On January 12, 2009, the Supreme Court of the United States asked the Department of Justice to weigh in on a case that will decide whether a new digital home recording technology violates US copyright laws. The case is Cable News Network, Inc., et al. v. CSC Holdings, Inc., et al. (No. 08-448), in which CNN and other content providers sued New York-area cable provider Cablevision and its subsidiary, claiming that Cablevision’s next-generation “Remote Storage-Digital Video Recorder” (RS-DVR) service violates the copyrights of the TV networks and film studios. The outcome of this case could change the future of home video recording, and may help define key concepts in copyright law as applied to the digital age.

Cablevision’s new RS-DVR service would offer customers a new, less expensive way to record television broadcasts for later viewing. Instead of downloading a TV program through a set-top box and storing that copy in the consumer’s own computer memory, the RS-DVR copies TV programs and stores them on Cablevision’s hard drives at a central remote server. Customers then can retrieve their own unique copies of recorded programming from the remote server. Cablevision is promoting this new technology as a cheaper home recording alternative because it does not require the installation of expensive individual set-top DVR boxes in customers’ homes. The media industry worries, however, that if this cheaper RS-DVR service becomes readily available, more consumers will use the technology to skip past commercials, potentially leading to a further decrease in advertising revenues for the industry. While CNN and other content providers currently license TV programs to Cablevision, they have not licensed Cablevision to store and re-transmit those programs to users via RS-DVR.

The suit arose in 2006, when CNN and other copyright owners sued Cablevision in the US District Court for the Southern District of New York, alleging that Cablevision directly infringes copyrights owned by the TV networks and film studios because the RS-DVR itself copies and then “performs” the copyrighted works without Cablevision’s paying additional licensing fees. Cablevision, by contrast, argues that it is not a direct infringer because it is the consumer, and not Cablevision, who orders copies of and then calls up the protected works for time-shifting.

The central legal questions, and the points on which the district court and US Court of Appeals for the Second Circuit disagreed, were: Who is doing the copying, and does transmission of the TV programs constitute a “public” performance? The content providers argue, and the district court held in 2007, that Cablevision was doing the copying, once by making unauthorized temporary “buffer” copies of all shows, and a second time by making permanent copies on its central computer to stream to customers who request those shows. Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 478 F.Supp.2d 607 (SDNY 2007). The district court further held that the RS-DVR infringes the public performance right by then transmitting those copies to consumers’ televisions upon demand, thereby making copyrighted works available to the public (even though members of the public may receive the transmissions at separate places at separate times) without the additional required licenses.  In light of all that Cablevision does to design and operate the RS-DVR service, maintain exclusive physical control of and access to the central server, and supply the copyrighted content, the district court found that Cablevision, and not end-users, was responsible for the illegal copying and public performances.  Accordingly, the district court enjoined Cablevision from proceeding with its RS-DVR service without obtaining the proper licenses. 

The Second Circuit reversed in August 2008, holding that customers, not Cablevision, do the copying, and that Cablevision therefore cannot be a direct infringer. The Cartoon Network LP, LLLP v. CSC Holdings Inc., 536 F.3d 121 (2d Cir. 2008).  According to Cablevision and the appeals court, the temporary “buffer” copies initially created, which exist for only 1.2 seconds before they are overwritten by new data, are not “sufficiently permanent or stable to permit [the work] to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration” and thus do not qualify as “fixed” copies under the Copyright Act.  See 17 U.S.C. § 101. Regarding the permanent copies made, the Second Circuit found that the end-user, not Cablevision, decides what programs will be copied and transmitted for later viewing.  The RS-DVR merely automatically reacts to customers’ orders, the court found, and thus plays no volitional role in direct copying.  According to the court, Cablevision would at most be secondarily liable for infringement, but the plaintiffs did not raise the issue of contributory liability.  Essentially, the court likened the RS-DVR to a user pushing the “record” button on a VCR, which the Supreme Court held in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), constitutes legal consumer time-shifting and is non-infringing fair use.  Finally, on the question of whether the RS-DVR violates the copyright owners’ public performance right, the Second Circuit found that no “public” performance occurs because a copy saved by an individual subscriber can only be accessed by that single subscriber. The Second Circuit therefore found that Cablevision was not liable for direct copyright infringement.

If the government advises the Supreme Court to take up this case, it likely would not come before the Court until the 2009 fall term. CNN and the other broadcast networks and film studios are currently awaiting the Court’s approval of their petition for certiorari. On certiorari, the Supreme Court would have before it several key questions fundamental to copyright law:  (1) What is a “fixed” copy?; (2) What does it mean “to perform the copyrighted work publicly”?; and, in general, (3) How does the Copyright Act apply to new technologies that allow for the automated and on-demand access to and delivery of copyrighted content? With such high-stakes questions at issue, various music companies, the Screen Actors Guild, and several professional sports leagues have filed amicus curiae briefs in support of the television networks. Arent Fox is monitoring this case for further developments. 

For more information, please contact:

Anthony V. Lupo
lupo.anthony@arentfox.com
202.857.6353

Loni J. Sherwin
sherwin.loni@arentfox.com
202.715.8581