321 Studios v. Metro Goldwyn Mayer Studios, Inc.

Last updated
321 Studios v. Metro Goldwyn Mayer Studios, Inc.
US DC NorCal.svg
Court United States District Court for the Northern District of California
Full case name321 Studios, Plaintiffs,
v.
Metro Goldwyn Mayer Studios Inc., Defendants.
DecidedFebruary 19, 2004
Docket nos. 3:02-cv-01955
Citation(s)307 F. Supp. 2d 1085 (2004)
Holding
both of DVD Copy Plus and DVD-X Copy violated the DMCA and that the DMCA was not unconstitutional. 321 Studios was enjoined from manufacturing, distributing, or otherwise trafficking in any type of DVD circumvention software.
Court membership
Judge(s) sitting Susan Illston
Keywords
DVD ripping software, DMCA

321 Studios v. Metro Goldwyn Mayer Studios, Inc., 307 F. Supp. 2d 1085 (N.D. Cal. 2004), [1] is a district court case brought by 321 Studios seeking declaratory judgment from the court that their DVD ripping software, i.e. DVD Copy Plus and DVD X Copy do not violate the provisions of the Digital Millennium Copyright Act ("DMCA"), [2] or, in the alternative, that the DMCA is unconstitutional because Congress exceeded its enumerated powers, these provisions are unconstitutionally vague and/or violate the First Amendment.

Contents

The District Court for the Northern District of California rejected 321 Studios' claims for declaratory relief, holding that both DVD Copy Plus and DVD-X Copy violated the DMCA and that the DMCA was not unconstitutional. Simultaneously, the court granted an injunction to enjoin 321 Studios from manufacturing, distributing, or otherwise trafficking in any type of DVD circumvention software.

Background

Plaintiff

321 Studios was a private company that marketed and sold software and instructions for copying DVDs. [3] DVD Copy Plus consisted of an electronic guide explaining how to create backup copies of DVDs, two pieces of free, publicly available software, and a CD burning application. This software allowed users to copy portions of DVDs onto CDs regardless of whether they were encoded using Content Scramble System ("CSS"). DVD X Copy created backup copies of DVDs onto a user's computer that could then be burned to a DVD. DVD X Copy used a CSS key to access the data if a DVD was encoded with CDD. [4]

Defendants

The defendants were mostly made up of members of the Motion Picture Association of America ("MPAA"). As a result of the claim of unconstitutionality, the United States joined the suit as an intervening defendant. [1]

Claims

The plaintiff filed a complaint including two claims:

1. Claim One is a declaratory judgment that the distribution of DVD Copy Plus and DVD-X COPY do not violate the provisions of the DMCA or, in the alternative, that these provisions of DMCA are invalid because Congress exceeded its enumerated powers, these provisions are unconstitutionally vague, and/or these provisions violate the First Amendment of the Constitution.

2. Claim Two seeks another declaratory judgment that the distribution of DVD Copy Plus and DVD-X COPY do not violate the Copyright Act on the grounds that they have substantial non-infringing uses, that the use of these software constitute fair use, and/or that the relevant provisions of the Copyright Act, if interpreted to bar the distribution of DVD Copy Plus and DVD-X COPY, violate the First Amendment.

The court's analysis in the decision did not reach the Copyright violation issue, but directly rejected 321 Studios's claims and granted the injunction based on the DMCA provisions.

Issues

The litigation solved mainly two issues. First, whether or not 321 Studios was liable under sections 1201(a)(2) and 1201(b)(1) of the DMCA. Section 1201(a)(2) of the DMCA prohibits the "manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, or part thereof, that" is primarily designed or produced for purposes of circumventing a technological protection measure that controls access to a copyrighted work. Section 1201(b)(1) prohibits the same for technological protection measures that effectively protects an exclusive right of a copyright owner. [2]

The second issue concerns whether or not the DMCA, as construed by members of the MPAA, is unconstitutionally void. 321 Studios argued that the DMCA is invalid, because (1) the DMCA in this context restricted 321 Studios' free speech protected under the First Amendment, (2) the DMCA impermissibly burden the fair use rights of the end users, and (3) the DMCA exceeded the scope of congressional powers. [1]

Court's Holding

The court held that both of DVD Copy Plus and DVD-X Copy violated the DMCA and that the DMCA was not unconstitutional. The court enjoined 321 Studios from manufacturing, distributing, or otherwise trafficking in any type of DVD circumvention software.

Court's Rationale

DMCA Violations

1201(a)(2) Liability

The court found that, because 321 Studios' DVD copying software circumvented CSS, a technological protection measure that effectively controls access to the DVDs, because the software had only limited commercially significant purpose or use other than to circumvent CSS, and because it was marketed for use in circumventing CSS, the court would not grant declaratory relief to 321 Studios on the 1201(a)(2) claim. 321 Studios argued that because the owner of a DVD has the authority of the copyright holder to access the DVD, they have the authority of the copyright owner and so cannot be liable under 1201(a)(2). The court rejected this argument using the reasoning put forth by the Second Circuit in Universal Studios v. Corley, arguing the "basic flaw in this argument is that it misreads subsection § 1201(a)(3)(A). [5] That provision exempts from liability those who would `decrypt' an encrypted DVD with the authority of a copyright owner, not those who would `view' a DVD with the authority of a copyright owner." [1]

321 Studios also argued that if their software was a violation, then all DVD players must necessarily be a violation because they also decrypt CSS. The court rejected this argument as well, stating that the difference between 321 Studios and the manufacturer of a DVD player is that the manufacturer has been given a specific CSS key subject to strict use restrictions. [1]

1201(b)(1) Liability

The court found that, because 321 Studios' DVD copying software circumvented CSS, a technological protection measure that effectively controls the copying of DVDs, because the software had only limited commercially significant purpose or use other than to circumvent CSS, and because it was marketed for use in circumventing CSS, the court would not grant declaratory relief to 321 Studios on the 1201(b)(1) claim. 321 argued that CSS does not actually control copying from the DVD, it only controls access. The court dismissed this argument, stating "while 321 is technically correct that CSS controls access to decrypted DVDs, the purpose of this access control is to control copying of those DVDs, since encrypted DVDs cannot be copied unless they are accessed." [1]

321 Studios also argued that their software did not violate 1201(b)(1) because many uses of the software were legitimate uses sanctioned by copyright law, such as accessing public domain DVDs or DVDs without CSS, making a fair use of DVD content, or making a single archival copy. The court dismisses this argument, asserting that the downstream uses of the software are irrelevant in determining whether or not 321 Studios itself was violating 1201(b)(1). The court said that, while there are legitimate uses that some users might engage in, 321 Studios itself was distributing software which had the primary purpose of circumventing CSS. [1]

DMCA Constitutionality

Impermissible Restriction of Speech

The court rejected 321 Studios' argument that the DMCA, as enforced in this case, would result in an impermissible restriction of free speech. The court agreed with 321 Studios that computer code qualifies as speech for purposes of first amendment, however, they did not agree that enforcing the DMCA in this case would regulate computer code on the basis of content. The court held that only the functional element of the computer code was barred, and so the DMCA did not suppress the code based on its content. As such, the court applied an intermediate scrutiny standard in evaluating the restriction of speech in this case. [1]

Applying the intermediate scrutiny standard, the court found that Congress enacted the DMCA while carefully balancing the interests of copyright holders and the public. As such, the court held that the DMCA suppressed only as much speech as necessary to the furtherance of the interests of copyright owners and so was not an impermissible restriction of speech. [1]

Impermissible Burdens on Fair Use

The court rejected 321 Studios' argument that the DMCA unconstitutionally burdens the fair use rights of users of copyrighted materials. The court agreed with 321 Studios that fair use necessarily incorporates first amendment accommodations, but rejected that there is an absolute first amendment protection for fair use of copyrighted works. The court pointed out that fair use is still possible under the DMCA, even if it might be difficult to do so without circumventing CSS. 321 Studios argued that this places an unreasonable financial burden on fair use, an argument that the court said must be tied to the content of the speech, not simply the function. 321 Studios also argued that the DMCA also impairs access to non-copyrighted works protected by CSS. The court responded to this by asserting that a user could copy the access from a non-CSS encrypted DVD or from another non-digital source. [1]

Over-Extension of the Scope of Congressional Powers

321 Studios further claimed that the DMCA is inevitably an over-extension of Congressional powers because the DMCA is inconsistent with fair use. The court rejected this conclusion using reasoning from the Universal Studios v. Corley case, stating that restricting one technological means of gaining access to or reproducing a work does not foreclose the possibility of making use of the work. [5] 321 Studios asserted that the line of reasoning in previous DMCA cases was overturned by the conclusion in Eldred v. Ashcroft that fair use is constitutionally based. [6] The court responded by emphasizing again that the DMCA does not eliminate fair use, and that fair use does not guarantee users of copyrighted works with using a work in any technological fashion. [1]

Impact

321 Studios inevitably shut down as a result of this decision and similar lawsuits. [7] While the court's ruling on the constitutionality of the DMCA is consistent with rulings made across the country, many public interest groups have continued to lobby to overturn portions of the DMCA. [8] Some have criticized the courts classification of CSS as an access control for purposes of the DMCA, arguing that "if every act of rendering protected content is an act of accessing the content and the statute prohibits individual circumvention of access controls, then the individual privilege to circumvent rights controls exists only in theory." [9]

Related Research Articles

The Digital Media Consumers' Rights Act (DMCRA) was a proposed law in the United States that directly challenges portions of the Digital Millennium Copyright Act, and would intensify Federal Trade Commission efforts to mandate proper labeling for copy-protected CDs to ensure consumer protection from deceptive labeling practices. It would also allow manufacturers to innovate in hardware designs and allow consumers to treat CDs as they have historically been able to treat them.

Ripping is extracting all or parts of digital content from a container. Originally, it meant to rip music out of Commodore 64 games. Later, the term was used to mean to extract WAV or MP3 format files from digital audio CDs, but got applied as well to extract the contents of any media, including DVD and Blu-ray discs, and video game sprites.

Anti-circumvention refers to laws which prohibit the circumvention of technological barriers for using a digital good in certain ways which the rightsholders do not wish to allow. The requirement for anti-circumvention laws was globalized in 1996 with the creation of the World Intellectual Property Organization's Copyright Treaty.

<i>Universal City Studios, Inc. v. Corley</i> American legal case

Universal City Studios, Inc. v. Corley, 273 F.3d 429, was a court ruling at the United States Court of Appeals for the Second Circuit. The ruling was the first significant test of the anti-circumvention provisions of the Digital Millennium Copyright Act.

<i>Chamberlain Group, Inc. v. Skylink Technologies, Inc.</i> American legal case concerning the DMCA

The Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178 is a legal case heard by the United States Court of Appeals for the Federal Circuit concerning the anti-trafficking provision of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1201(a)(2), in the context of two competing universal garage door opener companies. It discusses the statutory structure and legislative history of the DMCA to help clarify the intent of the anti-circumvention provisions and decide who holds the burden of proof. It expresses that the statute creates a cause of action for liability and does not create a property right, and holds that as Chamberlain had alleged that Skylink was in violation of the anti-trafficking provision, it had the burden to prove and failed to show that access was unauthorized and its rights were infringed under the Copyright Act. As Chamberlain incorrectly argued that Skylink had the burden of proof and failed to prove their claim, the court upheld summary judgment in favor of Skylink.

<span class="mw-page-title-main">DVD Decrypter</span>

DVD Decrypter is a software application for Microsoft Windows that can create backup disk images of the DVD-Video structure of DVDs. It can be used to make a copy of any DVD protected with Content Scrambling System (CSS). The program can also record images to disc — functionality that the author has now incorporated into a separate product called ImgBurn. The software also allows a copy of a region-specific DVD to be made region free. It also removes Macrovision content protection, CSS, region codes, and user operation prohibition.

MacTheRipper is a Mac OS X application that enables users to create a playable copy of the contents of a Video DVD by defeating the Content Scramble System. During this process it may optionally modify or disable the DVD region code or the User operation prohibition features of the copied data. The previous lack of an OS X equivalent to the PC software DVDShrink gave this standalone DVD ripper widespread popularity among Macintosh users.

Lexmark International, Inc. v. Static Control Components, Inc., is an American legal case involving the computer printer company Lexmark, which had designed an authentication system using a microcontroller so that only authorized toner cartridges could be used. The resulting litigation has resulted in significant decisions affecting United States intellectual property and trademark law.

<span class="mw-page-title-main">FAIR USE Act</span>

The "Freedom and Innovation Revitalizing United States Entrepreneurship Act of 2007" was a proposed United States copyright law that would have amended Title 17 of the U.S. Code, including portions of the Digital Millennium Copyright Act (DMCA) to "promote innovation, to encourage the introduction of new technology, to enhance library preservation efforts, and to protect the fair use rights of consumers, and for other purposes." The bill would prevent courts from holding companies financially liable for copyright infringement stemming from the use of their hardware or software, and proposes six permanent circumvention exemptions to the DMCA.

DVD X Copy is a consumer software program that enabled novice computer users to copy any DVD movie to any blank DVD. Most commercial DVD movies include Content Scrambling System (CSS), a copy-protection technology designed to prevent DVD movies from being copied. This controversial DVD copy software program included technology that decrypts the CSS copy protection mechanism on DVD movie discs. DVD X Copy products are still being sold on the DVD X Copy website, although it was previously believed to be no longer sold or supported.

The WIPO Copyright and Performances and Phonograms Treaties Implementation Act, is a part of the Digital Millennium Copyright Act (DMCA), a 1998 U.S. law. It has two major portions, Section 102, which implements the requirements of the WIPO Copyright Treaty, and Section 103, which arguably provides additional protection against the circumvention of copy prevention systems and prohibits the removal of copyright management information.

Digital rights management (DRM) is the management of legal access to digital content. Various tools or technological protection measures (TPM) like access control technologies, can restrict the use of proprietary hardware and copyrighted works. DRM technologies govern the use, modification and distribution of copyrighted works and of systems that enforce these policies within devices. DRM technologies include licensing agreements and encryption.

<span class="mw-page-title-main">Digital Millennium Copyright Act</span> United States copyright law

The Digital Millennium Copyright Act (DMCA) is a 1998 United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet. Passed on October 12, 1998, by a unanimous vote in the United States Senate and signed into law by President Bill Clinton on October 28, 1998, the DMCA amended Title 17 of the United States Code to extend the reach of copyright, while limiting the liability of the providers of online services for copyright infringement by their users.

<i>MDY Industries, LLC v. Blizzard Entertainment, Inc.</i> Court case in the United States

MDY Industries, LLC v. Blizzard Entertainment, Inc and Vivendi Games, Inc., 629 F.3d 928, is a case decided by the United States Court of Appeals for the Ninth Circuit. At the district court level, MDY had been found liable under theories of copyright and tort law for selling software that contributed to the breach of Blizzard's End User License Agreement (EULA) and Terms of Use (ToU) governing the World of Warcraft video game software.
The court's ruling was appealed to the United States Court of Appeals for the Ninth Circuit, which reversed the district court in part, upheld in part, and remanded for further proceedings. The Court of Appeals ruled that for a software licensee's violation of a contract to constitute copyright infringement, there must be a nexus between the license condition and the licensor’s exclusive rights of copyright. However, the court also ruled, contrary to Chamberlain v. Skylink, that a finding of circumvention under the Digital Millennium Copyright Act does not require a nexus between circumvention and actual copyright infringement.

<i>Facebook, Inc. v. Power Ventures, Inc.</i> Lawsuit brought by Facebook in the United States

Facebook, Inc. v. Power Ventures, Inc. is a lawsuit brought by Facebook in the United States District Court for the Northern District of California alleging that Power Ventures Inc., a third-party platform, collected user information from Facebook and displayed it on their own website. Facebook claimed violations of the CAN-SPAM Act, the Computer Fraud and Abuse Act ("CFAA"), and the California Comprehensive Computer Data Access and Fraud Act. According to Facebook, Power Ventures Inc. made copies of Facebook's website during the process of extracting user information. Facebook argued that this process causes both direct and indirect copyright infringement. In addition, Facebook alleged this process constitutes a violation of the Digital Millennium Copyright Act ("DMCA"). Finally, Facebook also asserted claims of both state and federal trademark infringement, as well as a claim under California's Unfair Competition Law ("UCL").

<i>DVD Copy Control Assn, Inc. v. Kaleidescape, Inc.</i>

DVD Copy Control Association, Inc. v. Kaleidescape, Inc., 176 Cal. App. 4th 697 is a legal case heard by the California Court of Appeal concerning breach of contract and breach of the implied covenant of good faith and fair dealing. It discusses incorporation by reference regarding a supplemental document that was not part of the written license agreement between the parties. The Court of Appeal reversed the trial court's judgment and ruled in favor of the plaintiff, finding that defendant was bound to the entire contract, including the supplemental document.

<i>RealNetworks, Inc. v. DVD Copy Control Assn, Inc.</i> 2009 court case

RealNetworks, Inc. v. DVD Copy Control Association, Inc., 641 F. Supp. 2d 913 (2009), is a United States District Court case involving RealNetworks, the movie studios and DVD Copy Control Association regarding the Digital Millennium Copyright Act (DMCA) claims on the manufacturing and distribution of RealDVD, and a breach of license agreement. The district court concluded that RealNetworks violated the anti-circumvention and anti-trafficking provisions of the DMCA when the DVD copying software RealDVD bypasses the copy protection technologies of DVD.

youtube-dl is a free and open source download manager for video and audio from YouTube and over 1,000 other video hosting websites. It is released under the Unlicense software license.

Green v. Department of Justice is a pending lawsuit at the United States District Court for the District of Columbia filed to test the constitutionality of the anti-circumvention provisions enacted in the 1998 Digital Millennium Copyright Act (DMCA). The lawsuit argues that, as passed, the anti-circumvention provisions of the DMCA prevent legitimate speech under the First Amendment to the United States Constitution.

<i>RealNetworks, Inc. v. Streambox, Inc.</i>

RealNetworks, Inc. v. Streambox, Inc., 2000 WL 127311, was a copyright law case of the United States District Court for the Western District of Washington, over the anti-circumvention provisions of the Digital Millennium Copyright Act and whether those provisions are violated by a service that enables Internet users to circumvent the copyright protection controls used by a streaming platform.

References

  1. 1 2 3 4 5 6 7 8 9 10 11 321 Studios v. Metro Goldwyn Mayer Studios, Inc., 307F. Supp. 2d1085 ( N.D. Cal. 2004).
  2. 1 2 17 U.S.C.   § 512.
  3. ↑ "DVD Copy Controls Head to Court | TechHive". Archived from the original on 2011-12-09. Retrieved 2011-03-02.
  4. ↑ Judge Blocks Sales of DVD Copying Program | PCWorld
  5. 1 2 Universal City Studios, Inc. v. Corley , 273F.3d429 (2d Cir.2001).
  6. ↑ Eldred v. Ashcroft , 537 U.S. 186 (2003).
  7. ↑ The Augusta Chronicle
  8. ↑ "The Movie Empire Strikes Back: 321 Studios v MGM Studios" (PDF). Jltp.uiuc.edu. Retrieved 2013-08-17.
  9. ↑ Julie E. Cohen, "The Place of the User in Copyright Law", SSRN 814664
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.