321 APPEALS DMCA RULINGS THAT BANNED ITS DVD-BACKUP SOFTWARE
DVD-backup software developer 321 Studios filed appeals in 2 federal courts Thurs. against preliminary rulings that banned sale of its products. The company contends the orders violated its free speech rights and customers’ fair use prerogatives. 321 also claims a provision of the Digital Millennium Copyright Act (DMCA) used to block the sale of its software -- the clause that prohibits circumvention of copy protection mechanisms -- is unconstitutional. The maker of the DVD X Copy family of DVD cloning applications requested emergency stays of the rulings.
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321 filed its appeals and stay requests in the 9th U.S. Appeals Court, San Francisco, and 2nd U.S. Appeals Court, N.Y.C. The 9th Circuit includes the U.S. Dist. Court, L.A., that Feb. 20 first ruled against 321 and in favor of Hollywood studios’ request for an injunction against the sale of the DVD cloning software. As a result, since Feb. 27, 321 has sold only versions of backup software that do not circumvent DVD’s Content Scrambling System (CSS). The products don’t include a so-called “CSS ripper” that enables unfettered copying of protected DVDs. But CSS rippers are widely available, free, on the Internet. Downloaded to PC, they enable CSS hacking with “ripper-free” DVD backup programs from 321 and other software companies.
In the 2 courts, 321’s appeals argue the DMCA is unconstitutional if, as the 2 trial courts ruled, the DMCA allows consumers to copy DVDs on fair use grounds but denies them the tools -- such as programs with CSS rippers. The company’s brief says fair use rights are constitutionally mandated. “Even New York Judge Richard Owen acknowledged at a March 15, 2004, hearing that if the DMCA effectively denies consumers the tools to exercise their fair use rights, then 321 has ‘a beauty there,'” the company said.
321’s challenges also argue procedural points. The company contended its free-speech rights had been violated in U.S. Dist. Court, N.Y.C. 321 argued that with its preliminary injunction, the court imposed an unlawful prior restraint on 321’s free speech rights by prohibiting 321 from speaking out about its products and dealing with customers in jurisdictions where no DMCA-like law applies. Additionally, 321 said the Cal. and N.Y.C. district courts ignored previous case histories. Specifically, 321 said the rulings were inconsistent with Chamberlain Group v. Skylink, where another district court concluded that the DMCA didn’t prohibit the sale of a universal garage-door-opener remote control, even though the remote bypassed encryption. The Chamberlain court upheld the garage owner’s right to open his own garage door, and 321 similarly argued that lawful purchasers of DVDs have the inherent right to unlock their DVD’s encryption to access the DVD’s contents.
The appeal by 321 claims the DMCA unlawfully extends copyright protection. The company said that, in effect, the rulings deny consumers the tools to make digital copies of DVDs, thus preventing access to and copying of public domain films and govt. works -- in violation of the “limited times” provision of the Constitution’s copyright clause. Elsewhere, 321 has pointed out that many movies starring John Wayne have entered the public domain, and copying of those DVDs should be lawful.
Financial considerations also are covered in 321’s appeals. The company argued that the harm 321 and its customers are suffering under the injunctions “dwarfs any harm the Studios might incur should the Courts of Appeal grant stays.” It further argued that “in fact, the threat of harm was so inconsequential to Paramount and Fox that those Studios waited 18 months before filing their case,” -- an allusion to the late 2003 suit by those studios in N.Y.C., about 1-1/2 years after 321’s DVD cloning products got to market.
The saga of 321 v. Hollywood is nearly 2 years in the making. The company, in April 2002, filed a pre-emptive suit in Cal. asking the federal court to rule that the company’s software didn’t violate the DMCA and was legal for sale. Later that year, the Hollywood studios countersued, requesting an injunction against the sale of 321’s software. The next step in the N.Y.C. 2nd Circuit case will be a hearing on a motion for stay on April 13, when the court will set a schedule for briefing and argument on the merits of the case. The Cal. 9th Circuit motion for stay can be ruled on any time, without a public hearing. Opening briefs are due June 18. 321’s legal filings are available in the “Press” section at www.321studios.com.