Does RealDVD sidestep copy protections?

With testimony expected to resume Tuesday in the RealDVD case, it's unclear whether U.S. District Judge Marilyn Patel will lift a restraining order against the sale of the DVD-copying technology. Still, the "Napster judge" has signaled some of her concerns about the software.

RealDVD enables users to duplicate a DVD and store the copy on a computer hard drive. RealNetworks, the company behind RealDVD, during a preliminary hearing in Patel's court on Friday, asked the judge to allow it to once again begin selling the software. The Motion Picture Association of America objects to the selling of it, and in a lawsuit filed in September, the MPAA accused Real of violating copyright law and breach of contract.

The case could go a long way in deciding whether consumers have the right to make copies of their DVDs and could also lead to a total overhaul of Hollywood's DVD business model.

During Friday's opening statements, Leo Cunningham, one of Real's attorneys, told the judge that the major studios were not worried about piracy. He said RealDVD protected movies better than their own encryption and told the judge that there is a glut of software available on the Web that enables people to make unauthorized copies. The real reason Hollywood wanted to block the sale of RealDVD, Cunningham claimed, was to eliminate a potential competitor. The studios have launched a competing service, he said.

"Yes, but the difference is (the studios) have the copyright," said Patel, who had listened quietly to the opening statements from MPAA attorneys.

What Cunningham was referring to was the bundling of digital film copies with DVDs that some of the studios have begun offering--for an extra charge. In his response to Patel, Cunningham argued that while "fair use is not a defense" for the circumvention of encryption, consumers find making backup copies of their DVDs attractive.

"It's even more attractive to consumers to get everything for free," Patel said, in a seemingly sarcastic remark. Apparently, Patel wasn't buying Real's assertion that consumer demand justified the creation of RealDVD.

In the RealDVD proceedings, Patel has consistently raised concerns about the software's potential to become a pirate tool. When she placed the restraining order on the sale of RealDVD in October, she said there are "serious questions" about whether the software violates copyright law and "it's impossible to bring back copies once they're out in the market."

At the intersection of technology and copyright law, Patel has etched her mark. She is the judge who decided that Napster failed to meet the requirements to be considered an Internet service provider and was therefore not covered by the Digital Millennium Copyright Act.

Without protection under the DMCA's safe harbor provision, Napster was held responsible for illegal downloading its users committed and this doomed the company.

Since then Patel has been known to many as the Napster judge.

Does RealDVD crack encryption
The RealDVD case appears to hang on a central question: whether RealDVD circumvents copy protections. If it does, then that is a violation of the DMCA. A sidestepping of copy protections would also violate the terms of the license Real has with the DVD Copy Control Association, the group responsible for protecting DVDs and Blu-ray discs.

Real says it complies fully with the Content Scramble System (CSS), the encryption technology used to prevent copying of DVDs, and the contract it has with the studios doesn't prohibit anything in RealDVD.

"Real's excuses for the circumvention are just that, excuses," Bart Williams, one of the MPAA's attorneys, told Patel. Nothing in the license enables Real "to build a DVD copier as opposed to a DVD player."

The MPAA says the DVD-CCA license is designed specifically to provide protection against unauthorized consumer copies. It allows a licensee to make a player, nothing more.

Marsha King, a retired vice president at Warner Bros., testified Friday that the whole purpose of the DVD-CCA licensing was to prevent consumer copying. "That was the premise," she said. "The studios were adamant that no copy be placed on the (computer) hard drive. This was after all a perfect copy...The only thing we authorized was playback of the movies...no copies were to be made...it was a mantra."

MPAA lawyers told the judge that RealDVD is actually based on code Real obtained from a Ukrainian hacker group.

Reporters and other members were not privy to testimony and other evidence produced by the MPAA after Patel closed the courtroom Friday to anyone not bound by a nondisclosure agreement. Lawyers for the DVD-CCA told the judge that they wanted the courtroom sealed to protect trade secrets that included keys and algorithms associated with its encryption code.

CNET argued that the "trade secrets" were readily available on the Web, but the judge ruled that there were indeed trade secrets. On Tuesday, the DVD-CCA is once again expected to ask that the courtroom be cleared.

Also on Tuesday, RealNetworks CEO Rob Glaser is expected to testify, according to the company's representatives. Real has offered a "non-spirited objection" to the closing of the courtroom.