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MGE UPS Systems, Inc. v. GE Consumer and Indus. Inc.: Fifth Circuit Limits DMCA by Distinguishing Circumvention to Access Software and Circumvention to Violate Copyright

Copyright Patent

MGE UPS Systems, Inc. v. GE Consumer and Indus. Inc., No. 08-10521 (5th Cir. July 20, 2010)

Slip Opinion

The Fifth Circuit affirmed the ruling of the District Court for the Northern District of Texas, which dismissed MGE UPS Systems Inc.’s (“MGE”) Digital Millennium Copyright Act (“DMCA”) claim against Power Maintenance International, Inc. (“PMI”) and General Electric Company (“GE”) pursuant to Fed. R. Civ. P 50(a).

The Fifth Circuit held that the DMCA’s provisions apply to protections designed to prevent infringement of copyrighted material and not protection from mere access to that material.  Thus, the circumvention of a protection measure that fails to shield the copyrighted material from being read and copied is not a violation of the DMCA.  The court further noted that once a protection measure has been circumvented, the DMCA no longer applies to the use of that work.

Barry Sookman provides an overview of the case and an analysis of the court’s ruling.  Info/Law has a critical discussion of the DMCA in light of this case’s holding.

MGE manufactures uninterruptable power supplies (“UPSs”).  MGE also provides copyrighted software programs, Pacret and Muguet, that are critical for servicing the UPSs.  In order to access the software, a laptop running the program requires an external hardware security key, known as a dongle.  Each dongle has an expiration date and a maximum number of uses limit.  Whenever launched, the software will search for the dongle and verify its validity.  Several years after MGE introduced the software, hackers published instructions on how to defeat the security key.  Once the security key is defeated, a technician has unlimited access to the software.  PMI services UPSs, including those manufactured by MGE. Before June 2000, PMI employees obtained a hacked version of the software from an unknown source.  GE later acquired PMI in 2001.  In December 2004, MGE filed suit against GE/PMI for DMCA violations among other things.

Under the DMCA, “no person shall circumvent a technological measure that effectively controls access to a work protected under this title.” 17 U.S.C. § 1201(a)(1)(A).  As an issue of first impression, the Fifth Circuit determined the meaning of access under the statute.  In holding as it did, the court distinguished between access protections that prevent access to the protected work and protections that prevent copyright infringement.  The court concluded that the former was not covered by the DMCA because it was too broad.  If the DMCA were read to cover access protections to the work itself, the court noted, it would impede certain fair use permitted by the Copyright Act.  MGE’s technological measure was not a protection to prevent infringement because even with the proper dongle, the software was unprotected from copying.  Since the dongle did not protect against copyright violations, circumvention of it was not within the reach of the DMCA.  The court further noted that the DMCA applied to the act of circumventing the technological measure, not to the use of the copyrighted work after circumvention had already occurred. Since MGE lacked evidence that GE/PMI employees performed the circumvention, the court held that MGE presented no claim under the DMCA.

In so holding, the court limits the DMCA to those cases where a defendant circumvents a protection that is designed to prevent infringement of copyrighted material. As pointed out by Barry Sookman, such a limitation is inconsistent with prior circuit court decisions and fails “to consider [] legislative history.”

Ian B. Brooks is a 3L at the Harvard Law School.