RealNetworks calls Hollywood studios an 'illegal cartel'

By Tim Conneally | Published May 14, 2009, 11:55 AM

RealNetworks is now pointing an accusatory finger at Hollywood, and yesterday filed a countersuit in the U.S. District court of Northern California calling the DVD Copy Control Association and its related Hollywood studios an "illegal cartel."

The suit originated late last year when Real's DVD archiving software RealDVD was taken to court, and then temporarily banned for violation of the Digital Millennium Copyright Act. The hearings continued, but it turned out that RealDVD wasn't the main reason for the litigation after all. The true threat, as RealNetworks would reveal, was a product known as "Facet" -- a set-top box that allows CSS-protected DVDs to be copied, stored, and recalled at any time, like a much cheaper Kalidescape (the product upon which Real based its initial defense.)

Real's latest suit accuses the DVD Copy Control Association and Studio defendants (Disney, Paramount Pictures, Sony Pictures, 20th Century Fox, NBC Universal, Warner Bros., and Viacom.) of a horizontal conspiracy, and antitrust violations regarding CSS control.

The suit reads, "If one major Studio had entered into a deal with Real...it would have made it difficult for the rest of the Studios to charge consumers supra-competitive prices for their own 'managed copy' products, and so eventually many would likely have entered into their own agreements with Real. Such a deal also would have demonstrated the clear lack of irreparable harm required for an injunction. Because of the significance of one Studio entering into a deal with Real, the Studios decided that they could not break ranks. Instead, hiding under the umbrella of an organization that they control -- the DVD CCA -- the Studio Defendants jointly campaigned to eliminate the possibility of any entity other than themselves competing in this market."

Real says it almost signed a deal with Paramount, but at the last minute, that studio said it would require a huge payment to deal with Real individually. "There is no place under the antitrust laws of the United States for competitors to agree with one another that they will not enter into individual business deals with another potential competitor, for fear that such a deal would undermine their collective position in the Courts or in the marketplace," the complaint reads.

RealNetworks has repeatedly taken the stance that it is looking out for the consumer, claiming that Hollywood studios want to charge DVD owners to exercise their "fair use" rights:

"Whether or not customers have a fair-use right to make backup copies of the DVDs they already have purchased, the Studios' collective agreement not to negotiate individual licenses for their content with RealNetworks...is nothing more than an illegal price fixing scheme between horizontal competitors. The harm to consumers from such a scheme is obvious -- they will pay higher prices for the privilege of making digital copies of their DVDs."

Comments

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You can fight it by not buying their product. It will only take a year or two to let them know we won't put up with their crap. Unfortunately, there are too many people that want to be entertained. :-(
Stop going to the movies, buy used dvd/cds/games or trade (the physical ones not mp3's) with friends what you already have. stop using iTunes, and all the other online music outlets, go camping instead of to the movies, make your own music. learn to play a guitar, not guitar hero.

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"fair use" rights
Disney, Paramount Pictures, Sony Pictures, 20th Century Fox, NBC Universal, Warner Bros, and Viacom do not believe in such a thing, all they care about how much they can rip u off.

Copyright laws were never intended to be used this way its only been the manipulation of the big corporation threw the courts they've end up this way.

As for them beaning an "illegal cartel".
I agree on that one 100%, the only thing big business has on their minds is how money they can rip u off and they done care how they get.
Big Business is all about greed they don't care about people just how much they can rip u off.

Why do u think were in a globe recession, GREED people GREED...
All caused by Big Business trying to rip u off.
They still making money but we the people suffer for it and they are still lining their pockets.
Seem fair too you..

So it's for all to stand up and fight for your rights not only yours but your friends the people next door, everybody.

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I agree that consumers should have the right to "fair use" such as making a back up so you can give the kids the copy and not the irreproducible disk (i.e. disney movie), But unfortunately the W.T.O. wants all countries to use it's laws regarding copy-protection so any change to copyright laws is unlikely =(

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I agree that "fair use" should be allowed but unfortunately the world trade organization is the source of the current DMCA laws and wants all member nations to have laws that are along the same lines so along with corruption theres no way any changes will happen =(

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Agreed.. Oh wait.. They own the products so they should be able to do what they want right??

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Under current laws? Yes.

That's the problem....not the labels, not the studios....it's the laws. Copyright has become a monster, completely and totally devoid of any of it's original intent.

This needs to be fixed before anything else happens. Of course...it'll never happen (Congress-critters being bought out as stated by Scott), but it';s the right and logical place to start, regardless.

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@Tool You sarcastically say to Scott (below) "Nah, we should start by blaming the guys with the money, right?" Then about face and agree with Scott that "guys with the money" are the problem having "bought off" Congress :) So, who should we blame? Congress for allowing RIAA and other IP lobbyists to maintain the status quo? Since we know the problem (copyright law), how can we change the current situation?

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Money isn't the problem. The *laws* are the problem.

Did that clear things up for you?

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Finally, some sort of acknowledgement of the way those greedy corporate giants hold everyone to ransom. I hope all this leads to a weakening of their grasp even if it is just a slight improvement.

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The Obama administration has said that they are actually going to go after some anti-trust cases (the Bush administration didn't go after a single one). Going after the recording industry wouldn't be too popular in congress (bought off) but it would with younger voters.

It would also be the right thing to do, but that doesn't matter much when it comes to intellectual property issues.

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Here's a thought:

Instead of going after the studios and labels, who are not by anyone's definition, monopolies (or even breaking any laws), we fix the *real* problem...Copyright terms and penalties.

7 year copyright terms, non-extendable, after which the work becomes public domain. Fines equal to *no more* than 10x the "retail" cost of the work (A $22 DVD would *max* at a $220 fine), and no possibility of jail-time (all in cases where the infringing use was *not* for profit).

Stop them from being able to abuse the current laughable copyright laws and we *might* see some improvement in *all* aspects of the entertainment industry...

Nah... It's much easier to blame the guys with the money, right?

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What made you pick 7?

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Original was 14, I believe. I believe that's fine, but it's probably *way* too long for the ADD/gotta have it now/entitlement crowd...

Figured there might be room for a compromise.

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Seven years makes sense...ten at the most. After that the work is going to either be considered a classic (still sells) or old junk (doesn't sell).

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