The Supreme Court has declined to hear the appeal filed in the case against the cable provider Cablevision, leaving undisturbed the Second Circuit's earlier decision in Cable News Network, Inc., et al., v. CSC Holdings, Inc., et al. Unlike a regular DVR that holds stored programming in a consumer's own home, the network-based remote-storage DVR holds recorded copies on the network's server and "streams" the programming when a subscriber is ready for viewing. The denial of certiorari results in a final ruling that Cablevision's remote-storage DVR service does not make Cablevision liable for direct copyright infringement; that the "buffer" copies that resulted in the course of the recording process are legal; and that the replaying of recorded programming does not constitute an unauthorized performance. Under the leading case, Sony Corp. of America v. Universal City Studios, Inc., such use was found to be a permissible way to allow consumers to view programming at a time of their choosing, and not a violation of the network's rights.
This case was discussed previously in the analysis of the "text-to-speech" function in the latest Kindle, as an example of one approach the various circuit courts have taken when determining whether unlawful copying has occurred. One of the most notable aspects of the Second Circuit's decision was its analysis of the guidelines for when a copy is only "transitory" or when it is sufficiently fixed so as to result in an unlawful copy. Overturning the Cablevision case could very well have made Amazon's position much less clear.
Numerous broadcasters have objected to remote-storage DVRs that allow consumers to store television shows and other programming on the cable provider's video-on-demand server instead of on consumers' own hardware. But does it really matter where a viewer's saved programming resides? As long as each individual request for saved programming results in an individually saved copy that can be viewed, how is this different from the nearly outdated option of recording programming on a VHS cassette that is permitted by Sony? Those opposed to the remote DVR argued that remote storage, as opposed to a physical onsite set box or VHS, crossed an already blurry line. Not only did they claim that remote storage was akin to archiving and re-transmitting their programs, but, as a result of a "storage buffer" created when the program is replayed, the broadcasters claimed that the technology created a new, infringing copy, violating the network's rights in performance. Cablevision clearly took the position that it was no different than the use permitted by the Sony case. Whether requested programming was stored on a user's own box, or whether it was stored remotely, it was only accessible by that viewer, and the choice of what to record, when, and for how long was still dictated by the viewer. If a viewer failed to record programming at its originally-designated time, Cablevision was not enabling access to copies recorded by other viewers or providing an "on demand" service. A copy of a program recorded by a viewer was transmitted to that same viewer, thus, no public performance was made.
The suit was originally filed by Cartoon Network and CNN, among others. After an initial district court opinion in favor of the broadcasters, the Second Circuit overruled the decision, finding that the storage buffer was not unlawful because although a copy is made, it is no longer than 1.2 seconds and is constantly being overwritten. The Second Circuit found that such copy was never more than transitory and thus did not make Cablevision liable for infringement. Furthermore, as a result of any programming only being stored at the command of a customer, Cablevision itself did not actually own any copies of programming, which was considered to be controlled solely by the users. The Second Circuit also made a note that many of the facts that were relied upon by the district court in finding Cablevision liable for the creation of the copies, such as Cablevision's "continuing relationship" with its RS-DVR customers, control over content that could be recorded, and the "instrumental[ity]" of copying to the RS DVR system, are actually more pertinent to a consideration of contributory infringement, rather than direct infringement. Cablevision I, 478 F. Supp. 2d at 618–20. Just as with the long-standing opinion in Sony Corp. of America v. Universal City Studios, Inc., simply because such technology has the ability to be used for an infringing behavior, the court would not block it due to its substantial non-infringing use, and would not find the provider liable of direct infringement.
The denial of certiorari ultimately adopted by the Supreme Court was strongly favored by the Solicitor General, who had been asked by the Supreme Court to render an advisory opinion as to whether the appeal should be heard. One of the points made in the Solicitor General's brief was that a usual reason for granting certiorari—a disagreement among the circuits—was not present. This view also suggests that the seemingly conflicting results reached in the Second Circuit's decision in Cablevision and in Ninth Circuit case MAI Systems Corp. v. Peak Computer, Inc. 991 F.2d 511 (9th Cir. 1993) are not, in fact, irreconcilable. The Second Circuit court held that when just over one second of an audiovisual work, a "buffer," is held on a remote-storage DVR, the copying is only transitory and did not violate copyright holder's rights. This opinion could be seen at odds with MAI in which the Ninth Circuit found that loading a program into RAM makes a copy of the software that can be restricted by copyright, and since such copy could be "perceived, reproduced, or otherwise communicated," it infringed plaintiff's copyright in the software. In its decision, the Second Circuit specifically stated that reliance on MAI and subsequent cases following its rule was not proper in the Cablevision matter, as the MAI court did not address any requirement for duration of the "copy," as it was not necessary to the issues in the case. The Supreme Court appears to agree with this line of reasoning, seemingly making a determination that the outcomes of the two circuits are not at odds.
Also of note was the brief's point that Cablevision took the issues of secondary, contributory infringement off the table, along with issues of fair use. Considering that those two areas are prime for clarification in issues involving network-based digital technology, the Solicitor General took the position that the present case simply did not have the whole scope of legal issues and facts that would make it an ideal case for clarifying the entire panoply of legal questions raised by the new technology. While this is not exactly a ringing endorsement of the Second Circuit's decision, nonetheless, it does allow it to stand, and clarifies the fact that no major split is perceived among opinions issued by different circuits. In fact, the Solicitor General's opinion was critical of certain aspects of the Second Circuit's decision, perhaps most notably its analysis of whether the playback feature of the remote DVR could constitute a "public performance." In the brief, the Solicitor General pointed out that it found certain language questionable as it could imply that a performance would not be "public" unless it could be transmitted to more than one person. Regardless of the fact that such an opinion from the Solicitor General is not legally binding as precedent, the Supreme Court appears to have endorsed these views.
Still, the issue remains far from settled. Was it really that "storage buffer" copy and subsequent replaying that was the problem for the networks, or was this motivated by a perceived loss of ad revenue as a result of fewer viewers watching programming "live" and choosing instead to watch at their leisure and skip the advertisements? Also not resolved are any issues of contributory infringement, and it remains to be seen if any new litigation arises once Cablevision, or other providers, begin to actually provide the services in dispute, and one of the broadcasters may eventually raise a claim for secondary infringement as a result of the misdeeds of the eventual users of a remote storage DVR technology.
For now, the ruling, in conformity with Sony, still requires that the cable provider's servers maintain a separate digital copy for each viewer when so requested, instead of allowing multiple users to access a single central copy. If the ad revenue is really the strongest motivator for the broadcasters, one wonders if this leaves the avenue open for cable providers and networks to come to a compromise to restrict technology that enables viewers to skip over ads in exchange for the right to only maintain one copy of programming, rather than one for each request.
Vol. 53, June 2010