Storage Technology Corporation v. Custom Hardware Engineering & Consulting, Inc., et al. (United States Court of Appeals for the Federal Circuit) 

In 1998, Congress addressed copyright issues that had emerged with digital media by enacting the Digital Millennium Copyright Act (“DMCA”). The DMCA includes an anti-circumvention provision, 17 U.S.C. § 1201(a)(1)(A), which, in pertinent part, states: “No person shall circumvent a technological measure that effectively controls access to a work protected under this title.” In prohibiting circumvention, Congress struck a balance between the interests of non-infringing users and the owners of copyrighted computer codes that could easily be pirated. The plaintiff Storage Technology Corporation (“StorageTek”) manufactures automated tape cartridge libraries for storing computer data. The libraries are operated via StorageTek’s copyrighted computer code, which, as installed, consists of a functional code that runs the units and a maintenance code that can troubleshoot and maintain the units. StorageTek only licenses the functional code to its customers, expressly excluding the copyrighted maintenance code from the license. Unauthorized access to the maintenance code is prevented by a StorageTek password protection function called “GetKey.” The business of the defendant, Custom Hardware Engineering & Consulting, Inc. (“CHE”), is repairing StorageTek libraries, which it does by circumventing GetKey and using StorageTek’s copyrighted maintenance code without its permission. StorageTek sued CHE in the Federal District Court in Massachusetts on a number of bases, including copyright infringement and circumvention in violation of the DMCA. The district court granted an injunction, which CHE appealed to the Federal Circuit. In its decision vacating the injunction, Storage Tech. Corp. v. Custom Hardware Eng’g & Consulting, Inc., 421 F.3d 1307 (Fed. Cir. 2005), the Federal Circuit panel held that to establish liability under the DMCA a plaintiff must show not only unauthorized circumvention to access copyrighted material but also that the defendant either infringed or facilitated the infringement of the copyright. In so holding, the panel relied on Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178 (Fed. Cir. 2004). Both decisions essentially amended the anti-circumvention provision to contain an infringement requirement that is not stated in the statute itself. StorageTek petitioned the Federal Circuit for a rehearing or a rehearing en banc on several grounds. NELF filed an amicus brief urging the Court to grant StorageTek’s request for a rehearing on the ground that the panel’s rewriting of the DMCA violates basic principles of statutory construction and substitutes the court’s view for what the statute actually says. Since the anti-circumvention provision is unambiguous, the federal courts are bound to enforce it as written. NELF also pointed out that the panel’s interpretation of the anti-circumvention provision, like that of the panel in Chamberlain, renders it entirely duplicative of already existing copyright protections. This is not what Congress intended, and the panel in this case impermissibly tampered with the delicate balance that Congress has struck between the various interests in this area. On December 16, 2005, the Federal Circuit denied Storage Technology’s motion.