full-disclosure - Is the record industry turning to Trojan horse programs to copy-protect CDs?

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From: rms at computerbytesman.com (Richard M. Smith)
Subject: Is the record industry turning to Trojan horse  programs to copy-protect CDs?

Analysis of the MediaMax CD3 Copy-Prevention System
http://www.cs.princeton.edu/~jhalderm/cd3/

Abstract.  MediaMax CD3 is a new copy-prevention technique from SunnComm
Technologies that is designed to prevent unauthorized copying of audio CDs
using personal computers. SunnComm claims its product facilitates "a
verifiable and commendable level of security," but in tests on a
newly-released album, I find that the protections may have no effect on a
large fraction of deployed PCs, and that most users who would be affected
can bypass the system entirely by holding the shift key every time they
insert the CD. I explain that MediaMax interferes with audio copying by
installing a device driver the first time software from the CD is executed,
but I show that this provides only minimal protection because the driver can
easily be disabled. I also examine the digital rights management system used
to control access to a set of encrypted, compressed audio files distributed
on the CD. Although restrictions on these files are more relaxed than in
prior copy protected discs, they still prohibit many uses permitted by the
law. I conclude that MediaMax and similar copy-prevention systems are
irreparably flawed but predict that record companies will find success with
more customer-friendly alternatives for reducing infringement.

Windows has a feature called "autorun" that automatically starts programs
from CDs when they are inserted into the computer. If a MediaMax-protected
CD is placed in a PC that has autorun enabled, Windows runs a file called
LaunchCD.exe located on the disc. This program provides access to the
DRM-controlled encrypted content, but it also loads a special device driver
into the system's memory. On Windows 2000/XP, this driver is called SbcpHid.
The LaunchCD.exe program also presents an end user license agreement (EULA).
If the user ever clicks Accept to agree to the terms of the license, the
MediaMax driver is set to remains active even after the computer is
rebooted. The driver examines each CD placed in the machine, and when it
recognizes the protected title, it actively interferes with read operations
on the audio content. Similar methods are used to protect the tracks on
Windows 98/ME and Mac OSX systems.