Movie Industry Wins a Round in DVD Copyright Case

By John Sullivan
The New York Times

August 18, 2000

federal judge in Manhattan ruled today that a Web site operator cannot distribute a computer program used to crack codes that prevent the piracy of movies.

The ruling, a victory for the motion picture industry, applies only to the Web site operator, Eric C. Corley, and his company, 2600 Enterprises. But experts on both sides of the issue agreed that the decision could have far greater reach as the courts hammer out legal guidelines that will govern the rules of commerce and free speech in the digital world.

Like recent decisions concerning the unauthorized transmission of music over the Internet, the battle over the distribution of code-breaking programs used to copy digital versatile disks, or DVD's, has been closely watched by the entertainment industry and Internet groups.

Motion picture companies argued that they had invested tremendous amounts of money on the assurance, through long-recognized copyright laws, that they would have the exclusive right to sell their movies to the public. Their opponents argued that new federal laws designed to protect those copyrights were overly restrictive, saying they unreasonably blocked the legitimate use of digital movies and illegally infringed on their right to free speech under the Constitution.

In a detailed analysis, Judge Lewis A. Kaplan tried to weigh both positions and to measure Congress's 1998 guidelines for Internet copyright, known as the Digital Millennium Copyright Act. Judge Kaplan found that Congress had clearly intended to prohibit the distribution of software used to circumvent copyright protections, something he said the defendant's Web site did by posting the code-breaking program.

"Each side is entitled to its views," Judge Kaplan wrote. "In our society, however, clashes of competing interests like this are resolved by Congress."

Judge Kaplan found that the Digital Millennium Copyright Act, which prohibits the distribution of software designed to circumvent copyright protections, did not violate Mr. Corley's First Amendment right to free speech, and he prohibited Mr. Corley from posting the program in the future or from establishing Internet links with other sites that provided copies of the code.

This afternoon, Mr. Corley's lawyers asserted that Judge Kaplan's analysis was incorrect and said they would appeal. Martin Garbus, Mr. Corley's lawyer, said the decision would have made its way to higher courts no matter what the outcome because "this is an issue that has to be decided by the Supreme Court."

Because Judge Kaplan sits on the district court, which is the trial court of the federal system, his decision is not binding on other federal courts and is subject to review by the Court of Appeals for the Second Circuit. But the judge's decision has considerable persuasive force for other courts both because it is the first time the law has been tested and because the Manhattan court is among the more prestigious district courts.

"It is a very important case dealing with how intellectual material is going to be transmitted over the Web," Mr. Garbus said yesterday. "The Internet, as a free exchange of information, is crippled by this decision."

Lawyers for the motion picture industry said the case was not about free speech, but about efforts to circumvent copyright protections that were established by Congress. "What we sued the defendants for was circumventing our protective device," said Leon P. Gold, the lawyer for the movie companies. Mr. Gold likened the code-breaking programs to a key that could be used to break into a bank vault.

"You cannot steal any other person's property, even if it is copyrighted property," he said.