2nd Circuit Reverses in Remote Storage DVR Copyright Case

August 4, 2008. The U.S. Court of Appeals (2ndCir) issued its opinion [44 pages in PDF] in Cartoon Network v. CSC Holdings, reversing the judgment of the District Court, and holding that CSC's Remote Storage Digital Video Recorder (RS-DVR) system does not violate the Copyright Act by infringing plaintiffs' exclusive rights of reproduction and public performance.

Cablevision Systems Corporation (CSC) is a cable television company. It developed a RS-DVR for its subscribers.

Unlike video cassette recorders (VCRs), which use a device connected to the consumer's television and store programs on cassettes, and digital video recorders (DVRs), such as those made by Tivo, which store programs on consumers' drives, Cablevision's RS-DVR stores programs on drives housed and maintained by Cablevision.

The plaintiffs are the Cartoon Network and other content companies. They license content to Cablevision, but have not licensed storage and playing of their programs by use of Cablevision's RS-DVR system.

The plaintiffs filed a complaint in U.S. District Court (SDNY), seeking declaratory and injunctive relief, alleging that Cablevision's RS-DVR system would directly infringe their copyrights both by making unauthorized reproductions, and by engaging in public performances, of their copyrighted works.

17 U.S.C. § 106 provides, in part, that "the owner of copyright ... has the exclusive rights to do and to authorize any of the following ... (1) to reproduce the copyrighted work in copies or phonorecords ... (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly".

The District Court granted summary judgment to the plaintiff content companies, and enjoined Cablevision from operating its RS-DVR system without first obtaining licenses from the plaintiff content companies. The District Court's opinion is reported at 478 F. Supp. 2d 607.

The Court of Appeals wrote this summary of the District Court's holding. "First, by briefly storing data in the primary ingest buffer and other data buffers integral to the function of the RS-DVR, Cablevision would make copies of protected works and thereby directly infringe plaintiffs’ exclusive right of reproduction under the Copyright Act. Second, by copying programs onto the Arroyo Server hard disks (the ``playback copies´´), Cablevision would again directly infringe the reproduction right. And third, by transmitting the data from the Arroyo Server hard disks to its RS-DVR customers in response to a ``playback´´ request, Cablevision would directly infringe plaintiffs’ exclusive right of public performance." (Parentheses and internal quotations in original.)

The Court of Appeals reversed.

First, the Court of Appeals held that Cablevision's acts of buffering in the operation of its RS-DVR system do not create copies, within the meaning of the Copyright Act, and hence, Cablevision would not violate the plaintiffs' exclusive right of reproduction under Section 106(1).

Second, the Court of Appeals held that Cablevision would not engage in direct copyright infringement of the plaintiffs' reproduction right when a copy of a program is made, because Cablevision's subscribers, not Cablevision, would make the copy. Moreover, Cablevision's providing of the RS-DVR system does not warrant the imposition of direct liability. Cablevision would at most be secondarily liable. But, the plaintiffs did not raise secondary liability.

Third, the Court of Appeals held that the playback of stored programs would not violate the plaintiffs' exclusive right "to perform the copyrighted work publicly" because the playback would not be to the public.

The Court of Appeals concluded that because "Cablevision’s proposed RS-DVR system would not directly infringe plaintiffs' exclusive rights to reproduce and publicly perform their copyrighted works, we grant summary judgment in favor of Cablevision with respect to both rights."

The Court of Appeals received several amicus curiae briefs. See for example, brief [45 pages in PDF] of a group of law professors urging reversal.

See also, brief [47 pages in PDF] of the Center for Democracy and Technology (CDT), Public Knowledge (PK), Computer and Communications Industry Association (CCIA), Electronic Frontier Foundation (EFF), Cellular Telecommunications Industry Association (CTIA), Consumer Electronics Association (CEA), Home Recording Rights Coalition (HRRC), and others, urging reversal of the District Court.

In contrast, see brief [PDF] of the Progress & Freedom Foundation (PFF) urging affirmance.

Gigi Sohn, head of the PK, stated in a release after the Court of Appeals released its opinion that "This decision is a great victory for innovation, technological progress and consumers' rights."

She added that the "content industry, in suing Cablevision, once again overreached in its goal to limit the personal uses of increasingly popular technology. We hope this case will be another signal to Hollywood to scale back its attacks on consumer-friendly technologies."

The PFF amicus brief, written by Solveig Singleton, argued that "Skewing the inquiry to avoid imposing liability on a sophisticated business venture here is not necessary to keep the ``balance´´ of copyright. Rather, it would exacerbate the difficulties faced by content owners today in developing new licensed distribution channels, without gain in the long run for consumers or new distribution technologies. Going forward, services like Cablevision's are of little value without licensed content, and consumers' ultimate interest is in preserving market mechanisms such as licensing that enable creators to get paid. Most importantly, broad exemptions from liability can disable licensing markets, which ultimately serve consumers and innovative distributors as well as content creators and producers."

This case is Cartoon Network LP, et al. v. CSC Holdings, Inc., et al., U.S. Court of Appeals for the 2nd Circuit, App. Ct. Nos. 07-1480-cv(L) and 07-1511-cv(CON), appeals from the U.S. District Court for the Southern District of New York, Judge Denny Chin presiding. Judge John Walker wrote the opinion of the Court of Appeals, in which Judges Sack and Livingston joined.