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Copyright content providers lose control of DVR market

By University of Houston Law Center

Who should derive revenue from remote DVR systems? According to a panel of the Second Circuit Court of Appeals, the revenue should not go to the content providers. This decision, grounded in three very narrow interpretations of the Copyright Act, works a shift of potentially significant revenue away from content providers. Hopefully, it will be challenged and reversed on rehearing.

 

 The case seemed simple for the content providers, but with judicial panel sympathetic to the other side it became what is a potential nightmare for copyright owners in digital environments. 

 

A recurring issue today in court is who control or has an advantage in the newly emerging digital and elated markets. Are technologists like Google in control with a right to use any content any time without permission, or do we still value the content creators?   This is not a philosophical issue and the combatants are not professors or mavericks. They are large companies with billions of dollars at stake. This is the era of the information wars.

            In the Cartoons case, Cablevision implemented a remote DVR system, allowing customers to select, store, and later play cable broadcasts. In the system, when cable programs are received by Cablevision, they are routed through a buffer (buffer 1) and copied briefly while software checks if any customer had requested copying of the program for later replay. If there was a request, the program would be copied into a server (buffer 2) and held for later viewing by the customer. When the customer later desired to watch the program, the DVR system delivered a performance to the customer’s home video.  Variations of this system are widespread in the cable market and are a robust competitor to home recording systems.

            Cablevision did not ask for licenses from the content (program) providers for copying their programs or publicly performing them at times other than the original transmission. It simply implemented the system and charged customers who desired to use it. 

            The Second Circuit concluded that this was fine – a major corporation (a cable company) could reuse another company’s copyrighted product without permission or payment. This was a complicated decision, but fundamentally, a choice by the panel to turn potentially billions of dollars away from the creative parts of the industry to those who copy and retransmit. It was a wrong decision.

            First, the panel held that copying was not copying if the copied image lasted for only a second or two. So, the entire line of cases started in the Ninth Circuit’s MAI decision remains intact, but now seems to become a question of …..   I do not know what. 

            Second, the full content was copied into buffer 2 by Cablevision’s system. But, no, cablevision who charged for this service, did not make the copies – the customers did – at least if you believe the panel of he court!

            Strike 2.

            Strike 3 is when the court held that, when the customer who caused the copy to be made, eventually asked for it to be performed in the customer’s home – this was not a “public” performance.

            This may be among the worst appellate court decisions in copyright law history.

Full post as published by University of Houston Law Center Faculty Blog on September 08, 2008 (boomark / email).