When RealNetworks debuts new DVD-to-PC copying software Monday morning at DEMOfall 08, one major selling point will be that users can sleep soundly knowing for the first time that their homemade copies of commercial movies are perfectly legal.

Maybe. (Update, Sept. 30: The legal battle begins.)

The motion picture industry, which doesn't even like to see the words "DVD" and "copying" in the same sentence, says it's not ready to endorse that blanket assurance from RealNetworks, as it learned of the product only late last week. The industry has fought such DVD copying in the past, last year losing a drawn-out courtroom battle with an upstart maker of high-end media servers, a ruling one losing attorney suggested -- warned, actually -- would "open the floodgates" to exactly the type of inexpensive DVD copying system RealNetworks is unveiling today. The industry has appealed that court ruling.

Called RealDVD, the $50 application from RealNetworks ($30 introductory price) may make digital movie collections more accessible, portable and easier to manage ... in addition to causing consternation in the multibillion-dollar DVD industry. (Update, Sept. 30: Network World's Keith Shaw reviews the product here.)

"Unlike existing consumer applications on the market today, RealDVD is licensed DVD software that saves a secure copy of a DVD to the hard drive without removing or altering the CSS encryption," says RealNetworks in a press release preceding Monday's onstage demonstration in San Diego. Network World's biannual DEMO event, the technology industry's preeminent showcase for startups and new products, runs through Tuesday with 72 exhibitors slated to strut their stuff.

RealDVD needs 10 to 40 minutes to copy a flick and eats up 4 to 8 gig per saved movie, according to RealNetworks. Portable storage devices will be required to augment hard drives for users who want to collect more than a handful of movies. "Saved DVDs are then encrypted and locked again to make sure they cannot be shared or stolen," the company says. Users may purchase additional licenses in order to view their collections on up to 4 additional machines for $20 per machine.

While RealNetworks emphasizes the convenience features of RealDVD, it's the potential legal issues that will earn the product extra attention. The DEMO show book puts it this way: "If you're feeling a little guilty about the DVD library you ripped to your hard drive, listen up: RealNetworks will help you go legit."

At least that's the claim from the company's FAQ about the product:

Is it legal to save movies with RealDVD? Yes, provided that you are the owner of the original DVD and you use your saved copy solely for your personal use.

Now raise your right hand ...

Asked if the movie industry had any problems with the copying enabled by RealDVD, RealNetworks spokesman Ryan Luckin told me Friday afternoon that his company had just begun informing industry officials about the product, which despite any questions on that score was to be available for download Monday at www.realdvd.com. "They seem to be OK with it," he added.

Not so fast, says the Motion Picture Association of America.

"We really just became aware of this in the past 24 hours," Elizabeth Kaltman, a spokeswoman for the MPAA, told me late Friday. "We have nothing else to say at this time."

There was also nothing in her tone to suggest that the MPAA's acquiescence is a mere formality.

According to Luckin, RealNetworks' confidence in the legal foundation of RealDVD is based in part on a courtroom victory scored in March 2007 by high-end home-entertainment center maker Kaleidescape, which had been sued by the DVD Copy Control Association. The group appealed that decision in December.

The ruling in favor of Kaleidescape was hailed by the victor as a triumph for innovation and consumer rights, according to a story in EE Times:

"We will see more competition now," said (Kaleidescape founder and CEO Michael) Malcolm. "That's probably the biggest loss in the eyes of the DVD CCA. They will see a lot more consumer companies going into this kind of product." In closing arguments (the DVD CCA's attorney) warned that a ruling in favor of Kaleidescape "could open the floodgates to copycats. Prices could come down to that of a laptop for products that are not as elegant as Kaleidescape's but have the same basic functionality."

Elegance is in the eye of the beholder, but there's no doubt that day has arrived -- and at a lot less than the price of a laptop.

What remains to be seen is whether the movie industry will continue to fight what has so far been a losing battle.