[blindlaw] Analysis of 2nd Circuit DVR Decision

[Angie Matney]

Here's more information on the DVR case I mentioned earlier. Of course, the
situations are distinguishable; but the court found that ha DVR provider was
not a direct infringer because the "copy" that was created existed for only
1.2 seconds. It also held that transmitting a program to a consumer was not
a public performance.

 

Here's the link, followed by the text.

 

 <http://www.drmwatch.com/legal/article.php/37654>
www.drmwatch.com/legal/article.php/37654

 

 

Appeals Court Reverses Cablevision DVR Decision
August 14, 2008
By Solveig
<http://www.drmwatch.com/feedback.php/http:/www.drmwatch.com/legal/article.p
hp/3765446>  Singleton

Several content providers (including Cartoon Network and Disney) sued
Cablevision, arguing that the cable company's new remote storage digital
video recording (DVR) system violated their copyrights. Last Monday, the
Second Circuit ruled
<http://www.ca2.uscourts.gov:8080/isysnative/RDpcT3BpbnNcT1BOXDA3LTE0ODAtY3Z
fb3BuLnBkZg==/07-1480-cv_opn.pdf>  that the remote DVR system did not
directly violate the copyrights, reversing the lower court
<http://www.drmwatch.com/legal/article.php/3668626>  ruling of last year.
The case will be key in deciding whether remote copying services face
liability for direct or for contributory infringement. 

Cablevision's DVR system functioned, in essence, like a Tivo with a very
long wire. As Cablevision sent out programming to subscribers, the remote
DVR allowed consumers to select certain programs to record and play back
later. The actual copying and storage, though, was done off-premises on
systems operated by Cablevision. (Cablevision, of course, had a license to
send the programs out to subscribers, and the content providers and
Cablevision agreed that the license did not authorize the new remote DVR
service). 

>From the content standpoint, then, someone is making unlicensed copies
(setting aside arguments about fair use). but who? Cablevision, or the
consumer? The consumer chooses which buttons to push-but Cablevision
operates the physical equipment. If Cablevision is the legal actor,
Cablevision faces direct liability; but if it is the consumer, Cablevision
faces only indirect liability-contributory infringement, as did Grokster.
The content companies opted for the argument that Cablevision was directly
liable, won in the court below, but lost the appeal.

The court below had ruled, first, that Cablevision's remote DVR system
violated copyright directly in holding the stream of programming in RAM
briefly in the ordinary course of operations. The Second Circuit rejected
this; the Copyright Act requires that a copy be "fixed," or embodied in the
buffer for more than a transitory period, and Cablevision's system held the
data for no more than 1.2 seconds. 

The Second Circuit next examined the argument that Cablevision should be
directly liable for creating the playback copies. Earlier cases involved
remote copying over the Internet, the question of whether an ISP would be
liable when its system automatically copied a work posted by a customer. The
answer then was "no." Cablevision's remote DVR is like the ISP, in that it
supplies the system, but doesn't push the button. The Court explained that
what mattered was whose volition was exercised in making the copy. Here, the
volitional acts were Cablevision's, in designing the system, and the
consumers', in pushing the buttons to order a copy be made. 

The court in this case found an analogy to the VCR persuasive: the key
volitional act is the consumers', not Cablevision's. The district court had
compared the remote DVR analogous to a copy shop that made copies for
professors. The professors supplied the material, and the copy shop copied
it; the copy shop was directly liable. Here the Second Circuit again focused
on volition. Because the copy shop employed a human being to make the
copies, the copy shop had exercised its volition. Cablevision's system
responded automatically, and thus did not. 

But Cablevision also supplies the content, making the choice of programming
and licensing it. Is that enough to make a difference? Here the Second
Circuit made a judgment call: "This conduct is indeed more proximate to the
creation of illegal copying than, say, operating an ISP or opening a copy
shop . . . Nonetheless, we do not think it sufficiently proximate to the
copying to displace the customers as the person who 'makes' the copies." The
court here emphasized that ruling otherwise would blur the line between
direct and indirect copyright infringement. 

Finally, the court considered whether Cablevision "performed" the work for
the "public" in playing it back for the consumer. The answer was again no.
The work had been copied by a single consumer, and was played back for that
single individual at his request. The performance was not to the "public."
The bottom line was that Cablevision might be indirectly liable for
copyright infringement, but was not directly liable. 

A number of amici curae had filed briefs below (including this author),
either in support of or against liability. Some warned that the lower
court's holding Cablevision liable threatened the future of remote storage,
the Internet, innovation, or the balance of the copyright system as a whole.
But, if anything, the opinion supports the contrary view, that Cablevision's
involvement with the system is significantly different from that of an ISP
or from the equipment maker in the landmark Sony v. Universal ("Betamax")
case that established consumers' rights to time-shift video in the first
place.. 

Other amici warned that a failure to hold Comcast liable undermined
incentives to negotiate further distribution licenses with content
producers. This point, perhaps, is addressed by the Second Circuit's hints
that Cablevision might have run into more trouble against a different result
against a theory of contributory infringement. 

On the whole, the case's language is less of a victory for the "tech" side
than the bare result suggests. Remote DVR has escaped the frying pan, to
find itself uncomfortably close to the Grokster fire. Recall that the 2005
Supreme Court opinion extended liability for indirect infringement to those
who induce infringement by others. Last week's decision leaves room for
another content owner to press that theory in future litigation.

Solveig Singleton is a lawyer, an adjunct with the Convergence Law Institute
and an adjunct fellow with the Institute for Policy Innovation. She is the
author of an amicus
<http://pff.org/issues-pubs/filings/2007/070712SingletonCartoonvCSCamicusbri
ef.pdf>  brief filed in this case on behalf of the Progress and Freedom
Foundation.