From 321 Studios’ press release:
321 Studios has filed appeals and emergency stay requests to both the United States Court of Appeals for the Ninth Circuit and the United States Court of Appeals for the Second Circuit.
In both cases, 321 Studios makes the following arguments, among others:
DMCA is unconstitutional
If, as both Courts ruled, the Digital Millennium Copyright Act (DMCA) allows consumers to copy DVDs based on fair use grounds but denies the tools to do so, then the DMCA is unconstitutional as fair use rights are constitutionally mandated. Even New York Judge Richard Owen acknowledged at a March 15, 2004 hearing that if the DMCA effectively denies consumers the tools to exercise their fair use rights, then 321 has â€œa beauty there.â€
New York injunction violates free speech
321 argues that the Southern District Court of New York, in styling its preliminary injunction, imposed an unlawful prior restraint on 321 Studios’ free speech rights by prohibiting 321 from speaking out about its products or dealing with customers in jurisdictions where no DMCA-like law is applicable.
Both courts ignored Chamberlain
Both district court opinions are inconsistent with Chamberlain Group, Inc., v. Skylink, where another district court concluded that the Digital Millennium Copyright Act (DMCA) did not prohibit the sale of a universal garage-door-opener remote control, even though the remote bypassed encryption. The Chamberlain Court upheld the garage owner’s right to open his own garage door, and 321 similarly argues that lawful purchasers of DVDs have the inherent right to unlock their DVD’s encryption to access the DVD’s contents.
DMCA unlawfully extends copyright protection
The opinions also sanction the CSS-encryption scheme by the Studios even when public domain films and works of the U.S. Government are involved. In effect, the rulings deny consumers the tools to make digital copies of DVDs, thus preventing access to and copying of public domain films and government works, all in violation of the â€œlimited timesâ€ provision of the Copyright Clause of the U.S. Constitution.
The balance of harm is in 321’s favor
The harm that 321 and its customers are suffering under the injunctions issued by the California and New York district courts dwarfs any harm the Studios might incur should the Courts of Appeal grant stays. In fact, the threat of harm was so inconsequential to Paramount and Fox that those Studios waited 18 months before filing their case.
The next step in the Second Circuit case will be a hearing on a motion for stay on April 13. Thereafter, the Second Circuit will set a schedule for briefing and argument on the merits of the case.
The Ninth Circuit motion for stay is ripe for ruling without a public hearing. The briefing schedule will begin with opening briefs on June 18. 321 Studios’ legal filings are available in the press section of the company’s website, www.321studios.com.