Cablevision's proposed remote storage digital video recorder system does not violate the Copyright Act, a federal appeals court ruled Monday.
The 2nd U.S. Circuit Court of Appeals overturned a grant of summary judgment to film and TV producers who claimed Cablevision's system would directly infringe their copyrights by making unauthorized reproductions and by engaging in public performances.
Judges John M. Walker Jr., Robert D. Sack and Debra Ann Livingston decided the appeal in The Cartoon Network v. CSC Holdings Inc., 07-1480-cv. Walker wrote for the court.
Unlike TiVo and other digital video recorder systems that are run through boxes attached to televisions, Cablevision's remote storage system, RS-DVR, would allow customers without a set-top box to record programming on hard drives maintained by the company at a remote location.
Programming copyright holders sued in the Southern District of New York, where Judge Denny Chin granted them summary judgment and enjoined Cablevision from operating the system unless it obtained the necessary licenses from content providers.
Chin agreed with the plaintiffs that Cablevision would commit direct infringement by copying at two points in the process -- first by briefly storing data on what is called a primary ingest buffer and, second, by sending the programs onto its Arroyo Server hard disks.
The judge also agreed that by transmitting the data from the hard disks to customers, who are armed only with a remote, the company would directly infringe on the copyright holders' exclusive right of public performance.
At the circuit, Walker first focused on the right to "reproduce the copyrighted works in copies," as protected by §106 of the Copyright Act.
The act, he said, defines "copies" as "material objects ... in which a work is fixed by any method ... and from which the work can be ... reproduced." It also states that a work is "fixed in a tangible medium of expression when its embodiment ... is sufficiently permanent or stable to permit it to be ... reproduced ... for a period of more than transitory duration."
Chin had found that as the system worked, a copy is made because the buffer data was capable of being reproduced, in other words, that the work was "fixed" in the buffer.
But the circuit was persuaded there was no copying because of the short time the data reside in the buffers.
"Given that the data reside in no buffer for more than 1.2 seconds before being automatically overwritten ... . we believe that the copyrighted works here are not 'embodied' in the buffers for a period of more than transitory duration, and therefore are not 'fixed' in the buffers," he said.
VCR ANALOGY
The circuit then turned to the question of whether the data stored on the Arroyo Server hard disks triggered direct liability for Cablevision, with the key question being who is actually making the copy -- Cablevision or the consumer.
Walker compared the system to a videocassette recorder.
"In the case of a VCR, it seems clear -- and we know of no case holding otherwise -- that the operator of the VCR, a person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine," he said. "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 demand."
Walker also compared Cablevision's offering of the RS-DVR to a company that makes photocopiers available to the public on its premises. The circuit disagreed with Chin's emphasis on Cablevision's "unfettered discretion in selecting the programming that it would make available for recording."
Walker said this control is not "sufficiently proximate to displace the customer as the person who 'makes' the copies when determining liability under the Copyright Act."
And Chin's focus on Cablevision's "continuing relationship" with its RS-DVR customers, control over recordable content, and the "instrumental[ity] of copying to the system," Walker said, "seems to us more relevant to the question of contributory liability," as opposed to the direct liability the producers were seeking.
The final question before the court concerned the right to perform the copyrighted work publicly under 17 U.S.C. §106(4), which, in relevant part, is defined as transmitting or otherwise communicating a "performance or display of the work" to a place "open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered."
Walker said that under the transmit clause, "we must examine the potential audience of a given transmission by an alleged infringer to determine whether that transmission is 'to the public.'
"And because the RS-DVR system, as designed, only makes transmissions to one subscriber using a copy made by that subscriber, we believe that the universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission."
Walker cautioned that the court's holding "does not generally permit content delivery networks to avoid all copyright liability by making copies of each item of its content and associating one unique copy with each subscriber to the network, or by giving their subscribers the capacity to make their own individual copies.
"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," he said.
David Ellen, Cablevision's executive vice president and general counsel, released a statement saying the company had been confident in its position.
"We've always believed that under existing copyright law, the remote-storage DVR is no different than traditional DVRs that are in use today," Ellen said. "We're obviously pleased with the court's decision, which is a significant victory for consumers and will allow cable providers to deliver this popular DVR technology faster and much more efficiently."
James Anderson, a spokesman for the Cartoon Network, said "We respectfully disagree and are considering the appropriate next steps."
David Sohn, senior policy counsel of the Center for Democracy & Technology, filed a brief on behalf of his organization and a number of amici arguing for the reversal of Chin's decision.
"We were very concerned that the lower court's decision would have the potential to chill innovation in any number of products that use today's networking capabilities to provide storage and functionality at remote locations," Sohn said. "It seemed the lower court attached a lot of significance to the physical location of the storage, and that's a real problem because, in a networked world, in which increasingly all kinds of devices and services connect to the Internet, there shouldn't be any reason for people not to use" a remote location.
Jeffrey A. Lamkin of Baker Botts argued for Cablevision.
Katherine B. Forrest of Cravath Swaine & Moore argued for the Cartoon Network.
Robert Alan Garrett of Arnold & Porter argued for plaintiffs 20th Century Fox Film Corp.
Marc E. Isserles of Cohen & Gresser filed amici on behalf of 28 law professors who specialize in copyright law and the Internet. They argued that considering buffering to be copying would have damaging consequences.
"The buffering issue is really not just about Cablevision's system, but much more generally a victory for the public's right to access and use digital information," Isserles said.
Had Chin been upheld, he added, the ruling would have created "liability anytime someone used a digital device. The concern of the law professors was that this would create a sort of monopoly rights over what some have called the right to read or the right to access information."
