May 13th, 2009
Real files antitrust countersuit against Hollywood's "illegal cartel"
Real Networks has turned the tables on Hollywood movie studios, filing a countersuit in U.S. District Court today that accuses the studios of violating antitrust laws by collaborating to form an “illegal cartel” that’s trying to monopolize the DVD market. (PDF)
The countersuit accuses the DVD Copy Control Association and the major studios of conspiring to eliminate any competitor from being in the market for fair-use copies of DVDs. The suit went on to note that the studios refused to enter into partnerships with Real unless the studios collectively agreed.
Also see: Studio, Real trade lawsuits over RealDVD
The matter stems back to Real’s DVD-copying software product, called RealDVD. The product allows users to make a copy of a DVD and places restrictions on the playback capabilities as a means of discouraging piracy and mass distribution. Shortly after the software was released last fall, the studios filed suit, asking for - and receiving - an injunction to halt sales of the software.
The courts agreed and, since then, the software has been unavailable. The two sides have argued their points in court in recent weeks and closing arguments are scheduled for May 21.
This countersuit likely won’t affect those proceedings. In its claim, Real Networks is asking for an injunction that would bar the DVD CCA and the studios from their “anticompetitive” activities, as well as monetary damages. In the suit, Real said the studios are motivated by their own financial gain and are engaged in practices that allows them to profit from their “illegal scheme.” Specifically, the suit says:
…despite the fact that their customers have a fair-use right to make backup copies of the DVDs they already have purchased, the Studios would like to force DVD owners to pay a second time to obtain that copy. In other words, the Studios want to charge consumers to exercise their fair-use rights. If the co-conspiring Studios and the DVD CCA succeed in imposing this illegal surcharge, they will have reduced the value of the DVDs consumers already own or would buy… The Studios perceive the new products developed by RealNetworks as a significant threat to their ability to monetize the non-infringing digital copies consumers already are entitled to create, a stream of revenue to which the Studios purport they are entitled but as to which the copyright laws, in fact, give them no right…
Unless a court intervenes, the studios will face no competition in the market that allows users to to make a secure backup copy of a DVD, Real said. Without competition, studios will have no reason to make fair-use copying technology available, the company said.
The studios listed in the suit are: Disney, Paramount Pictures, Sony Pictures, 20th Century Fox, NBC Universal, Warner Bros. and Viacom.
Also see: RealDVD hearing: Don’t block the software because of what-ifs
Video: RealDVD goes live, let the lawsuits begin
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
Subscribe to Between the Lines via Email alerts or RSS.
