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Copy Protection Group Sues Kaleidescape

The legal action being taken by the DVD Copy Control Association against video server manufacturer Kaleidescape raises many questions about the product category. Among those questions: Is its future in jeopardy?

Since it rolled out a video server in 2003, Kaleidescape has loudly proclaimed its adherence to copy protection strictures, including those embodied by the Digital Millennium Copyright Act (DMCA) and the DVD Copy Control Association (DVD CCA). The DVD CCA licenses the Content Scramble System (CSS), an encoding scheme used by DVD makers to thwart the use of DVDs by anything other than a DVD playback product with (licensed) CSS decoding software.

Kaleidescape has a license from the DVD CCA to employ CSS decoding in its media servers, which it does.

Now, DVD CCA is suing Kaleidescape for breach of contract, claiming, "[W]hile Kaleidescape obtained a license to use CSS, the company has built a system to do precisely what the license and CSS are designed to prevent ... the wholesale copying of protected DVDs," said William Coats, the lead litigation counsel for DVD CCA, in a statement announcing the suit.

DVD CCA filed the suit (case #1-04-CV-031829) on Dec. 7, 2004, in the California Superior Court, Santa Clara County. The Kaleidescape system allows users to copy their DVDs onto the server for instant access via any connected television on the home network. Kaleidescape's scheme disallows the distribution of DVDs on the server to any device not connected to an in-home Kaleidescape client.

But that's not good enough for the DVD CCA, which claims in the lawsuit, "Kaleidescape is required to prevent the creation of persistent digital copies of DVD content and is required to implement architectures that prevent such copying."

Stated more clearly in the suit, "Kaleidescape is required to implement architectures in which the user must have the physical DVD disc in the drive during authentication and playback."

In other words, the suit charges that, after a user copies a DVD onto the Kaleidescape server, he can pass it along to a friend to copy, who can pass it to another friend, and so on.

In an interview with CE Pro, Kaleidescape CEO Michael Malcolm claimed, first of all, that the terms of the license alleged in the lawsuit, "simply are not there [in the DVD CCA license agreement]. I've personally read it cover to cover. Their claims are bizarre."

In any case, Kaleidescape has implemented other rules, if not technological, to ensure that users physically own and retain any DVD copied onto a Kaleidescape server. "We require users to continue to own the DVD, and reserve the right to shut off the system if they violate that rule," he says. (See the user agreement)

Is Hollywood behind the suit?

While the bulk of news stories blame Hollywood for the Kaleidescape mess, Malcolm believes the movie Mecca may not be the instigator of this action. "We've had very friendly dealings with most of the Hollywood studios," says Malcolm. "Some of their executives have purchased Kaleidescape for their homes."

Besides, says Malcolm, "Major studios are selling hundreds of DVDs when someone buys our system." In fact, movie makers represent only one-third of the DVD CCA board, the remainder comprised of consumer electronics and computer manufacturers. Malcolm wonders if would-be competitors in the CE and IT space are behind the suit. "There are members of the DVD CCA who would like to be making a product like ours," he says. "They don't want to see a new CE vendor emerge."

One impartial attorney, who is unaffiliated with the Kaleidescape case but understands the inner workings of the DVD CCA, sees it differently. While it is quite possible that the CE/IT members of the DVD CCA could be behind the Kaleidescape lawsuit, the attorney, who asked not to be identified, suggests that such members would probably be driven more by legal, rather than market, concerns: "It seems more likely that they believed the interpretation of the license implied by the product in question was not one that content owners would support, especially if applied to less expensive and more generally available products."

In other words, Kaleidescape's implementation might invite challenges from Hollywood, thereby hampering the development of the video server category, which has huge potential for the mass market. Basically: Don't blow it for the rest of us.

So what's the solution?

It appears that Kaleidescape did everything by the literal rules. Given today's nascent technology, how could the company implement "architectures in which the user must have the physical DVD disc in the drive ...", which the DVD CCA claims is implied by the licensing agreement? Of course, requiring the presence of the physical disc wholly defeats the purpose of the Kaleidescape product.

What else can Kaleidescape and competitors do but make their ultra-wealthy clients swear to the rules, and threaten to take away their expensive toys if they cheat?

Malcolm has at least one suggestion: "Let customers buy movies from us, then we could destroy the DVD or put it in escrow, so there's no way to copy it. But we don't have the right to do this."

Malcolm has broached this subject in the past. "The problem is, there's no 'them' to talk to," he says. Little is known about the DVD CCA. While not confidential, the membership roster is not readily available. The license agreements are confidential. Check the Website -- there's no contact name, phone number or any other way to contact the powerful organization other than by applying online for a license. (See related editorial)

DVD Ripping: The Whole Picture
Kaleidescape vs. DVD CCA: Judge Rules Against Movie Servers
Tentative ruling in landmark DVD-copying case says Kaleidescape knew its movie servers might be in violation of DVD CCA licensing agreement that prohibits copying of DVDs.
DVD Ripping: The Latest on the Legal Front
This compilation of articles on the legality of DVD ripping, and related fair-use cases, will be updated continuously.
Understanding the Kaleidescape, RealDVD Cases
What have the courts really decided on DVD copying, and what are the implications for the future? We debunk the myths about the the two lawsuits and clarify the current legal state of DVD ripping.
Is DVD 'Ripping' the Same as 'Archiving?'
Is the term "ripping" generally understood as the "illegal" form of copying a disk? Likewise, is "archiving" known as the bit-for-bit "legal" way of doing it?
Can You Be Sued for Helping Clients Rip DVDs?
EFF attorney Fred von Lohmann explains some of the legal issues involved in selling and installing products that enable users to copy DVDs.
Is Your DVD Server Legal? Manufacturers Say Yes!
Developers of movie-ripping products insist their products are legal. Here's how the manufacturers justify their solutions.
Copy Protection Group Sues Kaleidescape (2005)
Kaleidescape has a license from the DVD CCA to employ CSS decoding in its media servers, which it does. Now, DVD CCA is suing Kaleidescape for breach of contract.
Would Studios Rather We Buy DVD Ripping Products Offshore?
As studios work to quash legitimate products like RealDVD, offshore providers of DVD ripping software -- like AnyDVD developer SlySoft -- are reaping the rewards.
Industry Insider: DVD CCA Is an Innovation-Stifling Cartel (2005)
The DVD Copyright Control Association (DVD CCA) is a bunch of bullies. The organization manages to coerce all manufacturers of DVD players to sign away their rights to innovation.

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Article Topics

News · Media Servers · Legal · Legal · Media Server · All topics

About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]


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