321 Studios vowed to continue the fight for Americans' right to make backups of legally-purchased DVDs and to appeal the ruling by United States Librarian of Congress. As part of his triennial review of digital fair use under the Digital Millennium Copyright Act (DMCA), the Librarian effectively decided Americans should not be allowed to restore or backup DVDs they lawfully purchased, even when they are damaged and become unplayable. Technically, the Librarian decided that Americans cannot circumvent access control mechanisms on DVDs in order to restore lost access or make a backup copy for safekeeping -- even when they have lawfully purchased the DVD and it stops working. Ignoring evidence that many DVDs are out of print and hard to replace, the Librarian relied on the flawed reasoning of the U.S. Register of Copyrights, who told him that consumers don't need to take steps to preserve access to DVDs they have purchased because there is a "ready availability of replacement copies in the market at reasonable cost." In short, the Librarian is saying to people: If a DVD is flawed, forget about trying to restore it -- go spend more money on a replacement copy. In addition, the Librarian rejected the suggestion that consumers may take reasonable steps to skip advertisements on commercial DVDs.

Robert Moore, 321 Studio's Founder and President said today: "The Copyright Office has made two fundamental mistakes: it has failed to recognize that DVDs are software and it has failed to recognize that Americans have a right to backup DVDs they spent hard-earned money to purchase. 321 will appeal this ruling on behalf of the millions of Americans who want and need our products. 321 believes that the DMCA tramples on the fair use and first amendment rights of all Americans and that the Librarian's interpretation of the DMCA is arbitrary and unreasonable."

Moore continued: "Our customers are not pirates or criminals -- they're soccer moms who want to make sure The Little Mermaid is always at hand, dads who want to protect their movies from the 'DVD rot and delamination' they've been hearing about and are starting to witness first-hand, and movie lovers who can't find a replacement copy of an out-of-print work or who can't afford to buy a second or third copy of The Matrix after the original gets so scratched the DVD player can't read it."

It is 321 Studios' position not only that the DMCA anti-circumvention rules are vague and confusing, but also that the standards the Librarian has devised ignore Congress' intent. The DMCA was originally enacted to prevent online piracy; it was never Congress' intention to stamp-out fair use rights in the digital age. 321 will appeal today's ruling in federal court.

In an effort to secure a balanced, consumer-friendly interpretation of the DMCA, 321 Studios has filed a declaratory judgment action against eight major motion picture studios. Currently, the company is waiting for a California-based federal court to rule on a partial summary judgment motion in a counter-claim suit filed by seven of the same studios.

"321 Studios is a voice of reason in advocating for the fair use rights of consumers with respect to DVDs and other digital media that consumers have lawfully purchased," Moore said. "We anxiously await the decision from the Northern California district court, and we will continue to be a champion for the rights of our customers to control their personal DVD portfolios."

321 Studios' complete line of DVD backup, recovery, and creation software will continue to be sold through the company's website ( www.321studios.com ) and at major retailers while the company appeals.