RealDVD Preliminary Injunction Order

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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA

REALNETWORKS, INC., a WashingtonCorporation; and REALNETWORKS HOMEENTERTAINMENT, INC., a DelawareCorporationPlaintiffs and Counter-defendants,v.DVD COPY CONTROL ASSOCIATION,INC., a Delaware nonprofit corporation,DISNEY ENTERPRISES, INC., a Delawarecorporation; PARAMOUNT PICTURESCORP., a Delaware corporation; SONYPICTURES ENTER., INC., a Delawarecorporation; TWENTIETH CENTURY FOXFILM CORP., a Delaware corporation; NBCUNIVERSAL, INC., a Delaware corporation;WARNER BROS. ENTER. INC., a Delawarecorporation; and VIACOM, Inc., a DelawareCorporation,Defendants and Counter-complainants./ UNIVERSAL CITY STUDIOSPRODUCTIONS L.L.L.P., UNIVERSALCITY STUDIOS L.L.L.P., PARAMOUNTPICTURES CORPORATION, TWENTIETHCENTURY FOX FILM CORP., SONYPICTURES TELEVISION INC., COLUMBIAPICTURES INDUSTRIES, INC., SONYPICTURES ENTERTAINMENT INC.,DISNEY ENTERPRISES, INC., WALTDISNEY PICTURES and WARNER BROS.ENTER. INC.,Plaintiffs,v.REALNETWORKS, INC., a WashingtonCorporation; and REALNETWORKS HOMEENTERTAINMENT, INC., a DelawareCorporationDefendants./ No. C 08-04548 MHP

MEMORANDUM & ORDERRe:

Studio Plaintiffs’ and DVD CopyControl Association’s Motion forPreliminary Injunction

No. C 08-04719 MHP

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123456789101112131415161718192021222324252627282BACKGROUNDOn September 30, 2008, RealNetworks, Inc. and RealNetworks Home Entertainment, Inc.(together, “Real”) brought action in this court against the DVD Copy Control Association, Inc.(“DVD CCA”) and several major motion picture studios, seeking a declaratory judgment that Realhas neither breached its license agreement with DVD CCA nor violated the Digital MillenniumCopyright Act, 17 U.S.C. sections 1201 et seq. (“DMCA”) by manufacturing and distributing its“RealDVD” product. That same day, several major motion picture studios brought action in theUnited States District Court for the Central District of California to enjoin Real from manufacturing,distributing or otherwise trafficking in RealDVD, in alleged violation of the DMCA and as a breachof contract. The Central District case was transferred to this court, where the cases were related andconsolidated.Following an October 3, 2008 hearing, the court granted the motion picture studios’requested Temporary Restraining Order (“TRO”) to restrain and enjoin Real from manufacturing,distributing or otherwise trafficking in RealDVD or any products substantially similar. The TROhas been extended several times at the consent of all parties pending the completion of the motionpicture studios’ and the DVD CCA’s motions for a preliminary injunction, which is now before thecourt. The hearing on this matter was held over five days in April and May 2009.Having considered the parties’ submissions, arguments of counsel, and the case file, the courtrules as follows on the preliminary injunction motion. The court makes the following Findings of Fact and Conclusions of Law to support its ruling. To the extent that any findings of fact areincluded in the Conclusions of Law section, they shall be deemed findings of fact, and to the extentthat any conclusions of law are included in the Findings of Fact section, they shall be deemedconclusions of law. ///// ///// ///// ///// /////

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123456789101112131415161718192021222324252627283FINDINGS OF FACTI.PartiesA.RealNetworks, Inc.1. RealNetworks, Inc. is a company incorporated and based in Seattle, Washington, thatdevelops, manufactures and sells platforms for the delivery of digital media. See AmendedComplaint for Declaratory Relief, Docket No. 62, ¶ 10, Exh. A (“Compl.”).

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RealNetworks HomeEntertainment, Inc. is a subsidiary of RealNetworks, Inc. and is incorporated in Delaware, with itsprincipal place of business in Seattle, Washington. Id. ¶ 11.2. Real started fifteen years ago as a pioneer in the market for technology that relates to thedelivery of audio and video content over the Internet. See Hearing Tr. (Glaser) at 440:8-9, 440:21-441:19. Today, Real sells several popular product lines that deliver streaming audio and video of copyrighted content online, which Real licenses from content owners in the film, television, musicand electronic gaming industry. Id. at 442:7-14.3. Real has never been accused of copyright infringement from a major content provider. Id.at 443:17-23. Real has brought and prevailed on DMCA claims for circumvention of Real’s accesscontrol and copy protection measures it affords to content owners. See RealNetworks, Inc. v.Streambox, Inc., 2000 WL 127311, *8 (W.D. Wash. Jan. 18, 2000).B.Motion Picture Studios4. The motion picture studios involved in this consolidated action, as either plaintiffs andcounter-defendants or declaratory relief claim defendants, are: Disney Enterprises, Inc., ParamountPictures Corp., Sony Pictures Entertainment, Inc., Twentieth Century Fox Film Corp., NBCUniversal, Inc., Warner Bros. Entertainment, Inc., Viacom, Inc., Universal City Studios ProductionsL.L.L.P., Universal City Studios L.L.L.P., Sony Pictures Television, Inc., Columbia PicturesIndustries, Inc., and Walt Disney Pictures (collectively, “Studios”).5. The Studios are content owners of copyrighted works, including movies and recordedtelevision programs. The Studios or their subsidiaries distribute their movies on Digital VersatileDisks (“DVDs”). See Studios’ Answer, Docket No. 59, ¶ 20.

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