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Kaleidescape legal update

CEPro article and elsewhere said:
Kaleidescape's Blu-ray servers, which require discs to reside in a carousel for authentication, have never raised legal questions. The DVD CCA has denied Kaleidescape?s offer of a similar solution for DVDs.
Click to expand...
I thought we were all thinking about how much we hope this comes back to bite the DVD-CCA? Vaults are an inelegant (not to mention expensive) solution. Let 'em burn for getting greedy.
 
Very interesting article...

I don't know if any of you have read the whole 60+ page statement of decision, but there is a section in it (page 55-56) where the court tears a strip off MM for having previously claimed as recently as Oct 2011 that the company has the funds to operate while it comes into compliance, that none of their employees are solely involved in DVD playback etc etc, and yet now being seen to plead poverty if a decision goes against them. (http://www.dvdcca.org/documents/DVDCCA-v-Kaleidescape-Statement-of-Decision-20120308.pdf)

I see in the article MM is talking about if they can survive, and layoffs etc, which contradicts his previous statements. I hope that isn't the basis of their appeal to the courts as it seems they're already on record to the contrary.

Does anyone know if it is possible to obtain the appeal documents from the California Courts to see exactly what the arguments are that are being put forward?
 
K is going to put forth whatever arguments it can in hopes of convincing the court of the merits of their argument. All litigants do. I would not read in to his statement that K is going to fold if the injunction is ultimately granted.

What he is saying is true- the company will suffer irreparable harm while the appeal is made. If K ultimately succeeds on the appeal, then the harm K has suffered during the appeal will be permanent.

Most importantly, the DVDCCA does not have a corresponding and opposing argument that they will suffer irreparable harm while this second appeal is made.

I believe that the court is supposed to weigh the potential harms of the two parties and grant K's request if they dEcide that K's irreparable harm will exceed the DVDCCA's. It will.

Someone correct me if I am wrong on this...
 
Transepoch said:
I thought we were all thinking about how much we hope this comes back to bite the DVD-CCA? Vaults are an inelegant (not to mention expensive) solution. Let 'em burn for getting greedy.
Click to expand...

One of the articles mentioned that Kaleidescape supposedly offered this to the DVDCCA and they rejected it. It read to me like the DVDCCA was simply not in a mood to negotiate and it's simply out to crush Kaleidescape.
 
I believe the App. Ct. was supposed to decide whether the injunction would be stayed during the appeal process by the 18th, but frankly I'm so unconcerned either way that I stopped paying attention.


Jim
 
DVD CCA filed reply to Kal's appeal on 4/April. Kal have 10 days to reply to that (if they want to) from filing date - so that must be ~14/April. I guess at some point (shortly?) after the appeal court considers all the arguments presented. Seems like they were quite quick to put the temporary stay in place, so hopefully this will equally be concluded quickly one way or another.

Neither result is particularly good IMO - even in the best case a stayed injunction during an appeal casts a bit of doubt in the customer's mind.
 
videofile said:
DVD CCA filed reply to Kal's appeal on 4/April. Kal have 10 days to reply to that (if they want to) from filing date - so that must be ~14/April. I guess at some point (shortly?) after the appeal court considers all the arguments presented. Seems like they were quite quick to put the temporary stay in place, so hopefully this will equally be concluded quickly one way or another.

Neither result is particularly good IMO - even in the best case a stayed injunction during an appeal casts a bit of doubt in the customer's mind.
Click to expand...

I could not agree more. Kaleidescape has to get in front of this thing. There are many alternatives to building this business than continuing to chase this ridiculous legal battle.

Kaleidescape must know the extent of everyones catalog of DVD's. I suspect that it would be cheaper for them to buy Blue Ray equivalents for their existing customers libraries and up sell them on newer technologies that are legal. This legacy format legal battle has the ongoing probability of killing this company and for what......a format that is dying if not dead already.

There are technological options to go round this contract issue that the engineers can solve that are in all probability cheaper than the legal costs. Put the technology architects in a room and take the proposals to the established customer base for comment and support. Do something ......... anything ........to get in front of this thing once and for all. Your customers will support innovation as long as it ensures the companies long term survival and value proposition.

I'm beginning to sound like a broken DVD!!!!

Peter
 
Reading the 60+ page court document it looks like advice was taken years ago that formed the whole basis for the companies direction and upon which all the points at issue are now based and do appear heavily stacked in the plaintiff's favour. I would say 'nineball's' proposal above could be considered as a cost saving option but then the legal profession is a self fulfilling one and like 'turkey's they don't often vote for Christmas.
 
Peter, I don't see how Kaleidescape gets in front of this based on your suggestions.

Forcing people to upgrade to BR if they don't want to is not a good move. People don't want to be forced to buy things they don't want.

Your posts cause me to think you are somewhat desperate for Kaleidescape to make some kind of move to put this to bed. The simple fact of the matter is legal proceedings take a really long time. I'm sure they would also like to put this in the rear view mirror. Remember, they did prevail in the first trial. It was the DVDCCA that would not accept the courts decision. Now its Kaleidescapes turn to appeal. And round and round we go.

My suggestion is if you feel that upset by this- write the DVDCCA and suggest they let this go. Kalediescape is not the mass market and they've even admitted (so I gather) that they've not suffered any harm from Kaleidescape.

In the mean time the lawyers for both sides make lots of $$$$.... and I'm with Jim- I'm not really that excited by this right now. It needs to play out.

In terms of how this looks to customers- I really think Kaleidescapes best argument for a new customer is their BR playback and that is not in question.
 
JerryL said:
Peter, I don't see how Kaleidescape gets in front of this based on your suggestions.

Forcing people to upgrade to BR if they don't want to is not a good move. People don't want to be forced to buy things they don't want.

Your posts cause me to think you are somewhat desperate for Kaleidescape to make some kind of move to put this to bed. The simple fact of the matter is legal proceedings take a really long time. I'm sure they would also like to put this in the rear view mirror. Remember, they did prevail in the first trial. It was the DVDCCA that would not accept the courts decision. Now its Kaleidescapes turn to appeal. And round and round we go.

My suggestion is if you feel that upset by this- write the DVDCCA and suggest they let this go. Kalediescape is not the mass market and they've even admitted (so I gather) that they've not suffered any harm from Kaleidescape.

In the mean time the lawyers for both sides make lots of $$$$.... and I'm with Jim- I'm not really that excited by this right now. It needs to play out.

In terms of how this looks to customers- I really think Kaleidescapes best argument for a new customer is their BR playback and that is not in question.
Click to expand...

Jerry, just to be clear. I'm a huge fan and I want the company to succeed. I am not a pessimist by nature nor am I trying to do any further harm to the company. I am also NOT a troll for any kind of vested interest with respect to this industry domain.

I do have sufficient interest in how this process unfolds first as a past and future customer and second, almost equally, as a business person with some management experience in this arena.

I'm not arrogant enough to presume to know precisely what the details of a successful transition might be but I do know what the framework for success will look like. I think we can agree that 'Wait and See' is not going to build customer confidence so downstream business has to be impaired at best.

The foundation message and the brand has to shed this uncertainty now. I don't think they can sit around waiting two years for a phone call from counsel for an outcome that to date appears prospectively nebulous at best. That is a plank that is going to progressively weaken with the passage of time. Worse, the world of competition is not idly standing by in this same window of opportunity.

The essence of my concern is that, based on the company's public posture, there appears to be a strong message that we are all going to Las Vegas in the next couple of years and we are supposed to keep our fingers crossed that the numbers come out right. In a healthy business environment you only go to Las Vegas when you can reassure your customers that you know what the numbers will be before the dice hit the table.

I want to hear now from the management team what my investment will look like if we lose this thing in two years. I also want to know now what the general strategies are to strengthen he company's value proposition in the growing sea of competition beyond the current legal woes.

I want to hear this message clearly and unequivocally from Kaleidescape and not from some senile forum member (that would be me) ..............

Jerry, I think we both want the same thing as an outcome. The challenge we have I suspect is how we get there.

Peter
 
JerryL said:
My suggestion is if you feel that upset by this- write the DVDCCA and suggest they let this go. Kalediescape is not the mass market and they've even admitted (so I gather) that they've not suffered any harm from Kaleidescape.
Click to expand...

I keep seeing this quoted (I think mostly in interviews with MM) and must admit it puzzles me a little - the statement of decision has a whole section from page 47 onwards which discusses extensively the disagreement between Kal and DVDCCA on whether any harm has been suffered ("A, The Nature And Extent Of DVDCCA?s Harm."

I think what MM is referring to is just on a very particular point; that DVDCCA hasn't offered any evidence that the studios themselves have suffered harm (ie a list of illegally copied movies as evidence of such harm). The DVDCCA have put forward plenty of argument that they themselves have suffered harm (of the non-monetary kind):

"The evidence presented at trial demonstrates that the harm to DVDCCA?s mission of maintaining the integrity and uniformity of the License Agreement that would arise from an unaddressed breach of the License Agreement cannot be adequately remedied through monetary relief and thus that harm is irreparable. Accordingly, under the Court ofAppeal?s decision, the parties? contractual stipulation in Section 9,2 of the License controls and this Court must enter a permanent injunction to remedy Kaleidescape?s breach"

I've always had a lot of respect for the product and the company, but this kind of thing just makes me mad as the PR from Kal seems to be miles away from what is in the court statement of decision; do they think we can't read or something?
 
I'm sorry but that quote is silly. #1 we don't have the evidence presented at trial- so its all out of context. #2 an unaddressed breach of the License Agreement is probably happening every second in every town in the nation. #3, Monetary harm is usually the test in cases like this. Their argument is probably that an unaddressed breach would cause others to do the same and thus CAUSE MONETARY HARM. Its always about the money.

I think Mr. Malcolm is likely just condensing his answer for the press.

In the end it just seems to me that you'd prefer Kaleidescape handle its PR differently. OK, thats fine. But I wouldn't get too frustrated. Whats the point?

Peter,

I agree its better to be in control of your destiny but I don't see how they truly can be at this point. It seems to me that they tried to work it out and it didn't work out.

Yes, they need to still offer DVD functionality. They still do. If they can basically play this out for another 12-24 months then maybe the DVD functionality won't be as critical. In the mean time they are supposedly working on their download feature. Maybe the fog here is better for them and is part of their strategy? Certainly the DVDCCA which is a group made up of some of the largest and strongest companies on the planet can afford to bleed a small little startup like Kaleidescape so this is likely part of their strategy.

I don't fault your point of view but I don't think they are going to say very much to us now because that might tip their hand at future product information. For example, what if Kaleidescape were to do some kind of variation on your idea but with the download store.

You're right that it would be best to have clarity. Rarely do we get such things.
 
What will your investment look like in two years if Kaleidescape loses?

The same. It will look exactly the same. Your server will cotinue to operate as it does today. Because you bought it before the case concluded.

If Kaleidescape loses the case, all sales going forward- new sales- will not import or playback DVDs.

Are you buying DVDs currently when a BLURAY copy exists? You are going to be ok. Because your server will continue to operate as it is today.
 
iansilv said:
If Kaleidescape loses the case, all sales going forward- new sales- will not import or playback DVDs.
Click to expand...

This is not quite correct. If the injunction comes into force, systems sold after the injunction will continue to be able to play DVDs from the player's drive. DVD *importing* will not be possible.
 
To further refine that- you could probably still import home movies on DVD or a DVD that is not encrypted- if such things exist.

But I'm not sure what the CCA is asking for its relief- is it simply to stop selling the systems? Is it to stop maintaining the systems in the field? Is it to modify the systems in the field so they no longer can import encrypted discs OR simply even playback discs already transferred to the hard drive?
 
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