DVD Copying Software Pulled Off Shelves

By Maria Cheung

Reviewed by Jennifer Williams

Real Networks, the company that manufactures RealDVD, a DVD copying software, has agreed to pay $ 4.5 million and to permanently stop selling the software as part of its settlement deal with six major Hollywood film studios. The lawsuit began in 2008, when the film studios sued Real Networks and accused the company of selling software that essentially helped consumers steal the content of various DVDs by enabling the public to copy the DVDs.  The studios probably sued the company for contributory infringement because Real Networks was distributing a device that could materially contribute to the infringement and the company probably had knowledge that the device could be used in an infringing way.

As a defense, Real Networks basically argued the Sony defense, which bars a manufacturer or seller who distributes a device that has substantially non-infringing uses from being sued for contributory infringement.  The company argued that RealDVD was designed only to let consumers make a back up copy of movies on their PC hard drive.

The U.S. district court for the Northern District of California granted a preliminary injunction against sales of the product last year. The court stated that RealDVD violates federal law and a license agreement that the company had previously signed with the DVD Copy Control Association. The case had been scheduled to go to trial but Real Networks ultimately settled the case with the six Hollywood movie studios, Viacom and the DVD Copy Control Association. Real Networks will withdraw its appeal of the preliminary injunction and stop supporting RealDVD or any other technology that allows consumers to duplicate copyrighted content. The company plans to also reimburse the 2,700 people who paid $30.00 to purchase the device. The $4.5 million paid to the film studios is to cover their legal costs.

It is interesting to me that Real Networks tried to argue the Sony defense because in my opinion its defense that its device was only designed to let consumers make backup copies of films on their PC hard drive is not a valid Sony defense. The Sony defense comes from a case in which Universal Studios sued Sony Corporation, the manufacturer of the VCR device for contributory infringement. The court in that case held that Sony did not infringe on Universal’s copyright because the VCR has substantial commercially significant non-infringing uses. The VCR allowed consumers to record shows or films that they otherwise could not watch at the time the shows or films were aired and enabled the consumers to watch the shows or films at a later time. Sony, like Real Networks, could not control how consumers used the devices but the VCR had a more valid substantial non-infringing purpose. There is no genuine non-infringing use of the RealDVD since if the consumer possesses a legal copy of the DVD already, there is no need to make a copy on the consumer’s hard-drive or on an external USB hard-drive unless the consumer plans to sell the DVD or give it away. The RealDVD device was not being used simply for unauthorized home time shifting, which the court held was a legitimate fair use of the VCR in the Sony case. It was truly being used for infringement purposes.

I, for one, am happy that Real Networks settled the case because perhaps it will re-enforce the concepts of copyright law, which so often seem to be forgotten. Although we live in world of freedom of information and technology, it is important to remember artists’ rights and to respect copyright law. In a world with Netflix and iTunes, there is simply no need for a device that allows consumers to personally duplicate copyrighted materials at home.

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