Gizmodo says in a post today:
Testing the waters with a low-stakes product isn’t a bad idea in itself, but RealDVD is the wrong low-stakes product for the job. Real claims that Facet copies DVDs to an internal HDD, but offers absolutely no means by which these files could be shared—they’re DRMed, disconnected from the outside world a locked in an actual box. RealDVD, on the other hand, copies films to your PC’s drive and wraps them in iTunes-style DRM, which allows playback on up to five machines. That opens opens a piracy angle for the MPAA—one that could conceivably swing the case in their favor, killing RealDVD and precluding production of Facet for reasons that don’t even apply to it.
On some instinctive level, I see where Gizmodo is coming from here. You never want to give courts a reason to dislike you when you’re walking in their doors, and ‘piracy’ is certainly going to make courts a little skeptical, even if the ‘piracy’ is of a very limited sort that hundreds of millions engage in every time they use their ipod.
At the same time, once you look at it a little more deeply, RealDVD is probably a perfectly fine case for Facet- two big features of the law at issue make it very unlikely that the courts would decide any differently for one product or the other. They sink or swim together.
First, Real is very wisely making very loud noises about the chilling effects on product innovation that the DMCA has here. Since Sony, courts have been told to be very concerned about this issue, and generally, they have been. Even in Grokster, where the Supreme Court absolutely creamed Grokster, the justices were very careful to say that they didn’t want to discourage all innovation- only innovation that was imagined, implemented, and marketed as piracy gear. So Real is getting off on the right foot- focusing on personal use and innovation.
More importantly, the law in this particular case makes it clear that piracy doesn’t matter- so the (relatively) subtle difference between what the two Real products do after the copy takes place aren’t something the court should pay much attention to. There are two relevant sections of the DMCA:
17 USC 1201(a)(1)(A) No person shall circumvent a technological measure that effectively controls access to a work protected under [the copyright act].
17 USC 1201(a)(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that … (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title;
Take a quick read of that first part. If you “circumvent” a “technological measure”, the law as written doesn’t care if you’re doing it to ‘pirate’ or to find the author’s email address so you can send him a billion dollars. You’ve violated the DMCA, period. So both Real products are essentially the same – from the perspective of the law – on this score. The second restriction is similar- it is illegal to sell a system whose core reason for being is focused around DMCA violation. We don’t ask what the non-circumventing functionality is (does it use the copies to club baby seals or save orphans?). We only ask whether it has ‘limited commercially significant purpose’ other than the ‘circumvention.’ Again, the Real products, while different from a consumer (and maybe PR) perspective, violate (or don’t violate) the law in roughly the same way.
Given the importance of innovation, and the irrelevance of piracy to the DMCA, this is probably a perfectly fine test case- maybe not ideal, but as good as they are going to get given the flaws in the law they are trying to get around.