RealNetworks, Inc. and RealNetworks Home Entertainment, Inc. (we'll just call them RealNetworks, because in reality, they are one in the same) released for sale a software package named RealDVD in September of 2008.  By September 30, 2008, we were in court, with RealNetworks suing for Declaratory Judgement.  On August 11, 2009, the court released its decision in favor of the Movie Studios, but for those that would like to back up their DVDs, a glimmer of hope remains.

The major issue that was the turning poitn of this case, was not whether RealNetworks and their software package RealDVD actually infringed on copyright or related, but the license agreement between DVD CCA and RealNetworks.  The language of the license agreement The DVD CCA licensed the CSS technology to RealNetworks, in essence hoping that RealNetworks was not breaking or decrypting the CSS technology (a violation of the DMCA anti-circumvetion provisions).

The license restricts licensees of the CSS technology from promoting "unauthorized" copies of the DVD content from being made, as well as requiring the digital data to perform certain DVD drive checks to ensure that there is a physical disk.

RealNetworks argument was that as a licensee of the CSS Technology, 1. The DMCA doesn't apply and the content providers and DVD CCA are limited to a breach of contract claim and 2. They have implemented the CSS technology at the time of "saving a copy" and therefore have not bypassed or removed layers of CSS protection.

In regards to 1., the court was very clear that both a breach of contract claim and a DMCA claim can co-exist, and therefore the remedies of the entities is not limited to a breach of contract claim.

With respect to 2., the court said emphatically "once is not enough" when referring to the implementation of the CSS technology.

The court lastly cited Section 1201(b)(1) against RealNetworks in stating " '[s]ection [1201](b)(1) is aimed fundamentally at outlawing so-called 'black boxes' that are expressly intended to facilitate circumvention of technological protection measures for purposes of gaining access to a work.' See Report of the House Comm. on Commerce, H.R. Rep. No. 105-551 (II), 1998 WL 414916, at 39. The DMCA was intended for products like RealDVD; products that are expressly designed to circumvent technological measures for purposes of thwarting the rights of copyright owners' to decide who may gain access to their copyrighted works in digital format."

Lastly, the court commented on a "Fair Use" defence in relation to the DMCA.

The court affirmed that Fair USe is a defense when discussing copying by citing the U.S. Copyright Office Summary of the Digital Millenium Copyright Act of 1998 'explaining that the distinction between section 1201(a) and (b) as to the act of circumvention in itself was "to assure that the public will have the continued ability to make fair use of copyrighted works. Since copying may be a fair use under appropriate circumstances, section 1201 does not prohibit the act of circumventing a technological measure that prevents copying.' "

However, the Court concluded that while you can make a fair use backup copy for yourself, fair use "does not apply to manufacturers or traffickers of the devices prohibited by 17 USC §1201(a)(2)."  So essentially you can make a copy, but no one can help you make a copy, which unless you are DVDJon, you arent' going to make a copy.  A bit of a circular argument I would say.

I would hope for an appeal, but I don't expect one....this is a battle that until the copyright world changes a little, RealNetworks stands to lose.