Hollywood cracks down on DVD chipmakers

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As I understand it:

a contract puts agreed-upon limits on legal rights, but cannot grant an illegal right. In other words, in a contract, you voluntarily waive rights that you would otherwise have, to gain the benefits of the contract. A contract cannot legally grant rights that would otherwise be illegal (such as a contract to murder).

Case in point is software EULAs. These act as contracts in which the user gives up rights that would otherwise be granted under the copyright law (for instance, the ownership of the copy of the software in question, and the rights that would normally go with that such as the right to make as many backup copies as the user deems necessary to protect the investment in the software, and the right to use the software as the user sees fit rather than as the publisher sees fit) in return for the rights to use the software. EULAs in general are horribly unbalanced in favor of the software publishers, and really should not qualify as legal contracts since there is no give-and-take (in most real contract situations, both sides propose various preliminary contracts [each usually starting out very one-sided towards the proposing side], until finally a compromise contract is agreed upon by both sides, which is therefore more likely to be fair to both sides).

In the particular case being discussed here, the DVD CCA wrote up a licensing contract that all makers of chips would have to sign in order to be able to decode CSS. This is a legitimate, if one-sided, contract, on the face of it: the DVD makers voluntarily gave up rights in return for the right to perform CSS decoding, as needed to play CSS-encoded DVDs and thus make DVD players that would be at all competitive in the market.

The main legal question here is whether the MPAA is justified in suing the makers of the chips, rather than the actual violators of the agreement (namely, the companies making the allegedly license-violating DVD players).

So much for the legality. In PRACTICAL terms, the MPAA is making a horrendous PR move here (though hardly the first nor the last in this regard). As has been said, piracy cannot be stopped by any means short of not making DVDs in the first place (or at least not enabling them to be viewed by any means, which would effectively be the same thing). All they can do is limit the ability of honest people to enjoy the product.

Ironically, if it weren't for the Betamax decision, there would BE no DVD (or VHS, for that matter) movie aftermarket in the FIRST place! The MPAA fought the VCR tooth-and-nail when it came out, and now VHS and DVD copies of movies make up the vast majority of their movie revenues (not counting ancilliary merchandizing such as Spider-Man 2 T-shirts, toys, etc.), much more so than theater box-office, Pay-per-View, network licensing (including cable, satellite, etc.), etc. COMBINED! Look at how many movies are made DIRECT-TO-VIDEO! Movies can be profitable on that ALONE! Indeed, many Hollywood studios would likely be bankrupt by now if it weren't for the VCR that they so hated at the time!

Posted by: Joel R   Posted on: 08/26/04 You are currently: a Guest | Members login | Terms of Use

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