In an opinion filed July 20, 2010 in the U.S. Court of Appeals for the Fifth Circuit, Circuit Judge Emilio M. Garza ruled that Defendant General Electric did not infringe on a power supplier’s digital copyrights when it used protected software unlocked through a hacked security key.
This ruling is representative of a circuit split with the majority of the nation’s courts on whether bypassing digital rights management (DRM) for purposes that do not violate copyright law constitutes an infringement under the Digital Millennium Copyright Act’s (DMCA) anti-circumvention provision.
Previously on the other side of the circuit split, courts have held that any bypass or breaking of DRM constituted an infringement under the DMCA’s anti-circumvention provision, regardless of whether the bypass or breaking of DRM was used to violate intellectual property interests.
The case is MGE UPS Systems Inc., v. GE Consumer and Industrial Inc.; GE Industrial Systems Inc.; General Electric Company; Power Maintenance International Inc., U.S. Court of Appeals for the Fifth Circuit, No. 08-10521.
“Merely bypassing a technological protection that restricts a user from viewing or using a work is insufficient to trigger the (Digital Millennium Copyright Act's) anti-circumvention provision.”
“The DMCA prohibits only forms of access that would violate or impinge on the protections that the Copyright Act otherwise affords copyright owners."
Brief background on the software copyright infringement case and parties involved;
Suit was originally filed by MGE UPS Systems (MGE) to enforce and protect its copyright rights for a product it manufactures, uninterruptable power supply machines, and sells to companies. One of the companies (MGE) sells to is Power Maintenance International (PMI), which was procured by GE in 2001.
To alter or fix MGE’s uninterruptable power supply machines, technicians have to use MGE’s copyrighted software programs that are unlocked with an external hardware security key called a “dongle.” Dongles have expiration dates, passwords and a maximum number of uses.
Years after MGE introduced this technology, hackers posted information online on how to bypass the hardware key. Once a key is cracked, the software can be freely used and copied.
MGE’s software copyright infringement complaint alleged that GE, through PMI employees who had obtained a copy of the software from a hacked machine, used the software 428 times between June 2000 and May 2002, even after a judge barred GE from using MGE's software and trade secrets.
At the district level in the district court for the northern district of Texas, Plaintiff MGE won a jury award of over $4.6 million in damages for copyright infringement and misappropriation of trade secrets, but the same trial judge dismissed MGE’s DMCA claims.
MGE appealed to the Court of Appeals for the Fifth Circuit, arguing that its dongles barred the kind of access to its software that the DMCA is meant to prevent.
Directly addressing MGE’s claim that the DMCA applied GE’s conduct in bypassing the copyrighted material, Judge Garza wrote;
MGE… “advances too broad a definition of ‘access.’”
"Without showing a link between 'access' and 'protection' of the copyrighted work, the DMCA's anti-circumvention provision does not apply."
"The owner's technological measure must protect the copyrighted material against an infringement of a right that the Copyright Act protects, not from mere use or viewing."
Will this case lead to a Supreme Court ruling on the matter?
It's unknown if MGE plans to appeal the DMCA portion of the ruling.
For more information on this case and related DMCA articles;