Prepaid cellular phone seller sues over DMCA exceptionDecember 6, 2006

TracFone Wireless, the largest seller of prepaid cellular phone service in the United States, has sued the Librarian of Congress and Register of Copyrights, alleging that one of the DMCA exemptions granted last month is unlawful. Specifically, TracFone is upset about the exemption permitting cellular phone users to "unlock" their phones in order to use them with another service provider.TracFone makes money by selling phones at fairly low prices and charging more for cellular service to make up the losses on the phone sales. TracFone has sued companies that "unlocked" their phones in the past, alleging violation of the DMCA.In its complaint, TracFone alleges that the exemption violates the Administrative Procedure Act, the Due Process Clause, and violates the principle of separation of powers. The first two allegations are based on TracFone's assertion that it did not get adequate notice and opportunity to comment on the proposed exemption. The separation of powers argument essentially argues that permitting the Copyright Office to provide these exemptions is an unconstitutional delegation of legislative authority by Congress.The third assertion is the most interesting, as if TracFone is successful in its separation of powers argument, then all DMCA exemptions granted by the Copyright Office would likely be nullified on the same grounds.