Studios Sue Retailer for Piracy

The lawsuit, filed in New York by Twentieth Century Fox Film Corp. and Paramount Pictures Corp., marks the first time a movie company has sued a retailer of the forbidden software by 321 Studios Inc.

Other retailers voluntarily halted sales of the software after federal judges in New York and California – at Hollywood’s behest – ordered 321 of suburban St. Louis to stop making and marketing it.

Hollywood studios long have insisted that DVD-copying products violate the 1998 Digital Millennium Copyright Act, which bars circumvention of anti-piracy measures used to protect DVDs and other technology.

Since the New York and California rulings, 321 has shipped retooled versions of its DVD-copying products, removing the software component required to descramble movies.

The latest lawsuit, announced Friday by the Motion Picture Association of America Inc., was filed in the U.S. District Court for New York’s southern district, where a judge in March barred 321 from marketing the software.

“Technology One, by categorically refusing to comply with the studios’ cease-and-desist notices, will learn from the courts that by continuing to sell the banned software it is breaking the law,” said Jim Spertus, vice president and chief of the MPAA’s domestic anti-piracy operations.

“With two federal injunctions prohibiting the further sale of 321’s DVD circumvention products, it has no excuse to flout the law,” Spertus said.

A worker at California-based Technology One, who refused to identify himself, said he was unaware of the lawsuit but that “nobody ever told us to stop selling” the questioned software.

That employee said Technology One no longer has the software in stock, though the company’s Web site – – suggests otherwise.

“The court order as far as resellers were concerned didn’t concern us,” he said.

The latest lawsuit seeks a court order barring Technology One from continued sales of the software, as well as damages including profits from the previous sales.

“When faced with such flagrant violations, the MPAA member companies will aggressively defend copyright laws,” said Jack Valenti, head of the MPAA.

In court and before Congress, 321 has argued its products merely guarantee consumers fair use of the movies they’ve bought, including backing up expensive copies of children’s movies in case the originals get scratched.

Robert Moore, 321’s chief executive, testified May 12 before a House panel in support of a measure that would amend the DCMA to let film buffs make personal copies of DVD movies and other digital content for limited purposes.

Sponsors described the proposal as a consumers’ rights bill for digital media that would allow consumers to bypass encryption locks built into DVD movies by Hollywood to prevent copying. Such encryption schemes are increasingly common in music and movies.

Hollywood studios and the music industry said that would lead to more piracy and lost sales.

Source: Associated Press