FALL 2010
Course No.: 9200-710 (& 810)-001
Course ID:  85723 & 85725
Time: M, W 4:45-6:15 p.m.
Room TBD
Professor Jay Dratler, Jr.
Across from Room 231D (IP Alcove)
Home: 330-835-4537
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008, 2010  Jay Dratler, Jr.  
For permission, see CMI.

Notes and Questions on RealNetworks, Inc. v. Streambox, Inc.

1.  As this case shows, not every defendant in a Chapter 12 case will be a hacker like Corwin in Reimerdes.  This is the first decision under Chapter 12 involving a commercial concern as a defendant. Which types of cases are likely to have greater commercial and economic significance, those like Reimerdes, which keep hackers at bay, or those like this one?  Don't cases like this one help define the shape of the Internet and the consumer-electronics industries?

2.  Unlike Reimerdes, this case involved an application for a preliminary injunction, i.e., an injunction to be granted temporarily, pending trial.  Are such cases under Section 1201 likely to be common or rare?

The standard for preliminary injunctions enunciated by the court here, often called the "sliding-scale" test, is a variant of the traditional four-factor test discussed in the Notes on Reimerdes.  It is not intended to be entirely new law, just a new approach to the traditional test, in which courts seek to minimize the risk of possible harm to the parties pending trial.  See Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative, and Industrial Property § 13.01[1] (Law Journal Press, 1991).  Can you articulate how the test enunciated here addresses that fundamental concern?

As under the traditional four-part test, the "balance of harm" figures importantly in the "sliding-scale" test.  With respect to each of Steambox's three products, who is likely to suffer more harm pending trial: the plaintiff if the injunction is denied in error, or the defendant if the injunction is granted in error?  Is the court correct in its assessments of the balance of harms in each instance?

The risk of harm is always asymmetrical in one respect.  If the court erroneously denies the injunction but rules for the plaintiff at trial, the court can compensate for the plaintiff's interim harm by awarding damages, as long as plaintiff has asked for them.  But how can the court redress the wrong done by an erroneous grant of a preliminary injunction pending trial?  What can it do for the aggrieved defendant after trial?  Does this opinion suggest an answer?

3.  The court finds that the defendant's distribution of the "Streambox VCR" violates both of the two anti-trafficking rules.  Can you articulate why, making specific reference to what that product does?  Was the court right on this point?  Did the "Streambox VCR" do what Congress intended to prohibit under both the anti-trafficking rule for access controls (subsection (a)(2)) and the anti-trafficking rule for use controls (subsection (b))?

Which of the three conditions, (A), (B), or (C), best applies to defendant's distribution of the Streambox VCR?  Which provides the weakest case for the plaintiff?

4.  The court's decision on the "Ripper" has important practical and economic consequences.  The court finds that this product was just a "format converter" and not a "black box" for circumventing access or use controls.

From a policy perspective, was the court right in attempting to distinguish between format converters and "black boxes"?  What would be the consequences if any software developer could claim that a proprietary file format was a "technological measure" designed to protect copyrights?  What if a particular format had become a standard?  Couldn't Microsoft claim that its proprietary format for "Microsoft Word" documents was such a measure and therefore prevent anyone from converting documents to other word-processing formats?  Would that result be socially and economically desirable?

But how does one distinguish between a proprietary format and a protective technological measure?  Is the distinction obvious in this case?  Does the court provide any hints as to the relevant considerations in general?

5.  In analyzing the Streambox "Ferret," the court refuses to rule definitively on the plaintiff's likelihood of proving at trial that a RealPlayer with a new search engine added by the Ferret is a "derivative work" covered by Section 106(2) of the Copyright Act of 1976.  It nevertheless provides relief, finding "a substantial question" raised on that point and the balance of harms tipped sharply in the plaintiff's favor.

Was the court right to reach this result?  What would be the economic consequences for utility programs and "add-ons" if rival producers could market programs to modify them without the original producers' consent?  Would the incentive to invest money in add-ons increase or decrease?  the incentive for producers to maintain and improve them?  Isn't one of the rights traditionally most valued by copyright owners the right to determine in precisely what form the copyrighted work reaches the public?  Did the court's decision on the Ferret affirm that right?

6.  Finally, consider the length and focus of the opinions in the two cases, Reimerdes and RealNetworks.  Which case was the harder one on its facts?  In which opinion were the reasoning and the results more clearly stated?  Was the extended discussion in Reimerdes justified?  Does the juxtaposition of the two opinions demonstrate that, in drafting judicial opinions as in drafting contracts, less is often more?

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