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Fair-Use Debate Closes RealDVD Trial
IP Law & Business
May 22, 2009
Is RealNetworks Inc. a cutting-edge technology company, willing to fight off Hollywood lawyers who use IP law to slow their competitors and squelch innovation? Or is it a "ripping company," willing to blow off entertainment companies' copyrights in the name of bigger profits?
Lawyers with starkly different views on the company's DVD-copying software faced off Thursday in U.S. District Judge Marilyn Hall Patel's courtroom. The Motion Picture Association of America, which has sued to keep the RealDVD software off the market, made its closing arguments, asking Patel to issue a preliminary injunction that would keep the software off the market while litigation over the device's legality moves ahead.
The movie studios' position is perfectly clear, argued Bart Williams, the Munger, Tolles & Olson partner representing the MPAA -- they never intended to give consumers the right to make personal copies of a DVD, and consumers have no right to do so under the Digital Millennium Copyright Act. The DMCA makes it illegal to circumvent electronic protection schemes designed to protect copyrighted material. The copying software is also in violation of an agreement RealNetworks signed with the DVD Copy Control Association, argued Williams and his colleagues.
"The copyright owners' message is: Don't copy content from DVDs," Williams said. "Real ignores the purpose of the license, and indeed the purpose of the Copy Control Association."
If a method of copying circumvents DVD copy protection, it is always illegal and can't be a "fair use," Williams argued.
The case is being closely watched, in part because courts haven't made clear whether consumers have a right to copy DVDs for their personal use. If such a right exists, many technology companies could begin offering similar software and devices, which the studios argue would exacerbate its piracy problem. Lawyers for the studios and the DVD Copy Control Association said that the CSS license, like the DMCA, includes an absolute ban on copying DVDs without copyright holders' permission. A ruling in the studios' favor would allow content companies to dominate the market for the next generation of products that play that content.
RealNetworks says it's following the law and the license it signed with the DVD Copy Control Association. That license to the "content scramble system" or CSS, is required for electronics manufacturers who want to manufacture DVD players. The fact that RealNetworks is a legitimate CSS licensee makes its case different from those of other companies that have had their DVD-copying equipment shut down, argues the company.
But RealNetworks lawyers said that the CSS license has always been about security, and that RealDVD offers encryption that's far more secure than the security offered by DVD manufacturers. The product was specifically designed to appeal to lawful users, not pirates, they argued.
"We are selling a product with all kinds of restrictions to lock down further copying," said Donald Scott, a partner at Bartlit Beck Herman Palenchar & Scott. "The market for people who want free rein and to not pay is already well-served out there."
Scott further argued that RealDVD was in the clear on the DMCA claims because it falls under the "fair use" doctrine.
"They [the studios] do own the copyrights," Scott said. "But it's also true that the buyer has certain rights. He has the right to play and replay that movie as many times as he wishes. And we think he also has a fair use right to have a copy on a hard drive, not just for security, but to be able to have these [RealDVD] features."
But Patel raised the issue that a DVD can be rented or borrowed and then copied repeatedly -- a problem that movie studio lawyers called "Rent, rip and return" or "Borrow, rip and return."
Scott acknowledged that was a risk, but if the studios would cooperate with RealNetworks, they could prevent it.
"The rental copies need to be marked as rentals, so we can recognize them and not copy, which they do in Europe," Scott said. "Those are things the studios do already when it suits them."
Scott also said that RealDVD actually leaves the studios' encryption in place and merely adds its own -- a description the studios' lawyers contested. "A company that devotes programmer after programmer, month after month of programmer time, to figure out a way not to encounter a copy protection scheme -- that's the definition of circumvention," said Rohit Singla, a partner at Munger, Tolles & Olson's San Francisco office. Singla said it took RealNetworks programmers 18 months to figure out how to copy the most tightly protected DVDs.
A screen displaying documents to the courtroom was turned off at Singla's request when he started describing how those copy protection devices work.
Last week, Real asked Patel to amend its original complaint. Real wants to add antitrust claims to the dispute, saying that the movie studios and DVD CCA were conspiring to siphon off more profits from consumer copies that should be considered "fair use." Technology that enables features around the fair use copy should be open for competition, Real argued.
