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post #1 of 45 Old 03-12-2012, 01:06 PM - Thread Starter
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So now I hear the CA Supreme Court has slapped an injunction on not only Kaleidescape, but also the Kaleidescape dealers. It prohibits them from selling or supporting or servicing them. Kaleidescape will appeal, but that will take a couple of years, and in the mean time what will consumers who own this stuff do if it breaks down or locks up or something? And can Kaleidescape stay in business if they have no sales for two years? What a mess!
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post #2 of 45 Old 03-12-2012, 01:28 PM
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You might want to check your sources.

1. It was an appeals court, not the California Supreme court.
2. The injunction does not apply to dealers.
3. Injunctions such as these generally come with a stay during the appeals process.
4. The ruling has already been appealed.

Here is the basic progression on this case over the last 8 years:

Kaleidescape was sued by the DVD CCA.

Case went to trial. Kaleidescape won.

DVD CCA appealed the ruling of the trial and won their appeal, invalidating the original ruling but not giving the DVD CCA an outright victory.

Case went back to trial again. This time, the DVD CCA won.

Kaleidescape has appealed the ruling.

We are still likely 1-2 years away from this being fully resolved. As it stood, regardless of who won this trial, the losing side was going to appeal.

In the mean time, Kaleidescape is still shipping systems and dealers are still selling them until the case is settled, assuming that the above injunction does not take place until the appeals are finished. Kaleidescape is also still servicing systems, as their servers aren't part of the "Prohibited Technology" to which the injunction applies.
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post #3 of 45 Old 03-12-2012, 01:34 PM
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Okay, take a deep breath......

That is INCORRECT.

It is true that the lower court finally ruled on the matter (this was the second trial coming off appeals). It is also true that an Injunction was ordered. The Injunction has nothing to do with dealers (directly), it couldn't as we are not parties to the action.

The Injunction order is being viewed by K as a "Mandatory" injunction and is thus stayed while awaiting an appeal based on the scope of the Injunction (this appeal was filed by K on March 9th). According to K, it will likely take a year or two to be decided. Until then, business as usual (even with this disclosed to two separate clients this morning, they still ordered their systems).

Keep in mind that this litigation has no affect on BR/CD's/Downloads, etc, and only affects DVD's, and even then, this should not affect current owner's with content they currently have stored in their systems. This was all imported during the time period that it was legal (contractually) to do so. In fact, it should not affect any new owner's that buy in before the Injunction actually takes affect.


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post #4 of 45 Old 03-12-2012, 02:03 PM
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My post above was in reponse to OP, not Mike. He is correct.


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post #5 of 45 Old 03-12-2012, 02:29 PM - Thread Starter
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The original on-line article I read earlier in the day has since been amended to reflect the less far-reaching implications as described by Jim above. My apologies for thinking the reporter had her facts straight.
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post #6 of 45 Old 03-12-2012, 03:03 PM
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If anyone is interested, the DVDCCA has a scanned copy of the judge's statement of decision on its website, here. Not unexpected. The judge ruled that the specifications impose a playback from disk requirement and also foreclose copying CSS-protected content from DVDs onto a hard drive or server for playback without the physical DVD present.

PLEASE NOTE: My remaining posts on this subject have been removed.

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post #7 of 45 Old 03-12-2012, 04:46 PM
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Quote:
Originally Posted by Steve Goff View Post

Who says it has ever been legal contractually to import DVDs? Certainly not this or any other court.

Didn't fair use ruling allow you to make back up copies or store dvd's on hard drive as long as you own them
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post #8 of 45 Old 03-12-2012, 05:11 PM
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Well, the suit is between Kaleidescape and the DVD CCA as a contract dispute. As an end user does not have a contract with the DVD CCA, they are not able to go after the end user in a breach of contract claim.

A DMCA suit would not be able to successfully go after a Kaleidescape end user either, as they are not breaking the copy protection of the content because the system uses a CSS key. On top of that, the misery that would befall the studios for grouping a lot of their own industry people in a lawsuit would be a disaster. Basically, the RIAA method of suing the downloaders was a way to use their clout to push around people who couldn't afford the legal fees of a trial. The user base here is about the polar opposite of some kids downloading music - Kaleidescape users are well heeled individuals that can push back.

The only viable target here is Kaleidescape.
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post #9 of 45 Old 03-12-2012, 05:22 PM
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Quote:
Originally Posted by mani View Post


Didn't fair use ruling allow you to make back up copies or store dvd's on hard drive as long as you own them

I don't think the legality of the DMCA as it applies to fair use for the end user has been challenged in court. Mostly, that's because the industry will NEVER go after end users who legally purchased discs. The PR backlash alone would finally force congress to modify the DMCA and the industry would rather just leave it alone. As such, it's an unenforced part of the DMCA and therefore an aspect of it that consumers can just ignore.

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post #10 of 45 Old 03-12-2012, 06:48 PM
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Quote:
Originally Posted by Steve Goff View Post

Plainly K is a viable target for a contract action, but the court also held that the Sony case has been superseded by the DMCA. And the court said the key must be used for playing the movie from the DVD disc. And a well healed client still needs a good legal theory. Whether they'll actually go after anyone else is another question.

The well healed client's legal theory is that the DVD CCA does not have standing to go after an end user for breach of contract when that end user does not have a contract with the DVD CCA to breach.

Example: I make you sign an NDA and then tell you a secret. If you tell that secret to your friend and your friend goes on to tell the world, I can go after you for divulging the secret. I cannot go after your friend because he did not sign an NDA.
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post #11 of 45 Old 03-12-2012, 08:02 PM
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Quote:
Originally Posted by Steve Goff View Post

Who says it has ever been legal contractually to import DVDs? Certainly not this or any other court that I know about. An injunction isn't what makes something illegal. It says stop doing the illegal thing.



I was referring to the contract between K and the DVD-CCA. K operated for years based on their understanding of the original contract with the DVD-CCA, and sold many systems before the DVD-CCA decided to essentially "rewrite" the terms of the original agreement. The contract dispute that led to this litigation was about the DVD-CCA's ability to expand and add restrictions in these amendments. Until a final and binding decision is rendered that says K is in violation of the contract, it is arguably legal under the original contract ("contractually legal") to use the K system the way it was designed, importing the content to the Server so the KEAOS operating system can improve the user experience.

The decision in the case, and the subsequent Injunction granted by the court based on that decision, is not final until K's appeal is decided in the appellate courts.


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post #12 of 45 Old 03-13-2012, 01:07 AM
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Read them all awhile ago, and you know as well as I do, they didn't. That wasn't my point, never defended the arguments only described them, and stated my opinion that as owner's importing content we had the legal right (again, speaking only from a contract standpoint) to do so because the decision that agrees with the CCA position is not yet final due to K's appeal. Now, the Injunction is a different matter. If that, for some reason, goes into affect before the appeal is heard (K's position, understandably, is that it shouldn't based on CA law), then of course the argument about being able to continue importing DVD's ends with that Injunction, at least until the appeal is heard. Personally not worried either way, I no longer purchase DVD's, only importing BR.

In any case, I understand your point, and because of a chronic lack of sleep, I'm doing a poor job explaining mine. That's all I'll say on the matter, so you can post now and claim the winning argument. I do that with my wife all the time.


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post #13 of 45 Old 03-13-2012, 08:20 AM
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Originally Posted by Mr.Poindexter View Post

I thought Charlie Sheen was the guy who was winning.


Funny Mike.


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post #15 of 45 Old 03-13-2012, 12:04 PM
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Relevant

Here's an excerpt...

The megaretailer announced that customers can bring their DVDs into their local Wal-Mart, and pay $2 to get access to each title via Walmart.com's cloud service, powered by the UltraViolet platform. The $2 only supplies a user with access to a copy in standard definition; a high-definition copy will cost $5.



http://news.cnet.com/8301-31001_3-57...col;topStories

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post #16 of 45 Old 03-13-2012, 12:13 PM
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The DMCA suit as discussed is a contract issue, BUT Kaleidescape still does not have authority to copy Bluray no one does....
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post #17 of 45 Old 03-13-2012, 02:56 PM
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Quote:
Originally Posted by thebland View Post

Relevant

Here's an excerpt...

The megaretailer announced that customers can bring their DVDs into their local Wal-Mart, and pay $2 to get access to each title via Walmart.com's cloud service, powered by the UltraViolet platform. The $2 only supplies a user with access to a copy in standard definition; a high-definition copy will cost $5.



http://news.cnet.com/8301-31001_3-57...col;topStories

Irreconcilable. If you're Wal-Mart, you can rip and sell. If you're a niche brand, you can not even rip.
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Originally Posted by jmichaelf View Post

Irreconcilable. If you're Wal-Mart, you can rip and sell. If you're a niche brand, you can not even rip.

WMT is paying the studios for that right.
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post #19 of 45 Old 03-14-2012, 07:17 PM
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Quote:
Originally Posted by thebland View Post

Relevant

Here's an excerpt...

The megaretailer announced that customers can bring their DVDs into their local Wal-Mart, and pay $2 to get access to each title via Walmart.com's cloud service, powered by the UltraViolet platform. The $2 only supplies a user with access to a copy in standard definition; a high-definition copy will cost $5.



http://news.cnet.com/8301-31001_3-57...col;topStories

Is this through Vudu or another walmart product?
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post #20 of 45 Old 03-15-2012, 02:27 AM
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Is this through Vudu or another walmart product?

Vudu. Details, including how it works, are in the press release here:

http://www.vudu.com/disc_to_digital_press_release.html

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post #21 of 45 Old 03-15-2012, 12:13 PM
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I'm certainly not a legal expert, probably not even a qualified novice and I have a question.

If Kaleidescape ultimately loses, do the dealers and end customers now have basis for claims against Kaleidescape?

If Kaleidescape was found to have breached a contract and sold products based on that breach, I would think the end users and dealers have basis for damages. That could force Kaleidescape into bankruptcy.

P.S. I don't own a Kaleidescape or have any vested interested in the company.

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post #22 of 45 Old 03-15-2012, 02:45 PM
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I'm adding this latest release to dealer's from Kaleidescape. Hopefully it will make K's position clearer....


Dear Kaleidescape Dealer,

Many of our dealers are confused by the sensationalized headlines about the injunction, some of which say falsely that we can no longer ship products or that Kaleidescape dealers have been enjoined from selling Kaleidescape Systems. This reporting is wrong. The injunction is dated April 8, 2012, and is not effective before that date. In fact, it may never go into effect. Even if the injunction goes into effect, we believe our dealers will not be subject to the injunction because they act independently and outside of Kaleidescape's control.

We believe the injunction issued by Judge Monahan is a mandatory injunction. Under California law, a mandatory injunction is automatically stayed (i.e., suspended) pending an appeal. Kaleidescape filed notice of its appeal on March 9. Therefore, the injunction should not go into effect unless, after hearing our appeal, the Court of Appeal affirms Judge Monahan's ruling. It will likely be some time, perhaps one and one-half to two years, before the appeal is decided.

We are taking steps to seek immediate confirmation from the courts that the injunction is stayed pending the resolution of the appeal. We will let you know the outcome of that process, which we hope will occur before April 8, 2012. Even if the courts disagree with our position that the injunction is stayed, the injunction would not go into effect until Sunday, April 8, 2012 at the earliest.

If the injunction were to take effect, Kaleidescape would promptly comply with all of its terms. In that case, new Kaleidescape Systems sold after the effective date would:
Not import DVDs to hard disk.
Only play DVDs directly from the tray, just as rental movies are played today.
Import and playback Blu-ray Discs and CDs from hard disk, just as they do today.


All systems shipped prior to the effective date would continue to import and play back DVDs from hard disk, just as they do today. We will continue to provide service and support for all systems in the form of hardware repairs, movie and music guide updates, Kaleidescape alerts, and software updates with new user-experience features.

So for now we are shipping Kaleidescape Systems that import DVDs, and we will continue to do so unless the injunction goes into effect.

As in the past, I will keep you apprised of important developments in this ongoing legal battle.

Sincerely,

Michael Malcolm
Chairman, Founder and CEO
Kaleidescape, Inc


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post #23 of 45 Old 03-15-2012, 05:23 PM
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So per Kaleidescape, all units sold before the effective injunction date will still allow copying the DVD to the hard disk? They are grandfathered in?

I ask because when Dish lost one of the appeals to Tivo, the popular rumor was all Dish PVR's would be shut down. And of course it''s very easy to do in this case because Dish has full control over the box via satellite. BTW, I think this is still in the courts.

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post #24 of 45 Old 03-15-2012, 07:55 PM
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Quote:
Originally Posted by Glimmie View Post

So per Kaleidescape, all units sold before the effective injunction date will still allow copying the DVD to the hard disk? They are grandfathered in?

I ask because when Dish lost one of the appeals to Tivo, the popular rumor was all Dish PVR's would be shut down. And of course it''s very easy to do in this case because Dish has full control over the box via satellite. BTW, I think this is still in the courts.


That's what K is saying, although the term "grandfathered" is my choice of words, K indicates those systems are not affected by the Injunction, and given what little I do know, I agree that current systems will not be affected and that's all I feel comfortable posting in public.

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post #25 of 45 Old 03-16-2012, 08:22 AM
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Glimmie,

If the existing Kaleidescape systems still function as they currently do, the end users and dealers would not really be able to show damages given that they would have lost zero functionality. Also, a large percentage of those customers would have purchased systems during the litigation. I don't know how that would come into play - people saying Kaleidescape should have known vs. the argument that you knew about the litigation when you purchased the system.
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post #26 of 45 Old 03-27-2012, 11:03 AM - Thread Starter
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Hindsight is 20-20, but it would have been better if K had never negotiated with DVD-CCA from the get go. In doing so, K attained a short-lived and seeming higher level of legitimacy only to have the devil foreclose while others who took an end-around approach are moving forward unmolested. I see that the stay was denied.
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post #27 of 45 Old 03-27-2012, 12:10 PM
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One thing I find interesting is there are so alternative solutions. Not many that are as intagrated as Kaleidescapes, but ones that work as well or better. Including simple HTPCs with backed up content. Even Oppo supported BD and DDV ISO format until a few weeks ago. Now you just hvae to have a menu structure instead. Still very easy to do.

I have seen a K system for DVD and thought, nice, but what makes it special. Can anyone chime in? I am not trying to rip any owners or the company... just saying there have always been options and continue to be many others out there right now. If anything it is suprising they did this to K when some others are popular, just not in the high end realm.

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Quote:
Originally Posted by rovingtravler View Post

I have seen a K system for DVD and thought, nice, but what makes it special. Can anyone chime in? I am not trying to rip any owners or the company... just saying there have always been options and continue to be many others out there right now. If anything it is suprising they did this to K when some others are popular, just not in the high end realm.

Three things I would say:

1. You don't have to learn anything. Just like buying a TV and having it work, this one does too. You talked about Oppo changing this and that. You don't need to know anything like that.

2. Since they use a "playback" license to play content, they don't get invalidated like Slysoft on new titles when the copy protection is advanced. Yes, Slysoft eventually gets around to supporting the new bits but K never hiccups.

3. Networks very easily. Just plug in a new player on your home network and it all just works. You immediately see your library and can start playing content.
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post #29 of 45 Old 03-28-2012, 06:26 PM
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Quote:
Originally Posted by rovingtravler View Post

One thing I find interesting is there are so alternative solutions. Not many that are as intagrated as Kaleidescapes, but ones that work as well or better. Including simple HTPCs with backed up content. Even Oppo supported BD and DDV ISO format until a few weeks ago. Now you just hvae to have a menu structure instead. Still very easy to do.

I have seen a K system for DVD and thought, nice, but what makes it special. Can anyone chime in? I am not trying to rip any owners or the company... just saying there have always been options and continue to be many others out there right now. If anything it is suprising they did this to K when some others are popular, just not in the high end realm.

One word SIMPLICITY. Enough said

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post #30 of 45 Old 03-29-2012, 09:13 AM
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I agree about simplicity, however, at least until last week the oppo was ever easier. Hit one button and save to a drive. Plug drive into Oppo or stream.

But why would someone spend all this money on a system that was in lit and could be banned. A lot of people with crossed fingers kind of got taken.

David

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