Intellectual Property Law

Cablevision Wins Remote Storage DVR Appeal, But....

By Cynthia Brumfield

Cablevision Systems today won its appeal of a lower court ruling that banned the cable operator's use of a networked or remote storage DVR (RS-DVR), handing Hollywood a big defeat in its effort to stamp out what could be a particularly cost-effective and popular method of recording programs. In its decision (PDF), the U.S. Court of Appeals for the Second Circuit said that the District Court for the Southern District of New York erred in ruling that the RS-DVR, which enables customers who do not have a stand-alone DVR to record programs on hard drives maintained by Cablevision, directly infringes the copyrights of program creators and remanded the case back to the lower court.

The court said that even though Cablevision set up a complex system that supports the remote recording, that system is basically akin to a VCR, the manufacturers of which were held free from infringment liability in the Supreme Court's landmark Sony Betamax case. Writing for the court, Judge John M. Walker said that "We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer?s command."

It is the customer, and not Cablevision, that is making the copy Walker wrote, and therefore Cablevision cannot be directly infringing upon the programs' rightsholders.

Here, by selling access to a system that automatically produces copies on command, Cablevision more closely resembles a store proprietor who charges customers to use a photocopier on his premises, and it seems incorrect to say, without more, that such a proprietor ?makes? any copies when his machines are actually operated by his customers.

But, the court did seem to hold open the idea that Cablevision's contribution to the creation of an infringing copy is so great that it might, in some other case with different arguments, be held liable for direct infringement. Walker wrote:

We need not decide today whether one?s contribution to the creation of an infringing copy may be so great that it warrants holding that party directly liable for the infringement, even though another party has actually made the copy. We conclude only that on the facts of this case, copies produced by the RS-DVR system are ?made? by the RS-DVR customer, and Cablevision?s contribution to this reproduction by providing the system does not warrant the imposition of direct liability.

The court also held open the door that Hollywood could arge that the RS-DVR is responsible for contributory, as opposed to direct, infringement.

We do not address whether such a network operator would be able to escape any other form of copyright liability, such as liability for unauthorized reproductions or liability for contributory infringement.

Nevertheless, the decision was decisively in favor of the networked DVR and Cablevision hailed it as a victory for consumers. "This is a tremendous victory for consumers, which will allow us to make DVRs available to many more people, faster and less expensively than would otherwise be possible," Cablevision COO Tom Rutledge said in a statement.

Full post as published by IP Democracy on August 04, 2008 (boomark / email).