Media Wonk

Fair use after Kaleidescape - March 30, 2007

The time for a showdown over DVD format-shifting may be nigh.

The ruling by Judge Leslie C. Nichols in the DVD Copy Control Assn.’s breach-of-contract suit against Kaleidescape Systems has, for now at least, dashed studio hopes of avoiding the question by hiding behind the CSS license agreement.

You can read more on the ruling and CSS here.

DVD-CCA says it will appeal the ruling. But if it’s upheld, and Kaleidescape’s home media servers are again declared to be in compliance with the CSS license as drafted, focus will inevitably shift from Kaleidescape to its users.

Do DVD owners have the right under copyright law to use a legal device to make a permanent, complete copy of a disc for private, non-commercial use in another format?

Most copyright experts would tell you there is no explicit or clear-cut right in the law to “back up” a DVD in its entirety.

No court has ever so ruled, and there’s nothing in the law comparable to the Audio Home Recording Act covering video.

But it’s not a question copyright owners have been eager to test in court, either.

An adverse ruling could establish a new fair-use right to copy.

Rather than confront the question head-on, the DVD-CCA in the Kaleidescape case tried to render it moot: if Kaleidescape’s servers violated the CSS license it would have to stop making them (or change the design) irrespective of its customers’ rights under copyright law.

Having lost that point (pending appeal) the studios’ position is now precarious.

As a compliant CSS licensee, Kaleidescape’s servers are authorized to decrypt CSS content. Copying that content to a hard drive, therefore, does not require an unauthorized circumvention of CSS.

That could preclude the studios from bringing a DMCA charge against the manufacturer for trafficking in a circumvention device—their other favored method of avoiding the fair use question.

To prevail against Kaleidescape, the studios might have no choice but to go after its customers directly.

Apart from the fact that Kaleidescape’s 2,600 documented customers so far include several prominent Hollywood personages, its users could offer a fairly compelling fair use defense.

Users copy their own DVDs to the server, where the content is protected using 256-bit AES encryption and remains encrypted at every point in the home network. All they’re doing is shifting the content to a more convenient format so it can be accessed from anywhere in the house without the need to store physical DVDs.

Sounds like a potential fair use to me.

The studios might lamely argue (as DVD-CCA did) that Kaleidescape owners might also use their $20,000 servers to copy rented DVDs. But in a copyright case, in federal court, that argument would almost certainly fail under a Betamax analysis (substantial non-infringing uses and all that).

The other alternative for the studios (if DVD-CCA loses its appeal) is do nothing.

Rather than risk an adverse ruling, they might simply let a thousand servers bloom. But that could have the effect of establishing a de facto fair use right to copy that future courts would be loathe to revoke.

The studios’ best hope is to win the appeal and then forget the whole thing.

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