RealNetworks: Rent, Rip, Return ... Really?

It's deja vu all over again. In San Francisco on Friday, U.S. District Court Judge Marilyn Hall Patel, who ruled against Napster seven years ago, heard opening arguments in the DVD copyright case brought by the major Hollywood movie studios and The Motion Picture Association of America against RealNetworks.

The consortium of movie studios and the association is seeking to bar RealNetworks from selling its RealDVD software, which copies DVDs to home computers, a practice it calls "rip, rent and return."

As in the Napster music file sharing case, at issue is copyright protection. In this instance, the issue is movies rather than music, but it also pits big industry against smaller companies that want to share the love of music and movies with consumers.

Last September, the MPPA filed suit against RealNetworks and won a temporary restraining order from Judge Patel, blocking the company from selling RealDVD.

"We are disappointed that the movie industry is following in the footsteps of the music industry and trying to shut down advances in technology rather than embracing changes that provide consumers with more value and flexibility for their purchases," RealNetworks said in a statement at the time.

The company maintained that it is fully compliant with the DVD Copy Control Association's license agreement.

"RealDVD provides consumers with a great solution for the playback and management of their DVD collections," the company said in a statement at that time. "It does not enable users to distribute copies of their DVDs. RealDVD not only maintains the DVD's native CSS encryption intact, it also adds another layer of digital rights management encryption that effectively locks the DVD copy to the owner's computer to ensure that the content cannot be improperly copied or shared."

In Friday's hearing, the MIPAA's lawyer, Bart Williams, characterized RealNetworks as robbing movie studios of profits.

"In the end, this case will be about how RealNetworks tries to take money that is not theirs," Williams said, according to Reuters.

RealNetworks lawyer Len Cunningham argued that the studios have their own plans in place to make backup products, called digitalcopy, Reuters said.

"They have aggressively marketed it," he said. "The threat [to Hollywood] is for legitimate competition."

Judge Patel retorted, "They have the copyright."