Anti-piracy battle moves to hardware

Powerhouses such as Intel (intc) and IBM (ibm) are taking early steps toward building antipiracy protections for music, videos and software directly into storage drives, memory cards, chips and other hardware parts. These technologies, some of which are nearing the marketplace, could block a song or any other digital material from being copied or saved--potentially welcome news to record labels and movie studios.

Microsoft (msft) and others are pursuing the same idea with software, but critics say even the best of these models is likely to be broken or stripped out by dedicated hackers. Hardware-based protections could prove a much stronger layer of protection.

The battleground over hardware controls crosses territory ranging from the obscure inner workings of computer storage devices to intellectual property disputes that some say may soon reach the Supreme Court as a part of the Napster controversy or other pending copyright cases. For for all involved, these massive issues boil down to a simple question: How much can technology and entertainment companies control what consumers do with their products after buying them?

"If they succeed in this, all of a sudden these industries have complete control over how the public does such things as backing up their music libraries," said John Martilla, director of the Electronic Frontier Foundation's (EFF) Campaign for Audiovisual Free Expression, which is spearheading opposition to several "digital rights management" technologies. Even legal activities such as sampling digital works for educational or critical purposes could be blocked under proposed models, Martilla said.

On the other side are copyright holders, who argue that the proliferation of peer-to-peer networks threatens to undermine entire industries ranging from entertainment to software. Even after recent legal precedents that imposed limits on Napster, underground traders have vowed to circumvent any restrictions.

The motives of the hardware manufacturers are not solely altruistic. Computer and electronics companies badly want the market for digital media players to expand--and that means convincing the content companies that the world is safe for digital music and video.

Why bother?
The idea of building copy-protection technology into hardware is not a new one, nor has it proved highly successful in other initiatives. The Secure Digital Music Initiative (SDMI), sponsored by the music, technology and consumer electronics industries, has been trying to find a universally acceptable way to do just that with limited success for two years.

A key problem is that partial measures aren't particularly useful. Security locks are foolproof only when all brands of stereos, computers and MP3 players use the same antipiracy technology, leaving consumers little choice but to accept it. When products with no protections have been left on the market, consumers have purchased those instead.

This consumer trend has been evident for years. Circuit City's Divx DVD player, designed to control the use of digital videos, died a quick market death. Sony's Vaio Music Clip was the only music player to add early versions of the SDMI's proposals, but the technology was removed after negative reviews and slow sales.

Even more successful products with copyright protections have met with difficulty. DVDs and DVD players work together to prevent piracy partly with an encryption system that blocks copying. But a young Norwegian man figured out how to evade this in 1999, forcing a series of legal battles by the movie industry in attempts to keep that information off the Internet.

This history alone would seem to provide ample evidence that technology companies might take a jaundiced view of building features into their products that restrict their customers' ability to use them. But as personal computer sales are flattening, hardware makers are doing what they can to help jump-start the market for media content that might persuade consumers to buy more high-end machines.

"We're not in this for the fees we're going to get from the record companies or anything," said Don Lake, program director for copy-protection business development at IBM Research, which is helping to develop several anti-piracy technologies. "We're a PC company. As long as we see content providers that want to protect content, and we have the technology, we're going to help."

Blocking storage devices
One of the most recent controversial plans has come from a group dubbed the 4C Entity, which includes IBM, Intel, Matsushita Electric and Toshiba.

The group has created a technology called CPRM (Content Protection for Recordable Media) that would block certain types of files from being transferred to portable devices such as Zip drives, or microdrives, or the flash memory cards used in MP3 players. A similar specification is designed for prerecorded media such as audio DVDs.

The 4C group sparked intense protest by taking their proposal to an industry standards group last year, asking that support for copyright protection be added directly into the rules dictating how data storage drives--including PC hard drives--talk to each other.

Although the 4C proposal was ultimately withdrawn, another proposal that seeks much the same guards is being put to a vote by mail, with ballots to be tallied April 2. Whatever the outcome, the 4C group is pressing forward with the licensing process for its technology, and portable devices with the copy protections built in could emerge as soon as this summer.

"I think that in the grand scheme of things, the only way to make copy protections work is to invoke the hardware in a very integrated way," said Eric Scheirer, an analyst at Forrester Research.

Although Intel has made other moves toward providing anti-copying technology, it has made no effort to put the technology on its core computer chips, a shift that would vastly increase the profile and probability of success for digital rights management. Other chipmakers are pursuing this course but have yet to announce any products.

Cirrus Logic has begun producing chips that include copy-protection technology from InterTrust. Texas Instruments and chip designer ARM Holdings have licensed the same technology.

InterTrust also creates its own chip, dubbed the RightsChip, which can be used to lay the foundation of anti-piracy technology deep into digital music devices or even desktop computers. Although it would not disclose details, InterTrust says it has already manufactured and shipped more than 200,000 of these chips to a customer that will use them for personal computers.

"This kind of architecture makes it possible to build applications where it's not feasible to modify or hack the software," said Olin Sibert, InterTrust's vice president of strategic technology.

The company's rights management technology is already being built into such high-profile products as Creative Labs' Nomad II MP3 player, but not at the hardware level. More recently, Nokia took a 5 percent stake in InterTrust with an eye toward adding content protection to MP3-playing cellular phones.

Adapting to the hardware
Having the content protection built into players and computers can go a long way toward making piracy more difficult. But a critical step is still missing: For these devices to have a significant effect, the record companies or studios must release their music, CDs or movies in the formats that take advantage of the devices' protections.

The entertainment industry could conceivably act quickly if a hardware solution were to become available, but unanimous agreement remains an elusive goal.

Competing versions of digital rights management software that allow copyright holders to control who can use their works--and how--are still being tested by most of the record labels. Microsoft and InterTrust each have won considerable support, but no company has settled on a single format.

Many analysts expect this chaos to continue well into the future, a prospect that bodes ill for successful, widespread antipiracy locks unless some universal standard can be mandated. Although it's unlikely Congress will step in to impose rules, skeptics say this might be what it will take.

"There are so many interests that have to be on the same page," Forrester's Scheirer said. "I think the only way this would work is through legislation."