Movie Industry Suffers Blow in DVD Court Ruling

In a closely watched case about DVD hacking and Web publishing freedoms, the California state Supreme Court has ruled that the Internet’s reach does not erase jurisdictional boundaries.

The court threw out a lawsuit filed by the DVD Copy Control Association, which had accused Texas resident Matthew Pavlovich of publishing trade secrets. Pavlovich allegedly posted a program on his Web site that enabled users to bypass copy protections and copyright safeguards on DVDs.

In a split ruling, the court found that in order for a California business to sue an out-of-state person or entity in state court, it must prove that the person or entity “expressly aimed” harm at the California company.

“The record fails to show that Pavlovich expressly aimed his tortious conduct at or intentionally targeted California,” Justice Janice Rogers Brown wrote in the decision.

Wider Implications

The ruling was seen as a blow to the movie industry’s bid to reel in hackers, since it may spill over into other cases involving the piracy or illegal sale of movies on the Internet.

Many legal experts believe the Supreme Court eventually will have to weigh in on jurisdictional issues raised by the case. The DVD industry group could force the court’s hand by appealing the California ruling, something its attorney indicated was a possibility.

In fact, the three justices who dissented from the majority opinion said Pavlovich’s actions were in effect aimed at the state because it is the epicenter of the movie industry.

Lightning Rod

The case became a lightning rod for various opinions, with the American Civil Liberties Union filing a brief in support of Pavlovich, who was a student at Purdue University in Indiana when he set up the Web site where the DVD code was posted.

The source code, which also could make it possible for unlicensed DVD players to read copyright-protected movies, was posted in 1999. Pavlovich has claimed his aim was to make it easier for Linux-based DVD players to be used to play popular movies.

Pavlovich still may face suit in either Texas or Indiana, the California court ruled.

And the DVD industry’s legal efforts will move forward despite the ruling, because at least one defendant in a copyright infringement suit lives in California.

Big Picture

The larger implication of the ruling is that companies could be forced to file suit in the home jurisdictions of alleged hackers, making it more costly to pursue such cases.

Some in the software development community hope the ruling will lend weight to a grass-roots effort to oppose the Digital Millennium Copyright Act (DMCA), which many believe is stifling legitimate development efforts as well as alleged hacking and piracy.

And Electronic Frontier Foundation legal director Cindy Cohn told the E-Commerce Times that even the case’s narrower implications are significant.

“It puts to rest the notion that you can drag someone into California court simply because he should have known that a Web publication could harm Hollywood,” Cohn said. “It underscores that real-life borders don’t completely disappear online.”