U.S. federal judge weighs DVD copying case

SAN FRANCISCO Thu May 21, 2009 9:37pm EDT

SAN FRANCISCO May 21 (Reuters) - A Federal District Court judge in California weighed arguments in a contentious DVD copyright case between Hollywood movie companies and RealNetworks Inc (RNWK.O) on Thursday, but did not indicate when she might rule.

U.S. District Judge Marilyn Hall Patel is expected to issue a written decision on whether sales of RealNetworks' software that allows people to make backups of their DVDs on a home computer -- which she temporarily halted in October -- can resume.

Her decision will come after hearing more evidence on whether the company violated the Digital Millennium Copyright Act of 1998 and the license it had with the DVD Copy Control Association and will indicate what she expects will happen if the issue goes to trial.

The movie companies argued that "RealDVD" software should be banned because it violates copyright law and agreed-upon encryption methods.

"Real reduces the cost of a DVD to zero if you borrow it or $3.99 if you rent it," said Motion Picture Association of America lawyer Bart Williams, quoting from earlier testimony.

RealNetworks said that DVD owners have a "fair use" right to make copies of their own DVDs, but said on Thursday the software did enable sharing among friends.

"Those are cumbersome ways to make copies and those are not the markets we are targeting, but yes, it can happen," said Don Scott, a lawyer for the Seattle-based digital media company.

The company said it would be willing to rewrite portions of the code to address specific concerns.

Scott said the studios' reluctance to help RealNetworks mark DVDs or create other protections was fear of losing market share.

The studios sell their own backup copies of movies, but said that RealNetworks violated the Digital Millennium Copyright Act because it does not hold the copyrights.

"This case is about Real trying to take money that is not theirs," Williams said. "When you buy a movie, you buy a copy of the movie, not the movie itself."

If the injunction against RealNetworks' software stands, it could bolster studio sales of digital backup copies.

If it falls, it could establish a beachhead for software that transfers movies from DVDs to hard drives, opening the door for many companies to sell software and devices that can store and organize movies from DVDs.

RealNetworks CEO Rob Glaser said in early May the company spent about $6 million in the first quarter on the lawsuit.

The studios would not comment on how much they have spent.

Movie companies in the case are owned by Walt Disney Co (DIS.N), Time Warner Inc (TWX.N), Sony Corp (6758.T), News Corp (NWSA.O), Viacom Inc VIAb.N, and General Electric Co (GE.N). They were joined by the Motion Picture Association of America and the DVD Copy Control Association.

A preliminary injunction would be in effect until the case is decided in a trial.

The case is RealNetworks, Inc. et al v. DVD Copy Control Association, Inc. et al in the Northern District Court of California, case number 3:08-cv-04548-MHP.

(Reporting by Clare Baldwin; Editing by Richard Chang)

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