RealNetworks battles studios

Company claims majors violated antitrust law

Just as a judge is set to rule on the legality of RealNetworks’ DVD copying software, RealNetworks has filed a new charge against the majors, alleging they violated antitrust law by banding together to fight the vid-copying software.

Real filed its amended complaint Wednesday in federal court in San Francisco. It claims that the six major studios have violated the Sherman Antitrust Act, the California Cartwright Act and the California Unfair Competition Law by collectively licensing their DVD encryption technology through the DVD Copy Control Assn., of which the majors are all members.

The RealNetworks complaint maintains that the DVD Copy Control Assn. (DVD-CCA) will grant a Content Scramble System encryption license to a company only if all of its members approve. The Content Scramble System (CSS) is the protection included on commercial DVDs to prevent copying. The DVD-CCA licenses CSS to hardware and software companies to manufacture DVDs.

RealNetworks was given a license from the DVD-CCA for its RealDVD software, and RealNetworks argues that this makes the software legal since the DVD copy that the software makes also contains CSS copy protection. But the studios have argued in their suit against RealNetworks that the license doesn’t give RealNetworks the right to offer software that allows users to make backup copies of movies on DVD.

In its latest filing, Real is alleging that the studios are using CSS to maintain a monopoly and claims consumers have a “fair use” right to make a copy of DVDs they own.

“The CSS License Agreement is being used to extend a legally granted monopoly over content into separate markets — to prevent competition from technologies that would allow a copy of content for fair use purposes,” Real alleges in the complaint.

In the amended complaint, Real is asking for an injunction to block what it describes as studio antitrust practices and monetary damages for lost business.

Closing arguments in the hearing on the studios’ request for a preliminary injunction on the RealDVD software are set for May 21.

(Jennifer Netherby writes for Daily Variety sister publicationVideo Business.)