How the Copyright Office Saved McDonald’s Ice Cream
When Congress attempts to craft legislation to deal with the changing needs of an increasingly digital world, the laws they draft can have unintended consequences. The 1998 Digital Millennium Copyright Act (DMCA) was no exception. One such unexpected outcome was Copyright Law’s contribution to an ongoing problem, so irksome that it became a flashpoint focal point of the 2024 election: McDonald’s ice cream machines are so often broken.[1]
The Digital Millenium Copyright Act’s § 1201
- 1201 of the DMCA covers the circumvention of copyright protection systems, stating that “[n]o person shall circumvent a technological measure that effectively controls access to a work protected under this title.”[2] The provision aims to prevent circumvention of things like the encryption systems used on DVD movies and CD copy-protection technologies, either through direct action to circumvent access controls or by creating or distributing tools to make such circumvention possible.[3]
In enacting the anti-circumvention provisions, Congress was responding to two primary pressures: first, a “perceived need to implement obligations imposed on the U.S. by the 1996 World Intellectual Property Organization,” and second, the concerns of copyright owners who feared widespread piracy in a digital world.[4] In responding to these pressures, Congress did not anticipate that businesses would use their ownership in Copyrighted Software attached to their devices and § 1201 to hinder legitimate competition.[5]
When enacted, § 1201 contained exceptions for certain activities, “including security testing, reverse engineering of software, encryption research, and law enforcement.”[6] Unfortunately, since § 1201 became law, a wide array of industries have used the DMCA’s § 1201 to block aftermarket competition, from laser printer toner cartridges, to videogame console accessories, to iPhones,[7], to McDonald’s ice cream machines.[8] Many have criticized the exceptions as too narrow, leading to anticompetitive effects and not doing enough to help the intended constituents.[9]
A 2017 report published by the Copyright Office acknowledged these unforeseen consequences.[10] While the report concluded that the overall structure and scope of § 1201 were sound, it called for an expansion of the existing exemptions to the anti-circumvention provisions.[11] In 2023, the Copyright Office issued a notice of rulemaking aimed at determining whether or not to adopt certain exemptions to the statutory prohibition on circumvention of technological measures that control access to copyrighted works.[12] The Federal Trade Commission and the Department of Justice’s Antitrust Division submitted a joint comment to the Copyright Office in March of this year, stating that repair-related exemptions promote competition in repair markets, facilitate competition in markets for repairable products, and remove barriers that limit the ability of independent service providers to provide repair services.[13] They warned that technology protection measures can squash competition in secondary and repair markets and expressed support for renewing the exemption “related to computer programs that control devices designed primarily for use by consumers for diagnosis, maintenance, or repair of the device and expanding it to include commercial and industrial equipment.”[14] The Copyright Office’s final rule was issued on October 28 of this year, and included exceptions for “computer programs that are contained in and control the functioning of lawfully acquired equipment that is primarily designed for use in retail-level commercial food preparation when circumvention is a necessary step to allow the diagnosis, maintenance, or repair of such a device . . . .”[15]
What’s That Have to Do with McFlurries?
Across the United States, McDonald’s franchise owners are required to purchase the Taylor C602, an ice cream machine designed specifically for McDonald’s stores.[16] Every time a C602 breaks down, the franchise owner must have a Taylor-authorized technician come to run diagnostics and repair the machine.[17] According to iFixit, one of the parties involved in petitioning the Copyright Office to create exemptions to § 1201, “simple fixes are often stymied by digital locks installed on the machines” by Taylor Company.[18] These digital locks are coded into the C602’s protected software, so § 1201 makes it illegal for third parties to break them.[19]
Practically, this creates a situation in which franchise are left with a choice between allowing the ice cream machines to stay broken, or to call Taylor-authorized repairmen, often at a cost of thousands of dollars per visit.[20] Taylor financial statements indicate that up to 25% of their gross revenue comes from reoccurring maintenance costs.[21] Understanding this makes it easier to see why Taylor uses § 1201 in this way. By squeezing out the market for third-party repairmen, they are able to capture all maintenance costs for the C602 machines.[22]
The Copyright Office’s recently enacted final rule upends this status quo, allowing for franchise owners to repair their ice cream machines without the high costs and wait times of using a Taylor-authorized technician.[23]. The rule has the potential to alleviate a long-vexatious part of McDonald’s operation and represents a win for the “Right to Repair” movement, led by the Electronic Frontier Foundation and Public Knowledge nonprofit, which aims to exempt repair-related activities from the DMCA’s anti-circumvention provisions. [24] The movement aims to get legislation enacted to provide both customers and independent repair services with the ability to repair their own, legally purchased devices.[25]
The newly announced rule does not just apply to McDonald’s, although McDonald’s is one of the noteworthy ‘victims’ of § 1201; it also covers other food device manufacturers and a host of other industries.[26] Nevertheless, advocates for the Right to Repair movement note that there is still an issue preventing adoption of a widespread right to repair: the new rule is limited to allowing the owners of legally-purchased ice cream machines to circumvent the digital locks.[27] We’ll have to wait and see what the practical applications of the new formal rule will be on the consumption of McDonald’s ice cream.
Footnotes
