Kaleidescape, manufacturer of high-end movie servers, beat the DVD CCA the first go-around. Now the organization, which licenses the DVD scrambling system, is fighting back. So is Kaleidescape, with cries of antitrust.
06.21.2007 — Kaleidescape just can’t get a break these days. The DVD Copy Control Association (DVD CCA), which licenses the DVD encryption system (Content Scramble System, or CSS), wants to add an amendment to its licensing agreement that requires a DVD to be present during playback.
In other words, you can’t watch a movie stored on a hard drive, meaning Kaleidescape and its fellow movie-management makers would be in violation of the DVD CCA’s licensing agreement.
Here we go again. The DVD CCA already lost its first lawsuit against Kaleidescape, which makes very high-end movie servers. The organization argued that its licensing agreement expressly prohibited the copying of a DVD onto a hard drive.
Kaleidescape said that there was no such stipulation in the agreement, and the judge agreed. So now the DVD CCA wants to state very clearly that you cannot rip a DVD to a hard drive. Period.
Here’s the proposed amendment:
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.
If passed, DVD CCA members would have 18 months to comply.
Kaleidescape CEO Michael Malcolm wrote a scathing letter (below) to the decision makers at the Content Protection Advisory Council—including officials from consumer electronics manufacturers, PC makers and content providers—condemning the proposed amendment.
Malcolm argues that the group—none of whose members make movie servers—simply wants to put a competitor out of business. Adding the amendment, he says, violates antitrust regulations.
The real purpose of this proposed amendment is to put Kaleidescape out of business by excluding the Kaleidescape System from the DVD playback devices authorized by the CSS License Agreement. You should be aware before you vote on the proposed amendment that you expose yourself, your employer, and the DVD CCA to serious and substantial antitrust liability if you vote for this amendment. Both federal and state antitrust laws outlaw anticompetitive conduct by businesses joining together to put a competitor out of business.
The cries of antitrust violations are not far-fetched. Even the folks at the Electronic Frontier Foundation have suggested that there may be some antitrust issues with the DVD CCA.