
of American Publishers, the American Society of Media Photographers, 
the Business Software Alliance, the Entertainment Software Association, 
the Motion Picture Association of America, the Picture Archive Council 
of America, and the Recording Industry Association of America (``Joint 
Creators''), representing various content owner groups, offered no 
objection in principle

[[Page 65263]]

to an exemption such as that promulgated in 2010. They observed that 
the market is evolving rapidly and that the market share of the major 
electronic book platforms had increased substantially since the last 
rulemaking. However, they opposed elimination of the requirement in the 
existing exemption that all ebook formats contain access controls 
before the exemption could be invoked.
    When the Register was first called upon to consider an exemption 
for ebooks in 2003, the marketplace was very different. At that time, 
ebooks were distributed primarily for use on personal computers 
(``PCs''), readable with freely available software, and the public's 
reception of ebooks was tentative. Today, ebooks are marketed mainly 
for use on mobile devices, ranging from dedicated ebook readers using 
proprietary software (e.g., Amazon's Kindle) to multipurpose devices 
running free software applications (e.g., an Apple iPad running 
Amazon's Kindle app). Nonetheless, there are often substantial costs 
associated with owning dedicated reading devices, and there are 
inefficiencies associated with having to own more than one such device. 
The restrictions recommended by the Register in prior rulemakings are 
therefore not reflective of the current market conditions.
    The Register determined that the statutory factors of Section 
1201(a)(1)(C) strongly favor an exempted class to address the adverse 
effects that were established in the record. The designated class is 
not merely a matter of convenience, but is instead intended to enable 
individuals who are blind or visually impaired to have meaningful 
access to the same content that individuals without such impairments 
are able to perceive. As proponents explained, their desire is simply 
to be able to access lawfully acquired content. In short, the exemption 
is designed to permit effective access to a rapidly growing array of 
ebook content by a population that would otherwise go without.
    NTIA also indicated its support for the adoption of an exemption, 
noting that ``[r]equiring visually impaired Americans to invest 
hundreds of dollars in an additional device (or even multiple 
additional devices), particularly when an already-owned device is 
technically capable of rendering literary works accessible, is not a 
reasonable alternative to circumvention * * *.''
    Explaining that literary works are distributed electronically in a 
wide range of formats, not all of which are necessarily widely 
understood to constitute ``ebooks,'' NTIA noted that it preferred the 
more general term ``literary works, distributed electronically.''
    At the hearing, proponents confirmed that it was not their intent 
to create a situation where publishers are not getting paid for their 
works, and that the author or publisher should be compensated for the 
price of the mainstream book available to the general public. Thus, the 
first prong of the designated class permits circumvention by blind or 
other persons with disabilities, effectively ensuring that they have 
access through the open market, while also ensuring that rights owners 
receive appropriate remuneration.
    The second prong of the proposal (the part that would extend the 
exemption to authorized entities) is a new consideration; it has not 
been the subject of a prior Section 1201 rulemaking and proponents did 
not provide extensive analysis. Nonetheless, the Register found that 
the proposal was supported by relevant evidence and thus recommended 
that authorized entities should enjoy an exemption to the extent 
required to carry out their work under Section 121. The Register 
recommended some modifications to the proposal as written to ensure 
that it is consistent with, but not an enlargement of, Section 121. In 
relevant part, Section 121 permits qualified ``authorized entities'' to 
reproduce and distribute nondramatic literary works provided the 
resulting copies are in ``specialized formats exclusively for use by 
blind or other persons with disabilities.''
    In her recommendation, the Register noted that several provisions 
in Section 121 appear ill-suited to the digital world and could benefit 
from comprehensive review by Congress. Section 121 was enacted in 1996 
following careful consideration of the public interest, including the 
interests of persons with disabilities and the interest of authors and 
other copyright owners. The issues relating to digital uses are complex 
and deserving of consideration beyond what can be accomplished in this 
proceeding.

B. Wireless Telephone Handsets--Software Interoperability

    Computer programs that enable wireless telephone handsets to 
execute lawfully obtained software applications, where circumvention 
is accomplished for the sole purpose of enabling interoperability of 
such applications with computer programs on the telephone handset.

    This exemption is a modification of the proponents' proposal. It 
permits the circumvention of computer programs on mobile phones to 
enable interoperability of non-vendor-approved software applications 
(often referred to as ``jailbreaking''), but does not apply to 
tablets--as had been requested by proponents--because the record did 
not support it.
    Proponent Electronic Frontier Foundation (``EFF''), joined by New 
America Foundation's Open Technology Initiative, New Media Rights, 
Mozilla Corporation (``Mozilla''), and the Free Software Foundation 
(``FSF''), as well as several hundred individual supporters, sought an 
exemption to permit the circumvention of access controls on wireless 
devices so that the devices can be used with non-vendor-approved 
software that is lawfully acquired. In 2010, the Register recommended, 
and the Librarian designated, a class that permitted circumvention of 
technological measures on certain telephone handsets known as 
``smartphones.'' In recommending that class, the Register found that 
many such phones are protected by access controls, that proponents' 
intended use--to render certain lawfully acquired applications 
interoperable with the handset's software--was fair, and that the 
access controls adversely affected that use. The Register also found 
that the statutory factors prescribed by 17 U.S.C. 1201(a)(1)(C) 
weighed in favor of granting the exemption.
    In this proceeding, proponents urged an expanded version of the 
class designated in 2010, citing dramatic growth in the mobile phone 
market, along with continued widespread use of technological measures 
to prevent users from installing unauthorized applications on such 
phones. They proposed that the exemption be extended to include 
``tablets,'' such as Apple's iPad, which, in EFF's words, have 
``enjoyed similar radical popularity over the past two years.''
    EFF asserted that courts have long found copying and modification 
to enable device interoperability noninfringing under the doctrine of 
fair use. It further noted that the Register concluded in the 2010 
rulemaking that jailbreaking was a fair use, and maintained that 
nothing in the factual or legal record since the last proceeding 
suggested that a change in this position was warranted.
    EFF also asserted that the last three years have seen dramatic 
growth in the adoption of smartphones and tablets as consumers 
increasingly shift from traditional personal computers to mobile 
devices. EFF argued that the technological restrictions on phones and 
tablets have an adverse effect on

[[Page 65264]]

consumer choice and competition. Specifically, it noted that Apple, 
whose devices ``refuse to run any unapproved third-party software,'' 
has strict rules about the type of programs approved for sale through 
its ``App Store,'' the only authorized source of iPhone and iPad 
applications. EFF further asserted that although Android-based devices 
are generally less restricted than Apple devices, most still employ 
technological measures to block functionality and prevent the 
installation of certain types of software. EFF urged the Register to 
consider that such technological measures are not intended to protect 
the copyrighted firmware, but instead to promote anticompetitive 
business practices.
    Joint Creators asserted that the proposed exemption is unnecessary 
and beyond the scope of the rulemaking because Section 1201(f) of the 
Copyright Act already defines ``the contours of acceptable 
circumvention related to interoperability.'' Specifically, Joint 
Creators argued that the proponents have not established that Section 
1201(f) does not already permit the conduct in which proponents seek to 
engage and, ``if it were established that Congress chose not to include 
the conduct at issue within [Section] 1201(f),'' then proponents have 
failed to establish that the Librarian has the authority to upset that 
decision through this proceeding. The Register concluded that it was 
unclear, at best, whether Section 1201(f) applies in this circumstance, 
so she proceeded to analyze the merits of the proposed exemption.
    Joint Creators did not directly challenge EFF's fair use analysis 
but instead took issue with the Register's previous fair use finding. 
In reviewing the fair use question, the Register noted that the factual 
record with respect to fair use was substantially the same as it was in 
2010 and that there had been no significant developments in pertinent 
case law that would cause the Register to reevaluate the analytical 
framework applied in 2010. The purpose and character of the use is 
noncommercial and personal so that individual owners of smartphones may 
use them for the purpose for which they were intended. The nature of 
the copyrighted work--firmware--remains the same as it was in 2010, and 
it remains true that one engaged in jailbreaking need only modify the 
functional aspects of the firmware, which may or may not be subject to 
copyright protection. Those engaged in jailbreaking use only that which 
is necessary to engage in the activity, which is often de minimis, 
rendering the third factor potentially unfavorable, but nevertheless of 
minimal consequence. With respect to market harm, notwithstanding the 
earlier exemption, the proliferation of smartphones has increased since 
the last rulemaking, suggesting that the fourth factor favored a fair 
use finding even more than it did in 2010.
    The Register found that proponents had established that the 
prohibition is adversely affecting, and is likely to continue to have 
an adverse impact on, certain uses of mobile devices in which the 
firmware, a copyrightable work, is protected by technological measures. 
The evidence in the record indicated that smartphones have been widely 
adopted and that consumer acceptance of such devices will continue to 
increase in the future. Nonetheless, the vast majority of mobile phones 
sold today contain technological measures that restrict users' ability 
to install unauthorized applications.
    The Register determined that the statutory factors weighed in favor 
of a renewed exemption for smartphones, as nothing in the record 
suggested that the market for mobile phones had been negatively 
impacted by the designation of such a class and, in fact, such a class 
might make smartphones more attractive to consumers. While Joint 
Creators raised concerns about pirated applications that are able to 
run on jailbroken devices, the record did not demonstrate any 
significant relationship between jailbreaking and piracy.
    On the other hand, the Register concluded that the record did not 
support an extension of the exemption to ``tablet'' devices. The 
Register found significant merit to the opposition's concerns that this 
aspect of the proposed class was broad and ill-defined, as a wide range 
of devices might be considered ``tablets,'' notwithstanding the 
significant distinctions among them in terms of the way they operate, 
their intended purposes, and the nature of the applications they can 
accommodate. For example, an ebook reading device might be considered a 
``tablet,'' as might a handheld video game device or a laptop computer.
    NTIA supported the designation of a class for both smartphones and 
tablets. Noting the broad support for such an exemption and the 
numerous noninfringing uses enabled by jailbreaking, NTIA asserted that 
``the mobile application market has thrived, and continues to do so, 
despite--and possibly in part because of--the current exemption.'' NTIA 
was persuaded that the proposed class should apply to tablets as well 
as mobile phones, believing that category to have been sufficiently 
defined by EFF. As noted, however, the Register determined that the 
record lacked a sufficient basis to develop an appropriate definition 
for the ``tablet'' category of devices, a necessary predicate to 
extending the exemption beyond smartphones. In future rulemakings, as 
mobile computing technology evolves, such a definition might be more 
attainable, but on this record, the Register was unable to recommend 
the proposed expansion to tablets.

C. Wireless Telephone Handsets--Interoperability With Alternative 
Networks

    Computer programs, in the form of firmware or software, that 
enable a wireless telephone handset originally acquired from the 
operator of a wireless telecommunications network or retailer no 
later than ninety days after the effective date of this exemption to 
connect to a different wireless telecommunications network, if the 
operator of the wireless communications network to which the handset 
is locked has failed to unlock it within a reasonable period of time 
following a request by the owner of the wireless telephone handset, 
and when circumvention is initiated by the owner, an individual 
consumer, who is also the owner of the copy of the computer program 
in such wireless telephone handset, solely in order to connect to a 
different wireless telecommunications network, and such access to 
the network is authorized by the operator of the network.

    This exemption is a modification of the proponents' proposal. It 
permits the circumvention of computer programs on mobile phones to 
enable such mobile phones to connect to alternative networks (often 
referred to as ``unlocking''), but with limited applicability. In order 
to align the exemption to current market realities, it applies only to 
mobile phones acquired prior to the effective date of the exemption or 
within 90 days thereafter.
    Proponents Consumers Union, Youghiogheny Communications, LLC, 
MetroPCS Communications, Inc., and the Competitive Carriers 
Association, supported by other commenting parties, submitted similar 
proposals seeking an exemption to permit circumvention to enable 
wireless devices to interoperate with networks other than the network 
on which the device was originally used. In 2006, and again in 2010, 
the Register recommended, and the Librarian designated, a class of 
works that permitted the circumvention of technological protection 
measures applied to firmware in wireless handsets for the purpose of 
switching to an alternative wireless network.
    Proponents advanced several theories as to why ``unlocking'' is a 
noninfringing use, including that it does

[[Page 65265]]

not implicate any copyright interests or, if it does, the conduct is 
permitted under Section 117 of the Copyright Act. In particular, 
proponents asserted that the owners of mobile phones are also the 
owners of the copies of the computer programs on those phones and that, 
as owners, they are entitled to exercise their rights under Section 
117, which gives the owner of a copy of a computer program the 
privilege to make or authorize the making of another copy or adaptation 
of that computer program under certain circumstances, such as to permit 
the program to be used on a particular machine.
    Proponents noted that ``huge numbers'' of people have already 
unlocked their phones under the 2006 and 2010 exemptions and claimed 
that ending the exemption will lead to higher device prices for 
consumers, increased electronic waste, higher costs associated with 
switching service providers, and widespread mobile customer ``lock-
in.'' Although proponents acknowledged that unlocked mobile devices are 
widely available for purchase, they contended that an exemption is 
still warranted because some devices sold by carriers are permanently 
locked and because unlocking policies contain restrictions and may not 
apply to all of a carrier's devices. Proponents characterized software 
locks as impediments to a competitive marketplace. They claimed that 
absent the exemption, consumers would be forced to continue to do 
business with the carrier that sold the device to the consumer in the 
first instance, or to discard the device.
    CTIA--The Wireless Association (``CTIA''), a trade association 
comprised of various commercial wireless service providers, objected to 
the proposals as drafted. Overall, CTIA maintained that an exemption 
for unlocking is not necessary because ``the largest nationwide 
carriers * * * have liberal, publicly available unlocking policies,'' 
and because unlocked phones are ``freely available from third party 
providers--many at low prices.'' Nonetheless, CTIA indicated that its 
members did not object to a ``narrowly tailored and carefully limited 
exception'' to permit individual customers of wireless carriers to 
unlock phones for the purpose of switching networks.
    CTIA explained that the practice of locking cell phones is an 
essential part of the wireless industry's predominant business model, 
which involves subsidizing the cost of wireless handsets in exchange 
for a commitment from the customer that the phone will be used on that 
carrier's service so that the subsidy can eventually be recouped by the 
carrier. CTIA alleged that the industry has been plagued by ``large 
scale phone trafficking operations'' that buy large quantities of pre-
paid phones, unlock them, and resell them in foreign markets where 
carriers do not subsidize handsets. On the question of noninfringing 
use, CTIA asserted that the Section 117 privileges do not apply because 
owners of wireless devices do not necessarily own the software on those 
devices.
    The Register confronted similar arguments about Section 117 in the 
2010 proceeding. There, the parties relied primarily upon Krause v. 
Titleserv, Inc., 402 F.3d 119 (2d Cir. 2005), as the leading authority 
regarding ownership of computer programs. After reviewing mobile phone 
agreements introduced in the 2010 proceeding, based on the state of the 
law at that time, the Register concluded that ``[t]he record * * * 
leads to the conclusion that a substantial portion of mobile phone 
owners also own the copies of the software on their phones.''
    Since the Register rendered her 2010 Recommendation, the case law 
has evolved. In 2010, the Ninth Circuit issued its decision in Vernor 
v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010), holding that ``a 
software user is a licensee rather than an owner of a copy where the 
copyright owner (1) Specifies that the user is granted a license; (2) 
significantly restricts the user's ability to transfer the software; 
and (3) imposes notable use restrictions.''
    Proponents made only a cursory attempt to respond to Vernor and 
failed to offer relevant agreements to support their view of software 
ownership. CTIA, by contrast, cited agreements from several major 
carriers in an effort to demonstrate that the software on the mobile 
handsets is licensed, rather than sold, to a phone's owner. 
Nonetheless, the Register was forced to conclude that the state of the 
law--and its applicability to mobile phone software--remains 
indeterminate. Although Vernor and Krause are useful guideposts in 
considering the status of software ownership, they are controlling 
precedent in only two circuits and are inconsistent in their approach; 
whether and how those standards would be applied in other circuits is 
unknown. Moreover, while CTIA contended that the agreements it offered 
unequivocally supported a finding that users do not own the software, 
in reviewing those agreements, the Register believed the question to be 
a closer call. The Register therefore determined that some subset of 
wireless customers--i.e., anyone considered to own the software on 
their phones under applicable precedent--would be entitled to exercise 
the Section 117 privilege.
    The Register further concluded that the record before her supported 
a finding that, with respect to new wireless handsets, there are ample 
alternatives to circumvention. That is, the marketplace has evolved 
such that there is now a wide array of unlocked phone options available 
to consumers. While it is true that not every wireless device is 
available unlocked, and wireless carriers' unlocking polices are not 
free from all restrictions, the record clearly demonstrates that there 
is a wide range of alternatives from which consumers may choose in 
order to obtain an unlocked wireless phone. Thus, the Register 
determined that with respect to newly purchased phones, proponents had 
not satisfied their burden of showing adverse effects related to a 
technological protection measure.
    However, with respect to ``legacy'' phones--i.e., used (or perhaps 
unused) phones previously purchased or otherwise acquired by a 
consumer--the record pointed to a different conclusion. The record 
demonstrated that there is significant consumer interest in and demand 
for using legacy phones on carriers other than the one that originally 
sold the phone to the consumer. It also supported a finding that owners 
of legacy phones--especially phones that have not been used on any 
wireless network for some period of time--may have difficulty obtaining 
unlocking codes from wireless carriers, in part because an older or 
expired contract might not require the carrier to cooperate.
    Despite the increasing availability of unlocked phones in the 
marketplace and the trend toward wireless carriers' unlocking phones in 
certain circumstances, NTIA favored a broader exemption. It asserted 
that the unlocking policies of most wireless carriers are not 
reasonable alternatives to circumvention because many such policies 
apply only to current customers or subscribers, because some carriers 
will refuse to unlock devices, and because unlocking policies are often 
contingent upon the carrier's ability to obtain the necessary code. 
Further, ``NTIA does not support the notion that it is an appropriate 
alternative for a current device owner to be required to purchase 
another device to switch carriers.''
    The Register concluded after a review of the statutory factors that 
an exemption to the prohibition on circumvention of mobile phone

[[Page 65266]]

computer programs to permit users to unlock ``legacy'' phones is both 
warranted and unlikely to harm the market for such programs. At the 
same time, in light of carriers' current unlocking policies and the 
ready availability of new unlocked phones in the marketplace, the 
record did not support an exemption for newly purchased phones. Looking 
to precedents in copyright law, the Register recommended that the class 
designated by the Librarian include a 90-day transitional period to 
allow unlocking by those who may acquire phones shortly after the new 
exemption goes into effect.

D. Motion Picture Excerpts--Commentary, Criticism, and Educational Uses

     Motion pictures, as defined in 17 U.S.C. 101, on DVDs 
that are lawfully made and acquired and that are protected by the 
Content Scrambling System, where the person engaging in 
circumvention believes and has reasonable grounds for believing that 
circumvention is necessary because reasonably available 
alternatives, such as noncircumventing methods or using screen 
capture software as provided for in alternative exemptions, are not 
able to produce the level of high-quality content required to 
achieve the desired criticism or comment on such motion pictures, 
and where circumvention is undertaken solely in order to make use of 
short portions of the motion pictures for the purpose of criticism 
or comment in the following instances: (i) In noncommercial videos; 
(ii) in documentary films; (iii) in nonfiction multimedia ebooks 
offering film analysis; and (iv) for educational purposes in film 
studies or other courses requiring close analysis of film and media 
excerpts, by college and university faculty, college and university 
students, and kindergarten through twelfth grade educators. For 
purposes of this exemption, ``noncommercial videos'' includes videos 
created pursuant to a paid commission, provided that the 
commissioning entity's use is noncommercial.
     Motion pictures, as defined in 17 U.S.C. 101, that are 
lawfully made and acquired via online distribution services and that 
are protected by various technological protection measures, where 
the person engaging in circumvention believes and has reasonable 
grounds for believing that circumvention is necessary because 
reasonably available alternatives, such as noncircumventing methods 
or using screen capture software as provided for in alternative 
exemptions, are not able to produce the level of high-quality 
content required to achieve the desired criticism or comment on such 
motion pictures, and where circumvention is undertaken solely in 
order to make use of short portions of the motion pictures for the 
purpose of criticism or comment in the following instances: (i) In 
noncommercial videos; (ii) in documentary films; (iii) in nonfiction 
multimedia ebooks offering film analysis; and (iv) for educational 
purposes in film studies or other courses requiring close analysis 
of film and media excerpts, by college and university faculty, 
college and university students, and kindergarten through twelfth 
grade educators. For purposes of this exemption, ``noncommercial 
videos'' includes videos created pursuant to a paid commission, 
provided that the commissioning entity's use is noncommercial.
     Motion pictures, as defined in 17 U.S.C. 101, on DVDs 
that are lawfully made and acquired and that are protected by the 
Content Scrambling System, where the circumvention, if any, is 
undertaken using screen capture technology that is reasonably 
represented and offered to the public as enabling the reproduction 
of motion picture content after such content has been lawfully 
decrypted, when such representations have been reasonably relied 
upon by the user of such technology, when the person engaging in the 
circumvention believes and has reasonable grounds for believing that 
the circumvention is necessary to achieve the desired criticism or 
comment, and where the circumvention is undertaken solely in order 
to make use of short portions of the motion pictures for the purpose 
of criticism or comment in the following instances: (i) in 
noncommercial videos; (ii) in documentary films; (iii) in nonfiction 
multimedia ebooks offering film analysis; and (iv) for educational 
purposes by college and university faculty, college and university 
students, and kindergarten through twelfth grade educators. For 
purposes of this exemption, ``noncommercial videos'' includes videos 
created pursuant to a paid commission, provided that the 
commissioning entity's use is noncommercial.
     Motion pictures, as defined in 17 U.S.C. 101, that are 
lawfully made and acquired via online distribution services and that 
are protected by various technological protection measures, where 
the circumvention, if any, is undertaken using screen capture 
technology that is reasonably represented and offered to the public 
as enabling the reproduction of motion picture content after such 
content has been lawfully decrypted, when such representations have 
been reasonably relied upon by the user of such technology, when the 
person engaging in the circumvention believes and has reasonable 
grounds for believing that the circumvention is necessary to achieve 
the desired criticism or comment, and where the circumvention is 
undertaken solely in order to make use of short portions of the 
motion pictures for the purpose of criticism or comment in the 
following instances: (i) In noncommercial videos; (ii) in 
documentary films; (iii) in nonfiction multimedia ebooks offering 
film analysis; and (iv) for educational purposes by college and 
university faculty, college and university students, and 
kindergarten through twelfth grade educators. For purposes of this 
exemption, ``noncommercial videos'' includes videos created pursuant 
to a paid commission, provided that the commissioning entity's use 
is noncommercial.

    These related exemptions are modifications of the proponents' 
proposals. They permit the circumvention of motion pictures contained 
on DVDs and delivered through online services to permit the use of 
short portions for purposes of criticism and comment in noncommercial 
videos, documentary films, nonfiction multimedia ebooks offering film 
analysis, and for certain educational uses by college and university 
faculty and students and kindergarten through twelfth grade educators. 
They also permit the use of screen capture technology to the extent an 
exemption is necessary under the law. However, the exemptions do not 
apply to the use of motion picture excerpts in fictional films, as the 
Register was unable to conclude on the record presented that such use 
is noninfringing.
    Proponents submitted eight proposals requesting the designation of 
classes to allow the circumvention of lawfully made and acquired motion 
pictures and audiovisual works protected by various access controls 
where the user seeks to engage in a noninfringing use. The proposals 
were comprised of three subgroups:
    First, proponents of exemptions for noncommercial videos sought to 
use clips from motion pictures to create new noncommercial videos, such 
as remix or mash-up videos, for criticism, comment, and other 
noninfringing uses. Proponents for these uses included EFF and 
University of Michigan Library (``UML''), supported by the Organization 
for Transformative Works. UML's proposal requested an exemption very 
similar to the Register's 2010 recommended exemption for motion 
pictures contained on DVDs protected by Content Scrambling System 
(``CSS''), which encompassed educational uses and documentary 
filmmaking, in addition to noncommercial videos. However, UML indicated 
that the exemption should apply not only to motion pictures but to 
audiovisual works generally. EFF sought to broaden the 2010 exemption 
by expanding it to include audiovisual works and to include 
circumvention of motion pictures acquired via online distribution 
services. It also sought to enlarge the exemption to include not just 
criticism or comment but any noninfringing use, and to cover 
``primarily noncommercial videos,'' a category that would include 
videos generating some amount of revenue.
    Second, proponents of exemptions for commercial uses by documentary 
filmmakers, fictional filmmakers, and multimedia ebook authors sought 
an

[[Page 65267]]

exemption to use clips from motion pictures to engage in criticism, 
comment, or other fair uses. Proponents for these uses included 
International Documentary Association, Kartemquin Educational Films, 
Inc., National Alliance for Media Arts and Culture, and Independent 
Filmmaker Project (collectively ``Joint Filmmakers''); UML; and Mark 
Berger, Bobette Buster, Barnet Kellman, and Gene Rosow (collectively 
``Joint Ebook Authors''). Each of these proposals requested an 
exemption to circumvent motion pictures or other audiovisual works for 
use by creators of noninfringing commercial works, namely, documentary 
films, fictional films, and multimedia ebooks offering film analysis. 
As noted, UML's proposal largely tracked the exemption recommended by 
the Register in 2010. Joint Filmmakers' proposal sought to expand the 
2010 exemption by adding fictional filmmakers, as well as by extending 
the exemption to cover any noninfringing use. Joint Filmmakers also 
sought to include circumvention of Blu-ray discs protected by the 
Advanced Access Content System (``AACS'') and motion pictures digitally 
transmitted through protected online services. Joint Ebook Authors' 
proposal sought the use of short portions of motion pictures for the 
purpose of multimedia ebook authorship. Like Joint Filmmakers, Joint 
Ebook Authors indicated that the proposed exemption should not depend 
on uses that involve criticism or comment but should instead merely 
require that the use be noninfringing. Joint Ebook Authors also 
proposed that the exemption include digitally transmitted video in 
addition to CSS-protected DVDs.
    Finally, proponents of exemptions for educational uses sought to 
use clips from motion pictures for criticism, comment, or other 
educational purposes by college and university professors and faculty, 
college and university students, and kindergarten through twelfth grade 
educators. Proponents for these uses included UML; Library Copyright 
Alliance (``LCA''); Peter Decherney, Katherine Sender, Michael X. Delli 
Carpini, International Communication Association, Society for Cinema 
and Media Studies, and American Association of University Professors 
(``Joint Educators''); and Media Education Lab at the Harrington School 
of Communication and Media at the University of Rhode Island (``MEL''). 
The proposals by UML and LCA requested an exemption similar to the 2010 
exemption recommended by the Register for circumvention of CSS-
protected DVDs, except that UML sought to broaden it to apply to 
audiovisual works, as well as to students across all disciplines of 
study. Joint Educators' proposed exemption sought to enable college and 
university students, as well as faculty, to use short portions of 
video, as well as to circumvent AACS-protected Blu-ray discs and 
digitally transmitted works. Finally, MEL requested an exemption for 
the circumvention of audiovisual works used for educational purposes by 
kindergarten through twelfth grade educators.
    Because each of the proposals involved the use of clips from motion 
pictures or audiovisual works, the eight possible exemptions were 
addressed as a group in the Register's Recommendation. The proposals 
for exemptions to allow the circumvention of lawfully obtained motion 
pictures protected by access controls for various commercial, 
noncommercial, and ``primarily noncommercial'' purposes shared a 
unifying feature in that in each case, proponents were seeking an 
exemption to allow circumvention for the purpose of reproducing short 
clips to facilitate alleged noninfringing uses. Creators of 
noncommercial videos sought to use portions of motion pictures to 
create noninfringing works involving criticism or comment that they 
asserted were transformative. Documentary filmmakers and multimedia 
ebook authors sought to reproduce portions of motion pictures in new 
works offering criticism or commentary. Fictional filmmakers wished to 
incorporate motion pictures into new films to convey certain messages. 
Film and media studies professors sought to assemble motion picture 
excerpts to demonstrate concepts, qualities, and techniques. Other 
educators sought to reproduce clips of motion pictures to illustrate 
points for classroom discussion.
    Joint Creators and DVD Copy Control Association (``DVD CCA'') 
opposed the proposals pertaining to noncommercial videos and, more 
generally, the use of motion pictures contained on CSS-protected DVDs. 
Joint Creators also opposed the use of motion pictures acquired via 
online distribution services. Joint Creators questioned whether 
proponents had met the required statutory burden for an exemption. They 
urged the Register precisely to analyze the alleged noninfringing uses 
to determine whether they were, in fact, noninfringing. In addition, 
they argued that the proposed exemption for circumvention of AACS-
protected Blu-ray discs should not be approved.
    DVD CCA maintained that none of the examples offered in support of 
the proposed exemptions for documentary filmmakers, fictional 
filmmakers, or multimedia ebook authors sufficiently established that 
CSS is preventing the proposed uses. DVD CCA asserted that there are 
several alternatives to circumvention, including clip licensing, screen 
capture software, and video recording via smartphone that would enable 
proponents affordably and effectively to copy short portions of motion 
pictures without the requested exemption.
    As for educational uses, Joint Creators and DVD CCA did not oppose 
the granting of an exemption covering circumvention of CSS for a 
variety of college and university uses involving copying of short 
portions of motion pictures, but asserted that the exemption should be 
limited to conduct that is clearly noninfringing and requires high-
quality content.
    Advanced Access Content System License Administrator (``AACS LA'') 
generally opposed the requested exemptions as they would apply to AACS-
protected Blu-ray discs. It asserted that proponents have failed to 
make the case that they face substantial adverse effects with respect 
to content available only on Blu-ray discs.
    In reviewing the proposed classes, the Register noted that certain 
of the proposed exemptions referred to ``audiovisual works'' as opposed 
to ``motion pictures.'' The Register observed that Section 101 defines 
``motion pictures'' as ``audiovisual works consisting of a series of 
related images which, when shown in succession, impart an impression of 
motion, together with accompanying sounds, if any.'' Section 101 
defines ``audiovisual works'' somewhat more broadly, as ``works that 
consist of a series of related images which are intrinsically intended 
to be shown by the use of machines or devices such as projectors, 
viewers, or electronic equipment, together with accompanying sounds, if 
any, regardless of the nature of the material objects, such as films or 
tapes, in which the works are embodied.'' Under the Copyright Act, 
``motion pictures'' are thus a subset (albeit a very large one) of 
``audiovisual works.'' The record for the proposed classes was directed 
to uses of motion pictures such as movies, television shows, 
commercials, news, DVD extras, etc., and did not focus on uses of 
audiovisual works that would fall outside of the Copyright Act's 
definition of ``motion pictures.'' Based on the record, the Register 
found no basis for considering exemptions beyond motion

[[Page 65268]]

pictures and treated the requested exemptions for ``audiovisual works'' 
as requests relating to motion pictures.
    The Register determined that proponents of exemptions for 
noncommercial videos, commercial uses by documentary filmmakers and 
multimedia ebook authors, and uses in educational contexts had 
established that a significant number of the proposed uses were for 
purposes of criticism and commentary. She noted that such uses fall 
within the favored purposes referenced in the preamble of Section 107 
and, especially in light of the brevity of the excerpts used, are 
likely to be fair uses. More specifically, the Register determined that 
the proposed uses tended to be transformative in nature, employing 
short clips for purposes of criticism, comment, teaching, and/or 
scholarship, rather than for the works' originally intended purpose. 
Despite the commercial aspect of uses by documentary filmmakers and 
multimedia ebook authors, the Register noted that when a short excerpt 
of a motion picture is used for purposes of criticism and comment, even 
in a commercial context, it may well be a productive use that serves 
the essential function of fair use as a free speech safeguard. While 
the Register did not conclude that a court would find each and every 
one of proponents' examples to be transformative, she did find that the 
record amply supported the conclusion that a substantial number of the 
proffered examples likely would be considered transformative fair uses.
    The Register also concluded, however, that the same fair use 
analysis did not apply to fictional filmmakers, at least on the record 
presented. She noted that fictional films differ from the other 
categories of use because their purpose is typically for entertainment, 
rather than for criticism or comment. As the Register explained in her 
Recommendation, under appropriate circumstances, a use by a fictional 
filmmaker might well be a fair use. But fictional film proponents 
merely described their desired uses and did not present concrete 
examples--such as existing films that made use of preexisting material 
in a clearly transformative manner--that permitted the Register to make 
a finding of fair use in this context. The record did not allow a 
satisfying determination as to the nature of the fictional filmmakers' 
proposed uses, the amount of the underlying works fictional filmmakers 
generally sought to use, or whether or how such uses might affect the 
market for the original works.
    In addition, the Register observed that, to the extent discernible 
from proponents' descriptions, a number of the examples cited did not 
appear readily to lend themselves to a conclusion that the described 
use would likely be considered fair. More specifically, the use of an 
earlier work to flesh out characters or motivations in a new work, or 
to develop a storyline, as suggested by some of proponents' descriptive 
examples, does not inherently serve the purpose of criticism or comment 
on the existing work. The Register therefore concluded, on the record 
before her, that fictional filmmakers had failed to establish that the 
uses in which they sought to engage were likely to be noninfringing.
    Having determined otherwise with respect to the other proposed 
categories of use involving criticism and comment, however, the 
Register proceeded to consider whether there were adequate alternatives 
to circumvention to accommodate these noninfringing uses.
    Opponents pointed to clip licensing, smartphone video recording, 
and screen capture software as alternatives to achieve the desired 
uses. The Register found that clip licensing was not a reasonable 
alternative, as the scope of content offered through reasonably 
available licensing sources was far from complete. Moreover, requiring 
a creator who is making fair use of a work to obtain a license is in 
tension with the Supreme Court's holding in Campbell v. Acuff-Rose 
Music, Inc., 510 U.S. 569 (1994), that rightsholders do not have an 
exclusive right to markets for commentary on or criticism of their 
copyrighted works.
    Nor did smartphone recording appear to be an adequate option, as 
the evidence indicated that smartphone recordings yielded inferior 
video and audio quality, and failed to capture the complete image as it 
was meant to appear on the screen.
    In the 2010 proceeding, the Register determined that screen capture 
technology offered a cost-effective alternative technique to allow 
reproduction of motion pictures for certain uses. Unlike the last 
proceeding, where the Register raised screen capture technology as a 
possible alternative, in the current proceeding it was opponents who 
pointed to screen capture as a reasonable solution. However, based on 
the video evidence and commentary from proponents and opponents 
concerning screen capture technology, the Register determined that the 
screen capture images, while improved in quality since the last 
rulemaking, were still of lower quality than those available by 
circumvention of access controls on motion pictures; they were somewhat 
diminished in clarity and depth, and could exhibit pixilation.
    Concerning screen capture, documentary filmmakers suggested that 
the lower-quality images generated by this technology were not suitable 
for the dissemination of their films. The Register found a similar 
argument persuasive in the previous rulemaking based on certain 
distribution standards generally requiring that films adhere to 
specific quality standards that cannot be met by screen capture. Unlike 
in the last proceeding, however, the Register was not convinced on the 
present record that the distribution requirements would give rise to 
significant adverse effects. In this proceeding, the parties explained 
the standards in greater detail, including the fact that certain 
accommodations are made by distributors with respect to pre-existing 
materials.
    Nonetheless, the record did support the conclusion that, in some 
cases, for other reasons, the inability to circumvent to make use of 
higher-quality material available on DVDs and in protected online 
formats is likely to impose significant adverse effects on documentary 
filmmakers, noncommercial video makers, multimedia ebook authors, and 
certain educational users. Creators of noncommercial videos provided 
the most extensive record to support the need for higher-quality source 
material. Based on the video evidence presented, the Register concluded 
that diminished quality likely would impair the criticism and comment 
contained in noncommercial videos. For example, the Register was able 
to perceive that certain noncommercial videos would suffer 
significantly because of blurring and the loss of detail in characters' 
expression and sense of depth.
    Although the record was not as robust in the case of documentary 
filmmakers and multimedia ebook authors, it was sufficient to support a 
similar finding that for certain uses--i.e., when trying to convey a 
point that depends upon the ability to perceive details or subtleties 
in a motion picture excerpt--documentary filmmakers and ebook authors 
would likely suffer adverse effects if they were unable to incorporate 
higher-quality images. Similarly, educational uses that depend upon 
close analysis of film or media images might be adversely impacted if 
students are unable to apprehend the subtle detail or emotional impact 
of the images they are analyzing. But where precise detail is not 
required for the particular use in question--for example, where a clip 
is presented simply to illustrate a historical event--the Register

[[Page 65269]]

concluded that lower-quality screen capture images appeared adequate to 
fulfill the noninfringing use.
    As an additional concern relating to screen capture technology, 
proponents maintained that even if the Register acknowledged now, as 
she did in 2010, that certain types of video capture software are 
noncircumventing, there is still no assurance that all copyright owners 
share this view. Proponents observed, for example, that litigation had 
been instituted over the use of similar methods of acquiring content 
protected by access controls. In light of the unsettled legal 
landscape, the Register determined that there is a need for limited 
exemptions to address the possible circumvention of protected motion 
pictures when using screen capture technology.
    The record also indicated that there is some amount of motion 
picture material available only on Blu-ray discs, such as bonus 
material or, more rarely, entire films released exclusively on Blu-ray. 
However, the cited uses of Blu-ray-exclusive content in the record were 
insignificant in number. Moreover, with respect to documentary 
filmmakers in particular, for the reasons discussed above, the Register 
was not persuaded that Blu-ray content is necessary to meet applicable 
distribution standards. The Register therefore concluded that the 
record did not reflect a substantial adverse impact due to the 
inability to use motion picture materials contained on Blu-ray discs.
    Overall, based on the record presented, the Register determined 
that, when a higher-quality excerpt is essential to a particular use, 
an exemption to permit circumvention of CSS-protected DVDs and 
protected online formats is appropriate. For uses where high-quality 
material is not critical, screen capture technology provides an 
adequate alternative to circumvention, and an exemption to permit the 
use of such technology is appropriate.
    Looking to the statutory factors, the Register noted in her 
previous determination that ``while CSS-protected DVDs may very well 
have fostered the digital distribution of motion pictures to the 
public, there is no credible support for the proposition that the 
digital distribution of motion pictures continues to depend on the 
integrity of the general `principle' that the circumvention of CSS is 
always unlawful.'' She found that the record in the current proceeding 
similarly failed to support a finding that there could be no exemption 
to the prohibition on circumvention of CSS-protected DVDs. In light of 
the negative impact the prohibition on circumvention has on favored 
uses, such as criticism, comment, news reporting, teaching, 
scholarship, and research, as established in the proceeding, the 
Register concluded that the statutory factors support appropriately 
tailored exemptions to facilitate those uses.
    NTIA agreed that an appropriate exemption to permit proposed 
noninfringing uses is necessary because users lack sufficient 
alternatives to circumvention. It asserted that ``generally, the 
technological alternatives [to circumvention] produce low-quality 
videos, and associated license agreements often impose significant 
content limitations on the final work product.'' It further noted that 
clip services are limited in scope and may not meet the needs of all 
users, and that licensing negotiations are ``expensive and burdensome, 
especially when the licensee seeks to critique the copyrighted work.''
    NTIA proposed that the Register recommend a class that encompasses 
``[m]otion pictures and other similar audiovisual works on DVDs or 
delivered via Internet Protocol,'' asserting that the class should 
encompass ``audiovisual works,'' which is broader than ``motion 
pictures.'' NTIA also proposed to replace ``for the purpose of 
criticism or comment'' with ``for the purpose of fair use,'' and to 
expand the applicable circumstances beyond documentary filmmaking to 
include educational uses by college and university professors and 
college students, educational uses by kindergarten through twelfth 
grade educators, primarily noncommercial videos, and nonfictional or 
educational multimedia ebooks. Citing an inadequate definition of the 
proposed class of users, and a lack of demonstrated harm, the NTIA did 
not support an exemption for fictional filmmakers.
    While the NTIA's views largely tracked those of the Register's 
concerning the need to designate appropriate classes, for the reasons 
discussed above, the Register did not believe that certain of NTIA's 
proposed expansions were supported by the record.
    In explaining her recommended exemptions, the Register emphasized 
that the use of only short portions or clips was critical to her 
determination that the proposed uses were noninfringing. She rejected 
the proposed expansion of the exemption to cover unspecified 
``noninfringing'' or ``fair'' uses where circumvention is not 
undertaken for the purpose of criticism or comment as, based on the 
record, criticism or comment were central to the uses supporting the 
exemption.
    The Register also noted that while there might be additional 
noninfringing uses by multimedia ebook authors that could support a 
more broadly conceived exemption, the record in the proceeding 
supported only an exemption for ebooks offering film analysis.
    Further, to the extent proponents for noncommercial videos sought 
an expanded exemption to cover ``primarily noncommercial videos''--as 
opposed to ``noncommercial videos''--they failed to demonstrate that a 
meaningful number of such uses would qualify as noninfringing; 
proponents identified only a single video that allegedly fell within 
this category, because it generated advertising revenue. It was not 
clear from the record, however, as to why such an example should be 
considered ``primarily noncommercial'' as opposed to ``primarily 
commercial.'' On the other hand, proponents established a sufficient 
basis to clarify that the exemption for noncommercial works should 
include videos created pursuant to a paid commission, provided that the 
commissioning entity uses the work solely in a noncommercial manner.
    With respect to educational uses, the Register found that the 
record supported a determination that college and university professors 
and other faculty, as well as students, in film studies and other 
courses focused on close analysis of media excerpts may sometimes need 
to reproduce content from CSS-protected DVDs and protected online 
formats to enable such analysis. Because the recommended exemption is 
limited to educational activities involving close analysis, there was 
no basis to limit the exemption only to professors. The Register 
further determined that non-professor faculty at colleges and 
universities also should be permitted to take advantage of the 
exemption when there is a pedagogical need for high-quality source 
material. In addition, the record supported a finding that instructors 
of pre-college-level students sometimes engage in close analysis of 
motion picture excerpts in media-oriented courses and might have a need 
for high-quality source material.
    The Register stressed that prospective users of the recommended 
exemptions for the use of motion picture excerpts should take care to 
ensure that they satisfy each requirement of the narrowly tailored 
exemptions before seeking to operate under their benefits, and consider 
whether there is an adequate alternative before engaging in 
circumvention under a recommended exemption. The Register noted that

[[Page 65270]]

screen capture technology should only be employed when it is reasonably 
represented, and offered to the public, as enabling the reproduction of 
motion picture content after such content has been lawfully decrypted--
that is, when it is offered as a noncircumventing technology. And, 
finally, users of the limited exemptions should be prepared to defend 
their activities in light of the alternatives as they exist at the time 
of their use of the exemption, including any further innovations in 
screen capture or other technologies that may produce higher-quality 
results than were obtainable as of the Register's Recommendation.

E. Motion Pictures and Other Audiovisual Works--Captioning and 
Descriptive Audio

    Motion pictures and other audiovisual works on DVDs that are 
protected by the Content Scrambling System, or that are distributed 
by an online service and protected by technological measures that 
control access to such works, when circumvention is accomplished 
solely to access the playhead and/or related time code information 
embedded in copies of such works and solely for the purpose of 
conducting research and development for the purpose of creating 
players capable of rendering visual representations of the audible 
portions of such works and/or audible representations or 
descriptions of the visual portions of such works to enable an 
individual who is blind, visually impaired, deaf, or hard of 
hearing, and who has lawfully obtained a copy of such a work, to 
perceive the work; provided however, that the resulting player does 
not require circumvention of technological measures to operate.

    This exemption is a modification of the proponents' proposal. It 
permits the circumvention of motion pictures and other audiovisual 
works contained on DVDs or delivered through online services to 
facilitate research and development of players capable of rendering 
captions and descriptive audio for persons who are blind, visually 
impaired, deaf, or hard of hearing. The exemption responds to the 
primary need articulated by proponents in their submissions and at the 
hearings and one compelled by public policy, namely research and 
development. With respect to other uses proposed by proponents, the 
Register was unable to conduct a fair use analysis due to insufficient 
facts on the record, and, in particular, a lack of clear information 
regarding how captions and descriptive audio would be created, 
disseminated, or otherwise made available in connection with the 
underlying audiovisual work.
    Proponents Telecommunications for the Deaf and Hard of Hearing, 
Inc., Gallaudet University, and the Participatory Culture Foundation 
proposed that the Register recommend four related classes of works to 
allow circumvention of technological measures applied to content 
distributed via the internet and ``fixed-disc media'' for the purpose 
of creating, improving, and rendering captions and descriptive audio 
tracks to enable individuals with disabilities to perceive such works, 
and for the purpose of conducting research and development on 
technologies to enable such accessibility. They urged that the 
prohibition on circumvention has had a ``decidedly negative'' impact on 
teaching, scholarship, research, and criticism. They stated that not 
only does the prohibition stifle the research and development 
associated with the development of accessible technologies, it also 
restricts the amount of content that is perceptible by individuals with 
disabilities.
    Although not particularly clear from the proponents' written 
filings, at the hearing it became apparent that the primary interest 
was in the development of players capable of merging commercially 
accessible content with captions and descriptive audio that are created 
separately, generally by parties other than the copyright owner of the 
original copyrightable work. Proponents alleged that circumvention was 
necessary to achieve their objectives because they required access to 
the ``playhead,'' that is, the technical timing information embedded in 
internet-delivered and fixed-disc-based content that would allow proper 
synchronization of captions and descriptive audio with the underlying 
video content to which it applied.
    Proponents explained that although some of the content in question 
is already captioned or provides descriptive audio, most does not. They 
acknowledged that the recently passed Twenty-First Century 
Communications and Video Accessibility Act (``CVAA''), Public Law 111-
260 (codified in scattered sections of 47 U.S.C.), likely will require 
a substantial amount of digitally distributed programming to be 
captioned. However, they asserted that the CVAA does not extend to a 
wide range of content, including that which is distributed exclusively 
online (e.g., content that does not appear first on broadcast or cable 
television). Indeed, in recent rulemaking proceedings under the CVAA, 
many content producers and distributors asserted that the creation or 
improvement of captions and descriptive audio is burdensome and would 
require permission from the copyright owners.
    Proponents noted that the motion picture industry separately had 
asserted that voluntary captioning of a limited amount of programming 
would require ``eight years to phase in.'' They further noted that 
Netflix provides captions or subtitles on fewer than 5,000 of its 
nearly 12,000 titles. In addition, proponents explained that when such 
captions do exist, they may be ``riddled with errors'' or 
inconsistently formatted, hampering accessibility. With respect to 
descriptive audio, proponents observed that such tracks may play back 
at an inappropriate volume.
    As for opposition, AACS LA and DVD CCA filed separate but 
substantially similar comments, taking issue with the proposed 
exemptions. They argued that the marketplace has evolved and will 
continue to evolve in such a way that satisfies accessibility needs. 
AACS LA further asserted that the proposed exemption potentially could 
harm future growth of the marketplace solutions for accessibility 
concerns. At the hearings, AACS LA offered a free license to its 
technology to enable developers to develop compatible implementations 
to enable accessibility, and it was suggested that DVD CCA would do so 
as well.
    Joint Creators also opposed, similarly asserting that voluntary 
efforts and regulatory compliance are sufficient marketplace drivers 
for accessible materials. In addition, they maintained that proponents 
had failed to meet their burden. In their view, proponents had 
presented only scattered examples of errors in captions and that such 
errors are little more than a ``mere inconvenience''; they also 
suggested that the proposed underlying uses might infringe the 
reproduction, distribution, and adaptation rights of the copyright 
owners.
    Assessing the record in light of the statutory factors, the 
Register concluded that a limited exemption was appropriate to 
facilitate the proposed research and development. The Register found 
that the substantial quantity of inaccessible content, and the likely 
increase in the amount of content distributed free from any requirement 
that it be rendered accessible, essentially limits the universe of 
materials with respect to which individuals with certain disabilities 
may engage in commentary, criticism, scholarship, and the like. As 
observed by the Register, the proposal was aimed at allowing the wide 
range of motion pictures and other audiovisual works that are available 
to the general population to be accessed and enjoyed

[[Page 65271]]

by those with disabilities. For such individuals, the exemption 
represents the difference between having and not having access to works 
available to everyone else.
    The Register determined that the record with respect to research 
and development was sufficiently clear to support an exemption for 
those activities. Dr. Christian Vogler of Gallaudet University 
demonstrated a software development effort aimed at creating a player 
to combine captions or descriptive audio with commercially available 
motion picture and audiovisual content. With respect to this project, 
the Register was able to conclude that the purported use did not 
implicate the copyrighted content itself, but only certain non-
protectable information about the work--i.e., the timecode information 
accessible through the protected ``playhead.'' Moreover, the Register 
found that there did not appear to be any reasonable alternatives to 
circumvention in order to obtain this information. Although, as noted, 
AACS LA and DVDCCA had indicated a willingness to offer a free license 
to those interested in developing accessibility tools for playback 
devices, the record indicated that no such license was currently in 
place, and it was unclear whether such a license would come to fruition 
during the next three years.
    The Register found that proponents had demonstrated that there is a 
wide range of content contained on CSS-protected DVDs and delivered in 
protected online formats that is inaccessible to individuals with 
certain disabilities and as to which there is no alternative, 
accessible version. She further determined that the record did not 
support the proposition that circumvention was necessary with respect 
to Blu-ray content, as the same content is generally available on DVDs 
or online.
    Beyond research and development, the Register found that the scope 
of proponents' intended uses was difficult to discern from proponents' 
written submissions, as the papers were fraught with broad 
generalizations. During the hearing, proponents were able to articulate 
three broad categories of conduct: (1) Conducting research and 
development on accessible technologies to develop a player capable of 
presenting or manipulating captions or descriptive audio (as discussed 
above); (2) creating such captions or descriptive audio or corrections 
thereto; and (3) presenting such captions or descriptive audio along 
with the underlying lawfully acquired work. Still, the precise contours 
of certain aspects of the proponents' intended exploitation of the 
proposed exemption remained elusive.
    Pointing to a footnote in Sony Corporation of America v. Universal 
Studios, Inc., 464 U.S. 417 (1984), which provides in dicta that 
``making a copy of a copyrighted work for the convenience of a blind 
person is * * * an example of fair use,'' proponents asserted that each 
of the broadly defined intended uses was fair. However, fair use 
analyses are, by statute, necessarily fact specific. Most of the 
proposed uses relating to the creation of captions and descriptive 
audio proposed by the proponents were so generally described that the 
Register found it impossible to evaluate whether they would be 
noninfringing. For example, proponents discussed both creating captions 
for content that is uncaptioned, including through crowdsourcing 
techniques, and fixing incorrect or poorly implemented captions. Each 
of these activities could have different implications under a 
traditional fair use analysis. Absent specific facts pertaining to the 
particularized uses, however, such an analysis was not possible.
    NTIA supported proponents' proposals but suggested that the 
Register should recraft the exemptions into three categories that it 
believes were supported by the record. Specifically, NTIA would have 
fashioned a class specifically aimed at those developing the tools to 
facilitate the creation, improvement, or rendering of captions and 
descriptive audio; another class specifically for those engaged in the 
creation of captions and descriptive audio; and a third class for those 
using the captions and descriptive audio. NTIA further noted that it 
did not support the inclusion of Blu-ray because DVD remains the 
dominant format, online video distribution is outpacing Blu-ray 
adoption, and the effect of the proposals on the Blu-ray market was 
uncertain.
    The Register and NTIA were in agreement on the need to ``open the 
doors for innovation and empower the millions of Americans with visual 
and hearing disabilities to participate to the fullest possible extent 
in our society's multimedia culture.'' However, for the reasons 
described above, the Register determined that, based on the current 
record, a more narrowly tailored class to permit research and 
development of assistive technologies was appropriate. The Register 
nonetheless made a point of encouraging the continued development of 
accessibility technologies and future proposals for exemptions to 
advance such efforts.

IV. Classes Considered But Not Recommended

    Upon the recommendation of the Register of Copyrights, the 
Librarian has determined that the following classes of works shall not 
be exempt from the prohibition against circumvention of technological 
measures set forth in Section 1201(a)(1)(A):

A. Literary Works in the Public Domain--Digital Access

    The Register concluded that the requested exemption to access 
public domain works was beyond the scope of the rulemaking proceeding 
and declined to recommend its adoption. As further explained in the 
2010 rulemaking, ``Section 1201 does not prohibit circumvention of a 
technological protection measure when it simply controls access to a 
public domain work; in such a case, it is lawful to circumvent the 
technological protection measure and there is no need for an 
exemption.''
    Proponent Open Book Alliance (``OBA'') proposed an exemption to 
permit the circumvention of literary works in the public domain to 
enable access to works that are digitally distributed. Proponent sought 
a ``clarification'' that circumvention of technological measures for 
the purpose of accessing such literary works does not violate Section 
1201(a)(1).
    As explained above, Section 1201(a)(1) provides that ``[n]o person 
shall circumvent a technological measure that effectively controls 
access to a work protected under this title.'' The prohibition on 
circumvention of technological protection measures thus does not apply 
to public domain materials because such materials are not protected 
under Title 17.
    Joint Creators filed comments in response to OBA's proposal. Joint 
Creators did not object to the conclusion that Section 1201(a)(1) is 
inapplicable to literary works that are in the public domain but 
cautioned that many distributions of such literary works contain 
ancillary copyrightable elements, such as cover art, inserts, 
photographs, prefaces, and the like.
    NTIA shared the proponent's concern that ``the implementation of 
[technological measures] restricts universal access'' to public domain 
material, and that such restrictions ``may have a negative impact on 
educational institutions and research organizations,'' as well as other 
adverse impacts on the public. NTIA also recognized, however, that 
works in the public domain are not affected by the prohibition on 
circumvention.

[[Page 65272]]

Accordingly, NTIA agreed that an exemption is not required for this 
class of works.
    As Joint Creators observed, questions may arise when a 
technological measure controls access not only to a work in the public 
domain, but at the same time controls access to other works that are 
protected by copyright. There was no need for the Register to address 
this issue on the record presented, however, because proponents neither 
raised it nor presented any evidence relating to it.

B. Video Game Consoles--Software Interoperability

    Because the Register determined that the evidentiary record failed 
to support a finding that the inability to circumvent access controls 
on video game consoles has, or over the course of the next three years 
likely would have, a substantial adverse impact on the ability to make 
noninfringing uses, the Register declined to recommend the proposed 
class.
    EFF, joined by Andrew ``bunnie'' Huang (``Huang''), FSF, SaurikIT, 
LLC (SaurikIT), and numerous individual supporters, sought an exemption 
to permit the circumvention of access controls on video game console 
computer code so that the consoles could be used with non-vendor-
approved software that is lawfully acquired.
    EFF observed that modern video game consoles are increasingly 
sophisticated computing devices that are capable of running not only 
games but ``entire computer operating systems.'' All three major video 
game manufacturers, however--Sony, Microsoft, and Nintendo--have 
deployed technological restrictions that force console purchasers to 
limit their operating systems and software exclusively to vendor-
approved offerings. These restrictions require a console owner who 
would like to install a computer operating system or run a ``homebrew'' 
(i.e., independently developed) application to defeat a number of 
technical measures before they can do so--a process that proponents 
refer to as ``jailbreaking.'' Proponents sought an exemption from 
Section 1201(a)(1) to permit such jailbreaking of video game consoles. 
Because the class they proposed would enable interoperability only with 
``lawfully obtained software programs,'' proponents asserted that the 
exemption would not authorize or foster infringing activities.
    In its comments, EFF explained the circumvention process with 
reference to Sony's PlayStation 3 (``PS3''). Sony's PS3 employs a 
series of technological protections so that the console can only 
install and run authenticated, encrypted code. One such measure is the 
encryption of the console's firmware, which restricts access to the 
console. The firmware must be authenticated by the console's 
``bootloader'' software and decrypted before it can be used. Once the 
firmware has been authenticated and decrypted, it, in turn, 
authenticates applications before they can be installed or run on the 
PS3. EFF added that Microsoft's Xbox 360 and Nintendo's Wii employ 
similar authentication procedures as technological protection measures.
    In further support of its requested exemption, EFF recounted that 
when Sony launched the PS3 in 2006, it included a software application 
called ``OtherOS'' that permitted users to install Linux and UNIX 
operating systems on their consoles. EFF provided examples of 
researchers who were able to use these earlier PS3 consoles in lieu of 
other computer systems to conduct various forms of scientific research, 
citing an Air Force project that made use of 1700 PS3s, as well as two 
academic projects employing clusters of PS3s to create high-performance 
computers. Some of these researchers chose to use clustered PS3s 
because they were less expensive than the available alternatives. In 
2010, however, Sony issued a firmware update for the PS3 that removed 
the OtherOS functionality. PS3 users were not forced to upgrade, but 
the failure to adopt the upgrade precluded access to certain gameplay 
features and might make repair or replacement of the gaming system more 
difficult.
    EFF further asserted that none of the three major console 
manufacturers currently allows the installation of independently 
developed applications on their consoles unless the developer has 
obtained approval of the software from the manufacturer through a 
``stringent'' process that may require the developer to license costly 
development tools. As a result, hobbyists and homebrew developers 
engage in circumvention to defeat technical restrictions in order to 
create and run games and other applications on the PS3, Wii, and Xbox 
consoles.
    EFF noted over 450 independently created games and applications for 
Nintendo's Wii available on the homebrew site WiiBrew.org, as well as 
some 18 homebrew games and several nongaming applications developed for 
the PS3--including a file backup program called ``Multiman'' and an 
application that transforms the PS3 into an FTP server--and a handful 
of other homebrew applications for other platforms and handheld gaming 
devices. EFF pointed out that there is no strong homebrew community for 
the Xbox360, attributing this phenomenon to a Microsoft development 
program that allows developers to publish games ``with relative ease.''
    Proponents argued that manufacturers' technological restrictions on 
video game consoles not only constrain consumer choice but also inhibit 
scientific research and homebrew development activities. Pointing to 
the Register's determination in the last Section 1201 rulemaking that 
circumvention of technological measures on smartphones to enable 
interoperability with lawfully obtained applications was a permissible 
fair use, proponents urged that the same logic should apply here. 
According to proponents, the restrictions on video game consoles do not 
protect the value or integrity of copyrighted works but instead reflect 
a business decision to restrict the applications that users can run on 
their devices.
    EFF explained that a ``large community'' of console jailbreakers 
currently exists for all three major video game consoles but noted that 
such jailbreakers face potential liability under Section 1201(a)(1). As 
evidence of this, EFF cited recent litigation pursued by Sony against 
an individual and others who developed a method for jailbreaking the 
PS3. EFF explained that in January 2010, George Hotz (also known by his 
online name ``GeoHot'') published a method for jailbreaking the PS3. In 
response, Sony initiated a lawsuit against Hotz and others alleging, 
among other things, that the defendants had conspired to violate the 
DMCA.
    Finally, a few supporters of EFF's proposal suggested potential 
scenarios in which a console might need to be jailbroken to effectuate 
a repair but did not provide any specific evidence of actual repair 
issues.
    The proposal to permit circumvention of video game consoles was 
vigorously opposed by the Entertainment Software Association (``ESA''), 
Sony Computer Entertainment America LLC (``SCEA'' or ``Sony''), and 
Joint Creators. Opponents filed extensive comments in response to EFF's 
request.
    ESA characterized video game consoles as ``the center of an 
intellectual property ecosystem'' which makes copyrighted content 
readily and legally accessible, stating that the entire system depends 
upon effective and secure access controls. ESA explained that there are 
at least two potential access controls at issue. To play an 
unauthorized application, the user must circumvent not only the 
encryption on the console's firmware, but also modify

[[Page 65273]]

the firmware to defeat the authentication check access control. It 
added that once modified, the firmware will operate, but the access 
controls will be circumvented, effectively allowing the console to run 
unauthorized content.
    SCEA's comments focused on its PS3 console (the dominant example 
addressed in EFF's proposal). SCEA confirmed that the technological 
restrictions controlling access to the PS3 protect both its firmware 
and the copyrighted video games that are developed for that system. As 
explained by SCEA, allowing circumvention of the PS3 access controls 
would mean that the basic security checks could be skipped and the 
firmware freely modified to bypass or eliminate the process by which 
the video games are authenticated for use on the console, thus making 
it ``virtually certain that successful hackers, under the guise of the 
exemption, will create the tools that enable even novice users to make, 
distribute, download, and play back illegal copies of games.''
    Throughout their comments, opponents stressed piracy as an 
overriding concern, noting that once a user circumvents a console's 
security measures--even for an ostensibly benign purpose--it becomes a 
vehicle for unauthorized content. In their view, EFF's attempt to limit 
the exemption to interoperability with lawful applications would make 
no difference in practice, because ``all known methods for 
circumventing game console [technological protection measures] 
necessarily eliminate the measures' ability to preclude the play, 
reproduction and distribution of infringing content.''
    In support of their contentions regarding the link between 
circumvention and piracy, opponents provided documentation of console 
``hacking packages'' that come bundled with applications to play 
pirated content. They further noted, again with supporting materials, 
that the homebrew channel installed with a popular Wii hacking package 
automatically includes applications that enable the console to play 
pirated content. They pointed out, with still further support in the 
record, that the ``Multiman'' backup system referenced by EFF as an 
example of a useful application enabled by jailbroken PS3s is used to 
decrypt and copy protected PS3 games so they can be illegally 
distributed. Other documentary evidence submitted by opponents showed 
that the PS3 FTP file server application described by EFF is used as a 
means to transfer illegal files. Opponents also furnished multiple 
examples of advertisements for console jailbreaking services that 
included (for an all-in price) a library of pirated games.
    Opponents pointed to online forums and other sources that 
specifically referenced George Hotz's hack of the PS3--described 
sympathetically by EFF in its proposal--as permitting users to play 
pirated games and content, and provided representative postings. The 
documentation evidenced a broadly shared perception in the gaming 
community that jailbreaking leads to piracy. Notably, some of those 
providing commentary made the further observation that such piracy 
would negatively impact the development of new games.
    Possibly referring to Hotz, SCEA elaborated on the hacking issue by 
commenting specifically on the events surrounding a 2010 breach of its 
PS3 system. In that case, hackers announced that they had successfully 
circumvented the technological measures on PS3 firmware, which was 
accomplished by exploiting vulnerabilities in Linux operating in the 
OtherOS environment. Although the hackers stated that they did not 
endorse or condone piracy, one hacker subsequently published PS3's 
encryption keys on the Internet, which were quickly used to create 
jailbreak software to permit the use of illegally made games. Sony saw 
an immediate rise in the number of illegal copies but no increase in 
homebrew development, while sales of legitimate software ``declined 
dramatically.'' As a result of the hack, Sony decided it had no choice 
but to discontinue OtherOS and issued a system upgrade that disabled 
OtherOS functionality for those who wished to maintain access to Sony's 
PlayStation network.
    Mindful of the exemption established by the Librarian in the prior 
proceeding to permit jailbreaking of smartphones, opponents urged that 
video game consoles are not the equivalent of iPhones, asserting that 
the technological measures on game consoles legitimately protect the 
creation and dissemination of copyrighted works by discouraging pirated 
content and protecting creators' investment in new games. Opponents 
distinguished the development of a video game--a long and intensive 
process ``akin to * * * motion picture production'' involving a team of 
developers that can cost tens of millions of dollars--from the relative 
ease and inexpensiveness of creating a smartphone application. 
According to opponents, the development of new video games would be 
significantly impaired without reliable technological protections to 
protect developers' investments.
    With respect to the need to jailbreak consoles to permit the 
operation of Linux-based homebrew programs, opponents observed that 
while EFF's request focused on the PS3, the homebrew community for that 
device is small, as evidenced by the fact that less than one-tenth of 
one percent of PS3 users (fewer than 2,000 in all) had made use of the 
PS3's OtherOS feature. In any event, they noted, there are over 4,000 
devices on which Linux can be run without the need for circumvention, 
and homebrew games and applications can be played on a wide array of 
open platform devices. Opponents further observed that each of the 
three major video game console manufacturers has a program to support 
independent developers in creating and publishing compatible games.
    Finally, opponents disputed proponents' suggestion that 
circumvention is necessary to repair broken game consoles, explaining 
that each console maker offers authorized repair services free of 
charge for consoles still under warranty for a nominal fee thereafter.
    Although EFF sought to rely upon the Register's 2010 determination 
that modification of smartphone software to permit interoperability 
with non-vendor-approved applications was a fair use, the Register 
concluded that the fair use analysis for video consoles diverged from 
that in the smartphone context. Unlike in the case of smartphones, the 
record demonstrated that access controls on gaming consoles protect not 
only the console firmware, but the video games and applications that 
run on the console as well. The evidence showed that video games are 
far more difficult and complex to produce than smartphone applications, 
requiring teams of developers and potential investments in the millions 
of dollars. While the access controls at issue might serve to further 
manufacturers' business interests, they also protect highly valuable 
expressive works--many of which are created and owned by the 
manufacturers--in addition to console firmware itself.
    The Register noted that research activities and functional 
applications that proponents claimed would be enabled by circumvention 
might well constitute transformative uses. On the other hand, 
circumventing console code to play games and other entertainment 
content (even if lawfully acquired) is not a transformative use, as the 
circumvented code is serving the same fundamental purpose as the 
unbroken code. While the second and third fair

[[Page 65274]]

use factors did not greatly affect the analysis, on the significant 
question of market harm, the Register concluded that opponents had 
provided compelling evidence that circumvention of access controls to 
permit interoperability of video game consoles--regardless of purpose--
had the effect of diminishing the value of, and impairing the market 
for, the affected code, because the compromised code could no longer 
serve as a secure platform for the development and distribution of 
legitimate content. The Register noted that instead of countering this 
evidence with a factual showing to prove opponents wrong, EFF merely 
asserted that its proposal would not permit infringing uses. The 
Register did not believe that this response satisfied proponents' 
obligation to address the ``real-world impact'' of their proposed 
exemption. Overall, the Register found that proponents had failed to 
fulfill their obligation to establish persuasively that fair use could 
serve as a basis for the exemption they sought.
    The Register further found that even if proponents had satisfied 
their burden of establishing noninfringing uses, they nonetheless 
failed to demonstrate that video game console access controls have or 
are likely to have a substantial adverse impact on such uses. 
Proponents identified two broad categories of activities that were 
allegedly threatened by the prohibition on circumvention, scientific 
research and homebrew software development. With respect to scientific 
research, a small number of research projects involving only one type 
of gaming console, the PS3, suggested a de minimis impact, if any. This 
conclusion was reinforced by record evidence indicating that Sony had 
in fact cooperated with and been a supporter of research efforts and 
that alternative computing resources for such projects were available 
in the marketplace.
    Nor, according to the Register's analysis, did the record support a 
finding that Section 1201(a)(1) is having a substantial adverse impact 
on lawful homebrew activities. The most significant level of homebrew 
activity identified by EFF appears to have occurred in relation to the 
Wii, but the record was relatively sparse in relation to other gaming 
platforms. Concerning the use of video game consoles to operate Linux 
software generally, the record showed that only a very small percentage 
of PS3 users availed themselves of the (now discontinued) OtherOS 
option that permitted users to run Linux on their PS3s. At the same 
time, there are thousands of alternative devices that can be used to 
develop and run Linux-based video games and other applications. In 
addition, the record indicated that developers can and do take 
advantage of various manufacturer programs to pursue independent 
development activities.
    Finally, as noted above, the Register determined that proponents 
offered no factual basis in support of their suggestion that users are 
having difficulty repairing their consoles as a result of Section 
1201(a)(1). This appeared to be only a hypothetical concern, as 
proponents failed to document any actual instances of users seeking to 
make repairs.
    The Register therefore concluded that proponents had failed to 
establish that the prohibition on circumvention, as applied to video 
game console code, is causing substantial adverse effects.
    Turning to the statutory factors, the Register took issue with 
proponents' view that piracy was an irrelevant consideration because 
the exemption they sought was only to allow interoperability with 
``lawfully obtained applications.'' The Register explained that she 
could not ignore the record before her. Even if piracy were not the 
initial or intended purpose for circumvention, the record substantiated 
opponents' assessment that in the case of video games, console 
jailbreaking leads to a higher level of infringing activity, thus 
sharply distinguishing the case of video consoles from smartphones, 
where the record did not support the same finding. The evidence also 
suggested that the restriction limiting the proposed class to 
``lawfully obtained'' applications--which the Register has found 
effective in other contexts--did not provide adequate assurance in this 
case. The Register noted that simply to suggest, as proponents had, 
that unlawful uses were outside the scope of the exemption and 
therefore of no concern was not a persuasive answer.
    Finally, the Register agreed with proponents' assessment that the 
access controls protecting video game console code facilitate a 
business model, as many technological restrictions do. But the Register 
concluded that in the case of gaming platforms, that was not the sole 
purpose. Console access controls protect not only the integrity of the 
console code, but the copyrighted works that run on the consoles. In so 
doing, they provide important incentives to create video games and 
other content for consoles, and thus play a critical role in the 
development and dissemination of highly innovative copyrighted works.
    NTIA supported the ``innovative spirit epitomized by independent 
developers and researchers whose needs proponents contemplate in this 
class,'' but noted that the evidence in the record was insufficient to 
support the considerable breadth of the proposed class. NTIA asserted 
that the record was unclear with respect to the need for an exemption 
to enable software interoperability, and that there was compelling 
evidence of reasonable alternatives available for research purposes. 
NTIA was also ``cognizant of the proposal's likely negative impact on 
the underlying business model that has enabled significant growth and 
innovation in the video game industry.''
    Although NTIA did not support the exemption as requested by 
proponents, it did support a limited exemption to allow videogame 
console owners to repair or replace hardware components, or to ``obtain 
unlicensed repairs when the console is out of warranty or when the 
console and authorized replacement parts are no longer on the market.'' 
As explained above, however, the Register found that the record lacked 
any factual basis upon which to recommend the designation of even such 
a limited class.

C. Personal Computing Devices--Software Interoperability

    While the Register recognized that the concern expressed by 
proponents--that a broad implementation of restrictive access controls 
could preclude users from installing operating systems and applications 
of their choice--is a significant one, she found that proponents had 
relied heavily on speculation and failed to present specific and 
compelling evidence in support of a focused exemption. The Register 
therefore declined to recommend the adoption of the proposed class.
    Software Freedom Law Center (``SFLC''), supported by FSF, Mozilla, 
SaurikIT, New Yorkers for Fair Use, Huang, and others, sought an 
exemption to permit the circumvention of computer programs on personal 
computing devices to enable the installation of other software, 
including alternative operating systems, when such software is lawfully 
obtained. The proposed exemption would have allowed circumvention by 
the device owner or by someone acting at the device owner's request.
    In requesting this exemption, SFLC explained that there are two 
broad categories of access controls on personal computing devices: 
``application locks,'' which effectively prevent users from installing 
certain software applications, and ``OS locks,'' which effectively 
prevent users from installing replacement operating systems. Citing the 
Librarian's 2010 determination

[[Page 65275]]

permitting jailbreaking of smartphones to enable interoperability, SFLC 
asserted that the restrictions addressed by the smartphone exemption 
have become commonplace on other mobile computing devices and have 
begun to appear on personal computers. Accordingly, SFLC contended that 
the smartphone exemption should be ``expanded'' to include ``all 
personal computing devices'' so as to permit circumvention for the 
purpose of installing any software the user chooses, including a new 
operating system.
    SFLC explained that the mobile device market, which includes not 
only smartphones but also tablet computers, is dominated by Google's 
Android operating system and Apple's iOS, which together account for 94 
percent of the market. The two most popular ebook readers, Amazon's 
Kindle and Barnes & Noble's Nook, are Android-based devices. According 
to SFLC, ``[a]ll of the restrictions addressed by the [smartphone] 
exemption are reproduced on the new formats.'' Thus, the iOS on the 
iPhone and iPad limits applications to those obtained from Apple's 
store. In the case of Android, users are allowed to install 
applications obtained from channels other than Google's Android 
Marketplace, but Android withholds ``many vital privileges'' (i.e., 
important device functionalities) from alternatively sourced 
applications. In addition, even though the Kindle and Nook are Android-
based, Amazon and Barnes & Noble have substituted their own exclusive 
distribution channels, which cannot be avoided without jailbreaking.
    SFLC further observed that Microsoft has announced that it will 
require hardware manufacturers for the forthcoming Windows 8 operating 
system to enable a secure boot system--which can function as a type of 
OS lock--``by default.'' It asserted that because Microsoft controls 
nearly 90 percent of the operating system market, secure boot will be a 
``nearly ubiquitous'' feature on personal computers in the next year. 
According to SFLC, this will ``decimate'' what is now a thriving market 
for alternative PC operating systems. In a further submission to the 
Copyright Office, however, SFLC conceded that Microsoft had established 
a program to enable developers to ``have their operating systems signed 
by Microsoft''--i.e., to acquire a secure boot key--for a fee of 99 
dollars.
    SFLC acknowledged that the stated justification for OS locks is to 
protect device owners from malicious software by making it impossible 
for viruses to gain access to, or replace, a device's operating system. 
But in SFLC's words, ``[t]his `security feature' is undiscerning: it 
will reject the device owner's intentional installation of an operating 
system just as it will reject a virus's payload.'' SFLC observed that 
``[t]o the extent the firmware lock being circumvented merely prevents 
unauthorized operating systems from running, it does not protect access 
to a copyrighted work of the device producer, but rather prevents 
access to a competing copyrighted work to which the device owner has a 
license.''
    On the question of noninfringing use, SFLC asserted that it is not 
infringing for the owner of a device to install applications that have 
not been approved by the device's manufacturer. According to SFLC, this 
conclusion--drawn from the Register's analysis and findings in the 2010 
rulemaking proceeding--applies with equal force to application locks on 
devices other than smartphones, as well as to OS locks. SFLC noted that 
in 2010, the Register determined that circumvention for the purpose of 
achieving interoperability was either ``noninfringing or fair.'' SFLC 
further opined that, while modification of a preinstalled operating 
system is sometimes necessary to circumvent an application lock, the 
same is not true of OS locks, as removal of a device's default 
operating system does not implicate any of the exclusive rights of the 
owner of the operating system.
    The proposed class was opposed by Joint Creators, who argued that 
the requested exemption ``targets every device and every platform, and 
creates an open-ended standard for circumvention.'' In their view, if 
granted, the exemption ``would strip any copyright owner, distributor, 
or licensee from exercising any choices with respect to how to 
construct a distribution system related to personal computing, and 
would thus expose copyright owners and their business partners to 
unnecessary risk, piracy, and unpredictability.'' Joint Creators 
characterized proponents' request as, ``at best, premature,'' and 
maintained that proponents had failed to meet the substantial burden 
required for an exemption.
    Joint Creators also contended that the ``primary effects'' of such 
an exemption would be to enable distribution of pirated applications, 
and to remove technical limitations that would otherwise protect trial 
versions of applications. According to Joint Creators, circumvention of 
technical measures on computer programs is accomplished primarily to 
unlock trial versions of software or enable access to pirated copies or 
unauthorized modified versions.
    Joint Creators stressed that proponents' arguments in favor of the 
proposed class were based on speculation rather than facts. They 
asserted that proponents' comments presented ``theories'' about what 
might occur but failed to demonstrate that the scenarios they portrayed 
were more likely than not. In particular, with respect to the secure 
boot issue, Joint Creators pointed out that proponents had not 
identified a single platform that precluded the installation of an 
alternative operating system.
    Finally, Joint Creators asserted that the proposed class--in 
purporting to immunize circumvention, ``performed * * * at the request 
of the device's owner''--amounted to a request to exempt the provision 
of circumvention services, which is prohibited under Section 
1201(a)(1)(E).
    The Register found that proponents had offered very little support 
for their claim that the uses for which they sought an exemption are 
noninfringing, even though it is a threshold requirement before an 
exemption can be considered. Instead, proponents chose to rest their 
case upon the Register's conclusion in the 2010 rulemaking--in the 
context of smartphones--that it was not an infringement to install 
applications that have not been approved by a device's manufacturer. 
The Register opined that proponents' conclusory declaration that the 
expansive set of uses upon which they premised their request was 
noninfringing was inadequate in the context of the rulemaking.
    The Register noted that the record was murky on the especially 
critical issue of whether the removal of an operating system from a 
device in its entirety--an activity proponents sought to facilitate 
through the rulemaking process--required the circumvention of technical 
measures before erasing the operating system, or whether it was 
possible to remove an operating system without prior circumvention 
(even if such removal also simultaneously removed the access controls 
for that operating system). At the hearings, the Copyright Office 
sought clarification on this point from the parties, but the results 
were inconclusive. Another question that was not answered by the record 
was whether an OS lock preventing the operation of an alternative 
operating system is in fact a technological measure protecting a 
copyrighted work within the meaning of Section 1201(a).
    The Register explained that to the extent an operating system can 
be removed without having first to gain

[[Page 65276]]

access to the work through an act of circumvention, even if such work 
is protected for other purposes by technological measures, such removal 
would not constitute a violation of Section 1201(a)(1). This is because 
upon deletion of the work, any such technological measure is no longer 
``effectively control[ling] access'' to the work. In such a case, of 
course, an exemption is unnecessary.
    The Register also observed that much of proponents' concern 
appeared to be centered on Microsoft's to be launched Windows 8 
operating system and its ``secure boot'' functionality. But proponents' 
own statements indicated that this concern was speculative. It appeared 
undisputed in the record that, at least as of today, purchasers of PCs 
are able to install alternative operating systems without resorting to 
circumvention. Indeed, proponents conceded that the specification 
allegedly adopted by Microsoft ``does not prevent manufacturers from 
allowing users to disable the lock or add non-Microsoft keys,'' and 
also acknowledged that Microsoft permitted developers to acquire keys 
for 99 dollars.
    The Register determined that proponents' suppositions concerning 
the features of forthcoming software fell short of making a case that 
the harmful effects they posited were more likely to occur than not. 
The Register reiterated that mere speculation cannot support an 
exception to Section 1201(a)(1); rather, predicted adverse effects are 
only cognizable ``in extraordinary circumstances in which the evidence 
of likelihood of future adverse impact is highly specific, strong and 
persuasive.'' The Register concluded that proponents had failed to 
offer any such evidence here.
    The Register additionally observed that granting an exemption for 
such a sweeping class would be without precedent in the history of 
Section 1201 rulemakings. In the past, faced with a proposed class with 
respect to which the proponents have offered substantial and persuasive 
evidence, but for which the definition proposed is not fully congruent 
with the proponents' showing, the Register has--to the extent a 
sufficient basis exists in the record--refined the class definition to 
ensure that it is appropriately tailored to her findings. But such 
refinement is only possible where the proponent of the proposed class 
has otherwise succeeded in demonstrating that some version of its 
exemption is warranted. The Register cannot delineate the appropriate 
contours of a class ``in a factual vacuum.''
    As a final consideration, the Register noted that to the extent the 
proposed class would effectively permit the provision of circumvention 
services to others--as it appeared to do--it must be rejected, as the 
provision of such services to others is forbidden under Section 
1201(a)(2) of the DMCA.
    NTIA was ``not convinced that Secure Boot constitutes `a 
technological measure that effectively controls access to a work' 
protected by U.S. copyright law.''' It further noted that proponents 
had failed to present evidence that the secure boot functionality 
restricted access to Windows 8 or any other work for purposes of 
protecting copyright. NTIA thus did not support the designation of the 
proposed class.

D. Motion Pictures and Other Works on DVDs and Other Media--Space 
Shifting

    The Register concluded that proponents had failed to establish that 
the prohibition on circumvention is imposing an adverse impact on 
noninfringing uses and declined to recommend the requested exemptions 
for space shifting.
    Proponent Public Knowledge, as well as proponents Cassiopaea, 
Tambolini, Susan Fuhs, Kellie Heistand, Andy Kossowsky, and Curt 
Wiederhoeft, sought similar exemptions to permit the circumvention of 
motion pictures and other works on DVDs and other media to enable 
``space shifting,'' i.e., the copying of complete works to permit 
personal use on alternative devices.
    Proponent Public Knowledge stated a desire to move lawfully 
acquired motion pictures on DVDs to consumer electronic devices, such 
as tablet computers and laptop computers, that lack DVD drives. It 
asserted that consumers' inability to play lawfully acquired DVDs on 
the newest devices adversely affected noninfringing uses of the works 
contained on DVDs, and that a reasonable solution was for these 
consumers to copy the motion pictures into a format that could be 
viewed on the new devices. Public Knowledge urged that such an 
exemption ``would merely allow a user to make use of a motion picture 
she has already acquired.'' The space shifting proposals by the 
additional proponents--most of which were one page or less--sought 
similar exemptions, but offered few factual details and little or no 
legal analysis.
    The current proposals were not unlike the proposal sought in the 
2006 rulemaking. In that rulemaking, the Register declined to recommend 
a space shifting exemption in part because the proponents failed to 
offer persuasive legal arguments that space shifting was a 
noninfringing use. The Register also addressed space shifting in the 
2003 rulemaking in her consideration of a requested exemption regarding 
``tethering.'' In her 2003 recommendation, the Register observed that 
``no court has held that `space-shifting' is a fair use.''
    Public Knowledge cited RIAA v. Diamond Multimedia Systems Inc., 180 
F.3d 1072 (1999), and Sony Corporation of America v. Universal City 
Studios, Inc., 464 U.S. 417 (1984), in support of its contention that 
space shifting is a noncommercial personal use, and therefore a fair 
use. It applied the four-factor fair use test of Section 107 in support 
of its assertion that the sort of space shifting for which it sought an 
exemption is a noninfringing use. Public Knowledge further argued that 
the space shifting would not negatively impact the availability of, or 
harm the market for, copyrighted works, or contribute to piracy. 
Finally, Public Knowledge claimed that there were no reasonable 
alternatives to such space shifting.
    Public Knowledge asked the Register to evaluate the legitimacy of 
personal space shifting through ``independent examination.'' According 
to Public Knowledge, the Section 1201(a) rulemaking process of 
``recommending, consulting, determining, and speculating necessarily 
requires the Register to draw conclusions beyond parroting the statute 
and existing case law.''
    Proponents of the additional proposals sought to exempt other 
digital works, including sound recordings and ebooks, in addition to 
motion pictures, for purposes of space shifting. They offered 
insufficient factual or legal analysis in support of their proposed 
exemptions, however.
    DVD CCA opposed the requested exemptions by first observing that, 
although many new electronic devices are made without DVD drives, 
consumers can still play DVDs on such devices through the use of 
peripheral tools, i.e., external drives that connect to the devices and 
are capable of playing DVDs. DVD CCA argued that just because a 
consumer prefers a portable device for certain purposes, it does not 
mean that the consumer is foreclosed from using a different device to 
play DVDs or that an exemption for space shifting is warranted.
    DVDCCA further noted that, contrary to the statements made by 
Public Knowledge, consumers have not purchased the motion picture 
itself, but a DVD copy of the motion picture, which affords only the 
right to access the work according to the DVD format specifications, 
i.e., through the use of a

[[Page 65277]]

DVD player. DVDCCA explained that consumers are able to purchase the 
copy at its retail price--typically less than 20 dollars--because it is 
distributed on a specific medium that will only play back on a licensed 
player. It stated that the Register has previously recognized that 
there is no unqualified right to access a work on a particular device.
    DVDCCA alleged that the proposed exemption would harm the market 
for works distributed in the DVD medium as well as that for works 
offered in other digital media, explaining that the proposed exemption 
would displace sales for existing and forthcoming digital offerings 
that the DMCA was meant to encourage. It further alleged that the 
proposed exemption would create ``public confusion'' as to what is 
permitted activity.
    Joint Creators similarly disputed Public Knowledge's assertion that 
consumers are adversely affected by an inability to play DVDs on 
electronic devices that are not designed to play DVDs, pointing to 
services that provide access to numerous titles for low subscription 
prices. They argued that it was not the purpose of the rulemaking to 
provide consumers with the most cost-effective manner to obtain 
commercial video content.
    AACS LA opposed an exemption for space shifting that would apply to 
AACS technology protecting Blu-ray discs. It noted that proponents had 
failed to satisfy their burden to demonstrate that an exemption is 
warranted or that space shifting is a noninfringing act.
    The Register recognized that there is significant consumer interest 
in the proposed exemption. Proponents, however, had the burden of 
demonstrating that the requested use was noninfringing. Neither of the 
two key cases relied upon by proponents, however, addresses or informs 
the space shifting activities at issue.
    The Register noted that she had previously explained that Diamond 
Multimedia--a case in which the court was called upon to interpret the 
Audio Home Recording Act (``AHRA'')--``did not hold that `space-
shifting' is fair use. It did state, in dicta, that `space-shifting' of 
digital and analog musical recordings is a noncommercial personal use 
consistent with the Audio Home Recording Act.'' Notably, neither 
Diamond Multimedia, nor the statute it interpreted, addressed motion 
pictures, the focus of Public Knowledge's proposal.
    Turning to Sony, the Register clarified that that case involved 
``time-shifting,'' defined by the Supreme Court as ``the practice of 
recording a program to view it once at a later time, and thereafter 
erasing it.'' It did not address the legality of ``librarying,'' i.e., 
the maintenance of copies of copyrighted works. Here, by contrast, 
librarying was among the activities contemplated by the proposed 
exemptions.
    The Register further observed that the law does not guarantee 
access to copyrighted material in a user's preferred format or 
technique. Indeed, copyright owners typically have the legal authority 
to decide whether and how to exploit new formats. The Register noted 
that while the law may someday evolve to accommodate some of 
proponents' proposed uses, more recent cases touching upon space 
shifting confirm that the fair use implications of various forms of 
space shifting are far from settled. The Register reiterated her view 
that the Section 1201 rulemaking process was ``not the forum in which 
to break new ground on the scope of fair use.'' She then proceeded to 
assess the proposed exemptions under the traditional fair use factors.
    In urging that space shifting is a fair use, Public Knowledge 
characterized the copying of motion pictures for use on personal 
devices as a ``paradigmatic noncommercial personal use'' that could 
facilitate a transformative use. It further asserted that integrating 
reproductions of motion pictures from DVDs into a consumer's media 
management software was analogous to the integration of thumbnail 
images into Internet search engines found to be a transformative use in 
Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007).
    The Register did not agree with this analysis. In her view, the 
incorporation of reproductions of motion pictures from DVDs into a 
consumer's media management software is not equivalent to the provision 
of public search engine functionality. Rather, it is simply a means for 
an individual consumer to access content for the same entertainment 
purpose as the original work. Put another way, it does not ``add[] 
something new, with a further purpose or different character, altering 
the first with new expression, meaning,'' or advance criticism, 
comment, or any other interest enumerated in the preamble of Section 
107. The Register therefore concluded that the first fair use factor 
did not favor a finding of fair use. The Register additionally 
determined that where creative works were being copied in their 
entirety, factors two and three also weighed against fair use, and that 
there was an inadequate basis in the record to conclude that the 
developing market for the online distribution of motion pictures would 
not be harmed by the proposed uses.
    Finally, the Register concluded that proponents had failed to 
demonstrate that the use of a reasonably priced peripheral, a different 
device, or an online subscription service to access and play desired 
content did not offer a reasonable alternative to circumvention. 
Accordingly, the Register was not persuaded that the inability to 
engage in the space shifting activities described by proponents is 
having a substantial adverse impact on consumers' ability to make 
noninfringing uses of copyrighted works.
    NTIA suggested what it described as a ``more narrowly-constructed'' 
version of Public Knowledge's proposed exemption. Specifically, it 
supported an exemption to allow circumvention of lawfully acquired DVDs 
``when the DVD neither contains nor is accompanied by an additional 
copy of the work in an alternative digital format, and when 
circumvention is undertaken solely in order to accomplish the 
noncommercial space shifting of the contained motion picture.'' NTIA 
voiced support for the motion picture industry's efforts to make 
content available on the wide range of new devices, and encouraged the 
industry to continue developing new offerings. It contended that by 
limiting the exemption to circumstances in which the market had not 
supplied alternatives to DVDs, ``the potential adverse effect on the 
market is minimal.''
    The Register likewise expressed support for the motion picture 
industry's innovation and the development of market approaches to 
satisfy the demand for electronically distributed content. But while 
the Register was sympathetic to the desire to consume content on a 
variety of different devices, she noted that there is no basis under 
current law to assume that the space shifting activities that would be 
permitted under NTIA's proposal would be noninfringing. Moreover, in 
light of the record before her, the Register did not find that such 
activities would not adversely affect the legitimate future markets of 
copyright owners.

V. Conclusion

    Having considered the evidence in the record, the contentions of 
the commenting parties, and the statutory objectives, the Register of 
Copyrights has recommended that the Librarian of Congress publish 
certain classes of works, as designated above, so that the prohibition 
against circumvention of

[[Page 65278]]

technological measures that effectively control access to copyrighted 
works shall not apply to persons who engage in noninfringing uses of 
those particular classes of works.


    Dated: October 22, 2012.
Maria A. Pallante,
Register of Copyrights.

Determination of the Librarian of Congress

    Having duly considered and accepted the Recommendation of the 
Register of Copyrights, which Recommendation is hereby incorporated by 
reference, the Librarian of Congress is exercising his authority under 
17 U.S.C. 1201(a)(1)(C) and (D) and is publishing as a new rule the 
classes of copyrighted works that shall be subject to the exemption 
found in 17 U.S.C. 1201(a)(1)(B) from the prohibition against 
circumvention of technological measures that effectively control access 
to copyrighted works set forth in 17 U.S.C. 1201(a)(1)(A).

List of Subjects in 37 CFR Part 201

    Copyright, Exemptions to prohibition against circumvention.

Final Regulations

    For the reasons set forth in the preamble, 37 CFR part 201 is 
amended as follows:

PART 201--GENERAL PROVISIONS

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 17 U.S.C. 702.


0
2. Section 201.40 is amended by revising paragraph (b) to read as 
follows:


Sec.  201.40  Exemption to prohibition against circumvention.

* * * * *
    (b) Classes of copyrighted works. Pursuant to the authority set 
forth in 17 U.S.C. 1201(a)(1)(C) and (D), and upon the recommendation 
of the Register of Copyrights, the Librarian has determined that the 
prohibition against circumvention of technological measures that 
effectively control access to copyrighted works set forth in 17 U.S.C. 
1201(a)(1)(A) shall not apply to persons who engage in noninfringing 
uses of the following classes of copyrighted works:
    (1) Literary works, distributed electronically, that are protected 
by technological measures which either prevent the enabling of read-
aloud functionality or interfere with screen readers or other 
applications or assistive technologies in the following instances:
    (i) When a copy of such a work is lawfully obtained by a blind or 
other person with a disability, as such a person is defined in 17 
U.S.C. 121; provided, however, the rights owner is remunerated, as 
appropriate, for the price of the mainstream copy of the work as made 
available to the general public through customary channels; or
    (ii) When such work is a nondramatic literary work, lawfully 
obtained and used by an authorized entity pursuant to 17 U.S.C. 121.
    (2) Computer programs that enable wireless telephone handsets to 
execute lawfully obtained software applications, where circumvention is 
accomplished for the sole purpose of enabling interoperability of such 
applications with computer programs on the telephone handset.
    (3) Computer programs, in the form of firmware or software, that 
enable a wireless telephone handset originally acquired from the 
operator of a wireless telecommunications network or retailer no later 
than ninety days after the effective date of this exemption to connect 
to a different wireless telecommunications network, if the operator of 
the wireless communications network to which the handset is locked has 
failed to unlock it within a reasonable period of time following a 
request by the owner of the wireless telephone handset, and when 
circumvention is initiated by the owner, an individual consumer, who is 
also the owner of the copy of the computer program in such wireless 
telephone handset, solely in order to connect to a different wireless 
telecommunications network, and such access to the network is 
authorized by the operator of the network.
    (4) Motion pictures, as defined in 17 U.S.C. 101, on DVDs that are 
lawfully made and acquired and that are protected by the Content 
Scrambling System, where the person engaging in circumvention believes 
and has reasonable grounds for believing that circumvention is 
necessary because reasonably available alternatives, such as 
noncircumventing methods or using screen capture software as provided 
for in alternative exemptions, are not able to produce the level of 
high-quality content required to achieve the desired criticism or 
comment on such motion pictures, and where circumvention is undertaken 
solely in order to make use of short portions of the motion pictures 
for the purpose of criticism or comment in the following instances:
    (i) In noncommercial videos;
    (ii) In documentary films;
    (iii) In nonfiction multimedia ebooks offering film analysis; and
    (iv) For educational purposes in film studies or other courses 
requiring close analysis of film and media excerpts, by college and 
university faculty, college and university students, and kindergarten 
through twelfth grade educators. For purposes of this exemption, 
``noncommercial videos'' includes videos created pursuant to a paid 
commission, provided that the commissioning entity's use is 
noncommercial.
    (5) Motion pictures, as defined in 17 U.S.C. 101, that are lawfully 
made and acquired via online distribution services and that are 
protected by various technological protection measures, where the 
person engaging in circumvention believes and has reasonable grounds 
for believing that circumvention is necessary because reasonably 
available alternatives, such as noncircumventing methods or using 
screen capture software as provided for in alternative exemptions, are 
not able to produce the level of high-quality content required to 
achieve the desired criticism or comment on such motion pictures, and 
where circumvention is undertaken solely in order to make use of short 
portions of the motion pictures for the purpose of criticism or comment 
in the following instances:
    (i) In noncommercial videos;
    (ii) In documentary films;
    (iii) In nonfiction multimedia ebooks offering film analysis; and
    (iv) For educational purposes in film studies or other courses 
requiring close analysis of film and media excerpts, by college and 
university faculty, college and university students, and kindergarten 
through twelfth grade educators. For purposes of this exemption, 
``noncommercial videos'' includes videos created pursuant to a paid 
commission, provided that the commissioning entity's use is 
noncommercial.
    (6)(i) Motion pictures, as defined in 17 U.S.C. 101, on DVDs that 
are lawfully made and acquired and that are protected by the Content 
Scrambling System, where the circumvention, if any, is undertaken using 
screen capture technology that is reasonably represented and offered to 
the public as enabling the reproduction of motion picture content after 
such content has been lawfully decrypted, when such representations 
have been reasonably relied upon by the user of such technology, when 
the person engaging in the circumvention believes and has reasonable 
grounds for believing that the circumvention is necessary to achieve 
the desired criticism or comment, and where the circumvention is 
undertaken solely in order to make use of short portions of the motion

[[Page 65279]]

pictures for the purpose of criticism or comment in the following 
instances:
    (A) In noncommercial videos;
    (B) In documentary films;
    (C) In nonfiction multimedia ebooks offering film analysis; and
    (D) For educational purposes by college and university faculty, 
college and university students, and kindergarten through twelfth grade 
educators.
    (ii) For purposes of this exemption, ``noncommercial videos'' 
includes videos created pursuant to a paid commission, provided that 
the commissioning entity's use is noncommercial.
    (7)(i) Motion pictures, as defined in 17 U.S.C. 101, that are 
lawfully made and acquired via online distribution services and that 
are protected by various technological protection measures, where the 
circumvention, if any, is undertaken using screen capture technology 
that is reasonably represented and offered to the public as enabling 
the reproduction of motion picture content after such content has been 
lawfully decrypted, when such representations have been reasonably 
relied upon by the user of such technology, when the person engaging in 
the circumvention believes and has reasonable grounds for believing 
that the circumvention is necessary to achieve the desired criticism or 
comment, and where the circumvention is undertaken solely in order to 
make use of short portions of the motion pictures for the purpose of 
criticism or comment in the following instances:
    (A) In noncommercial videos;
    (B) In documentary films;
    (C) In nonfiction multimedia ebooks offering film analysis; and
    (D) For educational purposes by college and university faculty, 
college and university students, and kindergarten through twelfth grade 
educators.
    (ii) For purposes of this exemption, ``noncommercial videos'' 
includes videos created pursuant to a paid commission, provided that 
the commissioning entity's use is noncommercial.
    (8) Motion pictures and other audiovisual works on DVDs that are 
protected by the Content Scrambling System, or that are distributed by 
an online service and protected by technological measures that control 
access to such works, when circumvention is accomplished solely to 
access the playhead and/or related time code information embedded in 
copies of such works and solely for the purpose of conducting research 
and development for the purpose of creating players capable of 
rendering visual representations of the audible portions of such works 
and/or audible representations or descriptions of the visual portions 
of such works to enable an individual who is blind, visually impaired, 
deaf, or hard of hearing, and who has lawfully obtained a copy of such 
a work, to perceive the work; provided however, that the resulting 
player does not require circumvention of technological measures to 
operate.
* * * * *

    Dated: October 22, 2012.
James H. Billington,
The Librarian of Congress.
[FR Doc. 2012-26308 Filed 10-25-12; 8:45 am]
BILLING CODE 1410-30-P