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Digital entertainment services company RealNetworks (NASDAQ:RNWK), is currently in a high-profile legal battle with Hollywood top movie studios about its controversial new software package, RealDVD, the first mainstream PC application that allows users to easily save their DVDs to their hard drive.

On Tuesday, Judge Marilyn Patel of the Northern District of California, extended a temporary restraining order issued last week, barring RealNetworks from selling its new RealDVD program after infuriated Hollywood studios sued, saying the software illegally bypasses copy-protection measures intended to prevent duplication of DVDs.

RealNetworks, says its software, which would sell for about $50, doesn’t violate laws because it doesn’t break the copy-protection system. The company has expressed confidence that the court will determine that its new program “complies with the DVD CCA [Copy Control Association] license agreement, and that it is not in violation of any copyright laws.”

Judge Patel however, has hinted that it may schedule a hearing on whether to turn the temporary restraining order into a more permanent ban.

On Sept. 30 RealNetworks after accusing Hollywood studios of trying to impede advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases, filed an action for a declaratory judgment against DVD Copy Control Association, Disney Enterprises (NYSE:DIS), Paramount Pictures, Sony Pictures Entertainment (NYSE:SNY), Twentieth Century Fox Film Corp. (NASDAQ:NWS), NBC Universal (NYSE:GE), Warner Bros. Entertainment (NYSE:TWX), and Viacom (VIA.B), in the United States District Court for the Northern District of California. The lawsuit asked the court to rule that RealNetworks’s RealDVD software, made available to consumers at www.realdvd.com, fully complies with the DVD Copy Control Association’s license agreement.

For the time being, RealDVD is the talk of the tech industry and RealNetworks is back in the limelight. However, why the Seattle-based company would go to the extent of rolling out a product destined to spark a fierce legal battle, remains still a mystery.

One thing is certain. RealNetworks is not new to controversy and legal fights. In 2004, RealNetwork created Harmony which enabled tracks from its Rhapsody music service to be played on Apple's (NASDAQ:AAPL) iPods. Apple blasted RealNetworks at the time for acting like an “illegal hacker” and warned of fighting the Seattle firm’s new program that made its rival music service compatible with Apple’s iPod players.

In Oct. 2005, the company won an antitrust lawsuit against Microsoft (NASDAQ:MSFT) asking the software giant to include the RealPlayer streaming media software in Windows. Microsoft agreed to settle the case and paid $761 million, with $460 million coming in the form of up-front cash payment resolving damages claims.

Source: RealNetworks Battles Hollywood Studios Over RealDVD