Protection Under the DMCA (Digital Millennium Copyright Act) Safe Harbor

Posted in Copyrights, IP Ownership, PRACTICAL IP Tips, Websites, Domain Names & Apps

What is the DMCA?

The Digital Millennium Copyright Act (“DMCA”) is an amendment to the United States Copyright Act (i.e., the federal copyright law) signed into effect in October 1998 that, among other things, provides certain limitations on the liability of online service providers (“OSP”) for acts of copyright infringement.

The DMCA actually contains two types of liability limitations:

The first protects an OSP which provides a link to copyrighted online material located on another site.

The second, which we discuss in more detail here, limits the liability of OSPs that store copyrighted materials on a system or network they control or operate if (among other things), (i) such storage was directed by a third-party user, (ii) the service provider has designated an agent (also referred to as a “take-down agent”) to receive notifications of claimed infringement and (iii) the service provider has both registered the agent’s contact information with the U.S. Copyright Office and publicly provided such information on its website.

It is important to note that, because the DMCA protects against claims of copyright infringement and not other types of wrongdoing, it will not help against claims of infringement concerning trademarks or service marks or claims of defamation, stolen trade secrets, etc.

Why is the DMCA important?

The DMCA is a “safe-harbor,” which is legalese for a written exception to the general rule that an OSP is liable for the acts of infringement its users commit. Because the DMCA is intended to protect OSPs from inadvertent infringement by third parties, it will not help in a situation where the OSP itself is accused of infringement (i.e., posting copyrighted content in its own right), or where it knows content it hosts infringes a copyright.

Since the DMCA can be an absolute defense to liability for copyright infringement by a third party, registering a take-down agent may even prevent someone from suing the OSP for infringement in the first place.

Does the DMCA apply to me?

In essence, you qualify as an OSP and are eligible for protection under the DMCA if you operate, manage or host a website (including a blog) that allows users (aka third parties) to upload content. That can include the following activities:

  • Allowing users to post comments or reviews, or respond to discussion threads
  • Allowing users to upload media, such as pictures, .gifs or videos

The above is true because the definition of “infringe” or “infringement” is very broad and captures many activities. For example, if your site allows users to submit a thumbnail sized avatar and the user chooses a copyrighted image, you can be liable. Knowledge or intent are not relevant for purposes of liability for infringement under the copyright law; so, you can be held responsible for copyright infringement even if you have no idea these activities are going on (and, if you have not registered a DMCA agent, even if you take down the offending material immediately after being notified!).

How can I obtain protection under the DMCA? 

With 3 easy steps!

1.    Designate a copyright take-down agent to receive DMCA takedown notices.  

In order to designate an agent, an OSP must provide some basic information and pay a filing fee ($105 for the first OSP, $35 for up to 10 additional OSPs) to the U.S. Copyright Office. The requested information includes the full legal name of the OSP(s) and contact information (including email address) for the agent and the U.S. Copyright Office has provided a form for this purpose. The U.S. Copyright Office maintains an official list of designated agents, which allows a person who believes his or her work is being infringed to quickly send a takedown notice.

2.    Adopt a copyright infringement policy and notify site users.  

The OSP must publish a statement on its website to provide notice to the site users of its copyright infringement policies, the consequences of repeated infringing activity, and advising users of the takedown agent’s contact information.  Many people include a DMCA policy in their terms of service, but it may also be placed in a separate document.

 3.    Watch for and properly comply with any notice of claimed infringement received.

A person claiming infringement must provide the OSP a signed written notice meeting certain specifications, including: identification of the work which is allegedly infringing, a demand to remove such material, the claimant’s valid contact information, and statements to the effect that (i) the claimant is the owner of the material (or authorized to act on the owner’s behalf) and (ii) the material is not being used in an authorized manner.

Recall that the DMCA protects only against copyright infringement, not against other types of accused wrongdoing.  Therefore, an OSP must be careful to make sure any notice it receives alleges a copyright infringement and not some other type of wrong doing.

Also note that not all cease and desist letters or takedown notices will be proper, and an OSP is not under a legal obligation to comply with notices that do not meet the requirements. If a takedown notice does meet the proper requirements, an OSP should: (1) “expeditiously” remove or disable access to the potentially infringing material (unfortunately, the standard for “expeditious” is unclear) and (2) notify the potentially infringing user that his or her material has been removed to allow them to file a counter-notice. Often, a potentially offending user will not file a counter-notice, but if he or she does, the OSP should forward the counter-notice to the person who claimed infringement. That person must then file a lawsuit within 14 days; otherwise, the OSP may reinstate the disputed material.

While there is no requirement under the DMCA for an OSP to remove any material(s), the receipt of a valid takedown notice acts to give the OSP notice of the allegedly infringing activity, and therefore ineligible for limited liability. The OSP may then face liability for continuing to host the material.

Consult a qualified attorney if you are unsure of what the notice or demand letter is alleging or if you have questions about whether you must comply with a takedown notice.

I didn’t register a DMCA agent and now someone has filed a copyright infringement lawsuit against me. Am I out of luck?

In order to benefit from the safe harbor protections, an OSP must register a DMCA agent prior to an allegation of infringement which it wishes to defeat with the registration.

Even if an OSP has not registered a DMCA agent, it can still defend against a claim on the merits of the alleged infringement. For example, if the amount of supposedly infringing material is small or is posted in a way meant to be educational and includes a citation for the material, you may have a defense under the fair use doctrine (although a fair use defense may not apply depending on the facts of each particular situation). Some cases also indicate that a defense may exist by asserting that infringing third-party posts are simply not the responsibility of the OSP. However, if an OSP has not registered under the DMCA, it will not be able to claim that it was unaware of the infringing activity or that it quickly removed the offending material.

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Confusion on Software Patents and Alice v. CLS Bank - Alice in a Computer Wonderland

Posted in Litigation, Patents, Software

ComputerLast term the U.S. Supreme Court handed down Alice Corp. v. CLS Bank International. Alice drew interest for its focus on software and patentability under 35 U.S.C. § 101, the statute that codified eligibility for patent protection. The outcome impacts industries such as software, computer hardware, and telecommunications. Patents dealing with software or computer-implemented inventions may not lead the ten o'clock news...but some of the most successful American companies, such as Apple, Microsoft, and Google, work in this sector, and the Alice decision was of great interest to the whole industry. So the Supreme Court had all of Silicon Valley on the edge of its seat waiting for Alice.

The patents in suit in Alice dealt with software used in financial trading - specifically a computer-based method for intermediated settlement. For example, two parties to a financial trade choose to use a third party intermediary. This intermediary accepts payments from each side and completes the transaction when each party has fulfilled its obligations. A party's failure to pay terminates the trade. This system presents less risk because no money has been exchanged if one party fails its obligations. Alice's patents took this financial practice and implemented it on a computer. CLS Bank challenged the patents' subject matter eligibility under § 101. Section 101 states:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

The Supreme Court has previously found implicit exceptions to this statute, namely, laws of nature, natural phenomena, and abstract ideas are not eligible for patent protection.  

The Supreme Court heard the case after the district court invalidated Alice's patents on summary judgment. The judge ruled that a method of intermediated settlement to minimize risk is a "basic business or financial concept." At the Federal Circuit, a panel reversed the district court by a vote of 2-1. CLS Bank petitioned for en banc rehearing, which the court granted. Seven out of ten judges on the en banc panel agreed with the district court and invalidated Alice's patents. But the Federal Circuit created more confusion than certainty. The confusion came from the multiple opinions (seven) and the lack of a discernible standard for applying § 101. The plurality opinion, with five votes, outlined an analysis focusing on the risk of "preemption." Preemption occurs when a patent issues on a fundamental concept or idea. Upholding such a patent preempts the use of the building blocks of invention, therefore stifling innovation.

Alice appealed and the Supreme Court granted cert. A measure of interest in the case: third parties filed over forty amicus curiae briefs. The Supreme Court unanimously invalidated the patents. Justice Thomas, writing for the court, reasoned in part:

We need not labor to delimit the precise contours of the 'abstract ideas' category in this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of 'abstract ideas' as we have used that term.

Alice Corp. v. CLS Bank International, 134 S. Ct. 2347, 2357 (2014).

Since the decision, practitioners have debated whether Alice changed the law or affirmed it. Over the summer numerous courts invalidated computer-implemented patents on § 101 grounds based on the Alice decision. Examples include:

This wave of decisions suggests that Alice changed the law. On the other hand, the first judge to look at Alice's patents found them invalid. The Supreme Court affirmed, not overruled, the trial court judge.

We will see how the case law develops and how the USPTO implements Alice in its rulemaking. Our experience so far is that the USPTO is taking a tougher stand against software patents. Software is still patentable in certain circumstances but it will take time to discern the exact limits of software patentability post-Alice.  

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New Weapon for Combating Online Defamation in Texas

Posted in Defamation, In the News, Litigation

The Texas Supreme Court has held that authors of online content can be ordered to delete defamatory statements they make on their websites.

In Robert Kinney v. Andrew Barnes et al., the president of the BCG Attorney Search legal recruiting firm, Andrew Barnes, posted statements on the websites and that implicated former BCG recruiter Robert Kinney in a kickback scheme during his time at BCG.  Barnes owned and 

Kinney sued Barnes for defamation, and sought an order that would:  (1) require Barnes to delete the alleged defamatory statements from his websites (and request that third-party publishers of the statements do the same) upon a final adjudication that the statements are defamatory; and (2) permanently enjoin Barnes from making similar statements in the future.  Barnes argued that Kinney’s requested relief would constitute prior restraints on his right to free speech under the Texas Constitution.    

The Texas Supreme Court held that ordering the deletion of statements after a final adjudication that those statements are defamatory would not constitute a prior restraint.  Justice Lehrmann wrote for the Court:  “Such an injunction does not prohibit future speech, but instead effectively requires the erasure of past speech that has already been found to be unprotected in the context in which it was made.  As such, it is accurately characterized as a remedy for one’s abuse of the liberty to speak and is not a prior restraint.”

However, the Court held that enjoining the making of similar statements in the future would constitute a prior restraint on speech, which would be permissible only in rare circumstances.  The Court then held that Kinney v. Barnes did not present such a circumstance.  Specifically, the Court held that enjoining future defamatory statements would not effectively remedy defamation without chilling free speech, even if similar statements had already been judged defamatory and ordered deleted.

In so holding, the Court rejected Kinney’s argument that the case for enjoining future online speech was more compelling due to the speed with which online defamatory statements can spread to a vast audience.  Rejecting Kinney’s argument, the Court made clear that online speech shall receive the same protection under the Texas Constitution as speech disseminated through other mediums.

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Copyright Protection is Not Monkey Business

Posted in Copyrights, In the News, IP Ownership

Macaca_nigra_self-portrait_(rotated_and_cropped)The U.S. Copyright Office released an updated 1,222-page “Compendium of U.S. Copyright Office Practices, Third Edition” earlier this week clarifying its position that it "will register an original work of authorship, provided that the work was created by a human being."  The report goes on to state that "[t]he Office will not register works produced by nature, animals, or plants.  Likewise, the Office cannot register a work purportedly created by divine or supernatural beings, although the Office may register a work where the application or the deposit copy(ies) state that the work was inspired by a divine spirit."  The report provides examples of works that will not be protected by copyright, and the first example is "A photograph taken by a monkey."

The report was released weeks after wildlife and nature photographer David Slater claimed that Wikimedia was infringing his copyrights in the "selfies" taken by macaque monkeys in Indonesia by allowing thepictures to be posted in Wikimedia Commons, a library of public domain photos.  Wikimedia refused to remove the images because it believed the monkey was the photographer, and, therefore, the "author" of the photo...and, as non-humans can't own copyrights, the photo was in the public domain.  Slater argued that he staged the shot and set up the selfie intentionally, so it's irrelevant that the monkey pressed the shutter (likening the monkey to an assistant).

Although Slater may still file a lawsuit against Wikimedia (as UK or European law may allow Slater to claim ownership if he employed "labour, skill and judgment" in connection with the photographs or they were part of his “intellectual creation”), he is currently offering free canvas prints of the monkey selfie and donating money to the Sulawesi Crested Black Macaques Conservation Programme for each print redeemed.


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SCOTUS Preview: Trademark Confusion

Posted in Litigation, Trademarks


In the 2014-2015 term the Supreme Court will decide at least two important trademark cases. (There's still time for them to add more.) Here's a quick preview of one of them:

In B&B Hardware, Inc. v. Hargis Industries, Inc., B&B (a manufacturer of sealing fasteners) owns the registered mark "SEALTIGHT," and Hargis (also a manufacturer of sealing fasteners) sought to register the mark "SEALTITE." The marks are associated with similar products, but the products move in different channels of trade.

This case is about the two ways in which parties, under the Lanham Act, can litigate the issue of whether one mark is "likely to cause confusion" with another -- and how these two proceedings may or may not impact one another. Parties can litigate the "likely to cause confusion" question before the Trademark Trial and Appeal Board (TTAB), in disputes over the registration of new marks. And they can also litigate this same question in court, in lawsuits for trademark infringement.

B&B opposed Hargis's effort to register its mark, claiming "SEALTITE" was likely to cause confusion with B&B's "SEALTIGHT," which was already registered. In fact, Hargis even admitted there had been incidents of actual customer confusion. The TTAB agreed and eventually declined to register Hargis's mark.

While this proceeding before the TTAB was ongoing, B&B also filed suit in federal court for trademark infringement. And after the TTAB concluded that Hargis's mark was likely to cause confusion, B&B sought summary judgment in the district court -- arguing that the TTAB's conclusion precluded the district court from concluding otherwise. But the district court refused to give preclusive effect to the TTAB's decision, and even refused to allow B&B to present the TTAB's decision to the jury, as evidence of the likelihood of confusion. And, in the end, the district court ruled against B&B, finding that there was no likelihood of confusion and no infringement.

The Eighth Circuit Court of Appeals affirmed the district court's decision, and rejected B&B's contention that the TTAB's decision should have had preclusive effect. The court of appeals based its decision on the fact that the TTAB's standard for determining whether a mark was "likely to cause confusion" was different from the Eighth Circuit's standard -- and the court noted that B&B's ability to successfully oppose the registration of Hargis's mark did not necessarily establish an ability to successfully sue for infringement.

But, as B&B points out in its petition for certiorari to the Supreme Court, the circuit courts are divided over this preclusion issue, and the Eighth Circuit's decision to deny preclusive effect to the TTAB's ruling conflicts with decisions in other circuits. The Supreme Court granted certiorari to resolve this disagreement among the lower courts.

Notably, the Supreme Court reversed 73% of the decisions it reviewed last term. The Court reviewed two decisions by the Eighth Circuit, and reversed them both.

Given the facts of this case, given the unsavoriness of having two adjudicating bodies (the TTAB and the district court) reach conflicting conclusions on the same question, and given the Supreme Court's penchant for resolving circuit splits through reversals, my prediction (for what it's worth) is that the Court will reverse the Eighth Circuit, and hold that the TTAB's administrative determination that Hargis's mark was "likely to cause confusion" should have precluded the district court from determining otherwise -- or, at the very least, that the district court should have deferred to the TTAB's determination, unless the court found strong evidence to rebut it.

The case has not yet been set for oral argument.


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Who Owns the X-Men?

Posted in Copyrights, In the News, IP Ownership, Litigation

MagnetodebutA potentially important copyright case has made its way through the Second Circuit Court of Appeals and could be on its way to the Supreme Court.

If you’re not a big comic-book fan, you might not have heard of Jack Kirby. But if you’re breathing in America these days, you’ve probably heard of the X-Men, Thor, the Incredible Hulk, Iron Man, and the Fantastic Four. Kirby created (or co-created) these comic-book characters while working as an independent contractor for Marvel Comics, from 1958–1963, and his four kids have been trying to recover the copyrights to these characters for the past five years.

Kirby died in 1994. In 2009 his four children sought to terminate the assignment of Kirby’s copyrights to Marvel, to recover those rights for the extended renewal term under the 1976 Copyright Act. But Marvel filed suit to void this termination, claiming Kirby’s creations belonged to Marvel as “works for hire” under § 26 of the 1909 Copyright Act.

The 1909 Act was in effect during Kirby’s time at Marvel (1958–1963), but the Act’s “work for hire” provision did not apply to independent contractors until the Second Circuit extended it, by judicial decision, in 1972—well after Kirby had left Marvel. Much later, in a 1989 case called Community for Creative Nonviolence v. Reid, the Supreme Court criticized the Second Circuit’s judicial extension of the “work for hire” provision to independent contractors. But the Supreme Court has never squarely decided whether this extension of the “work for hire” provision under the 1909 Act was wrong.

This case, styled as Kirby v. Marvel Characters, Inc., essentially asks the Supreme Court to decide this question. The Second Circuit followed its own precedent to hold that the “work for hire” provision does apply to work created by independent contractors—a decision that voids the Kirbys’ attempt to recover their father’s copyrights under the 1976 Act. But the Kirby kids have taken their case to the Supreme Court—and the Supreme Court has asked Marvel to respond to the Kirbys’ petition, which is a sign that the Court might be interested in reviewing (and perhaps reversing) the Second Circuit’s decision.


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U.S. Supreme Court Says Aereo Is Illegal

Posted in Copyrights, In the News, IP Ownership, Litigation

Aereo is a company that provides (or used to provide) a service for streaming TV shows over the internet. Basically, an Aereo subscriber chooses a TV show that is currently broadcasting, and Aereo tunes an antenna to pick up the TV signal and translate it into data for streaming the show to the subscriber.

A group of TV producers, marketers, distributors, and broadcasters—all holders of copyrights to the shows being streamed—sued Aereo for copyright infringement, arguing that Aereo was infringing their right to “perform” their works “publicly.” In response, Aereo argued that it was not “performing” anything, under the meaning of the Copyright Act, but was merely providing equipment that enables viewers to view the performance.

The Supreme Court, in a 6-3 decision written by Justice Breyer, ruled against Aereo, saying that Aereo’s service does “perform” the works, and is therefore illegal. The Court did its best to limit its holding, to avoid discouraging the emergence or use of new or different technologies. But according to the Court’s majority, Aereo is functioning much like the cable-TV providers that the Copyright Act was specifically amended, in 1976, to reach. In other words, Aereo is acting illegally much like those cable-TV providers in the 1970s, who were broadcasting TV shows without permission from the copyright holders.

Justice Scalia filed a dissenting opinion, contending that Aereo does not “perform” anything under the meaning of the Copyright Act. According to Scalia, the majority’s “looks-like-cable-TV” standard is “improvised” and “will sow confusion for years to come,” in copyright law. But Scalia's opinion was joined only by Justices Thomas and Alito.

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Best Legal Practices for Brands on Social Media

Posted in Advertising, Copyrights, PRACTICAL IP Tips, Privacy & Data Protection, Trademarks, Websites, Domain Names & Apps

Legally promote your brands and fans on social media with this overview of intellectual property, privacy, advertising and promotions issues and solutions...Best Legal Practices for Brands on Social Media

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Facebook, You and the Government: The SEC is Following Your Tweets

Posted in In the News, Privacy & Data Protection, Websites, Domain Names & Apps

The United States Securities and Exchange Commission has finally joined the age of social media.  In a watershed report issued last month, the SEC concluded that publicly-traded companies, subject to the still-vague limitations discussed below, may use social media sites to disclose material financial information to the investment community.

The SEC’s report followed an investigation into Netflix, Inc. and Reed Hastings, its Chief Executive Officer, after Hastings posted information about the company’s growing subscriber numbers on his personal Facebook page.  Although the SEC ultimately did not pursue a case against Netflix or Hastings, its investigation resulted in the SEC’s issuance of a report intended to modernize Commission rules regarding how companies share important information with investors.

Historically, these disclosure rules have been defined by the SEC’s Regulation Fair Disclosure, or “Regulation FD,” which generally requires issuers to publish material, nonpublic information to investors simultaneously.  According to the SEC, Regulation FD is “intended to ensure that all investors have the ability to gain access to material information at the same time.”  Regulation FD is, and always has been, about the fair and equal distribution of information to the investing public.

In its April 2, 2013 press release announcing the new rule, which effectively supplements Regulation FD, the SEC stated for the first time that, “companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation FD…”  This new rule, however, while granting companies the newly-issued power to use social media to share their important information, comes with conditions on the use of that authority.  Specifically, the SEC concluded that social media outlets – like the content of a company’s website – can constitute precisely the selective, and unfair, disclosure of material information that Regulation FD was designed to prevent in the first place.

While at first glance the SEC deserves credit for authorizing companies to do what the rest of the world already does, two new problems have resulted.  First, the Commission has yet to provide any real guidance to those companies on how they can use social media to share information with their investors.  Until the SEC provides more guidance on how issuers can use social media to share information with investors, these companies are largely left on their own in navigating – at their own peril – the dos and don’ts of the new rule.

Second, in an age of increasingly sophisticated frauds and identity theft, companies run the risk of having their social media feeds hijacked or spoofed, and false information consequently disseminated to the marketplace.  A fake Twitter or Facebook report on a public company could easily cost investors millions, if not billions, of dollars in the blink of an eye.

Because of the still murky waters surrounding the SEC’s new rule, companies should take a number of steps before using social media to disclose important information to the public:

  • Treat social media information as any other information issued via a traditional press release.  Identify an individual, or individuals, in your organization who will be responsible for approving the content of any social media information issued by the company.  Keep in mind that the SEC’s report notes that “disclosure of material, nonpublic information on the personal social media site of an individual corporate officer, without advance notice…is unlikely to qualify as a method”      complying with this interpretation of Regulation FD.
  • Make sure that no information is transmitted through social media without written approval of a designated individual within your company.  This will not only guard against incorrect or factually unverifiable information reaching the public through social media, but it will also protect the company from prematurely releasing information or accidentally      transmitting confidential or nonpublic information – something that has become increasingly common as social media communication has risen exponentially in the last few years.
  • Establish protocols for alerting investors about the format of social media the  company will use to transmit information.
  • Task individuals in your company with identifying the most effective and reliable social media channels through which to transmit information.
  • Monitor what’s out there in the social media world that potentially could be viewed, by the SEC or the public, as social media content from or sanctioned by your company, knowing that false or incomplete information could have an immediate impact on your company’s share price or result in an unwanted regulatory inquiry.

Please contact one of our attorneys listed below with questions regarding this topic, or to arrange for a more detailed presentation. To read more on this topic, click here.
Contact Information:

Jeff Ansley

Jay Wallace

Greg Kelminson  

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Unauthorized Unlocking of Cell Phones Now Illegal

Posted in Copyrights, In the News, Software, Websites, Domain Names & Apps

Pursuant to a ruling by the Librarian of Congress in his triennial review of potential exemptions to the Digital Millennium Copyright Act (DMCA), which prohibits circumventing technological measures that protect copyrighted works, it is now illegal to “unlock” a new mobile phone purchased from a carrier after January 26, 2013, without the approval of the carrier.

In other words, consumers who purchase a new mobile phone from a carrier on or after January 26, 2013, will either have to obtain the carrier’s permission to unlock the device or buy a new phone in order to change service providers.  Additionally, consumers traveling abroad won’t be able to use SIM cards from international carriers on a locked phone without the carrier’s permission.  “Legacy” phones “previously purchased or otherwise acquired by a consumer” prior to January 26, 2013 (whether used or unused) may legally be unlocked because they have been grandfathered in under the ruling.

Consumers who unlock a phone without the carrier’s consent could be fined $200 to $2,500 per act, and willful violators may now face criminal penalties of up to 5 years in prison and/or $500,000 in fines.

Unauthorized unlocking (even of legacy phones) may also violate the terms of the carriers’ contracts, and can result in contact termination fees, penalties, and/or discontinued service.

The unlocking exemption (which was granted in 2006 and 2010) could be reinstated in another three years during the Librarian of Congress’ next DMCA rulemaking proceeding, which will be initiated in late 2014.  There is also a We the People petition that calls for the White House to ask the Librarian to rescind the decision or support legislation that would make unlocking permanently legal.

It’s interesting to note that the same ruling exempts “jailbreaking” of cell phones (but not tablets or game consoles).  “Jailbreaking” occurs when a user removes restrictions on a device in order to download of apps or software not approved by the manufacturer or otherwise makes unauthorized modifications to the operating system. Jailbreaking voids the phone warranty, often violates the terms of phone license agreements, and can cause operating issues with the phone.  Once a consumer jailbreaks a phone, it can be unlocked; however, unlocking a phone through jailbreaking is now illegal and legitimate unlocking by a carrier is no longer an option.

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