DVDs Can Soon Be Legally Burned by Licensed Services

After a decade and a half of negotiations, waiting, and litigation - with the emphasis toward the latter - the DVD Copy Control Association, which administers the CSS copy protection scheme, formally announced yesterday that it will soon become legal for businesses to burn DVDs on demand whose copy protection includes CSS.

The announcement comes at what may finally be the resolution of a debate among different infighting groups of movie studios and CE manufacturers, over how - or whether - to implement a way for licensed companies to sell DVDs through a replication service. One such service, CinemaNow, has been in business since July 2006, offering licensed download-to-own movies via the Internet.

And another has been the subject of lawsuits and negotiations since 2004 that have threatened to destroy the company, despite an important legal victory. Kaleidescape, Inc. operates a service where movie DVDs can be burned and delivered to customers directly, through a kind of video jukebox-like vending machine.

A second group of studios and manufacturers along with Intel, whose DVD CCA included members noticeably differ from CinemaNow's original licensors, had proposed an amendment to CSS' procedural specifications that would have effectively prohibited CSS from being copied legally, as an intellectual property component unto itself.

"DVD Products, alone or in combination with other DVD Products, shall not be designed to descramble scrambled CSS Data when the DVD Disc containing such CSS Data and associated CSS keys is not physically present in the DVD Player or DVD Drive (as applicable)," the previously proposed amendment read, "and a DVD Product shall not be designed to make or direct the making of a persistent copy of CSS Data that has been descrambled from such DVD Disc by such DVD Product."

Kaleidescape's service relies on jukeboxes containing massive hard drives on which images of movie discs are stored. Had that amendment passed, the company's standing arrangement with DVD CCA would have been jeopardized.

But then again, the earlier contract between the two parties had been ruled unenforceable, partly because California Superior Court Judge Leslie Nichols ruled that the relationship between the CSS specifications and the CSS license was too murky, and that the specifications could not be enforced as though they were licensing provisions.

That suit was filed in December 2004; Kaleidescape only prevailed just last March. While the DVD CCA appeals, certain of its members were attempting to rewrite the provisions, perhaps by way of clarification.

The very existence of that proposed amendment was only revealed by way of an open letter from Kaleidescape, copies of which were sent to the press, as well as to several California congresspeople, the Federal Trade Commission, several attorneys-general, and the CEOs of the DVD CCA's principal member companies.

As one portion of the letter read, "There is no valid business justification for the proposed amendment. After hearing all the evidence at trial, the Superior Court of California expressly found in its decision that the DVD CCA and its members have suffered no harm from the Kaleidescape System. To the contrary, the first thing many Kaleidescape owners do is to purchase hundreds of additional DVDs."

It may have been that letter which tipped the scales in Kaleidescape's favor, though Panasonic was reportedly the lone holdout for the last three months. However, what the DVD CCA is working to implement is a technology called CSS Managed Recording. Unlike the so-called "mandatory managed copy" provisions still being debated by proprietors of high-definition discs, CSS-MR would apply only in professional circumstances. It would still be non-permissible for consumers to burn backups of discs.

Though the text of the amendment which did pass has not yet been released, it's believed that the grounds for justifying the consumer copy ban this time will not be that it's illegal to circumvent copy protection, but that copying CSS itself would be a violation of copyright.

That part's important, because legislation before Congress sponsored by Rep. Rick Boucher (D - Calif.) - one of the recipients of the Kaleidescape letter - would formally legalize individuals making backups of movies and other digital material as fair use.

Conceivably, if CSS were to be characterized as a separate and inviolable piece of intellectual property, then if the Boucher Bill were to pass, CSS' proponents could make the case that sure, you can copy the movie, but you can't copy anything else that's attached to the movie...such as CSS.

A spokesperson for Sonic Solutions told Video Business magazine that it's looking forward to being able to sell DVD-burning software to video stores and replication kiosks, in order to help them overcome the problem of as much as 50% of consumers' title requests not being met because they're not in stock.