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RealNetworks Deal Helps Kill Fair Use


If consumers can't copy DVDs that they legally own, what's left?

RealNetworks (RNWK) -- the company behind some of the worst streaming-media players in the history of the web -- has handicapped the video-viewing experience yet again. Real has laid down its sword and given up its fight to put RealDVD back into consumers' hands after the MPAA began questioning the legal ramifications of it in 2008.

RealDVD's software allowed DVD content to be copied onto a hard drive. Naturally, no fewer than six movie studios -- including Paramount Pictures (VIA), 20th Century Fox (NWS), and Warner Bros. (TWX) -- took Real to task for granting that capability to consumers. Last August, San Francisco judge Marilyn Hall Patel ruled that the software was in violation of the Digital Millennium Copyright Act (DMCA) and a matter of copyright infringement. (See When American Judges Are Luddites.) And rather than appeal the uninformed decision, Real has thrown up its hands and acquiesced, giving studios and the always-rational MPAA a clear-cut precedent in any case against DVD-ripping tools.

Way to go, Real.

By agreeing to the permanent injunction, RealDVD can no longer be installed into any product and Real must pay $4.5 million to the studios in court costs and legal fees -- because, God knows, they're bleeding money.

After reveling in what he called a "successful conclusion" to the case, the MPAA's general counsel Daniel Mandil said, "Judge Patel's rulings and this settlement affirm what we have said from the very start of this litigation: It is illegal to bypass the copyright protections built into DVDs designed to protect movies against theft."

Real had long defended the software as a tool for consumers to make legal copies of DVDs they own -- similar to how millions of people use iTunes (AAPL) to rip CDs -- and clearly falls under fair-use rights. But the studios disagreed, claiming the software can be used to copy borrowed or rented DVDs.

Mind you, RealDVD only allowed one copy on one hard drive -- unlike iTunes, which is unlimited in its "piracy" scope. So when can we expect the studios to file an injunction against Apple? This month? Next?

Fred von Lohmann, senior attorney to the Electronic Frontier Foundation, wrote about the matter when the case began in October 2008. Lohmann suggests that with all the other programs consumers have to rip a DVD -- Handbrake, DVD Shrink, MacTheRipper -- and all the nefarious BitTorrent sources from where to download, "Hollywood can't possibly believe that the $30, DRM-hobbled RealDVD software represents a piracy threat in an environment rife with easier options." He adds, "It has nothing to do with piracy and everything to do with controlling innovation."

Rather, "[It's] to send a message about what happens to those who innovate without permission in a post-DMCA world." And since Real has given up the fight, that message can now be delivered to anyone the MPAA pleases.
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