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RealNetworks settles RealDVD dispute with Hollywood studios |
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RealNetworks will now have to permanently halt the manufacture and sale of RealDVD under a 'stipulated consent judgment and permanent injunction' approved by Judge Marilyn Hall Patel of the United States District Court, Northern District of California. The order brings to a close a year and a half long legal action against RealNetworks by the DVD Copy Control Association (DVD CCA) and major motion picture studios. They were arguing that RealDVD violated the Content Scramble System (CSS) license agreement and made illegal permanent copies of copy-protected DVDs.  In September 2008, a temporary injunction stopping sales of RealDVD was imposed shortly after the product was introduced. At the time, DVD CCA and the studios alleged that the product – which made permanent playable copies of DVDs – failed to comply with copy protection requirements to which RealNetworks had contractually agreed. The court has now permanently prohibited RealNetworks from, among other things, "manufacturing, importing, marketing, offering to the public, providing or otherwise trafficking in RealDVD." In a statement, RealNetworks said that it has settled lawsuits with the six major Hollywood movie studios, Viacom Inc., and the DVD Copy Control Association related to Real's RealDVD product. As part of the settlement, RealNetworks will withdraw its pending appeal of the District Court's preliminary injunction, and the parties have agreed to the terms of a permanent injunction that will prohibit RealNetworks from distributing or supporting RealDVD or any other technology that enables the duplication of copyrighted content protected by the Content Scramble System, ARccOS, or RipGuard. The Content Scramble System (CSS) is the protection system that has enabled the owners of movie content to provide consumers access to high quality DVD movies for home viewing on their video systems and computers. CSS, according to DVD CCA statement, protects motion pictures from unauthorized duplication and infringement of the intellectual property contributed by the many writers, directors, actors and producers who create such works. Real also agreed to pay the studios $4.5 million for their costs and fees in connection with the litigation. Real will turn off the metadata service that provides DVD cover art and movie information, for the approximately 2,700 existing RealDVD customers, and the company is in the process of refunding the purchase price of the product to these customers. Bob Kimball, president and acting CEO for Real said, "We are pleased to put this litigation behind us." He said the settlement was “another step toward fulfilling our commitment to simplify our company and focus on our core businesses.” Real said its payment obligation under the settlement agreement will be reflected in its consolidated financial results for the quarter and year ended December 31, 2009, which the Company will include in a Form 8-K to be furnished tomorrow to the Securities and Exchange Commission. |
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