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Large content owners have constantly sought to control every use of their content. In pursuit of this control, they have often sued the creators of technologies that have offered consumers new ways of enjoying content. Those sued have included the makers of the digital audiotape, the Betamax videotape recorder, and the Pioneer Inno used with XM's satellite radio service. The latest lawsuit in this saga has been filed by a group of Hollywood studios against RealNetworks. The object of their ire this time is RealDVD, software that allows consumers to make copies of their DVDs.
Here’s how RealDVD works: It allows a consumer to make a complete bit-for-bit copy of a DVD, including the included CSS encryption, onto his computer or an external hard drive. The consumer can register up to four additional computers with RealNetworks, all of which can play that copy. However, RealNetworks claims that the consumer would not be able to watch the movie on portable devices such as iPods or iPhones.
Predictably, the studios claim that this copying is illegal and distorts consumer understanding of what is legal. To quote from their complaint,
by promoting RealDVD as completely legal and legitimate, Real conveys the false impression that conduct that consumers have long understood to be wrong is now legal.
Really? Have consumers always understood copying to be wrong? The assertion flies in the face of Sony Corp. of America v. Universal City Studios, where the Supreme Court said that recording of television programs on the Betamax for later viewing was fair use. Scholars have observed that this decision paved the way for devices such as tape recorders, photocopiers, CD burners, iPods and other digital media players to come to the market.
Just like these devices, RealDVD would provide greater flexibility and choice to consumers in how they enjoy their content. It would allow consumers to put their content on computers or external disks and watch movies wherever they want to. It would allow them to make backup copies.
So what arguments could the studios have against this technology? First, they argue that Real's product would compete with their video on demand and digital download services. So let us examine this argument. If studios could prevent RealDVD from being marketed, consumers would have to pay for copies of the content they already own simply to be able to watch it on a different platform. Such a requirement is unfair. Copyright law provides for fair return on investment, not the right to make money out of every single use. For example, the law allows copyright owners to charge you for the music CDs you purchase but not for ripping the CD onto your iPod.
Second, the studios argue that RealDVD is a tool for circumvention of a technological lock (DRM) and by marketing it RealNetworks is violating the anticircumvention provisions of the Digital Millennium Copyright Act (DMCA). The DMCA's anticircumvention provisions prohibit the breaking of digital locks that control access to copyrighted content without the authorization of the copyright owner. The studios distribute their content on DVDs with an encryption system called CSS (Content Scrambling System) and license device makers to decrypt CSS through a body called the DVD Copy Control Association (DVD CCA). Although RealNetworks obtained a license from DVD CCA, the studios claim that there is a DMCA violation because the purpose of the license is to allow the manufacture of a DVD player, but not a device that can copy DVDs. Without specifically stating that the license prohibits copying, they claim that the RealDVD violates the intention of the license. In other words, the studios think that a device maker should guess what a license intends in addition to actually following its terms to the letter. In fact, others who have tried to introduce similar products have thoroughly researched the terms of the license and been unable to find a restriction on copying. What is more, a California court has ruled that that the CSS license does not prevent copying of content.
Whether or not the DVD CCA license permits copying (I am not saying that it does not), the larger point is that RealDVD allows personal uses that do not harm the studios. Content is wrapped in DRM when it is transferred from the DVD to the hard drive thereby preventing supposed massive Internet redistribution. Yet, the studios want to prevent RealDVD from ever entering the market. What do you think? Would you be willing to give up your right to move your music from your CD to your iPod? If not, is it fair to apply a copying restriction against copying movies?