RealNetworks tried to fight the good fight against the Motion Picture Association of America (MPAA), but in the end, someone had to lose, and that someone is RealNetworks.
A U.S. District Judge has issued a permanent injunction barring RealNetworks from selling RealDVD, the company's controversial DVD copying software. In addition, the two sides reached a settlement offer that will also have RealNetworks forking over $4.5 million to the movie studios to pay for legal fees.
"We are gratified by the successful conclusion of this important matter," said Daniel Mandil, the MPAA's general counsel. "Judge Patel's rulings and this settlement affirm waht we have said from the very start of this litigation: it is illegal to bypass the copyright protections built into DVDs designed to protect movies against theft."
Pursuing the case further likely would have cost the company in excess of $10 million, no doubt a deciding factor in conceding defeat and agreeing to the settlement, no matter how much we might not like it.
"We are pleased to put this litigation behind us," said Bob Kimball, president and acting CEO for Real. "This is another step toward fulfilling our commitment to simplify our company and focus on our core businesses. Until this dispute, Real had always enjoyed a productive working relationship with Hollywood. With this litigation resolved, I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood's great work to consumers."
Hit the jump and post your reaction to the conclusion of this case.
Down but not out, RealNetworks said it will file an appeal and ask that a court ruling to ban sales of its DVD-copying software, RealDVD, be lifted.
The original ruling dates back to August when a federal district judge issued a preliminary injunction to halt sales of the software after film studios successfully argued that RealDVD violated copyright law. The injunction drew major interest from consumers looking for some clarification in the murky Fair Use waters.
RealNetwork's appeal only addresses the injunction, not the case itself, which, barring a resolution, is moving towards a jury trial.
"What they're going to argue is that somehow the legal basis for the injunction is wanting," said Denise Howell, an appellate and technology lawyer. "They will say that there has been an error of law somewhere along the way but they're going to try and undo the injunction. Real is facing an uphill battle."
Underscoring just how out of touch the Motion Picture Association of America is with its consumer base, the MPAA has spoken out regarding a buyer's (lack of) rights in making a single backup copy of a DVD. The comment came in response to a question raised bu U.S. District Judge Marilyn Patel, who during the RealDVD case, asked the MPAA if whether or not it believes it's legal for consumers to make backup copies of legally purchased DVDs for personal use.
"Not for the purposes under the DMCA," said Bart Williams, an attorney for the MPAA. "One copy is a violation of the DMCA."
And technically, he's right, at least in terms of circumventing copyright mechanisms to make said copy. But what's startling about the comment is that the MPAA has traditionally hid behind the threat of mass software piracy and the resulting lost sales in supporting the DMCA, but apparently you're no better than pirates for profit if you make a single backup copy of a DVD you already paid for.
"We believe the buyer has that right to play a DVD as many times as they want," Don Scott, one of RealDVD's attorneys, told Patel. "We think he also has the right to make a copy, this fair use copy."
Hot on the heels of the Pirate Bay trial, which just recently ended (not without considerable controversy), another trial is just now getting started. This one, however, involves RealNetworks and its RealDVD ripping program, a $30 piece of software that has drawn the ire of the Movie Picture Association of America (MPAA).
At the heart of the issue is RealDVD's ability to make digital copies of DVDs to a user's hard drive while still retaining the DVD-copy protection. The process even adds a further layer of DRM to the files it rips, so as far as RealNetworks is concerned, the program doesn't run afoulof the Digital Millennium Copyright Act (DMCA).
Naturally, the MPAA vehemently disagrees, even going so far as to say the software should be called StealDVD instead of RealDVD. Even more troubling for the MPAA is the RealNetworks' plan to develop DVD-saving software for manufacturers of DVD players. Facet, as it's being called, would allow Toshiba, Sony, and other companies to sell players capable of copying DVDs and save them internally. A prototype capable of storing about 70 movies has already been made, and it's expected that similar devices would sell for around $300 or less.
"The movie industry wants people to buy DVDs an so do we," said Bill Way, VP and general counsel of RealNetworks. "They have a real problem with piracy, and we are not that problem. I don't think our product will make the problem one iota bigger. I think it gives people an opportunity to make digital copies of their movies in a legal way."
Right or wrong, it will now be up to the courts to decide.
In the most pointed paragraph of the letter, the MPAA’s Jeff Williams writes:
“Forgive us if we take offense when the EFF and other activist organizations that continually take the side of those who profit from widespread copyright infringement attack our industry as one that stifles innovation. It's a desperate throw-back to the Napster days of old when they pull out this tired and weathered playbook. It's not 2001 anymore.”
The letter also argues that Hollywood and the internet are no longer at odds, and that legal services like iTunes and Hulu represent ways in which the industry is embracing innovation.
What do you think? Is the MPAA right to say that “The days of Hollywood being from Mars and Silicon Valley being from Venus are simply over?” Hit the jump and let us know.
RealNetworks has temporarily suspended the sale of its RealDVD software in accordance with Judge Marilyn Hall Patel’s request. The DVD copying tool is the bone of contention between the Motion Pictures Association of America (MPAA) and RealNetworks. The two are currently locked in a legal battle.
The case will come up for hearing in the U.S. District Court in San Francisco on Tuesday. Judge Marilyn Hall Patel will be hearing the matter. Although most MPC readers are in favor of DVD copying, they have very little sympathy for RealDVD due to its encryption features and $30 price tag.
Although RealNetworks downplayed any legal perils while announcing its DVD copying software last month, the major film studios have acted in the most obvious manner possible by suing the software company.
In the eye of the storm lies RealNetworks’ DVD copying tool called ReadDVD that allows users to make digital copies of their DVDs on their internal or external hard drives. However, the Motion Pictures Association of America (MPAA) hasn’t taken a liking to the tool. The MPAA has dragged RealNetworks to court over RealDVD and is praying for a temporary restraining order against the sale of the software.
Greg Goeckner, executive vice president of MPAA, quipped that the software be called StealDVD instead of RealDVD. However, RealNetworks feels that the software can not be used for piracy as it encrypts the digital copies in such a manner that they can’t be shared.
RealNetworks is soon going to tread the perilous waters of DVD copying. The company has announced that it is going to release RealDVD, an application for making digital copies of DVDs. Although DVD copying applications have been available for long, RealDVD will be the first such tool to be released by a major company.
RealNetworks is fully convinced that there won't be a strong case against it, if the company is ever dragged to court over the software. RealDVD will come with certain restrictions to prevent its use for piracy. "We have put in significant barriers so people don't just take this and put it on peer-to-peer networks," RealNetwork's Robert Glaser told NYT. However, he did not spill the beans on the exact nature of the curbs. RealDVD will carry a $30 price tag.