October 10, 2003 2:16 PM PDT
SunnComm won't sue grad student
SunnComm had angrily assailed Princeton doctoral student John "Alex" Halderman just a day before, claiming that his academic paper was "at best, duplicitous and, at worst, a felony." The company had pledged to file a civil suit against Halderman under the Digital Millennium Copyright Act (DMCA) and lobby federal prosecutors to indict him on criminal charges.
SunnComm CEO Peter Jacobs acknowledged his threat to file a lawsuit was a mistake. "I felt the researcher has an agenda, which he does," he said. "But that's not relevant, and I learned that...The long-term nature of the lawsuit and the emotional result of the lawsuit would obscure the issue, and it would develop a life of its own."
Jacobs refused to divulge the reasons for his change of heart, saying only that "when the original firestorm cleared and we had a chance to poll the different organizations (including customers, advisers and shareholders) I started to have a different picture on how to resolve the issue."
Halderman, the computer science graduate student, said Friday that he's "confident the paper doesn't violate the DMCA, but I'm glad they've decided to drop the matter."
SunnComm's threats had drawn enormous attention in a short time, with some legal analysts saying a lawsuit would represent an egregious abuse of the DMCA, which broadly prohibits "circumventing" copy-protection technologies. The law does contain narrow exceptions for reverse engineering and academic research, though two proposals in Congress would make the exemptions far broader.
Halderman's paper, published Monday and titled "Analysis of the MediaMax CD3 Copy-Prevention System," describes flaws in the MediaMax technology SunnComm sold and BMG Entertainment used on an Anthony Hamilton CD it released last month. It concludes that "most users who would be affected can bypass the system entirely by holding the Shift key every time they insert the CD," an action that prevents the MediaMax drivers from loading.
Since Halderman's paper appeared, SunnComm's shares have slipped precipitously, losing about $10 million in value. The company's stock appears on the Over-the-Counter Bulletin Board and was trading at 11 cents Friday morning.
Without giving specifics, SunnComm's original statement indicated that the company had planned to sue Halderman and claim libel or defamation in addition to the DMCA charges. "No matter what their credentials or rationale, it is wrong to use one's knowledge and the cover of academia to facilitate piracy and theft of digital property," the original statement said. "SunnComm is taking a stand here because we believe that those who own property, whether physical or digital, have the ultimate authority over how their property is used."
Sounding slightly bitter, Jacobs blamed reporters for the topsy-turvy week his company had experienced. "You can never underestimate the ability of the press to oversimplify the issue," he said. "It wasn't about the Shift key...It had nothing to do with that. It had to do with reviewing a rabbit when we invented the duck and saying the rabbit didn't work right."
Jacobs said MediaMax's security system, which he predicted would be adopted by three major record labels by the end of the year, "was designed for the 90 percent of the people out there who would never work around a technology.
"I didn't think that I could get joy; I didn't think I could relieve the problem by suing," Jacobs said. "If you want to call it a mistake, yes, it was a mistake to probably talk about launching some lawsuit. But the reality is you live, you learn--and you try to do the right thing all the time."