The company has opened the first fruits of its Project DReaM software – a DRM architecture, a streaming server and some APIs – to the open source community under the Common Development and Distribution License

Announcing the project at a Progress and Freedom Foundation shindig in Aspen, Colorado on Sunday, Sun president Jonathan Schwartz did not mince words when describing what the company hopes to achieve.

Incredible economic value is waiting to be tapped, Schwartz said, but we must not allow progress to be stifled by clumsy, self-defeating Internet tollgates in the form of a monolithic, closed digital rights management system.

DRM is the hot-button issue where technology and media collide, and a constant source of debate for what could be called the technology rights crowd — Linux-loving geeks and consumer rights policy wonks.

The issue at hand is fair compensation without loss of fair use, as Schwartz succinctly put it. Fair use is an American legal doctrine that says, among other things, that it’s ok to make copies of copyrighted work under certain circumstances.

In the analog world, this often meant backing up albums or movies to tape, but the internet has created a whole new set of rights scenarios, such as copying content to portable devices, to more than one PC, or to CD or DVD.

With the launch of Open Media Commons, Sun is apparently aligning itself with, or at least appealing to, those who believe the advent of widespread DRM represents Big Media’s attempt to dilute the fair use doctrine.

Politics aside, Sun’s plan is to encourage OMC to specify open, royalty-free digital rights management and codec standards. The DRM-OPERA spec it released this week is independent of specific hardware and operating systems and is not restricted to specific media formats, according to Sun.

On the surface, it appears to be another one of Sun’s anything but Microsoft moves, although in the case of DRM, the list of companies Sun is targeting is longer.

Microsoft has its own Windows Media DRM, and is a joint owner, with Time Warner and Thomson, of ContentGuard Holdings Inc, which holds some fundamental intellectual property on rights management.

Apple Computer Inc’s FairPlay, used in iTunes and iPod, is perhaps the best-known DRM. RealNetworks Inc also has DRM in its online music service.

InterTrust Technologies, owned by Sony and Phillips, is another big DRM patent holder. It also claims to have dozens of fundamental DRM patents, and managed to squeeze Microsoft for $440m in license fees two years ago.

InterTrust chief executive Talal Shamoon confessed to being a little perplexed by Sun’s announcement, especially given the fact that Schwartz made the announcement without naming any supporting players.

The whole point of DRM interoperability is that you have people to interoperate with. Is Jonathan Schwartz going to interoperate with himself? he said. Sun would need some support from movie studios to make OMC take off, he suggested.

Shamoon also expressed surprise that Sun announced OMC given that it is already a member of the Coral Consortium, an InterTrust-initiated group that is seeking interoperability between different proprietary DRM frameworks.

Coral has backing from, as the InterTrust connection would suggest, major consumer electronics vendors. It is also supported by the four big record labels. It has about 40 members in total, 10 months after its formation.

For InterTrust, which makes a living licensing its IP, it’s a case of the more DRMs the better. What’s concerning for the company is the fact that Schwartz was quoted yesterday saying the OMC’s specs would work around existing patent collections.

Sun appears to digging deeper into DRM, pushing specs for DRM architectures themselves, rather than just the interoperability glue that allows a song from one music store to be played on the devices of another.

The company has shown in the past that it can successfully rally the open source community to its cause when it needs to, especially when it has a sexy issue like fair use or privacy to ignite the flames of developers’ passion.

The Liberty Alliance, a Sun creation that formed as a hasty countermeasure to Microsoft’s privacy-threatening plans for its Passport single sign-on service, has arguably been a lot more successful than Passport itself.