Technology company 321 Studios, with a staff of 60 people, develops products to let people make high-quality replicas of DVDs. But last spring the movie studios, fearing that 321's technology would lead to rampant unauthorized copying, threatened to contact federal prosecutors.
The company responded bya judge to declare its copying products legal. A few months later, the studios , claiming the products violate the DMCA by offering software that circumvents protections on its DVDs to allow people to copy them. The studios asked for an injunction prohibiting 321 from selling its DVD Copy Plus and DVD X Copy programs.
As both sides prepare for a major court hearing on the matter next month, 321 Studios CEO Robert Moore talked with CNET News.com about incurring the wrath of Hollywood and how a hobby turned into a personal crusade.
Q: Why do you think Hollywood picked you as a target?
A: Probably because we introduced a product that actually has the capability of making one-to-one DVD copies. Prior to that, their reaction to our declaratory relief action last year was nothing more than a motion to dismiss. They wanted to throw it out of court.
Why did you file the original claim seeking to declare your product legal?
We filed it because there was a newspaper article carried in Gannett newspapers across the country. It was a four-paragraph article, and the first two paragraphs were about how Ken Jacobson of the MPAA (Motion Picture Association of America) had asked the Justice Department to investigate criminal violations of the DMCA due to these DVD copying programs that were making their way around on the Internet. And the next two paragraphs were about my company. So the obvious inference was that we were in their bull's-eye, and that scared us a lot. Prior to that I didn't know about the DMCA.
We're not criminals. We're Americans. We're availing ourselves of our fair use rights.
When I saw that, I kind of freaked out and wanted to close the business down.
Hollywood has countersued and is seeking to stop you from shipping your product. What's the status of the case now?
We want to go trial. DVD X Copy does not circumvent an access control mechanism, and that we can prove in court. Our goal is to have the summary judgment motion denied and move forward with discovery and go forward with a trial before jury.
When you jumped into a company that was making software that makes copies of DVDs, didn't you think that might raise some concerns among the movie industry?
Actually, quite the opposite. I have a VCR sitting on top of my television that's a dual VCR, where you put the master in the left and put the blank in the right and there's a copy button in the middle. I bought that at a retail store. I don't know which one because it's eight or nine years old now, and I've used that to make copies of my VHS tapes without giving it a second thought. When I started getting into the DVD area, and determined that these DVDs could be easily damaged, I wanted to find a way to back them up and essentially taught myself to do it with tools that were available on the Internet. I still didn't know anything about the DMCA. I didn't know anything about at the time, and it was just a few months later that that article came. That's when I definitely became aware of the DMCA.
What about the threats of a criminal case? Did anything ever come of that?
No. The people that we spoke with felt that it was an obscene gesture and completely reprehensible that the studios would declare some type of criminal activity when clearly our product was designed for people to make archival backup copies of their DVDs. They were just outraged by it. I was scared to death by it. I think that what happened is the potential of criminal investigation continued until ElcomSoft was in 2002. I think that probably had a lot to do with what action they decided to pursue from that point on because it was right after that they filed the countersuit.
Why would the acquittal of ElcomSoft cause Hollywood to file a civil suit against you?
My suspicion about this is that of course the ElcomSoft case was basically a DMCA case, a criminal case, and the government does not like to lose, and they lost in this case. I fully expected ElcomSoft to be found guilty, but when the acquittal came down it may have tempered the desire of anyone in the prosecutors office to come after us from a criminal standpoint.
You tout your product as software that helps people make copies of DVDs that they already own. How do you make the distinction between making a backup copy and making a copy that I can give to my friend and he can give to his friends and so on. Hollywood's obviously worried about that.
First of all, I was brought up to believe in personal responsibility, and that means we can't blame an object rather than the perpetrator. We don't throw the crowbar into jail. We throw the person who uses the crowbar to illegally enter someone else's home into jail. So basically, we think that what we've done is introduce antipiracy measures into DVD X Copy that speak volumes about our intent with this product. In the end, it is the individual's responsibility to use it in an appropriate manner.
Companies haven't had very much luck taking on Hollywood or the record labels. Why would yours be different?
I don't really see that any company in the past has put forth the effort to become the voice of reason and to try to reach a middle ground everyone can agree on. In the past, I've seen two different camps. One is the extremist intellectual property camp, who want a pay-for-play business model. They would like legislation passed in Congress to enforce their business model. On the other hand, you've got the free-use camp. Their motto is, "If we've got it, you can have it." These are two extremes, diametrically opposed to one another. I vehemently disagree with the Napsterites of the world. I believe in everybody's right to create, author, invent and exploit their works for profit--or even not for profit, for public recognition.
Is there any interesting thinking out there about how to solve the problem?
We're in this new digital era and no companies have come forward to propose any significant solution to this. Everybody talks in this cloudy, mysterious way. And we are saying, "Look, we can solve at least this problem, which has to do with consumers' fair use rights and expectations and intellectual property control," and that's why we introduced DVD X Copy. It has the three antipiracy features built into the product. We are very much an antipiracy company.
This cause chose us, not the other way around.
You recently offered a $10,000 reward for information leading to the conviction of people who use your product to make unauthorized copies. Why did you do that?
It's really going back to the MPAA and saying, "You're calling us a criminal. Prove it." We're not criminals. We're Americans. We're availing ourselves of our fair use rights.
Have you had any takers for the reward program?
None. We've had no tips. We've had nobody offer any substantive information that would indicate anybody is using DVD X Copy for piracy reasons. We have had people contact us and indicate that there are people selling bootleg DVDs out of their vans and out at flea markets, but they have nothing to do with our product.
Could that be an indication that people just aren't willing to rat out their friends? You'd have to have a pretty intimate knowledge of how somebody copied a DVD in order to claim the reward.
I think we have to define piracy, and I believe piracy to be the theft of intellectual property for commercial gain, at least in this regard. If you made a copy and gave it to your friend, why don't you give the original to your friend and keep the copy? There's absolutely nothing wrong with that whatsoever. If you buy a DVD, you are able to give it, sell it, rent it, do whatever you want with your property, are you not? The same thing would apply here. I wouldn't go along with the definition that piracy is making a copy of a movie and letting your friend watch it. That's not something that's going to impact Hollywood's revenue streams. We're talking about piracy, which is what the MPAA is claiming, that this product is being used for widespread piracy reasons. That's a completely false statement with no credible shred of proof.
Aren't they more worried that people eventually will just copy them and send them all across the Internet and somehow all of the copying might affect the studios' bottom line?
The truth is that's going on right now and it's been going on for years. When "Lord of the Rings" came out in movie theaters, it hit the Internet two days before it was released in the U.S. There are plenty of piracy tools available on the Internet for free that people have used and continue to use to pirate movies--not just DVDs but movies that haven't been released in the theaters yet. They use special compression techniques to get these files down to somewhat of a manageable size, and by that I mean maybe 500 or 600 megabytes. DVD X Copy doesn't recompress the video in any way, shape, or form. And in fact if you wanted to retransmit a typical DVD movie in its entire quality over the Internet and you had a dial-up connection, it would take you approximately 10 days to download that file.
Have you talked to any of the studios about the rewards program or any of this?
Yes, I've sent a letter to Jack Valenti and (others at) the MPAA, basically expressing our desire to work with them in an antipiracy campaign, that we're interested in consumer fair use rights, that we're not interested in free use, that we're not interested in enabling anyone to pirate DVD movies. That letter basically was answered back from their attorneys who instructed us not to contact them again. We also placed telephone calls to the MPAA saying the same thing and we were given a call back instructing us not to contact them again.
What were you hoping to accomplish?
I wanted to try to find a way to work with them and address their concerns. After looking at the antipiracy features that have been built into DVD X Copy, I believed they would be persuaded that this indeed was a product that could be used for a wide range of legitimate purposes and that there were enough antipiracy measures in the product that it would really deter anyone from using it as a piracy product. Again, all of those requests have gone unanswered, at least in any other way than through their lawyers.
You started this as a hobby, and now you're involved in a lawsuit and a Web site, Protectfairuse.org, a site devoted to rallying the troops to protect fair use. That's quite a jump.
Yes, it is. I enjoy what I do. I believe in what I do. I have a good group of people that work for us here. And there is an unbelievable aura of optimism throughout our company and a belief in what we're doing, that it's right and that it's just. This cause chose us, not the other way around.