(Originally published in the Entertainment Law column of the New York Law Journal, April 26, 2007. ***Note: The United States Court of Appeals for the Second Circuit reversed the decision discussed below in August, 2008, on the following basis: “because we find, on undisputed facts, that 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.” )
Last month’s S.D.N.Y. decision in Twentieth Century Fox Film Corp. et al. v. Cablevision Systems Corporation1 initially attracts interest for its core holding. Judge Denny Chin decided that a company offering a remote storage digital video recorder service (RS-DVR), which copies and transmits television programs to consumers without a license from program copyright owners, directly infringes program copyrights. Other details of the decision, however, reflect on further developing issues of digital entertainment. These include the legality of a service like TiVo (which is comparable to RS-DVRs in some ways and not in others); whether bits of copyrighted works captured in temporary computer memory ought to constitute independent copyright infringements; and whether a requested playback from allocated memory in a remote computer by a consumer at home is sufficiently “public” to be deemed a public performance.
The decision also offers a seminar in the technology of digital recorder systems including an overview of devices that capture and play back television programming. Although we will review that technology with enough detail to explain the Court’s result, the decision furnishes much more information than is found here.
The RS-DVR System
Defendants Cablevision and its parent, CSC Holdings, Inc., own and operate cable television systems. In March of 2006, Cablevision announced its new RS-DVR service intended for customers who lack a digital video recorder (DVR) in their homes. The RS-DVR would allow customers to record programs on central servers at Cablevision’s facilities and then play back the programs at home.
The plaintiffs – an aggregation of cable networks, studios, and broadcasters – took issue with Cablevision’s view that it didn’t need a license from owners of rights under copyright in the programs in order to make the RS-DVR available. They sought a declaratory judgment that the RS-DVR would violate their rights and an injunction to prevent defendants from rolling out the service without copyright licenses. After the parties cross-moved for summary judgment, the plaintiffs’ motion was granted and the defendants’ motion was denied.
The only question presented was whether or not Cablevision directly infringed copyright by offering the RS-DVR service. (No defense of fair use was before the Court.) Cablevision argued that it was not required to obtain a license in any of the programming because “the customer, not Cablevision, chooses the content and records the program for personal viewing.” It contended that the RS-DVR was no different for purposes of this analysis than home video cassette recorders (VCRs), which were found not to infringe the copyrights of program owners under the Supreme Court’s Betamax decision, Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984).
To address that argument, the Court found it necessary to examine the underlying technology of the RS-DVR, beginning with an overview of linear programming via cable. The decision then explained the workings of set-top recording devices. VCRs capture programming from television signals and record it onto magnetic tape housed in a video cassette. Digital video recorders – the functional descendants of VCRs– can record programs directly onto a hard drive contained within the box in the customer’s home from which the copies can be played back. DVRs combined with standard cable set-top boxes, called “set-top storage DVRs” (STS-DVRs), enable customers to select programs from an on-screen program guide.
Cablevision began to offer STS-DVRs to its digital cable customers in November 2004, but the plaintiffs’ target was the proposed RS-DVR system, which would store recorded programming remotely on computer servers located at Cablevision. Each server would contain hard disk drives in which each customer would be allotted a specific amount of storage capacity. The customer’s selections, from 170 channels of digital programming, would be stored indefinitely until deleted by the customer or overwritten by Cablevision when allotted space was used up.
For the RS-DVR system to work, the programming stream would be split. One stream would be sent to a router, which (among its functions) puts portions of programming temporarily into “buffers” — a form of random access memory (RAM). The programming stream also would be converted and further processed until fed into servers where programs are recorded and stored for later playback. These servers initially “read” the streams into a “primary ingest buffer,” which holds up to three frames of video from each of the linear channels carried by Cablevision at any given time. If a customer requests that a particular program be recorded, either by scheduling in advance or by just pressing “record” on the remote control, the set-top box conveys the command to a server at Cablevision, which communicates with other servers before a message is sent to the server containing the customer’s allocated portion of hard drive storage.
That server makes a buffer copy and then a unique hard drive copy for each customer request. The decision points out that if 1000 customers each requested a copy of HBO’s “The Wire,” then 1000 copies would be made, with “each copy uniquely associated by identifiers with the set-top box of the requesting customer.” The server holding that copy then acts to inform other components of the system that the program has been recorded, it’s available for playback, and it should be listed on the customer’s on-screen program guide. If no customer asks for a recording of a particular program, it is not copied. But portions of programming are copied to buffer memory in two locations regardless of whether a customer requests that it be recorded.
When customers use their remote control to command playback, the set-top box communicates with yet another server that manages the playback process. The server holding the recorded copy in the customer’s allocated hard drive memory is instructed to read the recording into a “streaming buffer” before the program is eventually routed to the customer. The system also creates yet another buffer copy one or two seconds in length to facilitate the pause, fast-forward and rewind functions that are made available to the customer while watching the program at home.
In short, the RS-DVR requires “numerous computers, processes, networks of cables, and facilities” not to mention around the clock staffing. The Court concluded that the Cablevision system, if launched without program licenses, would infringe both the exclusive rights of reproduction and public performance under copyright.
The Reproduction Right
Cablevision did not dispute that the RS-DVR system made copies but considered itself a passive bystander to a recording process controlled by its customers, as would be the case with a VCR or DVR. The plaintiffs, on the other hand, argued that Cablevision was the one “doing” the copying because of its “continuing and active involvement” in the process. Because the Court found the RS-DVR to be “clearly a service,” it agreed with the plaintiffs.
Distinguishing the Betamax case, the Court found that the RS-DVR and the VCR “have little in common” apart from their time-shifting functions, and that the relationship between Cablevision and RS-DVR customers would be significantly different from that of Sony and purchasers of its VCRs. The Court observed that a VCR is a stand-alone piece of equipment purchased outright by the customer, used to make and play back copies without Sony’s assistance. Sony had nothing to do with its maintenance either. On the other hand:
“the RS-DVR is not a stand-alone machine that sits on top of a television. Rather, it is a complex system that involves an ongoing relationship between Cablevision and its customers, payment of monthly fees by the customers to Cablevision, ownership of the equipment remaining with Cablevision, the use of numerous computers and other equipment located in Cablevision’s private facilities, and the ongoing maintenance of the system by Cablevision personnel.”
As the Court observed, “the simple push of a button by the RS-DVR customer does not produce a recording” the way a VCR can. Instead, it merely transmits a request to “set the recording process in motion.”
In the Court’s view, this ongoing participation by Cablevision also distinguished the STS-DVR from the RS-DVR. Cablevision argued that no one ever sued Cablevision or any other cable operator for providing STS-DRVs to customers and, by extension, the RS-DVR presented no infringement. But the Court responded that the “fact that plaintiffs and other programming owners have not sued cable operators over the legality of STS-DVRs does not insulate the RS-DVR from such a challenge… nor have plaintiffs conceded the legality of STS-DVRs.”
In any event, the Court found that, “under the hood,” the STS-DVR and the RS-DVR were “vastly different.” The RS-DVR more closely resembles video on demand (VOD)– a service that Cablevision provided under license from programming owners.
Accordingly, copies of programs made by the RS-DVR infringed the reproduction right under copyright. But which copies? First, there was the complete copy stored indefinitely on the customer’s allotted hard drive space in the server at Cablevision’s facility, which the Court held to be infringing. Then, there were portions of programming stored temporarily in buffer memory on Cablevision’s servers. The defendants denied that those uses qualified as “copies” under the Copyright Act because they were not “fixed” and were “otherwise de minimis.” The Court disagreed because the buffer copies were of “more than transitory duration”. Moreover, the Court held that even if only three frames of each program carried over the channels resided in the primary ingest buffer at any given time, the entire programming content ultimately would pass through that buffer and the aggregate effect of all of that “can hardly be called de minimis.”
The Public Performance Right
In addition to unauthorized copies, transmissions by the RS-DVR system also would result in unauthorized public performances, according to the Court’s decision. These would occur when a customer requested playback of a recorded program and it was retrieved from the server and streamed to the customer. Cablevision also argued that any such performance was the customer’s doing, not Cablevision’s. The court rejected that suggestion a second time for the same reasons, finding that Cablevision “actively participates in the playback process” through its “array of computer servers.” The customer could not cause a playback to happen by merely using the remote control.
Cablevision further argued that even if it were “doing” the performing, each performance is “fundamentally private” and not an infringing public performance because the streaming “emanates from a distinct copy of a program uniquely associated with one customer’s set-top box and intended for that customer’s exclusive viewing in his or her home.” The Court rejected that argument for two reasons. First, the Copyright Act’s definition of performance includes transmissions “whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or different times.” 17 U.S.C. Sec. 101. Secondly, where the relationship between the party sending a transmission and the party receiving it is commercial, courts have determined that the transmission is one made “to the public.”
As noted above, questions regarding other developing facets of digital entertainment also were implicated by the decision. Among them is the legality of a service like TiVo (which, to be clear, was not involved in the Cablevision case). The technology of TiVo is fundamentally different from that of Cablevision’s proposed RS-DVR, even though the experience of users is similar. In the case of TiVo, the computer memory that copies programming and plays it back is in the box in the consumer’s home and not at a remote location. Accordingly, when the consumer hits the “record” or “play” button, recording or playback is activated without remote mediation, just as with a VCR. However, most of the other characteristics cited by Judge Chin in Cablevision to distinguish an RS-DVR from a Betamax-protected VCR also apply to TiVo: an ongoing relationship between TiVo and its customers; payment of monthly fees by the customers to TiVo; the use of TiVo computer facilities to deliver program schedules (from which the customer makes recording selections); and, presumably; ongoing maintenance of at least part of the system at TiVo facilities. And, as it refers to itself, TiVo is a “service.” Moreover, the Cablevision decision states that a set-top DVR was not necessarily insulated from legal challenge. Does TiVo infringe copyright or do its distinguishing features make all the difference? That question, with all its significance for the television industry, remains unanswered.
The decision’s treatment of buffer copies also touches on a topical facet of digital entertainment. The Court in Cablevisiondecided that temporary buffer copies were no less an infringement than copies in long-term memory. Perhaps this ruling only will be underscored in subsequent cases involving buffer copies that are found to facilitate infringing acts (e.g., as in this case, unauthorized long-term storage and transmissions). The legal sands may be shifting, however, with respect to buffer copies created to facilitate authorized uses, even if the buffer copies themselves are not licensed. On March 22, the day of theCablevision decision, Marybeth Peters, Register of Copyrights, testified before a House subcommittee and recommended that Congress “amend the law to clarify what constitutes a public performance in the context of digital transmissions [of music]… to provide that when a digital transmission is predominantly a public performance, any reproductions made in the course of transmitting that performance will not give rise to liability.”2
Lastly, we come to the issue of whether server-to-home transmissions constitute a public performance. Arguably, not every transmission ought to constitute a public performance (a point made by Ms Peters in the same testimony in the context of music downloads). Should a transmission to a private home of a personally recorded copy, uniquely retrieved on the initiative of a customer from allocated memory in a central server, be considered a public performance? Yes, says the Cablevision decision, citing cases that involved “commercial” transmissions of video copies by a hotel to guests in their rooms, and by a video rental store to patrons in “private viewing rooms.”
Cablevision says it will appeal.
1 Nos. 06-Civ. 3390 (DC) and 06 Civ. 4092 (DC), __ F. Supp. 2d __, 2007 WL 867093, 82 U.S.P.Q.2d 1075 (S.D.N.Y. March 22, 2007).
2 “Reforming Section 115 of the Copyright Act for the Digital Age.” Statement of Marybeth Peters, the Register of Copyrights, before the Subcommittee on Courts, the Internet, and Intellectual Property, Committee of the Judiciary, March 22, 2007, available at the Copyright Office website: http://www.copyright.gov/docs/regstat032207-1.html.