California Superior Court Trial on DVD Copy Control Association v. Kaleidescape to Be Held in San Jose, California on Monday, March 19.

MOUNTAIN VIEW, Calif. -- Kaleidescape, Inc., the market leader in home entertainment servers that give consumers unprecedented freedom and flexibility in organizing, storing, and playing back their DVDs and CDs, would like to encourage you to attend the California Superior Court trial of the "DVD CCA v. Kaleidescape" lawsuit, beginning on Monday, March 19, 2007 in San Jose. The lawsuit was filed by the DVD Copy Control Association ("DVD CCA"), an arm of the Hollywood studios, on December 7, 2004.

The Kaleidescape System is a revolutionary, award-winning home entertainment system that allows consumers to load and organize their DVDs and CDs on a secure hard drive, and to play back their movies and songs throughout the home with ease and convenience. At the same time, the movies stored on the Kaleidescape are secure from pirating, and cannot be uploaded to the Internet or used to burn unauthorized DVDs; in fact, the movies are more secure inside the Kaleidescape system than they are on DVD discs. The DVD CCA alleges that by providing consumers with this innovative, yet secure product, Kaleidescape is in breach of its license from the DVD CCA for the Content Scramble System ("CSS"), a method used to encrypt video and audio data on DVDs. The license agreement however, contains no prohibition against the Kaleidescape System.

Monday's hearing may include important First Amendment issues for the press. Kaleidescape expects that the DVD CCA may seek to close the trial and exclude the public and the press, even though the CSS encryption system has not been a secret for many years. The CSS encryption system was broken by a 15-year-old Norwegian teenager in 1999 and is widely available on the Internet.

On June 1st, 2005, Kaleidescape filed its Answer and Cross-complaint against the DVD CCA. Kaleidescape's cross-complaint states that the DVD CCA breached the CSS license by not allowing the ombudsman process mandated by its own bylaws to be completed, and that the DVD CCA breached the covenant of good faith and fair dealing by making its unreasonable and unsupported allegations against Kaleidescape and not participating in the ombudsman process in good faith. Kaleidescape's cross-complaint also seeks a declaration from the Court that the CSS license does not include terms that the DVD CCA claims have been breached by Kaleidescape.

When:    Monday, March 19, 2007
Where:   Downtown Superior Court of Santa Clara County
         191 North First Street, San Jose, CA 95113

What:    Oral arguments in California Superior Court relating to the

Who:     Michael Malcolm, founder, chairman and CEO of Kaleidescape
         will be available for comment on trial.

Media
Contact: Andrea Cousens, Eastwick Communications: 310-270-8903 or
         [e-mail].

More information on the lawsuit is available online at: http://www.kaleidescape.com/company/legal.html.

About Kaleidescape

The Kaleidescape System is redefining home entertainment by transforming the way movies and music are collected, managed and enjoyed throughout the home, yacht or private jet. The Kaleidescape System combines a compelling interface, outstanding industrial design, and services that set new standards in the consumer electronics industry. Kaleidescape was founded in 2001 and is privately held. The company is headquartered in Mountain View, California with research and development conducted by Kaleidescape Canada, Inc., based in Waterloo, Ontario. Kaleidescape products are available through a worldwide network of custom-installation dealers and distributors. For more information, contact Kaleidescape at [phone] or [phone], email us at [e-mail] or visit www.kaleidescape.com. Contact a local dealer for international pricing.

Kaleidescape is the trademark of Kaleidescape, Inc., and may be registered in some jurisdictions. Other trademarks and trade names are owned by third parties and may be registered in some jurisdictions.