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Another DVD copying program bites the (courtroom) dust

August 11, 2009 |  8:48 pm

U.S. District Judge Marilyn Hall Patel handed another important legal victory to the entertainment industry today, issuing a pretrial injunction that bars RealNetworks from manufacturing or selling its RealDVD disc-copying program on the grounds that it violates federal and state laws. (You can download the decision here.) Patel -- the jurist who made the initial ruling against the Napster music-sharing networkin 2000 -- held that Real's license from the DVD Copy Control Assn. to make DVD-playing software did not authorize it to create copies that removed the discs' restrictions on playback and copying. She also ruled that Real violated its contract with the DVD CCA, and that it had bargained in bad faith. In short, she rejected virtually every aspect of Real's defense.

The injunction, if it isn't overturned on appeal, also makes it all but impossible for Real to proceed with plans for a home video jukebox that can copy and store people's DVD collections onto a hard drive. Real had hoped to develop a mass-market version of Kaleidescape's high-end movie storage and playback system. The DVD CCA had sued Kaleidescape for breach of contract, only to lose in state Superior Courttwo years ago. But the major Hollywood studios sued Real for allegedly violating not only the DVD CCA contract, but also the anti-circumvention provisions of the 1998 Digital Millennium Copyright Act.

Patel's holding on the DMCA claim...

... was consistent with the 2004 rulingby another federal judge in San Francisco against 321 Studios, the maker of DVD-copying software. But there was an important difference in the two cases: Real had a license from the DVD CCA to make software that decrypts and plays DVDs, while 321 Studios did not. That license, Real argued, meant that it wasn't circumventing anti-piracy technologies on DVDs in violation of the DMCA -- it was using the keys that it was authorized to use. But Patel sharply disagreed, saying that the license barred Real from enabling the disc's contents from being played unless all of the original protections were still in place.

Her ruling is bad news for any manufacturer hoping to make a video jukebox that enables people to rip their movies onto a hard drive the way they do their CDs. According to Patel, the terms of the license require that the keys to unlock a movie come from the original disc at the time of playback. It didn't matter that Real added a more effective anti-piracy technology to the copies it made; all that mattered was that Real removed the original limits on access and copying. Her explanation underscored the sweeping powers the DMCA gave to copyright holders to use electronic locks to set the terms for how their works are consumed:

The statute is not, as Real asserts, solely intended to thwart hackers. Rather, it provides broad statutory protection against circumvention of technological measures that protect the interests of copyright owners. This includes any form of unauthorized use — not just “breaking” — of a technology such as CSS [Content Scramble System, one of the anti-piracy technologies on DVDs], which requires the application of information or a process with the authority of the copyright owner, to gain access to copyrighted works.

Patel gave a strongly worded defense of an individual's ability to make fair-use copies of DVDs, writing:

The purpose of copyright law, and the fair use that copyright law embodies as an exception to protection, is not to protect the business model of any particular company. The court will not hold that consumers do not have the “fair use” right to make copies of CSS-protected DVD content simply because the DVD CCA would be harmed by such use of its licensed works.

But she also held that the DMCA barred companies from making tools to enable that copying, regardless of the public's interest in making legal uses of copyrighted works:

Whether the public interest would best be served by continuing to enjoin Real from making its products available to consumers, and protect the Studios’ rights at the expense of the consumers’ rights, to engage in legal downstream use of the Studios’ copyrighted material is an excellent question. It is also one the court does not and will not reach, because the statutory structure of the DMCA leaves no room for ambiguity. By making it a DMCA violation to distribute products that enable consumers to override copyright owner preferences against unauthorized copying, Congress determined that the public interest is best served by outlawing such products.

According to Patel, when Congress enacted the DMCA's anti-circumvention provisions, it tipped the balance of interests in favor of copyright owners:

There is always a struggle between pleasing copyright holders and copyright users. The DMCA represents Congress’ attempt at a balance to preserve ownership rights protection for companies and artists in the face of the modern reality of a digital world with an increasingly technologically-savvy population. In some circumstances, the law can choose to value the right of public access to unavailable copyrighted works more heavily than the property rights of the owners of those works. However, the reach of the DMCA is vast and it does not allow courts the discretion to make this assessment and render a value judgment untethered from the language of the statute. In the words of Justice Cardozo, “[l]aws are not to be sacrificed by courts on the assumption that legislation is the play of whim and fancy.” People ex rel. Alpha Portland Cement Co. v. Knapp, 230 N.Y. 48, 62 (1920).The court is bound by the DMCA provisions at issue, even if it determines the extent to which innovative technologies realize their future potential.

In other words, Patel interprets the DMCA as giving copyright holders the power to act as technology gatekeepers, particularly where innovations in the consumption and distribution of copyrighted works are concerned. It's a chilling thought. In his response to the ruling, MPAA Chairman Dan Glickman sought to downplay that aspect, portraying RealDVD as a willing lawbreaker and the studios as friends of new technology:

The creative community has been teaming for years with an array of technology partners to expand consumer choices for enjoying movies, TV shows and other content in diverse ways.  This includes free streaming, on demand rentals, purchased downloads, as well as DVD bonus digital copies of entire TV shows, series and feature films. We are committed to advancing the consumer experience through technology while sustaining the creative community that makes the movies and TV shows we love.  This will continue to be our member companies’ focus, and we look forward to continuing to make constructive progress in those areas.

Not surprisingly, Glickman didn't mention that the studios have been dragging their feet for years on proposals from technology companies to let people create home video jukeboxes and make personal-use copies of the discs they buy. There are non-trivial business issues involved (for example, how to prevent people from copying rented discs), but the lack of progress after literally years of inter-industry talks suggests that Hollywood isn't really interested in that particular avenue of innovation.

Real issued a perfunctory statement this evening, saying it was disappointed with the preliminary injunction and still considering its next move.

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

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