Prof. Pasi Tyrvainen at the University of Jyväskylä has written an article on "Concepts and a Design for Fair Use and Privacy in DRM" published in the February issue of D-Lib Magazine. The article is well worth reading.
[Some background material on Fair Use can be found at various places on the EFF web site, including the Fair Use FAQ and their view of Fair Use and DRM. The sources cited in Fair Use are also useful references for those wishing to dig deeper. Tyrvainen's article has a good academic-style set of references as well.]
Among Tyrvainen's main points are that it's possible to implement DRM applications that take into account most of the Fair Use contexts recognized under US law.
There are other solutions to the problem of DRM and Fair Use other than Tyrvainen's solutions (some cited by Tyrvainen and listed in his bibliography). For example, among other things discussed in this InterTrust patent [large file warning] is the notion of "membership cards," which, as a first approximation, might best be understood as file that represents a user's membership in some class: AARP members, faculty and students at Stanford, a library card, or an employee of Time Warner.
The membership card can expire [no longer an AARP member], be checked for authenticity and integrity, and, in some instances, revoked for whatever reason, although revocation is not guaranteed and takes some resources to effect.
Some membership cards can represent Fair Use contexts. On behalf of rightsholders, a "research" or "education" context membership card can be issued to faculty and and students. A DRM system can check to see if a valid research membership card is present on the computer of the user requesting access, and if so, allow use without charge. If there is not such a membership card because the person is an employee of Time Warner, then the appropriate charge is made.
Regardless of implementation, Prof. Tyrvainen and I agree that DRM and Fair Use are not inherently incompatible.
