Earlier in the week, Hollywood won a court case against DVD-copying technology from Kaleidescape. The studios argued that it was copyright violation, and lost in court in 2007, but an appeals court overturned that ruling.
Kaleidescape has responded, saying that it's "surprised and disappointed by the Court of Appeal's decision". The full case is complex, and revolves around whether a document called "General Specifications" was part of the contract between Kaleidescape and the movie industry.
The original court ruled that because it was never referenced in the contract, it was not part of the contract, but an appeals court overturned that decision yesterday. Kaleidescape has vowed to take the case to the Californian Supreme Court.
However - in the mean time it's not yet been ruled as to whether Kaleidescape complies with the specifications, and until that happens, the company says that its products are 100% licensed and legal. Unsurprisingly, the prosecutors are seeking an injunction to prevent sales until the issue can be determined.
We'll keep you posted of the progress of the litigation.