Appeals court sides with Hollywood over hackers, rules that DVD copying hurts sales

Thursday, November 29th 2001, 12:00 am

By: News On 6

SAN FRANCISCO (AP) _ In a victory for Hollywood's major studios, a New York federal appeals court upheld a ruling against a man who posted on his Web site a program that let users copy DVDs.

The 2nd U.S. Circuit Court of Appeals in New York ruled unanimously Wednesday in favor of nine major Hollywood studios that sought to force Eric Corley, operator of the 2600 Magazine Web site, to remove links to the program that unscrambles DVD encryption.

Corley's attorneys had argued at trial that publishing the program, called DeCSS, was protected as free speech and that their client merely was covering the news value of the technological development by posting the code.

The appeals court agreed with the lower court that there were both speech and non-speech components to publishing the DeCSS program and that the federal law covering the Internet was not too broad in its application to the case.

The initial use of DeCSS to access DVD movies does not cost movie producers money because the user must first buy the DVD, the appeals court found.

``However, once the DVD is purchased, DeCSS enables the initial user to copy the movie in digital form and transmit it instantly in virtually limitless quantity, thereby depriving the movie producer of sales,'' the court wrote in its opinion. ``The advent of the Internet creates the potential for instantaneous worldwide distribution of the copied material.''

The lawsuit was argued before U.S. District Judge Lewis Kaplan, who found last year that the availability of DeCSS created great financial harm to Hollywood. The appeals court agreed.

``It's really a terrific victory for content providers who want to put out technology to protect content in digital format,'' said Charles Sims, an attorney with Proskauer Rose LLP, who represented the major movie studios.

Cindy Cohn, an attorney with the Electronic Frontier Foundation, helped represent Corley in the case. She said she had not seen the appeals court ruling, but was disappointed upon learning of the outcome.

``I think it's a setback for free speech. It appears that the court is upholding censorship of the magazine online,'' Cohn said.

The case was the biggest challenge yet to the Digital Millennium Copyright Act of 1998 that makes it illegal to circumvent anti-piracy measures built into commercial software or to distribute such unauthorized tools.