What does this mean for Kaleidescape? Q and A with company founders

On June 2, Judge William Monahan of the Superior Court of California approved an agreement between the DVD Copy Control Association (DVD CCA) and Kaleidescape to end the decade-long litigation.

At the crux of the lawsuit, the DVD CCA alleged that because Kaleidescape allowed users to play copied content without requiring the DVD to be in the player during playback, Kaleidescape violated the “CSS General Specifications” section of the license agreement.

In March 2007, Judge Leslie Nichols ruled in Kaleidescape’s favor, finding the company in full compliance of the DVD CCA’s CSS licensing. However this lower court ruling was appealed to California’s 6th District Court of Appeal, and in August 2009, this court reversed the lower court’s decision.   

According to the appeal filed by the DVD CCA, “When DVD CCA became aware of how the Kaleidescape system functioned, it was concerned that the system did not comply with the pertinent specifications for CSS. In or about December 2003, DVD CCA demanded that Kaleidescape cease manufacturing and selling its system until modifications could be made to bring it into compliance. Kaleidescape representatives met with representatives from DVD CCA in January 2004 but were unable to convince DVD CCA that its system complied with the license requirements. Further attempts to resolve the dispute were unsuccessful. DVD CCA filed this lawsuit on December 7, 2004.”

In March 2012, Judge Monahan ruled against Kaleidescape, finding it in breach of its contract with the DVD CCA, and imposed a permanent injunction against Kaleidescape. Kaleidescape appealed the ruling and was granted a request to stay the injunction while the appeal was pending.

(You can read more about that decision here: DVD CCA 1, Kaleidescape and Innovation 0 and see my interview with Kaleidescape's founder and then CEO, Michael Malcolm, here: Kaleidescape Verdict: IT IS SO ORDERED)

This settlement definitively brings this lawsuit to a close.

Following the settlement, the DVD CCA issued this statement:

“Under the settlement agreement, two significant actions have occurred in the California courts.

“First, on May 19, 2014, at Kaleidescape’s request, the California Sixth District Court of Appeal dismissed Kaleidescape’s appeal of a California trial court’s 2012 judgment. The trial court had ruled that Kaleidescape’s DVD playback device known as the Kaleidescape System breached the License because it used CSS to make permanent copies of DVD content, which could then be played back without any need for the actual DVD.

“Second, following return of the case to that trial court, Judge William Monahan on June 2, 2014 granted the joint request of DVD CCA and Kaleidescape to put into effect the injunction previously issued by that court to prohibit Kaleidescape from using CSS in breach of the CSS License Agreement. The injunction was made effective as of November 30, 2014, and modified to give the trial court jurisdiction to enforce the terms of the settlement agreement.”

Curious what implications this settlement meant for Kaleidescape and its business going forward, I reached out to company founders, Cheena Srinivasan, CEO, and Michael Malcolm, for some clarification.

What does finally settling this lawsuit mean for Kaleidescape?

“Settling the lawsuit is a watershed moment for us because it paves the way for expanding our relationships with the studios which will usher in a new era for Kaleidescape. This dispute has been a painful distraction for over a decade. By entering into a settlement agreement, Kaleidescape can now focus on the electronic distribution of movies to Kaleidescape Systems, in the highest quality via the Kaleidescape Store. This will allow many more customers to conveniently build a personal library of the finest movies and enjoy an immersive movie-watching experience at home without having to handle a disc.”

What will this ruling mean for Kaleidescape’s dealers and customers?

“For dealers, it will be easier to sell the system because they will no longer have to answer questions about the lawsuit. Getting rid of the lawsuit removes concerns that some prospective customers have had in the past. Customers will have easy access to many more electronic titles from our Store and will be able to enjoy the convenience of digital downloads, the quality of Blu-ray, and a catalog of titles that’s second to none.”

Please click here to continue reading Kaleidescape's comments regarding this settlement...