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The judge presiding over the latest blockbuster challenge to the Digital Millennium Copyright Act said Thursday that she was “substantially persuaded” by a pair of rulings that sided with copyright holders in upholding the law. U.S. District Judge Susan Illston of the Northern District of California sounded ready to allow a group of film studios to use the controversial law to stop 321 Studios’ distribution of software that allows users to make copies of encrypted DVDs. Though it appears a happy ending is in store for Hollywood studios, Illston did toss in a couple of plot twists during arguments on summary judgment Thursday. 321 Studios v. Metro-Goldwyn-Mayer Studios, 02-1955, centers on two programs — DVD X-Copy and DVD Copy Plus — that crack the encryption on DVDs in order for copies to be made. But the Digital Millennium Copyright Act, passed in 1998, forbids the circumvention of encryption measures designed to protect digital works. 321 Studios says its software is intended to allow DVD owners to make backup copies for personal use and argues it is a fair use that Hollywood can’t prevent. “Under the studios’ interpretation of the DMCA, there are no fair use rights of digital works at all,” said Keker & Van Nest partner Daralyn Durie during arguments. Film studios say the software enables piracy by allowing users to put movies on the Internet. Throughout the hearing, Mitchell Silberberg & Knupp partner Russell Frackman repeatedly referred to St. Louis-based 321 Studios as illegal “traffickers.” One of the cases Illston sees as persuasive was written by her colleague U.S. District Judge Ronald Whyte. In a case involving software that unlocks encryption on Adobe Systems Inc.’s e-Books, Whyte rejected a fair use challenge to the DMCA. Though Illston was throwing few lifelines to 321 Studios, two things happened Thursday that may help opponents of the much-criticized law, the primary weapon creative industries are using to protect their digital works. One, Illston stumped a government lawyer appearing with the studios, and two, she asked about Roger Ebert. Illston asked Department of Justice lawyer John Zacharia how, once a copyright expires, a work would ever enter the public domain if studios continued to produce encrypted copies. Zacharia didn’t have a good answer. She also asked Frackman about a free speech argument Durie advanced. “What about Siskel & Ebert?” she asked. If a studio refuses to cooperate, how could a movie reviewer include a clip? Frackman said, “Fair use is not a constitutional right. It never has been a constitutional right.” Frackman also argued that works protected by the DMCA aren’t subject to the copyright exceptions carved out in 1984′s Sony Corp. v. Universal City Studios, 464 U.S. 417, which upheld the legality of VCRs because of their substantial, non-infringing uses. Cindy Cohn, legal director of the Electronic Frontier Foundation, expressed concern after the hearing that the studios would shift all creative works toward the digital medium — which, under Frackman’s theory, could mean there would be no fair use rights. Durie argued as much during her argument, saying the studios are releasing fewer films on video. “Plenty of content is released only in DVD format and protected by CSS,” she said. But Frackman said 321 Studios is taking the fair use argument too far. “Under no doctrine of copyright law is the user entitled to make extra copies,” Frackman said.

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