April 25, 2009 | By corynne mcsherry

RealDVD v. DVD-CCA: The Duel Begins In Earnest

Opening shots were fired Friday in the RealNetworks v. DVD-CCA case. Unfortunately, the public was excluded from key parts of the battle, when the presiding judge, Marilyn Hall Patel, granted DVD-CCA's request to close the courtroom.

Some quick background: In September 2008, the motion picture industry sued RealNetworks over its RealDVD software, which was designed to allow consumers to copy their DVDs to their computers for later playback. Real had obtained a license from DVD-CCA for its Content Scramble System ("CSS") software, following a path blazed by Kaleidescape in an earlier court fight, DVD-CCA v. Kaleidescape, where a California state court rejected the DVD-CCA’s argument that Kaleidescape's licensed digital DVD jukebox violated the DVD-CCA license. Despite this precedent favoring Real, Judge Patel ordered a temporary halt to distribution of RealDVD in October 2008. At issue now is whether that temporary injunction will stay in place until the case is resolved. Such an injunction, Real's attorney told the court Friday, would sound the "death knell" for the product.

On Friday, the first day of what is expected to be a three day hearing, the movie studios claimed that Real deliberately circumvented several layers of technical protections built into DVDs, including not just CSS but also ARccOS, RipGuard, bus encryption and bus authentication.

Anticipating Real's claim that its technology facilitates fair use, the studios also insisted that fair use never excuses digital copying of a DVD, and that they have a right to be paid for every additional copy made. As the attorney for the DVD-CCA put it: "DVD-CCA doesn't license copying." In fact, he argued, the license forbids it. The technical, procedural and general "specifications" that accompany the CSS license describe what an authorized product can do. If the licensee follows the steps laid out in the specifications, he said, it will get an legal player--but not a copier. The DVD-CCA also argued that Real knew the licensing consortium didn't intend to permit copying because of the positions it took in the Kaleidescape case.

The studios and DVD-CCA did their best to portray RealDVD as a massive threat to Hollywood, arguing that the technology will encourage consumers to "rent, rip and return" rather than buying DVDs, and that the 5 copy limit built into the technology was hardly an effective limit. Judge Patel asked, as she did at the TRO hearing, whether those 5 copies can be copied. Answer: Yes and no. They can be copied, but can only be played on an authorized computer--but Real could "easily" change that.

Real, for its part, sought to frame the case as a dispute about legitimate competition. The question, said Real's attorney, is whether the studios' copyrights can be extended to control competition and fair use. But doesn't copyright give the right to exclude? asked Judge Patel. Yes, the attorney replied, but not when the use in question is a fair use. "If someone wants to make a copy of something they own," Real's lawyer went on, "do they have to pay the studios again?" Real argued that it did not violate the CSS license because its product not only wraps CSS around every copy made, it adds a second layer of DRM, Advanced Encryption Standard, which is "30 septillion times harder to break" than CSS. (The studios argue that this second layer of protection is really intended to lock consumers into Real's own business model). This case is not about security, said Real’s lawyer--DVDs are "safer" when they are copied with Real technology than at any other time.

The studios and DVD-CCA then presented their first witness, Marsha King, an attorney who helped craft the original CSS license. After a lunch break, they asked Judge Patel to close the courtroom before they presented their second witness, Dr. John Kelly. Kelly’s testimony, they claimed, would concern the CSS technology and the DVD-CCA licensing documents, and necessarily reveal closely held trade secrets. Greg Sandoval of CNet challenged the closure, noting that much of the technology at issue in the case was already public, and that the trial in the Kaleidescape case had been open to the public (although a few exhibits had been sealed.) Real also opposed closure, although not "adamantly," calling the court's attention to a 2004 California Supreme Court ruling which recognized that CSS technology may have lost its trade secret status. The defendants (with DVD-CCA taking lead) responded that while some technology might be publicly available, the DVD-CCA technical specifications are still a closely guarded secret. Judge Patel ordered the defendants to present any testimony that did not involve trade secrets first, and then closed the courtroom.

The hearing will resume Tuesday, April 28, so stay tuned for further reports.


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