Last week, of course, we paid a fair bit of attention to the latest round of DMCA exemptions, which come along every three years. It was surprising that the Copyright Office and the Library of Congress seem to keep moving the bar (slowly, slowly) towards a more consumer friendly approach, as compared to the early exemptions which never helped consumers at all. Still, the exemption requests that got rejected show how arbitrary the process appears at times.

A lot of folks have written up some pretty thoughtful analysis of the exemptions and the exemption process, and I wanted to highlight three of them here. The first two are similar. Peter Jaszi wrote a very detailed piece (and it’s only part one!) highlighting some of the subtext of the exemptions this time around, including a subtle, but extremely important point, that the Copyright Office and the Librarian of Congress may be moving away from the problematic “four factors” fair use analysis (with the most emphasis on the fourth factor, “market impact”) towards one where the key factor is whether or not a work is “transformative.”

What are the most important take-aways from this passage? In my mind, there are three: First, the Copyright has subscribed fully to the proposition that in today’s dominant jurisprudential approach to fair use, “transformativeness” rules. The four statutory factors remain important, of course, but the inquiry into whether and how borrowed material has been repurposed by the user tends to inflect, if not to determine, the analysis of each. And that’s true across the board — even with respect to the famed and feared factor four (market effect), where transformativeness can trump even a showing of lost licensing revenue. This enlightened understand of fair use helps not only to explain why the Recommendation came out as it did this time, but contains a strong suggestion about the kind of reasoning we can expect in future rulemakings.

This is actually a pretty big deal, as many of us have long believed that a transformative use should be a clear cut case of fair use, since it is a new creation (what copyright law is supposed to encourage). The second piece I wanted to highlight is by Larry Downes, which discusses the exact same part of the rulemaking, and how it ever so slightly moves the fair use needle, by noting that the fourth factor (the market impact) should be narrowly focused on the market for the specific work copied, not a larger product. That is, the reason the Copyright Office found jailbreaking a smartphone to be fair use was because it said the copying was only of the firmware, and the proper “market” to measure was not the overall iPhone market, but the market for the firmware alone. And, in that market, jailbreaking does not harm the market for the iPhone’s firmware.

In granting the exemption, the Copyright Office rejected Apple’s claim that jailbreaking harmed the market for the iPhone. The fair use analysis, the Register said, focuses on the market for the protected work, which in this case is the iPhone’s firmware. Since the modifications needed to jailbreak the firmware don’t harm the market for the firmware itself, the infringing use is fair and legally excused. It doesn’t matter, in other words, that jailbreaking has a potentially big commercial impact on the iPhone service.

That distinction is the notable feature of this decision in terms of copyright law. Courts, and now the Copyright Office, are well aware that technology companies try to leverage the monopoly rights granted by copyright to create legal monopolies on uses of their products or services. In essence, they build technical controls into the copyrighted work that limits who and how the product or service can be used, than claim their intentional incompatibilities are protected by law.

While somewhat different in approach, it feels like Downes and Jaszi are each seeing the same basic thing — the Copyright Office and the Librarian of Congress (along with a series of recent court rulings) have realized that the pure four factor test hasn’t always been useful or applied properly. This does move the needle ever so slightly in a much better direction.

And, for that, we should be happy.

That said, it is worth noting that both of Jaszi and Downes’ write-ups have to pick out these details through the legal minutiae. Taking a big step back to look at the forest, rather than counting the rings on a single downed tree, is Tom Lee, who wrote up an excellent analysis for The American Prospect, pointing out that the very fact that we have this slow and unwieldy exemption rule-making process should actually demonstrate the massive problems of the DMCA itself. Specifically, we should all be quite troubled that the government effectively gets to weigh in every three years on how you can use electronic equipment that you purchased:

It might seem strange for the government to attempt to regulate consumers’ use of their electronics, then turn a blind eye toward violations. For that matter, the exemptions themselves might seem a bit arbitrary. Isn’t it a little silly to permit jailbreaking an iPhone but not an iPod? Might any of the 25 other suggested exemptions have had merit? Doesn’t this all reek of selective enforcement (albeit executed at a glacial pace)? And isn’t it a bit ridiculous to rely on the librarian of Congress to mediate the tensions between rights holders, device manufacturers, and the IP-buying public?

The answer to all of these questions is yes. But it’s worse than that. Proscribing circumvention technologies is a bad idea. This is true even if we immediately carve out reprieves from that restriction, and regardless of whether those reprieves are narrow in principle or wide in practice.

It’s true that asking people not to violate copyright doesn’t work very well, so it’s understandable that rights holders invented DRM. But DRM doesn’t work very well, either. Now we’ve invented a law to force people to pretend that DRM works. That law doesn’t work, either, of course — and it couldn’t. The exemptions are a recognition of the fact that if the DMCA functioned perfectly, it would be intolerable. DRM is a lock that can be opened by software, and software is little more than an idea — certainly the circumvention techniques, the substance of that software, are nothing more than ideas.

While there is the general progression (at a snail’s pace) of smarter implementation of fair use, Lee’s point is a really important one that gets lost in the shuffle. The very fact that we need a triennial exemption rule-making suggests that the law is ridiculously broken. It is, as Lee notes, a sort of charade. We all are supposed to pretend DRM works, and when it doesn’t, we start playing by different rules. And since those rules sometimes get confusing, we need a referee to step in and issue specific exemptions? It’s a game of regulatory theater, where people pretend that copyright law actually does something (i.e., protect content) that it does not do.

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