RealNetworks, Inc. v. DVD Copy Control Ass'n

This case involves the digital media company RealNetworks, DVD Copy Control Association (DVD CCA) and the major motion picture studios. RealNetworks licensed the Content Scramble System (CSS), a technology commonly used on copyrighted DVDs to prevent unauthorized copying, from DVD CCA and released the product RealDVD that allows users to make hard drive copies of copyrighted DVDs. However, some major movie studios feel that RealDVD can threaten the emerging market in digital downloads and encourage people to make copies of rental DVDs instead of purchasing. RealNetworks, on the other hand, believes that copying of DVD is now legal after the favorable ruling of a 2007 California Superior Court case against Kaleidescape, a manufacturer of high-end media servers capable of copying copyrighted DVD content to the servers. Therefore, RealNetworks sued the DVD CCA and several major movie studios on September 30, 2008 seeking for a declaratory judgment that RealDVD neither violated the Digital Millennium Copyright Act (DMCA) nor breached the licensing contract with DVD CCA. On the same day, the studios sued RealNetworks by alleging that RealNetworks violated the DMCA and breached the contract. == District court ruling ==

The district court issued a temporary restraining order on October 3, 2008 after the initial hearing of the case to prevent the sale and distribution of RealDVD. The temporary restraining order was turned into a preliminary injunction against RealNetworks on August 11, 2009 by Judge Marilyn Hall Patel, barring the manufacturing and distribution of RealDVD or any other similar software product after the court found that RealNetworks violated the DMCA and breached the CSS licensing agreement with DVD CCA. DMCA claims on Content Scramble System The DMCA prohibits circumvention of "effective" access control of copyrighted works and the trafficking of tools that are designed primarily to circumvent "effective" access control or copy control of copyrighted works. RealNetworks alleged that that CSS is not effective anymore because it has been cracked or hacked. However, the court ruled that the DMCA statute does not require the access control or copy control technology to be strong as long as it prevents unauthorized access and/or copying under ordinary course of operation and with the authority of the copyright owner. Since the court concluded that CSS is still effective for ordinary uses, the DMCA claim against RealNetworks is valid. Breach of license agreement RealNetworks argued that it fully complied with the CSS license agreement not only by preserving all of the associated protection but also by adding Advanced Encryption System (AES) encryption to the copied content so that only the person who made the copy can play back the copied content with RealNetworks' player. However, the court decided that preserving the CSS protection only once during the initial playback of the DVD is not enough and any subsequent absence of CSS technology during the playback of copied DVD content from the hard drive is a contract violation. However, the court dismissed the claim because consumer can get the same hard drive copies through digital downloads, and some DVDs even come with an additional, non-CSS encrypted DVD that allows the users to copy the content onto the hard drive. Also, even if RealNetworks is able to obtain a license to circumvent CSS, RealNetworks still violated the DMCA for circumventing ARccOS and RipGuard. == Subsequent development ==

In November 2009, RealNetworks filed an appeal to the United States Court of Appeals for the Ninth Circuit, asking to remove the injunction on the sales of RealDVD. RealNetworks claimed that the district court applied an incorrect legal standard in granting a request by the major studios to halt sales of the software and was wrong to presume RealDVD would cause the film industry irreparable harm. In March 2010, RealNetworks and DVD CCA reached a settlement in which RealNetworks agreed to the injunction against selling the RealDVD software and a payment of $4.5 million in legal cost to the studios. It would also refund the payments from the approximately 2,700 current users of RealDVD. Despite the defeat of DVD-copying tools in this and other court cases, many similar software, such as HandBrake which by itself only works with unprotected digital media, continue to be free and widespread on the internet. Some believe that this indicates the ineffectiveness of the major studios' effort to restrict the copying of DVDs through legal rulings. == Related cases ==

• Universal City Studios, Inc. v. Reimerdes is one of the first cases that tested the DMCA in dealing with the legality of unlicensed CSS decryption software. In this case, the movie studios sought for an injunction against the distribution of DeCSS, a program made to allow the copying of DVD content onto the hard drive. • 321 Studios v. Metro Goldwyn Mayer Studios, Inc. is another early DMCA case trying to determine the legitimacy of software that allows the users to make copies of DVDs. In this case, 321 Studios stressed that such a software is legal because it allows users to make fair use copies of DVD content. • DVD Copy Control Association, Inc. v. Kaleidescape, Inc. is a closely related case in the sense that both Kaleidescape's and RealNetworks' systems are meant to allow the users to better organize their media content through DVD copies on the hard drive. But unlike the RealNetworks case, the Kaleidescape case addresses only the breach of CSS license agreement. ==See also==