RealNetworks, studios battle over DVD ripping software

Both sides have filed lawsuits

By Jennifer Netherby -- Video Business, 9/30/2008

SEPT. 30 | The major studios and RealNetworks are headed to court in two separate lawsuits filed this morning over the software company’s launch today of DVD ripping software that allows consumers to transfer movies from DVDs to their PC.

RealNetworks launched the software, RealDVD, this morning and soon after filed a preemptive suit against the DVD Copy Control Assn. and the six major studios, asking a court to essentially declare the software legal. RealNetworks filed its suit in U.S. District Court in Northern California.

Hours later, the Motion Picture Assn. of America filed suit against RealNetworks in U.S. District Court in Los Angeles to stop the software company from selling RealDVD. The Motion Picture Assn. of America is asking for a temporary restraining order, charging that the company’s software violates the Digital Millennium Copyright Act by circumventing CSS copy protection on DVDs.

RealDVD, announced earlier this month, allows consumers to transfer movies, TV shows and other studio content from DVD to a computer hard drive. RealNetworks says it can do this without breaking copy protection, making the software legal. The company has a license from the DVD Copy Control Assn. to use CSS encryption.

“RealDVD not only maintains the DVD's native CSS encryption intact, it also adds another layer of digital rights management encryption that effectively locks the DVD copy to the owner’s computer to ensure that the content can not be improperly copied or shared,” the company said in a statement.

The MPAA disputes that RealDVD doesn’t break CSS copy protection.In its suit, the MPAA claims that Real's license from the DVD-CCA only authorizes the company to make DVD player products, and, therefore, RealDVD is a misuse of CSS prohibited by the DVD-CCA.

“RealNetworks’ RealDVD should be called StealDVD,” MPAA executive VP and general counsel Greg Goeckner said in a statement announcing its lawsuit. “RealNetworks knows its product violates the law and undermines the hard-won trust that has been growing between America’s movie makers and the technology community. The major motion picture studios have been making major investments in technologies that allow people to access entertainment in a variety of new and legal ways.”

One of the MPAA's concerns is that consumers will rip movies they rent.

The group says RealDVD encourages "'rent, rip and return,' whereby a person rents a DVD from a legitimate business such as Blockbuster or Netflix, uses the RealDVD software to make multiple permanent illegal copies of the movie and returns the DVD, only to rent another popular title and make permanent copies of it, repeating the cycle of theft over and over again without ever making a purchase."

The organization points out that RealNetworks notes this practice is illegal on its Web site.

The studios also charge that RealDVD would threaten sales of DVDs, video-on-demand and digital downloads, saying it "fundamentally changes the economic equation of buying DVDs. For example, why pay $18.50 for a DVD if the same content can be copied permanently and perfectly for the two dolloars (or less) it costs to rent the movie.”

The MPAA further warns that RealDVD "would enable massive theft of creative content that would have a direct, negative impact on the delivery of movies, TV shows and other entertainment to consumers through the home entertainment and digital distribution markets."

RealNetworks said it filed its suit today in response to threats made by the studios and “to protect consumers’ ability to exercise their fair-use rights for their purchased DVDs.”

RealDVD’s launch follows the DVD Copy Control Assn.’s court loss last year in its lawsuit against Kaleidescape, a company that makes home theater systems that allow consumers to store their DVD library on a server for playback on their home network. That case is on appeal.

“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,” a RealNetworks statement said.

RealNetworks is suing the DVD Copy Control Assn., Disney Enterprises, Paramount Pictures Corp, Sony Pictures Entertainment, 20th Century Fox Film Corp., NBC Universal, Warner Bros. Entertainment and Viacom.

RealDVD is selling online at www.RealDVD.com for $29.99. To see how it works, click here.

The software allows users to transfer DVD content to up to five PCs or portable drives licensed to an individual user. Once content is transferred, RealNetworks says the discs are encrypted again and cannot be shared or stolen.

RealDVD imports box art, genre and other details while saving the copy. Transfers take between 10 to 40 minutes, and users can watch the content as they’re transferring it. Films use 4GB to 8GB of space on a computer or portable hard drive.