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It must be emphasized that the purpose for distributing video on DVD is so consumers may watch and enjoy the films. Given the realities of the networked environment and the Internet, all devices and ”way stations” of delivery systems must maintain content as securely as it was received and neither circumvent protections nor release content to the next device or component in the clear. This license will include obligations concerning what copy protection rules must be followed (e.g. no copies allowed, one copy allowed, etc.) as a condition for decrypting the content and making it accessible to the user. Copy protection rules imposed by encryption/decryption license. Therefore, the copy protection technology adopted had to provide that DVD discs played on legitimate players would be viewable on existing television sets. For example, to succeed in the marketplace DVD players needed to be compatible with the existing installed base of television sets.

12 The most visible of the alternatives that have been introduced was the DIVX system sponsored by Circuit City and a group of private investors. One group focused on policy issues and one focused on technical issues, the technical group adopting the name of the Copy Protection Technical Working Group (”CPTWG”). Because DVD was a new format, it provided the ideal opportunity to build in copy protection technology. Any unlicensed device may transmit or pass on encrypted content without restrictions, provided such device does not decrypt or otherwise make the content accessible. This means that such devices and systems may not pass content which has been legitimately decrypted through either analog or digital connections to other devices and systems without the appropriate protections. Therefore, the negotiations centered on how the content of DVD discs should be treated by playback devices (both consumer electronics and computer devices) once it is decrypted. On the consumer electronics side, the analog VCR market was fairly mature and DVD offered a new generation of players that could gain wide popularity with consumers and generate substantial equipment sales. The basic ”design goals” that were required for this copy protection technology and licensing structure were: Sufficient technical and legal protection to ”keep honest people honest,” i.e., to make it difficult for an ordinary consumer to make a copy of protected content by consumers using normal home-type products; Sufficient technical and legal protection to prevent the easy creation of widely available and usable means of avoiding the technical and legal protections afforded by the technology and related licensing; Implementation in both computer and consumer electronics products such that the effect is insignificantly burdensome in complexity and cost in both environments; Technology licenses that are both sufficient to provide the necessary legal protections and low in burdens on product manufacturers and distributors; and Transparent operation to consumers, except where consumers attempt to make unauthorized copies of content protected using the system.

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On the computer side, DVD represented an opportunity for the personal computer to get into the home entertainment market as a playback device for movies. Film studios, however, were not prepared to release their movies on this new digital format without protections against unauthorized copying and distribution—particularly digital copying and distribution. Both the consumer electronics and computer industries were eager for the introduction of this new format for motion pictures. The consumer electronics industry initially resisted this approach, out of a concern that encryption would be very taxing to its devices, adding complexity and cost. Origins of CPTWG and DVD Video Copy Protection The need for a group to facilitate copy protection discussions among these three disparate industries became evident in the spring of 1996, when the trade association representing the major motion picture studios and the trade association representing the consumer electronics manufacturers presented to the computer industry a joint proposal for legislation. DVD video provides high quality video on a convenient 5-inch disc format that is resistant to wear and damage and allows for attractive consumer features, such as multiple foreign language versions. As an experienced eCommerce lawyer, Richard Newman provides a distinct benefit to clients that are interested in mitigating potential liability exposure or that are facing legal challenges associated with marketing operations.