The Next Big Thing
DVD has been the next big thing for the past three years. Basically, DVD is
the next generation of CD ROM, and is capable of holding 5.2 Gigabytes of
data -- enough for a full-length movie. Until recently however, competing
standards and movie industry reluctance kept DVDs from mainstream
The DVD Forum changed that early last year when they announced a standard
that would scramble DVD data using unbreakable encryption. The DVD Forum
then created the DVD CCA to license un-encryption keys to the makers of DVD
drives. The industry finally had a green light, and the DVD marketing
fanfare began in earnest.
A few months later, the unbreakable encryption was cracked, not by software
pirates, but by a group of teens in Norway calling themselves Masters of
Reverse Engineering. MORE's goal was to create a way to view DVD movies on
Linux, since there were no commercial applications available. When MORE
examined XingDVD (a Windows DVD player made by RealNetwork) they discovered
the software contained an unencoded DVD encryption key. This information
gave MORE the clues they needed to quickly break the DVD encryption
algorithm. They then wrote a program called DeCSS that allowed Linux users
to watch DVD movies.
In a matter of days the news, the DeCSS software and the details of the DVD
encryption were all over the Internet. Not only were Linux users able to
watch their DVD movies, but since the information on the DVD encryption had
entered the public domain, there was no longer any legal reason for new DVD
manufacturers to pay DVD CCA for a license to use that information.
Faced with such a substantial loss of revenue and face, DVD CCA did what
American companies do best. They sued.
The Same Old Thing
Deciding to sue was simple enough, but deciding who to sue was quite
complicated. The DVD encryption method was not patented -- which would have
required the information to be made public. Instead, the DVD CCA decided to
protect their algorithm as a trade secret, disclosing it only to licensees.
Owners of trade secrets, however, don't have exclusive rights to them, and
the law provides no protection for trade secrets that are discovered via
It seemed that no laws had actually been broken. Granted, the license
agreement distributed with the XingDVD software prohibited reverse
engineering, but Norwegian courts apparently don't consider shrink wrap
agreements to be legally binding. In any event, the boy who discovered the
trade secret was 16 years old; a minor unable to enter into a binding
contract. Perhaps the DVD CCA has a case against RealNetwork, through whose
negligence the encryption code was reveled, but suing your customers is
generally considered to be bad business.
Faced with this dilemma, the DVD CCA decided to sue everyone else within
legal reach. They filed a suit against 72 named and anonymous individuals
who ran websites that were either distributing DeCSS, explaining details of
how the algorithm worked or had links to such sites. Their case is an odd
one. None of the listed defendants were involved in the creation of DeCSS
and many were not even involved in its distribution. The DVD CCA, however,
maintained that the information was not yet public and demanded that all
files, discussion and links be removed to protect their "secret."
On December 29, the day of the court hearing for the preliminary injunction,
members of Slashdot gathered in front of the Santa Clara County courthouse
and handed out bound, printed copies of the DeCSS program. Continuing the
ruse, one of the plaintiff's attorneys submitted his copy into evidence and
asked the court to have the "trade secret" sealed.
In the end, the judge rejected the movie industry's request for a temporary
restraining order. The second hearing is later this month, but it seems
unlikely that the judge will find in favor of the plaintiffs.
Things That Matter
The DVD CCA has been framing this case as a matter of intellectual property
theft, software piracy and copyright violation. That's simply not what this
case is about. DeCSS is not being used to pirate movies. In fact, it is far
more expensive to pirate a DVD movie than it is to buy one. DeCSS is being
used to allow people who legally purchased a DVD-movie to view it on Linux.
This case is about the DVD CCA's loss of control. When their trade secret
was still a secret, they could use license agreements to force DVD
manufacturers to implement whatever standards and features they saw fit.
They have lost the ability to decide which companies can and cannot make DVD
software. And perhaps most important, they have lost their potential revenue
stream. Companies used to have to pay a substantial fee to access to the
technical specifications needed to make software to play DVD movies. That
information is now freely available.
In short, by relying on trade secrets rather than patents and copyrights,
the DVD CCA lost the opportunity to become the Microsoft of the DVD world.
Since their secret is now so widely known, it seems they have little chance
of putting the genie back in the bottle through legal harassment of web site
owners. Nor can the DVD Forum change the encryption method since that would
render all current DVD players unable to play new movies.
It seems that DVDs have arrived and really will be the next big thing.