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Kaleidescape Files Appeal on DVD Movie Storage Case

12 Mar, 2012 By: Erik Gruenwedel

Kaleidescape has filed an appeal of a permanent injunction by a California Superior Court that found the company’s DVD and Blu-ray Disc movie storage system violated CSS license provisions of the DVD Copy Control Association.

Sunnyvale, Calif.-based Kaleidescape filed the appeal March 9, the day after a superior court judge declared a permanent injunction on the company’s platform, launched in 2001, that allowed disc owners to make and store digital copies of their movies in a closed system for future playback.

Ironically, the latest litigation comes as major studios are rolling out cloud-based digital lockers (UltraViolet and Apple’s iCloud) in an effort to invigorate sellthrough of physical and digital movies.

Kaleidescape claims its system prevents DVDs from being copied to the Internet, to writable DVDs, or to computers or mobile devices. Furthermore, users cannot download a pirated movie from the Internet to a Kaleidescape set-top box. Kaleidescape said its business platform is a boon to disc sellthrough as it enables the average household with about 110 discs the ability to store the content digitally. The average Kaleidescape user owns more than 500 movies on DVD and Blu-ray.

The DVD Copy Control Association, which is spearheaded by the major studios, disagreed and filed a lawsuit Dec. 7, 2004. That case ended 2007 with a favorable ruling for Kaleidescape. The DVD CCA appealed to the California Court of Appeal, which in 2009 sent the matter back to the California Superior Court for a second trial.

“Kaleidescape operates with a very high degree of integrity, and we work meticulously to comply with each and every agreement that we sign, so this ruling is extremely disappointing,” said CEO Michael Malcolm. “We have always believed, and continue to believe, that our products comply with the CSS license agreement, and in court we will continue to fight the DVD CCA’s allegations to the contrary.”

Malcolm said he’s been baffled for the past eight years why a lawsuit ever happened, since he said Kaleidescape encourages disc sellthrough, not piracy.

“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,” he said. “Imagine a world where Apple wasn't allowed to build the iPod because Sony wanted a ‘level playing field’ for the Walkman.”

The DVD CCA welcomed the superior court ruling, saying it validated its belief that Kaleidescape knowlingly violated provisions of CSS.

“When [Kaleidescape] developed and marketed its video server systems, it knowingly violated those requirements,” the DVD CCA said in a statement. “We believe that this court’s decision in the Kaleidescape matter along with the U.S. District Court’s ruling on RealDVD emphasize the importance of those rules to the benefit of consumers, developers and manufacturers.”

The latest motion filed with the California Courts of Appeal in Santa Clara is expected to take up to two years.



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