RealNetworks sued over DVD-copying software

LOS ANGELES — Hollywood's six major movie studios Tuesday sued Seattle-based RealNetworks to prevent it from distributing DVD-copying software they said would allow consumers to "rent, rip and return" movies or even copy friends' DVD collections outright.

The studios stand to lose key revenue from DVD sales, estimated by Adams Media Research at $14 billion this year, if consumers stop buying DVDs and copy rental discs from outlets like Netflix and Blockbuster instead.

The suit, filed in U.S. District Court in Los Angeles, alleges RealNetworks' RealDVD program, which launched Tuesday, illegally bypasses the copyright protection built into DVDs.

"The incentive for the consumer is obvious and all but overwhelming," the studios said in a request for a temporary restraining order. " 'Why,' he or she may ask, 'should I pay $18.50 to purchase a DVD when I can rent it for $3.25 and make a permanent copy?' "

For $30, consumers can buy RealDVD and use it to copy DVDs to computers or portable hard drives, though the program prevents them from transferring the files to other users. The maker on its Web site calls RealDVD "100 percent legal."

"This is not a product that enables Internet piracy," said Bob Kimball, general counsel for RealNetworks.

Real has said the software enables DVDs to be copied onto up to five computers — with the purchase of up to four extra program licenses for $20 each — and does not alter the discs' encryption technology meant to prevent wide piracy.

The software locks the copy to the hard drive where it is copied and to the program it was copied with, Kimball said, adding that copying one's personal collection of DVDs amounts to "fair use" allowed by law.

He said the company discourages using the program to rip rental DVDs, but he acknowledged there's nothing to prevent consumers from doing that.

"We are very open to coming up with solutions to that problem that will require industry participation," he said.

The studios had asked the company not to launch the product last week.

They argued that the Digital Millennium Copyright Act makes it illegal to circumvent technology that prevents copying without the express permission of the copyright holders.

In a motion for a restraining order, the studios argued that a ruling by a California state court last year in favor of a company that sells entertainment centers that allow DVD copying is irrelevant to their case.

The plaintiffs in the suit against RealNetworks include Paramount Pictures, Sony Pictures, Twentieth Century Fox, Universal, The Walt Disney Co.'s Disney studio, and Warner Bros.

RealNetworks' stock slipped 3 cents to $3.42 Tuesday.