By Dawn C. Chmielewski Knight Ridder Newspapers (KRT) Software that allows consumers to make backup copies of their DVDs _ or unauthorized duplicates of any movie they rent from Blockbuster or borrow from a friend _ has raised the ire of Hollywood studios, which claim it’s nothing more than tool for piracy. The looming court battle between software-maker 321 Studios and seven entertainment companies, to be heard later this month in San Francisco, is more than just another chapter in the seemingly endless legal wrangling between Hollywood and technologists. It could further define consumer rights in the digital age. 321 Studios and technology activists say the lawsuit _ which the software maker defensively initiated last April _ could establish the right of consumers to make personal copies of DVD movies they legitimately own, just as they do now with music CDs or computer software. The studios say that’s just a pretext to gain legitimacy for a $100 software product whose real value lies in cracking the copy protection on DVDs to make flawless bootlegs. Attorneys for 321 Studios argue that the St. Louis company’s products, “DVD Copy Plus” and `DVD X Copy” (www.321studios.com), say the software has perfectly legitimate uses. DVDs are fragile objects that can be rendered unplayable by scratches and cracks. Consumers _ be they parents of small children known to use movie discs as Frisbees, or the adult son of a handicapped father who inadvertently drops and scratches the media _ have legitimate need to make backup copies of their DVDs, 321 Studios argues. DVD X Copy is intended for these users _ and others who offered sworn legal statements in the case. “This isn’t about circumventing an access control mechanism. This is about whether you, in the privacy of your own home, can do what you want with what you already own,” said Elizabeth Sedlock, 321 Studios chief marketing officer. “I can buy Picaso today, cut it to ribbons and paint all over it … There’s nothing that I own that I cannot do anything I want with, except a DVD.” 321 Studios argues its DVD copying software is impractical as piracy tool. It takes four to six hours to reproduce a disc _ making it unwieldy for mass-producing bootleg copies. Users also need a computer with a DVD recording drive, which are still relatively rare. The older DVD Copy Plus only a CD recording drive, but makes a lower-quality copy. Indeed, the latest version of the software, DVD X Copy, includes anti-piracy measures. Once the user creates a backup copy of a movie with DVD X Copy, the software erases the unencrypted version from the computer’s hard drive. It stamps an FBI-styled disclaimer onto each copied disc that warns against its resale. And it inserts a digital flag onto each backup DVD to prevent the user from making copies of copies. 321 Studios says it uses watermark technology to embed each disc with the user’s registration information, making it possible to identify those who misuse the software. Attorneys for the movie studios called these copy protections flimsy at best. Any person with the slightest technological savvy can move the unprotected copy of the movie from their computer’s “temporary” folder _ where DVD X Copy stores it _ into another folder, where it can be uploaded to the Internet. And the watermarking and digital signatures only work when DVD copies are created using the 321 Studios’ software. These mechanisms don’t apply if the user makes discs on any other DVD-authoring software. And none of these safeguards are offered on 321 Studio’s original product, DVD Copy Plus. “What you are left with on your hard drive, when you use Copy Plus as directed, is an unencrypted, unprotected copy of movie, already compressed and ready for Internet distribution,” said Steven B. Fabrizio, a Los Angeles attorney representing the studios. “The only thing left to do is press the button and say, `distribute.` ” Fabrizio says 321 Studios’ anti-piracy efforts are a distraction from the central issue of the case: whether consumers can legally copy DVDs. Most consumers seem willing to accept Hollywood’s terms of use _ that they can enjoy the benefit of watching the film in crisp digital clarity, anytime, on any DVD player. They don’t get reproduction rights. All DVD movies are protected by a technology known as “Content Scramble System,” or CSS, which garbles the data in every video frame. The movie can only be viewed on licensed DVD players that contain a software key to unlock the encrypted film so it can be viewed. Hollywood argues that 321 Studios’ software amounts to a high-tech lock pick. It skirts DVD access controls by capturing the video stream after a movie has been unscrambled. And that, the studios argue, violates the Digital Millennium Copyright Act of 1998, which makes it a federal offense to market traffic in any technology designed to circumvent copy-protection systems like CSS. It’s the same argument the studios used successfully in 2000 to force Eric Corley and his company, 2600 Enterprises, to remove a DVD-decryption code known as DeCSS from its hacker quarterly Web site. 321 Studios claims it does not circumvent CSS. Rather, it uses commercially licensed DVD player software on the user’s computer to unlock the movie, and then captures and digitizes the video output. It that respect, it’s no different from any other DVD player or cable television set-top box. Those consumers who use DVD X Copy to make archival copies are merely exercising their `fair use” rights under the 1976 Copyright Act, according to 321 Studios. That law considers, among other factors, whether the copy is used for commercial purposes and whether it erodes the underlying value of the copyrighted work. It’s the same fair use argument Sony raised to defend the legality of its home video cassette recorder in 1984. And Diamond Multimedia made similar claims in defense of its pioneering Rio portable music player. The DMCA rewrites copyright rules to reflect the realities of the digital world, effectively redefining the notion of fair use, said Mark Radcliffe, an intellectual property attorney in Palo Alto. It provides for a level of control that was impractical in the old, analog world because the risks of piracy are greater. “It comes down to a fundamental question of copyright law: What is the right balance between what the government grants you and what the copyright holder can do,” said Radcliffe. “The real question is have we struck the right balance?” If Hollywood succeeds in removing 321 Studios’ products from the market, it will have little impact on movie piracy, said Fred von Lohmann, senior intellectual property attorney for the Electronic Frontier Foundation, a San Francisco advocacy group that filed legal briefs on 321 Studios’ behalf. “If you are intent on making copies of your DVDs to distribute them to the world _ that continues to be easy to do. There are plenty of free tools out there to allow you to rip things onto your computer,” said von Lohmann. “The only person this hurts is the consumer who wants to do what they’ve always been able to do with their media.” The long-term implications could be chilling. Future consumer products, like home media servers capable of feeding video streams to any display in the home, may never materialize, said von Lohmann. That’s because the easiest way to populate virtual film libraries is to engage in the forbidden act of “ripping” DVDs. “That product category, which is completely obvious, is virtually stillborn because the DMCA says sorry, consumers can’t have that ability to do that with their DVDs that they’ve legally purchased.” ___ ‘copy 2003, San Jose Mercury News (San Jose, Calif.). Visit MercuryNews.com, the World Wide Web site of the Mercury News, at http://www.mercurynews.com. Distributed by Knight Ridder/Tribune Information Services.