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RealNetworks, Studios File Counter Suits Over DVD Copying

30 Sep, 2008 By: Erik Gruenwedel

Digital media company RealNetworks Sept. 30 filed a pre-emptive federal lawsuit against the major studios and DVD Copy Control Association seeking court approval for software that allows users to legally copy commercial DVDs to their PC.

The studios, via the Motion Picture Association of America, shortly thereafter filed a counter suit in L.A. District Court seeking a temporary restraining order preventing sales and distribution of RealDVD, which went on sale online the same day for $29.99.

The studios also seek unspecified damages.

Seattle-based RealNetworks touts the software, which it claims is compliant with CSS encryption, as ideal for consumers who want flexibility, less clutter and a lower risk of damage to their store-bought DVDs.

The suit, filed in San Francisco District Court, seeks declaratory judgment against the DVD Copy Control Association, Disney Enterprises, Paramount Pictures Corp., Sony Pictures Entertainment, 20th Century Fox Film Corp., NBC Universal, Warner Bros. Entertainment and Viacom.

“RealNetworks took this legal action to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs,” the complaint said.

In addition to CSS encryption, RealNetworks said the software includes an additional layer of digital rights management that it said effectively locks the DVD copy to the user’s PC, disallowing illegal copying and file sharing on the Internet.

“We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases,” RealNetworks said.

The MPAA said RealDVD violates provisions of the Digital Millennium Copyright Act by illegally bypassing copyright protections included in movie DVDs to safeguard against illegal copying and file sharing.

“RealNetworks’ RealDVD should be called StealDVD,” said Greg Goeckner, EVP and general counsel for the MPAA.

Goeckner said RealDVD undermines “hard-won trust” between the studios and technology companies, in addition to studios’ investments in video-on-demand (VOD), download-to-own and digital copies increasingly featured with DVDs and Blu-ray Disc releases.

The suit contends consumers could rent movies from Blockbuster and Netflix and illegally copy them to their computers in a practice called “rent, rip and return.”

The MPAA said RealNetworks acknowledges on its own Web site that its software could be used for illegal purposes.

“We will vigorously defend our right to stop companies from bringing products to market that mislead consumers and clearly violate the law,” Goeckner said.

Richard Doherty, media analyst with The Envisioneering Group in New York, said he expected the litigation following RealNetworks’ announcement of the software Sept. 8 and subsequent press that characterized it as an illegal ripping program.

He said the majority of the $30 retail price goes toward satisfying the various license agreements. Doherty said he believes the technical sides of the studios understand RealDVD compared to the legal departments.

“This is a 100% legal product,” Doherty said. “It’s the lawyers who started [the litigation].”

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