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Kaleidescape Settles with DVD CCA

10-year legal battle ends between Kaleidescape, maker of DVD servers, and the DVD CCA, which governs copyright protection of DVDs. A statement on DRM? Not really.

Kaleidescape, the high-profile maker of DVD servers, apparently has ended its legal battle with the DVD CCA, which sued the manufacturer in 2004 for making DVD servers that allegedly encourage customers to rip copyrighted movies illegally.

Yesterday, the Superior Court of California, Santa Clara, noted a “voluntary dismissal” of the case. Kaleidescape CEO Cheena Srinivasan tells CE Pro that both parties have agreed not to comment at this time.

Court notices indicate that Kaleidescape requested a dismissal of the case on May 12 and that the next day a joint notice of settlement was filed. The court took three days to review the parties’ stipulations and determined on May 19th, “Case complete.”

The case ends a long and complicated test of the rights of both content creators and the studios who market that content … as well as the consumers who “own” copies of the content and the manufacturers who unlock it.

The studios are represented by the DVD CCA (Copy Control Association), which creates and governs the Content Scramble System (CSS) that protects DVDs. That group argues that the license that governs CSS – required of all manufacturers who make DVD players – expressly prohibits the manufacturers from allowing users to copy DVDs, even if they own those DVDs.


Kaleidescape has always maintained that the DVD CCA contracts express no such prohibitions. In any case, Kaleidescape servers make bit-for-bit copies so that the digital rights management (DRM) provisions of CSS are preserved.

Many analysts erroneously attribute Kaleidescape’s legal woes to the Digital Millennium Copyright Act (DMCA), which prohibits the manufacture and distribution of products that encourage copyright infringement.

But no lawsuit under the DMCA has been brought against Kaleidescape, which has a relatively small customer base of wealthy clients including the Hollywood elite.

Also erroneously, many assume that Kaleidescape and similar DVD-copying systems are legal under the “Fair Use” doctrine, but that is not the case in the U.S.

Even so, the UK famously made it legal in March to rip protected DVDs there for personal back-up.

The legal imbroglio with the DVD CCA has forced Kaleidescape to impose burdens on its customers and its engineers … while offshore companies like AnyDVD and the U.S. manufacturers that employ their legally untouchable software proceed with impunity.

We cannot say for sure if the Kaleidescape settlement with the DVD CCA has broader implications for DRM but we assume (hopefully) that the closure allows Kaleidescape to go forward with its business.
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Article Topics

News · Product News · Video · Media Servers · Legal · 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]

13 Comments (displayed in order by date/time)

Posted by Adam Kent  on  05/20  at  03:30 PM

Sorry Julie but it isn’t legal to copy DVDs in the UK it is to be debated before parliament before it goes through quote ; “The regulations will now be debated in both Houses of Parliament. If they are approved they will come into force on 1 June 2014.”

Posted by Bob Rapoport  on  05/20  at  04:18 PM

Hi Julie,

I dont think impunity is the right word here, AnyDVD stopped selling last month after this court action:

The law of the land remains committed to copyright protection, Intel and the Studios are not idle. Its against the law to rip or copy a Blu-ray disc or upload one to the internet or a remote server.

Good story to cover, thanks.

Posted by Rodolfo La Maestra  on  05/20  at  05:39 PM

Regarding “for making DVD servers that allegedly encourage customers to rip copyrighted movies illegally.”

That is actually the case of other servers that compete with Kaleidescape because for their systems to be useful they expect the user to obtain and use the ripping software sold by other companies, transferring the responsibility of the illegal act to the user itself, but Kaleidescape rather sells a turn-key server system that includes such ripping software, and that is beyond “encouragement”.

Posted by Roger Owings  on  05/20  at  07:18 PM

A win (almost) for honest consumers.
Congratulations to Kaleidescape!!

Posted by Chris  on  05/20  at  09:16 PM

Well, at least I learned a new word today.  Imbroglio; about all I got out of this was that new word.  Thanks!

Posted by murray the K  on  05/21  at  11:13 AM

interesting stategy on KScape part ... drag out lawsuit to a time when DVD disc sales are totallly irrevelent to any business model anymore.

well at least all the lawyer’s kids college tuitions are paid for ! 

and lets be honest with outselves .. MANY Kscape systems are filled with discs rented from Netflix or borrowed from the brother in law.

Posted by Julie Jacobson  on  05/21  at  11:44 AM

Adam and Bob, thanks for the input. Will revise the story.

Posted by Julie Jacobson  on  05/21  at  12:00 PM

Chris, thank you for coming forward. For the others, imbroglio is “an extremely confused, complicated, or embarrassing situation.”

But I think of the word more as a maelstrom.

Posted by Bill  on  05/21  at  09:10 PM

I can totally see these systems full of rented discs… well, except for the part where they refuse to import rental discs.  Even legitimate purchases of off-rental discs require hoop-jumping.

That and your theory is analogous to folks who overspend and have no money left to put furniture in their new home.  It may happen, but is comprised of a VERY small contingent.

Posted by cinelife  on  05/22  at  09:02 AM

I strongly disagree with the “many” comment from Murray above, and similar comments that claim K systems are filled with rentals, etc.  This lawsuit was filed back in the day when it cost $30K+ to even enter K’s world, and no owner I knew that could afford a system had the time or inclination to copy discs they didn’t own, myself included.  If the Studio’s were so concerned about rentals being ripped, why did it take them so long to produce DVD’s that are coded as rentals, thereby allowing K to create filters to prevent such copying (which they did as soon as this feature was available).  While it is likely some have violated the user terms regarding discs not owned, I wouldn’t say it’s “many.”    This is pure speculation, and comments like that are usually made by folks that would make illegal copies themselves, IMO.

Posted by murray the K  on  05/22  at  11:01 AM

sadly the many comment was made by someome, me, who constantly insisted on always playing by the rules.  its amazing that we have lost bids on 6 figure systems to multi million dollars homes because “the other guy” was willing to preload the Kscape with movies and the music server with music for free.  this is something we refused to do.  ok so instead of many lets just say ... frequent ...  in any case the amusing thing is that Kscape was able to wear down the CAA long enough til DVD sales didnt matter anymore -  instead of the digital copyright act .. we should be referring to this as the 2004 to 2014 CA attorney relief act   smile

Posted by paulcunningham  on  05/27  at  02:50 PM

Agreed that, some statistical outliers aside, the vast majority of Kaleidescape systems out there likely contain 99% legally acquired content. In my experience, most of the Netflix/rental discs in a Kaleidescape system were there because the user didn’t know how to directly play a disc from the tray, and only knew how to import it. And of course with the wide availability of rental Blu-ray discs the problem has lessened quite a bit.

@Murray - you were losing $100,000+ projects because you wouldn’t include a couple thousand dollars’ worth of legally purchased media in addition to the client’s own? I’m not saying it’s completely impossible, but I would suggest that you might be missing the forest while staring at that particularly small tree.

Posted by Julie Jacobson  on  05/27  at  03:14 PM

Where’s the LIKE button?

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