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RealDVD Case Back In Court This Week

San Francisco — Testimony will continue this week in the movie industry’s legal challenge against RealNetworks’s RealDVD software, which copies movie DVDs to a PC’s hard drive for storage and playback.

RealNetworks is defending the $29.99 software from a lawsuit filed late last year by the movie industry, which contends the software violates the Digital Millenium Copyright Act (DMCA). The studios fear the software, and by inference DVD-copying movie servers for the home, will encourage consumers to copy rented and borrowed DVDs and thus harm the studios’ DVD rental and sales income.

The software package has been off the market since last October after Judge Marilyn Patel of the U.S. District Court for the Northern District of California issued a temporary restraining order (TRO) prohibiting RealDVD sales. The TRO would remain in effect while she considers a movie-industry request for a preliminary injunction, which would keep RealDVD off the market during a full trial on the merits of the studios’ complaint.

If the judge grants the preliminary injunction, “it would say Hollywood would likely win if the case went to trial and would suffer irreparable harm if RealDVD went on the market again,” a spokesman said.

After Patel decides whether to grant a temporary injunction, either side could appeal. In one potential scenario, the judge could impose an injunction against RealDVD availability, Real could appeal, and if Real lost the appeal, the issue of RealDVD’s legality could go to full trial while a temporary injunction is in force.

Following six months of discovery and depositions after imposing the TRO, the judge last week began to hear witnesses to help her decide the temporary-injunction request. The hearings resume on Thursday, and closing arguments could be heard this Friday or the following week, a RealNetworks spokesman said.

During last week’s hearings, RealNetworks revealed that it developed its own DVD jukebox, a DVD player equipped with hard drive and RealDVD software to copy and store movie DVDs. Had it not been for the TRO, issued last October, the device could have been available for sale in early 2009, a RealNetworks spokesman told TWICE. “We were far enough down the path with a lot of companies that we were ready to go to market before the studios sued us,” he added. Real talked to LG, Sharp, Buffalo and TiVo about manufacturing the product, he said.

In their suit, the studios seek damages and a permanent injunction against sales of the software, which also enables four additional PCs, registered with Real at a cost of $19.99 each, to play copies saved to an external USB hard drive.

Judge Patel is the judge who shut down the original Napster peer-to-peer file-sharing service.