Microsoft and Intel's much-feared "Trusted Computing" initiative seems to not have gotten off the ground, but smaller-scale efforts have become much more common in the last few years. Manufacturers can now regulate after-market behavior with chips and cryptography, which can create much more specific and onerous burdens than the old tools: licenses, contracts, and mechanical design. These restrictions are making their way into music, videos, phones, printers, cars, you name it.
In a 2002 New York Times column, economist Hal Varian argued that these techniques cause prices to go up in uncompetitive markets. But, more insidiously, they stifle innovation, as demonstrated by the following example (among others). In an effort to make more money selling ink cartridge, some printer manufactuerers have added chips to ink cartridges preventing operation if the cartridge has been refilled by a third party.
A hot area of computer-chip research design involves taking off-the-shelf inkjet printers, loading the cartridges with magnetic ink and squirting integrated circuits onto metalized plastic. That technology may revolutionize integrated circuit production — but it definitely requires using products in ways the manufacturer didn't intend.
That sort of thing will be simply impossible if digital rights management becomes commonplace.
These measures create many roadblocks for experimentation. The real shame is that by doing so they make innovation a lot less attractive for all but the most powerful people and organizations, those who can pay their way around such restrictions before even starting. Total control of inventions by their manufacturers may be the death knell for the legend of the inventor in the garage.