It's the end of the line for RealDVD, the consumer DVD-copying software that barely ever saw the light of day.
RealNetworks said today that it agreed to the terms of a permanent injunction that prohibits the company from selling the product or any technology that enables DVD-ripping. The product allowed users to copy their personal DVDs onto a hard drive for restricted playback, much like music CDs can be imported into a computer via Apple's iTunes and other products.
As part of the settlement, Real will also disable the technology that powers the approximately 2,700 copies of the software that were sold before the studios prevailed and were able to score an injunction to halt sales of the product. Those customers will be receiving a refund from Real.
Finally, Real will pay the studios $4.5 million for fees related to the lawsuits. In a statement, president and acting CEO Bob Kimball, who replaced company founder Rob Glaser after he stepped down in January, said:
We are pleased to put this litigation behind us. This is another step toward fulfilling our commitment to simplify our company and focus on our core businesses. Until this dispute, Real had always enjoyed a productive working relationship with Hollywood. With this litigation resolved, I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood’s great work to consumers.
The product was controversial from the beginning, with the Hollywood suits coming in as soon as the company released the products. In the months that followed the filing of the suits, Glaser was committed to fighting the studios, saying that it was a product worth fighting for.
There were fair-use advocates - myself included - who said that the courts shouldn't block innovative software based on "what-if" scenarios, which were played out during court proceedings last Spring. Music CD-ripping products also contain plenty of what-ifs related to improper use and unauthorized copies but no one is shutting down the "Import CD" feature on iTunes.
In the end, the technology that powered the software - and the question of whether its use was authorized - raised enough red flags to dilute any arguments related to fair-use. Ultimately, the case came down to Real's violation of the Content Scramble System (CSS) license agreement it had with the studios. In a statement, Jacob Pak, president of the DVD Copy Control Association, said:
Almost from the moment this product was introduced, it was clear RealDVD violated the CSS license. Now, after months of arguments from both sides, the legal message is clear: making a DVD copier is a breach of the CSS license. This case demonstrates how important it is to uphold legal agreements that are essential to fostering and maintaining a vibrant competitive industry... We would always prefer to focus our efforts on working with licensees on the development of new or improved DVD products for consumers and our industry. But such a cooperative approach requires licensees to respect the CSS license and its amendment process, which did not occur in this case. The CSS license, which allows licensees to develop and manufacture compatible products under common specifications and at low cost, enabled the birth and growth of a robust DVD industry, benefiting consumers and technology companies as well as those companies whose high-quality entertainment is protected on DVDs.