Tuesday, August 11, 2009

Court issues preliminary injunction in RealDVD case; solid victory for studios and DVD CCA

The major movie studios and the body that licenses the main DRM technology on DVDs have won another major legal victory in their fight against DVD ripping. In a 58-page opinion, Judge Marilyn Hall Patel -- famous for shutting down Napster a decade ago -- issued a preliminary injunction that keeps in place her temporary ban on RealNetworks' $29.99 RealDVD program, which enables consumers to copy DVDs. Judge Patel concluded that RealDVD violates the provisions of the DMCA that prohibit trafficking in software that circumvents DRM, as well as the license agreement it had obtained from the DVD CCA. Among the significant rulings in her opinion was her conclusion that there is no fair use exception to the DMCA's prohibition on trafficking in anti-circumvention devices -- a position that Real itself had embraced, and on which it had prevailed, in an earlier suit.
RealDVD Preliminary Injunction Order

Judge Patel's opinion appears, at least on the surface, to conflict with a 2007 decision from a California state court on the issue whether the CSS license issued by the DVD CCA permits the licensee to facilitate making permanent copies of DVDs. In a case brought by the DVD CCA against Kaleidescape, the maker of a high-end DVD server, a Santa Clara County Superior Court judge held that a document called the "General Specifications," which include a requirement that the DVD be present in the device during playback, is not part of the CSS license. (That decision is now on appeal.) But Judge Patel ruled that the General Specifications are part of the CSS license (see p. 44). Her opinion says that she "does not deem this finding in conflict with the
Kaleidescape holding, which involved different facts and a different party." Perhaps I'm missing something, but I simply don't see how the two decisions are reconcilable on this point.

While today's decision involved only the issuance of a preliminary injunction, and theoretically Real could achieve a different result at trial, Judge Patel's opinions were definitive and strongly-stated, and it seems unlikely that new evidence or arguments would emerge that could persuade her to change her mind. Real has asserted affirmative antitrust claims, which remain pending.

The MPAA issued a statement through its Chairman and CEO Dan Glickman praising today's decision:
We are very pleased with the court’s decision. This is a victory for the creators and producers of motion pictures and television shows and for the rule of law in our digital economy. 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. Throughout the development of RealDVD, RealNetworks demonstrated that it was willing to break the law at the expense of those who create entertainment content.

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.
Predictably, Real was not pleased:
We are disappointed that a preliminary injunction has been placed on the sale of RealDVD. 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.
Here's an op-ed piece I wrote back in April for the San Jose Mercury News, explaining why this case is important to the studios. And here's my previous coverage, which includes links to many of the briefs.


  1. Back in April, I remarked that I expected Real would have trouble in a number of points. Not being an attorney, I didn't expect to be right on so many of them! But in a quick read, the Court appears to have agreed that:

    1. "Authorized copies" are the ones the copyright owner decides should be made.

    2. ARccOS and RipGuard are indeed effective methods protected by DMCA for all the same reasons I mentioned, including that it took Real over a year to break them and that it would be nonsensical to expect the law would only protect methods that could not possibly be broken by any means whatsoever.

    3. The CSS license is probably a contract of adhesion but when Real entered the agreement, it concealed its intent to build a copying device it knew DVD CCA viewed as prohibited by the license. (And, btw, this may be the difference between the Kaleidescape and RealDVD cases: When Kaleidescape entered the agreement, they did not know DVD CCA's position regarding playback without a physical disc in the drive. After all, as the Court found, DVD CCA consistently refuses to offer any advice or explanation re: the license. But by the time Real entered the license, DVD CCA had already sued Kaleidescape and Real definitely did know that DVD CCA did not view this as authorized by the license.)

    4. RealDVD does not comply with the CSS license because they do omit the handshake with the DVD drive when playing back from the hard disk.

  2. When will this unconscionable DVD CCA license be overturned? Imagine for a moment if the music industry operated under the same terms.

    All the CDs you had purchased? Useless. Couldn't use them with your ipod or other mp3 player. In this way innovation is being stifled.

    Do consumers see any difference between a CD and DVD, other than one is audio and one is video? No.

    Let's not forget the absurd demonstration concocted by the DVD CCA and MPAA lobbying for no educational fair use exception for bypassing CSS at the last Copyright Office hearings. Their solution for educators? Set up a video camera and point it at a television screen to capture the video for educational purposes. What teacher has time (or expertise) to setup such an elaborate artifice?

    Finally the DVD CCA is an inappropriate cartel, receiving legal protection from antitrust plaintiffs under such ill-conceived laws as 15 USC 4301 etc, as evidenced by its numerous appearances and filings on the Federal Register.


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