Court rules RealNetworks circumvents CSS

PHYSICAL: Studios win injunction against RealDVD copying software

By Jennifer Netherby -- Video Business, 8/11/2009

AUG. 11 | PHYSICAL: A federal judge in California Tuesday sided with the major studios and issued a preliminary injunction barring RealNetworks from selling its DVD copying software RealDVD and a set-top device in development that could also copy DVDs.

U.S. District Court Judge Marilyn Hall Patel said in her ruling that RealDVD and the Facet device in development circumvent CSS, the copyright protection used on commercial DVDs, violating the Digital Millennium Copyright Act. Patel also said Real violated its CSS License Agreement by making permanent DVD copies of copyrighted films. The license was one of the reasons Real argued that the software was legal.

Patel also rejected RealNetworks’ “fair use” argument that the company was enabling consumers to exercise their right to make personal backup copies. She wrote that while consumers have a fair use right to make a backup of a DVD for their personal use, federal law bars companies from making or selling the tools to allow them to do so.

“We are disappointed that a preliminary injunction has been placed on the sale of RealDVD,” RealNetworks said in a statement. “We have just received the judge’s detailed ruling and are reviewing it. After we have done so fully, we’ll determine our course of action.”

In a statement, Motion Pictures Assn. of America chairman Dan Glickman called the ruling a victory for creators and producers of movies and TV shows.

“Judge Patel’s ruling affirms what we have known all along: RealNetworks took a license to build a DVD player and instead made an illegal DVD copier,” Glickman said. “Throughout the development of RealDVD, RealNetworks demonstrated that it was willing to break the law at the expense of those who create entertainment content.”

RealNetworks began selling RealDVD last September and both sides immediately sued each other over the software’s legality. For the week it was available, Real sold an estimated 3,000 copies for $30 each. The software promised to legally allow users to burn up to five backup copies to a computer hard drive of any commercial DVD.

Real, which has a CSS license issued by the DVD Copy Control Assn., had argued in the preliminary injunction hearing in April that the license allowed it to make DVD copies. Patel disagreed.

She said in her ruling that the company “clearly violated” the agreement by making backup copies that could be played without a DVD in a disc drive.

Not only that, Patel wrote that RealDVDs backup copies don’t include copy protections mandated by CSS, such as CSS authentication and encryption.

Patel wrote the agreement was irrelevant because Real’s products were made to circumvent DVD copyright protections. Real has claimed that RealDVD doesn’t circumvent CSS protection and provides additional protections on copies. But Patel ruled that isn’t the case, that the company uses its CSS license to unlock a DVD and copy it to a hard drive, but then doesn’t perform CSS-required authentication and encryption steps when playing back movie copies.

“Real cannot use the CSS License Agreement as a sword to unlock, decrypt and descramble CSS content and then assert this right as a shield against a DMCA violation,” the judge wrote.

The DVD-CCA also issued a statement Tuesday. “The association, which represents the interests of the personal computer, consumer electronics and content industries as well as DVD consumers, is committed to enabling high-quality entertainment to be available for use at home and elsewhere. The ability to make that entertainment available depends upon a set of guidelines upon which all participants in these industries can rely.”

The judge did seem to leave open for Real the possibility that Facet, also called Vegas, could have been legal under certain circumstances.

“Had Real’s products been manufactured differently, i.e., if what happened in Vegas really did stay in Vegas, this might have been a different case,” she wrote in her ruling. “But, it is what it is. Once the distributive nature of the copying process takes hold, like the spread of gossip after a weekend in Vegas, what’s done cannot be undone.”

If Facet, or Vegas, made a copy that was kept on the device hard drive, that would make it similar to the higher-end Kaleidescape system it was modeled after. Kaleidescape copies DVDs to a home server for viewing on home theater systems. The company won an initial lawsuit against the DVD-CCA, but a California appeals court ruled that the servers are in breach of CSS.