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Tuesday, December 18, 2007
DVDCCA Files Opening Brief in Appeal of Kaleidescape Decision

The DVD Copy Control Association (DVD CCA) on Monday, filed its opening appellate brief with the California Court of Appeal in its case against Kaleidescape for breach of the CSS license agreement.

The brief is part of the ongoing legal battles between DVDCCA and Kaleidescape, a company that sells media servers. The Kaleidescape system imports DVDs into a hard drive array for future playback. The DVD disks do not remain in the system, something the DVD CCA said would allow users to keep unauthorized digital copies of rented or borrowed DVDs. DVDCAA brought the case in the California Superior Court earlier this year asking the court to force Kaleidescape to change its design or stop selling its server that stores hundreds of DVD movies on a hard drive array.

However, the Superior Court judge ruled last March that Kaleidescape's media server did not violate the CSS DVD protection technology since an entire section of the DVD CCA's spec for the Content Scramble System (CSS) was not technically included as part of the license agreement. As a result, the court ruled that Kaleidescape was in full compliance with the DVD Copy Control Association's license to the Content Scramble System.

The new brief claims that the trial court erred in its interpretation of the CSS licensing agreement.

DVDCCA's argument emphasizes in the fact that under the CSS License agreement, licensees must follow the "CSS Specifications," which include both "Procedural Specifications" and "Technical Specifications." The Procedural Specifications are publicly available, whereas the Technical Specifications contain trade secrets and are delivered to licensees in certain membership categories after they sign the license agreement and pay an administrative fee.

"The main question in the pending appeal is whether a document entitled "CSS General Specifications," which was delivered to Kaleidescape after it entered into the license agreement and paid its fee, is a component of the Technical Specifications with which Kaleidescape must comply," the DVDCAA said . "As the brief explains, the General Specifications contain crucial protections against unauthorized copying of DVD content, including, the requirement that when a machine plays back DVD content for viewing, the physical DVD itself must be present in the device."

DVDCAA also claims that the court's interpretation that "General Specifications are not a subset of the Technical Specifications" is wrong.

"In California, courts interpret disputed contract terms by looking at the language of the contract at issue in light of other evidence showing the mutual intent of the parties. One type of evidence that is considered particularly powerful in determining this mutual intent is how the parties conducted themselves after entering into the agreement," DVDCAA added.

"Here, overwhelming evidence, including the language of the license agreement and a wealth of undisputed evidence regarding Kaleidescape's conduct, shows that the parties mutually understood the General Specifications to be a subset of the Technical Specifications." "Kaleidescape's own witnesses consistently testified that this was their understanding. Moreover, during almost the entire course of this litigation - at the summary judgment stage and right up to the moment of trial - Kaleidescape affirmatively took the position that the General Specifications were Technical Specifications."

DVDCAA also said that the court mistakenly refused to consider all the post-contractual evidence showing that Kaleidescape shared the DVDCCA's view that the General Specifications are a component of the Technical Specifications. "In so doing, the court reached the absurd result of reading out of the license agreement provisions that are essential to the agreement's central purpose of preventing the unauthorized copying of copyrighted DVD content," the association claims.

The DVDCCA is now seeking reversal of a trial court ruling. "For the foregoing reasons, this Court should reverse the trial court'decision and remand for a new trial to decide the issue of breach. This court should instruct the trial court on remand that specific performance is available as a matter of law, and that the parties' remedial stipulation is enforceable," the brief concludes.

DVDCAA's complete brief is available here.

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