Two court cases in the USA could decide the fate of whether Australian’s will be allowed to copy and store content much to the angst of movie and music companies.

When it comes to content delivery such as music and video’s, Australia is in a global backwater with several major movie studios and music companies refusing to license their content for sale in Australia over the Internet.

Companies like Microsoft with their media centre offering have refused point blank to deliver either an electronic program guide or content. The only PC company to deliver content has been Apple with their iTunes store. Also in the running is Telstra with their Bigpond offering along with some fringe players like TiVo with their Blockbuster offering.

What the movie and music companies fear is that Australians will RIP down their content and illegally distribute it or store it for future use,  which is why Foxtel refuses to allow storage to be attached to their set top box. They have also disabled the USB port.

However, this could change if two major court cases currently underway in the USA go in favour of Real Networks who manufacture a low cost DVD ripping software offering and Kaleidescape who manufacture a storage server which is already sold in Australia.

Both companies are fighting to sell hardware and software that make the copying and storage of content easier.

Two years ago, I reported that a US judge ruled that Kaleidescape could sell a line of media servers that allowed ripping a DVD to a hard drive. Last year, we reported that Real Networks was also in court fighting for the right to sell their $29.95 DVD ripping software.

In June, a state appellate court heard an appeal brought by the DVD Copy Control Association, a plaintiff in both the case against Kaleidescape and RealNetworks.

Click Here: $6M DVD Ripping Argument To Be Made This Week

Both cases concern fundamentally the same technology and arguments: whether both companies have the right to manufacture a product that rips DVDs to a hard drive, and if that capability violated the DVD CCA’s contract or some other copyright law.


PC Magazine reported recently “Kaleidescape really was the blueprint for us to enter that market,” Rob Glaser, the chief executive of RealNetworks, testified at trial, characterising Kaleidescape’s server as a “Porsche,” a “beautiful” product that Real set out to undercut on price.

Now, the confluence of the two rulings presents a chicken-and-egg problem for both courts, as one ruling will directly affect the other. A reversal by the California appellate court would directly affect the federal RealNetworks case, especially if the state ruling were to be delivered first. Upholding the Kaleidescape ruling will likely mean an appeal to the California Supreme Court, observers said, but it might also persuade Judge Marilyn Hall Patel to lift her injunction and permit RealDVD to be sold into the marketplace.

In 2007, the DVD-CCA originally sued Kaleidescape for breach of the DVD-CCA’s licensing contract governing CSS, specifically arguing that the Kaleidescape server failed to prevent digital copying, did not require a disc to be in the drive during playback, and violated specifications governing the Content Scrambling System (CSS), which protects DVDs. But on March 30, 2007, Judge Leslie C. Nichols of the Santa Clara County Superior Court in San Jose found for Kaleidescape.

Click Here: DVD Copying Legal Judge Rules

What emerged as the basis for Judge Nichols’ ruling, however, was a simple question: Were the detailed requirements, listed in a document known as the “General Specifications,” actually part of the contract that Kaleidescape and the DVD CCA signed? No, Nichols ruled, they weren’t.

The reason, the judge found, was a baffling failure on the part of the DVD CCA to explicitly list what Kaleidescape could or could not do with the DVD content, including copying it to a hard drive. Even worse, he found, was the DVD CCA’s apparent refusal to meet with Kaleidescape and explain those terms.


Kaleidescape’s appeal was heard on June 16. By law, a ruling must be handed down within 90 days, or Sept. 13. Usually, that ruling is delivered within 30 to 60 days, according to Thomas Moore of the Moore Law Group, who represented Kaleidescape at its initial trial.

When the Kaleidescape decision becomes final, certain aspects of the case cannot be re-argued against RealNetworks or any other company, Moore said. However, neither the Kaleidescape case nor the RealNetworks case is finalised: “the losing party [in Kaleidescape] will probably take a shot at the California Supreme Court,” said Thomas Moore.

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