On 11 August 2009, a U.S. District Court in California ruled that RealDVD, RealNetwork's software that enables users to copy DVDs for personal storage on hard drives, was in violation of U.S. copyright law. In light of the evidence that RealDVD circumvented anti-piracy protection requirements set out in law, Judge Marylin Patel granted the DVD Copy Control Association (DVD-CCA) a preliminary injunction against the release of RealNetwork's line of RealDVD products (see Real v. DVD-CCA ruling here).

Intended to be released in September 2008, the RealDVD software provided users with a variety of functions, including the copy and storage of DVDs to a computer hard drive for safekeeping and later playback.  The software would also act as DVD jukebox, allowing users to store up to 70 DVDs in their archives for organizing and playback of DVDs in a user friendly interface. However, with concerns of DVD pirating and a breach of licensing agreements, motion picture studios and DVD-CCA filed a lawsuit on September 20, 2008 asking for a temporary restraining order on RealDVD's release.

One of the main issues in the case was whether RealDVD complied with the Content Scramble System (CSS) Licensing requirements. CSS is a Digital Rights Management scheme licensed by DVD-CCA that incorporates encryption and authentication keys into DVD releases, drives and players. CSS schemes are able to prevent byte-for-byte copies of DVDs from being playable as the output is 'scrambled' without the proper decryption keys. CSS technology also requires that a DVD player authenticate itself to specific DVD drives. DVD playback is tied to the DVD itself in an authorized DVD drive.  As such, playback of a DVD will fail if the physical DVD is not within the DVD drive. As many DVDs on the market incorporate CSS technology, most DVD players require a CSS decryption module.

RealNetworks obtained a CSS license from the DVD-CCA for its RealDVD product. Under the agreement, the licensee is to "provide reasonable security to the contents of DVD discs...and to provide protection for copyrighted content against unauthorized consumer copying". The licensee also agrees to prevent "digital-to-digital copying in a personal computer environment". However, the line of RealDVD products purposely enables users to make these digital-to-digital copies of DVDs. Real software engineers developed software that was able to circumvent the methods of CSS copy-protection and other anti-piracy technologies such as ARccOS and RipGuard in order to enable users to create their digital archives.

DVD-CCA claimed not only a breach of contract, but also a violation of the Digital Millenium Copyright Act (DMCA) which prohibits the circumvention of copy-protection schemes.

The DMCA's access-control provision under s.1201 (a) prohibits manufacturers and users from producing or using devices that circumvent technological measures that controls access to the copyrighted work. It also provides for specific exemptions (currently six issued by the Librarian of Congress) that excuse circumvention in cases ranging from educational use to certain obsolete computer programs.

DMCA also contains s.1201 (b) which prohibits using or selling devices that circumvent protection afforded by a technological measure that protects the rights of a copyright owner (e.g. copy-protection), that parallels the ban found in s.1201 (a). However, s.1201 (b) does not have the specific exemptions found in s.1201(a) and is only subject to s.1201(c) which provides for the possibility of the right of fair use.

According to the U.S. Copyright Office, the omission of the specifically tailored exemptions for s.1201 (b) was intentional so it could accommodate the copying of a work as fair use under certain circumstances. Released as a DMCA U.S. Copyright Office Summary, it stated that the omission was to ensure 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."

As pointed out by Judge Patel, Congress did not intend to regulate users with authorized access to copyrighted works, and thus the DMCA implicitly recognizes a "user exemption" for fair use. Real has argued that this user exemption would include users who wish to copy DVDs for personal use. Patel, however, has declined to decide in this trial whether the "user exemption" would always include the making of personal copies.

Real also argued that DVDs are no different than CDs in the music industry. If users are able to make backup copies of their CDs or to transfer its contents to a computer or an iPod for personal use, a distinction should not be made for DVDs. The RealDVD platform had also relied upon a previous California ruling in DVD-CCA v. Kaleidescape that decided Kaleidescape's DVD jukebox software was not in violation of CSS Licensing agreement.

While Judge Patel appreciated Real's argument that a "user exemption" under the DMCA should include the making of personal copies of DVDs, Patel also ruled that Real is a manufacturer, which is not exempt from the DMCA's ban on trafficking devices that circumvent copy-protection technologies. Additionally, the DVD-CCA v. Kaleidescape ruling does not apply to Real's situation as the nature of the contract had changed. The Real CEO's belief that Kaleidescape's product was legal was a mistake and no evidence was shown that Real communicated to DVD-CCA that it intended to construe the Kaleidascape decision as authority to produce RealDVD.

Judge Patel's decision is not surprising given the current push for strengthening of anti-piracy legislation. Interestingly, this case brings attention to the issues that arise from Congress' attempts to provide fair use exemptions while weakening access to pirating technology.

But if I am allowed to make backup digital copies of DVDs for personal use, yet it is illegal for anyone to manufacture a device that allows me to make copies, I would essentially have no means of exercising my right of personal use in this manner. I may not have the technical expertise to create my own personal DVD copier, but would larger grassroots attempts in providing ways to copy DVDs also fall under DMCA's "user exemption" (e.g. release of open source software to the public on the internet)?

It seems that the attempt by Congress to legislate this balancing act has left many holes yet to be filled when the issues arise. As it stands, the "user exemption" for backing up DVDs under the DMCA is still largely non-existent - but we have stronger anti-piracy protection.