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Understanding the Kaleidescape, RealDVD Cases

What have the courts really decided on DVD copying, and what are the implications for the future? We debunk the myths about the the two lawsuits and clarify the current legal state of DVD ripping


What are the RealDVD and Kaleidescape lawsuits really about? Who is suing them for their DVD ripping products? And what will the cases mean once they have finally been settled?

There has been much confusion about these lawsuits. Here, we try to clarify them. (Note: while EH Publishing strives for accuracy, this article should not be construed as legal advice; please consult your own attorneys.)

First, as we write in our ongoing article, "DVD Ripping: The Latest on the Legal Front," those companies that make products that copy DVDs to a hard drive are prone to lawsuits on two fronts:
  • DVD Copy Control Association (DVD CCA)
    This organization licenses the Content Scramble System (CSS) for decrypting DVDs. To make legal DVD players that play copyright-protected DVDs, manufacturers must license CSS from the DVD CCA.

    The DVD CCA has claimed (in the cases of Kaleidescape and Real Networks) that it is a violation of its licensing agreement to make products that enable the copying of encrypted DVDs -- even if the copies are made bit-for-bit, i.e., if the decryption "wrapper" remains intact.

    Kaleidescape won round one of the DVD CCA's lawsuit. The courts ruled that a part of the DVD CCA's rules that may have prohibited DVD copying, was not part of the official licensing agreement that Kaleidescape signed. That ruling was overturned and now a court must decide if Kaleidescape does actually violate the CSS licensing agreement.

    The RealDVD software from RealNetworks, on the other hand, was found (preliminarily) to have violated Real's CSS license agreement with the DVD CCA.

  • Digital Millennium Copyright Act (DMCA)
    In its "circumvention" provisions, the DMCA prohibits the manufacturing or trafficking of products designed to circumvent measures that protect copyrighted titles.

    Most fair-use-loving authorities will concede that DVD rippers that chuck the CSS schemes don't pass muster with the DMCA.

    image
    Digital Media is one of the 6 Pillars of EHX Spring 2010: The New Opportunities Show. Save the date: March 24-27, Orlando, Fla.
    But is it circumvention if the manufacturer makes bit-for-bit copies of copyrighted DVDs? The big studios think it is. Under the auspices of the Motion Picture Association of America (MPAA), they sued RealNetworks for its RealDVD ripping software, claiming violations under the DMCA.

    In the most recent decision, Judge Marilyn Hall Patel upheld her original preliminary injunction against Real (complete ruling here), prohibiting the company from disctributing RealDVD until the case concludes. The court concluded that Real violated both contract with the DVD CCA, as well as the DMCA provisions that prohibit the trafficking of anti-circumvention devices.

Myths & Misconceptions about the Kaleidescape and RealDVD Cases

  • Kaleidescape is being sued for copyright infringement
    Not true. The current dispute is only about breach of contract, and the company has not been targeted on copyright-infringement grounds. The current status is that a key portion of Kaleidescape's CSS licensing agreement that may possibly suggest breach of contract is now allowed to be considered by the courts. Whether or not Kaleidescape actually breached won't be known probably for a couple of years.

  • A Kaleidescape victory means it's legal to rip DVDs
    Not exactly. If Kaleidescape wins, it means the company has complied with its DVD CCA licensing agreement, i.e., that it is not circumventing CSS copyright-protection schemes. If it is not circumventing, then it is not liable under the DMCA; however, not all licensed manufacturers of DVD ripping products have the same CSS licensing agreement that Kaleidescape has, so a win for Kaleidescape is not necessarily a win for all DVD CCA licensees.

    Prospects for Kaleidescape could be grim if you consider the Real ruling. It suggests that, if all of the DVD CCA license agreements are binding on Kaleidescape, then making copies of protected DVDs is prohibited: "That Real is a licensee to the CSS License Agreement is irrelevant to this analysis because the CSS License Agreement does not give license to copy DVD content to a hard drive permanently."

    And, of course, a positive ruling for Kaleidescape does not OK DVD-ripping products from companies that don't have a license with the DVD CCA. Such products are almost certainly illegal under the DMCA.

  • RealDVD was deemed illegal
    Sort of, but not really. If the most recent decision was the be-all end-all, then yes RealDVD would be illegal as would virtually any other DVD-ripping device. But this one court -- namely one Judge Marilyn Hall Patel -- does not have the final say, and she ruled only that Real Networks cannot sell the product for now, pending a full trial.

    Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation explains:

    The RealDVD ruling is not a binding precedent on anyone. Other judges can ignore it. However, it is likely to be persuasive to any judge evaluating a similar case. This is particularly true where there are relatively few precedents to draw on (which is true for the DMCA).

  • DVD-ripping products are legal if they "lock" content in a single box
    No. At least according to the Real ruling: "The fact that RealDVD 'locks' the DVD content to a computer’s hard drive is irrelevant for the purposes of license compliance, because the 'locking' has little to do with CSS."

  • Products that enable copying a DVD for back-up purposes are legal under the "fair use doctrine."
    Wrong, at least for now. Real (and others) rely on the so-called fair use doctrine (section 107) of copyright law (title 17, U.S. Code) that grants the "fair use" of copyrighted work. Surely making a back-up copy is fair use? Judge Patel shot down this argument of Real's, reiterating that the DMCA prohibits the "circumvention of access controls in ways that facilitate copyright infringement and for trafficking in circumvention devices that facilitate copyright infringement." As ruled, RealDVD does just that.

  • Real and Kaleidescape are legal because of the Sony Betamax precedent
    No. The landmark Betamax case gave Sony and others the right to sell TV-recording devices because such products had substantial non-infringing uses. That argument doesn't fly here, according to Judge Patel in the Real ruling, because the DMCA superseded Betamax: "Real’s persistence in arguing this point is both bumptious and futile. There is no grounding in law for Real to assert a 'fair use' defense based on RealDVD being capable of substantial noninfringing use."

  • It is illegal for consumers to make back-up copies of their DVDs
    Maybe not. The Real ruling applies only to manufacturers of DVD-ripping products, not necessarily to those who use such devices. "[T]he court appreciates Real’s argument that a consumer has a right to make a backup copy of a DVD for their own personal use. Whether this is a 'fair use' copy is not at issue, because while the DMCA provides for a limited 'fair use' exception for certain end users of copyrighted works, the exception does not apply to manufacturers or traffickers of the devices."

    Therefore, it seems, consumers are encouraged to purchase and use non-licensed DVD-ripping products from offshore companies like Slysoft that are untouchable.


    UPDATE 2:06 pm 17 Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation, clarifies some of the murky waters of consumer liability for DVD ripping:

    Judge Patel appears to say that fair use is never a defense to circumventing an access control, but that it can be a defense where a copy control is concerned (the DMCA treats "access control" differently from "copy control"). So it's not clear what she means on page 39, where you got the quote from. Because there is no way to make and play a back-up copy of a DVD without circumventing the "access control" of CSS. So I'm left a bit puzzled by the discussion. ...

    Here is what we know: the MPAA and the Copyright Office take the position that ripping a DVD using the usual decryptor tools (Handbrake, etc) always violates the DMCA. Whether that would hold up in court in every case is hard to know. And whether other DVD copying tools might be treated differently (e.g., screen capture utilities like SnapZ) is also hard to know, because it's not clear those tools do any "circumventing."
Stay up-to-date on DVD copying: DVD Ripping: The Latest on the Legal Front





DVD Ripping: The Whole Picture
 
Kaleidescape vs. DVD CCA: Judge Rules Against Movie Servers
Tentative ruling in landmark DVD-copying case says Kaleidescape knew its movie servers might be in violation of DVD CCA licensing agreement that prohibits copying of DVDs.
DVD Ripping: The Latest on the Legal Front
This compilation of articles on the legality of DVD ripping, and related fair-use cases, will be updated continuously.
Understanding the Kaleidescape, RealDVD Cases
What have the courts really decided on DVD copying, and what are the implications for the future? We debunk the myths about the the two lawsuits and clarify the current legal state of DVD ripping.
Is DVD 'Ripping' the Same as 'Archiving?'
Is the term "ripping" generally understood as the "illegal" form of copying a disk? Likewise, is "archiving" known as the bit-for-bit "legal" way of doing it?
Can You Be Sued for Helping Clients Rip DVDs?
EFF attorney Fred von Lohmann explains some of the legal issues involved in selling and installing products that enable users to copy DVDs.
Is Your DVD Server Legal? Manufacturers Say Yes!
Developers of movie-ripping products insist their products are legal. Here's how the manufacturers justify their solutions.
Copy Protection Group Sues Kaleidescape (2005)
Kaleidescape has a license from the DVD CCA to employ CSS decoding in its media servers, which it does. Now, DVD CCA is suing Kaleidescape for breach of contract.
Would Studios Rather We Buy DVD Ripping Products Offshore?
As studios work to quash legitimate products like RealDVD, offshore providers of DVD ripping software -- like AnyDVD developer SlySoft -- are reaping the rewards.
Industry Insider: DVD CCA Is an Innovation-Stifling Cartel (2005)
The DVD Copyright Control Association (DVD CCA) is a bunch of bullies. The organization manages to coerce all manufacturers of DVD players to sign away their rights to innovation.
 



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Article Topics

News · Digital Rights · Legal · Digital Media · Legal · Digital Rights · 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.

7 Comments (displayed in order by date/time)

Posted by Dave  on  08/17  at  09:47 AM

Julie,

Will you please clarify

Products that enable copying a DVD for back-up purposes are legal under the “fair use doctrine.”


Are you referring to software products (ie the fox) or mediaservers? or both?

Posted by Julie Jacobson  on  08/17  at  09:57 AM

If you take the RealDVD ruling as a given (and it’s not—hasn’t really been tested), then no products/services are “legal” if they enable you to copy DVDs onto a server, into the cloud, whatever.

Totally ridiculous since the judge also ruled that consumers themselves might be able to rely on fair use to back up their DVDs. They just have to do it with unlicensed products.

Posted by Joel DeGray  on  08/17  at  01:37 PM

Isn’t the root of the current Kaleidescape issue (completely seperate from RealDVD case) that after Kaleidescape paid their liscencing fee and entered into the liscencing agreement with the DVD CCA, that the DVD CCA tried to submit additional documents? Whether these documents are a subset of the original document (again never presented during the process) or a wholy seperate
doc, which was not in or part of the signed agreement. I don’t know how many integrators would get away with adding design and documentation fees, or other alterations after payments were received and Docs were signed…

Posted by Julie Jacobson  on  08/17  at  02:02 PM

Joel—yes, that was the entire premise of that case. Was the addendum part of the agreement? First court said no. Reversed on appeal. So, now that the addendum is admissible, does Kscape actually violate the terms? Question for the courts that won’t be answered for a long time.

I am told—and I cannot confirm—that there is some clause in the DVD CCA agreement that binds licensees to any addenda after original deal is signed.

Posted by Joel DeGray  on  08/17  at  02:36 PM

Nice- I wish I could write contracts like the DVD CCA and Apple / iTunes. I wonder if these suits cna then be constreud as tortious interference since Kaleidescapes business is media servers.

Posted by Julie Jacobson  on  08/17  at  08:45 PM

Joel:

DVD CCA is an Innovation Stifling Cartel

Maybe not tortious interference, but something just isn’t right.

Posted by Matt  on  07/14  at  11:34 AM

Ripping software that circumvents CSS is obviously a no-no under DMCA. What about a consumer or device who takes the DVD player analog out (no encryption at that point) and uses an analog to digital converter to make a digital, server ready copy of a DVD they own for fair use.

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