Real Networks loses DVD copy case against Studios. What now?

David Heath
Friday, 15 January 2010 05:39

IT Industry - Market

Last week, Judge Marilyn Hall Patel “Dismissed with Prejudice” the case brought by Real Networks against The DVD Copy Control Association and several movie studios.  This means that Real is liable for all costs in the case.

The on-going fight between Real Networks and the Studios has come to an abrupt halt.  Having already been barred from selling the product at the centre of the dispute, the Presiding Judge has issued a final order dismissing the case and awarding costs against Real Networks.

The software in question was two packages to be called Vegas and Facet that would permit the rightful licensees of DVDs (you and me, in other words) to take backup copies of a DVD for storage and playback from a computer hard disk.

The outcome of the case hinged on two aspects.

Firstly that the studios asserted (correctly, in the judges opinion) that Real failed to allege any anticompetitive conduct that would be the cause in-fact of an injury to Real.

Secondly that Real’s accusations of an antitrust conspiracy on the part of the studios failed to meet the legal requirements of such a claim.

Judge Hall Patel was quite scathing in her dismissal of Real’s case, “Real’s purported injury stems from its own decision to manufacture and traffic in a device that is almost certainly illegal under the DMCA.  In the circumstances of this case, there is no allegation Real could make that would give it antitrust standing.”

Subsequent to the decision, we hear that Founder and CEO Rob Glaser is resigning immediately and COO John Giamatteo will depart in April.

This is a significant blow to the company.  The loss of CEO, COO and many millions of dollars should cause them to lose some focus, however the market has reacted strangely positively to the judgement and resignations.  Since the announcement, the share price has jumped around 20%.  perhaps the market sees this as a weight off the company’s shoulders.

Time will tell.