×

Studios Win, RealNetworks Loses DVD Copying Case

RealNetworks
RealNetworks

Score one for the movie studios in their ongoing battle to fight digital piracy and protect intellectual property.

The MPAA is celebrating and RealNetworks is trying to figure out what to do next. The major studios, including Disney, Sony Pictures Entertainment, and Universal Studios, teamed up to sue RealNetworks last year, arguing its new RealDVD software enables illegal pirating. Dan Glickman, the MPAA chief says that this ruling affirms that the company took a license for a DVD player and instead built a DVD copier. You can bet the studios hope this will serve as a warning to any companies working on similar products.

With the studios home video revenue in decline, they need to do whatever it takes to protect that crucial chunk of profits. RealNetworks argued that its product allowed consumers to legally convert their DVDs to digital files to store and view on their own computers. The real risk is that consumers would "rent, rip, and return" DVDs. the U.S. District Court Judge Marilyn Hall Patel acknowledged that consumers have the right to make backup copies of DVDs for their own personal use. The problem here is that there's nothing preventing consumers from also making illegal copies.

Here's RealNetworks official response:

“We are disappointed that a preliminary injunction has been placed on the sale of RealDVD. We have just received the Judge's detailed ruling and are reviewing it. After we have done so fully, we'll determine our course of action and will have more to say at that time.”

This hardly means the studios can breathe a sigh of relief. Of course they're still contending with illegal piracy, which is a huge and growing problem, especially overseas. And now Universal and 20th Century Fox are battling with RedBox over the rights to rent their DVDs for $1 a night. More on that in the next blog.

Questions? Comments? MediaMoney@cnbc.com