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[August 27, 2007]

Unlocking the iPhone could invite DMCA suit

(InfoWorld Daily Via Thomson Dialog NewsEdge) Hackers who unlock Apple's iPhone from the AT&T network and share the method with 10 million of their closest Internet friends are inviting a lawsuit from the two companies, several intellectual property (IP)lawyers said Monday.

Apple and AT&T may have a legal case against unlockers under the U.S. Digital Millennium Copyright Act (DMCA), especially if they try to sell software code or devices that unlock the iPhone, the lawyers said. But the legal landscape gets a bit complicated -- there's a legal exception to the DMCA's anticircumvention provisions that allows individual mobile phone users to unlock their devices for use on other networks.

So figuring out how to unlock the iPhone yourself is not likely to be a DMCA violation, most of the IP lawyers said. But posting instructions or code online, even for free, may earn you a cease-and-desist letter from an unfriendly lawyer, and selling software or a device that unlocks the phone is inviting trouble, most of the lawyers said.

But there's plenty of disagreement among IP lawyers about the interpretation of the DMCA.

"It's an extremely grey [area], because I don't think the exemption was altogether clear," said Bart Showalter, an intellectual property lawyer in Dallas with the Baker Botts LLP law firm. "The idea of trying to use copyright to, in a sense, establish exclusivity in a service contract ... is going to be an interesting thing to watch."

John McLaughlin, founder of Uniquephones, based in Belfast, Northern Ireland, had planned to release software Saturday that wouldallow users to unlock their iPhone. But early Saturday morning, McLaughlin said he received a phone call from a man saying he was from a law firm representing AT&T. The caller saidMcLaughlin could be sued for copyright infringement.

Two other groups have claimed to have unlocked the iPhone.

Representatives of both AT&T and Apple declined to comment Monday on possible legal actions against unlockers.

Showalter suggested that unlocking the iPhone and posting code or instructions for free would likely fall under the exception to the DMCA's anticircumvention provisions, thus protecting the unlocker from legal action.

The exception allows circumvention of device controls "for the sole purpose of lawfully connecting to a wireless telephone communication network," according to language from the U.S. registrar of copyrights. So if a hacker unlocks the iPhone, then posts the unlocking code for free, he's engaging in a legal activity and enabling others to engage in the same legal activity, said Michael Lewis, an IP lawyer with Fox Rothschild LLP.

If that hacker is sued, he could probably argue that posting of the unlocking code is protected by free speech provisions in U.S. law, according to Lewis.

Other IP lawyers disagreed. Movie studios have successfully sued Web site operators for distributing the DeCSS DVD-copying code, noted Carole Handler, an IP lawyer with Foley and Lardner LLP. The unlocker of the iPhone who posts code online could be held liable for secondary copyright infringement, she said.

"I don't see that [Apple and AT&T] have a choice," Handler said. "They have to do something. If you don't protect your intellectual property, it's gone."

Lewis' colleague, Gerry Norton, agreed, saying the unlocking exception was narrowly written. "The exception was just for the end-user," he said.

Most of the lawyers agreed that selling software to unlock the iPhone, as McLaughlin was planning to do, would invite a lawsuit under the DMCA. "The courts seem to have less sympathy for people who are doing things to make a buck," Lewis said.

But there wasn't even unanimous agreement on the legal liability of selling unlocking software. If the software being distributed targeted only the network lock on the iPhone, the developer could have a defense, Showalter said.

"It does seem a little unusual to me that they say somebody can unlock their phone, but if someone tells them how to do it, that's a violation of the DMCA," he said. "If the software that's being sold is only doing the minimum amount that's necessary to allow it to interoperate with other services, you may have some support in the DMCA exception."

Beyond the legal questions about unlocking the iPhone, Apple and AT&T could face their own legal challenges, Handler said. The exclusive contract between the two companies could lead to an antitrust lawsuit if a competitor or customer could successfully argue there's no other device like the iPhone available on the market, she said.

"Consumers want new technology," she said. "This is the era of the consumer controlling the media. When the consumer is told he or she can't do something, they get pretty upset, and they start claiming conspiracy, antitrust, and the whole bit."

Copyright 2007 InfoWorld Media Group, Inc.

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