Business Industry

Congress Makes Unlocking Smartphones Legal

License agreement

This week, the Congress approved a bill allowing anyone to unlock their cell phones, regardless of restrictions may have been required when signing cell phone contracts. The Senate passed a similar version earlier in the month and President Obama will soon add his signature. Given the ease at which this Bipartisan bill passed, maybe its time for Congress to take another step and help limit other onerous clauses in the terms of service and license agreements consumers sign in order to access most services on the web.

When signing a cell phone contract, customers often received free or discounts on smartphones. Cell phone carriers created the unlocking provisions as a means of keeping customers from switching to another provider. The phone essentially remained the property of the cell phone carrier, with the customer receiving only a license to use the phone. Regardless of whether the customer broke their contract or had fully completed their contract, they couldn’t use their phone with another provider.

Each cell phone carriers tied its smartphones to its own network contractually; leaving cash strapped consumers with little choice but to stay with their carrier.

The Library of Congress Made the problem even worse

Then in 2012, the Library of Congress (LOC) created a legislative rule that made it illegal to unlock a cell phone without a service provider’s permission. The rule had heavy monetary penalties and, potentially, time in prison. Now, the Unlocking Consumer Choice and Wireless Competition Act reverses that ruling, although only temporarily. In 2015, the rule goes back to the LOC for reconsideration, where this Congressional action can be overturned. Reconsideration will be reviewed every three years. We can only hope that the LOC won’t return to such a nonsensical rule.

Having found an issue that this divided Congress was actually able to pass, Congress should take another step and tackle other burdensome licensing requirements, particularly those that unnecessarily require consumer’s to give up intellectual property rights as a prerequisite of membership. Various social media, photo-sharing, blogging or any other site that include user generated content, and the user will be required to sign an End User License Agreement (EULA), which often include clauses that are unnecessary.

Facebook, for example, gains the right to a user’s content which can be used outside of Facebook, including any photos or videos posted. Below is a clause from the Facebook EULA:

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

Posting a photo set to “public” viewing, gives Facebook the right to use that photo in any way they like.

License Agreement

Facebook can also give it to someone else, such as an advertising agency, as long as the use has something to do with Facebook.   Facebook’s license isn’t perpetual as it ends when the user deletes the photo. Except, if someone had shared that photo, then Facebook maintains the license until the shared copy is deleted. Even if the user deletes their account, Facebook still maintains the unhindered right to use that photo.

Some people would say, “if you don’t like the policy, then don’t join. Facebook can do what it wants with its own company.” That may be true, and if the problem lay only with Facebook, it wouldn’t be such an issue. Unfortunately, many sites have the same type of EULA, and in our Internet driven society, it is not practical to boycott all of them. Most consumers aren’t even aware that they are giving up those rights or which sites to avoid. It isn’t realistic to expect consumers to read every EULA, Privacy Policy or Terms of Service. Many of these policies are long and filled with legal jargon that many consumers wouldn’t fully understand. So instead, users click the “agree” box, move on and hope for the best.

In many cases, it is the lesser of two evils. As a photographer, I find it useful to upload photos to Facebook for many reasons, such as promoting my gallery shows. For me, the benefit outweighs the risk, but is that risk really necessary. Does Facebook really need an unlimited right to my work, or are they using their market dominance and power in the market to take advantage of people. For many people and small businesses, Facebook is an important tool for cost effectively reaching their customers. Facebook know that so adding clauses like the one mentioned earlier may aggravate people, but it won’t stop them from using the service.

To be fair, while companies like Facebook have these rights grabbing clauses, there is some self-regulation due to the public outcry that would occur should they use those rights to their fullest. Whether companies will always be worried about the potential PR backlash remains to be seen. Corporate management can be replaced causing a shift in corporate culture and attitudes. Even Steve Jobs was kicked out of Apple before they begged him to return.

Maybe these companies will remain tempered but would anyone be shocked if Facebook used user content in a way that the user didn’t like?

Allowing user to unlock their cell phones may seem like a small prize, but it is still a win against nonsensical or burdensome contractual licensing clauses. If consumers are lucky, maybe Congress can take that idea a little further and give consumers control over their online content as well.


About the author

Steve Schlackman

As a photographer and Patent Attorney with a background in marketing, Steve has a unique perspective on art and law. Should you have any questions on Intellectual Property contact him at [email protected] His photography can be seen online at or on display at the Emmanuel Fremin Gallery in New York City.

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