US Court approves settlement in Sony DRM suit - XCP gone

The Southern US District Court of New York has given preliminary approval to a settlement between Sony and lawyers of a class-action lawsuit brought on by buyers of DRM protected music CDs. Buyers of Sony’s XCP and MediaMax protected discs can either trade in the discs or download MP3 versions of the song. A small cash payment can also be taken by customers.

Last November, a media storm ensued after security researchers discovered some Sony music CDs had "rootkit-like" properties. Several lawsuits were subsequently filed against the the company.

The settlement covers CDs protected by First 4 Internet’s Extended Copy Protection and SunnComm’s MediaMax DRM schemes. XCP has bore the brunt of the press after Mark Russinovich of SysInternals post about the copy protection on his blog. Russinovich inadvertently found the protection after playing with a rootkit detection program that he had written. In the coming days, news outlets around the world picked up the story.

The Electronic Freedom Frontier along with several other organizations filed several lawsuits after the DRM protection was discovered. Many of those lawsuits were combined and handled by the Southern US District Court.

Purchasers of the affected CDs have many options for compensation. First they can just do a swap of their CD with a new version. They can also download the CD as MP3 file, receive an additional download as well as a payment of $7.50. Finally they can choose to download three albums from a list of 200 titles. In addition to direct compensation, Sony agrees to stop producing CDs with either XCP or MediaMax protection.

The lawsuit will still take several months to fully resolve. Corynne McSherry, staff attorney for the EFF, told TG Daily that notices will start going out on February 15th about how consumers can take advantage of the settlement. The final "fairness hearing" will be done on May 22. Postings will be placed in major newspapers and Sony’s corporate website. Even the Rolling Stone magazine will contain one, which McSherry thinks makes a lot of sense. "We think consumers are probably more likely to read the Rolling Stone than something like the New York Times," says McSherry.

McSherry says, "This was definetely a hard fought victory" and adds that there was much give and take at the negotiations table. "So they have agreed to not use XCP or MediaMax, but we couldn’t get them to agree to never use DRM again," says McSherry.

Regardless, DRM opponents will be pleased to note that Sony did agree to allow future DRM schemes to undergo independent security evaluation and to give consumers adequate pre-sale notice that DRM is placed on the disc. Of course that begs the question of what Sony will consider adequate - Will it be stickers or a sign by the rack of CDs ? "We haven’t come to a final agreement on what will constitute adequate notice," says McSherry.

Related stories :
Sony DRM Chronology
EFF Settlement FAQ