Copyright Case Streaming to Court

SAN FRANCISCO (01/04/2000) - In October, a Redmond, Wash.- based software company called Streambox.com announced a new utility that allows users to "rip" open audio files encoded for RealNetworks' RealPlayer. Now the two companies will probably meet in court.

A suit filed Dec. 22 by RealNetworks in U.S. District Court in Seattle accuses Streambox of violating the Digital Millennium Copyright Act with its Streambox Ripper and Streambox VCR, products designed to decode audio and video files intended to be played only on RealNetworks' RealPlayer. This is the first major test of the year-old law.

The suit also alleges that Streambox knowingly infringed on a RealNetworks copyright with the Streambox Ferret, a utility that adds functionality but also changes the appearance of RealPlayer on the desktop by replacing the Snap.com logo that usually appears on the player with a Streambox logo.

A Seattle judge already has issued a temporary restraining order against Streambox, saying it must halt production and sale of all three software products pending a Jan. 7 hearing. The court also ordered that RealNetworks post a $1 million bond should the court later find that the restraining order was wrongfully issued.

"Filing the suit demonstrates the importance of copyrights in the digital age," says Alex Alben, RealNetworks VP of government affairs.

RealPlayer, which has been downloaded 92 million times from RealNetworks' site, lets people "stream" audio and video files on their PCs. But unlike MP3 or WAV formats, RealPlayer won't allow end users to make extra copies or distribute the material to others.

"Only by affording this protection against piracy ... has RealNetworks been able to encourage copyright holders to make their content over the Internet," the suit alleges. Streambox's products bypass RealNetworks' security system, circumventing those protections. According to the Streambox Web site, the Streambox Ripper "rips open" RealAudio files and converts them to MP3, WAV or Windows Media Audio formats.

"Streambox has been stealing our streams for quite some time," says Opher Mizrahi, CEO of MovieFlix.com. "It's costing us bandwidth and we don't get the benefit of the registration. They can link to our movies illegally, and there's no reason to come to the MovieFlix Web site," he adds. "We don't go to sites and steal content," insists Streambox CEO Bob Hildeman.

What Streambox does, though, is provide a vast directory of streams and the software to decode them. "It is an alternate distribution tool, and our technology works much better and supports multiple formats," says Hildeman. "If content owners want to change a file format, they should be able to."

Though he believes the case will set a precedent, Hildeman says this isn't the struggle he'd expected at this point in his startup's growth. "We are after our first round [of funding], and this will put a damper on that."

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