Sony BMG settles FTC charges over anti-piracy CDs
WASHINGTON (AP) - U.S. regulators said Tuesday that Sony BMG Music Entertainment agreed to reimburse consumers up to $150 for damage to their computers from CDs with hidden anti-piracy software.
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Sony BMG Music Entertainment has included questionable Digitial Rights Management (DRM) software on many of its recent music CDs. "Sony" is a registered trademark of Sony Corporation. "BMG" is a registered trademark of BMG Entertainment. All marks are only used descriptively and do not imply any connection between or endorsement of this blog or any of its contents by the owner(s) of the marks.
Note that the title of most blog entries provides a link to the relevant document.
WASHINGTON (AP) - U.S. regulators said Tuesday that Sony BMG Music Entertainment agreed to reimburse consumers up to $150 for damage to their computers from CDs with hidden anti-piracy software.
--$8,202.82 - Costs
-$10,411.49 - Costs
-$79,314.75 - Attorney Fee
$115,334.16 - Interest
$384,447.23 - Principal
----$779.76 - Jury
-------------------
$598,490.21 - Total
US 2003-0169878 A1 - 10/217,994
Docketed to examiner - 8/22/05
US 2005-0223240 A1 - 10/506,964
Docketed to examiner - 09/23/05
The US 2005-0223240 A1 application appears to be a US prosecution of an WO 2004-109681 A3 / GB 2402802 A European Patent Office (EPO) application.
Note that I haven’t had a chance to read these patent applications, nor have I looked to see if either of the two SunnComm inventors had other patents or patent applications.
"Perfect Placement - MediaMax presents the record labels and music producers with unparalleled targeted marketing opportunities through a feature called Perfect Placement. This unique feature centrally serves up dynamic promotional content controlled by the record label to reserved spaces located throughout the MediaMax interface while a user is enjoying their CD on the computer. Imagine an artist's album is coming out and the record company has the ability to announce this event to all those playing the artist's previously released album in their computer."In short, the software they automatically install from music CDs containing their DRM software monitors what someone is playing, communicates this to a central site, receives advertisements in response to this information, and displays the ads to the user.
"MediaMax Technology Corporation, a Nevada corporation is in the business of providing copy control technology to the music and entertainment industry. This industry is generally unpopular with consumers because of their ability to make inexpensive unauthorized copies of entertainment software. The proliferation of illicit copying has resulted in perhaps billions of dollars of lost revenues for industry-wide content owners. The latest data available from the MPAA estimates that the U.S. motion picture industry lost in excess of $3.5 billion in 2003 due to packaged media piracy. Music industry unit ("CD") sales have been falling approximately 10% year-over-year for the past four years, according to the International Federation of Phonographic Industries ("IFPI"). In addition, the International Intellectual Property Alliance ("IIPA") estimated that copyright piracy, not including Internet piracy, around the world inflicts $20-$22 billion in annual losses to the U.S. copyright industries. As technology has become more advanced and efficient, illegal copying activity has increased because of its ease and simplicity."This, of course, explains why Sony has included DRM software on many of its recent albums.
"On November 2, 2005, we entered into an Employment Agreement with Kevin Clement, an executive at Sony BMG Music Entertainment, to join our company as Chief Executive Officer and President and as a member of our Board of Directors as of November 21, 2005. "Which helps explain why Sony BMG picked MediaMax / SunnComm for DRM software.
"We have an Exclusive Distribution Agreement with SunnComm to distribute, market, advertise, and sublicense the SunnComm Products throughout the world. The SunnComm Product that we will begin marketing is a content protection control technology called Media Max M4. The market for Media Max are all major and independent record companies along with their artists which may be concerned over lost revenues to illegal copying. Management believes that approximately 2 billion music CD's are sold annually worldwide. SunnComm currently has an agreement with a major record label and manufacturer to provide the Media Max M4 product upon their demand."This explains some of the relationship between Media Max and SunnComm. Interesting though that they don't point out that the "major record label" is presumably Sony BMG, esp. given that by this time, Sony BMG must have already shipped a number of SunnComm protected CDs AND they had hired Kevin Clement away from Sony.
"The License Management Technology, "LMT", provides a security platform that is able to monitor and control activity on all CD/DVD drives or burners when it determines that content protection could be compromised. The software is designed to be completely invisible to users, programs and system components. CDs created with the LMT are 100% compatible with standard audio CDs; therefore, playability on any regular CD or DVD device is guaranteed."And that is one of the big problems with the SunnComm DRM code - that it is so invisible that the user doesn't even know that it is installed on his computer, esp. since it installs regardless of whether the Sony EULA is agreed to or not.
"When the disc is inserted, the auto launch feature will activate the MediaMax M4 program on the second session, which feature is called launchcd.exe. Depending on the DRM license implementation, this program is either activated directly or through another program called autorun.exe. Launched first determines if the LMT Software controls are installed on the computer. If not, or if the disc concerned contains a newer version, it will copy the controls from the disc concerned and will install same. The LMT Software controls consist of two dynamic link libraries. The controls are used by the MediaMax M4 application (which is browser based).Media Max is essentially admitting here that the SunnComm code installs itself regardless of whether or not the computer user accepts the EULA, that it ties up resources by scanning running processes, and that the code tries very hard to hide itself from the user.
Whenever the LMT Software controls are activated, (i.e. when the second session software is executed), the LMT Software controls will first determine if the content protection device driver is installed on the system. If not, it will extract it from the main LMT Software into a separate file and install it as a standard Windows device driver.
The driver first locates all CDROM devices installed on the computer. Then it will poll each device once per second to determine if a new disc has been inserted. If so, it will read various elements of the disc to determine if it is a MediaMax M4 disc. It is important to note that the driver is completely idle (without any chance to affect the computer), unless an actual MediaMax M4 disc has been detected. Once detected, the driver will insert itself into the communication stream for that drive to prevent any non-authorized activities. While allowing the computer to access the second session without any limitations, the driver will interfere when applications try to access the first session.
When the driver detects that the MediaMax M4 disc is ejected, it will remove itself from the communication stream for that drive and switch back to the polling mode. Several enhancements are currently under development to make it very difficult to locate and/or remove the device drivers."
"We believe that today's market prefers playability over protection which its MediaMax M4 technology provides because it is compliant with the CD Redbook Standard."Which business plan got us here, where MediaMax / SunnComm DRM code is automatically installed on computers regardless of whether or not the accompanying EULA is accepted.
And the complaints are being heard at the Justice Dept. "It's fair to say that we're aware of consumer concerns on the installation of this software on Sony products," says Justice spokesman Paul Bresson, though he declined comment on the number of Sony-related complaints the agency has received. "For now we're going to wait for more facts to become available and then evaluate what, if any, action is appropriate."