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Kaleidescape Tells Dealers Injunction ‘May Never Go Into Effect’

In letter to Kaleidescape dealers, CEO Michael Malcolm says injunction on DVD movie servers is greatly 'sensationalized' by the press; in any case, dealers would not be subject to the order brought by the DVD CCA.


Kaleidescape CEO Michael Malcolm sent a memo to dealers today, saying that they will not be party to an injunction against the sale of Kaleidescape's DVD movie servers.

He reiterates that the company believes the injunction, requested by the DVD CCA and issued recently by the Santa Clara County court in California, will be stayed pending the outcome of an appeal. The appeal could take up to two years, Malcolm says.

RELATED: Take That, DVD CCA: 12 Ways to Rip DVDs

Kaleidescape is working furiously to gather more intelligence on the injunction, but in the meantime the company is continuing business as usual.

Here is the entire memo from Malcolm:

Dear Kaleidescape Dealer,

Many of our dealers are confused by the sensationalized headlines about the injunction, some of which say falsely that we can no longer ship products or that Kaleidescape dealers have been enjoined from selling Kaleidescape Systems. This reporting is wrong. The injunction is dated April 8, 2012, and is not effective before that date. In fact, it may never go into effect. Even if the injunction goes into effect, we believe our dealers will not be subject to the injunction because they act independently and outside of Kaleidescape's control.

We believe the injunction issued by Judge Monahan is a mandatory injunction. Under California law, a mandatory injunction is automatically stayed (i.e., suspended) pending an appeal. Kaleidescape filed notice of its appeal on March 9. Therefore, the injunction should not go into effect unless, after hearing our appeal, the Court of Appeal affirms Judge Monahan's ruling. It will likely be some time, perhaps one and one-half to two years, before the appeal is decided.

We are taking steps to seek immediate confirmation from the courts that the injunction is stayed pending the resolution of the appeal. We will let you know the outcome of that process, which we hope will occur before April 8, 2012. Even if the courts disagree with our position that the injunction is stayed, the injunction would not go into effect until Sunday, April 8, 2012 at the earliest.

If the injunction were to take effect, Kaleidescape would promptly comply with all of its terms. In that case, new Kaleidescape Systems sold after the effective date would:

-- Not import DVDs to hard disk.
-- Only play DVDs directly from the tray, just as rental movies are played today.
-- Import and playback Blu-ray Discs and CDs from hard disk, just as they do today.

All systems shipped prior to the effective date would continue to import and play back DVDs from hard disk, just as they do today. We will continue to provide service and support for all systems in the form of hardware repairs, movie and music guide updates, Kaleidescape alerts, and software updates with new user-experience features.

So for now we are shipping Kaleidescape Systems that import DVDs, and we will continue to do so unless the injunction goes into effect.

As in the past, I will keep you apprised of important developments in this ongoing legal battle.

Sincerely,
Michael Malcolm
Chairman, Founder and CEO
Kaleidescape, Inc.





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Article Topics

News · Product News · Video · Digital Media · Media Servers · Kaleidescape · Dvd Cca · Michael Malcolm · All topics

About the Author

Julie Jacobson, Editor-at-large, CE Pro
Julie Jacobson is co-founder of EH Publishing and currently spends most of her time writing for CE Pro, mostly in the areas of home automation, networked A/V and the business of home systems integration. She majored in Economics at the University of Michigan, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. Julie is a washed-up Ultimate Frisbee player with the scars to prove it. Follow her on Twitter @juliejacobson.

9 Comments (displayed in order by date/time)

Posted by Chris  on  03/15  at  04:05 PM

Show of hands…who cares?

At some point dealers need to make the ethical decision to stop supporting this over-priced product that continues to sit in the gray area of the law (whether you like or agree with the law or not, should have no bearing on this decision).  For me that took place last year.  There’s a reason, most if not all other DVD ripping companies are outside of the U.S. 

I often wonder what the cost of Kscape would have been if they a) were based outside the U.S. and b) hand’t spend hundreds of thousands of dollars in legal fees in an attempt to prove a point.

I really lost interest in this product beginning a few years ago, you know when every single client required iTunes integration…

Posted by joel degray  on  03/16  at  07:52 AM

Show of hands- who thinks iTunes is the be all, end all of all A/V solutions?

Posted by joel degray  on  03/16  at  07:59 AM

Show of hands- who thinks iTunes is the be all, end all of A/V library management
for all?

Posted by Chris  on  03/16  at  08:52 AM

Joel ^2,

I never said iTunes is the be all, end all of anything. I actually prefer CDs and Vinyl for listening to my music. The problem is EVERY single one of our clients is strolling around with an iPhone, iPad and iTunes on their computers. Guess what they all want distributed throughout their homes that Kscape has always failed to deliver, iTunes music!  I’ve got clients with 10s of thousands spent on iTunes content and haven’t purchased a CD or movie in years. Not my fault or problem really; it’s all about convenience for them. Kscape doesn’t provide that convenience so IMO it’s a dead end.

Now, if they could somehow fight off Goliath AND allow iTunes integration, they would continue to be a contender. Until then I refuse to support their neverending legal battles.

Posted by joel degray  on  03/16  at  01:16 PM

Should Kaleidescape also distribute (along with iTuned Music) Sirius / XM, Pandora, Boxee, Vudu, Hulu and TiVo too? PS.- did you buy a Tube preamp and a seperate phono stage or did you just get a receiver?

Posted by Chris  on  03/16  at  04:35 PM

Rhetorical questions mean nothing here.  Fact is iTunes is prevalent amongst all of my clients and is here to stay. I’d prefer to distribute iTunes via the same tried and true interface in Kscape than rely upon a 99 dollar box from Apple or a closed system such as Sonos; but alas, we can’t.

And by the way I have Rogue Audio tube separates at my house because I actually still enjoy listening to music in 2ch.  Is that enough of an entry fee to allow me to rent a slip next to you?

Posted by Tom O  on  03/16  at  07:23 PM

Hey Joel - Look at that dinosaur named Kaleidescape you think is so awesome. Less than 1% of the world cares that they can’t watch a movie on a $50K DVD player.

Posted by frank f  on  03/19  at  06:56 AM

Less than 1% of 1% play their vinyl on a $10k phono stage, yet there is still a market for it.

My yachting customers would be THOROUGHLY disappointed if there was no kaleidescape. Its still an amazing system with top quality hardware. Their integration is also perfect with almost any third party control system. The market is clearly not what it was just a few years ago, but the customers are still there. I dont see how you could complain about a niche product when our entire industry is full of them.

Maybe we should start complaining about every other company who rips customers off because they have to pay their engineers/staff huge salaries to support their niche products. I guess ill be the first to start.. damn you Nordost and your overly priced cables that I make crap loads of profit on DAMN YOU TO AV HELL!

Posted by joel degray  on  03/19  at  08:40 AM

A)  The 1% left will be the only ones with money, there is a market for Kaleidescape.
B)  Kaleidescape doesn’t force you to re-buy content you already own, for many customers, that’s over $10K
C)  An entire Kaleidescape system and 1500 movies worth owning are still less than $50K
D)  Agreed- iTunes is here to stay, just put it in the Samsung BD or the Casio watch where it belongs.

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