Hand-Held Device for DVD Movies Raises Legal Issues

[Steve Schear]

Hand-Held Device for DVD Movies Raises Legal Issues

PARIS -- Hollywood's bid to control how its movies are copied, stored and 
played is being tested by an unlikely source: a former French oil engineer 
in an out-of-the-way Paris suburb, Wednesday's Wall Street Journal reported.

Henri Crohas's company, Archos SA, makes a small hand-held device, like a 
bulky Palm Pilot, that can record and then play back scores of movies, TV 
shows and digital photos on its color screen or a TV set. The gadget -- 
which in effect does to movies what Apple Computer Inc.'s iPod does to 
music -- already has sold 100,000 units world-wide during the past six 
months, beating the big consumer electronics makers to the U.S. market.

Archos's device, which costs about $500 to $900 depending on the model, 
ignores an anticopying code found on a majority of prerecorded DVDs. That 
means consumers can plug the Archos device into a DVD player and transfer a 
movie to it. Users also can transfer recorded TV programs and digital music 
files to the Archos device. The Archos uses a video compression standard 
called MPEG-4 to cram as many as 320 hours of video at near-DVD quality 
onto its hard drive, the company says -- the equivalent of 160 two-hour 
movies.

A second kind of anticopying protection thwarts users from recording a 
playable copy of a DVD movie onto the hard-drive of a personal computer and 
then onto the Archos. But videos can be transferred from the Archos to a 
PC, where they could be burned onto a DVD or sent over the Internet, though 
that would likely violate copyright laws.

The gadgets alone aren't likely to spawn a Napster-style boom in online 
film piracy. Already, scofflaws with a PC equipped with a DVD player and 
special software can rip off films and share them over the Internet. And 
the process is slow: It takes as long to copy a DVD movie to the Archos 
device as it does to watch the movie. Still, Mr. Crohas and his 
150-employee team at Archos ( pronounced AR kos) present a fresh headache 
for Hollywood because they show how the industry's campaign to keep control 
of its films could be challenged by small players.

Wall Street Journal Staff Reporters Kevin J. Delaney and Bruce Orwall 
contributed to this article.