321 Studios v. MGM, 307 F. Supp. 2d 1085(N.D. Cal. 2004)

307 F. Supp. 2d 1085(N.D. Cal. 2004)

United States District Court,

N.D. California.

321 STUDIOS, Plaintiff,

METRO GOLDWYN MAYER STUDIOS, INC., et al., Defendants.

And Related Counterclaims.

No. C 02-1955-SI.

Feb. 19, 2004.

*1088 Daralyn J. Durie, Lloyd A. Farnham, Michael H. Page, Ashok Ramani, Clement S. Roberts, Keker & Van Nest LLP, San Francisco, CA, for Plaintiff/Counter-claimant.

Douglas R. Young, Stephanie Powers Skaff, James W. Morando, Nan E. Joesten, Farella Braun & Martel LLP, San Francisco, CA, Russell Jay Frackman, Patricia H. Benson, Marc E. Mayer, Mitchell Silberberg & Knupp LLP, Los Angeles, CA, Steven B. Fabrizio, Eric J. German, Mitchell Silberberg & Knupp LLP, Washington, DC, for Defendants/Counter-Defendant.

Deirdre Mulligan, pro se, Berkeley, CA, for Amicus.

Cindy Ann Cohn, pro se, San Francisco, CA, for Amicus.

Jocelyn Burton, U.S. Attorney's Office, San Francisco, CA, John H. Zacharia, United States Department of Justice, Washington, DC, for Intervenor.

ORDER GRANTING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND RESOLVING

RELATED MOTIONS

ILLSTON, District Judge.

Presently before the Court are defendant/counterclaimants' motion for partial summary judgment, and various accompanying motions. Having carefully considered the arguments of counsel and the papers submitted, the Court hereby GRANTS defendant/counterclaimants motion for partial summary judgment; GRANTS plaintiff Victor Mattison's motion *1089 to dismiss defendants' counterclaims; DENIES plaintiff's motion for denial or continuance of motion for summary judgment pursuant to Rule 56(f); GRANTS Electronic Frontier Foundation's and Copyright Law Professors' motion for leave to file amici briefs in opposition to defendants' motion for summary judgment; DENIES plaintiff's motion for leave to amend answer to counterclaim; GRANTS Larry Davis' motion to intervene as plaintiff; and GRANTS defendants' motion for judicial notice, for the reasons set forth below.

BACKGROUND

A digital versatile disc ("DVD") is a five inch wide plastic disk that stores digital information. Moore Decl., ś 2 n. 1; Schumann Decl., ś 7. DVDs currently make up 39% of the sales of video and film works. Schwerin Decl. ś 3. Many films are sold only in the DVD format. Moore Decl. ś 25; Schwerin Decl., ś 4. This format allows bonus features, such as alternate endings, deleted scenes, video games, alternate viewing configurations, commentary from directors and actors, and other menu-driven options, that are not available on VHS tapes or any other format. Moore Decl. śś 26-30; Schwerin Decl., ś 7; Touretsky Decl., ś 9; Schumann Decl., ś 18.

Many DVDs store the digital data in a format called the "Contents Scramble System" or "CSS." The Copyright Control Authority administers the CSS encoding scheme and the licensing of the electronic "keys" used by DVD players to playback DVDs. Moore Decl. śś 10-11; Schumann Decl., śś 12-14. The 31 CSS keys and the algorithm that can be used to decode a DVD are broadly available on the Internet. Touretsky Decl., śś 7, 11, 14, 22, 24; Schumann Decl., ś 22.

Plaintiff 321 Studios, LLC is a company that markets and sells software and instructions for copying DVDs. First Amended Complaint śś 1, 23, 26, 28, 29; Moore Decl., śś 2-4. 321 sells two products: DVD Copy Plus, which began selling in August 2001, and DVD-X COPY, which began selling in November 2002. Moore Decl. śś 2, 5. DVD Copy Plus consists of an electronic guide explaining how to create backup copies of DVDs, two pieces of free, publicly available software, and one CD burning application, PowerCDR, licensed from a German company. Moore Decl. ś 2. DVD Copy Plus copies video content from original DVDs regardless of whether they are encoded with CSS. Moore Decl. ś 3. The software does not create an identical copy of the DVD; rather it allows the user to copy a portion of the video contents on the DVD onto a recordable CD. Moore Decl. ś 3. DVD-X COPY requires the user to have a DVD drive that is capable of reading and writing data to blank DVD media. Moore Decl. ś 5. DVD-X COPY reads the data on the original DVD, decodes it, and then uses the data to create a backup copy of the DVD. Moore Decl. ś 6. This data is read by the DVD drive, decrypted by the DVD-X COPY software, and then stored on the computer (either in RAM or on the hard drive) until the backup copy of the DVD is created. Id. Once the backup copy is created, the stored data from the original DVD is automatically deleted. Id. If the DVD is encoded with CSS, DVD-X COPY uses a CSS "player key" to access the data; DVD-X COPY also contains publicly known computer code that performs the algorithms to decode the DVD data. Moore Decl. ś 8. DVD-X COPY does not affect the encryption on the original DVD. Moore Decl. ś 9.

Plaintiff 321 Studios filed a complaint for declaratory relief on April 22, 2002, seeking, in Claim One, a declaratory judgment from this Court that "its activities in distributing DVD Copy Plus and DVD-X COPY do not violate the provisions of the [Digital Millennium Copyright Act, *1090 "DMCA"] or, in the alternative, that these provisions are invalid in light of other copyright law provisions, these provisions are invalid because Congress exceeded its enumerated powers under Article 1, Section 8, of the United States Constitution, these provisions are "unconstitutionally vague, and/or these provisions violate the First Amendment of the Constitution." FAC ś 44. Claim Two seeks a declaratory judgment from this Court that its distribution of DVD Copy Plus and DVD-X COPY do not violate the Copyright Act "on the grounds that DVD Copy Plus and DVD-X COPY have substantial non-infringing uses, that the use of DVD Copy Plus and DVD-X COPY constitute fair use, and/or that the provisions of the Copyright Act, if interpreted to bar the distribution of DVD Copy Plus and DVD-X COPY, violate the First Amendment of the Constitution." FAC ś 49.

Most defendants ("the Studios") are members of the Motion Picture Association of America ("MPAA"). They are owners of copyrights in motion pictures, and produce and/or distribute DVDs that contain the copyrighted material. The United States was granted intervenor-defendant status on August 12, 2002 and limits its involvement to plaintiff's claims regarding the validity of the DMCA.

Now before the Court are defendant/counterclaimants' motion for partial summary judgment, plaintiff Victor Mattison's motion to dismiss defendants' counterclaims, plaintiff's motion for denial or continuance of motion for summary judgment pursuant to Rule 56(f), Electronic Frontier Foundation's and Copyright Law Professors' motion for leave to file amici briefs in opposition to defendants' motion for summary judgment, plaintiff's motion for leave to amend answer to counterclaim, Larry Davis' motion to intervene as plaintiff, and defendants' request for judicial notice.

LEGAL STANDARD

[Omitted]

DISCUSSION

I. Defendants' motion for partial summary judgment

In adjudicating this dispute, this Court finds a number of recent cases dealing with the DMCA instructive and persuasive. In the Second Circuit, many of these issues were considered at both the trial court level in Universal City Studios, Inc. v. Reimerdes, 111 F.Supp.2d 346 (S.D.N.Y.2000), and at the appellate level in Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2nd Cir.2001). In addition, Judge Ronald Whyte of this district wrote a lengthy and well reasoned opinion in United States v. Elcom Ltd., 203 F.Supp.2d 1111 (N.D.Cal.2002). This Court finds these cases dispositive on many of the same issues raised by plaintiffs and defendants in the instant case.

Corley (and the district court case of Reimerdes ) dealt, as this case does, with the decryption of DVDs. Eric Corley and his company, 2600 Enterprises, Inc., appealed the district court's judgment, following a full non-jury trial, which enjoined *1093 them from posting the DeCSS decryption program on the 2600 website, or linking to any website on which DeCSS was posted. Corley, 273 F.3d at 434-35. Defendants argued that the DMCA overstepped limits in the Copyright Clause on the duration of copyright protection, that the DMCA as applied to their dissemination of DeCSS violated the First Amendment, and that the DMCA violated the First Amendment and Copyright Clause by unduly obstructing "fair use" of copyrighted materials. Id. at 436. The Second Circuit held: 1) that the constitutional challenge based on the Copyright Clause was premature and speculative; 2) that intermediate scrutiny was the appropriate standard of review under which to analyze the injunction against posting or linking to DeCSS, and that under intermediate scrutiny the injunction did not unduly burden defendants' First Amendment rights; and 3) that the DMCA, as applied by the District Court, does not unconstitutionally limit fair use. Id. at 445, 450-458, 458-59.

In Elcom, the defendant was criminally prosecuted by the United States for violations of the DMCA. A product sold by Adobe Systems, called Adobe Acrobat eBook Reader, provides technology to read on personal computers books produced in digital form. Elcom, 203 F.Supp.2d at 1117. The Adobe Acrobat eBook Reader contained restrictions that allowed the purchaser of an electronic book to read the book only on the computer onto which the book had been downloaded, but barred the purchaser from emailing or copying the book onto another computer. Id. at 1118. Defendant Elcomsoft developed and sold a product called the Advanced eBook Processor ("AEBPR"), which allowed a user to remove the use restrictions from electronic books and allowed the book to be easily reproduced and electronically distributed. Id. Defendant was indicted for violations of the DMCA for trafficking in and marketing of the AEBPR. Defendant filed a motion to dismiss the indictment, based on the unconstitutionality of the DMCA. Defendant argued first that the DMCA was unconstitutionally vague as applied to it and therefore violated the Due Process Clause. Defendant also argued that the DMCA violated the First Amendment, contending that it was a content-based restriction that was not narrowly tailored to serve a compelling government interest, that it infringed the fair use rights of third parties, and that it was too vague, and therefore impermissibly chilled free expression. Judge Whyte held: 1) that the DMCA had no ambiguity in what tools are allowed or prohibited, and therefore the law was not unconstitutionally vague; 2) that while computer code is speech, and is therefore protected by the First Amendment, the DMCA is sufficiently tailored to protect legitimate and substantial governmental interests, and so did not burden defendant's First Amendment rights; 3) that the DMCA does not impermissibly violate fair use rights of users; 4) that the DMCA is not unconstitutionally vague under the First Amendment; and 5) that Congress did not exceed its authority in enacting the DMCA. [FN1]

FN1. After the Elcom motion to dismiss was denied, defendant was tried and acquitted by a jury.

This Court will discuss both the Corley and the Elcom decisions in more detail throughout this opinion.

A. 321's liability under the anti-circumvention provisions of the DMCA

1. The Digital Millennium Copyright Act

Congress enacted the DMCA in 1998 following the adoption of the World Intellectual *1094 Property Organization Copyright Treaty. Two sections of the DMCA are at issue in this case. The first, 17 U.S.C. § 1201(a)(2), provides:

No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -

(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;

(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or

(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.

The second, 17 U.S.C. § 1201(b)(1), provides:

No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that -

(A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof;

(B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion therefore; or

(C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof.

However, both sections are subject to 17 U.S.C. § 1201(c)(3), which provides:

Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title.

In both §§ 1201(a)(2) and (b)(1), only one of the three enumerated conditions must be met in order to find a violation of the statute. Defendant Studios contend that plaintiff 321 Studios is engaged in all three types of conduct prohibited by both §§ 1201(a)(2) and (b)(1).

2. The challenged conduct of 321 Studios

[12] The Studios state first that 321's DVD copying software is plainly technology within the meaning of § 1201. Defendants then assert that CSS is a technological measure that both effectively controls access to a work protected under the DMCA, triggering § 1201(a)(2), and effectively protects a right of a copyright owner under the DMCA, triggering § 1201(b)(1). As defined by the statute, a technological measure effectively controls access to a work "if the measure, in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work," while a technological measure " 'effectively protects a right of a copyright owner under this title' if the measure, in the ordinary course of operation, prevents, restricts, or otherwise limits the exercise of a right of a copyright owner under this title." 17 U.S.C. § 1201(a)(3)(B); (b)(2)(B). Defendants assert that CSS prevents access to DVDs in the absence of the proper *1095 CSS keys, and that only licensed DVD players can legally access the CSS keys in order to play DVDs. See Universal Studios v. Reimerdes, 111 F.Supp.2d at 317-318 ("One cannot gain access to a CSS-protected work on a DVD without application of the three keys that are required by the software. One cannot lawfully gain access to the keys except by entering into a license with the DVD CCA under authority granted by the copyright owners or by purchasing a DVD player or drive containing the keys pursuant to such a license.") 321, in a footnote, questions whether CSS is an effective control or protection of DVDs, since the CSS access keys are widely available on the internet. However, this is equivalent to a claim that, since it is easy to find skeleton keys on the black market, a deadbolt is not an effective lock to a door. Moreover, the statute itself defines "effectively protects a right of a copyright owner under this title" to mean "if the measure, in the ordinary course of its operation, prevents, restricts, or otherwise limits the exercise of a right of a copyright owner under this title." 17 U.S.C. § 1201(b)(2)(B). It is evident to this Court, as it has been to previous courts, that CSS is a technological measure that both effectively controls access to DVDs and effectively protects the right of a copyright holder. [FN2] See Reimerdes, 111 F.Supp.2d at 317-18 ("One cannot lawfully gain access to the keys except by entering into a license with the DVD CCA under authority granted by the copyright owners or by purchasing a DVD player or drive containing the keys pursuant to such a license. In consequence, under the express terms of the statute, CSS 'effectively controls access' to copyrighted DVD movies. It does so, within the meaning of the statute, whether or not it is a strong means of protection.")

FN2. Plaintiff 321 Studios also disputes that CSS protects the right of a copyright holder (as is necessary for a violation of § 1201(b)(1)), stating that it only controls access to DVDs, but is not a copy control device. That argument is discussed infra.

Defendants next state that 321's DVD copying software is "primarily designed or produced for the purpose of circumventing" CSS, "has only limited commercially significant purpose or use other than to circumvent" CSS, and is marketed by 321 for use in circumventing CSS. The statute defines to "circumvent a technological measure" as "to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner" and defines "to circumvent protection afforded by a technological measure" as "avoiding, bypassing, removing, deactivating, or otherwise impairing a technological measure." 17 U.S.C. §§ 1201(a)(3)(A) and (b)(2)(A). Defendants maintain that the only purpose of 321's software is to bypass CSS protection and thereby to permit access to and copying of CSS protected DVDs; and the 321 software would have no commercially significant purpose without the circumvention components. Further, defendants assert that none of the § 1201 exemptions apply and that legal uses of the software by 321 customers are irrelevant to liability under § 1201.

Plaintiff 321 Studios disputes all of these claims. 321 accuses defendants of ignoring "the central fact that makes 321's DVD Copy Code legal... DVD Copy Code works on original DVDs the user has already purchased, and thus unquestionably has the right to access." Pltf's Opposition 7:14-16 (emphasis in original). Plaintiff argues that any circumvention of CSS raises issues under only § 1201(a), not § 1201(b), because CSS controls only access to DVDs, not copying. Plaintiff further *1096 states that even if § 1201(b) does apply, DVD Copy Code would not violate it because its primary and intended use does not violate any right of a copyright holder. Plaintiff maintains that, if providing the means to decrypt CSS to the owner of the disk constituted "circumvention" under § 1201(a)(2), then all DVD player manufacturers must violate that section, because every DVD player provides the means to decrypt CSS. Plaintiff notes that making personal backup copies of DVDs is expressly authorized under the copyright laws as fair use, and that, since the primary and intended use of 321's software is legal fair use, 321 does not violate § 1201(b).

a. The provisions specific to § 1201(a)(2)

[13] Defendants assert that 321's DVD copying software is clearly violative of § 1201(a)(2), because it is designed for the purpose of circumventing CSS, which is a technological measure that effectively controls access to the DVDs; it has only limited commercially significant purpose or use other than to circumvent CSS; and it is marketed for use in circumventing CSS. 321 responds that it cannot be in violation of § 1201(a)(2) because "circumvent" by definition is done without the authority of the copyright holder. The DMCA provides at § 1201(a)(3)(a) that "to 'circumvent a technological measure' means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright holder." 321 states that it does have the authority of the copyright holder because its product only works on original DVDs, and the purchaser of the DVD has authority of the copyright holder to bypass CSS. This argument was offered and rejected in Corley, the Second Circuit case which also addressed issues of DVD copying and the DMCA. In Corley, the defendants argued "that an individual who buys a DVD has the 'authority of the copyright owner' to view the DVD, and therefore is exempted from the DMCA pursuant to subsection 1201(a)(3)(A) when the buyer circumvents an encryption technology in order to view the DVD on a competing platform." Corley, 273 F.3d at 444. The court responded: "the basic flaw in this argument is that it misreads subsection § 1201(a)(3)(A). That provision exempts from liability those who would 'decrypt' an encrypted DVD with the authority of a copyright owner, not those who would 'view' a DVD with the authority of a copyright owner." Id. This Court agrees with the Corley court that the purchase of a DVD does not give to the purchaser the authority of the copyright holder to decrypt CSS.

Plaintiff also claims that if its software is in violation of § 1201(a)(2), then all DVD players must also be in violation, since they also decrypt CSS. This argument lacks merit. Licensed DVD players have been issued a key to decrypt CSS, and in exchange must adhere to strict prohibitions on copying of the decrypted DVD; 321's software does not have such a license, and therefore does not have the authority of the copyright owner. Accordingly, this Court rejects plaintiff's argument that the "without the authority of the copyright holder" language exempts its product from liability under § 1201(a)(2).

b. The provisions specific to § 1201(b)(1)

[14] Plaintiff first asserts that CSS is not a copy control measure, since it controls only access to DVDs, but does not control or prevent copying DVDs. Plaintiff goes on that § 1201(b)(1), which prohibits devices that circumvent technological measures which protect "a right of a copyright owner," is concerned only with *1097 illegal copying. Thus, since 321's product circumvents only CSS, and CSS is not a copy control measure, § 1201(b)(1) does not apply at all to 321. However, 321 both misreads the statute and misstates the purposes of CSS. The statute prohibits manufacturing, importing, offering to the public, providing, or otherwise trafficking in any technology that circumvents protection afforded by a technological measure that effectively protects a right of a copyright owner. While 321 is technically correct that CSS controls access to encrypted DVDs, the purpose of this access control is to control copying of those DVDs, since encrypted DVDs cannot be copied unless they are accessed. 321 claims that CSS does not prevent copying, since it does not prevent copying the encrypted data on the DVD. However, as 321 admits "that copying is not particularly useful," as any copy made without circumventing CSS could not be accessed or viewed. Opp. at 3:9-10. It is clear to this Court CSS is a copy control system, and therefore § 1201(b)(1) does apply.

[15] 321 then states that, if § 1201(b)(1) applies, 321's software does not violate the section because the primary and intended use of the software does not violate any right of a copyright holder. It asserts that many uses of the software do not implicate the DMCA at all, as they do not involve accessing CSS; do not implicate copyright infringement, as they involve making copies of DVDs that are in the public domain; are fair use of copyrighted materials; or involve making a single, archival backup copy of a movie that the user has already purchased, which is authorized under copyright law. However, the downstream uses of the software by the customers of 321, whether legal or illegal, are not relevant to determining whether 321 itself is violating the statute. As Judge Whyte of this District stated in Elcom: "Congress did not ban the act of circumventing the use restrictions. Instead, Congress banned only the trafficking in and marketing of devices primarily designed to circumvent the use restriction protective technologies. Congress did not prohibit the act of circumvention because it sought to preserve the fair use rights of persons who had lawfully acquired a work." Elcom, 203 F.Supp.2d at 1120.

Corley also addressed and rejected a similar argument:

[Defendants] contend that subsection 1201(c)(1), which provides that "nothing in this section shall affect rights, remedies, limitations or defenses to copyright infringement, including fair use, under this title" can be read to allow the circumvention of encryption technology protecting copyrighted material when the material will be put to "fair uses" exempt from copyright liability. We disagree that subsection 1201(c)(1) permits such a reading. Instead, it simply clarifies that the DMCA targets the circumvention of digital walls guarding copyrighted material (and trafficking in circumvention tools), but does not concern itself with the use of those materials after circumvention has occurred. Subsection 1201(c)(1) ensures that the DMCA is not read to prohibit the "fair use" of information just because that information was obtained in a manner made illegal by the DMCA.

Corley, 273 F.3d at 443. Indeed, a simple reading of the statute makes it clear that its prohibition applies to the manufacturing, trafficking in and making of devices that would circumvent encryption technology, not to the users of such technology. It is the technology itself at issue, not the uses to which the copyrighted material may be put. This Court finds, as did both the Corley and Elcom courts, that legal downstream use of the copyrighted material by customers is not a defense to the *1098 software manufacturer's violation of the provisions of § 1201(b)(1).

[16] 321 also asserts that its software does not violate § 1201(b)(2) because the software does not "circumvent" encryption. Section 1201(b)(1) defines such circumvention, as "avoiding, bypassing, removing, deactivating, or otherwise impairing a technological measure," and 321 states that its software does not avoid, bypass, remove, deactivate, or otherwise impair a technological measure, but that it simply uses the authorized key to unlock the encryption. However, while 321's software does use the authorized key to access the DVD, it does not have authority to use this key, as licensed DVD players do, and it therefore avoids and bypasses CSS.

For these reasons, § 1201(b)(1) does apply to 321's DVD copying software.

c. The common provisions of § 1201(a)(2) and § 1201(b)(1)

While defendants claim that plaintiffs' product violates all three statutory prongs of §§ 1201(a)(2) and (b)(1), plaintiff asserts that 321 violates none of them. 321 asserts that its product was not primarily designed and produced to circumvent a technological measure, that it does not have "only limited commercially significant purpose" other than to circumvent CSS, and that the prohibition against marketing a product for use in circumventing such protection is violative of the First Amendment. This Court will take each prong in turn.

[17] Plaintiff states that its DVD copying software was not primarily designed and produced to circumvent a technological measure, but that it was designed and produced to allow users to make copies of all or part of a DVD. Plaintiff maintains that the ability to unlock CSS is just one of the features of its software. However, as defendants point out, only that specific feature is challenged here; and all that it does and was designed to do is to circumvent CSS. Defendants contend in their reply brief that 321's admission that a part of its software circumvents CSS is enough to render 321 liable, since the statute bars "any technology, product, service, device, component, or part thereof that is primarily designed or produced for the purpose of circumventing." §§ 1201(a)(2) and (b)(1) (emphasis added). Defendants' reading of the statute is correct. It is undisputed that a part of 321's software is solely for the purpose of circumventing CSS; this portion of the software, therefore, violates 17 U.S.C. § 1201(a)(2)(A).

[18] With regard to the second prong of both § 1201(a)(2) and § 1201(b)(1), it is impossible for this Court to determine on summary judgment whether 321's product has only limited commercially significant purposes other than circumvention, as this is a question of fact for a jury to decide, and neither party has produced significant evidence on this issue. With regard to the third prong of both § 1201(a)(2) and § 1201(b)(1), 321 does not dispute that it markets its DVD copying software for use in circumventing CSS, but states that the marketing prong of the statute violates the First Amendment. 321 claims that this prohibition against marketing forbids dissemination of information about the product's legal attributes, and that such a prohibition cannot be reconciled with the First Amendment. See Rubin v. Coors Brewing Co., 514 U.S. 476, 115 S.Ct. 1585, 131 L.Ed.2d 532 (1995); see also 44 Liquormart v. Rhode Island, 517 U.S. 484, 116 S.Ct. 1495, 134 L.Ed.2d 711 (1996). However, these cases are inapposite, as the First Amendment does not protect commercial speech that involves illegal activity, and this Court has found that the CSS circumvention portion of the 321 software is illegal. See *1099Florida Bar v. Went For It, Inc., 515 U.S. 618, 623-24, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995) ("The government may freely regulate commercial speech that concerns unlawful activity."); see also Corley, 273 F.3d at 447. Therefore, as 321 markets its software for use in circumventing CSS, this Court finds that 321's DVD copying software is in violation of the marketing provisions of §§ 1201(a)(2) and (b)(1).

Accordingly, this Court finds that 321's software is in violation of both § 1201(a)(2) and § 1201(b)(1), because it is both primarily designed and produced to circumvent CSS, and marketed to the public for use in circumventing CSS.

B. Constitutionality of the DMCA

Plaintiff 321 asserts that the DMCA, as construed by the defendants, violates the First Amendment and is therefore unconstitutional. 321 argues that a ban on its DVD copying software impermissibly burdens the First Amendment rights of its users; that the DMCA unconstitutionally restricts 321's speech; that the DMCA is substantially overbroad, so as to give 321 standing to pursue a constitutional challenge on behalf of its customers; and that the DMCA exceeds the scope of congressional powers.

The Studios respond that the intermediate level of scrutiny used by both the Elcom and Corley courts is the appropriate standard, and that under this standard the statutes pass muster: the government had legitimate and substantial interests in imposing the restriction; the interests are unrelated to the suppression of free expression; and the restrictions on the First Amendment freedoms of plaintiffs are no greater than is essential to the furtherance of the governmental interests. See Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 662, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994).

[Discussion of the First Amendment issues is omitted]

4. The DMCA does not exceed the scope of Congressional powers

[21] 321 claims that the DMCA cannot be sustained under the Commerce Clause, the Intellectual Property Clause, or the Necessary and Proper Clause. In Elcom, Judge Whyte considered and rejected the first two of these claims. With regard to the Commerce Clause claim, he stated:

Congress plainly has the power to enact the DMCA under the Commerce Clause. "The commerce power 'is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed by the Constitution." ' The DMCA prohibits conduct that has a substantial effect on commerce between the states and commerce with foreign nations. Trafficking in or the marketing of circumvention devices "for gain," as proscribed by Sections 1201(b) and 1204, has a direct effect on interstate commerce. To the extent that circumvention devices enable wrongdoers to engage in on-line piracy by unlawfully copying and distributing copyrighted works of authorship, the sale of such devices has a direct effect on suppressing the market for legitimate copies of the works. Accordingly, there is a rational basis for concluding that the regulated activity sufficiently affects interstate commerce to establish that Congress had authority under the Commerce Clause to enact the legislation.

Elcom, 203 F.Supp.2d at 1138 (internal citations omitted). Judge Whyte then acknowledged that the analysis of whether Congress was precluded by the Intellectual Property Clause from enacting the DMCA was a more difficult question, but stated:

Protecting the exclusive rights granted to copyright owners against unlawful piracy by preventing trafficking in tools that would enable widespread piracy and unlawful infringement is consistent with the purpose of the Intellectual Property Clause's grant to Congress of the power to "promote the useful arts and sciences" by granting exclusive rights to authors in their writings. In addition, Congress did not ban the use of circumvention tools out of a concern that enacting such a ban would unduly restrict the fair use doctrine and expressly sought to preserve fair use. See 17 U.S.C. § 1201(c). Therefore, on the whole, the DMCA's anti-device provisions are not fundamentally inconsistent with the Intellectual Property Clause.

Id. at 1140-41. He then went on to analyze whether the DMCA was "irreconcilably inconsistent" with a limitation contained *1104 within the Intellectual Property Clause:

While the DMCA may make certain fair uses more difficult for digital works of authorship published with use restrictions, fair use has not been eliminated. Similarly, the argument that Congress' ban on the sale of circumvention tools has the effect of allowing publishers to claim copyright-like protection in public domain works is tenuous and unpersuasive. Nothing within the DMCA grants any rights to anyone in any public domain work. A public domain work remains in the public domain and any person may make use of the public domain work for any purpose.

Id. at 1141.

The plaintiff here makes a similar claim, that since the DMCA outlaws the trafficking in and marketing of such de-encryption technology, that it has also eliminated the possibility of fair use. But as was stated in Corley

[Defendants] have provided no support for their premise that fair use of DVD movies is constitutionally required to be made by copying the original work in its original format ... A film critic making fair use of a movie by quoting selected lines of dialogue has no constitutionally valid claim that the review (in print or on television) would be technologically superior if the reviewer had not been prevented from using a movie camera in the theater, nor has an art student a valid constitutional claim to fair use of a painting by photographing it in a museum. Fair use has never been held to be a guarantee of access to the copyrighted material in order to copy it by the fair user's preferred technique or in the format of the original.

Corley, 273 F.3d at 459. Ultimately, the Elcom court concluded:

Accordingly, the DMCA does not run afoul of any restraint on Congress' power imposed by the Intellectual Property Clause. Section 1201(b) of the DMCA was within Congress' Commerce Power to enact, and because it is not irreconcilably inconsistent with any provision of the Intellectual Property Clause, Congress did not exceed its constitutional authority in enacting the law.

Id. at 1141-42.

However, 321 contends that while both Corley and Elcom state that fair use is not constitutionally based, the Supreme Court has, since those decisions, rejected that view in Eldred v. Ashcroft, 537 U.S. 186, 123 S.Ct. 769, 154 L.Ed.2d 683 (2003). In Eldred, the Court state: "[C]opyright law contains built-in First Amendment accommodations. First, it distinguishes between ideas and expression and makes only the latter eligible for copyright protection ... Second, the 'fair use' defense allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances." Id. at 788-89. However, § 1201 does not eliminate fair use, and the doctrine of fair use does not guarantee copying by the optimum method or in the identical format of the original. This Court determines that the DMCA does not exceed the scope of either the Commerce or the Intellectual Property Clauses. [FN4]

FN4. The Necessary and Proper Clause analysis is irrelevant, as Congress clearly stated that the DMCA was enacted pursuant to its authority under the Commerce Clause: "the Constitutional authority for this legislation is provided in Article I, section 8, clause 3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes." H. Rep. No. 105-551(II), at 35.

Accordingly, defendants are entitled to summary judgment that 321 has violated 17 U.S.C. §§ 1201(a)(2) and (b)(1), and that *1105 321 is not entitled to a declaratory judgment that its DVD Copy Plus and DVD-X Copy are permissible under 17 U.S.C. § 1201. Furthermore, this Court dismisses 321's Second Claim for Relief as moot, since by granting summary judgment to defendants, there is no current and justiciable controversy as to whether 321 is also liable for copyright infringement, the claim raised in the Second Claim for Relief.

[Other procedural and standing issues are omitted]

CONCLUSION

For the foregoing reasons, the Court GRANTS defendant/counterclaimants' motion for partial summary judgment (Docket # 70), GRANTS plaintiff Victor Mattison's motion to dismiss defendants' counterclaims (Docket # 68), DENIES plaintiff's motion for denial or continuance of motion for summary judgment pursuant to Rule 56(f) (Docket # 87), GRANTS Electronic Frontier Foundation's and Copyright Law Professors' motion *1108 for leave to file amici briefs in opposition to defendants' motion for summary judgment (Docket 91, 92), DENIES plaintiff's motion for leave to amend answer to counterclaim (Docket # 93), GRANTS Larry Davis' motion to intervene as plaintiff (Docket # 95), and GRANTS defendants' requests for judicial notice (Docket 100, 104). Further, this Court enjoins plaintiff 321 Studios from manufacturing, distributing, or otherwise trafficking in any type of DVD circumvention software. This injunction shall take effect seven days from the issuance of this order.

IT IS SO ORDERED.

307 F.Supp.2d 1085, 2004 Copr.L.Dec. P 28,753

(Apr. 22, 2002)