DRM and Patents

Most people associate Digital Rights Management (DRM) with music or movie companies. The motivation for DRM supposedly comes from the anti-piracy efforts of the RIAA or MPAA. In this world view, digital resources are locked up by greedy companies wanting to make maximum profits from the creative efforts of (generally) exploited artists.

That's one view. Another is that DRM exists because it can make big bucks for the technology companies that own the DRM technology. Evidence for this view can be found in the patent wars that are taking place around DRM and its components.

The story is long and complex, but suffice it to say that Microsoft is one of the larger holders of patents in the area of DRM. However, their attempts to monopolize the DRM market have so far been stymied. One of the more glaring incidents relates to the patent they purchased when they bought into Xerox's ContentGuard, the company that developed XrML (which later become the rights language portion of the ISO standard based on MPEG-21) and the holder of 49 US patents plus numerous others in Europe and Japan. In particular, they claim to hold the patent on rights expression languages, such that any rights management scheme that uses a rights expression language must pay them fees for the use of their technology. This includes any use of the rights expression technology that is described in what is now the international standard, ISO 21000. Basically, use the standard, pay a fee.

To that end, Microsoft and other holders of related patents (notably Intertrust, which claims to hold 61 US patents in the area of "trusted computing") formed the MPEG-LA, that is the MPEG licensing agency. It describes itself as "... the world leader in one-stop technology platform patent licenses, enabling users to acquire patent rights necessary for a particular technology standard or platform from multiple patent holders in a single transaction." The logo on its web site has the words "fair, reasonable, non-discriminatory access to fundamental technologies," and "one-stop technology standards licensing."

Once the ISO standard 21000 was passed, MPEG-LA announced that it would now provide licensing for any patents relating to DRM. Shortly thereafter the companies providing content primarily via cell phone (and mostly in Europe), the Open Mobile Alliance (OMA), received word that MPEG-LA had developed a license for them. The members of OMA were not using the new ISO standard. They were using OMA's own DRM standard based on the Open Digital Rights Language (ODRL), a patent- and license-free technology. With the assertion that all rights languages are covered by ContentGuard's patent, OMA was told that it now owed $1 per device (think: number of cell phones in use x $1), plus 1% of all revenue from content-related transactions for using its own technology. Ah, the beauty of the patent system.

What followed was about two years in which the OMA members went through various stages of response, from incredulity (Huh?!), to fear (can they really do this to us?), to bargaining, to stalling, and now, perhaps, to open rebellion. MPEG-LA has offered reduced prices (US $0.65 per device and $0.25 per transaction) in a second version of the license that no one wants, as if paying a little less for something you don't want to pay for at all will make the price more palatable. For all of its confident (you might say even arrogant) claims to be the rightful holder of all things DRM, it appears that no one today is paying MPEG-LA anything at all. And now Intertrust, a major partner in the MPEG-LA, is offering its own, separate deal with content providers. And others who wish to use DRM are designing that DRM to avoid those technologies for which patent rights have been claimed, such as the use of rights expression languages. In essence, the patent demands have caused the technology development to shift, and it's too early to tell what the effects of that will be.

Patent wars seem to be all about blustering, making demands, and acting threatening. It's a legal version of claiming to own the water rights in an arid landscape -- people downstream tend to pay you off, mainly because the cost to fight you will be as much or more than what you demand. What is interesting about this particular war is that the big bully does not seem to be winning. Of course, we still have to wait and see what will happen now that Microsoft has brought its DRM-enabled operating system to market (Vista), but it is just possible that this time the demands were so ridiculous that instead of paying up people are just walking away, shaking their heads in disbelief.