now with more cowbell
321 ... 0
Posted: 2004-08-14 00:41
2 comment(s)
Author: Phil Gengler
Section: Stuff

The biggest news of late (at least, that's applicable to this site) is the announcement that 321 Studios has decided to shut down. 321 Studios has been at the forefront of the MPAA's legal crusade against DVD copying. 321's flagship product, DVD X Copy, which allowed users to make backup copies of DVDs that were also stripped of the CSS, was denounced by the MPAA as a piracy tool. The legal struggle started back in 2002, when 321 preemptively sued several movie studios, seeking to have a court declare their product to be legal, heading off any lawsuits down the line. The studios countersued, and the matter has been tied up since. 321's failure to win a DMCA exemption in 2003 also came as a blow.

The end result of the whole mess has been to bankrupt the company. The MPAA's countersuit resulted in injuctions being issued against 321 Studio's software. Without a revenue source, and faced with mounting lawsuit costs, it was obvious that they could not put up the fight forever.

The downfall of 321 Studios comes a blow to those of us who hoped that the case would prove to be the catalyst for scaling back the DMCA, but the company was put into an untenable position through what Ars Techica described as a "paradox ... She [Judge Susan Illston] asserted that customer's(sic) appear to have a legal right to make backup copies of movies, but pointed out the DMCA made it illegal for customers to buy software that allows them to." This not a paradox created by her ruling. The DMCA creates that paradox, and Judge Illston read the law as it is written. The way §1201(a)(2)(A) is written does not leave any room for interpretation in the matter. DVD X Copy does circumvent the CSS encryption that "protects" the underlying work, and it is plainly stated in the law that:

No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that —

(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title

It is conceivable that the argument could be made that the software was not designed specifically to circumvent CSS, but since the fact that it does is integral to the software, it is not likely this would stand up in court.

It was also announced that 321 Studios will be settling with the studios for an undisclosed but "substantial" sum of money, and the terms of the settlement bar 321 from selling DVD X Copy. In a statement issued before his retirement (which I will be getting to in a moment), Jack Valenti said that "321 Studios built its business on the flawed premise that it could profit from violating the motion picture studios' copyrights."

Now, it should be fairly obvious here that 321 Studios did not violate any of the MPAA's copyrights. §1201 of the copyright law covers circumvention of access control, not infringement or violation. It may (and I say may because this was never decided finally) be the case that 321 Studios was in violation of §1201, but this does not make them copyright violators.

Changing subjects slightly, I mentioned above that Jack Valenti has retired as the head of the MPAA, as noted by Tim Wu over at Lessig's blog. There are also some choice quotes of Valenti's from his years as the MPAA head, all of which are worth reading (for the amusement), but one of them deserves to be copied everywhere:

We are facing a very new and a very troubling assault ... and we are facing it from a thing called the video cassette recorder and its necessary companion called the blank tape.
We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry ... whose total future depends on its protection from the savagery and the ravages of this machine [the VCR].
[Some say] that the VCR is the greatest friend that the American film producer ever had. I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Since the Supreme Court's Betamax decision in 1984 (which ruled VCRs legal), video sales have been Hollywood's biggest source of profit. To hear the same companies make the same accusations again for new technologies would almost amusing, if it were not for the fact that they stand poised to put a stop to nearly all technological development in the future.

Yes, it is the Inducing Infringement of Copyright Act (S.2560), formerly the INDUCE Act. I am not going to into detail about it, as many others have already done a better job than I ever will, but if the bill becomes law, Congress (which already seems to lean heavily toward supporting the MPAA) will be required to effectively approve any new technology if there is the slightest chance that it could ever be used for an infringement of copyright. (For those interested, video of the hearing on the act is available directly or via BitTorrent.)

Even without the INDUCE Act, we are already seeing some of the effects of this mindset. Recently, the FCC approved TiVo's plan for allowing users to share recorded programs with up to 9 other users over the Internet. I think it is a shame that we have come to a point where we need to ask permission to develop something legal.

There is a good deal of other news to read up on, but for me to summarize any more of it here would be a waste of time, as Copyfight has been doing an excellent job of that lately. I hope to start writing of some more recent news as it comes up from now on.


» tim wu
Posted: 2004-08-19 15:02:46
Author: jay

tim wu had an interesting post about the fcc recently on the lessig blog; did you catch it?

» re: tim wu
Posted: 2004-08-19 21:40:11
Author: Phil

He's actually done a couple of posts about the FCC, different aspects of what they're up to, but they're all good reading.

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