The Lexmark case represents one approach to reining in manufacturers’ efforts to use the DMCA to hamper aftermarket competition, but it is not the only one. In August 2004, the Federal Circuit Court of Appeals issued a ruling against a manufacturer of garage door openers that had been trying to stop the sale of compatible aftermarket remote controllers. The case, Chamberlain Group v. Skylink Technologies, takes a different route to reach the same end.
The DMCA was famously used to prohibit the dissemination of so-called “DeCSS” software, which cracked the Content Scrambling System encryption scheme used on most commercial DVDs. While the purveyors of the software insisted it was intended solely for the non-infringing purpose of permitting DVDs to play on certain computers, the Court responded that such a “fair use” argument was no defense to a DMCA violation.
It was on this precedent that the plaintiff in Chamberlain built its case. The garage door opener manufacturer made much of the fact that it employed a special “rolling code” to prevent unauthorized operation of its products. The aftermarket remote controller at issue in the case used a technique that sidestepped Chamberlain’s “rolling code” protection scheme. Just as the DeCSS computer program violated the DMCA by bypassing the DVD encryption scheme and permitting unauthorized access to copyrighted movies, Chamberlain contended that the aftermarket remotes violated the DMCA by bypassing its “rolling code” system and permitting the unauthorized triggering of its copyrighted software program to operate the garage door. If adopted, this reading of the DMCA could conceivably permit manufacturers of electronic products to eliminate aftermarket competition in many instances.
The Appeals Court soundly rejected Chamberlain’s position on two grounds. First, it focused on the question of whether the circumvention was “unauthorized” – an element required by the DMCA. Putting the burden of proof on Chamberlain, the Court noted that the company could not prove that it had expressly prohibited its customers from using third-party remotes. Customers who programmed their garage door openers to accept the aftermarket remote necessarily “authorized” that remote to access Chamberlain’s embedded software program. The Court therefore reasoned that Chamberlain could not satisfy the “unauthorized circumvention” element of its DMCA claim.
By itself, this holding might have been of limited significance. In theory, Chamberlain could impose mandatory license terms with its new garage door openers, expressly prohibiting their use with non-Chamberlain remote controllers. If such “shrink wrap” licenses were upheld in this context, the company could presumably sustain its burden in a future case, showing that the defendant’s access to its embedded software program was not authorized. If the Court’s decision rested exclusively on the “authorization” issue, Chamberlain could thus avoid the holding of the case with minimal effort.
But the Appeals Court also voiced a second, independent basis for rejecting Chamberlain’s claim. It said the circumvention must facilitate infringement in some manner to fall within the scope of the DMCA. That is, since the aftermarket remote did not potentially enable any copying or other infringement of the embedded software program, its circumvention of Chamberlain’s “rolling code” protection scheme could not be the basis for a DMCA claim.
TLB Comment: The Court’s strong desire in Chamberlain was to balance the rights of consumers (both consumers of content as well as electronics consumers) against those of providers. By threading the needle between prior DMCA-related decisions and traditional consumer-based protections such as those found in anti-trust law, it has largely succeeded. Electronics manufacturers may devise new technical schemes for driving out aftermarket competitors, but for now, decisions such as Chamberlain may limit their ability to accomplish that feat through statute alone.