03.15.2007 — Kaleidescape finally will have its day in court Monday, March 19, to face the DVD Copy Control Association (DVD CCA), the "arm of the Hollywood studios," as Kaleidescape calls it.

The DVD CCA, which licenses the Content Scramble System (CSS) for copy-protecting DVDs, sued Kaleidescape in December 2004, claiming the maker of video servers breached a contract by building "a system to do precisely what the license and CSS are designed to prevent ... the wholesale copying of protected DVDs," according to a statement released by the DVD CCA back then.

The DVD CCA has claimed all along that the lawsuit is about a breach of contract between one manufacturer and the licensing agent. It isn't about Hollywood suing the little server-maker-that-could.




Yeah, right.

The lawsuit is very much about fair use, with serious implications for any enablers of DVD copying.

I spoke recently with Kaleidescape CEO Michael Malcolm, who calls the lawsuit a "breach-of-contract issue, but with some fair-use issues embedded it in it." He says the DVD CCA has "gone on a great fishing expedition looking for theories of ways we've breached the contract; they haven't come up with much so far."

Initially, the DVD CCA says its licensing agreement prohibited the "creation of persistent digital copies of DVD content." However, asserts Malcolm, "Nothing in the agreement says anything about not allowing persistent copies."

Perhaps the most important fair-use issue here has to do with making "unauthorized" copies. The plaintiff may argue that a DVD copy is unauthorized because a content owner doesn't give permission for the duplication, "but we'll make the case that the copies are authorized by the United States of America," Malcolm says. "They don't have to be authorized by the content owners."

The DVD CCA is expected to file a motion to close the trial to the public and the press. Apparently the group is concerned about exposing trade secrets concerning its Content Scramble System -- you know, the encryption scheme that was broken in 1999 by a 15-year-old, and is now widely available on the Internet.

That is so DVD CCA.

"They're delusional that CSS is a trade secret," says Malcolm. "We're just amazed they're still claiming this fiction."

The trial begins Monday, March 19, at the Downtown Superior Court of Santa Clara in San Jose, Calif.

Malcolm says that the spectacle is expected to last about two weeks.

On a related note, the so-called Fair Use Act of 2007, introduced by Rep. Rick Boucher (D-Virginia) and Rep. John Doolittle (R-California) on Feb. 27, proposes some exceptions to the sad Digital Millennium Copyright Act (DMCA) of 1998. Encouraging, indeed, but the proposal still excludes the copying of DVDs.