Letter to the FTC 539814-00408

This is a copy of my comments to the Federal Trade Commission, who are asking for comments on DRM technologies for a Town Hall Meeting in March.

As you are doubtless aware, the Copyright Act of 1976 codifies the First-Sale Doctrine. This states that a purchaser of a copyright work has the legal right to sell or give away the copy, once it has been obtained–so long as no additional copies have been made.

One major issue I have with DRM technologies is that they deny the customer his legal right to resell the product on the second hand market. Also, in many cases purchased products may evaporate if the DRM provider goes out of business, yet still these products are described as being sold to the customer, with words like “buy”, “purchase” and “on sale” being used.

Netflix will let me keep a movie indefinitely, but I can’t sell the disc, and they reserve the right to demand it back. Similarly, iTunes digital movies can be kept indefinitely, but I can’t sell the movie, and Apple can turn off my access to it, analogous to demanding the disc back. Netflix describe their service honestly, as rental. Apple describe their service as purchase, with the button saying “Buy now”.

This seems to me to be confusing. Physical video stores like Blockbuster would not be allowed to say “Buy this movie for $3.89!” when the terms were actually rental with no due date for return, so I don’t understand why digital movie rentals are treated differently.

I have a simple proposal. It should be illegal to describe something as being “sold” or “for sale” unless the corresponding right of resale is available to the purchaser. Instead, a phrase such as “indefinite rental” should be used, as that’s what is really being offered.

In other words, when I “buy” a movie from the PS3 online store, I’m not really buying it, because I can’t resell it second hand when I’m done with it. So Sony should not be able to pretend I’m buying it; they should be legally required to describe the offering accurately, as an “indefinite rental”.

I think this would go a long way towards making it clear to the average consumer that their DRM-protected purchased content comes with metaphorical strings attached, and that it might go away one day.