Judge Bars RealNetworks From Selling RealDVD

     (CN) – Hollywood studios won a round in their fight to stop RealNetworks from selling software that lets users copy and save DVDs onto their computer hard drives. A federal judge in San Francisco kept in place an order barring the Seattle-based software company from distributing its RealDVD software.

     The $29.99 software lets users rip and store DVDs on up to five computers. Users can use RealDVD to copy rental films and other borrowed DVDs.
     On Sept. 30, 2008, RealNetworks sued the DVD Copy Control Association and several major film studios – including Disney, Paramount and Viacom – seeking a court declaration that RealDVD didn’t breach the company’s license agreement and didn’t violate the Digital Millennium Copyright Act (DMCA), a federal anti-piracy law.
     That same day, several studios filed suit in federal court in Los Angeles, asserting the opposite: that RealDVD is an illegal pirating tool.
     Four days later, U.S. District Judge Marilyn H. Patel issued a temporary restraining order halting the software’s distribution.
     The studios feared that RealDVD would illegally cut into the DVD sale and rental business, an industry that raked in more than $15 billion in 2007.
     The studios also took issue with RealDVD’s capacity to work around anti-piracy technology, known as CSS. Copies made and stored by RealDVD don’t include the CSS protections, but they do preserve content encryption. And RealDVD adds an advanced encryption to its saved DVD copies, which is far more secure and difficult to crack than CSS, according to software experts.
     RealDVD was also designed to eliminate the errors intentionally embedded by ARccOS and RipGuard, additional copy-protection software used by some studios. These programs insert physical or logical errors onto a DVD that can’t be detected by a regular DVD player, but that show up when users try to copy and save the protected DVDs. Studios have paid tens of millions of dollars over the past four years to protect their content using these systems.
     Judge Patel found that CSS technology still effectively controls access to DVD content, even though the system has already been cracked by hackers, as RealNetworks pointed out.
     She said studios appeared likely to win on their claim that RealDVD was designed to circumvent CSS protections. “Real[Networks] has admitted its intent upon initial development was to create a software product that copies DVDs to computer hard drives so that the user does not need the physical DVD to watch the content,” Patel wrote. “This unauthorized access infringes the Studios’ rights because it entails accessing content without the authority of the copyright owner.”
     The judge said the studios had legitimate claims over RealNetwork’s alleged circumvention of the CSS technology and breach of contract.
     She said it didn’t matter that RealNetworks legally licensed the CSS technology, because RealDVD only uses those protections once, when the user first inserts a DVD; all subsequent copying, saving and accessing circumvent CSS technology.
     “RealDVD does not escape liability because it abides by CSS technological measures only upon initial insertion of a DVD,” Patel wrote.
     The judge also rejected RealNetworks’ claim that the Digital Millennium Copyright Act, meant to stop classic hackers, does not apply to RealDVD.
     “This reasoning is flawed,” she wrote, adding that RealNetworks failed to show that its customers – and the products themselves – have legitimate purposes.
     Patel said that while individuals had the right to copy their own DVDs onto their computers, “a federal law has nonetheless made it illegal to manufacture or traffic in a device or tool that permits a consumer to make such copies.
     “In enacting DCMA, Congress chose to strike a balance to combat piracy and maintain economic incentives to create,” Patel explained. “The balance embodied in a federal law is not something this court can disturb.”
     She converted the temporary restraining order into a preliminary injunction against RealNetworks.

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