Federal district judge Marilyn Hall Patel complied and on Tuesday refused to lift the injunction.  She is now taking time to hear arguments from both sides -- and possibly from a special master (court-appointed expert) -- on how Real's technology works before considering next steps.  Her next hearing is not until mid-November.

Judge Patel's name will be familiar to followers of digital copyright: she was the judge in the original Napster case who enjoined Napster and found it guilty of secondary copyright infringement. 

There are two essential technical points at issue in this case.  The first is whether RealDVD circumvents (breaks or works around) the standard CSS encryption used on DVDs.  The second is whether the DRM that RealDVD puts in place of CSS in order to ensure that users can only play content on up to five of their own PCs, and whether that protection is sufficient to counteract any circumvention.  Judge Patel's remarks during Tuesday's hearing suggested that she would be looking at the types of uses that RealDVD enables -- and whether those uses amount to copyright infringement -- rather than whether RealDVD breaks "the letter of the law" regarding DRM circumvention. 

The MPAA has argued that RealDVD enables a "rent, rip, and return" use case, which goes against the spirit (if not necessarily the letter) of a video rental store's user agreement, but this is a separate matter from the question of a user's rights under copyright law.  The MPAA's lawsuit is the most aggressive legal move that the media industry has taken against Real to date.

RealNetworks had hoped to introduce RealDVD as a legal product by virtue of its similarity to a higher-end product from a vendor called Kaleidescape.  As we pointed out in our previous piece on RealDVD, Kaleidescape was sued by the DVD Copy Control Association (DVD CCA) over the terms of its licensing agreement, not over DMCA violations.  Kaleidescape prevailed in that case.  Before the MPAA sued RealNetworks, Real had hoped to get a court to issue a declaratory judgment that RealDVD did not violate Real's DVD CCA license, but that has not occurred.

As the MPAA well knows, statutory law (DMCA 1201) trumps contractual provisions (DVD CCA).  Therefore any such declaratory judgment may be worthless if Judge Patel sides with the media industry -- as she did seven years ago.