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Last May I posted — in an article titled “Challenging DMCA Conventional Wisdom” — about a creative, but seemingly futile, effort by RealNetworks to plead its way around the Digital Millennium Copyright Act for yet another variant of DVD-ripping software. Well I missed the conclusion. In mid-August a federal court in San Jose (the Northern District of California) sided with the movie studios against Real, issuing a permanent injunction, and holding in a well-reasoned opinion in RealNetworks, Inc. v. DVD Copy Control Association, that Real had violated the DMCA.
So this is effectively the end of RealDVD. Calling the DMCA a series of “epochal amendments” to US copyright law, Judge Marilyn Hall Patel concluded that CSS technology “effectively controls access” despite having been hacked, finding that the statute is directed at preventing circumvention by the “average consumer,” and that Real’s CSS license was no protection because it had exceeded the scope of the license.
While it is true that no case has ever held that a licensee of the DVD [Copy Control Association] can be held liable for circumventing that same technology under the DMCA, that is simply because no court has ever adjudicated the issue. And, it may be that no licensee has been so bold as Real.
Perhaps the only amusing part of this rather sad escapade is the court’s observation that the RealDVD product was known internally as “Vegas,” because of the well-known marketing phrase “what happens in Vegas, stays in Vegas.” Secrets don’t hold up that well in Hollywood, on the other hand.
Most observers believe that, right or wrong, the Digital Millennium Copyright Act (DMCA) prohibits copying of DVDs, even for backup purposes, because of its Content Scrambling System (CSS) encryption technology. Now Real Networks is challenging that conventional wisdom in California, where its RealDVD product is under attack. But the litigation developments actually suggest that Real is taking a different direction. According to CNet News, a “surprise” expert witness for Real:
disputes Hollywood’s claims that the industry included in a license for its DVD-encryption technology a ban on copying DVDs while in a computer hard drive. Real argues that because it possesses a license to use CSS and because the license doesn’t prohibit the copying of DVDs in all cases, Real isn’t guilty of breaching its contract.
How Real squares its contract argument with the DMCA claims against it by the movie studios is convoluted. Without getting into a lot of detail, the gist of the DMCA prohibition on reverse-engineering is that no one is permitted to “circumvent” technological means applied to protect digital content (i.e., DRM or content protection). The anti-circumvention provisions “put the force of law behind any technological systems used by copyright owners to control access to and copying of their digital works.” That’s exactly what CSS does, as I understand the technology. The fact that a CSS license may not prohibit copying is not the same as whether it is permitted under DMCA. So this approach is a good one for Real, but almost surely will be less than acceptable to the “open commons” crowd, which has detested the DMCA standard for a long time.
If you are interested, and especially if you disagree, please tell the U.S. Copyright Office, which is handling another periodic rulemaking to define what is and is not prohibited under the statute.
Wow, I’ve blogged in the past about how Real Networks’ devotion to subscription music distribution was an archaic business model. Now, Rob Glaser and company are about to launch a new software product that, if ruled lawful under the DMCA, may revolutionize movie distribution. Real Networks Throws Down the DVD Copy Gauntlet [FT.com]. In a post-Napster legal environment, however, it is fair to say that no one can predict with certainty how these sorts of issues will play out. But if Cablevision can offer a remote-storage DVR on the theory that users are copying, not the device’s software, there is a good chance Real is right. Good luck and Apple TV watch out now!
The French have views that strike Americans as strange on lots of issues, like Middle East terrorists, mistresses, Web censorship and now trademark rip-offs. So it was a big relief when, after last month’s French decisions for Louis Vitton and Hermes against eBay, the U.S. courts disagreed. It’s Up to You, Tiffany, to Keep the Counterfeiters Away [Law Blog-WSJ.com]. (The French apparently never got the memo that the Internet is a borderless network where national law can’t be effectively applied.) Seems that Tiffany’s high-priced lawyers argued that there was so much counterfeit merchandise sold on eBay that the company somehow had a legal obligation to police its auctions.
Well, that’s backwards. Intellectual property owners already can demand “notice and takedown” of infringing materials; the same thing is undoubtedly true of eBay. All that Vuitton, Hermes or Tiffany’s had to do was monitor auction and sales listings and notify eBay when they found fake items. Well, it’s much easier just to shift blame — and money — to someone else than take responsibility. All this case was about was moving financial responsibility for the cost of running a business (jewelry) from the retailer to the “deep pockets” dot.com company. That’s shameful.
In fact, U.S. District Judge Richard J. Sullivan in New York ruled that eBay and affiliates can’t be held liable for trademark infringement “based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites.” The judge reasoned that when Tiffany notified eBay of suspected counterfeit goods, eBay “immediately removed those listings.” That’s the correct decision and strikes the appropriate balance between IP holders and Web sites, IMHO.
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October 20th, 2009 | 
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