RealNetworks: Court Upholds Injunction Against Use of RealDVD

Aug.12.09 | About: RealNetworks, Inc. (RNWK)

I have to admit that I am blown away by a judge’s decision to grant a preliminary injunction on sales of RealDVD, RealNetworks’ (NASDAQ:RNWK) controversial software that allows consumers to rip DVD movies into a computer much the same way that CDs can be ripped.

Even though I didn’t like it, I understood why Judge Marilyn Hall Patel agreed back in October to grant a temporary restraining order against RealDVD. She wanted to review the facts of the case and discover what I’ve been saying for some time: the Motion Picture Association of America - which is representing the Hollywood studios - is using this case to stifle innovation, preserve an outdated business model and keep consumers from fair use of products that they own.

Now, the Wall Street Journal reports that the judge granted the studios a preliminary injunction, pending a full trial - which isn’t expected to begin for another year or two. In her 57-page ruling, quoted in the WSJ, the judge weighed issues such as fair use in her decision. According to an AP report, the judge said that RealNetworks failed to show that the RealDVD products are to be used by consumers primarily for legitimate purposes. She wrote:

The court appreciates Real’s argument that a consumer has a right to make a backup copy of a DVD for their own personal use… While it may well be fair use for an individual consumer to store a backup copy of a personally-owned DVD on that individual’s computer, a federal law has nonetheless made it illegal to manufacture or traffic in a device or tool that permits a consumer to make such copies.

One might think that RealDVD is just a free-for-all piece of software that immediately enables consumers to rip, burn and resell copies of the DVDs. But that’s not what the software does. RealDVD was supposed to address concerns about piracy because the software preserved encryption to block widespread distribution and digital rights management software to restrict what could be done with the content.

The MPAA - and the courts - make an assumption that consumers could abuse the software and find ways around its restrictions to pirate movies. I hate to break it to anyone, but movie piracy is alive and well - even without RealDVD. To punish honest consumers who could use the software for its intended use just because others might - repeat, might - misuse it is just plain wrong.