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RealNetworks Loses to Studios on Ban of DVD-Copying Software

By Joel Rosenblatt and Karen Gullo

Aug. 12 (Bloomberg) -- RealNetworks Inc.’s DVD-copying software will remain off the market after Walt Disney Co. and other movie studios won a ruling that the product violates laws protecting copyrighted works.

U.S. District Judge Marilyn Patel in San Francisco issued a ruling yesterday blocking all versions of RealDVD, the $30 software that allows consumers to save one backup copy of a movie to a computer hard drive. The copy can be played on that computer and on as many as four others running RealDVD.

RealDVD “circumvents a technological measure that effectively controls access to or copying of the studios’ copyrighted content on DVDs,” Patel wrote in the order.

The judge issued a temporary order in October barring Seattle-based RealNetworks from putting the product on the market until the studios’ lawsuit is decided at trial.

The studios’ lawyers argued that RealDVD violates federal laws prohibiting circumvention of encryption technology that prevents copyrighted works from being duplicated.

The product would encourage people to copy movies they rent and spur other forms of illegal copying and sharing of films, leading to billions of dollars in lost sales, the studios claimed. They sell DVDs that can be copied once and stored on a computer, though these cost more than a regular DVD.

RealNetworks, a seller of Internet music and video-games, denies the product violates anti-copying laws. RealDVD provides added security against illegal copying by ensuring that the digitally duplicated DVD can be played only on the computer that copied it, the company said.

Oona Rokyta, a RealNetworks spokeswoman, declined to comment yesterday.

Reliable Guidelines

Reginald Steer, a lawyer for the DVD Copy Control Association representing the computer and electronics industries, said the group is committed to “high quality entertainment,” which depends “upon a set of guidelines upon which all participants in these industries can rely.” The association joined the studios in opposing RealNetworks.

Disney spokeswomen Zenia Mucha and Brenda Kelly Grant didn’t immediately return calls seeking comment yesterday.

The case is RealNetworks v. DVD Copy Control Association, 08-04548, U.S. District Court, Northern District of California (San Francisco).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net.

Last Updated: August 12, 2009 00:01 EDT