Hollywood vs. RealNetworks: Victory for Hollywood

RealNetworks announced late Wednesday that it has reached an overarching settlement to end a series of lawsuits over its DVD-copying software. The company is now banned from further selling its RealDVD software.

Six of the major Hollywood studios, including Disney and Sony Pictures, filed lawsuits against RealNetworks because they claimed that RealDVD was an illegal pirating application.

Although RealNetworks initially argued that the software’s piracy protections (e.g., it only allowed for one copy of a DVD) gave them a legal defense from the piracy claims, each court proceeding added a new nail to RealDVD’s coffin. The software company eventually decided to just settle.

RealNetworks will now pay $4.5 million to the studios involved in the lawsuit, and all 2700 customers who purchased the program will receive a refund.

US District Court Judge Marilyn Hall Patel placed a ban on all RealDVD sales when the trial began. And in the middle of the months-long trial, she granted a preliminary injunction against the software. Attempts by RealNetworks to file a counterclaim against the studios, largely a retaliatory move, were quickly shot down.

The MPAA’s general counsel Daniel Mandil said, “Judge Patel’s rulings and this settlement affirm what we have said from the very start of this litigation: It is illegal to bypass the copyright protections built into DVDs designed to protect movies against theft.”

RealNetworks said it hopes to find new, “mutually beneficial ways” to allow users to share and back-up their movies.