RealNetworks,
most popularly known for digital music service Rhapsody and digital
media player software, RealPlayer, didn't get much of a chance to
celebrate the launch of its latest digi-coup, RealDVD.
That is because the company was promptly sued by Walt Disney Co.,
Warner Brothers, Columbia Pictures, Paramount Pictures, Sony, Twentieth
Century Fox, and Universal Studios -- basically all of Hollywood.
Sounds familiar?
High-end media server manufacturer Kaleidescape
is probably in Silicon Valley feeling RealNetworks' pain. Last year,
after a long battle with the DVD Copy Control Association (DVD CCA) in
which it was accused of illegally bypassing the organization's
encryption measures (the Content Scramble System), Kaleidescape emerged
victorious, setting a precedent that most likely influenced
RealNetworks to go ahead with the development of RealDVD.
At
the time of its victory, Kaleidescape's CEO Michael Malcolm, in
addressing the DVD CCA's reactionary ploy to create an amendment to its
own rules, said in a letter to the organization: "There is no valid
business justification for the proposed amendment. If enacted, [it]
will harm consumers because it will suppress competition in the market
for DVD playback devices, block the development of new and innovative
products that will give consumers new ways to enjoy the DVDs they own,
and interfere with the ability of consumers to exercise their fair use
rights under copyright law."
Malcolm's plea
apparently has done little to widen the myopic view -- that consumers
will rent, copy, and return DVDs, therefore killing their DVD business
sales -- of Hollywood big-wigs, however. Upon suing RealNetworks
yesterday, Greg Goeckner, executive VP and general counsel for
the Motion Picture Association of America referred to RealDVD as
"StealDVD" and accused RealNetworks of purposely violating the 1998
Digital Millennium Copyright Act, which forbids the bypassing of the
digital rights management often found on DVDs, CDs, and certain MP3
downloads.
For its part, RealNetworks is fighting back hard.
The company argues that RealDVD's technology is in line with the law as
it adds another layer of encryption to the digital copies that prevents
file sharing. To underscore the point, Rob Glaser, CEO and
chairman of RealNetworks, noted in a rare blog post
on his company's web site, that RealDVD "is clearly legal. Over a year
ago in the Kaleidescape case the court ruled that a hardware product
with very similar functionality was legal."
Glaser also
indicated that RealNetworks and the studios were in talks right up
until the night before RealDVD's Tuesday launch, and seemed surprised
and disappointed by the lawsuit. RealNetworks has filed a countersuit
in San Francisco hoping to get approval for its software from the bench.