Why MPAA Should Lose Against RealDVD
Earlier this week, the motion picture industry sued RealNetworks over its RealDVD software. The MPAA companies also asked for an immediate temporary restraining order (TRO) to block Real from distributing the product, which allows consumers to copy their DVDs onto their personal computers for later playback.
There are many obvious reasons why this is a short-sighted and futile gesture by the studios (as Jon Healey of the L.A. Times points out), but let's focus just on the fatal flaws in their legal theory. (We've posted the key legal documents, including TRO briefs, for those who want to read them and form their own opinions.)
In order to obtain a TRO or preliminary injunction, the studios have to demonstrate both (1) a likelihood of prevailing on the merits of the case and (2) irreparable harm if they don't get an immediate order blocking distribution of RealDVD. They fail on both counts.
Irreparable Harm ... Not
Let's take "irreparable harm" first. The studios claim that if consumers get the power to copy DVDs (gasp!), it will be a catastrophe for Hollywood's DVD, VOD, and digital download businesses. I'm not sure what alternate version of reality the MPAA is living in, but consumers have been able to copy DVDs for a long time, thanks to free, widely available DVD rippers like Handbrake, DVD Shrink, and MacTheRipper. And, as we pointed out back in 2006 in a filing with the Copyright Office, this isn't a fringe activity only for hacker super-users. DVD rippers are in wide circulation and have been routinely reviewed in the mainstream press (like the Fort Worth Star-Telegram, PC World and MacWorld, not to mention Lifehacker). In fact, most of us were wondering how RealDVD was going to compete with Handbrake, particularly since RealDVD costs more ($30 v. free) and does less (Windows only v. multi-platform, DRM restrictions v. no restrictions).
So if DVD copiers are already in the hands of millions of consumers, how does the introduction of RealDVD threaten "irreparable harm" to Hollywood? Answer: it doesn't.
Hollywood also argues that "Real's (false) prophesies of legality have the likely potential of altering consumer attitudes towards DVD-copying and, accordingly, consumer behavior." That's absurd. If the distribution of RealDVD does not threaten irreparable harm (because it's just one more DVD ripper), then Real's public statements about their legal position (all protected by the First Amendment) certainly can't tip the balance. After all, the MPAA's litigation, legislation, and public education efforts have already reached far more consumers than Real could ever hope to. Plus, there are those FBI warnings in every DVD, as the studios tout in the first line of their TRO brief: "Anyone who has ever watched a popular movie on a DVD knows from the opening frames that copying the content of the DVD is strictly prohibited."
[Aside for law nerds: The studios also make a half-hearted claim that they are entitled to a presumption of irreparable harm because that's the norm in intellectual property cases. That argument died two years ago, with the Supreme Court's 2006 ruling in eBay v. MercExchange rejecting those "presumptions." In fact, these same movie studios lost this same argument in front of the district court judge in MGM v. Grokster last year. See 518 F.Supp.2d 1197, 1212-14 (C.D. Cal. 2007).]
DMCA Violation ... Not
Nor are the studios likely to prevail on the merits of their DMCA claim. According to the studios, RealDVD "circumvents" the CSS encryption system that protects DVDs. The problem with that argument is that Real has a license from DVD-CCA to decrypt DVD movies, and the DVD-CCA v. Kaleidescape case tells us that the license does not prohibit making bit-for-bit digital copies of DVDs, so long as you keep them secure and play them in a software player that complies with the license requirements. This brings us to the heart of the studio's argument:
Although Real has authorization under the CSS license to use the decryption keys and licensed technology to play content on DVDs, Real does not have authority to use that technology to make a permanent, playable copy of DVD content. By using authorized technology for an unauthorized purpose, Real "avoid[s]," "bypass[es]" and "impair[s]" those very measures. In short, RealDVD circumvents CSS's access- and copy-control protections.
The trouble with this line of argument is that two courts have ruled that "using authorized technology for an unauthorized purpose" does not violate the DMCA. According to those courts, if someone gives you a password, and then you use it in an unauthorized way, there's no DMCA "circumvention." Here, the "password" would be the CSS keys to decrypt DVDs, which Real received as a DVD-CCA licensee. So using those keys for an "unauthorized purpose" is no DMCA violation. And, since the studios are seeking their TRO based solely on the DMCA, that should be the end of that.
[Aside for copyright nerds: if you believe the MPAA that the DVD-CCA license does not authorize "copying," but only "playback" of DVDs, then what about all the temporary RAM copies that are made by all licensed DVD players? The MPAA just got done arguing strenuously in the Cablevision case that all those RAM copies count as copies, no matter how short-lived. Have they changed their minds and embraced the Second Circuit's contrary ruling?]
The court should deny the TRO (and any subsequent preliminary injunction). Let the MPAA try to prove its case in court. In the meantime, let Real distribute RealDVD into the crowded market of PC-based DVD rippers and hard-drive based DVD jukeboxes. After all, Handbrake is more likely to kill off RealDVD than Hollywood is.