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Kaleidescape Verdict: IT IS SO ORDERED!

Sections: Audio, Movies, Source components, Streaming, Streaming, Video, Video servers

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That booming sound you may have heard Monday was the echoing ripple of a bit of your electronic freedom and innovation being smashed under the heavy-handed gavel of Judge William J. Monahan of the California Superior Court.

As I wrote several weeks ago in my DVD CCA 1, Kaleidescape and Innovation 0 post (a good read to get the background info on this case), Kaleidescape has been fighting an ongoing legal battle against the DVD CCA’s claim that Kaleidescape’s hard disk based movie server system violates its licensing agreement that prohibits the copying (storing, archiving, backing-up, ripping – tomato, tomahto) of DVDs. Judge Monahan had handed down a tentative ruling in late January that went against Kaleidescape and its innovative movie server system.  On Friday, his final “ORDER OF PERMANENT INJUNCTION” verdict was entered, with the ominous “IT IS SO ORDERED” written directly above the judge’s signature.

First, I’m bummed both personally and professionally to see that this latest ruling went against Kaleidescape. As someone that lives with and uses a Kaleidescape system on a near daily basis, I can say that it dramatically changes the way you use and enjoy your digital media.

As a dealer, I feel that the Kaleidescape system offers an end-user experience and quality-of-service and performance that is unmatched by any other company in its class, and I truly believe that Kaleidescape is one of the most innovative companies in the industry. It’s also disappointing that these legal issues have continued to hang over them for so many years, sapping resources away from being able to focus entirely on  innovating and improving their system.

As I wrote in my original post, “Kaleidescape has been fighting this fight for eight years now. Consider that the company released its first product in 2003, and it’s apparent that they have been dealing with this suit almost every day that they’ve been around. Think what other cool things they might have been able to do if they could have allocated all of that litigation time, money and distraction into just making their system even more awesome… “ (Even so, they have managed to build a ground-up Blu-ray system, improve their user interface, add the amazing and industry exclusive Kid’s Collection feature, add CinemaScape, add an iPad interface, add favorite scenes…)

And this ruling will not only directly affect Kaleidescape and the users of its system, but also on the next innovative company. Michael Malcolm, Kaleidescape’s founder and CEO, sums it up best on the legal update section of company’s website: “We’ve been baffled about why this lawsuit ever happened, since our products don’t encourage piracy, but do increase sales of movies. Maybe it’s because the large CE companies in Japan and the big computer companies in the USA, on the board of the DVD CCA, are afraid that Kaleidescape is building a better way to enjoy DVDs and Blu-ray Discs than they are. Imagine a world where Apple wasn’t allowed to build the iPod because Sony wanted a ‘level playing field’ for the Walkman.”

After reading Malcolm’s letter to his dealer base (reprinted at the end of my blog, linked below), I felt like this was bad news – a setback to be sure – but that Kaleidescape would be immediately filing an appeal and that we would see this go back through the courts over the next couple of years and that it would be business as usual in the meantime. In other words, this ruling was not “the nail in the coffin.” Then I saw a rather ominous tweet from an industry insider that led me to believe otherwise…

[[Click here to read that tweet, and the comments of Kaleidescape co-founder and CEO, Michael Malcolm, from my interview.]]

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