In March 2006, Cablevision -- a New York metropolitan area cable-television provider serving some three million households -- announced that it would initiate a Remote Storage Digital Video Recorder system (RS-DVR), which would allow customers to download their favorite movies and television programs for later viewing.*
Cablevision currently offers its customers a "set-top storage DVR," which records and stores selected presentations on the hard drive of the customer's set-top (or cable-box). By contrast, Cablevision's proposed RS-DVR system would store selections remotely in computer servers kept at the company's facilities.
In Twentieth Century Fox Film Company, et al v. Cablevision , the plaintiffs* filed suit in U.S. District Court seeking a declaratory judgment holding that the planned RS-DVR would violate their copyrights, and an injunction stopping Cablevision from administering the RS-DVR without permission or licenses. Cablevision countered with a request that the court find no violations of law.
Since the facts were not in dispute, the parties moved for summary judgment -- a decision based on the parties' documentary submissions.
Under the Copyright Act of 1976, copyright owners have the exclusive right to "reproduce the copyrighted work in copies" and "in the case of ... audiovisual works, to perform the copyrighted work publicly." Without a license from the copyright holder, anyone copying or publicly performing copyrighted material is liable to the copyright holder. Thus, the U.S. District Court was asked to decide whether Cablevision or the customer did the actual "copying" of the programs, and thus violated the law.
Cablevision cited Sony Corp. v. Universal City Studios , a 1984 U.S. Supreme Court decision which held that Sony was not liable for the copyright infringements of VCR-users, because it was the latter who actually duplicated the copyrighted material. Sony's involvement ended with the device's sale, and thus the company could not be held liable for purchasers' subsequent conduct. Cablevision argued that, since the RS-DVR was merely a more sophisticated form of a VCR, it also could not be found responsible for its customers' conduct.
According to the District Court, Sony was distinguishable.
While Sony's involvement in the copying process ended once the machine was sold, the RS-DVR system would only be available to ongoing customers of Cablevision's services. Significantly, the programs would not be stored in the customers' homes, but on the company's servers. In the Court's view, while the customer selected the program to download, Cablevision did the "copying," and thus was responsible for any infringement.
The Federal Court also decided that Cablevision was engaged in a "public performance" of the plaintiffs' intellectual properties. Since consumers would be unable to view the programs without Cablevision's assistance, the transmission comprised a public performance. As a result, the Court stopped Cablevision from copying or publicly performing copyrighted works by way of the RS-DVR system without first obtaining permission from the copyright owners.
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*The list of plaintiffs in this consolidated case reads like a TV Guide, and includes: Fox, the Cartoon Network, CNN, TBS, Turner Classic Movies, TNT, Disney, CBS, and NBC.
By the way, you would think a company like Cablevision would be a bit more "sensitive" to protecting intellectual property. In addition to operating New York City's Radio City Music Hall , Cablevision owns Madison Square Garden (home of the New York Knicks, Rangers and Liberty) and several programming businesses of its own (including AMC , IFC , and WE ).