A federal judge is slamming the door on RealNetworks' argument the Hollywood studios are a "price-fixing cartel" that illegally prevent the distribution of DVD-duplicating wares.

The Seattle-based electronics concern made the anti-trust argument in a failed bid to convince U.S. District Judge Marilyn Hall Patel in San Francisco to lift a distribution ban (.pdf) of its RealDVD software. It allows consumers to make copies of DVDs to hard drives.

The Motion Picture Association of America and others sued RealNetworks more than a year ago, claiming the software is illegal because it circumvents technology designed to prevent copying.

Patel's decision means that, at least for the foreseeable future, it remains unlawful in the United States to market devices that copy DVDs. Despite a huge black market for them, the MPAA feared that under a contrary ruling it would lose control of the DVD as the music industry did the CD. CDs were not encrypted and protected by the Digital Millennium Copyright Act.

"Real's purported injury stems from its own decision to manufacture and traffic in a device that is almost certainly illegal under the DMCA," Patel, who was the judge in the Napster case, wrote late Friday.

Paradoxically, the courts have never squarely addressed whether individuals have the "fair use" right to duplicate their own DVDs. Lawsuits have targeted the makers of copying services, not individuals making backup copies of their discs.

RealNetworks claimed the MPAA unlawfully conspired to prevent competition with the implementation of a CSS code licensed to DVD-player manufacturers – a code that is the key to unscramble Hollywood's encrypted DVDs.

The CSS code is licensed to DVD-player manufacturers, so electronic companies can acquire the keys to unscramble Hollywood’s encrypted DVDs. The code is designed to prevent unauthorized copying of movie discs.

The judge said RealNetworks breached the CSS and other anti-circumvention technologies affixed to DVDs, and hence had no standing to even bring the anti-trust allegations.

"The court holds that Real has failed to allege a plausible anti-trust injury. Even if Real were free to circumvent CSS technology, RealDVD would have been enjoined due to its circumvention of non-CSS encryption devices," Patel wrote.

Patel's decision last year blocking RealNetworks from selling its software is on appeal. A decision is not expected for about a year.

RealNetworks declined comment.

Photo: john_a_ward

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