Nintendo v. Go Cyber Shopping Glosses Over Important Issues in the New Digital Locks Regime

We now have our first court decision interpreting Canada’s new digital lock regime in Nintendo v. Go Cyber Shopping 2017 FC 246. Unfortunately, the decision glosses over two issues that future courts will need to look at more closely. The first is whether the regime extends to locks preventing mere access to a work, unaccompanied by any act of copyright infringement. The second is whether physical configurations, or other devices that play no direct role in bypassing a lock, are protected. Given uncontested facts (the Respondent did not tender any evidence before the court), there was no meaningful opportunity to rule on important interpretative issues concerning the liability of anti-circumvention technology distributors, or the interoperability exception.

In Nintendo, the video game giant brought copyright and technological protection measure (TPM) infringement actions against a Waterloo retailer of unauthorized devices and Nintendo games that could be played on Nintendo consoles and Wii (I will discuss only the console technology here). Nintendo protects against the pirating of its games with the use TPMs (colloquially referred to as ‘digital locks’) that included both physical (the shape of the game card insert) and code elements (header data). Go Cyber advertised and sold through its website “game copiers” — a device that can be attached to a Nintendo console and onto which infringing copies of Nintendo games could be loaded. Less clear was the extent to which those same game copier devices could be used to play legitimately purchased software (but not Nintendo games) on Nintendo consoles. Go Cyber was found liable for secondary copyright infringement on the basis that it at least authorized the download of infringing Nintendo games onto the game copiers. The case however is noteworthy for its treatment of TPM infringement.

Overview of the TPM Regime

In the 2012 amendments to the Copyright Act, Parliament added a TPM anti-circumvention regime to protect against piracy in the digital age. These provisions give copyright holders an extra layer of protection by making it an infringement for anyone to circumvent a TPM placed on a work. That protection extends to TPMs that prevent either the copying of, or access to, a work. The regime targets not only circumventers but also those who offer services or devices primarily for the facilitation anti-circumvention. There are important exceptions to these provisions including circumventing TPMs to achieve interoperability with legitimately purchased software in certain defined circumstances.

Accessing a Work for a Non-Infringing Purpose is TPM Infringement

No one disputes that TPMs that prevent someone from copying a work are caught by the anti-circumvention regime. But in this case, the TPMs in issue had nothing to do with the per se copying of the games. That copying happened at the point of downloading onto the memory card – a non-issue in this case. Rather the issue was the game copier device and header data that were bypassed to access code to achieve interoperability so as to play the loaded games. This is why the court analyzed circumvention according to whether the TPMs circumvented “access to a work” as defined in 41(a).

The interpretation of this provision in the US (with very similar wording) has proved controversial. Does this right mean that one who cracks a TPM to access computer code (which is a protected copyrighted work under the Act) is liable even if it is done for a purpose unconnected to an act of copyright infringement? In other words, is there a nexus between copyright infringement and TPM circumvention? There is no discussion of this issue in the Nintendo but the implication is that no such nexus is required. Circumvention to access computer code is enough.

US courts have split on this issue. In Chamberlain Group v. Skylink Technologies, the US Court of Appeals (Federal Circuit) ruled that circumvention of TPMs must be connected to an act of infringement. The court reasoned that US copyright legislation (again like ours) carefully balances rights under the Act that should not upset by an overly broad reading of the access right. On the other hand, as I discuss in my book, our digital locks regime is arguably worded more strongly than the US DMCA upon which it is based such that access to a work is protected.

The Chamberlain court also expressed concern that locks could be used to create and extend monopolies for private gain rather than fulfilling the purposes of intellectual property law protection. Abusive uses of the digital locks provisions, such as to prevent after market sales of print cartridges or repairs to garage door openers, are examples. Our own Federal Court of Appeal in Apotex v. Eli Lilly has ruled that (like US law) the exercise of IP rights is not necessarily a defense to anti-competition rules in Canada. Even if there is an “access right”, therefore, it is still possible the exercise of this right could run afoul of the Competition Act.

Indirect Measures that Help to Protect the Work Considered a TPM

The Nintendo court held that the physical configuration of the game card insert, apart from the code of the card that bypassed the header data, constituted a TPM. This would mean that the insertion of a game card without such code, i.e. that did not function as a bypass of the TPM, would constitutes infringement. While seemingly not problematic in this case, this ruling opens the door to less desirable applications. Does it mean that the shape of a plug or electrical insert, which might be used for different purposes including nothing to do with accessing code, is caught under this regime?

There is no justifiable reason to extend the scope of TPM beyond the measures that play a direct role in circumvention. After all, if ultimately there is no bypassing of the TPM, then there should not be liability.

What about Sales / Service of Circumvention Devices for Legitimate Purposes?

The TPM regime targets both circumventers and the intermediaries who distribute circumvention technologies. Liability for distributors, vendors and other intermediaries is generally based on the idea that the technology is “primarily for the purpose of circumventing” a TPM. Where distribution has a significant legitimate purpose, in other words, the activity is not caught. This will be an important issue in future cases though the lack of evidence brought by the Respondent in this case prevented it from being seriously addressed in this case.

As well, the interoperability exception permits the distribution of technology that allows a person to circumvent a TPM to interoperate legitimately purchased software with a protected program. Go Cyber alleged, but again did not tender evidence, suggesting that that its devices facilitated the interoperability of third party ‘legal’ software on Nintendo devices. The court found otherwise and thus this fairly narrow exception did not apply.

Going forward, Canadian lawyers and judges should become familiar with US case law interpreting the anti-circumvention measures in the DMCA. Lawyers will find almost 20 years of case law and experience interpreting a digital locks regime that is similarly worded in key respects (though with some striking differences) to our own. It is strange that, while English law was discussed in Nintendo, not a single US case was cited.