Kaleidescape Looses Appeal [Text View]

OtherSongs

08-12-09, 10:11 PM

A California appeals court has overturned the ruling handed to Kaleidescape in March 2007.

Read the details Here (http://news.cnet.com/8301-1023_3-10308493-93.html?tag=newsEditorsPicksArea.0).

Article From CE Pro (http://www.cepro.com/article/kaleidescape_loses_dvd_ripping_appeal_against_dvd_cca/)

Amusing in a very dark way.

The Hollywood movie biz (more concentrated?) still seems to have less of a clue than the (more widely spread and not just Hollywood) music biz.

Not that that says much for either.

Only that from what I see there is more diversity (and exploration) within the 2 channel music biz; which seems to be driven by the ease of ripping CD discs; not to mention the rampant Internet copying of lossy 2 channel music.

IMO the recent 2 legal cases against (lives likely ruined due to large court punitive money awards) those private individuals who illegally copied/shared 2 channel music, will likely come back to haunt the music hawks and help the 2 channel music biz move into the new future.

The Hollywood movie biz is nowhere near this; and IMO if anything it hurts Blu-ray more than it hurts DVD.

Just a guess or two on my part. :)

Cheers

rosedale11

08-12-09, 10:52 PM

What does this do to the person that already owns several.

howdydoody

08-12-09, 11:24 PM

What does this do to the person that already owns several.

My guess is that it will not impact you. As long as your hardware works you will be okay. I would not bet that you will have support as the hardware fails. This is tremendously bad news for Kaleidescape. Long term prospects are dismal IMO. OTOH, I am not a lawyer.

ptrubey

08-12-09, 11:40 PM

This has nothing to do with the DMCA per se. The court case is all about the DVDCCA license that Kaleidescape signed.

Other DVD ripping vendors probably do not have a valid DVDCCA license, and those manufacturers may indeed be in breach of the DMCA, but Kaleidescape is different.

OtherSongs

08-13-09, 12:32 AM

What I've come to love about experts is that they are so good with details.

amirm

08-13-09, 02:29 AM

What does this do to the person that already owns several.
If K goes out of business because of this, you lose the metadata service (movie guide data). I wonder to what extent they use the service to enable proper ripping of DVDs. If they use this, then you may also have trouble ripping some DVDs in the future.

QQQ

08-13-09, 02:44 AM

This has nothing to do with the DMCA per se. The court case is all about the DVDCCA license that Kaleidescape signed.
Good point, this was a contractual issue. And the first judge agreed very strongly with Kscape and all of the facts were on Kscapes side. I guess I will actually have to read the second decision :).

If K goes out of business because of this, you lose the metadata service (movie guide data). I wonder to what extent they use the service to enable proper ripping of DVDs. If they use this, then you may also have trouble ripping some DVDs in the future.
The system comes with a large amount of metadata installed on it (supposedly 100,000 DVD's or something like that), so it can even grab metadata if not connected t the Internet. And ripping can be done and data manually entered for discs for which there is no metadata.

QQQ

08-13-09, 04:12 AM

After they lost the first case the DVD association tried to modify the contract as follows (http://www.cepro.com/article/kaleidescape_loses_dvd_ripping_appeal_against_dvd_cca/) (another example of their sterling integrity, lose the case, change the contract):

6.4. Certain Requirements for DVD Products. DVD Products, alone or in combination with other DVD Products, shall not be designed to descramble scrambled CSS Data when the DVD Disc containing such CSS Data and associated CSS Keys is not physically present in the DVD Player or DVD Drive (as applicable), and a DVD Product shall not be designed to make or direct the making of a persistent copy of CSS Data that has been descrambled from such DVD Disc by such DVD Product.

This would appear to allow Kscape to modify the system to meet the contract, though I'm not sure if it's practical for larger collections. But it would be possible to stick a changer in there just to hold the discs. Absurd I know, but still an option. Of course that could be somewhat difficult to find the space if you have 3000 movies stored on your system!

But the case here seemed to be based on the initial contract anyhow.

What does this do to the person that already owns several.
Probably nothing but this not over. Kscape will appeal the case and most likely ask that the ruling be put on hold pending appeal. Whether it is or is not will I think be immense. This could easily drag on for a while. All hope is not lost. One would hope/assume they have prepared for this and have other options on the table but that could be wishful thinking. I'm looking forward to receiving a press release from them soon.

rgbyhkr

08-13-09, 09:05 AM

I could see a number of end game scenarios here. Yes, K will pursue their legal options and the ultimate outcome may not be decided for a while. If a worst case scenario occurs and they get ruled against with no ability to appeal, there are a variety of possibilities:

- Don't underestimate K's user base. Amongst the 1000s of systems they have sold, some have been to very big names in Hollywood. I could potentially see a play where those folks are reached out to by K to put the screws back on the studios. This would be a messy and complicated scenario, but an interesting one nonetheless. Yes, this could be the unfair "those with means getting better treatment", but what else is new? It happens all the time and since K owners tend to love their systems, I have a hard time seeing those with influence not exercising it rather than seeing K go away.

- While it's been a long time coming, the arrival of BR Managed Copy could actually help K. For one thing, they'd have a legitimate disc based movie business to continue running (in addition to music which will never be banned and the very real possibility of downloadable content and/or streaming delivery). Once the systems are in place to support MC processing and payment, there's at least the possibility that they could pursue trying to set up something similar for DVDs. It would be a lot of work and you'd have to get the studios to agree (I'm not even sure that the DVDCCA has the ability to license such usage), but it's a possibility.

- K can still operate their DVD ripping in countries that don't have the laws like the DMCA. I know, this is far from what they can do now, but it at least makes them viable. If they stopped selling the DVD rip functionality in markets where it was illegal but continued on in other areas of the business in those countries, existing customers would at least not be left hanging with no chance for support (whether K would be forced to upgrade the software in those markets to remove DVD ripping might be a very real concern).

- They could go "grey". While lots of other companies have gone the BYO decrypter route for DVD ripping, K has forged ahead as a legal solution. If they no longer had that in their arsenal, they could shift gears. Everything would stay the same (metadata, the actual process of copying data off the disc, workarounds for copy protection on specific discs (not access prevention - which is the only thing the DMCA bans), etc. All they then have to do is have the user install something like DeCSS. They could even write the app to apply the software to the system and give the user a link to a non-US source for it, with the usual legal "at your own risk" to make it as easy as possible. Does this knock down a huge benefit of K? Absolutely. But it does give them a very real way to continue on while still retaining DVD rip functionality. They wouldn't be the upstart trying to gain traction, they would be the established player forced to use a workaround.

Actually, this could very well be of benefit to K users. Think about all the things the K system doesn't do just in the interests of maintaining the legal DMCA argument. No content offloading to portable devices, streaming to computers, re burn of discs to replace damaged ones, etc. If K no longer had to keep up that fight, they'd be free to do all kinds of cool things that they can't now. Obviously, this is the option of last resort for K and one they probably do not want to turn to, but it is a very real option. I see them doing this rather then waving the white flag and shutting down.

The job now for K is to keep dealers comfortable. They need to reassure folks that this isn't over and that there's no near term risk of the product being banned. At the same time, they need to whisper that they also have a variety of plan Bs up their sleeve in case the court proceedings don't pan out in their favor. It's a bad time for this to have dropped, but at least they were able to build up revenue from sales when times were good, so that hopefully will carry them through this very large additional burden.

Jeff

PeterS

08-13-09, 12:17 PM

Seems to me the best option for K is to drop out of their agreement. License a third-party ripping engine which has had no access to the official agreements and fight the DMCA. Seems there are more holes there to exploit.

Dennis Erskine

08-13-09, 12:43 PM

sierraalphahotel

08-13-09, 01:25 PM

My uneducated speculation is:

1. Stay of execution while on appeal.
2. K brings out their BluRay system sooner than later.
3. K executes an agreement to provide movies via internet download

BluRay and internet download is the direction of the industry in any case (IMHO). In the process the people who'd really lose out are the DVD providers.

It would certainly be more feasible to download an entire DVD movie file compared to the much larger blu-ray version in the short term.

howdydoody

08-13-09, 04:48 PM

My uneducated speculation is:

1. Stay of execution while on appeal.
2. K brings out their BluRay system sooner than later.
3. K executes an agreement to provide movies via internet download

BluRay and internet download is the direction of the industry in any case (IMHO). In the process the people who'd really lose out are the DVD providers.
__________________

I think this assumes Kaleidescape does not wind up with a hefty financial judgment against them. I don't think that this is likely to be the case.

iansilv

08-13-09, 04:52 PM

Sure- it might be more feasible, but let's not forget that broadband hooked up to the K could have movies on que, constantly downloading, and activated once they were released much like steam does for games.

Personally, I think this does the movie industry no good, and really only benefits other tech giants like Apple and Microsoft who have competing movie download systems.

Anydvd-HD, MyMovies and media center it is then. Fine. What a bunch of ignorant, short sighted f@#$s the movie studios are being. They will just have control wrested from them by Apple and M$.

rgbyhkr

08-13-09, 05:37 PM

K's statement today about the decision:

http://www.kaleidescape.com/news/pr/legal-update.php

"We are surprised and disappointed by the Court of Appeal's decision and by their rejection of existing California contract law.

In the 2007 trial, the DVD CCA claimed that Kaleidescape breached the CSS License Agreement and in particular, a document called the "General Specifications". Kaleidescape successfully argued at trial that this document was not part of the contract since it was never referenced in the CSS License and was not provided to Kaleidescape until after the CSS License had been entered into. Kaleidescape also presented evidence at trial that, even if the General Specifications were part of the CSS License, Kaleidescape complied with it. In 2007, the trial court determined that the General Specifications were not part of the contract, but the trial court did not clearly rule on whether we complied with it. The Court of Appeal has now ruled that the document is part of the contract, but said nothing about whether or not Kaleidescape complies with it and has left that determination to the new trial court. The Court of Appeal did not issue an injunction against the sale of our products. The second trial will take place probably in a year or two, unless the California Supreme Court agrees to review the Court of Appeal's decision. We will continue to fight, and we expect to prevail.

In the meantime, Kaleidescape Systems remain 100% licensed and legal. We will continue selling Kaleidescape Systems, developing innovative products, and providing excellent service to our customers, including Movie Guide, Music Guide, automatic software updates, and automatic service alerts. The Blue-Laser Player is still on schedule for release in 2009."

Jeff

petemcn

08-13-09, 07:46 PM

K's statement today about the decision:

http://www.kaleidescape.com/news/pr/legal-update.php

The second trial will take place probably in a year or two,...

In the meantime, Kaleidescape Systems remain 100% licensed and legal. We will continue selling Kaleidescape Systems, developing innovative products, and providing excellent service to our customers,... "

Jeff

Like I said earlier, what customer in their right mind is going to spend upwards of 10-30k on a new Kaleidescape system with this hanging over K* head? I think they should hope for a much quicker resolution rather than hoping this will drag out while they are allowed to continue to operate.

Curt Palme

08-13-09, 09:00 PM

Heh, by the thread title, I figured people had simply lost interest in the product. :)

rosedale11

08-13-09, 10:08 PM

I guess me

ChrisWiggles

08-13-09, 10:15 PM

Dizzman

08-13-09, 11:18 PM

A. Lots of people bought k when the first lawsuit was hanging over their heads.
B. DO not cry uncle until the legal process has run its course. And as we all know... that will take years.
C. Stop talking about the DMCA, it has nothing to do with this. this is a case of contract law... plain and simple.
D. as has been mentioned, BD has had MMC ratified. so in all likelyhood, DVD's may become moot for a K buyer. new ones at least.

QQQ

08-14-09, 12:34 AM

A. Lots of people bought k when the first lawsuit was hanging over their heads.
Exactly, this is another case of hobbyists assuming the average Kscape customer is like them. That's not to say I don't agree this is an issue, but I am not writing them off yet, this has a way to go. I do believe however there is a difference now. A lot of dealers may be scared to sell it whereas previously they were not.

D. as has been mentioned, BD has had MMC ratified. so in all likelyhood, DVD's may become moot for a K buyer. new ones at least.
Totally moot. However I am unaware of the final MMC details being ratified. Where does your info come from?

amirm

08-14-09, 01:13 AM

Totally moot. However I am unaware of the final MMC details being ratified. Where does your info come from?
It happened a couple of months ago. We had threads on it here and and RC...

QQQ

08-14-09, 01:26 AM

QQQ

08-14-09, 05:51 AM

The complete statement:

August 13, 2009

Yesterday, the Sixth Court of Appeal of the State of California ordered the DVD CCA v. Kaleidescape, Inc. lawsuit back to the Superior Court for further proceedings.

We are surprised and disappointed by the Court of Appeal's decision and by their rejection of existing California contract law.

In the 2007 trial, the DVD CCA claimed that Kaleidescape breached the CSS License Agreement and in particular, that Kaleidescape did not comply with a document called the "General Specifications." Kaleidescape successfully argued at trial that the General Specifications document was not a part of the original contract since it was never referenced in the CSS License and was not provided to Kaleidescape until after the contract had been entered into. In addition, Kaleidescape presented evidence at trial that its products fully comply with the General Specifications anyway. In 2007, the trial court agreed with Kaleidescape that the General Specifications are not a part of the original contract. Because of this, the trial court did not clearly rule on whether Kaleidescape complies with the General Specifications. The Court of Appeal has now ruled that the General Specifications are a part of the contract, but did not decide whether or not Kaleidescape complies with them. The Court of Appeal has sent this back to the trial court to decide.

The new proceedings by the trial court will likely take place in a year or two, unless the California Supreme Court agrees to review the Court of Appeal's decision, in which case they may never take place at all. Kaleidescape will continue to fight, and we expect to prevail. However, it may take many years for this issue to be fully and finally resolved.

In the meantime, Kaleidescape Systems remain 100% licensed and legal. We will continue selling Kaleidescape Systems and providing excellent service to our customers and we will continue developing innovative products and technologies including the Movie Guide, the Music Guide, automatic software updates and automatic service alerts. The Blue-Laser Player is still on schedule for release in 2009.

Kaleidescape has been operating in the shadow of the DVD CCA's allegations for nearly five years. During this time we have continued to invest in the development of technologies that improve the entertainment experience and we have created the leading product in our category.

We sincerely appreciate your support and remain committed to delivering products that will delight and amaze our mutual customers for years to come.

Sincerely,

Michael Malcolm, CEO
Kaleidescape, Inc.

rgbyhkr

08-14-09, 07:20 AM

Like I said earlier, what customer in their right mind is going to spend upwards of 10-30k on a new Kaleidescape system with this hanging over K* head? I think they should hope for a much quicker resolution rather than hoping this will drag out while they are allowed to continue to operate.

Well, they originally got sued by the DVDCCA in December of 2004 and that initial case didn't get ruled in their favor until March 30th of 2007. So, they sold products to lots of customers for over 2 years while under the the same threat. Also, just as an FYI, the new Mini System sells for $8K.

In my mind, K's future has way more to do with how they adopt BR and digital downloads than this case. As I pointed out above, it would be fairly easy for them to go from using the CSS license to rip to having users BYO DeCSS. Again, I think that's an option they least want to take, but it ensures that there is a solution under a worst case that preserves current functionality forever.

Jeff

rgbyhkr

08-14-09, 07:38 AM

The only way I see them surviving is if they find some way to use a DVD changer to store all the DVDs, to make sure that somehow the DVD is in the drive while using the library of ripped content, which begs the question why even bother to rip it all in the first place...

I highly doubt they would bother going this route as a resolution to the contract dispute. It's a huge PITA, not to mention requiring a significant cost add on to the systems, perhaps even those already in the field (who would fall under a retroactive settlement). This is one solution I just don't see in the cards

I just don't see them surviving unless they can pull a rabbit out of the hat with regards to serving up BD.

This, along with digital downloads, is the true future of K. While MMC was ratified and awaits sign off from all the studios by 12/4/09, we still don't know what we'll have to pay for each one. There is an issue of the extent of the restrictions and the DRM, but really that doesn't impact K (because the current system already locks down DVD content, so any absence of flexibility to offload BR movies from the K to a portable device or a computer on your network with MMC wouldn't be any more restrictive than how the system already is now).

With MMC, K won't be the only legal player on the BR block. They'll get more competition. K has already positioned itself to push further into the lower priced market with the Mini System, but I can guess that even more players will enter once MMC gets going. Though, you could say that high MMC prices might help K (the K user base seems more likely to shell out money for the privilege of MMC than more price conscious users).

Digital downloads are also interesting. I can't see K building a complete business model just on downloads for the foreseeable future. It has to be one slice of a larger pie that they offer because the market is just too young. As digital downloads have evolved, more and more players have entered. There seems little chance that K could step in and become the leader, when alternate solutions can be had for very little money (Vudu boxes are dirt cheap these days). Instead, I wonder if K decides to stay up market and offer the highest quality downloads targeted at their high end user base. At this point, Vudu might be available at a good price as my indications are that they aren't doing as well as they'd like. Vudu's HDX quality is pretty darn good and could be a step off point to offer even higher res downloads. We're probably a ways off from true BR downloads, but K could keep pushing the envelope to try and get there.

Jeff

rgbyhkr

08-14-09, 07:48 AM

I remember. But there was no pricing and no decision on how many copies could be made. But I guess that will be up to each studio. I hope they've provided a provision as iTunes does to unauthorize a device. That's the most basic requirement so it's unthinkable they would not include it, BUT I assume nothing with regard to these folks. I'm eager to see how much they charge. It seems to me they could purposely kill it just by charging a ridiculous fee.

Expect Fox to be the ones doing exactly that. They seem to have been the most opposed to the whole idea, going all the way back to before HD-DVD and BR launched. The other studios though may be more relaxed and will hopefully look at MMC as an avenue to drive higher BR adoption. Low MMC prices or even promo codes for free MMC transfers would be a great marketing tool. The wrinkle in all this is the fact that Digital Copy has already been used in a number of BR titles. Those are built into the cost of the BR, so maybe that strategy will be used for MMC.

BTW, just in case anyone missed it, it looks like none of the BR discs being sold now will be eligible for MMC...

http://www.videobusiness.com/article/CA6664863.html

"Studios have until Dec. 4 to sign the final AACS agreement. Once they sign, they are required to make all Blu-ray releases ready for managed copy, said Ayers. Studios won’t have to actually allow consumers to make copies of Blu-ray releases until the first quarter, when AACS-LA gets its authorization server set up. Ayers said studios and suppliers also can set up their own authorization servers.

For content owners, adding the managed copy feature only requires that they encode discs to include a URL directed to an authorization server. Discs are serialized, so that the authorization servers can tell whether a copy has already been made.

Although studios and other content holders will be required to include managed copy on Blu-ray discs by the first quarter of 2010, Blu-ray hardware manufacturers aren’t ever required to add managed copy."

Jeff

Erik Garci

08-14-09, 10:48 AM

iansilv

08-14-09, 12:04 PM

Expect Fox to be the ones doing exactly that. They seem to have been the most opposed to the whole idea, going all the way back to before HD-DVD and BR launched. The other studios though may be more relaxed and will hopefully look at MMC as an avenue to drive higher BR adoption. Low MMC prices or even promo codes for free MMC transfers would be a great marketing tool. The wrinkle in all this is the fact that Digital Copy has already been used in a number of BR titles. Those are built into the cost of the BR, so maybe that strategy will be used for MMC.

BTW, just in case anyone missed it, it looks like none of the BR discs being sold now will be eligible for MMC...

http://www.videobusiness.com/article/CA6664863.html

"Studios have until Dec. 4 to sign the final AACS agreement. Once they sign, they are required to make all Blu-ray releases ready for managed copy, said Ayers. Studios won’t have to actually allow consumers to make copies of Blu-ray releases until the first quarter, when AACS-LA gets its authorization server set up. Ayers said studios and suppliers also can set up their own authorization servers.

For content owners, adding the managed copy feature only requires that they encode discs to include a URL directed to an authorization server. Discs are serialized, so that the authorization servers can tell whether a copy has already been made.

Although studios and other content holders will be required to include managed copy on Blu-ray discs by the first quarter of 2010, Blu-ray hardware manufacturers aren’t ever required to add managed copy."

Jeff

Disks are serialized? That is interesting... Are they only serialized for the MMC stuff or are all Blu-Ray disks currently serialized?

J.Mike Ferrara

08-14-09, 12:46 PM

rgbyhkr

08-14-09, 08:47 PM

Disks are serialized? That is interesting... Are they only serialized for the MMC stuff or are all Blu-Ray disks currently serialized?

From what I've read it's just for MMC and hasn't been implemented in current disks yet. That being said, the AACS spec is more complicated than the acces protection for DVDs, so I'm remembering something about the ability for the industry to "pull" compromised keys. Though, that may just be for hardware players vs. individual discs.

Jeff

ChrisWiggles

08-14-09, 10:26 PM

A regular DVD changer can only play one DVD at a time. By ripping them, K can do more, such as playing different DVDs in different rooms at the same time.

Right, I am very familiar with K-scape, you misunderstood me. What I meant was that if they are required to have the disc in the drive in order to descramble the CSS, then the only feasible way around that is to have a changer so that the system can physically verify that the disc is present physically somewhere on the system before serving up the content. But if you're stuck having to keep the disc somewhere in a carousel so that K-scape can "verify" that it is physically present somewhere before it will stream you the ripped version, it kind of begs the question of why not just stick with one of the various carousel based distribution methods? That won't make sense if you're streaming to multiple locations different things, but it makes the whole server streaming thing kind of silly if you still have to wait for a changer to spin around and check to verify that yeah, some movie you've ripped has its disc still physically present on the system to allow it to move forward and play that content.

That was the possibility I was envisioning.

rgbyhkr

08-15-09, 08:09 AM

Right, I am very familiar with K-scape, you misunderstood me. What I meant was that if they are required to have the disc in the drive in order to descramble the CSS, then the only feasible way around that is to have a changer so that the system can physically verify that the disc is present physically somewhere on the system before serving up the content. But if you're stuck having to keep the disc somewhere in a carousel so that K-scape can "verify" that it is physically present somewhere before it will stream you the ripped version, it kind of begs the question of why not just stick with one of the various carousel based distribution methods? That won't make sense if you're streaming to multiple locations different things, but it makes the whole server streaming thing kind of silly if you still have to wait for a changer to spin around and check to verify that yeah, some movie you've ripped has its disc still physically present on the system to allow it to move forward and play that content.

That was the possibility I was envisioning.

Yeah, I daydreamed for a bit on that very topic when reading the case details. I don't think it would be worthwhile pursuing for the reaosnons you mentioned and therefore I don't see K going this route regardless of how the case turns out, but I think there might be some creative solutions out there that might take a different form factor. A carousel system is just so slow, not to mention huge, so I wonder if someone couldn't come up with an alternate creative idea. If the bits can stream from the HDDs with the requirement that the disc is present (think XBox 360 Game rips), maybe there would be a way to store all those discs in a smaller form factor. Again, it's all academic as it would never be worth the effort but it might be interesting to see what someone creative came up with.

Jeff

howdydoody

08-15-09, 09:05 AM

Yeah, I daydreamed for a bit on that very topic when reading the case details. I don't think it would be worthwhile pursuing for the reaosnons you mentioned and therefore I don't see K going this route regardless of how the case turns out, but I think there might be some creative solutions out there that might take a different form factor. A carousel system is just so slow, not to mention huge, so I wonder if someone couldn't come up with an alternate creative idea. If the bits can stream from the HDDs with the requirement that the disc is present (think XBox 360 Game rips), maybe there would be a way to store all those discs in a smaller form factor. Again, it's all academic as it would never be worth the effort but it might be interesting to see what someone creative came up with.

Jeff
__________________

Actually, I think this is the only way out. The carousel does not need to be used to read the disk except initially. It needs to validate that the disk is in the system. I see no reason that the disk would have to be re-validated prior to stream as long as the carousel can log / document the removal of a disk (and prevent the streaming of the movie). All streaming would come from the hard drive as it does now.

Without this validation, I predict that they will ultimately lose in the courts. See the RealPlayer decision. Kaleidescape (as it stands) does not prevent making a copy of a rental movie. This is why they (RealPlayer) lost. The argument that the K system's extraordinary cost would not make financial sense to buy a system to circumvent purchasing movies does not hold water from a legal standpoint.

amirm

08-15-09, 11:48 AM

__________________

Actually, I think this is the only way out. The carousel does not need to be used to read the disk except initially. It needs to validate that the disk is in the system. I see no reason that the disk would have to be re-validated prior to stream as long as the carousel can log / document the removal of a disk (and prevent the streaming of the movie). All streaming would come from the hard drive as it does now.
I don't think this is in the cards for two reasons:

1. There is no contract/specification which stipulates this as a compliant system. If the DVD CCA contract is shown to be for playback only, then no system that copies its content will be deemed acceptable.

2. The industry has little motivation to enhance DVD to enable such scenarios. Hardware companies make no money from DVD players. And content companies want to move on to BD (as do many hardware companies). Indeed, this has been the barrier to having proper managed copy provision for DVD format. Folks want DVD to fade away...

QQQ

08-15-09, 11:59 AM

Amir,

I know you were initially involved in pushing for MMC for Blu Ray (or was it HD?)? Has anything concrete been published on MMC? Some critical issues off the top of my head:

1. Can a device be deauthorized so the disc can be ripped again to another device if I get rid of device 1? Without paying again?!

2. It appears to me it will be up to the studio to decide on the number of copies made. This seems absurd to me - there should be a minimum standard of 5. If MMC is going to have any value I need to be able to burn it to my PC, Kscape, portable device, and maybe a portable hard drive too. It's not like that's going to increase pirating either. I don't know of anyone sharing iTunes accounts!

3. How will portable devices be handled? If I burn it to my PC and then transfer it to my portable device, is that a second "rip"? Or is the portable device not considered a rip at all? Will the portable device expire?

We can take this to another thread if anyone objects, but I don't think there's too much else to discuss on this Kscape issue other than that we have to wait and see. I do think that adding a carousel is not going to happen. It would not even begin to solve the problem. I'd guess half or more of the K installations don't have space to be adding a bunch of carousels, on top of how undesirable that would be. Personally I'd like to see standard DVD totally die and be replaced with downloadable and Blu Ray.

rgbyhkr

08-15-09, 03:53 PM

Dizzman

08-16-09, 07:01 PM

k's original business plan was for downloadable content. the whole DVD thing was done to get going, create a user base, and show validity to studios.

besides the fact of what the intent of the "contract" is (that of course is the part in dispute) there is also the fact that the DVD CCA is contractually obligated to engage an ombudsman in order to work with k to find a resolution to the dispute. that was never done in the first palce and is part of the K cross complaint.

As much as we would all love this to be a fair use argument, it is not.

And you can rest assured that K is doing everything they can to ensure that MMC for BD is implemented in k. of course nobody yet knows how that will all work.

Mr.Poindexter

08-16-09, 10:43 PM

Here are two "truths" that will impact K's future:
1) Hollywood will not rest until it can implement "pay per view, any time, all the time"
2) Hard media - CD/DVD/BR - is in the last stage of relevancy. In the not too distant future, all media will be downloaded

Hollywood won't stop at pay per use. They want to be able to restrict access at will too.

Look at Disney taking movies off the market. They limit what months you can show them outdoors (via outdoor film licensing from Swank) and try to find a copy of Song of the South.

QQQ

08-16-09, 10:53 PM

http://www.techcrunch.com/2009/08/14/the-movie-studios-have-a-great-idea-to-ramp-up-piracy-and-blockbuster-wants-to-help/

iansilv

08-26-09, 06:57 PM

JlgLaw

08-26-09, 07:50 PM

Well, unless K can pull off blu-ray soon, or provide a definitive warranty on their products not being sued out of existance, this is going to affect their ability to sell. In fact, I would imagine failing to disclose this recent litigation setback to potential customers proactively may constitute fraud if thy are shut down to any new customers going forward.

I have always admired k, but it may be time to look at altenatives:

http://www.mymovies.dk/forum.aspx?g=posts&t=13196

Not one of the K owners I speak with regularly is really concerned about the ongoing litigation. It appears to me that most concerned people are non-owners. We, actual owners, chose to be with K for many reasons and have enjoyed ownership all of these past years while the fence-sitters continually justify why they don't own K (waiting for 1080p (it's here), waiting for BR, waiting for the litigation to end, blah, blah, blah...).

Not saying there aren't some concerned owners, but I'm in contact with a couple of dozen owners and they remain loyal and generally unconcerned. We all (those I know) believe that either K will prevail in the litigation, or we will have alternatives to continue our ownership of what is, IMO, the finest entertainment interface available.

Regarding litigation disclosure, that's up to each dealer. They are the party in direct contact with the buyer. I know my people (my A/V biz) discuss it whenever demoing a K system, and it hasn't affected sales (yet).

Jim

JlgLaw

08-26-09, 08:04 PM

Thought I'd add that while I can certainly understand a reluctance to buying into K at this point, it really hasn't affected the buyers we have seen. However, I do know that K is keeping an eye on what might be lost sales in order to prepare a case for their own damages going forward.

Jim

PeterS

08-26-09, 08:07 PM

QQQ

08-26-09, 08:10 PM

To add to what JlgLaw said, there are no monetary damages being sought by the DVD association, rather they are asking for an injunction that would stop K from selling the DVD ripper (player with ripper). That means if the worst case scenario happens, K has to stop selling a product that can rip standard DVD's. And soon they will have a product that rips Blu Ray. I could NOT CARE LESS if I can't rip regular DVD if I can rip Blu Ray.

Also, FYI there have been proposals by many members of the DVD association to to open up standard DVD's to a managed copy feature. One has not been accepted, but once it becomes standard on Blu Ray, it seems possible it might come to standard DVD's.

QQQ

08-26-09, 08:13 PM

K produces a nice system. However, when you can put together a great PC for under $10k which will stream and store DVDs and Blu Rays with full HD audio, and add extenders for about $300 - and there is no threat of going out of business from a lawsuit, I just don't see the point.
You never have but plenty of people do and plenty of people don't find your solution to be desirable. I can understand why many people do however, and don't feel the need to interject myself into every thread by a HTPC fan and say "I just don't see the point".

OtherSongs

08-26-09, 10:07 PM

OtherSongs

08-26-09, 10:09 PM

I could NOT CARE LESS if I can't rip regular DVD if I can rip Blu Ray.

Don't hold your breath.

Cheers

thebland

08-26-09, 10:25 PM

I'm plug and play. K is very slick with a very friendly interface. Playing with PCs is something I avoid like a colonoscopy. Who needs a PC when a simple alternative is already available? If I ever found time to watch movies, I'd own one!

Mr.Poindexter

08-26-09, 10:38 PM

I found that the time to watch movies is in inverse proportion to the frequency of posting on the net.

iansilv

08-27-09, 12:19 AM

Also, FYI there have been proposals by many members of the DVD association to to open up standard DVD's to a managed copy feature. One has not been accepted, but once it becomes standard on Blu Ray, it seems possible it might come to standard DVD's.

ok now this would be interesting- and here is a question for you or anyone who has a legal thought on this- what if the DVD idiots said no to K but then allowed, say Apple or M$ to implement DVD ripping- what then? Would that help k's case? Or open up another angle of legal defense?

QQQ

08-27-09, 12:32 AM

amirm

08-27-09, 03:13 AM

ok now this would be interesting- and here is a question for you or anyone who has a legal thought on this- what if the DVD idiots said no to K but then allowed, say Apple or M$ to implement DVD ripping- what then? Would that help k's case? Or open up another angle of legal defense?
Standard operating practice (to avoid anti-trust issues) is to follow "RAND" (Reasonable And Non-Discreminatory) licensing. So there is no fear of that.

It is actually the case that little companies get away with things that large companies cannot....

OtherSongs

08-27-09, 02:29 PM

I found that the time to watch movies is in inverse proportion to the frequency of posting on the net.

Sounds like a math major to me. :)

Cheers

bjzone

09-07-09, 11:22 AM

I still don't get it? Nobody spends 25k on a high end movie player/server to make illegal downloads, or copies? when i explain to people who see my K-scape for the first time what it does every single one always says "cool you could go to blockbuster and rent and copy movies all day long?" (NO!!! you miss the point) I like to buy and collect movies! i'm not looking to save $20 dollars with the 25 thousand dollar home theater investment i just made!

howdydoody

09-07-09, 09:37 PM

bjzone,
The problem is you could go to blockbuster and rent and copy movies all day long. The technology employed by K allows this. The price of the K is irrelevant.

vancouver

09-07-09, 10:22 PM

Would the same logic not count for fire arms as well? You could shot someone, so they should be illegal. Better yet, You COULD drink and drive so as a result no more beer.

would this not set a bad precedent for all computers as well?

howdydoody

09-08-09, 12:04 PM

vancouver,
you have no disagreement with me. I am for "fair use" copy. I am simply giving the reason for the judicial opinion on the RealDVD case. This has tremendous implications for K since K lost its recent court case. After the loss of the appeal, K is in essentially the same boat as RealDVD. RealDVD's boat is sinking.

PeterS

09-08-09, 12:20 PM

Dizzman

09-08-09, 02:10 PM

that is a flawed conclusion.

From the beginning K was above board. they analyzed the contract, found a way, suibmitted it, got a contract. the contract which btw says that any disputes will go to an ombudsman.

when the DVDCCA saw an issue they immediately went to litigation. there was no ombudsman appointed. so the DVDCCA broke the terms of their own contract. and THEY sued K. so all K could do was respond to the lawsuit. which they did. and won round 1. in round 2, the DVD CCA won. in round three? who knows.

IF (and it is a big IF) the DVDCCA wins round 3, k can still come up with a means to become compliant.

1. maybe it will mean that you need a bunch of changes in the basement that prove that the disc is still in the drive.

2. maybe they will give up on DVD since BD is close and getting closer to MMC (by close i mean to something that can be licensed and is not just an agreement surrounded by speculation on what it means.)

3. maybe they will release details on direct downloads (this was their original plan and they have some very unique patents that relate to content delivery and protection)

4. maybe they will go grey market since the only issue is the DVD CCA license.

5. maybe they will at that point initiate a DMCA lawsuit (should be no shortage of counterparties!)

Before making ridiculous pronouncements on the fate of k. take a long close look at the management. (http://kaleidescape.com/company/management.php) these are not your regular consumer electronics fly by night amateurs. the CEO founded NetAPP and what has become bluecoat systems. they are not going to roll over and they are not going to go away.

For the record, i worked there 3 years ago. i am a shareholder, however i have no knowledge of anything they plan to do. everything here is pure speculation.

What i do know is that they make a kick a$$ product that has no equal. and they will not be going away anytime soon. those that think they will, have not seen the product, and have not met the management.

howdydoody

09-08-09, 05:41 PM

1. maybe it will mean that you need a bunch of changes in the basement that prove that the disc is still in the drive.

I previously suggested something similar, but this idea was shot down. See below. I think amir is correct.

Quote:
Originally Posted by howdydoody
__________________

Actually, I think this is the only way out. The carousel does not need to be used to read the disk except initially. It needs to validate that the disk is in the system. I see no reason that the disk would have to be re-validated prior to stream as long as the carousel can log / document the removal of a disk (and prevent the streaming of the movie). All streaming would come from the hard drive as it does now.

I don't think this is in the cards for two reasons:

1. There is no contract/specification which stipulates this as a compliant system. If the DVD CCA contract is shown to be for playback only, then no system that copies its content will be deemed acceptable.

2. The industry has little motivation to enhance DVD to enable such scenarios. Hardware companies make no money from DVD players. And content companies want to move on to BD (as do many hardware companies). Indeed, this has been the barrier to having proper managed copy provision for DVD format. Folks want DVD to fade away...
__________________
Amir
Contributing Editor, Widescreen Review Magazine
Retired Digital Media/HD DVD insider (circa fall 2007)

Dizzman

09-08-09, 06:35 PM

the whole point is that if there is a conflict, then the ombudsman needs to sort out a solution. and if it is determined that the disc must be physically present... then that is one option. upon play, it reads the index or something like that.

My intention was merely to point out that there are plenty of potential options. and in reality, most of them are silly. when K was initailly planning the system they even explored a system that might destroy the disc (unreadable) once you imported it. but they rejected the concept.

as amir did point out though, this will all be very helpful in killing DVD. if all of a sudden there are loads of ways you can make fair use of your media when it is BD, then the reality is that many many people will gravitate that direction.

Dizzman

09-08-09, 06:38 PM

This signifies the end for K. The problem was in how they went about it. They were too "high-profile" and tried to "sneak one by". Had they been a bit more direct and gone after the DMCA they might have had a chance. Through the odd way they decided to interpret their license, there was no way possible this would work.

the fact is anybody who is interested in media servers should pay close attention. whether it is K, Escient, Niveus, Request, Blue Smoke... whomever.

K has created a system that not just complied with the contracts, but went to great lengths to exceed the needs. and to secure content to a level that is bullet proof.

PeterS

09-08-09, 07:13 PM

Actually, we have consulted with attorneys on this and have been expecting this for some time. K went ahead and obtained a license and using some legal manuevering claimed that the relevant parts of the agreement did not apply as they were not part of the original document, but additional components, which they then deemed "optional" to compliance. It was a very, very thin arguement and not one which was going to stand up. There is an issue in the law regarding "intent" and they clearly violated it.

This ruling will only jurt DVD copiers though and should not hurt BD-DVD should Managed Copy ever come to exist (I think not for many, many reasons). It will also not hurt Niveus or Blue Smoke as our boxes do not come equiped to do this - however as they are computers, whatever you install on them is up to you.

QQQ

09-08-09, 07:19 PM

Dizzman

09-08-09, 07:26 PM

that is the lamest argument there is. and the one that k has been trying to avoid. Simply stated then, you make a product that is perfectly legal as it is. but hey... if you happen to go load this HIGHLY ILLEGAL software and add it in using this handy utility we made... (i have no direct knowledge if you make it as easy as some) then YOU are breaking the law... but not us!

I used to love pointing dealers to the verbiage that one of the companies had on their website to clear themselves of liability. at the end of the day, products are made to do task a, b and c. IF i also allow it to do D... but i am not "actually" making it do so... am i complicit? the answer is yes. it would be a very simple thing to block DVD playback, but to not do so... well then, if a customer wants to do something grey market... hey, its his box.

when K signed the agreement, it said nothing about disc being present. so you have to sign the aggreement and then you get to see the part that makes the stipulation. so the argument is whether it is part of the agreement as signed onto.

Call it thin if you like, the first judge disagreed with that. and K has some very high powered legal minds on their side and would not go into something that would take millions of their own dollars (no VC involved, just private equity) on a
very, very thin arguement and not one which was going to stand up.

It is easy for others to stand on the sidelines and not even state their affiliation with the market sector and make pronouncements of impending death. but the only people that are hurting the future of MMC are NOT THOSE who make products that are as secure as fort knox and protect copyright. it is those who continue to make grey market products and then blame those bad ole consumers since,
however as they are computers, whatever you install on them is up to you.

Dizzman

09-08-09, 07:27 PM

Pretty Vague isnt it Q...

PeterS

09-08-09, 08:39 PM

Dizz, are you an attorney? I don't think so.

First, it is quite common to sign an agreement, with its intent clear, only to get the corresponding technical specifications on how things work and need to work once the documents are signed. This is all that happened in the K case.

As for your first arguement being "thin", by your description ALL computers would be illegal, as there is software available which allows you to do illegal things with them. This is obviously not the case. The Black Box uses all legal and licensed software, as does Niveus. Does this stop someone from buying and loading other software on it? No. Is there software out there which allows these illegal activities? Yes. Do we support or condone it? No!

The issue here is a fundamental one. K tried to "get away" with an end-run and a very poor arguement. The proper attack is to repeal the DMCA - good luck on that one, but it is patently unconstitutional in its current form, and needs to go back for some revision.

JlgLaw

09-08-09, 08:54 PM

Do we support or condone it? No!

So you make a box intended for that very purpose and then have the nerve to make a statement like that?:rolleyes:

At least K had the b**** to continue the fight while the rest of you backdoor whiners sat back making your products and winking at your customers about their intended use!

BTW, many attorneys found K's argument to be valid, and still do (and yes, I'm an attorney).

Jim

PeterS

09-08-09, 09:20 PM

No, we make a Home Theater PC, same as Niveus and many others.

The fact that some people rip DVDs with it or any other PC for that matter, is not something which is in our control.

QQQ

09-08-09, 09:25 PM

So you make a box intended for that very purpose and then have the nerve to make a statement like that?:rolleyes:

His may be some of the most inexcusable behavior I have ever seen on a forum. Here is has been making statements about Kscape, even "this signifies the end for K", and not bothering until this point to mention that he owns a wannabe competitor to K. Just amazing.

Also, I'd like to suggest that no one allows themselves to be further sucked into debating with this guy on the Kscape issue itself, it's not worth the time.

JlgLaw

09-08-09, 09:52 PM

His may be some of the most inexcusable behavior I have ever seen on a forum. Here is has been making statements about Kscape, even "this signifies the end for K", and not bothering until this point to mention that he owns a wannabe competitor to K. Just amazing.

Also, I'd like to suggest that no one allows themselves to be further sucked into debating with this guy, it's not worth the time.

Agreed, simply not worth the effort.

Jim

PeterS

09-08-09, 10:22 PM

You guys are "certifiable"!

We do not make a K "wannabe", we sell a HTPC. Are you saying that ALL HTPCs are K wannabes?

You have to realize that this is about companies clamping down and trying to protect their intellectual property through questionable legal tactics, not through compelling business practices. K got up and "thumbed their nose" at these guys and that is never going to work.

First, we have to have laws which encourage business and technical innovation, not stifle it. Second, we have to have strong courageous companies willing to go after bad practices and bring them down. K did not do this, they tried to exploit something they thought was a loophole in the agreement. They failed.

I, for one, do not see how they survive this. I hope they do, sincerely, as I think that the practice of killing technology through legislation is a very, very bad precident to set.

QQQ

09-08-09, 10:31 PM

You guys are "certifiable"!

We do not make a K "wannabe", we sell a HTPC. Are you saying that ALL HTPCs are K wannabes?
I knew when I posted you wouldn't even get what you have done wrong. As I said, just amazing.

PeterS

09-08-09, 10:33 PM

Q - I give up. Your posts in other threads I have followed have been equally insane.

howdydoody

09-08-09, 11:35 PM

QQQ,
Unlike PeterS, I have read your posts for years and almost without exception, I do agree with them. I do disagree, however with any contention that PeterS's posts are "inexcusable behavior". He has valid points. He may have a good product (or may not - I have never heard of them). I do appreciate his input and viewpoint. I am looking for a solution for multi-zone distribution of dvd and bluray content. I am not considering K as I do think they are doomed. I disagree with dizzman. He contends that I am doing something illegal if I buy a dvd, buy an HTPC, buy a legal software program (anydvd HD is legal in the country I buy it from) and use it for what I perceive as "fair use". I have been given a quote for Crestron HDMI distribution 8X8, but at 30k+ without labor or their media player I am less than enthusiastic.

I would like to use an analogy (although I recognize that I am inviting criticism). Let's recognize that it is unlawful (in any part of the US) to sell a replica of a Rolex watch. It is not, however, unlawful for me to buy this same watch in China and own this in the USA. It would be unlawful for me to set up a business to sell such watches, but that is not the point. I can own the watch. I can own Anydvd HD. No law prevents this. If I were to load this onto a computer and sell it - this is another issue. I can use this software for fair use. There is no proscription against this.

Will MPAA sue me for my copying of dvd's or bluray disks that I have bought to my hard drive? Come and get me! Won't happen. I don't share my files with anyone else. I am not involved in a commercial enterprise that benefits from this. Will they attempt to litigate HTPC manufacturers that optimize my ability to use AnydvdHD? Not a chance. Are these HTPC companies taking the easy way out compared to K "taking on the man"? Please! Let's not get personal here. Business is business.

I am a customer / end user. Let me define what I want. I want to purchase a network of configured HTPC's that I can load my software to allow me to stream my purchased DVD, bluray movies to any display in my house with a good interface (DVD artwork etc). I also want a Crestron module (rs-232 interface) for this so that I can control with a touchscreen rather than keyboard or even IR. AVS is great. With time, I could piece this together (although my Crestron integrator won't want to waste his time on me if I don't buy K), but I want it as easy as I can get.

QQQ

09-08-09, 11:59 PM

QQQ,
Unlike PeterS, I have read your posts for years and almost without exception, I do agree with them. I do disagree, however with any contention that PeterS's posts are "inexcusable behavior". He has valid points...
howdydoody, I am surprised at your response because it's not PeterS's opinions which I find inexcusable, and therefore am not going to respond to those parts of your post. It's the fact that he is making negative comments about a competitor (in this thread and many others) and only just now for the very first time divulged that he owns a competing company. And BTW, for him to classify his product as an HTPC as if that makes it "different" is ridiculous. He owns a company that is manufacturing an expensive media server, who cares what the OS is?

Let me put it this way. To my knowledge I have never directly criticized a competitor on a forum. It is inconceivable to me that I would go on a forum and anonymously take potshots at a competitor by name, even going so far as to say "this signifies the end of them" without divulging that I am one of their competitors (which admittedly he finally did). Do a search on Peter's posts, this is not the first thread. He has posted in many other threads about Kscape, while lauding HTPC's, and here on page 3 of this thread for the very first time we learn that he owns a competitor to Kscape and surprise of surprises, they sell an HTPC based system! If he wants to give critiques on Kscape he should clearly state in his sig that he owns a competing company and remind people of same in any posts he offers on them or ANY other competitor.

howdydoody

09-09-09, 12:54 AM

QQQ,
OK, I understand where you have an issue. I have not been following posts of PeterS. I do agree that transparency is important when posting.
Kevin

PeterS

09-09-09, 07:21 AM

Q - FYI, I am not criticizing K's products, technology or other areas upon which you and I would agree, would be unreasonable, only its on its legal strategy.

This is something which I feel MUST be debated and discussed both within the industry and from without. Unless we analyze what went wrong and what to do about it, we shall all suffer.

Do you suggest we all sit around and say/do nothing? I am not interested in quietly accepting this. I am not interested in your perceptions of perceived protocol. I am interested in understanding what happened and finding a way, a legal arguement, which will work. While you may consider us a competitor, I do not. However, I will agree that the problem K has found itself in can and will expand to the more general computer consumer should we sit by and do nothing about it - in this case we are in the same boat. However, we are no more competitors than any computer company would be with the manufacturer of CD-Players.

I hope you can put aside whatever obscure rules you deem appropriate and get down to the issues. This MUST be discussed and debated! This MUST be analyzed and challenged! Not just by consumers as part of a mental exercise, but by those whom it might affect.

The fact that a company I do work for makes computers has nothing to do with this, other than I may have a bit more insight into this than some others. The number of people on this very forum who work for computer and/or software companies who may have a stake in this would surprise you. Do you suggest that they all "register" as such before posting?

(PS - While "involved" with Blue Smoke as a designer, I am not an "owner" of the company - just to clarify)

markrubin

09-09-09, 07:36 AM

Moderator

Peter, you and any member are free to post here and express your opinions.

You also have a duty to disclose any affiliation you have in the industry

PeterS

09-09-09, 07:48 AM

I will add Blue Smoke to my signature. Had not in the past as I did not think it appropriate to "advertise" as such. However, if this is prefered, then so be it.

LJG

09-09-09, 08:52 AM

QQQ,

I am a customer / end user. Let me define what I want. I want to purchase a network of configured HTPC's that I can load my software to allow me to stream my purchased DVD, bluray movies to any display in my house with a good interface (DVD artwork etc). I also want a Crestron module (rs-232 interface) for this so that I can control with a touchscreen rather than keyboard or even IR. AVS is great. With time, I could piece this together (although my Crestron integrator won't want to waste his time on me if I don't buy K), but I want it as easy as I can get.

You should look into the Axonix Mediadeck 4 or Mediadeck Pro, it does everything you require now

Art Sonneborn

09-09-09, 09:47 AM

I know this is changing the subject now but do you guys feel that Kaleidescape will come out of this with a BD solution while it matters ?

Art

amirm

09-09-09, 11:31 AM

I know this is changing the subject now but do you guys feel that Kaleidescape will come out of this with a BD solution while it matters ?

Art
Viability of a BD solution is harder to determine. I suspect they will be able to come up with a system that passes the requirements for copy protection from AACS-LA though it won't be easy.

Key differentiation here is that BD copies may not be free. Even for clients who don't care about the cost, having to put in the billing info for the transaction and keeping them current, may be an issue. I am hoping the industry will give away the copies with a smooth and bug-free transaction system. Otherwise, legitimate systems will be disadvantaged relative to "unamnaged" copy solutions from functionality point of view.

Net, net, there are some unknowns for them even in the BD managed copy case.

Dizzman

09-09-09, 12:41 PM

knowing what is behind the K front end and the level of the people involved, i would say that k has as good a chance as any (and far better than many) to make the system fully compliant with the MMC provisions.

now, having said that... the reality is that nobody knows if this will ever come to fruition in a truly meaningful way. with different rules from studio a vs b. and maybe different rules on a title by title basis... the reality is that it may end up so confusing that trying to implement a product with MMC enabled could be product suicide.

Consumers will not understand the differences. nor will they care. they want something that works out of the box.

And with ipods and youtube and the like, the reality is that consumers want their media anywhere, everywhere and anytime.

So while products like axonix and blue smoke and niveus and Fusionrd (oy vay!) allow you to do that, they rely on something that if it moved its headquarters to the us shores for even a second, they would be shut down so fast that it would make your head spin.

We can argue fair use all we want, and claim that it trumps the DCMA, but until a court says it, it is not the case. And no, the DVDCCA is not going to come busting down your door for using it, nor is the RIAA going to charge you for ripping music unless you actually traffic the stuff.

And in the end, as has been stated many times, this is not a fair use case. it is a contract law case that one judge agreed with, one didnt, and many legal minds also agree with. the fact that some do not... well that is why there is a legal system. I know the owners of k, and i know that they are far too smart (well, not that smart, they fired me! :( ) to risk millions of their own dollars on a flimsy legal argument.

And as far as doing an attack on the DMCA, they did not have a case for that. they were not sued under copyright law. last i checked, you respond to litigation you are served, not the litigation you feel like.

Also look at how all this played out. making a box that "happens" to be able to play dvd's (hey, we can't control our customers) would have been one hell of a lot cheaper and easier than trying to build one that gave full flexibility AND fully protected all copyright, and all the other agreements they had to comply with. K had communicated fully with the DVD CCA and had been selling product for a while before they were suddenly hit with the suit (not with a warning and "invitation" to work with an ombudsman as was dictated as the process by the DVDCCA's own contract!)

So even if K is found in breach, the DVD CCA is still bound to work with them to find an equitable solution if possible.

sierraalphahotel

09-09-09, 01:29 PM

K had communicated fully with the DVD CCA and had been selling product for a while before they were suddenly hit with the suit (not with a warning and "invitation" to work with an ombudsman as was dictated as the process by the DVDCCA's own contract!)

So even if K is found in breach, the DVD CCA is still bound to work with them to find an equitable solution if possible.

Do you think the DVD CCA waited to see how successful K would be in financial terms before deciding to start their suit? In other words, had K failed and made no money, would the DVD CCA have been all that bothered?

Perhaps I misunderstand the suit. What do the DVD CCA have to gain from all this?

Dizzman

09-09-09, 01:42 PM

PURELY IN THE WORLD OF SPECULATION>>>>>
*****************************
It sure looked like once K started getting lots of traction, and winning awards, and getting lots of press... the suit came. Some speculation among dealers and others was that some manufacturers in the DVDCCA wanted to make their own, so a lawsuit would make K go away.

No idea what they will gain. K owners buy way more DVD's. the reality is that the DVDCCA is doing two things.
1. Shutting down many potential licencees.
2. Making themselves more and more irrelevant by pretending that i cannot find 30 ways to defeat their software in 10 seconds.

Ask a question...
why isnt AMX Max being sued? they make the same thing.
Why isnt fusionrd being sued? they claim (in a really vague inference) on their website that they have a license. (although their website gives no info whatsoever on their location.)

It is odd and perplexing. build a product, license everything, go to extreme measures to protect content, SPECIFICALLY avoid HIGHLY DESIRED features due to the fact that they could possibly impact the perception of content protection... get sued!

markrubin

09-09-09, 01:51 PM

I have been following the K lawsuit ever since it was originally filed:

I was angry when I first read of the suit, because it seemed that K went out of their way to do everything correctly

now, the more I read about it, the angrier I get

[disclaimer: just my opinion of course]

lymzy

09-09-09, 02:04 PM

I know the owners of k, and i know that they are far too smart (well, not that smart, they fired me! :( ) to risk millions of their own dollars on a flimsy legal argument.

I guess K is betting on the future change of content delivery chain.

If you take DVD out of their equation, K's most valuable asset is still unaffected IMHO.

Their UI/OS and especially their movie information service set a very solid foundation. If combine with the right delivery method, it would make a kill in the mass market.

Recent streamers based on 864x SoC like popcornhour C200/Dune Prime/others can stream bluray iso/file structure 1:1 rip. Most bluray players would have that function in the near future as well. But they all suck in UI and you have to organize the collection by yourself.

If K could release a frontend below $500 combine with their movie information service, it surelly will dominate the streamer market. The potential user base might also gain them clout in securing new form of content delivery deal.

I don't think manage copy, if it ever comes, would change anything for K.

Dizzman

09-09-09, 03:24 PM

When k started, they wanted to do over the internet delivery. the studios all said, come see us when you have an infrastructure in place.

lymzy

09-09-09, 04:10 PM

When k started, they wanted to do over the internet delivery. the studios all said, come see us when you have an infrastructure in place.
Infrastructure is just an excuse. People could download >50GB per day from those usenet provider using cable internet for a $10-$15 monthly fee. K could certainly support their user base on current infrastructure.

The problem is studios won’t license their content in HD unless you have mass distribution on the table first. In addition, once the infrastructure is in place, who could say K wouldn't be pushed around by the big guys like Sony, Apple or MS assuming we do have a delivery method without the physical medium in future?

Streaming dvd and bluray will be commoditized very soon in SoC based bluray players regardless of MMC/MC. XBMC which support automatic movie information scrap is getting very close to the K's UI. Advance system integration is not important for the mass. If K does not take their UI and movie information service to the mainstream in the near future, they might risk being an irrelevant player and only serving the niche market.

If DVDCCA pushs too hard and MC never really materialize, would K release a system which let customers do the ripping?

Dizzman

09-09-09, 05:53 PM

i have no idea what plans k has in the works should the lawsuit not go well.

However i know that they are smart and not planning on seeing their money go south.

sipester

09-09-09, 11:09 PM

PURELY IN THE WORLD OF SPECULATION>>>>>
*****************************

Ask a question...
why isnt AMX Max being sued? they make the same thing.
Why isnt fusionrd being sued? they claim (in a really vague inference) on their website that they have a license. (although their website gives no info whatsoever on their location.)

It is odd and perplexing. build a product, license everything, go to extreme measures to protect content, SPECIFICALLY avoid HIGHLY DESIRED features due to the fact that they could possibly impact the perception of content protection... get sued!

That's what I can't figure out. You listed two products, but there are so many high-end HTPC makers out there that broadly advertise Blu-Ray ripping such as Niveus, Axonix, Inteset, Vidabox to name a few. Sure, in fine print they say only unprotected Blu-Ray's work (like who has any of those, other than your Blu-Ray home videos??), but in all the glossy advertising, they list screen shots of being able to play Blu-Ray titles that are major Hollywood hits that, as far as I'm aware, there is no way of which to get in an unprotected format.

So as usual with most laws, the ones that go to the extra work to follow the law exactly get punished, and the ones who skirt around the issue (by having folks download slysoft) get away with it.

There must be something else going on behind the scenes that we aren't privy too since this lawsuit doesn't make sense to most of us here.

QQQ

09-09-09, 11:22 PM

There must be something else going on behind the scenes that we aren't privy too since this lawsuit doesn't make sense to most of us here.

You evidently haven't been paying much attention to Hollywood :). Are you aware of the infamous lawsuit that made it all the way to the supreme court in which Hollywood tried to stop the VCR from being made? They lost the case and the result was that Hollywood ended up making billions of dollars from the VCR.

There is nothing going on behind the scenes, you are assuming you are dealing with reasoning people. These are the same types of people winning million dollar judgments against single mothers who downloaded a few songs on the Internet (not that I condone stealing but come on).

If these companies were run by Silicon Valley types who thrive on new technology they would have figured out how to adapt to current technology years ago.

PeterS

09-10-09, 11:03 AM

Hi - my name is Peter, and I work with Blue Smoke Entertainment Systems!

Now, on to the reason for this post. Seems K is alive and kicking. They just introduced their iPhone remote app. It is going to cost an additional $69!

Here is a quick demo: http://www.engadget.com/2009/09/10/kaleidescape-joins-the-iphone-as-a-remote-party/

Isn't the iTunes and Sonos remote control app free? I know that Control4 also charges for theirs.

Dizzman

09-10-09, 12:22 PM

it was introduced a while back. remotescape put it up. they are run by one of the ex founders of k.

Remotescape is a seperate compnay that provided something that works like a mini crestron, so they felt the user community would be willing to pay.

Jinjuku

09-10-09, 12:55 PM

bjzone,
The problem is you could go to blockbuster and rent and copy movies all day long. The technology employed by K allows this. The price of the K is irrelevant.
You could drive your car through the front door of a bank. What is your point?

Jinjuku

09-10-09, 01:00 PM

This signifies the end for K. The problem was in how they went about it. They were too "high-profile" and tried to "sneak one by". Had they been a bit more direct and gone after the DMCA they might have had a chance. Through the odd way they decided to interpret their license, there was no way possible this would work.

The didn't try to sneak anything by. Laws and contracts are ALWAYS open to interpretation. That is just the way of it.

K* read the licensing agreement one way, the DVD CCA read it another. The first court agreed with K*. The 2nd one agreed with the DVD CCA. Now it is back to the courts on appeal.

What does the DMCA have to do with this? No content control system was circumvented in the making of the K* product.

Oh, and their interpretation did indeed work... How could think it didn't. Have you been waiting 2 1/2 years to be able to post this?

Jinjuku

09-10-09, 01:07 PM

You guys are "certifiable"!

We do not make a K "wannabe", we sell a HTPC. Are you saying that ALL HTPCs are K wannabes?

The only want "certifiable" transparency and disclosure from someone that is indeed a potential market rival of K*.

I didn't see you offering up you industry affiliation in your initial posts until someone figured it out. That can easily be construed and disingenuous and lead to a credibility problem for you.

Me, I am just consumer of movie and music that is tired of being called a criminal.

markrubin

09-10-09, 01:09 PM

The only want "certifiable" transparency and disclosure from someone that is indeed a potential market rival of K*.

I didn't see you offering up you industry affiliation in your initial posts until someone figured it out. That can easily be construed and disingenuous and lead to a credibility problem for you.

Me, I am just consumer of movie and music that is tired of being called a criminal.

you may have come late to the thread: please read all the posts first: Peter has made the proper disclosures

move on please

howdydoody

09-10-09, 01:46 PM

Quote:
Originally Posted by howdydoody
bjzone,
The problem is you could go to blockbuster and rent and copy movies all day long. The technology employed by K allows this. The price of the K is irrelevant.

You could drive your car through the front door of a bank. What is your point?

The point is that the car is not designed to specifically drive through the front door of a bank. It has a vast number of other purposes. The K system has one purpose and according to the judge in the RealDVD case, this purpose violates the terms of the licensing.

Dizzman

09-10-09, 01:56 PM

Me, I am just consumer of movie and music that is tired of being called a criminal.

In the end... this is the kicker.

It reminds me of one of the arguments that Real made in their case. they said that if this was to be used for trafficking... there are FAR easier ways and far better ways to do it. to use this program for trafficking is ridiculous.

I talked to a friend the other day who works for a PC company. we talked about this whole issue. He has a HTPC at home and STARTED ripping DVD's using one of the many programs. within a day he gave up as the cost of the drive, the time to do it and the pain in making it all work was far too great (for him). so the thought of getting all the content in from netflix and then ripping it in order to save the 18$ for the disc was ludicrous.

THe reality is that like in music... once there are legal ripping products the DVD sales will go way up. and sure, some folks will rip them from BB. But guess what? they already are. with more tools than you can imagine. And sure, some folks will rip that brand new release... but then likely buy it once it is available.

The trick is not in trying to stop ripping, it is in making it so that you cant do anything with that rip on your hard drive.

Dizzman

09-10-09, 02:02 PM

iansilv

09-10-09, 06:49 PM

there was a case a few years ago for some sharing site. i cant recall the name.

They argued that hey... we cant control what people put on the system and share. we just make a tool (sound familiar???)

But the response from SCOTUS was that there has to be a distinction between something that CAN be used for nefarious purposes and something that is BUILT for nefarious purposes.

So a car CAN be used for driving through the front window of a bank but was not BUILT to drive through bank windows.

So if a case ever comes up for K with regards to copyright or anything close to DMCA, then there may be something to argue.

This one is not.

It was Grokster- I just learned about this case in law school. They tried to argue exactly what you said, but the court said that the only reason for their existence was to share copywriter content, so they lost.

Here is the thing with K- I believe- and someone can correct me if I am wrong- I believe that K has a patent on the specific way they copy the disks without breaking the encryption, and because the copy resides in an encrypted environment and cannot be copied from there, they argued that it was in compliance with the DVDCCA's contract- then the DVDCCA added a clause to the renewal contract that stated a disk must be present in a drive for playback, and K was sued for not complying with it- but they argued that this was a new, material change to an ongoing licensing agreement and therefore was optional.

Am I off here?

QQQ

09-10-09, 07:09 PM

Here is the thing with K- I believe- and someone can correct me if I am wrong- I believe that K has a patent on the specific way they copy the disks without breaking the encryption, and because the copy resides in an encrypted environment and cannot be copied from there, they argued that it was in compliance with the DVDCCA's contract- then the DVDCCA added a clause to the renewal contract that stated a disk must be present in a drive for playback, and K was sued for not complying with it- but they argued that this was a new, material change to an ongoing licensing agreement and therefore was optional.

Am I off here?
You are spot on.

Now with regard to the issue some others have brought up, as much as I love K, I can say with confidence even without being an attorney that the price of it is totally irrelevant. To argue that "people don't buy a 25K server so they can rent movies at Blockbuster and put them on their server" is just totally irrelevant from a legal standpoint. It's also a weak argument because the fact is there there will be some people who use it that way.

The differentiating factor is I think what Dizzman so perfectly said. The purpose of the product is NOT to allow stealing even if some people might use it that way. That is at least for me a very worthwhile distinction.

iansilv

09-10-09, 09:54 PM

Well, over at engadget they've the first video of a working managed copy from bolt by pioneer. It is everything we imagined... :( there is a cost if the studios shoos to implement it, and I don't believe it copies it at the same quality as from the disk as I think there is some transcoding going on...

I will not pay for making a copy of a disk I own.

I will not use managed copy if the quality is not equal to the disk I bought.

howdydoody

09-10-09, 10:04 PM

The differentiating factor is I think what Dizzman so perfectly said. The purpose of the product is NOT to allow stealing even if some people might use it that way. That is at least for me a very worthwhile distinction.

Exactly. K and RealNetwork are being punished for a "contract violation". Had they chosen not to contract, they might be in a better position legally. I do think that Dizzman is correct in that they might have been able to prevail if a suit had been brought against them for violation of DMCA. At the very least, the constitutionality of the DMCA could and should have ultimately been brought into question. OTOH, I am a doctor and not a lawyer.

iansilv

09-10-09, 10:15 PM

Exactly. K and RealNetwork are being punished for a "contract violation". Had they chosen not to contract, they might be in a better position legally. I do think that Dizzman is correct in that they might have been able to prevail if a suit had been brought against them for violation of DMCA. At the very least, the constitutionality of the DMCA could and should have ultimately been brought into question. OTOH, I am a doctor and not a lawyer.

I think the constitutionality argument is what the DVDCCA wants to avoid... and let the law stand as a threat to people who are thinking about copying and not distributing...

PeterS

09-10-09, 10:19 PM

Howdydoody,

Exactly my point from before.

Problem with the agreement that they signed is that there is something known as the "intent" of the agreement. You can argue all day that the wording could be read one way or the other, however I think it is disingenuous of them to claim that they were unaware of the intent and that they were planning to go against the intent of the agreement.

Had they not had access to the technology through the agreement, and clean-roomed it on their own, they then could argue vis-a-vis the constitutionality of the DMCA. Not an easy road to go down by any stretch, but a more honest and direct approach for sure.

sipester

09-10-09, 11:00 PM

You evidently haven't been paying much attention to Hollywood :). Are you aware of the infamous lawsuit that made it all the way to the supreme court in which Hollywood tried to stop the VCR from being made? They lost the case and the result was that Hollywood ended up making billions of dollars from the VCR.

There is nothing going on behind the scenes, you are assuming you are dealing with reasoning people. These are the same types of people winning million dollar judgments against single mothers who downloaded a few songs on the Internet (not that I condone stealing but come on).

If these companies were run by Silicon Valley types who thrive on new technology they would have figured out how to adapt to current technology years ago.

I must have not made myself clear, I am fully opposed to the ridiculous way Hollywood and those related parties have made such a big deal out of DRM. My point was that if Hollywood is so big on going after everyone from big to small, including those like K* that have gone out of there way to be legal, why haven't they gone after the high-end HTPC makers so that so boldly claim to have DVD & Blu-Ray servers? As stated above, I know there is the fine print on their websites about unencrypted only, but all their marketing shows DVD's & Blu-Ray's that can't be obtained in an unencrypted format (unless you use slysoft or something else to make in unencrypted).

So if they think they have a case against K*, it would seem that it would be that much easier to go after the high-end HTPC makers, so that's the part that I don't understand.

QQQ

09-10-09, 11:13 PM

I did not think you were not opposed, I was simply answering your comment that there is something going on behind the scenes that makes this "make sense". There isn't.

With regard to your question about why Hollywood is not going after these other companies it's because they are much harder targets. Kscape and Real are "real" companies (pun intended). Now go to AnyDVD's website and try to find out where they are located. http://www.slysoft.com/en/contact.html I don't know if Hollywood could legally shut them down but even if they could they are very hard to go after, and often operate in foreign countries, and can pop up on the web under another name as soon as they are shut down. The product is a "cyberspace" product, downloadable, and again, very hard to shut down. Again, Real is the exception because they will actually honor a court decision and you won't find their software popping up 1 month later under another name.

And they aren't going to go after any of the HTPC companies because there's not a thing they can do to them. All they (HTPC sellers) are doing is selling perfectly legal computers.

Dizzman

09-10-09, 11:52 PM

Here is the thing with K- I believe- and someone can correct me if I am wrong- I believe that K has a patent on the specific way they copy the disks without breaking the encryption, and because the copy resides in an encrypted environment and cannot be copied from there, they argued that it was in compliance with the DVDCCA's contract- then the DVDCCA added a clause to the renewal contract that stated a disk must be present in a drive for playback

From what i understood, there is a general agreement and a specific technical agreement.

the "contract" claims to involve both, but you can only see part one when you sign.

the tech part has the specifics about the disc being present. but since you cant see it when you sign the contract... is it part of the contract?

That is what is being argued.

The underlying issues are
1. Why only K
2. Why after a while of selling product and not right away

In the end, MMC will likely be done so badly that it will have the same affect as not having it at all.

My estimate is that BD is the last of shiny silver polycarboante discs and it will never reach the depth of DVD due to the growth of streaming and the like.

Look at that LG DVD player for 200$ that can stream from the netflix library. and my previous director is the guy in charge of streaming at netflix... they are going nuts with that stuff.

Over time... why even buy it? stream it!

iansilv

09-10-09, 11:57 PM

lymzy

09-11-09, 12:31 AM

Over time... why even buy it? stream it!

There needs to be a download to own model.
Stream could not bring >=bluray quality in the foreseeable future.

K might want to strike a deal with Hollywood so they could use their hotswap drive to distribute movie on HDD just like those for dolby servers. One movie would be 80GB-200GB I guess.

Dizzman

09-11-09, 01:29 PM

There needs to be a download to own model.
Stream could not bring >=bluray quality in the foreseeable future.

:)

Dizzman

09-11-09, 01:32 PM

K might want to strike a deal with Hollywood so they could use their hotswap drive to distribute movie on HDD just like those for dolby servers. One movie would be 80GB-200GB I guess.

This was part of their original plan. THe reality is that hollywood it reticent to open the holy of holy's to smaller companies and ones without massive reach. so from my perspective, there would likely be a comapny the over time becomes the defacto distribution source that has the massive reach. they then sub license to other providers that maybe have access to better quality, bit depth, etc. they then add their own metadata, AR, etc.

Just a thought.

Dizzman

09-11-09, 02:23 PM

For me, buying is superior to streaming for collectibility and certainty. When I want to watch a movie, I want to be certain I can based on circumstances within my control, not relying/worrying about factors concerning my internet connection or anything else.

Buying downloadable movies... that's a different story. Show me itunes with resolution and sound quality equal to Bluray, but better compression on the video side that leads to better color and overall video quality, with meta data streamed about AR and everything else, and you will make me a customer.

Until then, Bluray is king.

The thing is, while bluray may be king... with the other limitations that may come our way with draconian MMC, etc... and the fact that streaming is becoming more and more ubiquitous every day, (there is even talk of cell phones having access to 3-400 meg download speeds) our perception will radically change. And Streaming may become the Ace!

I have ATT Uverse. so my house has a (from what i gather from their info pages) 20 meg pipe. and somehow i can stream HD at a moments notice. i will not for a second claim that this is equal to BD, but in 3-4 years...

iansilv

09-11-09, 03:16 PM

This was part of their original plan. THe reality is that hollywood it reticent to open the holy of holy's to smaller companies and ones without massive reach. so from my perspective, there would likely be a comapny the over time becomes the defacto distribution source that has the massive reach. they then sub license to other providers that maybe have access to better quality, bit depth, etc. they then add their own metadata, AR, etc.

Just a thought.

I don't understand this reasoning. I would think that Hollywood wants to deal with smaller distribution partners to consolidate power, and avoid Apple and Microsoft owning the main distribution channels...

Dizzman

09-11-09, 03:30 PM

since the work "hollywood" in this case means many different studios, it gets more complex.

However if i was going to give you access to the vault, there would be a tremendous amount of vetting required. and i would not relish doing that numerous times. security, technology, tracking, billing, etc is a massive undertaking. so you have to set standards. and in order to meet those standards, you need massive backbone. and massive infrastructure.

YOu need Amazons Billing systems, Akamai's Streaming power and Verisign's security and reliability framework.

So the point is that the barrier to entry goes up fast. Since you have to do this with 10-20 studios (or more) it becomes almost impossible for smallish companies (potentially, i am merely thinking out loud)

If i am going to give you access to the pure bits for star wars and titanic and everything else, i also have to be REALLY REALLY sure that you are not going anywhere. because i do not want my bits to suddenly dissapear out the back door once you close up shop.

not saying that it is impossible, just that to my brain it seems more logical that there is an infrastucture and huge business opportunity to be that clearinghouse. and it sets up way more possibilities for reach.

I know that apple, microsoft, netflix, and many others would happily fill that need.

FOrget a HTPC, Take all the great things of K, but allow the content reach of Apple. and then imagine that wehn you stream it, it copies locally, if you do not watch it for a while, it deletes half of the movie (so you can still start it, but have time to stream the rest before you hit the middle of the movie) and new blockbusters get pre-loaded on to the box based on you ordering them and the day orf release, an embargo is lifted...

The possibilities are really endless.

In the end though, we need security and streaming technology.

And there are very clever things afoot...
Am i making sense?

iansilv

09-11-09, 03:35 PM

Dizzman

09-11-09, 03:54 PM

yes- you do make sense. It's just that i think the studios would want to create that clearing house, instead of outsourcing it to Apple or Microsoft.

I just keep running in to this argument: I can do what I want right now with a combination of Anydvd-HD, WHS, MyMovies, and a little p.c. hardware. Its cumbersome, clunky some times, and is really subject to endless tweaking- but that is because the market has not been opened up to what K does by the studios and the DVDCCA.

The tech is there. Frustrating. /end rant

The only reason for "external" is that there are many different studios. so in a case like that, histroically they like to create a shared standard.

So while we could end up with a slution from each studio... it would be ugly.

And we ALL want to watch the content in multiple places in multiple ways.

QQQ

09-12-09, 01:03 AM

Here is a fun little example of DRM at work. I do most of my work on a computer running Windows Server. Until now iTunes has worked on it with no problems and I have thousands of dollars worth of music and movies I have purchased that sits in in it in Tunes. The other day iTunes released version 9.0 and it won't run on Windows server. I am ok with that as long as I can run the current version I have. But guess what?! Now when I try to download a new movie or TV show itunes tells me it's no longer allowed with my current version!

I truly hate these companies. It's just so frustrating that they can get away with this type of thing. It's like going out and buying a TV and suddenly 6 months later a message pos up that tells you if you don't buy a new TV you can't watch any new shows.

Edit: of course this could just be an arbitrary decision by Apple but I'm guessing it's part of their attempt to constantly force everyone into the latest quicktime version for drm purposes, otherwise why disallow purchasing if someone is not running the most recent version.

Sorry for OT rant :) but it seems to fit right in with why Hollywood would try to stop products like K.

TheMadMilkman

09-12-09, 02:37 AM

iTunes 9 stuff

A little googling seems to show that this is more along the lines of stupid mistake or plain ignorance. Apparently the software runs fine if you modify the installer slightly (read the first two posts):

http://discussions.apple.com/thread.jspa?messageID=10181590

amirm

09-12-09, 09:03 AM

I am ok with that as long as I can run the current version I have. But guess what?! Now when I try to download a new movie or TV show itunes tells me it's no longer allowed with my current version!
I feel your pain :). Unfortunately the way these things work, they have no choice but to do it that way.

Here is the issue. DRM system gets hacked (which in case of Apple Fairplay, is an easy thing). Apple finds out how they did that and rewrites the code as to break the hack from working (if they don't fix it, they may not get new content).

So far so good. But how do you entice users to download the "fix?" Would you download a new version of iTunes whose new "feature" is a fix that disables the hack? Of course not. From user point of view, that is a feature taken away, not added.

What to do? Aha! You tag your new content to require the new player. That way, users will invariably upgrade because new content, is new "feature!"

Of course there is breaking the installer is just bad and has nothing to do with the above.

bjzone

09-12-09, 11:36 AM

bleair

09-12-09, 02:37 PM

you guys make my point, nobody is going to buy a K to pirate movies? why is "hollywood" or any org. waisting time, money or legal resources to fight K unless they have a personal vendetta? Again who is going to spend $25k on a system to save 3k on movie purchases? And your right, you could drive (total) your 45k lexus thru the front of the bank to steal 10k, makes perfect sense to me

I'm not going to bother digging in the forum archives, but I recall how in this forum it was always the response that the reason that the K system cost $30,000 was "because K is legal, while all the other systems aren't".
:)

I agree with what you've wrote, but you're trying to use logic and think about what's reasonable. The suit with Kaleidescape has nothing to do with any of that.
Short of a supreme court ruling to change things (not likely) the major movie studios will make certain and fight _any_ legal notion that there is any legal option for you (as a person or as a corporate entity) to make a copy of a DVD. End of story.

Movie studios are unified in their opinion that "control" of content means better revenue streams. They will lobby, they will fight legal cases, and they will create education campaigns for public schools that carry that message.

I think the future is likely streaming. It can provide some great convenience features, plus it gives the studios what they crave - another revenue stream AND more control. Of course the streaming option has been tried multiple times (google for ClickStar, Vongo, MovieBeam, etc.) and currently there are several services out there (NetFlix rocks IMO). I hope one of them makes it.

All the streaming services vary in how restrictive and onerous they are to use and how much/little content they make available, and that may continue to sink all of them, but know this. You will never "own" the content you download. You may be able to buy a license to continue to play the content, but ownership is going away.

iansilv

09-12-09, 03:49 PM

Anyone here have access tot he DVDCCA contract and its OPTIONAL BECAUSE IT MATERIALLY ALTERS THE SIGNED AGREEMENT technical addendum document? It would be interesting to read through it...

sipester

09-12-09, 09:29 PM

PeterS

09-12-09, 10:36 PM

Re-reading this thread I think you are all missing the point.

Technology marches on. Always has, always will. Companies which have based their existance on a single technology and do not keep up with these advances will always fail.

The problem is that these companies do not like this fact of life and rather than to adapt their business models to provide a product that the consumer will consider fair and that they will pay for, they have decided to legislate the technology and make it illegal for technology to advance. In the long run this will fail. Apple proved this with the success of iTunes. Whatever you want to say, Apple went from nothing to controlling music distribution in the US in a few short years by adopting the technology which so frightened the industry.

Due to the encryption techniques used on DVDs and Blu-Ray this is not as easy as it was with CDs. However, in the end run, unless the legislation - the restrictive, idiotic, turniquet on technological advance, is repealed, it will be trampled.

You can not legislate technological advances. It will move forward, regardless. If you do not present a working business model which embraces it, the public will create one, legal or not, in order to acheive the desired goal.

iansilv

09-12-09, 11:21 PM

You can not legislate technological advances. It will move forward, regardless. If you do not present a working business model which embraces it, the public will create one, legal or not, in order to acheive the desired goal.

Well put.

Mr.Poindexter

09-13-09, 03:02 PM

Where there is a will, there is a way. Necessity is the mother of invention. Desire creates need. All the cliche's in the world...

As for the arguement of nobody would buy a Kaleidescape to pirate movies, the counterpoint is "what prevents a person who owns a Kaleidescape from pirating movie once he owns the system?" Once the person owns a Kaleidescape, the cost of the system is largely irrelevant because it is a sunk cost. Also, having a Kaleidescape provides another value over just the cost of the disc. If it didn't, legitimate users would have never purchased the system.

That is why the cost of the Kaleidescape is irrelevant to the discussion at hand.

Another thing I was thinking of is this:

It is entirely possible that Hollywood might want direct control over distribution of films via download rather than pass that off to Apple or Microsoft. If that is the case, they would make something similar to the DVD CCA but for direct download. If that is the case, they would be very interested to see if the DVD CCA can prevail in their case even if DVD is a dying commodity because it is a test case for the future distribution system.

Finally, I am amazed at how many people think Kaleidescape lost a case here. The first Judge said "Kaleidescape won" and the appeals judge said "No, they didn't win yet, the game is still not over" and people are interpreting that as a Kaleidescape loss when it just invalidated their win and sent it back to trial.

thebland

09-13-09, 05:06 PM

How much money do they have? These legal fights must be incredibly costly... Moreover, can they still sell these systems for revenue's sake or are they precluded from doing so? How has this fight affected sales? I'm no legal expert but it seems that this suit has cut their revenue stream and cost them large dollars to pay their lawyers.

JlgLaw

09-13-09, 05:10 PM

[QUOTE=.....Finally, I am amazed at how many people think Kaleidescape lost a case here. The first Judge said "Kaleidescape won" and the appeals judge said "No, they didn't win yet, the game is still not over" and people are interpreting that as a Kaleidescape loss when it just invalidated their win and sent it back to trial.[/QUOTE]

Exactly.

(I'll add that Judge Rushing's concurring opinion should be read, it is instructive.)

Jim

Dizzman

09-13-09, 10:25 PM

The CEO Of K founded a little company called NetAPP and another one called Cacheflow (now blue coat systems) while nobodys pockets are infinitely deep... his stubbornness bucket is very deep

JlgLaw

09-13-09, 11:02 PM

The CEO Of K founded a little company called NetAPP and another one called Cacheflow (now blue coat systems) while nobodys pockets are infinitely deep... his stubbornness bucket is very deep

I just spoke with Mike on Friday (by phone) and he made it clear this is a long way from being over.

Jim

audioguy

09-14-09, 12:24 AM

I just spoke with Mike on Friday (by phone) and he made it clear this is a long way from being over.

Jim

It may be mute. If a prospective consumer is contemplating purchasing a product that cost $30,000 BUT it may eventually be illegal to use it, that prospective client is probably going to delay that purchase until the dust settles. That translates to no (or at the least reduced) revenue which translates to K going toes up.

And there were a few other companies at CEDIA showing other movie servers (DVD and Bluray) who tried to assure me that their specific solution was legal.

QQQ

09-14-09, 12:40 AM

It may be mute. If a prospective consumer is contemplating purchasing a product that cost $30,000 BUT it may eventually be illegal to use it, that prospective client is probably going to delay that purchase until the dust settles. That translates to no (or at the least reduced) revenue which translates to K going toes up.

It will NEVER be illegal to *use*. As for the rest of your post, K has sold millions of dollars worth of systems during the period that these lawsuits have been going on, while all the posters on AVS who don't own one and never will have been crying that the sky is falling.

Here are the awards from this years CEDIA. Click through the pictures. What do you see in almost every large system?
http://www.cedia.net/awards/industry_recognition09.php

http://lh5.ggpht.com/_01yebtyOuDs/Sq3KBU6qK9I/AAAAAAAAAcA/kG5vUMomWKY/s800/k2.png

http://lh5.ggpht.com/_01yebtyOuDs/Sq3KBXUCqxI/AAAAAAAAAcE/w7Hs6wy3pH4/s800/k.png

Dizzman

09-14-09, 02:56 AM

It may be mute. If a prospective consumer is contemplating purchasing a product that cost $30,000 BUT it may eventually be illegal to use it, that prospective client is probably going to delay that purchase until the dust settles. That translates to no (or at the least reduced) revenue which translates to K going toes up.

And there were a few other companies at CEDIA showing other movie servers (DVD and Bluray) who tried to assure me that their specific solution was legal.

a. the word you are looking for is MOOT... silence has nothing to do with all of this. :D
b. k went from nothing to in the black with the spectre of the first lawsuit hanging over their head.

if you had a k, and they were shut down (about as unlikely an outcome as there is) it would continue to work. you would just have to enter your own movie metadata and possibly create a favourite scene of the movie from the first frame.

To quote Q...
K has sold millions of dollars worth of systems during the period that these lawsuits have been going on, while all the posters on AVS who don't own one and never will have been crying that the sky is falling.

and i would imagine that the owners have basically just shrugged and said "whatever... hey, come look at these favorite scenes I strung together!"

gulliBELL

09-15-09, 07:35 AM

...
2. K brings out their BluRay system sooner than later.

Let's hope so.

...
3. K executes an agreement to provide movies via internet download

BluRay and internet download is the direction of the industry...

Yeah, for you lucky guys in the US who have access to fast internet, but for much of the rest of the world who don't, internet downloads are not an option for quite some time.

PeterS

09-15-09, 12:18 PM

There is a problem with the Blu Ray system from K I don't think you may have considered.

1. I don't think it likely anyone would spend the money K wants for a system that did ONLY Blu Rays.

2. It is highly probably, given the latest ruling, that they can not bring out a new product which does anything with DVDs at this time.

2 is more of a business reason than a legal one, though there may be a legal component as well. You do not want to put out a new platform of technology which the courts may force you to change. It is much wiser to wait until this is all resolved prior to releasing to avoid costly changes post decision.

Additionally, Managed-Copy is just now coming on-line, and it looks far from compelling.

Dizzman

09-15-09, 02:14 PM

under the original suit, nothing changed. we continued to develop and sell product. they went from nothing to #474 (or something like that) on Inc's 500 fastest growing companies list last year (2008 list)

So no, your thought that they will stop coming out with products is a pretty poor assumption. And frankly, a rather rude one.

As has been pointed out. even a loss in the case will not stop anything. by the DVDCCA's own contract, they are obliged to appoint an ombudsman to work out an equitable solution. so with time for appeal, then time for ombudsman, and time to work through all that. So... 5 years? maybe more?

stopping development since you have no idea what is coming next would be the height of irresponsibility. TO the employees, to the equity stakeholders, etc.

THere are so many options for how to move forward that it is not even funny. Here is another thought, you license with Netflix where content gets delivered to the system, parked there if you will, but the dvd "license" is from them. there are so many ways to get content onto a system that all this may end up accomplishing is pushing forward development to other platforms.

And customers who still want a clean/legal/non frankenstein/lightning fast solution that is all integrated and works everytime you go to it since windows, max, unix, linux are nowhere to be seen will still seek it out and purchase it.

In my current Day Job, i manage all videoconferencing and AV systems for a silicon valley tech company. when we looked at cisco's telepresence, lots of people saw different things. some talk about box, bandwidth, etc. all i saw was one major difference. Polycom et all are (on the most part) selling boxes. they sell boxes and to a certain extent... what you do with them is up to you. as a result, experiences differ greatly, reliability, quality, etc is all over the map. (sound familiar at all)

Cisco sells an Experience. sure, there is lots involved behind the scenes, but the experience is what you buiy, and what cisco and their partners install. so no matter where you go, the quality, experience, etc is all the same.

That is why k refers to what they sell as the K EXPERIENCE... not the k system or the k server or the k player. sure, the dealer selects options, but the customer buys an experience. And it is an experience that nobody can come close to.

Full disclosure once more. i worked for k a few years ago. i am a shareholder. and i am not massive fan, i was fired just after a year (whew! made it to vesting of shares!) with 3 month old twins at home and was fired with (what i felt was) no warning at all. so while i am not their biggest fan and have my personal issues with the management... i still cannot do anything else but accept that what they have, is the single best CE product there is. and if i could afford one... i would still have one. Ask dealers, ask owners... nothing comes close.

PeterS

09-15-09, 02:47 PM

Under the original suit there is not the assumption of violating the contract - there now is.

An Ombudsman does not stop the DVDCCA from asking for, and probably receiving, an injunction under the current ruling, until such time as a resolution is reached. It is a reasonable request - especially under the terms you are outlining - where K continues to sell product even though they are in litigation.

As for Netflix - it is clear you do not understand the license Netflix has with the studios. They are allowed to show certain films, at sub-DVD resolution, some at sub-HD resolution on a limited licence basis. I do not believe that the licence will allow for the remote storage of these films - in fact, if memory serves, I think it is strictly forbidden.

No one has a problem with the K software or "experience" as you call it - that is except the studios, who want no part of it, and own the content at the core of the experience. They have rallied to bury K and will most likely succeed as they wrote all of the laws and agreements which they acuse K of violating.

Dennis Erskine

09-15-09, 04:03 PM

... and, if K should lose and the studios prevail following your thinking Peter, all other manufacturers of anything other than mechanical devices will also lose. That rather fine point is being lost in the fray. When one manufactures, or sells, a device that can rip copyrighted content, then it is argued that the sole purpose and intent of that feature is to violate the law. Anyone knowingly manufacturering or selling a device with such capability is knowingly violating the law. Take it from there.

PeterS

09-15-09, 04:54 PM

Dennis,

Though I respect you a great deal sir, I am sorry - but that is wrong.

Where K screwed up is in becomming a signatory to the DVD-Association. Once they signed that contract, there was an implied agreement not to use the technical information they were then supplied with in the manner they did. Their claim is that the technical information was not part of the original agreement, and therefore not covered - is truly disengenous and an attempt at a legal end-run.

OTOH - the DMCA would like to try to do what you are talking about, however, they are restricted to the actual acts which facilitate such copying - such as software algorithms. It used to be that you could "clean-room" code to get around almost any type of protection - the DMCA make this illegal as the implication of "copy-protection" is that the rights holder does not want it copied. The problem with this is that it is patently ridiculous to try to legislate this - code will be written to break almost anything. The question is will these companies ever try to put in place new business models to take advantage of the new technology - or will they simply try to legislate it away?

Dizzman

09-15-09, 05:50 PM

Under the original suit there is not the assumption of violating the contract - there now is.

The first suit claimed that they were violating the contract. that was never in dispute.

An Ombudsman does not stop the DVDCCA from asking for, and probably receiving, an injunction under the current ruling, until such time as a resolution is reached. It is a reasonable request - especially under the terms you are outlining - where K continues to sell product even though they are in litigation.

uh, yes it does. to get an injunction they would likely have to show eggregious harm. which there is not. remember, the first k EVER heard about an issue with the product (and they had to submit plans and overview to the DVDCCA i seem to recall) was the serving of the lawsuit. this was the part that drove their counter-suit. and i think that this case may still be on the books? but i cannot recall.

As for Netflix - it is clear you do not understand the license Netflix has with the studios. They are allowed to show certain films, at sub-DVD resolution, some at sub-HD resolution on a limited licence basis. I do not believe that the licence will allow for the remote storage of these films - in fact, if memory serves, I think it is strictly forbidden.

i never claimed that anything was cut and dry. Nor did i claim to have any knowledge whatsoever of the netflix streaming agreement. all i said was that there were potential options. Until anything has been worked through, there are lots of options. only once they are worked through and determined to be a no-go are they not an option. if an opportunity comes up for the studios to make more money... guess what... they will look at it.

No one has a problem with the K software or "experience" as you call it - that is except the studios, who want no part of it, and own the content at the core of the experience. They have rallied to bury K and will most likely succeed as they wrote all of the laws and agreements which they acuse K of violating.

What the heck are you talking about? the studios have no part of this. and if you did a poll in hollywood to see who has what, you would be amazed at how many actors/producers/directors and studio folks have K systems. you keep linking this to hollywood. it is purely a contact dispute with the DVDCCA (also referred to in various articles as an innovations stifling cartel)

Where K screwed up is in becomming a signatory to the DVD-Association.

Yup, big screw up trying to do things legally and signing a contract with an organization who promised through the contract to deal fairly and follow an approved process for disputes. Yup, big screw up

Their claim is that the technical information was not part of the original agreement, and therefore not covered - is truly disengenous and an attempt at a legal end-run.

Are you an attorney? i ask as you have asked me and i was quite clear that i am not. however i know that K has many that they consulted with before building the product. and i know that some here who are attorneys have also stated that they do not feel that k was doing an end run. maybe they did find a loop hole and exploit it. but last time i checked, large parts of the free enterprise system runs on exploiting loopholes and then finding ways to close them. We could argue all day about the spirit of the contract, but it is my non legal interpretation that contracts exist to specifically state who does what and what can and cannot be done.

So the reality is that this is one of those places where the ones doing the best are the lawyers. but for you to keep claiming that it is this and that is not cool.

How about if a bunch of us start making arguments about how much of a scam the Blue Smoke system is due to the fact that they know that everybody is going to load movies on it anyways and you are complicit by a nod and a wink?

the only FACT is that litigation is ongoing and will likely not be solved for years.

PeterS

09-15-09, 07:31 PM

iansilv

09-15-09, 08:25 PM

Dizz,

Your post is SO full of innacuracies and misunderstandings of the law, contracts, and business that I can not take the time to go through it once again and point them all out.

You ask if I am a lawyer - no as I have not taken the Bar Exam. Do I have legal training, yes, quite a bit; as part of my MBA work I focused and studied business contract law. I have also written many contracts and been part of the legal team regarding contracts worth in excess of many tens of millions of dollars.

Again, this is not an issue of what we would want to happen, or think should happen, it is an issue of the current laws and how they work, and how K tried to get around them. There is no arguement here - THEY TRIED TO GET AROUND THE CONTRACTS!

This is not a slam agains them, it is just the truth. If they prevail, GREAT. If they fail, THEY HAVE TO OWN IT!

Now, as far as their technology, it is very nice and I wish it to have a great future. However, making up comments like "they have potential options" as a panacea is patently ridiculous. Of course they do. Every option in the universe. However, that does not address the realities in front of them - and they will have to address them.

Look, the longer they are stuck in this, the more other options will catch up, and in many ways suplant them. They need to put this behind them in order to move forward once again. Right now the only way that will happen is if they put together a deal with the DVD Alliance - and this is up to the mood of the DVD Alliance. If they want to put K out of business, they now have the resources and ammo to do it. If they want a piece of the pie, they now have K in the position to demand just that.

Next move is theirs.

WTF are you talking about? Why do you think this so-called technical addendum is part of the contract? I am not a lawyer either, but as part of my training- law school- I am taking contracts right now.

The issue is simple- the technical addendum is presented after a contract for licensing is signed. It is just that- a TECHNICAL addendum that lays out things that are technical in nature, and not for public consumption as they are trade secrets and what not- that only people who have licensing contracts and are held to the standard of being a LICENSEE have a need to know.

When you put things in to a technical addendum that fall outside the realm of what is contracted for- like requirements unnecessary to the actual playback of the dvd (disk must be in the drive) you are adding material changes to the original contract. These are counter offers. They were not bargained for by K and are outside the original contract signed. Notice how the requirement that the disk must be in the drive for playback was added later.

K originally argued that they met the requirements of the DVDCCA on all its contract terms because their decryption of the disk took place in an encrypted environment where it could not be reached by the consumer- this was a part of the original contract. And this is what they built their machine on.

Look man, I am all for consumer choice and I agree that K might be sunk if they cannot get managed copy going on their existing equipment for bluray. And I do not claim to be a lawyer. But to dismiss their legal strategy as being somehow unethical is ********. And it smells of a biased argument considering your association with Blue Smoke.

If I am off on any of my legal crap above, someone please call me out on it. But I am pretty sure I have my facts straight.

iansilv

09-15-09, 08:35 PM

How about if a bunch of us start making arguments about how much of a scam the Blue Smoke system is due to the fact that they know that everybody is going to load movies on it anyways and you are complicit by a nod and a wink?
.

Ouch... I had not noticed this before....

But come to think of it- Peter S.- I don't think you ever really addressed the uniqueness of your systems in another thread started during CES. Correct me if I am wrong, but the black box and blu smoke systems are htpcs with high quality components, and this company's chassis to house them:
http://www.atechfabrication.com/

Which- don't get me wrong- i think its awesome and if K can't do blu ray I would look to a system like yours- but are there any components that were built specifically for your company?

JlgLaw

09-15-09, 08:43 PM

As anyone that has ever litigated a case knows, it's not over 'til it's over (meaning ALL appeals have been decided, or rejected). As someone that has litigated 50+ cases as lead counsel, and more than 25 as a solo, has never lost a case, and has taught both IP and Contract law for the past ten years, I'm comfortable in saying this case is far from over. (Sorry, but since we are throwing out resumes...)

In summary, the CCA sued K claiming they breached the CSS License agreement, in particular the section referred to as "General Specifications." K argued back that (1) the "General Specifications" were not a part of the original contract (CSS License agreement) because the General Specifications section (actually a separate document) was not referenced in the original contract, nor was it provided to K prior to contract signing. (In many jurisdictions this argument would prevail.) and, (2) that even if the General Specifications were deemed to be a part of the contract, K did not violate the General Specifications. K prevailed on the first argument, and the second argument was not decided.

On appeal, the CCA prevailed when the appellate court found the trial court erred in not finding the General Specifications to be a part of the contract and remanded back to that same court to decide IF K has violated the terms required by the General Specifications. This decision has been appealed by K to CA Supreme Court (could be a year or two before we know what is next).

Although possible, considering the "Irreparable Harm" K would likely face, versus the CCA not seeking any money damages (probably because of proof issues), I doubt a prelim. injunction would be issued.

Some may find K's arguments disingenuous, but IMO K has a good faith basis for believing the law is on there side. Obviously the trial court thought so as well.

I think it far more disingenuous that a company creates products that they know will be used to circumvent copyrights, in fact designs the products so they can actually be used for that purpose, and then has the audacity to throw stones at K.:rolleyes::rolleyes::rolleyes:

Jim

iansilv

09-15-09, 08:47 PM

... and has taught both IP and Contract law for the past ten years...

... and this is where I take a seat and STFU :)

Mostly because I don't want to get called on :D

Mr.Poindexter

09-15-09, 08:54 PM

His (peterS) company builds some parts and they use off the shelf components for other parts of the system.

iansilv

09-15-09, 08:57 PM

His (peterS) company doesn't build anything. They use off the shelf components.

OK- so they are putting them together and charging for the convenience and build quality. Fair enough. I just never understood what all the hoopla was about... and my music is all apple lossless....

PeterS

09-15-09, 09:11 PM

First, let me address Blue Smoke. Our Black Box product is an audiophile device which uses not only the highest quality components we can get, but also our own custome developed hardware and software systems - which give it some very unique capabilites in the market. As for our Blu Box, it has not been officially released as of yet, so I will simply say, "no comment" - other than we do not use ATech's cases.

Now, as far as the other points:

1. Taking a shot at me and a company I do work with is HIGHLY IMMATURE. Please keep it civil.

2. JLGLaw is correct - "it's not over 'til its over". However, a couple points. I have dealt with the DVD-Association and the intent of the agreement is clear.

3. It is often quite common to obtain technical information regarding a contract like this once and only once the contract has been signed. It is, has, and always will be part of the original agreement - even if not referenced in specific in the original agreement. Do you know how many technical addenda there were just for CD?

4. I agree an injunction in general is unlikely against existing product - but is extremely likely on any new products which K might produce while this is being litigated.

5. From what I know of the industry and the agreements which were signed, I do not believe that K acted in "good faith" here, but was looking for a loop-hole to challenge and thus exploit so that they could produce their product. It was a product the market was calling for, and that they felt this was the best way to approach it. Remember the fuss over suing regarding DECSS at the time this was developed? I am sure that during a meeting this was deemed the wiser direction.

6. In the end, I am not a practicing lawyer, though I have spent almost 25 years dealing with contracts and legal issues in the computer and consumer electronics space. I think it unlikely that they will prevail as the powers that be can simply out-spend them and have a great deal of case-law on their side.

7. I also think that you have to consider this case as politically motivated as well as legal. As with all things, it depends upon which way the wind is blowing. Given the DMCA and others, it is not blowing in K's favor - never really has.

8. I also agree that K has a good faith basis arguement to continue on - that does not mean that they acted in "good faith".

9. And lastly, your last paragraph is extremely juvenille and shows your lack of maturity and understanding of what is going on. I am not advocating that what K wants to do should be illegal, quite the opposite - I am for embracing technology with new business models which serve the consumer. I am simply arguing the legal basis for K's approach and the errors I see in it.

I do not consider that I am throwing stones at K. I have tried to discuss the legal merits of their case as I see it. This is something I have a fair amount of experience in, and find fascinating to debate. This has nothing to do with K as a company or their products.

As a company, we are not going to head in this direction for our Blu Box. This is something for our consumer's to decide how to deal with as there are both ethical and legal issues to be dealt with. Our goals are different than K's - we are manufacturing a PC, they are a Consumer Electronics company.

Please, can we simply discuss issues on this forum or do we have to resort back to acting like thre-year-olds in the playground and call names and spout whatever comes to our head?

Mr.Poindexter

09-15-09, 09:14 PM

It isn't really possible to stay on the Forbes fastest growing companies list for very long. Generally the companies on there get a big spurt of growth early on and then slow down to managable growth. I looked at where I would rank there and found Kaleidescape beat my business growth but it wasn't a total USC vs. San Jose kind of beat down. They are not much larger than my company.

What I can say is this: they are making a profit and growing and that generally means they can continue the fight for a long, long time. While the cost of the litigation is likely large, it is probably less than their profit margin and thus worth it for them to continue fighting.

Often times, lawsuits like this are designed to smother an opponent, dry up their sales and win through attrition. The hard nosed victor might win the fight eventually but not before being driven out of business. From all signs we see so far, it looks like that will not work on Kaleidescape because they are still growing and profitable even during the litigation. That tells me this case will go on until the conclusion and that could likely take another 3-4 years, more if appeals stretch out unusually long.

QQQ

09-15-09, 09:26 PM

Let me see if I can sum this up:

1. Guy comes on forum and for a year or however long makes derogatory statements about a company that is a competitor of a company he is involved with and he never bothers to divulge that he is or wants to be in direct competition with them.

2. Guy finally gets outed and continues to make derogatory and uninformed statements about other company and continues to state opinion as fact.

3. Guy now has the audacity to accuse other company of not acting in good faith!

4. Guy now accuses other people of being immature.

PeterS

09-15-09, 09:33 PM

Q,

You are full of it.

1) First post about K in this thread - 8/12/09 - about a month ago. No derogatory comments made about the company at all - don't know them worth anything - discussing legal strategies.

2) Outted? I'm sorry, adjusted my sig just for you. I have never once tried to hide the fact that I have done work with Blue Smoke - it's all over the boards. Brought my sig up to speed with board policy - my oversight - I apologize.

3) I did not accuse anyone of not acting in "good faith" - just pointing out that the legal definition is different from the commonly accepted one.

4) Take it where you can get it I guess.

Honestly, read your posts and mine. Yours attack me for having an association with a company which (my fault) I did not make as clear as I should have. They have nothing to do with the facts in the case.

Go back and read mine - I am trying to discuss the merits of the case as I read them and have access to the limited facts and documentation. If you would like to discuss the merits of the case from some enlightened point of view - I too am interested to hear your arguements. The rest - well you know...

PS - If you think my motivation here is to in any way do damage to K, then you have totally misread every single post. Also, I take it as flattery that you think my posts carry that much weight. I am interested in some insight and discussion about the legal merits - that is all. This is something I have spent a great deal of time on, and on which I think there is a fair amount of confusion and misunderstanding. In the end, however, the outcome will have less to do with the law and legal arguements than you think - "it ain't over 'til its over" is a very appropriate legal truism.

QQQ

09-15-09, 09:48 PM

1) First post about K in this thread
Right, this thread.

You are full of it.
Now now, please see admonition below:

Please, can we simply discuss issues on this forum or do we have to resort back to acting like thre-year-olds in the playground and call names and spout whatever comes to our head?

PeterS

09-15-09, 09:55 PM

Q,

Enough please, I am getting tired of this.

The only other posts I can remember (April or May of this year, I think) was about K was advising a person to contact Brian Binnerup of "My Movies" as he was concerned that K couldn't handle some ridiculous number of discs (25,000?) [note: he was told this by K] and I was hoping Brian could help him.

Part two - I stand by again. Please focus on the issues - stop the foolishness.

iansilv

09-15-09, 09:56 PM

First, let me address Blue Smoke. Our Black Box product is an audiophile device which uses not only the highest quality components we can get, but also our own custome developed hardware and software systems - which give it some very unique capabilites in the market.

2. JLGLaw is correct - "it's not over 'til its over". However, a couple points. I have dealt with the DVD-Association and the intent of the agreement is clear.

3. It is often quite common to obtain technical information regarding a contract like this once and only once the contract has been signed. It is, has, and always will be part of the original agreement - even if not referenced in specific in the original agreement. Do you know how many technical addenda there were just for CD?

4. I agree an injunction in general is unlikely against existing product - but is extremely likely on any new products which K might produce while this is being litigated.

5. From what I know of the industry and the agreements which were signed, I do not believe that K acted in "good faith" here, but was looking for a loop-hole to challenge and thus exploit so that they could produce their product. It was a product the market was calling for, and that they felt this was the best way to approach it. Remember the fuss over suing regarding DECSS at the time this was developed? I am sure that during a meeting this was deemed the wiser direction.

6. In the end, I am not a practicing lawyer, though I have spent almost 25 years dealing with contracts and legal issues in the computer and consumer electronics space. I think it unlikely that they will prevail as the powers that be can simply out-spend them and have a great deal of case-law on their side.

8. I also agree that K has a good faith basis arguement to continue on - that does not mean that they acted in "good faith".

9. And lastly, your last paragraph is extremely juvenille and shows your lack of maturity and understanding of what is going on. I am not advocating that what K wants to do should be illegal, quite the opposite - I am for embracing technology with new business models which serve the consumer. I am simply arguing the legal basis for K's approach and the errors I see in it.

I do not consider that I am throwing stones at K. I have tried to discuss the legal merits of their case as I see it. This is something I have a fair amount of experience in, and find fascinating to debate. This has nothing to do with K as a company or their products.

As a company, we are not going to head in this direction for our Blu Box. This is something for our consumer's to decide how to deal with as there are both ethical and legal issues to be dealt with. Our goals are different than K's - we are manufacturing a PC, they are a Consumer Electronics company.

I'm sorry Peter, but I think you just killed your credibility for giving any legal opinions on the K issue. I'm going to go with the practicing trial lawyer who teaches contracts on any legal issues. I signed a credit card receipt for some Thai food over the weekend- but I don't consider myself to have experience with financial contracts no matter how many of them I have signed.

And I think that your decision to "not head this way with" your Blu Box has more to do with the common limitations of the HTPC platform combined with K's intellectual property investment and product than it does with any high-browed or high-minded meeting you and your company partners have had where you decided to pursue a certain design direction...

But I would like to know what exactly, specifically and definitively what your black box hardware solution possesses that you produce or design in house that I or any other user cannot buy themselves without going through your company. In other words- can you please clear up the lingering questions of what exactly Blue Smoke Entertainment possesses as intellectual property that makes their products a worthwhile purchase above and beyond what a computer and AV enthusiast can produce themselves.

PeterS

09-15-09, 10:11 PM

First, ianslv, I have WRITTEN quite a few contracts in my day, not just signed them.

However, I would also like to hear more from a practicing trial lawyer on this issue. I would like to hear from one who has read the agreements (they are available) and has experience in this area of the law. I would easily defer to them. That is the kind of discussion I have been hoping for.

Second, you can "think" all you want. However, it is not the case. There are too many unknown issues right now as it comes to this area for us to make this determination, so we leave it up to the customer - as does every HTPC manufacturer.

As for the Black Box - since it it Off Topic - I will respond in a PM as is appropriate.

howdydoody

09-15-09, 10:48 PM

QQQ,

Your summary seems unfair. PeterS has admitted his bias. Dizzman has admitted his. All of us have some source of bias. Some may be resellers of K or system integrators that have sold or integrated with K products. His input has value (as does yours). Having bias simply indicates different perspective when we indicate where we are coming from. I think we all agree now that transparency is important. My disclaimer: I am an end user. I am a professional. I have been involved in legal disputes.

I disagree with the contention that the legal situation with K is status quo. When a civil lawsuit is initiated, there is a presumption of equal footing by both parties. When the case is decided in favor of one party in a lower court setting, the presumption tilts in favor of that party. When the appelate court rules in favor of one party (no matter what the lower court decision is) the presumption tilts very favorably in the direction of the victor. A reversal in state supreme court can happen, but we all know that the odds are against it. This is a complex case. The decision of the appeals court simply returns the case to the lower court to decide the other issue. Unfortunately for K, the RealDVD decision presents problematic case law for the "other issue". Pricing between K and RealDVD being irrelevant, they do essentially the same thing. They allow copy (once) to hard drive, maintaining DVD encryption. They do not allow disc duplication from the hard drive. RealDVD was a profitable company and does not look likely to withstand the legal hurdles. K has smart and wealthy owners. Despite proclamations by the CEO after the recent ruling, prior earnings etc. the business model and future remains at risk.

Let's look from my bias. I want a "toaster". A solution that works effortlessly without crashing. A reliable, "spiffy" user interface. Something that does BluRay and DVD. I am not worried about the copy protection police invading my home - I will not share my movies on the net or with federal agents.

Companies like Blue Smoke serve a purpose. I have no association with Blue Smoke or other other HTPC manufacturer.

After spending a month trying to sort out my solutions, I do believe that I will go with an HTPC manufacturer that has optimized components using Windows 7 that can integrate with my Crestron system. This, of course, assumes that I can get my Crestron system integrator to do my integration without purchasing a K system from them.

QQQ

09-15-09, 11:17 PM

I disagree with the contention that the legal situation with K is status quo.
I agree with what you are saying. That is, the "shadow" of the lawsuit is more "present" than it was before. What my comments were actually suggesting (in a roundabout way) is what I have said many times before - hobbyists do not even come close to representing the average consumer. Yet it's a common mistake for hobbyists to assume that their world view represents "reality". In this case many hobbyists project how they (the hobbyists) make their purchasing decisions onto the average K buyer. People who have the disposable income to spend 6 and even 7 figures on a system are often not going to deny themselves something they want and like because of a lawsuit. Don't get me wrong, I'm not saying wealthy people are careless with their money, that K won't and hasn't lost sales over this, I'm simply saying that to assume that the sky is falling is to not understand this issue. Nor am I suggesting BTW that there are not plenty of wealthy hobbyists here, however they are an aberration that does not reflect the average K consumer.

The average K consumer is a very successful professional who is NOT a hobbyist, does not research this stuff to death obsessing over what gives the nth degree of performance, and does not obsess over this lawsuit to the same degree that a hobbyist does - the hobbyists usually carefully measures every decision and wants to be "right", the average K consumer just wants to buy something that is super cool that they will enjoy. They are less risk averse, the hobbyist tends to be extremely risk averse.

Don't forget, another reason hobbyists have been moaning about K forever is its inability to rip Blu ray. Yet I don't know if I have ever had a single K customer ask me about that before purchasing one.

Despite proclamations by the CEO after the recent ruling, prior earnings etc. the business model and future remains at risk.
I have never claimed otherwise. The lawsuit is a discussion I have with any potential customer and always present as a risk. To present it in any other way would be silly. No one knows how this will turn out or what will happen to K. So when I disagree that the sky is falling, the difference between my stand and the person I am disagreeing with is that I am not saying it is raining gold either. I'm simply pointing out that many of the naysyers don't understand the market and would do best not to project their own purchasing habits onto it.

After spending a month trying to sort out my solutions, I do believe that I will go with an HTPC manufacturer...
But again, we know that you are not the average K consumer. NOT a criticism. You like to buy your equipment online. You like to do research. You like to hang out on message boards talking about this stuff. So it's no surprise that you have decided not to purchase a K system.

iansilv

09-15-09, 11:22 PM

I thought he wanted a Toaster? :)

QQQ

09-16-09, 08:27 AM

Your summary seems unfair. PeterS has admitted his bias. Dizzman has admitted his. All of us have some source of bias.
All bias is not equal any more than all ideas are equal. The types of statements below aren't just biased, they just amount to more potshots on the part of Peter:

Their claim is that the technical information was not part of the original agreement, and therefore not covered - is truly disengenous and an attempt at a legal end-run.

There is no arguement here - THEY TRIED TO GET AROUND THE CONTRACTS!

K did everything possible to create a system that honored the DVD CCA contract and the original judge even agreed with them that the addendum to the contract was not valid. So to claim that there is "no argument" and that they were "disingenuous" and that it's a "fact" that they were trying to get around the contract goes beyond "normal" bias to someone that is talking out of their ass.

On a separate issue even as a small employer one of the things that I do before hiring an employee is require them to read the employment agreement. I would never dream of hiring someone and then springing a binding employment agreement on them. Yes, there are always policies and so forth that will be covered after wards, but the core of the agreement must be covered up front. I think this is pretty common sense even for us non-lawyers. As a counter example, I've actually heard of some companies hiring an employee and then asking them to sign a non-compete! I find that outrageous.

Ultimately I think that is a part of what this K suit involves. Were the addendum's that were given to K afterwards just details or should they have been part of the core agreement? The first judge said they were not, the second judge said they were. Furthermore, it's worth noting that I don't believe the first addendum's even specifically said that a disc had to be present, in fact that addendum was added after the DVD CCA lost the first lawsuit! I believe it was a different clause that the DVD CCA tried to claim required a physical disc to be present, but even that was open to interpretation. Perhaps that has already been discussed in the thread and I am sure someone will correct me if I am wrong.

LJG

09-16-09, 09:29 AM

For an end user with a front projector install I just don't think a DVD platform at this point makes sense no matter how great the "user experience".....

QQQ

09-16-09, 09:53 AM

For an end user with a front projector install I just don't think a DVD platform at this point makes sense no matter how great the "user experience".....

See post above re: hobbyists :). I don't disagree, I would not buy a K system either right now if it was (only) for a dedicated theater. But as has been discussed here so may times, the people buying K are usually doing so because they want an incredible content distribution system for an entire house. I don't have a single project we've used a K system on where it's being used only for a theater, and usually it's also being used as a whole house multi-zone music server. When they come out with the Blu Ray player, then it will also make sense for the person who's priority is a dedicated theater. I do agree they expand their market even further when they can accommodate theater buffs, either via Blu ray or HD download.

QQQ

09-16-09, 10:12 AM

Back to the content issue. Here is a guy who if he ran Hollywood would have embraced and figured out how to make a fortune on embracing new technology years ago.

http://blogmaverick.com/2009/09/15/why-you-want-tv-everywhere-now/

jpjibberjabber

09-16-09, 12:16 PM

You will never "own" the content you download. You may be able to buy a license to continue to play the content, but ownership is going away.

Ownership never existed. The fact that you "own" a small plastic disc means nothing. You in fact own a coaster, because the content is only licensed to you. Thus, the justification of studios regarding copying is legally sided with more often than not, because it's the IP that's at issue, not the frisbee.

Ron Party

09-16-09, 01:53 PM

I'll add that Judge Rushing's concurring opinion should be read, it is instructive.
Jim, I just read the whole opinion, including Rushing's concurring opinion. Thought-provoking to state it mildly, particularly the discussion of the following issue:
In my view this case presents a fundamental question of contract law: When, if ever, does a contracting party bind himself to covenants or conditions of which, by mutual agreement, he will be made aware only after he enters into the contract? The traditional answer might have been “Never,” because the essence of a contract is an exchange of promises, and it is difficult to conceive of someone effectively promising to act (or refrain from acting) in a manner not then known to him.

JlgLaw

09-16-09, 02:13 PM

Exactly. He concurred, which is not unusual, but clearly had a problem with the concept of terms and conditions being later added to the original contract. He is not alone, most jurisdictions would not enforce later added unilaterally imposed terms.

Some might argue this is done all the time with certain types of contracts (i.e. credit cards, cable/sat, telephone, etc.) but in all of these cases they reserve the right to do so in the original contract, and should they occur, never really affect the basic terms of the original contract. They also usually "incorporate by reference" additional terms and conditions and make those terms and conditions available prior to signing. That did not occur in K's case.

To be clear, I'm not arguing the validity of the decisions in the case (I'll leave that up to the appropriate courts). I'm only defending K's "good faith basis" argument that some seem to think is absent here.

In all of these arguments, reasonable minds can differ.

Jim

Dizzman

09-16-09, 02:13 PM

The other factor that will Keep DVD alive for quite some time is related to the business my brother in law is in.

He Buys VHS tapes when rental stores sell them off. he then resells them. now why would he do this??? Simply stated, ocntent that does not exist in the DVD world. Just like the Depth of the DVD content library is massive. BD is still pretty small. And they will never be equal.

Lets look at what we know.

1. K is in a lawsuit.
2. It will drag on for years
3. Even if it ends up bad, there are lots of potential options to keep on going. From strictly above board, to grey market, to new things we have not yet seen.
4. EVERYBODY here has an opinion.
5. SOme of those opinions are based on no legal knowledge (most of us)
6. Some of those opinions are based on a bit of a closer intimacy with K (a few of us)
7. Some of those opinions are based upon actual viewing of the contract (at least the first "in dispute" part)
8. Some of those opinions are based upon being an acknowledged expert in the field of IP and contract law and being a practicing attorney in that filed (ok, 1 person)

For anybody to make proclamations about the future based on their opinion of this case is beyond silly. to try to put opinions forwards as fact is disingenuous.

What we can all agree is that the fact that the DVD CCA is still fighting to preserve an encryption system that has as many software defeats as this one does is the height of stupidity.

the only thing stupid about trying to build a "legal" system is willingly walking into that morass when EVERYBODY knows that not only have the cows left that barn, they hitched a ride to new york!

Say what you want, but i appreciate that K has tried and still trys to do this legally. i do not like the fact that when i eventually decide to start putting dvd's on a pc that i will in essence be breaking the law to do so. but as long as the folks in charge of the keys keep pretending that they have a secure system and refuse to allow technology to bring them even greater revenue... such will be the case.

QQQ

09-16-09, 02:21 PM

Jim, I just read the whole opinion, including Rushing's concurring opinion. Thought-provoking to state it mildly, particularly the discussion of the following issue:

In my view this case presents a fundamental question of contract law: When, if ever, does a contracting party bind himself to covenants or conditions of which, by mutual agreement, he will be made aware only after he enters into the contract? The traditional answer might have been “Never,” because the essence of a contract is an exchange of promises, and it is difficult to conceive of someone effectively promising to act (or refrain from acting) in a manner not then known to him.

That's a great quote. I'm frequently involved in writing "scope of work" documents. To use an analogy, reading about this is like imagining writing a scope of work and having both parties agree to it, but upon agreeing to the scope, then presenting the contractor with a new and different scope you expect them to meet. It would be beyond absurd and so is this situation with the DVD CCA in this non-lawyers opinion. It seems to me the purpose of an addendum should be to reveal secret information or similar, but not to place additional and new encumbrances on the agreement itself.

Dizzman

09-16-09, 02:26 PM

i think that this is part of why they wanted to change the "open" contract to include a definite statement that the disc must be present in the drive in order to play it. K responded with threats of anti-trust i seem to recall.

In reality, it would be great if they chose to add that for all FUTURE signatories. and then let k do their thing. But that is unlikely. :D

Ron Party

09-16-09, 03:52 PM

That's a great quote. I'm frequently involved in writing "scope of work" documents. To use an analogy, reading about this is like imagining writing a scope of work and having both parties agree to it, but upon agreeing to the scope, then presenting the contractor with a new and different scope you expect them to meet....It seems to me the purpose of an addendum should be to reveal secret information or similar, but not to place additional and new encumbrances on the agreement itself. [Emphasis added.]
This is the rub, isn't it. Are the General Specifications correctly deemed additional and/or new encumbrances? Judge Rushing's concurring opinion goes about answering that question by first finding the General Specifications were, in essence, part of the original contract:
Kaleidescape‟s central obligation under the license agreement was to “comply with the CSS Specifications.” “CSS Specifications” is elsewhere defined as “the documentation relating to CSS entitled ‘CSS Specifications’ (including the Procedural Specifications and the Technical Specifications) that Licensor makes available to Licensee, as such documentation may be revised from time to time consistent with [specified provisions].” [Footnotes omitted.]

...The reference to “the Procedural Specifications and the Technical Specifications” is explicitly non-exclusive, i.e., the CSS Specifications “include” those documents. By strong implication, they may include others.
Judge Rushing further states:
Kaleidescape misses the point, it seems to me, when it asserts that the license agreement “unambiguously excludes the General Specifications document from the scope of the term "Technical Specifications.‟ ” Under the plain terms of the License Agreement, the question is not whether a document falls within the “Technical Specifications,” but whether it falls within the “CSS Specifications” with which the licensee agrees to comply. Kaleidescape's argument to the contrary rests on the premise that, as it says, “The "CSS Specifications‟ document has two parts: "I. Procedural Specifications‟ and "II. Technical Specifications.‟ ” But this assertion rests on the notion that by mentioning these particular documents, the License Agreement impliedly excluded other documents that might otherwise conform to the definition of “CSS Specifications.” I cannot accept his implicit invocation of the maxim expressio unius exclusio alterius est, which operates to impliedly exclude unmentioned things when a list of intended things is given. The mention of the Technical and Procedural specifications is explicitly non-exclusive, i.e., the agreement describes the CSS Specifications as “including the Procedural Specifications and the Technical Specifications.”
But then Judge Rushing does add some highly thought provoking discussion which does address your (Q's) concern more squarely:
The real questions are whether courts should enforce such after-disclosed terms at all, and if so under what conditions. I have little difficulty answering the first question in the affirmative.

...At the same time, by giving effect to such provisions courts will be empowering licensors to sell licensees a pig in a poke, a phrase dating back to an apparently widespread medieval confidence trick... If courts are not to become instruments of sharp practice, we must afford some protection against the situation where the pig turns out to be a cat, which scampers off leaving the licensee holding the bag. As safeguards against such situations, the practice should first be limited to circumstances where a reasonable commercial justification was reasonably apparent to the licensor. This suggests that, in some cases at least, a belatedly disclosed restriction may lose some or all of its contractual force because there was no reason it could not be disclosed prior to the promisor's entry into the agreement. The restriction should also be required to fall within the zone of reasonable expectation from the perspective of the licensee. This criterion might be implicated by an undisclosed restriction unrelated to the subject matter of the agreement, or one that unexpectedly impaired the economic value of the licensed information or technology.

PeterS

09-16-09, 04:11 PM

Extremely well put and to the point.

Dizzman

09-16-09, 04:18 PM

And in english Ron...? :D

Ron Party

09-16-09, 05:44 PM

Dang, Dizz, you know well and good that us attorneys don't speak English. (This is to state nothing of the fact that we can only answer a question by replying with 10 new questions.) I'll try to break down the gist of the concurring opinion (and please keep in mind I've only been referencing the concurring opinion which, in and of itself, is not binding).

Judge Rushing references the lower court's ruling in favor of K:
The trial court ruled that the disk-in-machine requirement was not part of the parties‟ agreement because the document in which it appeared--the “General Specifications”--was not explicitly identified in the license agreement as one of the documents it incorporated by reference.
and then states a disagreement with that finding. In other words, the contract obligated K to comply with "CSS Specifications" which included: (1) Technical Specifications; (2) Procedural Specifications; and (3) such documentation as may be revised from time to time consistent with certain specified provisions. The General Specifications would fall squarely in category number 3 per Judge Rushing (and, I might add, the official appellate court decision penned by Judge Premo).

Rushing does express concern over the potential for abuse or sharp practices when it comes to later disclosed documents or "after-disclosed terms" and, as such, Rushing suggests certain safeguards, including requirerments for reasonable commercial justification, reasonable expectations, etc.

PeterS

09-16-09, 06:30 PM

This has been standard practice in the industry for some time. The generalization is that the technical specifications and the requirements to meet them are always evolving and as such need to be covered in this manner.

Does this mean there can be abuses, sure. However, I think that the actions of K may have shown them an error in their previous draft and they moved to fix it. However, I think that if you read the Specifications and Requirements documentation, the intention is clear - this is not being provided to allow the copying of protected content.

This is where I think things "may" have gone awry.

Dennis Erskine

09-16-09, 07:55 PM

I think a couple of salient points have come forward from the "legal staff". One is this isn't over by a long shot. The second alluded to by Ron, is, if the court rules the subsequent documents are indeed a valid part of the contract, then I suspect the subsequent litigation will challenge the "reasonableness" of the added stipulations against the original intent and previous actions of the parties. That would add several more years.

mmiles

09-16-09, 08:09 PM

iansilv

09-16-09, 08:11 PM

Totally off topic but hey that is how I roll...

I spent some time at Fusion Research and AXONICS. The folks at AX said don't worry about the K-scope legal issue it is a contract violation not a technical or copyright matter.

The young tech at Fusion said is not legal and violates tons of copyright issues to save and store BluRay [ which is the selling point of AX ].

So what is the deal? Who is right here?

Neither- they don't know what they are talking about and are biased.

Except that AX is right about the contract violation and the Fusion guy is technically right about copying bluray... except for the personal fair use argument that has yet to be tested in the court system by an individual being sued by the AACS people for copying a bluray to a media server for personal use only and not distributing it. :)

mmiles

09-16-09, 08:42 PM

Another buzz and DIY product is "Popcorn". Any word???

QQQ

09-16-09, 08:55 PM

PeterS

09-16-09, 09:05 PM

Actually, here's a brief read:

1. If you signed the DVD Association agreement and then go ahead and produce a product in violation of that agreement (not saying K has, but has been alleged) then the agreement is in full force and the point of the litigation.

2. If you do not sign the Agreement, and have no access to the technical information provided to you by the association as part of the Agreement, then you are violating the DMCA. One of the convenants of which is - if it is Copy-Protected (technically) then we will protect it (legally).

In other words - damed if you do, damned if you don't. Only way in is to pick one and argue that it somehow does not apply.

Ron Party

09-16-09, 10:29 PM

DVDCCA sued Kaleidescape for breach of contract and breach of the covenant of good faith and fair dealing. The entirety of the appellate decision addresses the lower's court's finding there was no breach of contract. Generally speaking, if there is no contract then there can be no breach of the covenant of good faith and fair dealing.

If on appeal to the CA Supreme Court the appellate court's decision is affirmed, then not only is the trial court going to address breach of contract but in addition breach of the covenant of good faith and fair dealing.

Generally speaking, the covenant of good faith and fair dealing is implied in every contract and requires the contracting parties to, well, deal fairly and in good faith with one another (shocker, I know!).

Upon remand it is possible the trial court might conclude K breached that covenant by its reliance on the technical arguments. The appellate court made reference to deposition testimony by Stephen Watson, K's Chief Technology Officer, who stated:
Watson explained at his pretrial deposition that Kaleidescape knew that it would probably have to license CSS in order to build the system it planned. Knowing that it would not be given the technical specifications until after it executed the License Agreement and paid the administrative fee, Kaleidescape went forward, he said, and “chose to risk the possibility that the full CSS License would turn out to be unacceptable to us.” He agreed that the company understood prior to entering into the License Agreement that “that the license may not have permitted the product [they] were contemplating.” [Emphasis added.]
The appellate court also cited a Watson memo:
DVDCCA introduced a memo prepared by Watson after Kaleidescape had received the package of specifications but before this dispute arose. The memo, a compliance analysis that Watson transmitted to the founders in June 2003, revealed Watson‟s understanding that General Specifications was one of the previously undisclosed sets of CSS specifications to which the License Agreement referred.
The appellate court wrote that it was not until K submitted its trial brief that K first asserted the General Specifications argument:
On March 20, 2007, just as the evidentiary phase of the trial was set to begin, Kaleidescape filed a supplemental trial brief entitled, “Lack of Incorporation of CSS General Specifications into the CSS License Agreement.” In this brief, Kaleidescape explained: “As part of its review of the DVD CCA‟s allegations, Kaleidescape has now come to realize that nothing in the CSS License Agreement references and incorporates [General Specifications] into the parties‟ contract.” The brief goes on to argue, apparently for the first time, that General Specifications was not part of the agreement between the parties.

Ron Party

09-16-09, 10:35 PM

Does anyone have a link to the written decision of the trial court?

Ron Party

09-16-09, 10:55 PM

As has been pointed out. even a loss in the case will not stop anything. by the DVDCCA's own contract, they are obliged to appoint an ombudsman to work out an equitable solution. so with time for appeal, then time for ombudsman, and time to work through all that. So... 5 years? maybe more?
Dizz, I just read a copy of the complaint filed by the DVDCCA to initiate the lawsuit against K. Paragraph 26 states:
DVD CCA first learned of Kaleidescape's System in December, 2003 and immediately notified Kaleidescape in writing of its concern that the System did not comply with the requirements of the CSS License. The parties continued to communicate and, in accordance with the DVD CCA Bylaws, an independent Ombudsman was appointed in an attempt to resolve the dispute informally. After the Ombudsman process failed to lead to a resolution, the instant action was promptly filed.
I'm late to this dance (I just began reading this thread and the appellate decision today), but I'm wondering if there is any surviving requirement for the appointment of an ombudsman?

Dizzman

09-16-09, 11:00 PM

according to k (what they told us internally) the first that K ever heard was when the suit was filed.

Who Knows

bleair

09-17-09, 01:33 AM

Ownership never existed. The fact that you "own" a small plastic disc means nothing. You in fact own a coaster, because the content is only licensed to you. Thus, the justification of studios regarding copying is legally sided with more often than not, because it's the IP that's at issue, not the frisbee.

In imprecise, none lawyer speak, I'm saying the ability to sell the frisbee is "ownership" and with downloads, that "ownership" can be prevented.
See here:
http://en.wikipedia.org/wiki/First-sale_doctrine

A feature of downloaded media is that it can take this attribute away. Of course consumers might not mind. We'll see. My point is though, you will not be able to sell content you've paid money for and downloaded "to own".

Another attribute that's different between current frisbee-based media and downloads, is that the frisbees you own currently can't be "deactivated" or made inoperable. With downloads that is possible, even when you've paid money "to own" it.

sierraalphahotel

09-17-09, 05:15 AM

In imprecise, none lawyer speak, I'm saying the ability to sell the frisbee is "ownership" and with downloads, that "ownership" can be prevented.
See here:
http://en.wikipedia.org/wiki/First-sale_doctrine

A feature of downloaded media is that it can take this attribute away. Of course consumers might not mind. We'll see. My point is though, you will not be able to sell content you've paid money for and downloaded "to own".

Another attribute that's different between current frisbee-based media and downloads, is that the frisbees you own currently can't be "deactivated" or made inoperable. With downloads that is possible, even when you've paid money "to own" it.

Good points.

Possessing a disc would always be preferable to relying 100% on a download, IMHO. Imagine having all your friends around to watch a movie, but your content download vendor's servers are down and you can't play the movie because the software can't "validate" your account with the server! :eek:

sound dropouts

09-17-09, 04:12 PM

Hopefully somebody on the left when it comes to consumer rights.

Huh??? The left has always been against consumer rights (unions, protectionist policies, etc) and for labor/coporations. The right (fair trade, lower taxes) has always been FOR the consumer.

Mr.Poindexter

09-17-09, 09:17 PM

Ownership never existed. The fact that you "own" a small plastic disc means nothing. You in fact own a coaster, because the content is only licensed to you. Thus, the justification of studios regarding copying is legally sided with more often than not, because it's the IP that's at issue, not the frisbee.

Now that sounds like a true MPAA/RIAA type of statement. Ownership in fact DOES exist if you own a record. They cannot revoke your rights to listen to the album. They could place restrictions on you copying said record for resale but taking your statement, one could say you cannot "own" a copy of a Harry Potter book but you only have a license to read it.

It reminds me of a statement from Turner Broadcasting about how TiVo was illegal because you could skip ads. They said "when you watch a TV show, you are entering into a contractual agreement where you agree to watch the ads." Um, WHAT?! I don't recall entering a contract when I watch TV and when pushed on the watch commercials excuse when one had to go to the bathroom, they said an exception has to be made for bathroom breaks.

They really do want us to watch TV like this:
http://img2.timeinc.net/ew/dynamic/imgs/060609/14578__clockwork_l.jpg

iansilv

09-17-09, 09:19 PM

I say we all juice up for a bit of the good old ultra-violence!

QQQ

09-17-09, 09:27 PM

Huh??? The left has always been against consumer rights (unions, protectionist policies, etc) and for labor/coporations. The right (fair trade, lower taxes) has always been FOR the consumer.

So the left is for unions and corporations? Interesting. Are they also meat eating vegetarians?

Political arguments aside, the VCR case is an interesting one because it did not break down across normal political lines. http://www.eightiesclub.com/id408.htm

It was ironic to learn that when the VCR came out Hollywood wanted a cut of every VCR sold. Too fricken typical and funny. 25 years later and they are still trying the same tactics. A year ago they were actually arguing they should get a cut of every portable device sold.

Ron Party

09-17-09, 10:02 PM

Ron Party,

Thanks for your posts. I found this statement by the judge especially relevant:
This suggests that, in some cases at least, a belatedly disclosed restriction may lose some or all of its contractual force because there was no reason it could not be disclosed prior to the promisor's entry into the agreement.

Yesterday I briefly touched on the DVDCCA's claim against K for breach of the covenant of good faith and fair dealing, but I wanted to return to Q's post. Q picked up on something that was bugging me as I was reading both the official appellate and concurring opinions.

To what extent did the DVDCCA know what kind of system K was intent on producing before K entered into the License Agreement? As cited by the appellate court in support of its decision, Watson and K understood that the License may have precluded K from producing the K system. Well, can't that same argument be used against the DVDCCA? If the DVDCCA can be charged with that knowledge, then isn't that the classic pig-in-a-poke case to which Judge Rushing made reference in the concurring opinion?

Morerover, the DVDCCA argued that the General Specifications were to be part of every license agreement. If so, then what justification did the DVDCCA offer for withholding disclosure until after K (or anyone, for that matter) enters into the License Agreement?

I mean, c'mon, were talking "general" specificatioins, by definition. There would seem to be no risk whatsoever to make known the disc-in-machine requirement. It's not as if the DVDCCA is providing access to the CSS decryption to everyone who wants it.

Just wondering out loud, but it seems to me K might have a case against the DVDCCA for breach of the covenant of good faith and fair dealing.

QQQ

09-17-09, 11:18 PM

Yesterday I briefly touched on the DVDCCA's claim against K for breach of the covenant of good faith and fair dealing, but I wanted to return to Q's post. Q picked up on something that was bugging me as I was reading both the official appellate and concurring opinions.

To what extent did the DVDCCA know what kind of system K was intent on producing before K entered into the License Agreement? As cited by the appellate court in support of its decision, Watson and K understood that the License may have precluded K from producing the K system. Well, can't that same argument be used against the DVDCCA? If the DVDCCA can be charged with that knowledge, then isn't that the classic pig-in-a-poke case to which Judge Rushing made reference in the concurring opinion?

Morerover, the DVDCCA argued that the General Specifications were to be part of every license agreement. If so, then what justification did the DVDCCA offer for withholding disclosure until after K (or anyone, for that matter) enters into the License Agreement?

I mean, c'mon, were talking "general" specificatioins, by definition. There would seem to be no risk whatsoever to make known the disc-in-machine requirement. It's not as if the DVDCCA is providing access to the CSS decryption to everyone who wants it.

Just wondering out loud, but it seems to me K might have a case against the DVDCCA for breach of the covenant of good faith and fair dealing.
Ron,

This is EXACTLY what I have wondered many times but since I have no idea what the inner workings are of these organizations, I do not know the answer. For instance, Kscape has made a huge issue since the beginning about how they consulted with numerous attorneys and the DVD CCA, and did everything possible to create a "legal" system. And they have said they were caught completely by surprise by the DVD CCA's decision. That being the case, the most obvious question is did they actually inform the DVD CCA about what they were planning? As a non-attorney that would seem to me to be the logical step to follow if you wanted to make sure you were not going to be in violation. But perhaps there are legitimate reasons they would not? Or perhaps that's not how the process works? Perhaps you submit a bunch of paperwork to a bunch of non-entities and hope for the best. From what I have read it's exceptionally difficult to track the DVD CCA down and even find a person to talk to.

It seems strange to me that the question you pose has not been answered in these suits. Or has it?

audioguy

09-17-09, 11:36 PM

Dizzman

09-17-09, 11:41 PM

It's not as if the DVDCCA is providing access to the CSS decryption to everyone who wants it.

nope... that requires 15 seconds in google :D

Dizzman

09-17-09, 11:54 PM

A K competitor I met at CEDIA (see http://www.xtreammediaservers.com) says that their approach (xstream media) is not in violation of any of the issues that are being brought against K. Anyone talk to these folks?

These are the same as blue smoke, mediamax, imerge, etc. it is an HTPC. if you choose to go buy the software that is illegal and put it on the box, and then illegally rip content... well then... that is up to you... wink wink!

They seem to also be setup (indirectly i am guessing) to browse and download the Netflix streaming stuff (hmmm... what a clever idea)

So it is a box that may have the grey market stuff on it already.

SO in essence, yes. it is violating the DMCA. and if the K case was a DMCA case... then we would say yes this is the same.

But no. k is one of only 2 (that i am aware of) that has an actual license to decrypt DVD's and the only one being sued about it.

K's "crime" is trying to create a product that is fully legal from end to end.

But the answer to your question is they are just bypassing all the issues and creating somthing that is in essence illegal. at least it appears that way if they come loaded witht he ripping software. but if they did not license anything, then they will likely stay under the radar.

audioguy

09-18-09, 12:00 AM

According to the guys I talked to, they are not decrypting them. Just copying the entire contents of the disk to the hardrive.

Dizzman

09-18-09, 12:09 AM

if you do not decypt... you cannot play! all K does is copy the disc image to the hardrive. all REAL DVD was doing was copying bit for bit to the hard drive.

To play them you either need a license, or you use the "illegal" decrypting software.

Ron Party

09-18-09, 12:10 AM

Ron,

This is EXACTLY what I have wondered many times but since I have no idea what the inner workings are of these organizations, I do not know the answer. For instance, Kscape has made a huge issue since the beginning about how they consulted with numerous attorneys and the DVD CCA, and did everything possible to create a "legal" system. And they have said they were caught completely by surprise by the DVD CCA's decision. That being the case, the most obvious question is did they actually inform the DVD CCA about what they were planning? As a non-attorney that would seem to me to be the logical step to follow if you wanted to make sure you were not going to be in violation. But perhaps there are legitimate reasons they would not? Or perhaps that's not how the process works? Perhaps you submit a bunch of paperwork to a bunch of non-entities and hope for the best. From what I have read it's exceptionally difficult to track the DVD CCA down and even find a person to talk to.

It seems strange to me that the question you pose has not been answered in these suits. Or has it?
There's not much in the appellate opinion that addresses this issue. There is cursory language:
When DVDCCA 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, DVDCCA 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 DVDCCA in January 2004 but were unable to convince DVDCCA that its system complied with the license requirements. Further attempts to resolve the dispute were unsuccessful. DVDCCA filed this lawsuit on December 7, 2004.
The appellate court noted that the following occcurred after K paid the adminstrative fee and signed the License Agreement:
After receiving the three sets of specifications--Title 609, Title 809, and General Specifications--Kaleidescape set to work to interpret them and build its system. Several Kaleidescape witnesses commented upon how difficult the license was to interpret and how they were unable to obtain any help from DVDCCA. [Emphasis added.]
This is one of the reasons why I'd like to find a copy of the written statement of decision of the trial court. That decision is almost certainly full of factual findings and may shed some light about what the DVDCCA knew and when. Indeed, the appellate court noted:
Prior to reciting its proposed decision, the trial court had summarized the testimony of every witness.

petemcn

09-18-09, 12:29 AM

These are the same as blue smoke, mediamax, imerge, etc. it is an HTPC. if you choose to go buy the software that is illegal and put it on the box, and then illegally rip content... well then... that is up to you... wink wink!

They seem to also be setup (indirectly i am guessing) to browse and download the Netflix streaming stuff (hmmm... what a clever idea)

So it is a box that may have the grey market stuff on it already.

SO in essence, yes. it is violating the DMCA. and if the K case was a DMCA case... then we would say yes this is the same.

But no. k is one of only 2 (that i am aware of) that has an actual license to decrypt DVD's and the only one being sued about it.

K's "crime" is trying to create a product that is fully legal from end to end.

But the answer to your question is they are just bypassing all the issues and creating somthing that is in essence illegal. at least it appears that way if they come loaded witht he ripping software. but if they did not license anything, then they will likely stay under the radar.

So as you say, it isn't really legal to do it, but you say that this will likely stay under the radar. Do you mean to the company or the end user? If K* turns out to be illegal and users start turning towards technically illegal policies (such as this type of solution), do you see the studios going after the end user?

While these are likely wealthier users than the ones that got press during the Recording Studios witch-hunts, it seems like it will be harder for the movie studios to win the law-suit as the end users will always claim fair-use and making a backup of something they already own.

So I guess what I'm asking, do you see any reason why end users shouldn't subscribe to one of these solutions?

audioguy

09-18-09, 12:33 AM

So I guess what I'm asking, do you see any reason why end users shouldn't subscribe to one of these solutions?

That is my question. If I buy, for example, the Xtream Media Server product that has no media loaded and load my own DVD's and Blurays, and then use that product, is that illegal??

Dizzman

09-18-09, 12:42 AM

the product seems to violate the DMCA in that it breaks encryption. Therefore in the strict letter of the law, it is illegal

if it did not decrypt, and you had to load AnyDVD or the like on it, then you would be breaking the law by using the product that violates the DMCA.

If i sold a computer, nobody is coming after me.

if i sold a computer that was preoloaded with everything you need to rip and stream movies and i did so with products that violate the DMCA i could be libel. However who would come after you is indeed the question.

The K thing is not hte studios. they have n o part of it and many of "them" own K systems.

Ron Party

09-18-09, 12:48 AM

OK. I found the a copy of the transcript of the March 29, 2007 hearing in which the trial court announced its decision. It's only 79 pages. I'll read it and, as Ahnold says, "I'll be back."

QQQ

09-18-09, 12:55 AM

BTW, isn't another element of this that the only real reason they went after K is that K gave consumers a means to bypass all the BS ads, previews, etc.? After all, they have not gone after AMX (who is the other licensee with a hard drive system) because AMX copies the disc without giving the user such options. At least that is the theory. The other possibility is that this is a test case and if they win they will then go after AMX.

petemcn

09-18-09, 12:55 AM

iansilv

09-18-09, 02:10 AM

If the studios ever came after the end user and said "you are using one of these products and imported them yourselves, we are suing you", the end user would say "I paid for the DVD and simply wanted to put it on my server. I didn't steal anything."

How could the studios possibly win that suit?

Obviously the verbal dialogue would be a bit more advanced than that, but with the studio execs, you never know...

The dvdcca would say that using the software to decrypt the disks is illegal according to the digital millenium copyrigt act. The user would appeal based on the doctrine of fair use and their right to make their own copy. This is a dangerous gamble for the dvdcca as the view opposing them has legal precedent in its favor.

audioguy

09-18-09, 06:55 AM

I'm about to show my ignorance here, but why is it if a consumer copys a DVD, bit for bit, not removing ads, etc considered "decrypting"?

QQQ

09-18-09, 07:39 AM

I'm about to show my ignorance here, but why is it if a consumer copys a DVD, bit for bit, not removing ads, etc considered "decrypting"?

Because there is copy protection on the disc meant to stop that. So the only way to copy it is to bypass that protection.

A lot of people are under the impression that DMCA applies mainly to Hollywood type content or software but the law in fact allows businesses to do all sorts of "neat" ;) things. As an example, there was a motorized garage door lift manufacturer that encrypted their signal from the RF transmitter to the garage door opener. Another company that sells 3rd party transmitters broke the encryption and sold replacement garage door transmitters to work with said company. Said company sued company that sold 3rd party transmitters and used the DMCA as the reason for their suit.

So we have an interesting issue there. In this instance a company tried to use DMCA to stop another company from making a competitive product that would work with their garage door openers. Should they be able to do that? I don't know, I can see both sides. I can see that a company wants to use encryption with their products for valid reasons. On the other hand, should it be illegal for another company to break that encryption if, as in this case, they were not stealing content, but simply making a product so it could work with other said product?

Now that I mention this, I'm going to have to look up that case and see how it ended up.

audioguy

09-18-09, 08:36 AM

QQQ: Thanks.

If the intent was to stop re-distribution of the content so that the content provider was not cheated out of a revenue opportunity, it would seem to me that there ought to be a way to write the law so that a consumer could make a single copy (i.e. for loading on a hard drive) and not be in violation of the law.

My guess would be that if they allowed that, it would be incredibly difficult for the content provider to control how/why the copy was made. So, in order to not have to deal with that particular issue, they just don't allow ANY copies.

I have no legal background but that approach seems particularly onerous to the consumer.

So what about many of the Blurays I am buying that have a digital copy included for loading on a hard drive. How does that play into all of this?

QQQ

09-18-09, 09:15 AM

BTW, here's what happened in that case I mentioned.

http://www.wired.com/techbiz/media/news/2003/11/61232

http://www.wired.com/science/discoveries/news/2003/09/60383

Ron Party

09-18-09, 11:42 AM

This is one of the reasons why I'd like to find a copy of the written statement of decision of the trial court. That decision is almost certainly full of factual findings and may shed some light about what the DVDCCA knew and when.
Wow. 79 pages and mostly a lot of wind. Little substance. I'm disappointed. The only references to the precontract discussions between the parties are as follows:
I think I've alluded to them, certainly the testimony of defense witnesses, to the effect the Plaintiff asserts, the Court does not adopt that interpretation. I saw this as a case in which everyone tried to do discovery in a way to kind of make up for the fact that nobody sat down and met and talked. [Emphasis added.]

...hard money was put down in an entrepreneurial environment taking a risk, that that risk was enhanced by the fact that they really couldn't get answers in the contract formation process. That the documents were delivered and analyzed. And I've heard the testimony of everyone at the defendant who said they tried to analyze it.
From what little discussion there is in the opinion, it seems as if there was no meeting of the minds, an otherwise essential element of any binding contract. The trial court at one point even states:
there was no real ongoing relationship between the parties in their conduct that would give real help to the court related to how they mutually intended to be carried out.
Hindsight being 20-20, if I'm investing 6 million of my own money, well...

QQQ

09-18-09, 11:50 AM

Wow! Thanks much Ron.

Dizzman

09-18-09, 01:02 PM

I recall K saying how it was impossible to get a hold of them

Ron Party

09-18-09, 01:11 PM

I recall K saying how it was impossible to get a hold of them
This would be quite consistent with the trial court's recitation of the testimony. It also is consistent with the trial court's characterization of the K business plan as being high risk.

QQQ

09-18-09, 01:46 PM

QQQ

09-18-09, 01:53 PM

Here's the article:

http://www.cepro.com/article/industry_insider_dvd_cca_is_an_innovation_stifling_cartel/

The nine-member board of directors is represented equally by studios, CE manufacturers and computer makers--the biggies, I hear, but nobody will divulge their identities!

Why doesn't Kaleidescape just talk to them? For starters, says Kaleidescape CEO Michael Malcolm, "There's no ‘them' to talk to. ... If you call them up, you can't really get people who will talk to you. You'll get no argument from the DVD CCA, whose chief litigator, William Coats, explains, "It's not a regular company. It doesn't have any employees. ... There's not like a technical group that you can go talk to. ... You can't call them up and ask questions...."

So, then, who collects the tens of millions of dollars in "administration fees" that flood into the organization every year? The money goes—surprise, surprise—to the for-profit organization that manages the DVD CCA, License Management International, LLC (LMI). The Morgan Hill, Calif., company was founded by John Hoy in 2000—the year after Hoy founded the DVD CCA. Go figure.

LMI, it turns out, also manages the three other significant "copyright-protection" bodies, including 4C Entity, which is expected to license the forthcoming CSS 2.0--potentially paving the way to double-charge CSS licensees--once through the DVD CCA and once through 4C, with the proceeds going to LMI.

I don't know enough to suggest that the DVD CCA is wrong in the Kaleidescape case. But I do know enough to infer that something about the DVD CCA stinks. An organization that wields that much power should have to, at the very least, put a contact name and phone number on its Web site, post its bylaws, disclose its board of directors, name its management company...

Steve Goff

09-18-09, 02:33 PM

This is one of the reasons why I'd like to find a copy of the written statement of decision of the trial court. That decision is almost certainly full of factual findings and may shed some light about what the DVDCCA knew and when. Indeed, the appellate court noted:
As you apparently have discovered, and for the benefit of others, Kaleidescape has the trial court's statement of decision on its website here (http://www.kaleidescape.com/files/legal/DVDCCA-vs-Kaleidescape-Statement-of-Decision.pdf?zoom_highlight=trial+court+written#search=%22tr ial%20court%20written%22), and the addendum here (http://www.kaleidescape.com/files/legal/DVDCCA-vs-Kaleidescape-Addendum-to-Statement-of-Decision.pdf?zoom_highlight=dvd+CCA#search=%22dvd%20CCA%22). The court intended that its oral statement be taken as its decision, as amended by the addendum.

Mr.Poindexter

09-18-09, 03:58 PM

If the studios ever came after the end user and said "you are using one of these products and imported them yourselves, we are suing you", the end user would say "I paid for the DVD and simply wanted to put it on my server. I didn't steal anything."

How could the studios possibly win that suit?

Obviously the verbal dialogue would be a bit more advanced than that, but with the studio execs, you never know...

I recall a case I heard of where the RIAA sued somebody for downloading songs they owned on CD because it was more convenient than ripping them themselves. I don't remember the specifics, but I don't think it ended too well for the consumer.

QQQ

09-18-09, 04:03 PM

Mr.Poindexter

09-18-09, 04:10 PM

*Too funny. AVS has the word I put spaces in between banned so it shows up as asterisks!

Can we make Internet Explorer do that to the words "Paris Hilton"?

DreamWarrior

09-18-09, 06:01 PM

That I would LOVE to read. That's actually what I have done on occasion. I'll b i t t o r r e n t* something I actually own because I'm traveling and don't have it with me or whatever. I've actually mused that it would be humorous if they came after me and I could prove that I've bought everything I downloaded. Of course I'm assuming common sense and decency would have something to do with the process, and it wouldn't.

*Too funny. AVS has the word I put spaces in between banned so it shows up as asterisks!
With BT I think they get their panties in a bunch more because you are aiding in the redistribution of their content than that you are downloading something you own, since you are providing it back as you download it. So, you are effectively making their content available to those that did not purchase it by downloading it via BT.

Though, I'm sure they would still be pissed even if you downloaded it via a different (non-sharing) method.

Mr.Poindexter

09-18-09, 06:09 PM

Their panties are in a bunch either way. With the sharing though, you are more culpable and often are sharing to multiple people which allows for more counts they can levy on you.

QQQ

09-18-09, 06:25 PM

Ya, that's why I turn off sharing (not because of fear but because I don't want to be helping other people steal content). I forget the term but I am what the pirates refer to as a "leecher" or something similar :D. I download but don't let anyone upload. It (Bit Torrent) is not something I do that often. Another example was when I was watching the season finale of lost and the DirecTV signal went out due to a thunderstorm. Well I'll be damned if I was going to wait for it to be available on itunes when I'm a Lost addict. But I've still bought every season of Lost so F'em if they want to come after me :D.

QQQ

09-18-09, 07:21 PM

Since we have been talking about how Hollywood needs to adpat to new technology, on a humorous note, see this article:
http://www.cepro.com/article/blockbuster_to_close_960_stores_by_end_of_2010/K5

and then see this prophetic video by the Onion.
http://www.youtube.com/watch?v=3TrPwOrf4sM

QQQ

09-19-09, 03:16 AM

Hindsight being 20-20, if I'm investing 6 million of my own money, well...
Only 6 million :)? Want to read something funny? Here's one that should be written about in business textbooks. Here's a company (ebay) who was somehow stupid enough to pay billions of dollars for a company (skype) and the original skype owners managed to keep ownership of the IP for the skype product! This is mind boggling. Meg Whitman is already gone but some high level people should be fired over this on, someone dropped the ball here big time. The former skype owners had to be laughing their asses off that they got them to agree to that or somehow sneaked it by everyone in the contract.

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/18/AR2009091803130.html

What's most interesting about the lawsuit is a single disclosure early in the lawsuit complaint. Not only does Skype not own the core P2P technology underlying the service, but they don't even have access to the source code (emphasis added):

...Skype did not obtain a license to the GI Software source code, however, and the license it did obtain was terminated based on Skype's breaches of the license agreement.

And this bit of information singlehandedly explains possibly the entire history of Skype over the last few years. Want to know why they never opened up to developers in a meaninful way? It's because they couldn't. They can't even tweak their own core source code to allow it. Skype has never disclosed this, but it must be a source of monumental frustration for them.

...But until this litigation is cleared up, and Skype has access to the actual source code that runs its service, that isn't going to happen.

The real story here is that Skype is restrained from innovating because they don't own their own IP. In fact, they can't even see the core IP.
How would you like to own a billion dollar company and you can't look at the source code for the product your company's existence is based on :D?

sound dropouts

09-19-09, 11:27 AM

So the left is for unions and corporations

Yes. Corporations have pushed for protectionism and subsidies more than labor, though both have wanted it. The right has traditionally been for free trade which both corporations and labor hate (though overall it maximizes utility for both foreigners and locals and makes everyone better off in the end). I am not saying labor and corporations necessarily like each other, but they both have common goals. Why do you think labor was celebrating in detroit when the big three got bailouts?

sound dropouts

09-19-09, 12:42 PM

I wouldn't say that all corporations are against free trade. It also doesn't necessarily make everyone better off in the end but it raises the overall standard of living. For example, if you lose $10 but I gain $20 we are collectively better off but you are not.

Yes, I agree. Which is why I send "in the end".

Also, I do not think labor unions have a common goal with business.

When I say common goal, I do not mean common interest. They each want something quite different, but the way of achieving these different ends is very similar. Hence the govt can say "we are working for labor" when in reality they are giving in to the lobbying of corporations.

Ron Party

09-19-09, 04:26 PM

Only 6 million :)? Want to read something funny? Here's one that should be written about in business textbooks...

How would you like to own a billion dollar company and you can't look at the source code for the product your company's existence is based on :D?
Just when you think you've heard it all... Too funny!

amirm

09-19-09, 09:02 PM

There were actually articles written by CE Pro on how difficult it was to even figure out who exactly the DVD CCA actually "is" so to speak. The author could never find a real person to actually talk with.
As the article that you linked to implies, there are people to talk to at LMI. But, folks should not have an expectation of talking to "DVD CCA." No one company in that group can represent the organization's views (legal, policy or otherwise). The group meets and discusses things but when it is all said and done, it is the licensing agent which has the authority to speak on its behalf.

Of course, LMI knows nothing about what led to the license. Their job is simple commerce, not answering K's questions.

This may all sound odd. But it is the way the entire industry works. Take MPEG-2 for example. MPEG-LA can talk to you about logistics of getting a license. But you don't go and talk to them about why something is in the standard as that work was done by an entirely different organization.

So if you want to be mad at something, be mad at CD, DVD, MPEG, SD card, AAC, DV, etc., etc :).

jpjibberjabber

09-20-09, 06:49 PM

Good points.

Possessing a disc would always be preferable to relying 100% on a download, IMHO. Imagine having all your friends around to watch a movie, but your content download vendor's servers are down and you can't play the movie because the software can't "validate" your account with the server! :eek:

This prevention can be - and is - made possible via authentication from hardware connected to the net. This is a key premise behind copy protection for BR. Although it may be obtuse for manufacturers to insist upon network connections for BR players, it essentially makes the frisbee simply a content vehicle, not a protection against unplayability.

markrubin

09-21-09, 07:10 AM

thread cleanup: political discussions are to be avoided

audioguy

10-05-09, 01:41 AM

I had previously asked about Xtream Media Server. A friend who is in the business received the following as it relates to the "legality" of what they offer. I'm not a lawyer so am not able to comment but I know a few lawyers hang out here so I would be interested in your comments:

"Several of you have asked about how we do Blu-Ray legally. We follow several crucial rules in order to keep ourselves "In the green". The way our software works accomplishes the following:

1. No wireless transmission- none of our units can transmit or receive content over secured or unsecured wireless networks.

2. No data interception, meaning the data stays within a hardline network and travels from client to client transmission only.

3. We do not offer support or install any burning hardware or software. Once on the unit the data *cannot* be duplicated.

4. Each unit is equipped with a physical Blu-Ray drive, meaning if I wanted to play a movie off of a disc I can; it is not just a storage unit or wireless broadcast media server ( as, for example, Linksys ).

5. There is no ability to stream over the Internet. We do not offer any form of Internet broadcast.

6. We have a disclaimer with each unit in the manual and every time you import a disc that reminds the client that it is illegal to import movies that you do not own, and that we in no way support or condone the piracy of another individual's intellectual property.

Our research has shown that as long as the user owns the disc they are importing and keeps it within the confines of one household there should be no problems with what our servers do. We do not advertise, express, direct, or imply in any way, shape, or form that our units "copy discs": its purpose is to create 1to1 digital backups of your movies for playback on their own equipment.. As you know, Blu-rayTM is a growing and evolving medium with several types of gray areas. Despite the legal setback in reference to Kaleidescape, in the Supreme Court, there is no injunction against Kaleidescape and their product is still legal to sell. We do not interfere with coding on the disc. We simply have the ability to import and control Blu-ray data without compromising any of their legal protections, using our hardware and software software."

iansilv

10-05-09, 02:15 AM

Is it windows based? Does it use anydvd-HD?

audioguy

10-05-09, 12:02 PM

Is it windows based? Does it use anydvd-HD?

I have no clue about the platform upon which it is based. Why would that make a difference about the legality of the product?

JlgLaw

10-05-09, 12:46 PM

In the eyes of the content owners, none of these devices are legal. Each manufacturer (of devices that make and store a persistent copy) has decided on an approach to try and get around the relevant statutes and case law. None of these approaches have been tested in court, and until they are, companies can claim whatever they like in marketing their products.

Jim

Dizzman

10-05-09, 01:22 PM

they are so full of crap it is not even funny.

2 companies (to the best of my knowledge) have a license to use the CSS system in their product. K and AMX Max. anybody else ILLEGALLY cracks the encryptions in order to get them on the hard drive, and then play them back. in some cases that software is provided on the product (REALLY dangerous and no back door arguments about legality if you do that) and some require you to get that software and put it on yourself. in either case it is a DMCA violation, and a copyright violation.

THere is no research to do. it is "Xtreamly" simple (i made a funny) they are violating the DMCA.

as far as fair use, no real arguments to be had. fair use is allowed. but to get fair use you have to violate the DMCA.

their comments about K are COMPLETELY irrelevant. the supreme court is not yet involved. and as has been said many times, K has NOTHING WHATSOEVER to do with copyright. it is purely a contract dispute between K and the DVD CCA. And dispute the proclamations of some, that element is contract law seems to be a solid dispute. first court agreed with k, appeals agreed with DVDCCA, and we have a few lawyers here who also happen to agree with k.

so in the end, the lawyers will all make lots of money and we will not get our movies LEGALLY on a pc for QUITE a while.