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Kaleidescape Wins CSS Suit

3/30/2007 11:50:00 AM Eastern

Mountain View, Calif.— Video server manufacturer Kaleidescape, based here, has been found “in full compliance” with the DVD Copy Control Association’s (DVD CCA) license to the Content Scramble System (CSS).

Santa Clara Superior Court Judge Leslie C. Nichols issued the ruling in the three-year-old lawsuit after a seven-day trial.

The DVD CCA filed the suit after Kaleidescape marketed a video server that uses an elaborate system to transfer DVDs encrypted with the Content Scramble System (CSS) onto its hard disk drives. The content is recorded with CSS intact onto internal hard disk drives in order to provide convenience to users and prevent multi-generational copies.

Kaleidescape pointed out the judge’s ruling recognized “Kaleidescape’s good faith in its efforts to ensure that its products were fully compliant.”

“Kaleidescape has been operating in the shadow of the DVD CCA's allegations for over three years. We are gratified that after hearing all of the evidence, the judge has completely vindicated our position,” said Michael Malcolm, founder, chairman and CEO of Kaleidescape.

DVD CCA counsel William Sloan Coats said in a statement that the DVD CCA intends to appeal “the adverse California Superior Court decision.”

“Clearly, we are disappointed by today’s events, but remain undeterred. This is a straightforward breach of contract case, nothing more. In its contract with DVD CCA, Kaleidescape – like all CSS licensees – agreed to use CSS for its intended purpose: preventing users from making copies of copy-protected material.”

“Kaleidescape’s system does the opposite – it facilitates the copying of CSS-protected DVDs onto a hard drive so content can be viewed without the original disk,” said Coats. “We will evaluate our options for next steps and then make a final decision. But, an appeal is expected.”

“While not pleasant, DVD CCA must enforce agreements and require adherence to specifications to protect the interests of all CSS licensees … from personal computer companies to electronics manufacturers to content producers like movie studios,” Coats stated.

“In spite of the ruling, DVD CCA continues to believe Kaleidescape, through the manufacture and sale of its system, is in violation of the terms of the CSS license. DVD CCA expects that point to be vindicated upon appeal,” the DVD CCA said.