Academic journal article Santa Clara High Technology Law Journal

Altering the Contours of Copyright-The DMCA and the Unanswered Questions of Paramount Pictures Corp. V. 321 Studios

Academic journal article Santa Clara High Technology Law Journal

Altering the Contours of Copyright-The DMCA and the Unanswered Questions of Paramount Pictures Corp. V. 321 Studios

Article excerpt


In Eldred v. Ashcroft ("Eldred") (1) the United States Supreme Court, upholding the constitutionality of the Copyright Term Extension Act ("CTEA"), (2) stated that "copyright law contains built-in First Amendment accommodations" in the form of the idea/expression dichotomy and the fair use defense. (3) When faced with a legislative restriction that arguably chills the exercise of free speech, the Eldred Court said these safeguards render further First Amendment scrutiny unnecessary unless Congress seeks to alter the traditional contours of copyright protection. (4) In Paramount Pictures Corp. v. 321 Studios, (5) the Second Circuit rejected, without comment, the motion from a software distributor, 321 Studios, for an emergency stay of a preliminary injunction issued by the District Court for the Southern District of New York against the distribution of 321 Studios' DVD backup and recovery software. (6) 321 Studios requested a stay pending consideration of two constitutional questions: (i) whether the anti-trafficking provisions of [section] 1201(a)(2) and (b)(1) of the Digital Millennium Copyright Act ("DMCA") (7) impermissibly altered the contours of copyright, effectively curtailing appropriate fair uses of digital works protected by technological measures, and (ii) whether the DMCA invalidates the constitutional limitation on the term of copyright by prohibiting the manufacture and sale of tools needed to exploit works protected by technological protection measures after the copyright term expires. Because the District Court relied explicitly (as had the District Court for the Northern District of California in 321 Studios v. MGM Studios, Inc.) (8) on the Second Circuit's opinion in Universal City Studios, Inc. v. Corley ("Corley") (9) without consideration of the implications of Eldred, only a higher court review could have altered the analysis. (10)

By failing to accept 321 Studios' emergency plea for a stay pending full consideration of the merits, the Second Circuit lost the chance to take into account the impact of the intervening holding in Eldred as well as significant facts that distinguished the New York Litigation from Corley. The Second Circuit, to the profound misfortune of 321 Studios and loss to the general public, let stand a less than trenchant opinion of the anti-trafficking provisions of the DMCA in the face of a record that showed that consumers were being denied the tools to make fair uses of copyrighted works and unrestricted use of public domain works. The result is a chilling of activity that is privileged under the First Amendment and a validation of a mechanism that can confer perpetual copyright status on public domain works. Too late to help 321 Studios, a bill that would have altered this result by restoring the fair use defense for digital works was introduced, but died with the end of the 108th Congress. (11)


In 2001, Robert Moore and Rob Semaan founded Terr, LLC, a company based in St. Louis, Missouri that did business as 321 Studios. The mission of the company was to provide software tools to help consumers protect their investment in digital media. Until it was forced out of business by no fewer than six separate lawsuits and two federal court injunctions, it was the leading provider of DVD backup, recovery, and creation software. 321 Studios had distributors and sales offices throughout Asia-Pacific, Europe, and the United States, and its premier DVD backup title, DVD X Copy Platinum, was one of PC Magazine's "Best Products of 2003." (12)

Despite the popularity of its products with consumers, 321 Studios found itself at the center of a legal struggle to establish that its DVD-copying software did not violate U.S. copyright law. Ultimately, 321 Studios was driven out of business before the serious constitutional questions that were raised by its products could receive full appellate consideration in court. The story of the 321 litigation must be told against the history of the DMCA and, specifically, of its rules regulating access to digital works. …

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