Kaleidescape prevails over the DVD Copy Control Association

On March 29, 2007, after a seven-day trial, Judge Leslie C. Nichols of the Santa Clara Superior Court in California ruled that Kaleidescape is in full compliance with the DVD Copy Control Association's license to the Content Scramble System, the method used to encrypt video and audio data on DVDs. As part of his statement of decision, Judge Nichols noted Kaleidescape’s good faith in its efforts to ensure that its products were fully compliant. The DVD CCA announced that it "strongly disagrees with the trial court's decision" and appealed the Court's ruling on June 5, 2007.

Read Judge Leslie C. Nichols' Statement of Decision.

Read Judge Leslie C. Nichols' Addendum to his Statement of Decision.

On May 29, 2007, some of the members of the Board of Directors of the DVD CCA asked a subcommittee of the DVD CCA called CPAC ("Content Protection Advisory Council”) to consider a possible amendment to the CSS License at their meeting of June 20, 2007. The amendment, if adopted, would have placed two new requirements on DVD Products: (1) The DVD Disc would need to be present when its CSS Data is descrambled by a DVD Product. (2) A DVD Product could not be designed to make or direct the making of a persistent copy of CSS Data that has been descrambled from a DVD Disc.

On June 15, 2007, Michael Malcolm, founder and CEO of Kaleidescape, Inc., sent a letter to the members of CPAC asking them to reject the proposed amendment and noting that it would harm consumers because it would suppress competition in the market for DVD playback devices, block the development of new and innovative products that give consumers new ways to enjoy the DVDs they own, and interfere with the ability of consumers to exercise their fair use rights under copyright law. Malcolm’s letter also pointed out that any member of CPAC who voted for the proposed amendment would expose themselves, their employer, and the DVD CCA to serious and substantial antitrust liability.

Read Michael Malcolm's June 15, 2007 letter to the members of CPAC.

At the CPAC meeting of June 20, 2007, the members who had proposed the amendment withdrew their request, and CPAC did not consider the proposed amendment at that meeting.

On October 16, 2007, three movie studios proposed two new amendments. The new amendments divide the failed June 2007 amendment into two parts (with minor modification): (1) The so-called “DVD Playback Amendment,” if adopted, would require the DVD Disc to be present when its CSS Data is descrambled, and (2) the so-called “Managed Copy Amendment,” if adopted, would prohibit a DVD Product from being designed to make or direct the making of a playable, persistent copy of CSS Data. Like the previously failed June 2007 amendment, these newly proposed amendments, if enacted, would have a significant adverse impact on competition in the marketplace, would harm consumers by denying to them products designed to enhance their DVD experience, would block innovation and development of new products and would deny to consumers fair use of their DVDs under copyright law.

On November 1, 2007, Michael Malcolm sent a second letter to the members of CPAC urging them to reject two new proposed amendments.

Read Michael Malcolm's November 1, 2007 letter to the members of CPAC.

If all three industry groups within CPAC were to vote in favor of either of these amendments at their November 7, 2007 meeting, then the DVD CCA would begin a lengthy process aimed at bringing the amendment into force about two years after such a CPAC vote; Kaleidescape would vigorously oppose such action by the DVD CCA, and that opposition would likely result in years of litigation.

 

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