Kaleidescape makes The Kaleidescape System, a jukebox that stores secure copies of the owner's DVDs and CDs for more convenient playback. The company, a DVD-CCA member and CSS licensee, was sued in 2004 by the DVD-CCA for violating the terms of the CSS license.
"It's an odd license because some of the agreement is kept secret until you agree and pay," said Kaleidescape chairman and CEO Michael Malcolm. "Then they tell you what you agreed to."
The DVD-CCA argued that the CSS license doesn't allow licensees to make a persistent digital copy of CSS-protected content and requires the presence of a physical disc during the playback de-scrambling of CSS-encrypted content.
In March 2007, Judge Leslie C. Nichols of the Santa Clara Superior Court disagreed and affirmed Kaleidescape's DVD copying under the terms of the CSS-license.
The DVD-CCA has appealed Judge Nicholas' decision. And Malcolm has twice urged members of the Copyright Control Association advisory committee to reject efforts by some DVD CCA board members and three movie studios to revise the CSS license to forbid what Kaleidescape is doing.
Thus, Brumfield sees an uncertain legal environment for RealDVD. "The studios want to directly control the rights for copying, even to one's own PC," she said. "They foresee generating ongoing revenue, or at least marketing benefits, from their ability to control copying across PCs."
Malcolm is baffled by Hollywood's resistance. "The pirates are already out there doing their piracy," he said. "I don't think that [altering the CSS license] will change this very much." RealDVD, he said, "will allow people who own DVDs to make copies if they want to, which they have a fair-use right to do."
Malcolm argues that movies studios should support products like RealDVD and the Kaleidescape System. Kaleidescape customers, he said, typically buy 100 to 200 new DVDs to load into the jukebox. He expects that RealDVD will also stimulate DVD sales. A more tolerant attitude on the part of Hollywood," he said, "will open up a lot of fair-use activities. The studios ought to just get over it and stop harassing companies that do this."
This article was edited on 9/9 to correct the name of the Electronic Frontier Foundation.