Advanced Copyright Issues on the Internet - Fenwick & West LLP

In addition, the court, citing Nimmer’s copyright treatise, ruled that, by passage of theDMCA, Congress had decided that “those who manufacture equipment and products generallycan no longer gauge their conduct as permitted or forbidden by reference to the Sony doctrine.For a given piece of machinery might qualify as a stable item of commerce, with a substantialnoninfringing use, and hence be immune from attack under Sony’s construction of the <strong>Copyright</strong>Act – but nonetheless still be subject to suppression under Section 1201.” 675 The court alsorejected Streambox’s asserted defense under Section 1201(c)(3) of the DMCA, which it cited forthe proposition that the Streambox VCR was not required to respond to the Copy Switch. Thecourt noted that this argument failed to address Streambox VCR’s circumvention of the SecretHandshake, which was enough by itself to create liability under Section 1201(a)(2). 676Turning to the Streambox Ripper product, the court ruled that the plaintiff had notestablished a reasonable likelihood of success on its DMCA claim. RealNetworks maintainedthat the primary purpose and only commercially significant use for the Ripper was to enableconsumers to prepare unauthorized derivative works of copyrighted audio or video content. Thecourt rejected this argument, noting that the Ripper has legitimate and commercially significantuses to enable content owners, including copyright holders and those acquiring content with thecontent owner’s permission, to convert their content from the RealMedia format to other formats.Moreover, there was little evidence that content owners use the RealMedia format as a“technological measure” to prevent end users from making derivative works. In any case, thecourt found that RealNetworks had not introduced evidence that a substantial number of contentowners would object to having end users convert RealMedia files that they legitimately obtainedinto other formats, or that Ripper would cause injury to RealNetworks. 677Finally, the court ruled that the plaintiff was entitled to a preliminary injunction withrespect to Streambox Ferret. RealNetworks claimed that Streambox committed contributory orvicarious copyright infringement by distributing the Ferret to the public, because consumers whoused the Ferret as a plug-in were making an unauthorized derivative work of the RealPlayer bychanging the RealPlayer user interface to add a clickable button that permitted the user to accessthe Streambox search engine, rather than the Snap search engine. Although the court stated thatit was not persuaded that RealNetworks had demonstrated that it was likely to succeed on itscontributory/vicarious infringement claims on this basis, the court concluded that RealNetworkshad raised serious questions going to the merits of its claims, and the balance of hardshipsclearly favored RealNetworks, because the addition of the alternative search engine afforded bythe Ferret jeopardized RealNetworks’ exclusive relationship with Snap. 678In September of 2000, the parties settled the lawsuit pursuant to an agreement in whichStreambox agreed to modify Streambox Ripper so that it no longer transformed RealMediastreams into other formats, to modify Streambox VCR so that it respected RealNetworks’ copyprotection features, to license RealNetworks’ software development kit (which would allow675676677678Id. at *23 (quoting 1 M. Nimmer & D. Nimmer, Nimmer on <strong>Copyright</strong> (1999 Supp.) § 12A.18[B]).RealNetworks, 2000 U.S. Dist. LEXIS at *23.Id. at *27-28.Id. at *30-33.- 163 -