The issue is among the top concerns of intellectual property (IP) experts who gathered for a panel discussion at the Consumer Electronics Show here Monday (Jan. 8). In a wide-ranging discussion, some members of the group called for an end to digital rights management technologies and said Internet darling YouTube may face legal action this year.

Companies including AT&T, Dell, Hewlett-Packard, Intel and Verizon will ask the World Intellectual Property Organization to narrow the scope of a draft treaty granting broadcasters broad intellectual property rights on the content they carry. The tech giants want to revise the proposal to reflect US laws that only address remedies for theft of broadcast content. They don't want to pay a new tier of royalties for music and movies beyond what is already due to content owners.

The issue will come to a head in meetings in mid-January in Geneva. The treaty comes up for final approval in the fall.

"This is a critical time for technology companies to get focused because people are trying to come to a consensus," said Sarah Deutsch, associate general counsel for Verizon, and a member of the CES panel. "The WIPO wants to push this ahead," she said.

In addition to this effort, the European Commission is reviewing its position on how private companies handle IP rights.

"There are lots of IP issues, but most of them are outside the US right now," said Don Whiteside, director of technology policy and standards at Intel Corp, another panel member.

A huge policy issue for all of us is how people redefine secondary liability. People could be sued for just passing through [illegal] content," added Whiteside.

Two members of the panel took the extreme position that digital rights management (DRM) technologies only hinder digital media adoption and should be abolished.

"All the advantages are with the pirates. That's why the studios are openly considering dropping DRM embracing the MP3 format," said Joe Fleischer, vice president of sales and marketing for Big Champagne (Beverly Hills), an online research company.

"DRM is like pimple cream, it may make you feel better, but it won't change what you are doing, so you can use as much as you like," Fleischer added.

Ashwin Navin, president of the Internet video distribution service BitTorrent, agreed. "I think any home network with DRM won't get off the ground. We use only open protocols and no DRM," he added.

Deutsch and Whiteside disagreed, pointing to successful models such as the Apple iPod and Verizon music service where DRM works. However, all sides agreed there is little hope for interoperability between DRMs given the heated competition between Apple and Microsoft who are behind two of the most widely used DRMs in the industry.

"The main players could with a single bilateral agreement have DRM interoperability today," said Whiteside. But "getting the main players to be willing" is the rub, he added.

"Microsoft and Apple are not DRM companies and have no incentive to interoperate," said Fleischer.

"It will be interesting to see what Apple does with the multi-vendor living room," said Jim Ramo, chief executive of online film retailer MovieLink, another panel member.

Internet video site YouTube has learned key lessons from more contentious digital media startups such as Napster, but is still under a legal cloud, said Fleischer. Both BitTorrent and YouTube are cooperating with copyright holders by taking down any illegally copied content once they have been informed of its presence, and YouTube is now creating filters in an effort to keep out pirated material.

But such efforts are doomed to failure given the wide variety of pirated materials and ways of avoiding detection, said Fleischer. The real issue is figuring out how to compensate for the performance, composition and master rights of video, he said.

"YouTube is trying to play ball, but the real show begins when the filter system breaks. That's when the real issues will come up," he said.

No one wanted to sue YouTube when it was a standalone company with no profits, but now that it has been acquired by Web giant Google, legal action is more likely, added Ramo.

The law does not require filters, but people are putting them in practice now, said Deutsch. "The question is will filters work, how effective will they be and will others follow suit in suing them," she said.

Panelists generally doubted that lawmakers will try to update copyright legislation as formulated by the Digital Millennium Copyright Act (DMCA). "If we opened up copyright law it might lead to more digital freedoms, but it also opens the door to DRM or other technology mandates," said Deutsch.

"I don't think you can pass a fair-use bill without throwing out the DMCA. It's a Gordian knot," said Whiteside.

"Every piece of information will move to the Internet including medical records and digital media, so the tools and policies we decide on have huge implications for how we work, live and vote," concluded Whiteside. "We need solutions that evolve with usage scenarios, and that's why I am staunchly opposed to government mandates," he said.