21 October 2005

Three WSJ articles: two on Jon Johansen, one on the DRM overkill.

The Wall Street Journal, 20 October 2005

Two Apple Foes Join Forces On Secret Project Called 'Oboe'

A young European software expert reviled by Hollywood has joined forces with a controversial California software entrepreneur whose new company aims to challenge Apple Computer Inc. in online music.

Jon Lech Johansen, the 21-year-old Norwegian who infuriated movie makers by creating a program that allowed consumers to copy DVDs onto their computers, began work this week at a San Diego start-up Internet company called MP3tunes.

The private company is headed by Michael Robertson, who founded mp3.com, a Web site that was sued by the music industry for copyright violations and was forced to pay millions of dollars in damages and licensing fees. Mr. Robertson sold mp3.com to Vivendi Universal SA for $372 million in 2001; it later was sold to CNET Networks Inc.

Mr. Robertson says he hired Mr. Johansen, who never completed high school, because "I admire his technology skills" and his "strength to stand up" to the Motion Picture Association of America. Through its international affiliate, the MPAA persuaded Norwegian authorities to prosecute Mr. Johansen over his free DVD program, which he had posted on the Internet in 1999 when he was 15 years old. The trade group, which represents film studios, argued that the program had sparked widespread illegal downloading and swapping of movies.

Mr. Johansen, who was dubbed "DVD Jon" by the Norwegian press, was tried twice in Oslo -- in 2002 and 2003 -- and acquitted both times, with the judges failing to find proof that the program had been used for illegal purposes. "Here you have a teenager standing up to that kind of pressure," says Mr. Robertson. "That shows pretty amazing intestinal fortitude."

Mr. Robertson won't say exactly what Mr. Johansen will do at MP3tunes, other than that he will work as an audio engineer on a digital music project (code named Oboe) that will start up later this year. Mr. Johansen, who was the subject of a front-page story [below] in The Wall Street Journal this past Saturday, also declines to comment on his new job.

Mr. Robertson's company, founded in February, operates an online music store that features songs in the MP3 format from emerging artists. Unlike the songs sold by its much larger competitor, Apple's iTunes, MP3tunes songs contain no restrictions on copying or on which portable music devices they can be played.

Both men have been targeting Apple over the digital restrictions on iTunes-purchased songs, which make it difficult to transfer them to devices other than iPods or a new Motorola Inc. cellphone called the Rokr, which Apple helped design. Mr. Johansen, who argues that such restrictions penalize consumers, has repeatedly altered the iTunes software to remove the restrictions, which are known in the industry as digital-rights management. He has posted his free software tools on a Web sit he calls "So Sue Me."

Mr. Johansen even created his own version of iTunes software -- which his Web site describes as "the fair interface to the iTunes music store" -- for buying songs from Apple without any restrictions on them. And when Apple introduced the Airport Express -- a device that can wirelessly transmit music to a home stereo system, but only from a computer running iTunes -- Mr. Johansen created a software tool that lets the device transmit other types of music files without using iTunes.

Mr. Robertson, who is also a critic of digital-rights management technology, confirms that he is behind badfruit.com, a Web site offering a program called BadApple that alters iTunes so that it will transfer songs to portable music players other than iPods.

A spokesman for Apple declined to comment.

Mr. Robertson ran into legal trouble with the music industry when mp3.com began allowing users to upload songs to its Web site from their compact-disc collections so they could listen to them online. The music labels claimed copyright infringement. "We got shellacked in court," he says. "I pretty much lost every ruling and every trial that we went through."

After Mr. Robertson sold mp3.com, he began selling a Linux-based computer operating system called Lindows. That brought lawsuits from Microsoft Corp., which said the program's name infringed on the trademark for its Windows operating system. The litigation was settled out of court.

In the end, Microsoft agreed to pay Lindows Inc. $20 million, according to a Securities and Exchange Commission filing. As part of the settlement, Lindows agreed to change its name; it is now called Linspire. Mr. Robertson, who is chairman of Linspire, says the program has about 500,000 users but the company isn't yet making money.

Mr. Robertson says he won't be surprised if the project he has hired Mr. Johansen to work on attracts lawsuits from the entertainment industry.

"New technologies are routinely attacked by the media companies," he says. "You better plan for it. I would be foolish if I didn't do that with all the new technologies that we're working on."

In an email, Mr. Johansen yesterday said that last week he consulted someone from the Electronic Frontier Foundation, a San Francisco-based advocacy group that favors fewer restrictions on digital technology, "so that I can avoid legal problems in the future." He says he intends to continue researching digital-rights management "on my own free time, but I won't be turning my research into [software] tools. Publishing just the research is protected under the First Amendment."

Mr. Johansen, who has attracted a large following of people who believe they should be free to use legally bought digital entertainment as they choose, says he received at least six job offers -- five from software companies -- since last weekend. But he had been in contact with Mr. Robertson for several months about working for him in California. He says he was lured to the state by the prospect of working for a company writing consumer software and by the climate.

Mr. Robertson says he met Mr. Johansen for the first time on Monday after previously communicating with him only by email and an Internet telephone conversation.

"He's a typical quiet Scandinavian, is modest and has a glint of brilliance in his eyes," Mr. Robertson says. "I'm happy he came to work for me."

Write to Steve Stecklow at steve.stecklow[at] @wsj.com

The Wall Street Journal, 15 October 2005

Repro Man

Meet the 21-year-old Norwegian who defied
Hollywood to help the world copy DVDs --
and beat the studios in court.
Now, he's liberating your iPod.
October 15, 2005; Page A8

Jon Lech Johansen dropped out of high school after just one year. He lives alone most of the time, except when he stays with his parents in his native Norway. The 21-year-old doesn't drive, rarely goes to parties and says he has no close friends, except his father. He spends about nine hours a day in front of his computer screen.

Yet this reclusive young Norwegian is the man who may be the entertainment industry's worst nightmare. Mr. Johansen, Hollywood executives claim, has done more than almost anyone in the world to ignite the explosion of movie piracy on the Internet, costing them billions of dollars in lost sales. He scoffs at that.

At the age of 15, Mr. Johansen wrote a computer program that allowed users to copy DVDs. Then he posted it on the Internet. A Norwegian private school awarded him a prize for making an outstanding contribution to society. The Norwegian government indicted him.

Mr. Johansen, whom the local press dubbed "DVD Jon," was tried twice in Oslo in criminal proceedings that featured testimony from Hollywood executives who maintained his program had unleashed a tidal wave of piracy. Supporters organized on the Internet and printed T-shirts and ties emblazoned with Mr. Johansen's software code; it even inspired a haiku. A small group marched in Oslo's May Day parade carrying a sign that read, "Free DVD-Jon." Mr. Johansen was acquitted both times.

He has since moved on. These days he is targeting Apple Computer Inc., repeatedly hacking the software that runs its popular, Internet-based iTunes music store to remove restrictions on how many times legally bought songs can be copied or on which devices they can be played. And Mr. Johansen says he may take a look at the new version of iTunes Apple released this week, which offers TV shows that can be played on new iPods -- although he's not too interested in trying to defeat its anticopy technology yet because he says the shows' video resolution is too low to look good on computers or TV sets.

An Apple spokeswoman declined to comment on Mr. Johansen.

Mr. Johansen may not be a household name in America. But he is lionized by people who, like him, believe that when they legally buy digital entertainment they should be free to use it as they please; fans have downloaded more than a million copies of his free software programs.

To others, he's a menace. His programs "spawned a whole new industry" of downloading pirated movies, says Andy Setos, president of engineering for News Corp.'s Fox Group. "Our profitability has been hurt." He also says Mr. Johansen's acquittals "caused people to begin to believe that it was OK to ignore" DVD copyrights.

A recent study by Student Monitor LLC, which tracks trends on college campuses, found 67% of undergraduates are either "in favor" of downloading pirated music or movies, or find it "acceptable because everyone does it." And it's not just kids -- the head of one music label privately admits his father uses Mr. Johansen's program to duplicate rental DVDs "so he doesn't have to pay late charges."

For his part, Mr. Johansen says he's no pirate and respects copyrights. People who use his programs for illegal purposes should be prosecuted, he says. He also disapproves of hackers who spread computer viruses or break into corporate security systems.

But Mr. Johansen vows to continue unlocking the digital restrictions placed on copyrighted online entertainment, known in the industry as "digital rights management." He describes himself as a defender of consumer digital rights, and says his software tools are aimed at an industry that is penalizing honest buyers by, among other things, forcing them to watch commercials or haul around their DVDs when they travel instead of letting them copy them to their laptops.

"I don't mind paying for good products," he says. "But when I do pay I want to use those products the way I prefer."

Emboldened by his acquittals, he regularly boasts of his exploits on an online diary, or blog. He calls it "So Sue Me."

Piracy of copyrighted entertainment isn't new. For years, people copied record albums onto cassette tapes and traded them, a violation of copyright law that was generally overlooked because the quality of the copies wasn't great. But with the advent of digital entertainment on compact discs and more powerful personal computers, perfect copies could be made easily. The music industry initially took no technological steps to prevent copying from CDs. When DVDs were introduced in 1997, the film industry encrypted their content to try to avoid the piracy then already beginning to plague the music business.

In Hollywood's view, Mr. Johansen sparked a huge increase in movie pirating around the world by posting his program on the Internet. Mr. Johansen disputes this, arguing the biggest film pirates mass produce DVDs using the same equipment the industry uses, not his software program.

This summer, inside a small, rented vacation house in a village near St. Tropez, Mr. Johansen's younger sister, Cathrine, 16, and a friend were watching an episode in English of the California-based TV series, "The O.C.," on a legally purchased DVD. His father, Per, a bearded, 54-year-old retired postal service manager, and his mother, Maria, were preparing lunch. Mr. Johansen was upstairs, taking a shower. He came down a few minutes later, a husky young man, with short-cropped dark hair, a wisp of a beard and pale skin despite the searing Mediterranean sun. Except for the facial hair, he is a young duplicate of his father; they even wear identical, rectangular-shaped, wire-rimmed glasses.

The younger Mr. Johansen left high school when he was 16, "because school wasn't challenging at all," he says. He worked briefly at a Norwegian interactive-television company and then spent two years at a startup that was developing a payment system for cellphones. He learned to speak fluent English mostly by watching American movies and using computer programs. "Life outside school has proven to be much more educational," he says.

He says he currently earns about $4,500 a month as a developer for a French software-consulting business he set up with his father. Their business card shows a color photo of a multi-storied, high-tech building. The company's headquarters? No, Per Johansen says with a laugh -- he got the image from a Web site that offers free business cards. Their company actually is based in a modest house in Provence where Mr. Johansen lives most of the year and it has only a handful of clients.

Growing up, Jon Johansen wasn't an average child, his father recalls. "When other parents had to yell at their children to do their homework, I had to say, 'You've done enough now. Can't you go out and play?' "

Mai Grimholt, who taught Mr. Johansen in middle school, remembers a serious student who liked politics and wasn't afraid to take unpopular views, such as arguing Norway should join the European Union, something the country hasn't done. "He would stand up for what he believed in," Ms. Grimholt says. She remembers another thing: He knew more about computers "than any of the teachers who had ever studied computers."

Mr. Johansen says he was writing simple programs at the age of 12. It was a passion he shared with his father, who, without his wife's knowledge, once spent three months of his salary on a personal computer. By 14, he had surpassed his father's computer skills. His father says he realized this after buying a digital camera that came with software to transfer photos to a PC.

Frustrated because the program kept crashing, he says he showed it to his son, who "reverse-engineered it and wrote small, tiny software" to do the job. While the original program required about 25 steps to transfer photos, his son's worked with just one. "It never crashed," Per Johansen says.

The younger Mr. Johansen's other great love was movies -- he had purchased more than 300 DVDs -- and in 1999 he bought a kit to play them on his own computer. He created a Web page and oversaw an online discussion group about the equipment. He also wrote a program to defeat the geographical-coding restrictions on the DVD player so he could watch American discs -- which cost much less than ones sold in Norway but wouldn't play on European machines. He posted his program on his Web page to share it with others.

Mr. Johansen also wanted to copy DVDs to the hard drive, or stored memory, of his PC, a process known as "ripping," so, among other things, he didn't always have to take DVDs with him when he traveled.

In September 1999, Mr. Johansen enlisted the help of his online discussion group, whose members went by pseudonyms. With their contributions -- one of them figured out how to circumvent the encryption -- he wrote a simple program that quickly ripped DVDs. After testing it successfully on his own legal copies of "The Matrix" and "The Fifth Element," he posted it on his Web site.

Unlike his confederates -- to this day he says he doesn't know their real identities -- he made no secret of his name because he believed he hadn't done anything wrong. Per Johansen says he was aware of what his son had done, and "thought it might be a legal problem." It also attracted the attention of the media. Within weeks, stories began appearing that identified his son as the teenager who cracked the encryption code for DVDs, realizing Hollywood's worst fear.

The international affiliate of the Motion Picture Association of America, which represents Hollywood studios, asked the youngster to remove his program from the Internet. He complied, but re-posted it about a week later after his father consulted a lawyer and became convinced the program was legal. The younger Mr. Johansen became instantly famous in Norway. His former teacher, Ms. Grimholt, sent him a congratulatory email. "Jon, the sky's the limit," she wrote.

At a ceremony on Jan. 15, 2000, a private Oslo school presented him with the Karoline Prize, awarded annually to a top high-school student. It carried an award of about $2,000. Mr. Johansen says he spent more than half of it on a top-of-the-line Sony DVD player.

Nine days later, Norwegian police officers, acting on a complaint from the MPAA's international affiliate, raided Mr. Johansen's house and seized his computer. They brought the teen and his father to the station and interrogated them each for about seven hours. Jon Lech Johansen says he cooperated, even providing the police with passwords to his PC. "I thought I had nothing to hide," he says, adding, "I was naïve."

In 2002, Jon Lech Johansen was indicted on charges of gaining unauthorized access to a DVD and causing damage by posting his program on the Internet. By that time, a federal judge in New York had already ruled, in a civil case brought by Hollywood studios, that publishing or linking to Mr. Johansen's program on the Internet violated U.S. law.

With his criminal indictment, the Norwegian teen became a cause celebre across the Internet. And not just among movie and music downloaders, but among computer programmers and free-speech advocates as well.

Hakon Wium Lie, a Norwegian computer engineer, carried a "Free DVD-Jon" sign in the 2002 May Day parade in Oslo and picketed a police station. "The sight of policemen running into this child's room I think upset a lot of people," says Mr. Lie, who is chief technology officer of Opera Software, an Oslo company that developed an alternative Web browser to Microsoft's Internet Explorer. "Some of us felt, including myself, that we might be the target next time."

David S. Touretzky, a computer-science professor at Carnegie Mellon University in Pittsburgh, says many professional computer programmers "were outraged" over the prosecution of Mr. Johansen, because they considered posting a program on the Internet a matter of free speech.

Dr. Touretzky says he continues to admire Mr. Johansen, especially his latest campaign against Apple. "He's still doing it. The guy's unrepentant," he says. "It's great."

The San Francisco-based Electronic Frontier Foundation, an advocacy group that favors fewer restrictions on digital technology, financed Mr. Johansen's initial legal costs. "He made a laughing stock of Hollywood, basically by showing that a 15-year-old kid could break through their super security system...that was protecting their billion-dollar market," says John Gilmore, one of the group's founders. Halvor Manshaus, a young Oslo private attorney who normally represents intellectual property holders such as publishers, volunteered to serve as the youth's public defender. "My feeling was he was outmatched," Mr. Manshaus says. It was the attorney's first criminal trial.

For six days in December 2002, a three-judge panel heard the case in Oslo. The head of the DVD-licensing organization flew in from California to testify. Over two days, Mr. Johansen calmly explained what he had done and how he did it. The trial mesmerized Norway; the verdict was broadcast live on the radio.

In the end, the court found that because he had legally purchased the DVDs he had ripped, there was nothing wrong with making copies for his own private use. The judges also found that even though he had posted his program on the Internet, there was no actual proof that it had been used for illegal purposes. Afterward, on the courthouse steps, Mr. Johansen declared he was going home to watch a DVD stored on his computer's hard drive.

Norwegian prosecutors appealed the verdict. Mr. Johansen was retried in December 2003. Again, he was acquitted. "We made him a star," says Thomas Dillon, an attorney for the MPAA in Brussels. That time, the judges noted that downloading movies wasn't practical in 1999 because broadband wasn't widely available and it could take 12 days to transfer a full-length feature film using a dial-up connection.

Chief prosecutor Inger Marie Sunde now says the Norwegian government's case against Mr. Johansen was hindered by an ambiguous law and the difficulty in proving "the connection between something that you have posted on the Internet and the damage done by it."

Even before his retrial began, and to the dismay of his own attorney, Mr. Johansen began going after Apple. He says he spent 80 hours dissecting iTunes, figuring out how it places digital restrictions on songs and how to circumvent them. In Mr. Johansen's view, Apple's restrictions on iTunes songs -- which, among other things, limit the number of times purchased songs can be copied without a loss of quality -- are "even worse than DVDs" because Apple retains the right to change the rules even after a consumer buys a song. "What will they allow you to do tomorrow?" he asks.

Mr. Johansen also recently circumvented -- in less than an hour -- an early version of a Google Inc. video-player program that only played Google-authorized videos. With his "patch," the program could play other videos as well, including pirated ones. Google has since updated its video technology.

In the six years since Mr. Johansen posted his DVD-copying software on the Internet, the online world has been transformed. High-speed Internet has become available globally and a feature film now can be downloaded in as little as 12 minutes. A slew of other software tools to rip DVDs have surfaced. To the dismay of the film industry, piracy not only has mushroomed, but has become morally acceptable to many -- one studio says its internal research shows that a majority of Americans see nothing wrong with it.

Meanwhile, Hollywood and the high-tech industry are now haggling over the next generation of DVDs, which they promise will have much stronger anti-copy protection but privately concede will never be completely hacker-proof. Movie studios also vow to address some of Mr. Johansen's complaints, offering consumers new options like allowing films to be copied onto hard drives legally, but probably for a price.

In June, Norway overhauled its copyright law, making illegal the posting of a program that defeats a DVD's anti-copy protection technology.

As for Mr. Johansen, he now says he plans to move to a different jurisdiction with more job opportunities and a better climate -- southern California. He hopes to take a job in the computer industry. "Of course," he says, "when I'm in the U.S., I will take great care not to break any U.S. law."

Write to Steve Stecklow at steve.stecklow [at] @wsj.com

Wall Street Journal, October 20, 2005

Media Companies Go Too Far in Curbing Consumers' Activities

Walter Mossberg, Personal Technology Columnist

In some quarters of the Internet, the three most hated letters of the alphabet are DRM. They stand for Digital Rights Management, a set of technologies for limiting how people can use the music and video files they've purchased from legal downloading services. DRM is even being used to limit what you can do with the music you buy on physical CDs, or the TV shows you record with a TiVo or other digital video recorder.

Once mainly known inside the media industries and among activists who follow copyright issues, DRM is gradually becoming familiar to average consumers, who are increasingly bumping up against its limitations.

DRM is computer code that can be embedded in music and video files to dictate how these files are used. The best-known example is the music Apple Computer sells at its iTunes Music Store. Using a DRM system it invented called FairPlay, Apple has rigged its songs, at the insistence of the record companies, so that they can be played only on a maximum of five computers, and so that you can burn only seven CDs containing the same playlist of purchased tracks. If Apple hadn't done this, the record labels wouldn't have allowed it to sell their music.

DRM systems are empty vessels -- they can enforce any rules copyright holders choose, or no rules at all. Apple's DRM rules are liberal enough that few consumers object to them. In fact, obtaining relatively liberal DRM rules from the labels was the key to Apple's success in selling music. But some other uses of DRM technology aren't so benign.

Some CD buyers are discovering to their dismay that new releases from certain record companies contain DRM code that makes it difficult to copy the songs to their computers, where millions prefer to keep their music. People who buy online music in Microsoft's Windows Media format too often run into the DRM error message "unable to obtain license" when trying to transfer the songs to a music player.

Some TiVo owners have reported seeing messages on their TV screens, apparently triggered by error, that warn that if the copyright holder so chooses, TiVo recordings can be made to expire automatically after a certain period.

For some activists, the very idea of Digital Rights Management is anathema. They believe that once a consumer legally buys a song or a video clip, the companies that sold them have no right to limit how the consumer uses them, any more than a car company should be able to limit what you can do with a car you've bought.

But DRM is seen as a lifesaver by the music, television and movie industries. The companies believe they need DRM technology to block the possibility that a song or video can be copied in large quantities and distributed over the Internet, thus robbing them of legitimate sales.

In my view, both sides have a point, but the real issue isn't DRM itself -- it's the manner in which DRM is used by copyright holders. Companies have a right to protect their property, and DRM is one means to do so. But treating all consumers as potential criminals by using DRM to overly limit their activities is just plain wrong.

Let's be clear: The theft of intellectual property on the Internet is a real problem. Millions of copies of songs, TV shows and movies are being distributed over the Internet by people who have no legal right to do so, robbing media companies and artists of rightful compensation for their work.

Even if you think the record labels and movie studios are stupid and greedy, as many do, that doesn't entitle you to steal their products. If your local supermarket were run by people you didn't like, and charged more than you thought was fair, you wouldn't be entitled to shoplift Cheerios from its shelves.

On the other hand, I believe that consumers should have broad leeway to use legally purchased music and video for personal, noncommercial purposes in any way they want -- as long as they don't engage in mass distribution. They should be able to copy it to as many personal digital devices as they own, convert it to any format those devices require, and play it in whatever locations, at whatever times, they choose.

The beauty of digital media is the flexibility, and that flexibility shouldn't be destroyed for honest consumers just because the companies that sell them have a theft problem caused by a minority of people.

Instead of using DRM to stop some individual from copying a song to give to her brother, the industry should be focusing on ways to use DRM to stop the serious pirates -- people who upload massive quantities of music and videos to so-called file-sharing sites, or factories in China that churn out millions of pirate CDs and DVDs.

I believe Congress should rewrite the copyright laws to carve out a broad exemption for personal, noncommercial use by consumers, including sharing small numbers of copies among families.

Until then, I suggest that consumers avoid stealing music and videos, but also boycott products like copy-protected CDs that overly limit usage and treat everyone like a criminal. That would send the industry a message to use DRM more judiciously.

• Email me at mossberg [at] wsj.com

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