At RealDVD hearing, MPAA says copying DVDs never legal

Updates are noted at the bottom of this story.

SAN FRANCISCO--Attorneys for the Motion Picture Association of America attacked fair use during a hearing in the RealDVD case here on Thursday, claiming it is not a defense for violating the Digital Millennium Copyright Act. To prove its point, the MPAA relied on RealNetworks' own testimony in a prior case.

U.S. District Judge Marilyn Patel is due to decide whether Real can once again start selling RealDVD, the software enables users to duplicate DVDs and store copies on their computers. The MPAA filed suit last September and accused Real of violating copyright law and breach of contract. Patel temporarily banned sales until hearing from both sides.

The case potentially could go a long way to determining whether it's lawful for a consumer to make backup copies of their DVDs and is being closely watched by fair use proponents.

Patel raised a crucial question during the MPAA's closing arguments. She asked Bart Williams, one of the MPAA's attorneys, whether a consumer possesses the right to copy a DVD he or she purchased for personal use.

"Not for the purposes under the DMCA," Williams said. "One copy is a violation of the DMCA."

Then Patel tried again. This time she asked about a hypothetical device that sounded very much like Facet, the DVD player that Real is planning to release that copies as well as plays DVDs. Real says that the copies of movies made by Facet are locked in the box and can not be distributed illegally.

"What if Real or someone made a device that allowed for making a copy only to the hard drive that is on that machine?" Patel asked Williams. "And you can't make another copy from that. Would that be circumvention of the DMCA? Would it in fact mean that it really was sufficient fair use under the DMCA?"

"Yes it would be circumvention," Williams replied, "and no it would not be fair use. The only backup copy Congress envisioned was archival, that you would never use until such time when your main computer wasn't working...Congress would not have gone through the process or have this process if you're going to say there is some fair use rights that allows you to circumvent."

Real once argued against fair use
Williams then told the judge that Real had argued against fair use in a legal case the company brought against Streambox nearly 10 years ago. Real filed suit against Streambox for creating the Streambox VCR, a system that enabled users to copy Real's streaming music and video. Streambox argued that users were making fair use copies. Real sought a temporary restraining order, just as the studios have in the current case, which was granted.

"There is no fair use defense (for Streambox against the DMCA)," Real argued in that case, court documents show. "The DMCA does not have a fair use exception allowing individuals to circumvent access and copy protection measures.

"In enacting the DMCA," Real continued, "(Congress) expressly outlawed products such as the (Streambox VCR) that serve to promote the unauthorized copying and distribution of copyrighted works."

For this reason, Williams asked the judge for an estoppel ruling against Real. This is a legal doctrine that would bar Real from arguing for fair use because it had made a counter argument--and prevailed--in a prior case.

Real is vulnerable to DMCA violation claims. The copyright law prohibits anyone from cracking copy protections.

Even if Patel rules that Real did not circumvent Content Scramble System, the studios encryption technology, which the MPAA claims it has, Real has to prove that it did not circumvent ARccOS and RipGuard. These are copy protections measures some of the studios use as an added layer of protection and are not covered in the CSS license Real obtained from the studios.

In previous court proceedings, MPAA lawyers presented e-mails and testimony that showed Real worked hard to find a way to get past ARccOS and RipGuard, including the hiring of an overseas company that the MPAA alleges is run by "Ukranian hackers."

Williams wrapped up and then it was Real's turn.

Case is about stifling competition
Don Scott, one of Real's attorneys told Patel that security wasn't an issue in the case because the copy protection, AES-128, that Real uses to protect the copies RealDVD makes is better than CSS. He said the case was really about the studios' attempt to stifle competition.

He said Real needs to make a copy to the hard drive in order for consumers to enjoy the many features that RealDVD and Facet offer.

As for the studios' claims that RealDVD and Facet can be used to copy rented or borrowed films without compensating the studios, Scott said Real could block copying of rentals if the studios cooperated by including some kind of identifying marks or "serial number" on the discs, but Hollywood has refused.

As for fair use, Scott said the MPAA was wrong.

"We believe the buyer has that right to play a DVD as many times as they want," Scott told Patel. "We think he also has the right to make a copy, this fair use copy."

Scott compared DVDs to music and pointed out that the music industry allows users to make copies. "This is the experience that has been recognized as lawful fair use," Scott said. "These same studios have talked about CDs. A purchased CD can be copied to a computer and then transferred to an iPod without any charge to the consumer."

Before breaking for lunch, Patel wanted to discuss Real's request to hear testimony from Peter Biddle, a former Microsoft employee who helped draft the CSS license and who came forward on Wednesday evening, after the court had finished hearing witness testimony.

Real told Patel that they were unable to find Biddle, who if allowed to testify would contradict the studios claim that the CSS license was intended to always forbid the copying of DVDs.

Patel denied Real's request. "Your inability to find him I find inexplicable," she told Real's lawyers. "I found him on Google in three minutes. I don't buy it."

Both sides completed their closing arguments and the hearing adjourned without any decision from Patel. There is no telling how long she will take to issue a ruling.

Update 12:50 p.m. PDT: To include more on MPAA's request that Real be barred from arguing for fair use.

Update 1:20 p.m. PDT: To include Real's arguments about fair use.

Update 3:11 p.m. PDT: To include Patel's denial of a request to hear testimony from Peter Biddle.