Kaleidescape legal update

[nineball]

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?

My call is that if the injunction stands that the functionality for DVD copy capability is removed from the systems. Kaleidescape can't claim they haven't got the capability. This whole process is not only about future business. The legal position is that K never had the right to maintain a persistent copy ever. Not in the future certainly but equally so in the past. Simple deduction will tell you that any future updates to KAOS will disable the functionality and there is no way I can see that the same court who determines that the permanent injunction is warranted will agree to segment or grandfather existing systems. It just doesn't make sense logically or legally.

My greater concern is that this whole issue if left on the table has to weaken a company that frankly needs strength and a sense of focussed commitment on downstream product evolution. This weakened 'state' will ultimately reduce the companies motivation to continue to support the DVD data base that is so instrumental to the Kaleidescape 'Experience'.

I'm not seeing any elements that indicate any hope for a sense of well being for the future. Before anyone gets upset for what may appear as a destructive point of view I am concerned that the company is NOT saying or more importantly doing anything publicly that is changing that impression short of empty platitudes about how wrong this whole thing is. The marketplace will have the final say but it is so very disappointing to watch this story unfold when it could be so different.

I would like to think that as owners our loyalty is NOT blind but has been honestly earned by a quality product and service that is clearly a cut above the industry standard. We should hold the company's feet to the fire to continue to maintain that posture which to my mind calls for a pretty aggressive public strategy that speaks to the future outside this legal fence.

They need to talk honestly about life after court. This whole legal thing has to be marginalized by innovative leadership that clearly excites and delights prospects for the immediate future. Only then can this inevitable circling of the drain be reversed.

Again I think this company has excellent promise but it has to ramp up its game significantly to achieve success.

Peter

 

[josh]

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.

Croptop, can you also say more about legacy systems sold before the injunction? 1) would importing of DVD's still be possible for systems sold before the injunction? 2) regardless of the answer to #1, would DVD content that's already on our servers operate as it always did?

 

[cinelife]

I know the questions were directed at Croptop, but the answer is yes to both questions. Current systems will not be affected in any way, according to K.


Jim

 

[iansilv]

Nineball- I'm sorry, but I just don't understand what you are trying to express.

No "leadership strategy" is going to change anything. This is not a bad management situation, or some sort of issue of incompetence. This is a company that was created expressly to build a DVD server. It has now expanded to serve BLURAYS in their systems. A lawsuit was filed saying that they could not build the DVD server and they fought it.

They may lose. If they lose, their ability to sell DVD server systems may or may not be so substantive to the company that they may or may not go out of business.

I think that because BLURAY is the future and existing owners will not have any change of functionality for storing and playing DVDs, it will not affect new sales as current consumers are adopting BLURAY.

I just don't understand how some company procedure change or management change, as a concept, applies to this situation.

 

[Joe]

OK, so if I expand my current system with another 3U server for extra storage, as i am planning to do sometime this year, will my entire system (including the new server) be still be able to import/playback DVDs even if the injunction is enforced?

 

[cinelife]

OK, so if I expand my current system with another 3U server for extra storage, as i am planning to do sometime this year, will my entire system (including the new server) be still be able to import/playback DVDs even if the injunction is enforced?

That specific question was asked by me, and the answer was "Yes."

"Not affected in any way," means exactly that, you can do anything in the future that you can do now. The injunction will not affect current owners. Again, this is according to K.


Jim

 

[nineball]

That specific question was asked by me, and the answer was "Yes."

"Not affected in any way," means exactly that, you can do anything in the future that you can do now. The injunction will not affect current owners. Again, this is according to K.


Jim

Jim, how does this make sense? I have a fully populated 3U. In six months after the injunction comes into play I buy another 3U. Inevitably I will have to update my KAOS (operating system) to recognize this new configuration or to accept new functionality which hopefully will continue as has been past practice.

This new update will first ask if I am a legacy customer and if I am then I can be sheltered from the current injunction? This will fly in the face of the courts who have said no more.

So then the way to prevent that from happening will be to fence legacy systems from system updates. Inevitably our current systems will be orphaned form the enterprise that comprises future evolution of the product.

Does this make sense? Because if it does all Kaleidescape has to do to overcome the concern is to guarantee that if the injunction DOES come into play that I get a full and complete refund of my purchase.

Peter

 

[cinelife]

Hi Peter,
I can only pass along what I've been told by K (management), and that is that the injunction, should it go into affect, only applies to new systems sold after the date of the injunction. I asked the following, and got the indicated responses.

Can current owner's continue to import DVD's? "Yes"

Will current owner's be supported with KEAOS updates relating to their DVD collections and importing new DVD content? "Yes"

What if someone wants to add a new Player, or Server, are they permitted to do so and retain the ability to import DVD content? "Yes, because the injunction only affects new 'systems' sold after the injunction date."

Not being a party to the action, and reading only the documents everyone else has read, I cannot explain why K believes they can continue to support DVD content for legacy owner's given what we've read about the injunction, but those are their answers.

As to whether someone should believe the answers, and invest in more components, that's a personal choice. I seriously doubt K would offer to buy-back components if those answers turned out to be wrong.

One thing is for certain, no conversation in this forum is going to change anything at K, or in the legal outcome.


Jim

Jim, how does this make sense? I have a fully populated 3U. In six months after the injunction comes into play I buy another 3U. Inevitably I will have to update my KAOS (operating system) to recognize this new configuration or to accept new functionality which hopefully will continue as has been past practice.

This new update will first ask if I am a legacy customer and if I am then I can be sheltered from the current injunction? This will fly in the face of the courts who have said no more.

So then the way to prevent that from happening will be to fence legacy systems from system updates. Inevitably our current systems will be orphaned form the enterprise that comprises future evolution of the product.

Does this make sense? Because if it does all Kaleidescape has to do to overcome the concern is to guarantee that if the injunction DOES come into play that I get a full and complete refund of my purchase.

Peter

 

[videofile]

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'm not sure if you read the statement of decision? In that section I mentioned the court sets out two legal precedents for injunctive relief in cases where there wasn't harm of the monetary kind. That section also summarises the evidence the court thought was important in this respect. In fact it seems from reading it that the prosecution did a bit of a number on some of Kal's witnesses with respect to the "harm" aspect. I find the tone of the whole statement of decision interesting in fact - it has a "feel" of being a real "telling off", which the original equivalents on the first trial didn't have...

The way I see this for what it is worth; DVDCCA / Hollywood wanted Kal shut down because of the "dangerous" precedent their equipment set; tried via DVDCCA contract to get it shutdown but failed first time round. To a large extent I believe the court were nonplused about the case (a load of rich guys with a device that copies DVDs? so what?) but the advent of the RealDVD showed them clearly that such tech could be brought to mass market (a large part of the case there centred not around the Windows SW product, but around a future Kal-like product Real wanted to sell for $100's instead of $1000's.), hence the studios et al took a different tact (DMCA). The Kal case was cited by Real as one of the reasons they could do it. So what we are seeing now is just Hollywood establishment sending in the cleanup crew to dot the i's and cross the t's, to make sure if anyone is watching they are earning. Sucks but that seems to be life in this market.

You are right; I would like this handled differently; I'd like to see a line drawn under this now as the uncertainty is damaging. I (and by proxy my customers) want to see a company with a proven track record & sustainable business model in selling the devices they might be limited to (ie non-DVD importing). As this is mostly an owners forum many of the voices relate to what an existing system can do or might be able to do in future. I'm mostly concerned over my liability in selling stuff at the moment (and as others say, Kal aren't going to underwrite sales going forward) and whether I can in all good faith offer these products when the CEO himself is saying that his company could close if the case goes against them.

 

[nineball]

Hi Peter,
I can only pass along what I've been told by K (management), and that is that the injunction, should it go into affect, only applies to new systems sold after the date of the injunction. I asked the following, and got the indicated responses.

Can current owner's continue to import DVD's? "Yes"

Will current owner's be supported with KEAOS updates relating to their DVD collections and importing new DVD content? "Yes"

What if someone wants to add a new Player, or Server, are they permitted to do so and retain the ability to import DVD content? "Yes, because the injunction only affects new 'systems' sold after the injunction date."

Not being a party to the action, and reading only the documents everyone else has read, I cannot explain why K believes they can continue to support DVD content for legacy owner's given what we've read about the injunction, but those are their answers.

As to whether someone should believe the answers, and invest in more components, that's a personal choice. I seriously doubt K would offer to buy-back components if those answers turned out to be wrong.

One thing is for certain, no conversation in this forum is going to change anything at K, or in the legal outcome.


Jim

Thank you Jim. This conversation you have quoted couldn't be any clearer with respect to the company's position. You are also right that it will come down to a personal choice. As an existing customer, as long as there is this direct legal threat of a permanent injunction I would refrain from investing another 70K until this is cleared up once and for all and not with a 2 year stay hanging in the wind.

It is bothersome that this forum has so little impact on the company. My experience here with all the diversity of opinion and support is that this is an excellent mature responsible resource for the company to use. It is a well moderated environment populated by folks who care about the company and its products. It is relatively uncontaminated with any particular bias or prejudice. It is an excellent source of information on product utility and also a source of self help. It is NOT like the other forums littered with kids and trolls.

I have found the dialog on issues to be healthy and respectful even in the heat of disagreement. Again it would be sad to think that the company doesn't take advantage of this resource.

Peter

 

[nineball]

I'm not sure if you read the statement of decision? In that section I mentioned the court sets out two legal precedents for injunctive relief in cases where there wasn't harm of the monetary kind. That section also summarises the evidence the court thought was important in this respect. In fact it seems from reading it that the prosecution did a bit of a number on some of Kal's witnesses with respect to the "harm" aspect. I find the tone of the whole statement of decision interesting in fact - it has a "feel" of being a real "telling off", which the original equivalents on the first trial didn't have...

The way I see this for what it is worth; DVDCCA / Hollywood wanted Kal shut down because of the "dangerous" precedent their equipment set; tried via DVDCCA contract to get it shutdown but failed first time round. To a large extent I believe the court were nonplused about the case (a load of rich guys with a device that copies DVDs? so what?) but the advent of the RealDVD showed them clearly that such tech could be brought to mass market (a large part of the case there centred not around the Windows SW product, but around a future Kal-like product Real wanted to sell for $100's instead of $1000's.), hence the studios et al took a different tact (DMCA). The Kal case was cited by Real as one of the reasons they could do it. So what we are seeing now is just Hollywood establishment sending in the cleanup crew to dot the i's and cross the t's, to make sure if anyone is watching they are earning. Sucks but that seems to be life in this market.

You are right; I would like this handled differently; I'd like to see a line drawn under this now as the uncertainty is damaging. I (and by proxy my customers) want to see a company with a proven track record & sustainable business model in selling the devices they might be limited to (ie non-DVD importing). As this is mostly an owners forum many of the voices relate to what an existing system can do or might be able to do in future. I'm mostly concerned over my liability in selling stuff at the moment (and as others say, Kal aren't going to underwrite sales going forward) and whether I can in all good faith offer these products when the CEO himself is saying that his company could close if the case goes against them.

In my book this is a very coherent and sound summary. Your concern about liability I think would be well covered off with total transparency. As long as you informed the potential customer of the background and risks I can't see where and of this might stick to you down the road.

However, I don't know what kind of sales process would want to start with a risk assessment of this kind. It's got to be a deal killer. I think we forget from all the noise and hype that organic customers of Kaleidescape want to obey the law. They have bought a product from a company who ran the extra mile to stay legal. The average Kaleidescape customer probably feels outrage that this is even happening, especially with so many blatantly illegal alternatives in the marketplace. We have paid a premium to stay legal!!!

In a sense, a stay of execution in the form of a two year appeal process may not be in the company's best interests and in fact may not be in the customer's best interest. Investing or even innovating on what ultimately might be an illegal system just does not make good business sense. I'm not predicting failure here, I'm simply taking a good measured look at the risks. With all the innovation and integration taking place in the market place I want Kaleidescape focused on those opportunities and not trying to repair a wreck that was not their fault and certainly not of their making.

Again videofile well said!!

Peter

 

[JerryL]

I'm not sure if you read the statement of decision? In that section I mentioned the court sets out two legal precedents for injunctive relief in cases where there wasn't harm of the monetary kind. That section also summarises the evidence the court thought was important in this respect. In fact it seems from reading it that the prosecution did a bit of a number on some of Kal's witnesses with respect to the "harm" aspect. I find the tone of the whole statement of decision interesting in fact - it has a "feel" of being a real "telling off", which the original equivalents on the first trial didn't have...

No I don't have time for reading all of this. Its just fun discussion here. Im not up on the state of the law in this area but IMHO if theres no monetary damages then what other kind are there when you're not dealing with criminal law. Unless this was a crime and then your description of the prosecution would be more apt- and it wouldn't be the DVDCCA going after K. This is a civil case. There wasn't any harm to reputations here- its simply money. No matter how you slice it- it will be money.

The way I see this for what it is worth; DVDCCA / Hollywood wanted Kal shut down because of the "dangerous" precedent their equipment set; tried via DVDCCA contract to get it shutdown but failed first time round. To a large extent I believe the court were nonplused about the case (a load of rich guys with a device that copies DVDs? so what?) but the advent of the RealDVD showed them clearly that such tech could be brought to mass market (a large part of the case there centred not around the Windows SW product, but around a future Kal-like product Real wanted to sell for $100's instead of $1000's.), hence the studios et al took a different tact (DMCA). The Kal case was cited by Real as one of the reasons they could do it. So what we are seeing now is just Hollywood establishment sending in the cleanup crew to dot the i's and cross the t's, to make sure if anyone is watching they are earning. Sucks but that seems to be life in this market.

Sounds right to me.

You are right; I would like this handled differently; I'd like to see a line drawn under this now as the uncertainty is damaging. I (and by proxy my customers) want to see a company with a proven track record & sustainable business model in selling the devices they might be limited to (ie non-DVD importing). As this is mostly an owners forum many of the voices relate to what an existing system can do or might be able to do in future. I'm mostly concerned over my liability in selling stuff at the moment (and as others say, Kal aren't going to underwrite sales going forward) and whether I can in all good faith offer these products when the CEO himself is saying that his company could close if the case goes against them.

I can't comment on this. You'll have to ask them. In so far as uncertainty- how about this- what if Kaleidescape said to its dealers- if you want to sell our product we need proof that you'll never get sued and never make any mistakes. Otherwise we don't have clarity from you and your not making a statement just makes us nervous. {Yes Im being cute here by flipping it around as yes as possible}. The bottom line is while this is ongoing I don't know how much they can say and I don't think anyone can expect them to say very much. So- we all, customers, dealers, whomever, have to make decisions with less than perfect information. It won't be the first time in our lives we do it, nor will it be the last.

 

[JerryL]

Peter, how do you know if Kaleidescape takes advantage of the forum? The term taking advantage itself being subjective. I'm sure they check it out and see our points of view from time to time. I'd be shocked if theres more than 1% of their client base here.

 

[nineball]

Peter, how do you know if Kaleidescape takes advantage of the forum? The term taking advantage itself being subjective. I'm sure they check it out and see our points of view from time to time. I'd be shocked if theres more than 1% of their client base here.

I don't know Jerry, I was taking Jim's view that nothing said in this thread is going to affect Kaleidescape's behaviour or the legal outcome. I agree with his view and I still believe its a missed opportunity.

Peter

 

[Transepoch]

We have paid a premium to stay legal!!!

And the rest of the experience...

That said, it's always best to remember rule #2 of buying electronics: buy based on what's on the box, not what may be there later. Worst case, we have to take legacy systems offline. If you figure any updates will nuke your DVD-watching capability, it's not like you want to download it anyway.

 

[videofile]

I see that Kal have filed their reply to DVD CCA's reply to Kal's appeal (!). Down to the court now I think - or do DVD CCA get to reply to this now?

http://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=6&doc_id=2007955&doc_no=H038037

04/16/2012 Exhibits lodged*************** appellant's additional exhibits in support of petition for writ of supersedeas
04/16/2012 Reply filed to: from appellant reply to oppo to writ of supersedeas

 

[JerryL]

I don't know Jerry, I was taking Jim's view that nothing said in this thread is going to affect Kaleidescape's behaviour or the legal outcome. I agree with his view and I still believe its a missed opportunity.

Peter

Thats Jim's opinion- which I am sure is a good one. However, I think constructive expressions of frustration due to the lack of information/ the fomentation of confusion on the customer side are likely to cause the people there to consider what/ if anything/ else they can do to lend clarity to the situation.

My opinion in having had (admittedly this is very limited) interactions with some people at Kaleidescape is they do care. BUT- in this kind of situation I just don't think you can expect them to say much right now. That's my take.

 

[iansilv]

I think Kaleidescape is going to give an update when the near-term legal options are exhausted. As in, when they know for sure whether the stay on the I junction will be granted or not, as that affects the next two years.

K is not a company to make uncertain announcements or give play-by-play commentary.

 

[JerryL]

Most companies aren't/ won't.

Will Apple tell us whats going on with all their on going litigation? Does some of it have the potential to really affect their business? I donno- I would imagine in the worst case scenario it does.

 

[nineball]

Most companies aren't/ won't.

Will Apple tell us whats going on with all their on going litigation? Does some of it have the potential to really affect their business? I donno- I would imagine in the worst case scenario it does.

Actually with over a hundred billion dollars cash on the balance sheet and no long term debt I suspect they can weather just about anything........

In my opinion the only thing that can really hurt Apple is Apple.

Peter