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Judge rules against Real

DVD software determined to circumvent copyright

A federal judge in San Francisco sided with the majors Tuesday and issued a preliminary injunction barring RealNetworks from selling its DVD copying software and a set-top device in development that could also copy DVDs.

U.S. District Court Judge Marilyn Hall Patel said in her ruling that the RealDVD software and the Facet device in development circumvent CSS, the copyright protection used on commercial DVDs, in violation of the Digital Millennium Copyright Act.

Patel also said Real violated its CSS License Agreement by making permanent DVD copies of copyrighted films. RealNetworks had argued that the software was legal because the company had obtained a CSS license agreement from the DVD Copy Control Assn., the coalition that polices DVD copyright protection.

Patel rejected RealNetworks’ “fair use” argument that the company’s products would merely enable consumers to exercise their right to make personal backup copies of commercial discs.

In a statement, RealNetworks said it was “disappointed” in the judge’s decision to issue a preliminary injunction.

“We have just received the judge’s detailed ruling and are reviewing it. After we have done so fully, we’ll determine our course of action and will have more to say at that time,” the company said.

In a statement, MPAA chairman Dan Glickman called the ruling a victory for creators and producers of movies and TV shows.

“Judge Patel’s ruling affirms what we have known all along: RealNetworks took a license to build a DVD player and instead made an illegal DVD copier,” Glickman said. “Throughout the development of RealDVD, RealNetworks demonstrated that it was willing to break the law at the expense of those who create entertainment content.”

RealNetworks began selling RealDVD last September, and both sides immediately sued each other over the software’s legality. For the week it was available, Real sold an estimated 3,000 copies for $30 each. The software promised to legally allow users to burn up to five backup copies of any commercial DVD to a computer hard drive.

RealNetworks had argued in the preliminary injunction hearing in April that its CSS license allowed it to make DVD copies. Patel disagreed.

She said in her ruling that the company “clearly violated” the agreement by making backup copies that could be played without a DVD in a disc drive.

Moreover, Patel wrote that RealDVD’s backup copies don’t include copy protections mandated by CSS such as CSS authentication and encryption.

Patel wrote the agreement was irrelevant because Real’s products were made to circumvent DVD copyright protections. Real has claimed that RealDVD doesn’t circumvent CSS protection and adds in additional protections on copies. But Patel ruled that isn’t the case: The company uses its CSS license to unlock a DVD and copy it to a hard drive but then doesn’t perform CSS-required authentication and encryption steps when playing back movie copies.

“Real cannot use the CSS License Agreement as a sword to unlock, decrypt and descramble CSS content and then assert this right as a shield against a DMCA violation,” the judge wrote.

The judge did seem to leave open for Real the possibility that Facet, also called Vegas, could have been legal under certain circumstances.

“Had Real’s products been manufactured differently, i.e., if what happened in Vegas really did stay in Vegas, this might have been a different case,” she wrote in her ruling. “But it is what it is. Once the distributive nature of the copying process takes hold, like the spread of gossip after a weekend in Vegas, what’s done cannot be undone.”

(Jennifer Netherby writes for Daily Variety sister publication Video Business.)

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