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B.Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.
The Electronic Frontier Foundation (EFF) proposed a class that would allow circumvention of the technological measures contained on certain wireless phone handsets (known as smartphones) that prevent thirdparty software applications from being installed and run on such phones. This circumvention activity is colloquially referred to as jailbreaking a phone.
The factual record with respect to this proposed class focused primarily on Apple’s iPhone, although there are allegations in the record involving other mobile phone manufacturers as well. EFF asserted, and Apple’s testimony confirmed, that any software or application to be used on the iPhone must be validated with the firmware that controls the iPhone’s operation. This validation process is intended to make it impossible for an owner of an iPhone to install and use thirdparty applications on the iPhone that have not been approved for distribution through Apple’s iTunes App Store.
EFF argued that jailbreaking is a noninfringing activity for three reasons. First, it alleged that at least in some cases, jailbreaking can be done within the scope of what is authorized under the license Apple grants to every iPhone user. It stated that [t]o the extent a jailbreaking technique does not modify any of the individual software programs that comprise the iPhone firmware collection, but instead simply adds additional software components to the collection, the practice may not exceed the scope of the license to `use the iPhone software’ or constitute a `modification’ of any Apple
software components, any more than the addition of a new printer driver to a computer constitutes a `modification’ of the operating system already installed on the computer.
Second, EFF asserted that to the extent a jailbreak technique requires the reproduction or adaptation of existing firmware beyond the scope of any license or other authorization by the copyright owner, it would fall within the ambit of 17 U.S.C. 1l7(a). EFF contended that the iPhone owner is also the owner of the copy of the firmware on the iPhone and that jailbreaking falls within the owner’s privilege to adapt those copies to add new capabilities, so long as the changes do not harm the interests of the copyright proprietor.
Finally, EFF contended that in any event, jailbreaking constitutes fair use of the firmware because jailbreaking is a purely noncommercial, private use of computer software, a largely functional work that operates the phone, and that the phone owner must reuse the vast majority of the original firmware in order for the phone to operate. Because the phone owner is simply modifying the firmware for her own use on the phone, there is no harm to the market for the firmware.
Apple responded that jailbreaking by purchasers of the iPhone is a violation of the prohibition against circumvention of access controls. It stated that its validation system is necessary to protect consumers and Apple from harm. Apple further contended that modifying Apple’s operating system constituted the creation of an infringing derivative work. Specifically, Apple argued that because purchasers of an iPhone are licensees, not owners, of the computer programs contained on the iPhone, Section 117 of the Copyright Act is inapplicable as an exemption to the adaptation right. Apple further argued that the fair use defense codified in 107 would not apply to jailbreaking activity under the statutory factors.
Based on the record, the Register has determined that the encryption and authentication processes on the iPhone’s computer programs are technological measures that control access to the copyrighted work (the firmware) for purposes of 1201(a)(1). Moreover, the Register finds that the evidence supports the contention that a technological protection measure is adversely affecting adding applications to the iPhone. The critical question is whether jailbreaking an iPhone in order to add applications to the phone constitutes a noninfringing use.
The Register does not find that the contract between Apple and purchasers of the iPhone authorize modification of the iPhone. Moreover, the Register cannot clearly determine whether the various versions of the iPhone contracts with consumers constituted a sale or license of a copy of the computer programs contained on the iPhone. The contractual language is unclear with respect to particular copies of the computer programs. Although Apple retains ownership of the computer programs, the contracts also expressly grant users ownership of the device. Since the copy of the computer program is fixed in hardware of the device, it is unclear what ownership status is to be given to the particular copy of the computer program contained in the device. Apple unquestionably has retained ownership of the intangible works, but the ownership of the particular copies of those works is unclear.
Moreover, the state of the law with respect to the determination of ownership is in a state of flux in the courts. Both proponents and opponents cited case law in support of their respective positions, but the Register finds it impossible to determine how a court would resolve the issue of ownership on the facts
presented here. While both parties agreed that the Second Circuit’s decision in Krause v. Titleserv, 402 F.3d 119 (2d Cir. 2005) is good law, that case dealt with a situation that is distinguishable in many respects from the present situation. The Register finds that the Krause case does not provide clear guidance as to how resolve the current issue.
However, the Register does find that the proponent’s fair use argument is compelling and consistent with the congressional interest in interoperability. The four fair use factors tend to weigh in favor of a finding of fair use.
Under the first factor in Section 107, it appears fair to say that the purpose and character of the modification of the operating system is to engage in a private, noncommercial use intended to add functionality to a device owned by the person making the modification, albeit beyond what Apple has determined to be acceptable. The user is not engaging in any commercial exploitation of the firmware, at least not when the jailbreaking is done for the user’s own private use of the device.
The fact that the person engaging in jailbreaking is doing so in order to use Apple’s firmware on the device that it was designed to operate, which the jailbreaking user owns, and to use it for precisely the purpose for which it was designed (but for the fact that it has been modified to run applications not approved by Apple) favors a finding that the purpose and character of the use is innocuous at worst and beneficial at best. Apple’s objections to the installation and use of unapproved applications appears to have nothing to do with its interests as the owner of copyrights in the computer programs embodied in the iPhone, and running the unapproved applications has no adverse effect on those interests. Rather, Apple’s objections relate to its interests as a manufacturer and distributor of a device, the iPhone.
Moreover, Congress has determined that reverse engineering for the purpose of making computer programs interoperable is desirable when certain conditions are met, and has crafted a specific exemption from Section 1201(a)’s prohibition on circumvention in such cases. While an iPhone owner who jailbreaks does not fall within the four corners of the statutory exemption in Section 1201(f), the fact that he or she is engaging in jailbreaking in order to make the iPhone’s firmware interoperable with an application specially created for the iPhone suggests that the purpose and character of the use are favored.
Turning to the second fair use factor, it is customary for operating systems functional works to enable third party programs to interoperate with them. It does not and should not infringe any of the exclusive rights of the copyright owner to run an application program on a computer over the objections of the owner of the copyright in the computer’s operating system. Thus, if Apple sought to restrict the computer programs that could be run on its computers, there would be no basis for copyright law to assist Apple in protecting its restrictive business model. The second factor decisively favors a finding of fair use.
Turning to the third factor, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, EFF admitted that because the Apple firmware is necessary in order to operate the iPhone, it is necessary for individuals who jailbreak their phones to reuse the vast majority of the original firmware. However, the amount of the copyrighted work modified in a typical jailbreaking scenario is fewer than 50 bytes of code out of more than 8 million bytes, or approximately 1/160,000 of the copyrighted work as a whole. Where the alleged infringement consists of the making of an unauthorized
derivative work, and the only modifications are so de minimis, the fact that iPhone users are using almost the entire iPhone firmware for the purpose for which it was provided to them by Apple undermines the significance of this factor. While the third factor arguably disfavors a fair use finding, the weight to be given to it under the circumstances is slight.
Addressing the fourth factor, the effect of the use upon the potential market for or value of the copyrighted work, EFF asserted that the firmware has no independent economic value, pointing out that the iPhone firmware is not sold separately, but is simply included when one purchases an iPhone. EFF also argued that the ability to lawfully jailbreak a phone will increase, not decrease, overall sales of the phones because users will know that by jailbreaking, they can take advantage of a wider array of third party applications.
Apple responded that unauthorized uses diminish the value of the copyrighted works to Apple. However, Apple is not concerned that the practice of jailbreaking will displace sales of its firmware or of iPhones; indeed, since one cannot engage in that practice unless one has acquired an iPhone, it would be difficult to make that argument. Rather, the harm that Apple fears is harm to its reputation. Apple is concerned that jailbreaking will breach the integrity of the iPhone’s ecosystem. The Register concludes that such alleged adverse effects are not in the nature of the harm that the fourth fair use factor is intended to address.
NTIA does not support designating the proposed class. While acknowledging that permitting iPhone jailbreaking could facilitate innovation, better serve customers, and encourage the market to utilize open platforms, NTIA believes it might just as likely deter innovation by not allowing the developer to recoup its development costs and to be rewarded for its innovation. NTIA also believes that the proponents’ public policy arguments should properly be considered by expert regulatory agencies, the Department of Justice, and the Congress. It concludes that the Register ought only to consider recommending the proposed class if she concludes that the access control measure would be a bar to actions that the above bodies might take in response to policy judgments made at those agencies.
The Register appreciates that many regulatory and policy issues pertaining to jailbreaking and smartphones fall within the competence of other agencies, and the Register has no desire to interfere with those agencies’ jurisdiction. However, the only question before the Register and the Librarian is whether Section 1201(a)(1)’s prohibition on circumvention is adversely affecting the ability of users of smartphones from engaging in noninfringing uses of the firmware on their devices. No other agency has the power to limit the application of the prohibition on circumvention in this (or any other) context. Any future action by a federal agency to permit jailbreaking will be futile without an exemption from liability under Section 1201(a)(1), but if a class is not designated in this rulemaking, all that it will mean is that Section 1201 cannot be used to prevent jailbreaking, without prejudice to any other legal or regulatory authority that might limit or prohibit jailbreaking.
On balance, the Register concludes that when one jailbreaks a smartphone in order to make the operating system on that phone interoperable with an independently created application that has not been approved by the maker of the smartphone or the maker of its operating system, the modifications that are made purely for the purpose of such interoperability are fair uses. Case law and Congressional enactments reflect a judgment that interoperability is favored. The Register also finds that designating a class of works that would permit
jailbreaking for purposes of interoperability will not adversely affect the market for or value of the copyrighted works to the copyright owner.
Accordingly, the Register recommends that the Librarian designate the following class of works:
<Q P="04"/> <EXTRACT><FP2-2>Computer programs that enable wireless communication handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.</FP2-2> </EXTRACT> C.Computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network.
In 2006, the Librarian designated a class of Computer programs in the form of firmware that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network, in order to permit the circumvention of access controls that prevent the owner of a cellphone from switching service on that cellphone to another wireless communication network. The access controls in question are embedded in
mobile phone’s firmware or software and prevent the mobile phone from gaining access to the settings that connect the mobile phone to a (e.g., Verizon’s) other than the original network (e.g., AT&T’s). Beneficiaries of that designation have now requested that the Librarian again designate a similar class of works. Representatives of wireless communication networks have opposed the request.
As she did three years ago, the Register recognizes that the requests fall within the zone of interest subject to this rulemaking. That is, circumventing a mobile phone lock, without the authority of the copyright owner, to gain access to the protected work (i.e., the firmware) is likely actionable under Section 1201(a)(1) of the Act. Further, a wireless carrier who is harmed by the circumvention of the software lock may bring an action for violation of Section 1201(a)(1) against anyone who circumvents such a technological protection measure.
The proponents of this class have presented a prima facie case that the prohibition on circumvention has had an adverse effect on noninfringing uses of firmware on wireless telephone handsets. Proponents have shown that mobile phone locks prevent consumers from legally accessing alternative wireless networks with the phone of their choice. This is the same type of activity that was at issue when the existing class of works was being considered in 2006.
The wireless networks asserted that by using a cellphone on another network, an act that is not authorized under their contracts, the customers infringe the exclusive right to reproduce copies of the computer software, because use of the mobile phones necessarily involves the making of copies in the random access memory of the mobile phone. Moreover, they asserted that the alteration of the computer programs in order enable the mobile phones to connect to another network constituted the unlawful making of derivative works, in violation of the copyright owner’s exclusive right to prepare derivative works.
the owner network
Proponents of the class asserted that the owners of mobile phones are also the owners of the copies of the computer programs on those phones and that as owners they are entitled to exercise their privileges under Section 117 of the Copyright Act, which gives the owner of a copy of a computer program the privilege to make or authorize the making of another copy or adaptation of that computer program under certain circumstances. The wireless networks responded that their contracts with their customers restrict the uses of the customers’ mobile phones and retain ownership of the copies of the computer programs that are loaded onto the mobile phones and enable the phones to operate. They also asserted those contractual restrictions make the networks and not the customers the owners of the copies of the computer programs, and therefore the privilege under Section 117 to make copies and adaptations of computer programs does not apply because that privilege is enjoyed only by the owner of the copy of the computer program. They also argued that the privilege does not extend to the customers’ conduct because the making of a new copy or adaptation in order to use the mobile phone on a network other than the original network is not, as the statute requires, an essential step in the utilization of the computer program in conjunction with a machine.
The Register has reviewed the appropriate case law with respect to who is the owner of a copy of a computer program for purposes of Section 117 when a license or agreement imposes restrictions on the use of the computer program and has concluded that the state of the law is unclear. The Register cannot determine whether most mobile phone owners are also the owners of the copies of the computer programs on their mobile phones. However, based on the record in this proceeding, the Register finds that the proponents of the class have made a prima facie case that mobile phone owners are the owners of those copies. While the wireless networks have made a case that many mobile phone owners may not own the computer program copies because the wireless network’s contract with the consumer retains ownership of the copies, they have not presented evidence that this is always the case even if their interpretation of the law governing ownership is correct. The record therefore leads to the conclusion that a substantial portion of mobile phone owners also own the copies of the software on their phones.
), there is only one carrier supporting the 3G frequencies used by the iPhone and that's the AT&T.
EULA is not legally binding in the EU. You're not breaking any laws by running a purchased copy of OS X on your PC.
