Is it illegal to “unlock” your phone? Why?

March 6, 2013

Law and technology

(Editor’s Note: Throughout the month of March, we’ll be looking at issues involving both the law and technology, whether on the large scale or down to the small scale of an individual practice).

Earlier this week, the White House declared that the “unlocking” of cell phones should be legal.

“Unlocking” is the modification of a phone’s firmware or software to allow the phone to connect to a different wireless carrier than from whom the phone was originally acquired.

Why is the White House concerning itself with such an issue?  Because a petition on the White House’s website requesting that cell phone unlocking should be legal reached the 100,000 signature threshold to elicit a response from the White House.

And, as stated above, the White House agreed.

But people have been unlocking their phones for years. Why is this now suddenly an issue?

Because the U.S. Copyright Office, part of the Library of Congress, issued a final ruling in October of 2012 that disallowed the practice under copyright law beginning on January 26, 2013.  After that date, unlocking your phone would be considered copyright infringement under the Copyright Act, and doing so would make one liable for civil and criminal sanctions.

You may be asking what your phone has to do with copyright law.  But it isn’t the copyright on the phone itself that’s at issue here; it’s what’s inside the phone: the aforementioned firmware (the phone’s underlying operating system) or software that is modified to allow the switching of carriers.

The programs and systems on your phone are protected by copyright – as are nearly all other forms of computer programming.  Nevertheless, considering that the Copyright Office had previously allowed cell phone owners to unlock their cell phones, the fact that the phone’s programming is copyright protected isn’t a barrier to unlocking per se.

Instead, the issue is who actually owns the copyright for the stuff on your phone.

And what the Copyright Office found on this issue is likely a much greater step backwards for consumers than the ruling outlawing phone unlocking: although it labeled it a “close call,” the text supporting the rule change seemed to indicate that the Copyright Office was increasingly of the persuasion that the programming on a phone is owned by the wireless carrier that issued it, and the consumer that owns the phone itself has only a license to the software.

The major limitation of this license is that the physical phone’s owner has no right to modify the phone’s firmware or software without express authorization of the wireless carrier.

There’s still some hope, though: the rule did explicitly say that, “some subset of wireless customers – i.e., anyone considered to own the software on their phones under applicable precedent – would be entitled to exercise the Section 117 privilege [that is, unlock his or her phone]. “

The rule also explicitly referenced the 2005 ruling from the Second Circuit Krause v. Titleserv, Inc. as supporting the notion that the physical owner of a phone also owns the copy of any programming that comes installed on the phone – and as such, those owners would be legally entitled to unlock their phones.

On the other hand, the ruling also mentioned the much more recent Vernor v. Autodesk, Inc, decided in 2010 in the Ninth Circuit, to support the opposite conclusion than that of Krause.

So where does the Copyright Office stand?  That “the state of the law – and its applicability to mobile phone software – remains indeterminate.”

It seems likely, however, that this new rule does not apply to the Second Circuit, assuming, of course, that a court agrees to follow Krause’s precedent.  For everyone else, though, it is undoubtedly illegal to jailbreak your phone (if purchased after January 26, 2013).

The good news is that the Copyright Office reviews these rules every three years, and the Office’s justification of this latest rule has demonstrated at least some willingness to be open-minded in its decisions.

The bad news is that the more recent of the two rulings on this issue may suggest an overall trend away from consumer ownership of the software on their phones, and, should this trend indeed emerge more evidently, the Copyright Office will likely follow suit in future rulings.

Hopefully, the petition and the White House’s reaction to it are an indication that public opinion is firmly on the side of broader consumer ownership rights for the products that they pay for, and that sentiment will counter or reverse any opposing trend.