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DVD software backups challenged in U.S. court

By David Lawsky

SAN FRANCISCO (Reuters) - Hollywood movie companies told a federal judge on Friday that RealNetworks violated copyright law by selling software that allows people to make backups of their DVDs on a home computer.

U.S. District Judge Marilyn Hall Patel convened the first-day arguments by the movie companies and the DVD Copy Control Association that "RealDVD" software should be banned.

"In the end, this case will be about how RealNetworks tries to take money that is not theirs," argued Bart Williams for the movie companies.

At one point, he said some RealNetworks code came from Ukrainian hackers, but a company spokesman said none was in the product.

If RealNetworks wins, it could establish a beachhead for software that transfers movies from DVDs to hard drives, opening the door for many companies to sell devices that can store and organize movies from DVDs.

RealNetworks began selling "RealDVD" for $30 at the end of September, but only a few thousand copies were out the door before it wound up in court. Judge Patel temporarily halted sales in October.

Now the judge is considering a preliminary injunction against the Seattle-based software company. RealNetworks lawyer Len Cunningham argued that the studios had their own products which provide for backups, called digitalcopy.

"They have aggressively marketed it," he said. "The threat (to Hollywood) is for legitimate competition."

The judge interjected: "They have the copyright."

Cunningham argued that DVD owners have a "fair use" right to make copies of their own DVDs. But Reginald Steer of the DVD group said the Digital Millennium Copyright Act of 1998 had overtaken that argument.

RealNetworks says the software can be used with one hard drive and only five devices, such as laptops or televisions. That would prevent it from getting on the Internet or being handed off from one friend to another, they say.

Movie companies in the case are Disney, Warner Bros, Sony Pictures Entertainment, Twentieth Century Fox, owned by News Corp, Paramount Pictures, owned by Viacom, and Universal Studios, owned by the NBC Universal media wing of General Electric Co. They were joined by the Motion Picture Association of America.

(Reporting by David Lawsky, editing by Matthew Lewis)

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