Digital Rights Management and the Marketplace

The Commission on Theft of American Intellectual Property hs released its 2013 report. The Commission is composed of a bipartisan group of American businesspeople, national security and foreign affairs experts, politicians and academics including:

• Dennis C. Blair (co-chair), former Director of National Intelligence and Commander in Chief of the U.S. Pacific Command
• Jon M. Huntsman, Jr. (co-chair), former Ambassador to China, Governor of the state of Utah, and Deputy U.S. Trade Representative
• Craig R. Barrett, former Chairman and CEO of Intel Corporation
• Slade Gorton, former U.S. Senator from the state of Washington, Washington Attorney General, and member of the 9-11 Commission
• William J. Lynn III, CEO of DRS Technologies and former Deputy Secretary of Defense
• Deborah Wince-Smith, President and CEO of the Council on Competitiveness
• Michael K.Young, President of the University of Washington and former Deputy Under Secretary of State 

Its stated goals include the documentation and assessment of the causes, scale, and other major dimensions of international intellectual property theft as they affect the United States.

One of the Commission's recommendations is to implement policies that would allow government and business entities to install monitoring software, among other things, to monitor and enforce digital rights management (DRM) restrictions on us of intellectual property.  Such DRM is common in software, e-publishing, music, and many other industries.

Needless to say, these proposals (which could greatly impact how businesses select and utilize their software tools) is highly  controversial. Critics say that the Commission has essentially endorsed the use of malware and spyware. A (fairly typical) critique can be found on the Houston Chronicle's Tech Blog:

[T]he malware described here would lock up your computer until you turned yourself in to the police. That type of software is apparently legal under U.S. law, but the commission suggests going further and actually damaging the systems of suspects...

At the very least, the [Commission's proposals] scrap due process, punishing people before they’ve even been convicted of doing something wrong.

IT World Canada has a feature on the Commission's report, including information on similar proposals by the Canadian Coalition of Business and Technology Associations:

“The recommendations are shocking as they represent next-generation digital locks that could lock down computers and even retrieve files from personal computers,” said Michael Geist, University of Ottawa Internet law professor, in his blog today.

The proposal solution rekindled the debate on digital rights management (DRM) tools, and some media outlets had compared the strategy to those use by cyber criminals who surreptitiously load so-called spyware and ransomware on their victims’ machines. For example, cyber criminals use keylogger programs and software that locks down a user’s computer and demands payment for returning the machine to its original state.

Meanwhile, at the Freakonomics Blog, Kal Raustiala and Chris Sprigman present an economic analysis suggesting that, at least in one industry (e-publishing), DRM may be an ineffective means of preventing IP piracy:

Well, whether DRM impedes pirates or not is precisely the relevant question. Tor says they haven’t noticed any increase in piracy of their e-books following the removal of DRM. They are, however, cagey about how they know this.  Probably it’s a combination of their sales projections being met, and also not seeing increased traffic in their books on notorious filesharing sites.  As a rough-and-ready measure of piracy, that’s probably pretty good, although by no means definitive. The bottom line is that a lot more data is needed.  Tor hasn’t experienced an apparent increase in piracy – would the same be true for a general-interest publisher?