Film Biz Fights DVD Copy Industry

Attempting to prevent a "movie Napster," the film industry has launched major legal assaults on makers of DVD copying software, charging that it violates the law by circumventing the format's copy-protection technology.

The US District Court in New York is the site of one front in the war. There, on May 15, lawyers for Paramount Pictures Corporation and Twentieth Century Fox Film Corporation sought an injunction to prevent five software companies from selling programs that let users copy DVDs. Defendants include,;; Internet Enterprises, Inc.; and RDestiny LLC.

The studios asert that copying software violates the 1998 Digital Millennium Copyright Act, enacted during the Clinton administration with the backing of the entertainment industry. The software companies contend that their products fall under "fair use" provisions of copyright law that allow consumers to make backup copies of software, transfers of music they have purchased, and limited numbers of photocopies for noncommercial purposes. Taking their cue from the music industry's malaise, the studios hope to contain an epidemic of DVD copying before it gets out of control.

The New York case is paralleled by one currently running in a San Francisco. In that case, St. Louis–based 321 Studios, maker of "DVD X Copy" and "DVD Copy Plus" software, had sued the film studios in a preemptive attempt to have its products declared legal. Film studios promptly counter-sued, at the insistence of the Motion Picture Association of America (MPAA), arguing that DVD X Copy and DVD Copy Plus were clearly in violation of the DMCA—essentially, the same issue in the NY case.

In San Francisco, Judge Susan has heard arguments from both sides but has yet to rule on the case. In New York, arguments have just begun. The film industry fears losing billions in revenue should DVD copying become as easy and widespread as CD burning. The DVD is not only the most successful consumer electronics format ever devised; in its short life it's also become a major revenue stream for Hollywood.

321 studios has sold more than a half million copies of its software. For the film industry, litigation may already be too late. Computer stores are full of DVD hardware and software, and prices for DVD drives and burners continue to drop month-by-month, very much following the pattern of CD technology of just a few years ago. Even if such products were declared illegal, consumers would still be able to obtain them outside the US.

Among the litigants in the 321 case are AOL Time Warner, Vivendi Universal, Pixar Studios, Metro-Goldwyn-Mayer, Walt Disney Company, and Sony Corporation. Ironically, Sony was the defendant and Disney the plaintiff in the 1984 Betamax case that legalized the VCR and legitimized consumer's rights to make private recordings of copyrighted material. The Supreme Court ruling in that case has been cited in every copyright-infringement action since.