Wednesday, January 13, 2010

Judge rules movie industry not a cartel

There was another interesting development in the RealNetworks case against the movie industry last Friday when Judge Patel ruled that the industry was not a cartel.
"For years, RealNetworks has wanted to produce and sell a product called RealDVD that would enable the legal owners of DVD movies to copy their content onto a hard disk drive, in order that the original discs may stay protected like archival copies. Movie studios responded in September 2008 by suing Real, alleging that its technology intentionally circumvented their copy control system -- a circumvention that violated the US Digital Millennium Copyright Act. That led to an injunction barring any sale of RealDVD, which is still in force today.
Real then responded with a countersuit, blasting the movie studios with an allegation that they were leveraging the DMCA as a platform on which to build a kind of content cartel...
But Judge Marilyn Hall Patel ruled Friday that just because Real believed there was no need to purchase a license, did not prevent it from negotiating to purchase a license. Thus the movie studios could not have collectively prevented Real from making a copying mechanism possible, since the alternative of negotiation was there and has always been there."
The judge said:
"Any assertion by Real that the Studios' refusal to license the copying of DVDs caused an antitrust injury apart from the delay resulting from the injunctive relief is contradicted by Real's assertions that it believed no license was necessary."

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