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DVD CCA Aims to Prohibit DVD Ripping Once and For All
Letter from Michael Malcolm, Kaleidescape CEO
Members of the Content Protection Advisory Council
DVD Copy Control Association
C/O John J. Hoy, President and Secretary
DVD Copy Control Association
225 B Cochrane Circle
Morgan Hill, CA 95037
Re: Proposed "Unknown Specification Amendment" To Be Discussed At The June 20, 2007 Meeting Of The Content Protection Advisory Council of the DVD Copy Control Association
Dear Member of the Content Protection Advisory Council:
I write to you regarding a proposed amendment to the license agreement governing the encryption system used to encrypt the contents of DVD movie discs. This amendment is currently pending before the Content Protection Advisory Council ("CPAC") of the DVD Copy Control Association, Inc. ("DVD CCA"), the association of movie studios, consumer electronics companies, and computer companies that licenses the encryption system.
This proposed amendment, if enacted, will harm consumers because it will suppress competition in the market for DVD playback devices, block the development of new and innovative products that will give consumers new ways to enjoy the DVDs they own, and interfere with the ability of consumers to exercise their fair use rights under copyright law.
Kaleidescape, Inc. is a fellow member of the DVD CCA and a licensee of the DVD CCA's Content Scramble System ("CSS") used to encrypt the contents of DVD discs. Kaleidescape is an innovative and creative developer and manufacturer of home entertainment systems, as well as a retailer of DVD movie discs for use with its home entertainment system.
Kaleidescape's signature product, the Kaleidescape System, has won every major consumer electronics award in its category. Much like Apple's iPod, the Kaleidescape System permits the consumer to make a secure private copy on a hard disk drive of every DVD and CD that the consumer owns and to play back the stored content in any room within the consumer's home.
The Kaleidescape System helps the consumer by indexing and organizing the content stored on it. Moreover, Kaleidescape has created for its customers an extensive database of information about the movies they own, including the cover art, reviews, and other detailed information about each movie. The Kaleidescape System also has an advanced user interface that allows customers to search the movies they own by many different criteria, including by actor, director, MPAA rating, year released, and running time. In addition, the Kaleidescape System allows parents to control or restrict the movies viewed by their children. By these features, the Kaleidescape System enhances the customer's experience of the movies he or she owns.
The Kaleidescape System actually protects video content more securely than does the CSS encryption system used on the DVD discs themselves: The Kaleidescape System stores video content on a hard disk drive in its original CSS-encrypted form, decrypting it only at the time of playback like any other DVD player. Moreover, the Kaleidescape System wraps the CSS encryption "keys" found on the DVD disc in an extra layer of military-strength encryption.
It is impossible to use the Kaleidescape System to upload or transfer movies to the Internet. The Kaleidescape System is a completely closed system.
- DVD CCA Aims to Prohibit DVD Ripping Once and For All (6/07)
- Kaleidescape Prevails in DVD Ripping Case (3/07)
- Kaleidescape CEO: Trial Does Have Fair-Use Implications (3/07)
- Kaleidescape Faces DVD CCA in Court Monday; Fair Use at Stake (3/07)
- Fair Use Act Would Allow In-Home Content Sharing, not DVD Ripping
- Industry Insider: DVD CCA Is an Innovation-Stifling Cartel (1/05)
- Copy Protection Group Sues Kaleidescape (1/05)
It is impossible to "burn" copies of DVDs with the Kaleidescape System. It cannot be used to create pirate or counterfeit DVDs. More information about the Kaleidescape System is available at ka1eidescape.com.
Kaleidescape worked very hard at designing the Kaleidescape System to ensure that it is fully compliant with the CSS License Agreement and that it respects the intellectual property rights of others. Since the introduction of the Kaleidescape System almost four years ago, however, the DVD CCA and certain of its members have campaigned to injure Kaleidescape's business and harm its sales of the Kaleidescape System. Most notably, the DVD CCA filed a lawsuit against Kaleidescape in December 2004 alleging that the Kaleidescape System breached the CSS License Agreement. We at Kaleidescape vigorously contested the DVD CCA's lawsuit, knowing that the DVD CCA's allegations were meritless, false, and, we believe, put forward in bad faith.
In March 2007, the DVD CCA's unfounded claims came to trial in the Superior Court of California. The Court heard witnesses and received evidence for over a week. In fact, a number of members of the DVD CCA board of directors testified at the trial. After hearing all of the evidence, the Superior Court of California found that the Kaleidescape System was fully compliant with the CSS License Agreement and that sales of the Kaleidescape System had caused no harm to the DVD CCA or its members. I invite you to read the Court's decision for yourself at http://www.kaleidescape.com/company/pr/PR-20070329-DVDCCA.html
In the wake of Kaleidescape's vindication by the Superior Court of California, some of the DVD CCA's members have now put forward a proposed amendment to the CSS License Agreement. This proposed amendment is described by the DVD CCA as "A proposed Unknown Specification Amendment submitted by Chris Cookson [of Warner Brothers], Benn Carr [of Walt Disney Studios], Jeffrey Lawrence [of Intel], Gabe Beged-Dov [of Hewlett-Packard], David Harshman [of Toshiba] and Andy Parsons [of Pioneer], members of the DVD CCA Board of Directors, to add a Section 6.4 to the CSS Procedural Specifications respecting certain requirements for DVD Products." A copy of the proposed amendment is attached to this letter. This proposed amendment will be considered by the CPAC at its June 20, 2007 meeting for adoption as part of the CSS License Agreement.
There is no valid business justification for the proposed amendment. After hearing all the evidence at trial, the Superior Court of California expressly found in its decision that the DVD CCA and its members have suffered no harm from the Kaleidescape System. To the contrary, the first thing many Kaleidescape owners do is to purchase hundreds of additional DVDs.
The real purpose of this proposed amendment is to put Kaleidescape out of business by excluding the Kaleidescape System from the DVD playback devices authorized by the CSS License Agreement. You should be aware before you vote on the proposed amendment that you expose yourself, your employer, and the DVD CCA to serious and substantial antitrust liability if you vote for this amendment. Both federal and state antitrust laws outlaw anticompetitive conduct by businesses joining together to put a competitor out of business.
The purpose of the antitrust laws is to promote competition and innovation, and thereby benefit consumers with products and services that are better or cheaper than the ones previously offered. The innovations of the Kaleidescape System are an example of the consumer benefits that fair and vigorous competition provides.
The United States Supreme Court has made clear that those who use a standards-setting organization to engage in anticompetitive activity and harm competitors can be held liable under the antitrust laws. Because of the potential for abuse, "private standard-setting associations have traditionally been objects of antitrust scrutiny." Allied Tube €3 Conduit Corp. v. Indian Head, Inc., 486 U.S. 492,500 (1988). "There is no doubt that the members of such associations often have economic incentives to restrain competition and that the product standards set by such associations have a serious potential for anticompetitive harm. Agreement on a product standard is, after all, implicitly an agreement not to manufacture, distribute, or purchase certain types of products." 486 U.S. at 500.
When members of a standards-setting organization like the DVD CCA set standards for the purpose of excluding a competitor from a market, they commit an antitrust violation. American Society of Mechanical Engineers, Inc. v. Hydroievel Corp., 456 U.S. 556 (1982). As the United States Supreme Court said in Hydrolevel, "a standard-setting organization like ASME [the American Society of Mechanical Engineers] can be rife with opportunities for anticompetitive activity. Many of ASME's officials are associated with members of the industries regulated by ASME's codes. Although, undoubtedly, most serve ASME without concern for the interests of their corporate employers, some may well view their positions with ASME, at least in part, as an opportunity to benefit their employers. When the great influence of ASME's reputation is placed at their disposal, the less altruistic of ASME's agents have an opportunity to harm their employers' competitors through manipulation of ASME's codes." 456 U.S. at 571.
The members of CPAC and of the DVD CCA board of directors are in a unique position to collude to promote an anti-innovation agenda on behalf of their corporate employers and to restrain competition and innovation within the consumer electronics and computer industries. That is exactly what the proposed amendment is intended to accomplish by putting Kaleidescape out of business and deterring other innovative companies from entering the market. The proposed amendment will harm consumers by denying them access to new and innovative products like the Kaleidescape System and by obstructing their ability to make fair use of the DVD movie discs that they own.
In closing, we request that you reject the proposed amendment. Instead, we invite you and your employers to join with us in working together to bring to consumers new and innovative products and services that enhance and expand the consumer's enjoyment of great entertainment.
[signed]
Michael Malcolm Founder, Chairman, and Chief Executive Officer Kaleidescape, Inc.
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11 Comments (displayed in order by date/time)
right so they are going to provide us multiple copies of the movie/tv shows we purchase then?
are they also going to write into their new plans that customers if the disc gets damaged or scratched due to being permentally in the drive can go back to the store at any time and get a replacement due to the faulty playbacks due to scratches due to their products being used?
Also this is going to put alot of companys who make dvd players that support the playback of DivX/XviD formats out of business as without ripping the movies/tv boxsets to a mpeg4 format then you cannot play them on a xvid/divx player.
i wonder who thinks of these stooopid ideas i really do… someone sits in a boardroom and plans to kill inovation and kill user experience in 1 fail swoop i really don’t know how these people sleep at night knowing they are screwing people left and right.
its as simple as this people i dont care who you are who reads this
IF I PAID FOR SOMETHING! then i own it and i will
do with that purchase what the hell i please.
im not being told where or what i can use my purchase on and i will use any messures available to me so i can continue using my purchase as i wish.
no one tells me where i can drive my car, what food i can store in my cubbard how i cook my chips, what lawn mower i can use if i can use it more than once or twice… what brand of milk i have to use on my corn flakes.
imagine if your lawn mower come with a rule that it would only allow you to cut the front lawn but not the back, or if your car decided you couldn’t drive on certain roads at certain times of a day.
so if this doesn’t apply to any other purchases i make it sure as hell isn’t going to apply to some stupid dvd disc
and if i can’t then i wont buy any more retail i’ll just turn to piracy and get it free anyway so ask yourself this are you trying to lose customers and push people to piracy because thats the way your heading your giving people no choice what so ever but to turn to the darker side.
Thank you Kaleidescape for taking on these turds.
Anyone who has been in this industry for awhile can see the trend to hard drive based media storage and playback. I think this whole thing can be summed up in one word, GREED.
Very well said, Mr. Malcolm. Maybe what needs to happen is that this amendment needs to be approved by a vote so that anti-trust lawsuits can go forward. It would be gratifying to see the DVD CCA’s short-sightedness bite them on the rear. And that would further solidify the legal rights for consumers to make, own, and use digital copies of the media they have purchased. The manufacturers have to get it out of their heads that the product they are selling is the round piece of cheap aluminum coated plastic. They are selling the digital data stored on that piece of plastic. When the consumer buys the disc, they are buying the data. When a consumer buys a product (the data in this case) it becomes their property. The manufacturers need to stop worrying about what the consumers are doing with that data. They should simply be satisfied that people are buying it.
to CEPro-
How can we as a group sign on to this issue and voice our concern, nay outrage to our policy makers.
Well, ladies and gentlemen.
If the DVD CCA ever puts forth such a perspostuous rule to fordbid ripping (ie - outlaw even making it available for playback on your own iPod), I along with many of my customers would just respond in kind and NEVER, EVER BUY ANOTHER DVD.
I wonder if they will THEN start to worry about what a bumbling mistake they did.
On the antitrust thing, I brought it up in my first editorial way back when, DVD CCA is an innovation-stifling cartel”
For that story, I interviewed Fred Von Lohmann, an attorney with the Electronic Frontier Foundation, a wonderful digital-rights organization.
Here’s what I wrote about the possibility of antitrust liability:
[A] legal challenge, it seems, could only come from an antitrust complaint. Indeed, says von Lohmann, “From the beginning, there have been antitrust concerns because of the obvious cartel structure of the DVD CCA, but it’s all cloaked in ‘protecting copyright owners from piracy.’ Some anti-competitive behavior has to be tolerated.”
Antitrust suits are “incredibly expensive to mount,” says von Lohmann. “I think the DVD CCA is taking the view that nobody out there has the money… The people that have the money are in the club!”
If you’re interested in more, read the whole editorial.
What about apple TV and ipod? No disc is present in that system. Does apple get a pass? Can’t they just make special versions of DVDs for rentals that would be illegal (and difficult) to copy, but store bought versions would be ok? Maybe we need to have a discman accessory to plug into the new iphone.
It’s not like profits on these discs are razor thin, either. What does it cost to press a DVD, a quarter? Spider-man 3 has already pulled in over 500 million dollars before the DVD has even come out. Hundreds of millions to come with the DVD & Blu-Ray versions. Poor,poor movie studio. I’d hate to see them miss the billion dollar mark because people didn’t buy multiple copies.
Greed>convienence
Having had recent, MOST unpleasant dealings with Kaleidescape myself let me assure you, they are not riding in on a white horse. I was an authorized dealer until a few days ago.
First, I SWEAR TO GOD that every word I am about to write is completely TRUE-feel free to contact me for the entire email string, so you can see for yourself.
They approved me as a dealer, I went to training, had them help me design a system for a client, I made my presentation, got the check and then, without warning, without the slightest notice or ANYTHING, they simple REFUSED my order, placing me in an untennable position with my client and creating a thoroughly HUMILIATING situation for me.
As far as I am concerned they can eat S#!t and go stand on their collective heads in the river! The sooner any company that is so profoundly lacking in decency, fairness, ethics and honesty is GONE, the better for our entire industry. I, for one will be supporting the DVD guys and I hope they sue Kaleidescape off the planet!
Believe me-it couldn’t happen to a group of people who deserve it more!
Tom Sarratt, President
CEDIA Certified Professional System Designer
Sarratt Electronics & Consulting, LLC
3438 Coleman Street
Columbia, SC 29205-2704
Office: 803-252-7401
FAX: 803-252-7402
Cell: 803-767-8194
This is a very serious issue clouded by great miss-understanding and abuse. I own a content loading company and always feel at great risk for my thoughts and comments. None the less I am an American Citizen who has the right and obligation to speak up; after all, it is the US. Government, who authorizes, grants and guarantees the right to make a copy, not the DVD CCA, MPAA nor the RIAA.
Our best communicated understanding of Copyright Law, DRM, DMCA and Fair Use come from those who stand to gain the most by our misunderstanding of it.
I certainly wouldn’t look to an Oil Company for an accurate understanding of Global Warming, and the same is true of the DVD CCA, MPAA and the RIAA when it comes to our rights of access and ownership over intellectual property, music and other arts.
Plainly, copyright law is there to ensure that there is a mechanism to deliver works of intellectual property and arts to the public. It ensures libraries; radio stations and other such outlets exist to enrich the public good. The passing of knowledge and arts are an obligation of a civilized culture, an obligation of existence.
DRM is an access protocol, a technical mechanism in the guise of a utility to prevent unlawful copying and distribution. The true effect is that it inhibits those lawful citizens from enjoying unfettered, fair use of articles which they legally paid to obtain.
Imagine buying an antique book written with ink that for some strange reason could not be read years later under incandescent light, but only by a candle. This is the effect of both DRM and region codes on a DVD, and if they could make a book that would “turn off” once you landed in a foreign country they would…
Truth be told, this is technical extortion and racketeering.
The DMCA is a whopper of a bill which, while oversimplifying, makes it illegal to create or use a tool whose purpose is to unlock a technical mechanism whose purpose is to contain and prevent access to copyrighted material. It is a “Protect Big Business” at the expense of the private citizen. The DMCA does not at all touch upon legal access by rightful owners nor reflect on fair use of the content being held captive by the container nor the encryption technology.
Certainly there is a way to license this, much in the same way a locksmith may legally use a set of lock picks or slim jim.
Big Business doesn’t want this solution- they want to sell you the White Album 8 times.
Perhaps they should focus on providing better works of art and intellectual properties that add value, inspire and promote cultural value, instead of pandering to lowest common denominator quality and quick buck efforts. I am certain that if they live up to their obligation of copyright law we would have better movies and music; in turn they would have greater profits
I am behind Kaleidescape all the way. This is no different than initially loading Microsoft Windows on your computer and then putting the disc away. I for one am not buying the White Album 8 times…
go for it, Kaleidescape!
Louise Y. Owenby
Louise Y. Owenby Tech Systems Design
CEDIA Certified System Designer
Lafayette, CA
As both a Kaleidescape dealer, and as a staunch advocate of fair use, not to mention a serious technology pundit, I can’t express how wrong-headed I think the DVD-CCA’s actions are. Not only does this new maneuver freeze out media server builders, but it freezes out the end user, end users who PAID for their movies. Clients who can buy a Kaleidescape or other high-end server buy their DVDs from retailers, not bootleggers. Enacting this change in the DVD-CCA’s licensing agreement will, in the end, be cutting their own throats. If that was the only net result, I could applaud their suicidal determination, but unfortunately server makers and customers will also suffer.