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Real v. MPAA: All is fair - October 7, 2008

There are no real surprises in RealNetworks' opposition filing to the studios' request for a temporary restraining order against RealDVD; the general drift of Real's likely legal arguments was pretty clear from its own initial complaint seeking a declaratory ruling that it was within its rights as a CSS licensee to market the DVD copying program. Real had also advanced those arguments in its opposition to the studio request for a TRO in the parallel case filed by the MPAA in federal court in Los Angeles (that case has since been transferred to the court in San Francisco, where Real filed its action, and the cases have been consolidated).

But the latest filing puts those arguments pretty squarely. If the case ever gets to a trial on the merits, the studios would likely be forced to confront head-on two related questions they have never previously wanted to see litigated. It makes you wonder whether they really thought this thing through before filing their lawsuit against Real. (Note: I'm not dealing here with the largely factual question of whether RealDVD performs a "circumvention" of CSS as defined by the CSS license agreement.)

The first such question is whether consumers have the right under the doctrine of fair use, to make backup copies of their own DVDs:

Specifically, Defendants cannot show that the "commercially significant purpose" of RealDVD--to make a personal backup copy of a DVD--violates any copyright right of Defendants in the DVD content. To the contrary, making such a secure backup copy is quintessential fair use under Sony Corp. of America v. Universal City Studios, Inc...Under Sony, Defendants do not possess the right under the copyright laws to prevent users from making such a backup copy. And here, because the copy function of RealDVD is designed to limit any copying solely to such a fair-use backup, nothing that RealDVD is designed to do implicates a copyright right of Defendants. Because RealDVD does not affect the "exercise of a right of a copyright owner under the copyright laws," Defendants cannot maintain a violation of the DMCA.

In other words, no law is being violated here because copyright law permits fair use. The key underlying question, then, is whether, in fact, consumers have a fair-use right to make backup copies of their own DVDs. If the answer is yes, then it calls the whole copy-protection scheme for DVDs and Blu-ray Discs into question.

The related question raised by Real, and for which the studios also probably don't want to risk an answer, is whether, in fact, the DMCA can be used to affect an "end-run around fair use" as Real filing puts is:

Under [the DMCA] liability can only be found for alleged "circumvention" of a "technological measure" where the "technological measure" "effectively protects a right of a copyright owner under this title."
[...]
Here, the Defendants have no copyright interest to protect that is implicated by the intended and commercially significant uses of the RealDVD software to play DVDs, to retrieve on-line information and content about DVDs or to make a secure, non-transferable backup copy of a DVD for a Real account-holder's personal use."

In other words, fair use is a right that belongs to the user, not the copyright owner. Since the DMCA's prohibition of circumvention applies only to encryption that protects the rights of copyright owners, it can't be violation to provide fair-use tools to users.

Real goes on to cite another case--involving garage door openers--in which a federal appeals court found that circumvention was not a violation of the DMCA because the encryption in that case was being used to protect competitive interests, not any of the exclusive rights of copyright owners.

The RealDVD case, however, would be the first time that question was put with respect to the fair use of a copyrighted work, and it goes directly to the heart of the whole anti-circumvention scheme of the DMCA.

The studios might have been better off leaving the answer ambiguous.

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