Skylink Wins! Fed. Cir. shoots down Chamberlain's DMCA claim

This just in:

Skylink has won its DMCA case on appeal. It's a lengthy and interesting unanimous opinion by Judge Gajarsa, with some real gems reining in some of the overbroad and much-abused language of Section 1201:

The DMCA does not create a new property right for copyright owners.  Nor, for that matter, does it divest the public of the property rights that the Copyright Act has long granted to the public.  The anticircumvention and anti-trafficking provisions of the DMCA create new grounds of liability.  A copyright owner seeking to impose liability on an accused circumventor must demonstrate a reasonable relationship between the circumvention at issue and a use relating to a property right for which the Copyright Act permits the copyright owner to withhold authorization-as well as notice that authorization was withheld.  A copyright owner seeking to impose liability on an accused trafficker must demonstrate that the trafficker's device enables either copyright infringement or a prohibited circumvention.  Here, the District Court correctly ruled that Chamberlain pled no connection between unauthorized use of its copyrighted software and Skylink's accused transmitter.  This connection is critical to sustaining a cause of action under the DMCA.  We therefore affirm the District Court's summary judgment in favor of Skylink.

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Chamberlain's proposed construction would allow copyright owners to prohibit exclusively fair uses even in the absence of any feared foul use. It would therefore allow any copyright owner, through a combination of contractual terms and technological measures, to repeal the fair use doctrine with respect to an individual copyrighted work-or even selected copies of that copyrighted work. Again, this implication contradicts § 1201(c)(1) directly. Copyright law itself authorizes the public to make certain uses of copyrighted materials. Consumers who purchase a product containing a copy of embedded software have the inherent legal right to use that copy of the software. What the law authorizes, Chamberlain cannot revoke.

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In a similar vein, Chamberlain’s proposed construction would allow any manufacturer of any product to add a single copyrighted sentence or software fragment to its product, wrap the copyrighted material in a trivial “encryption” scheme, and thereby gain the right to restrict consumers’ rights to use its products in conjunction with competing products. In other words, Chamberlain’s construction of the DMCA would allow virtually any company to attempt to leverage its sales into aftermarket monopolies—a practice that both the antitrust laws, see Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 455 (1992), and the doctrine of copyright misuse, Assessment Techs. of WI, LLC v. WIREdata, Inc., 350 F.3d 640, 647 (7th Cir. 2003), normally prohibit.

(Thanks Dennis!)