OPINION: Copy regime
By Paul Sweeting -- Video Business, 11/2/2007
NOV. 2 | A PROPOSAL BY three studios to establish a managed-copy regime for DVDs could get derailed this week by continued legal skirmishing between the DVD Copy Control Assn. and Kaleidescape Systems, a maker of high-end home media servers.
Paul Sweeting is editor of Content Agenda
The proposal is slated for consideration at a meeting of DVD-CCA’s Copy Protection Advisory Council (CPAC) scheduled for Nov. 7 in Los Angeles. But a letter sent over the weekend to members of CPAC by Kaleidescape CEO Michael Malcolm threatens the group with legal action should the proposal be approved.
A similar threat in June led CPAC to postpone action on a similar proposal.
The proposal, offered by Warner, Disney and Fox, would amend the CSS license agreement governing the use of the encryption system on DVDs to permit DVD movies to be copied to a hard drive under certain circumstances.
The proposed managed-copy regime is meant to complement the managed-recording with CSS amendment approved earlier this year.
However, according to Malcolm’s letter, the proposed managed-copy amendment contains no requirement that the studios actually make DVDs available for copying. Without such a guarantee, the letter argues, all the amendment would do is impose restrictions on copying without ensuring that copies could, in fact, be made.
In Malcolm’s view, the proposed managed-copy amendment is simply a disguised attempt by the studios to prohibit Kaleidescape from continuing to sell its managed-copy servers.
“The only mandatory feature of the current ‘Managed Copy Amendment’ is … the prohibition on the making of persistent copies that is aimed at driving Kaleidescape out of business,” the letter says. “All the rest is illusory and is nothing more than another shameless attempt by certain members of the DVD-CCA to put Kaleidescape out of business.”
Should CPAC approve the amendment, Malcolm warned, it could open DVD-CCA to “serious and substantial antitrust liability.”
THE MANAGED-COPY amendment is actually one of two related proposals on the table for the Nov. 7 meeting, and perhaps not even the most controversial. The second proposal, also offered by Warner, Disney and Fox, would prohibit licensed DVD devices from being designed to descramble (i.e. playback) CSS-encrypted content unless the original disc is present in the DVD drive.
The proposal is virtually identical to the one offered in June, which was withdrawn after Kaleidescape’s first threat of legal consequences.
The amendment is aimed at closing what the studios see as a loophole in the CSS license resulting from the court’s ruling in their failed breach-of-contract suit brought against Kaleidescape in 2004.
In its ruling in favor of Kaleidescape earlier this year, the court said the CSS license as currently written does not legally prohibit playback from a source other than the original disc.
That ruling has been appealed, but the amendment is intended to moot the issue by retroactively changing the CSS license to prohibit such a design—a move Malcolm sees as an illegal conspiracy to put Kaleidescape out of business.
“The members of CPAC and of the DVD CCA board of directors are in a unique position to collude to promote an anti-innovation agenda on behalf of their corporate employers and to restrain competition and innovation within the consumer electronics and computer industries,” he said in his letter. “That is exactly what the proposed amendments are intended to accomplish by putting Kaleidescape out of business and deterring other innovative companies from entering the market.”
As a practical matter, Kaleidescape’s threatened legal action is probably enough to deter the consumer electronics and IT companies in DVD-CCA from going along with either of the studios’ proposals, just as it did in June.
That will leave legal managed-copy for DVDs in limbo—unless, of course, the studios want to challenge Kaleidescape on copyright grounds, instead of contractual grounds, and risk a court finding that Kaleidescape owners have a fair use right to copy their own discs to their own servers for their own personal use, regardless of what the CSS license says.
Paul Sweeting is editor of Content Agenda. Get more of Sweeting's analysis here.
