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Kaleidescape, ‘Agents’ Enjoined from Selling, Supporting Movie Servers

In DVD CCA vs. Kaleidescape, judge issues injunction that prohibits the sale and support of existing DVD movie servers. Kaleidescape has appealed.

UPDATE: All parties including dealers are enjoined from selling Kaleidescape DVD servers; only Kaleidescape is enjoined from supporting the servers, and only support related to CSS, according to Kaleidescape. Read updated article: Kaleidescape CEO ‘Shocked’ at Extreme Injunction Against DVD Movie Servers

The DVD Copy Control Association (DVD CCA) has prevailed in a final decision against Kaleidescape, a manufacturer of high-end movie servers.

Judge Willliam J. Monahan has affirmed the temporary decision he issued earlier this year in the Superior Court of California, Santa Clara County. To that, he added a permanent injunction against the sale and support of Kaleidescape's current DVD servers.

The far-reaching injunction touches not just Kaleidescape, but its agents, franchisees and "those acting in concert with them or at their direction," all of which are “permanently restrained and enjoined from directly or indirectly making, having made, selling, offering to sell, marketing, importing or otherwise transferring any DVD Playback Product” that does not have a physical disk present during playback, the court ordered.

As part of the injunction, Kaleidescape can no longer offer technical support for products that are already in the field, meaning existing servers can receive no updates or repairs (for clarification, read article update).

Related: Walmart, Vudu Ripping DVDs to the Cloud

Kaleidescape has filed an appeal and the company “believes that under California law the injunction order should not come into effect unless the California Court of Appeal affirms Judge Monahan's decision,” according to a statement issued today.

The company is confident that the injunction will be overturned in an appeals process that could take up to two years.

UPDATE: Exclusive interview with Kaleidescape CEO Michael Malcolm
Kaleidescape CEO ‘Shocked’ at Extreme Injunction Against DVD Movie Servers
DVD CCA surprises Kaleidescape with severe injunction order, CEO Michael Malcolm tells CE Pro. He believes stay will be granted until appeal is exhausted

The DVD CCA licenses the Content Scramble System (CSS) copy-protection scheme required of all (legitimate) DVD players. The organization sued Kaleidescape in 2004, arguing that its servers violate a licensing agreement that expressly prohibits the copying (ripping, archiving) of DVDs.

Kaleidescape has maintained all along that its servers abide by the licensing agreement and, furthermore, that the DVD CCA is so secretive and its contracts so confusing that a licensee cannot precisely interpret them.

In the Kaleidescape statement issued today, CEO Michael Malcolm explains:

For the past 8 years, we've been baffled about why this lawsuit ever happened, since our products don't encourage piracy, but do increase sales of movies. Maybe it's because the large CE companies in Japan and the big computer companies in the USA, on the board of the DVD CCA, are afraid that Kaleidescape is building a better way to enjoy DVDs and Blu-ray Discs than they are. Imagine a world where Apple wasn't allowed to build the iPod because Sony wanted a 'level playing field' for the Walkman.

Stay tuned for an exclusive interview with Malcolm later today, along with a discussion on the implications for Kaleidescape dealers and their clients. (Kaleidescape CEO ‘Shocked’ at Extreme Injunction Against DVD Movie Servers

Next page: order of permanent injunction

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Article Topics

News · Product News · Video · Digital Media · Media Servers · Legal · Kaleidescape · Dvd Cca · Drm · 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]

16 Comments (displayed in order by date/time)

Posted by Kevin Luther - BlackWire Designs  on  03/12  at  11:20 AM

This makes me so angry. The DVDCCA and MPAA are so out of touch with reality but sadly they have enough money and lawyers to keep squashing new innovations. Its pretty pathetic

Posted by Jon  on  03/12  at  12:36 PM

So what is stopping Kscape from going international and bypassing the legal system?

Posted by 39 Cent Stamp  on  03/12  at  01:56 PM

Good job hollywood! You have outdone yourself once again! You are really good at turning customers away.

And dont think we havent been paying attention to your efforts on the digital download/streaming front…

Posted by mlafave  on  03/12  at  02:33 PM

39, your “oatmeal” post is missing one final frame. The one where the ISP sends a warning for ripping Torrents. I’ve started a collection of those. I’m sure they’ll make for some nostalgic reading when I’m serving time.

Posted by Greg  on  03/12  at  02:40 PM

According to Kaleidescape only minutes ago via phone, their product still supports playback of sources othen than the “Prohibited Technology” since they play music and therefore they can ship product and provide support for all existing systems.

Posted by John  on  03/12  at  03:12 PM

Nothing is ever really “Final” when it comes to the US Court system….

Posted by Mike  on  03/12  at  04:08 PM

Why does this surprize anybody?  The Hollywood elite have all the money but if you try to tax them (which they should in California)  then they throw a fit.  This stuff is all politically motivated for the far left liberials which are hollywood.  Any way to destroy a private industry makes them happy.

Posted by Bill Maxey  on  03/12  at  06:46 PM

I received this response today:
“It’s business as usual here at Kaleidescape. We are still shipping the same products and fulfilling orders. We filed our appeal on Friday and we believe the injunction order should not come into effect unless the appeals court affirms the judge’s decision. We’re looking at another year or two before we will get back in to court.
We’re going to keep fighting the fight!”


Posted by Andrew  on  03/12  at  06:53 PM

This is a sad day for the CE industry.  Love it or hate it Kaleidescape is a true innovator that is building products that people want to own.  Now the courts continue to stomp all over the entrepreneur.

Posted by Christ Almighty  on  03/13  at  01:51 AM

I’ve been waving off my clients off from buying K-scapes for years for this very reason. DVD license prohibits certain types of use. It’s explicit and anyone who doesn’t know this isn’t paying attention. If you don’t like the rules, don’t play the game. Now the real fun begins: end-users suing installers for selling heretofore obsolete servers. They will argue installers should have known K-scape was in litigation. Blood will flow.

Posted by Larry "Christ Follower"  on  03/13  at  07:54 AM

I am very glad tgat the lord and savior has finally commented.

Posted by Jeff  on  03/13  at  10:09 AM

I’m happy Kaleidescape is ignoring the court order to stop selling it’s system. Way to give that judge the middle finger!

Posted by ohreally  on  03/13  at  12:12 PM

So where does this leave dealers? Are we really “enjoined” by this injunction?  And if so, is Kal underwriting any eventual legal costs which may be incurred? 

I guess it is all very well for Kal to keep going with this (seems like they don’t really have an option, other than disabling all DVD library functions), but eventually someone is going to be looking at a bill for the other parties legal fees regardless…  All of a sudden the “100% legal” solution doesn’t seem quite so clear cut. 

How do I explain this to my customers without them running a mile?

I found the whole 60 page statement on the DVDCCA website; the court seemed to give Kal pretty short shrift, cutting down their counter arguments to the preliminary decision very strongly indeed.

Posted by hometheater  on  03/13  at  03:05 PM

So the only legal way to watch a DVD is to physically have the disc in a single disc player that needs to read the data off the disc itself?  A High Def version also needs HDMI and an active internet connection?   

next - they will come for your DVR.

Posted by HT stuck in a Box  on  03/13  at  05:15 PM

So where does that leave UltraViolet?

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