Kaleidescape Launches Blu-ray Vault at CEDIA Ahead of December Court Date

ATLANTA -- Media-server company Kaleidescape is making a strong stand with product and rhetoric this week at CEDIA, in advance of the company’s Dec. 6 court date with the DVD Copy Control Association. The company is demoing a modular 100-disc vault designed to circumvent rigid and complex Blu-ray playback rules, Linus Wong, director of product marketing, told Consumer Electronics Daily. Wong said what the vault does complies with an agreement between Kaleidescape and the Blu-ray Disc Association requiring that a disc be present for Blu-ray playback.

The vault, which connects to one of the company’s M-class Blu-ray players, allows users to play content from Blu-ray discs stored on a Kaleidescape media server on TVs throughout a house. The discs remain in the vault, adhering to licensing requirements and the Digital Millennium Copyright Act, the company said, but still deliver instant playback of movies, a trademark feature of Kaleidescape’s high-end players. The suggested retail price of the vault, due to ship to dealers in Q4 with beta software, is $1,500, Wong said. Production software will be available early next year, he said.

Kaleidescape has an OEM agreement for the 100-disc mechanism, Wong said, adding that larger-capacity mechanisms don’t have the flexibility to make modifications the company needed to work with the its Blu-ray disc management system. The vault connects to an M-500 or M-300 player via USB. Customers can buy multiple vaults if they have more than 100 Blu-ray titles, Wong said, but each vault must be connected to its own M-class player. Wong said there’s no online access to the vault from outside the home today. “We're very wary and cognizant of the agreements we signed for Blu-ray, which are different from those we signed for DVD,” he said, adding that Blu-ray license agreements are 4,000-5,000 pages. “One way to ensure that we're in compliance with the agreements we have signed is to require that the discs be present."

Kaleidescape’s chief technology officer, Steve Watson, will hold a CEDIA session Friday for dealers and attendees called “Why Innovators Get Sued.” He gave us a preview of the session, in which he refers to “the Hollywood cartel” and discusses “collusion” among studios to reduce innovation and what he calls threats to the first-sale doctrine in copyright law. In his presentation, Watson posits that Hollywood wants playback devices to be commoditized so that consumers will reserve most of their limited resources for content rather than for playback devices, especially for high-end playback systems like those from Kaleidescape that start at roughly $10,000. He told us that the 5,000-page Blu-ray licensing agreement describes what licensees are and aren’t allowed to do. “You have to think of innovation first to eliminate it,” Watson said. “If you don’t think of it, you probably didn’t rule it out, and that’s an opportunity for us.” He called that kind of reasoning an abuse of the legal system and copyright laws and not what Congress had in mind when it enacted the DMCA. “The DMCA was not intended by Congress to enable Hollywood to prescribe how playback devices must be built or to enable mammoth companies like Panasonic, Toshiba, and Sony to maintain the status quo and restrain innovation by upstart competitors, but that’s how it’s been used,” he said.

The latest legal update on the Kaleidescape website says the company expects to return to trial court in Santa Clara County, Calif., Dec. 6 for a second trial on a complaint by the DVD Copy Control Association that Kaleidescape breached its CSS License agreement. Kaleidescape won the 2007 trial, in which the DVD CCA claimed that the company breached the CSS License Agreement and did not comply with a document called the “General Specifications.” Kaleidescape successfully argued at trial that the General Specifications document was not a part of the original contract and presented evidence that its products fully comply with the General Specifications. In 2007, the judge agreed with Kaleidescape that the General Specifications are not a part of the original contract but did not clearly rule on whether Kaleidescape complies with the General Specifications. A California Court of Appeal ruled in 2009 that the General Specifications are a part of the contract after all but did not decide whether Kaleidescape complies with them.

The December trial is expected to decide that issue, but Watson said the legal wrangling is far from over. “I don’t think that will be the end of it by a long shot,” he said. “It matters what happens but I don’t think it will be over, no matter what happens. The minute they stop suing us, we've turned into a dinosaur, so let’s hope that doesn’t happen."

Kaleidescape is also introducing at CEDIA a user interface and remote control specifically designed for children. When a child uses the colorful, egg-shaped remote, only the page for child-sanctioned movies selected by parents appears on screen. All text menus are replaced by graphical representations, the company said, and kids can’t exit that mode without help from a parent. The software update will be updated by October, the company said, and the remote lists for $39.