Cablevision’s Remote DVR Unplugged

March 26th, 2007

I have just finished reading the opinion in the Twentieth Century Fox v. Cablevision case from the Southern District of New York and boy, is it ever a stinker (to use the legal jargon).

Briefly, Fox sued Cablevision for setting up a “network digital video recorder”, a device that operates like a DVR, but uses equipment sitting in Cablevision’s facility rather than in a box in the consumer’s house. The court held that such a system violates Fox’s copyrights in its programming because Cablevision both copies and transmits the content to consumers without the proper licenses from Fox.

My first thought on reading the case was that it focused on extremely technical details only to reach a completely anachronistic ruling. In the age of Software as a Service, we have all gotten pretty used to the idea that technology can be administered remotely. We don’t need to have the set-top box, many of us may be happy not to have to plug yet another device into our TVs, and the end result for consumers is exactly the same. As Sherwin Siy notes, the main difference is the length of the cable.

Unfortunately, the more I think about it, the more it seems like it is the Copyright Act that has it wrong these days. Distinctions that used to matter no longer make a difference.

The court talked extensively about the fact that Cablevision was “transmitting” the content. Cablevision tried to argue that the consumers were actually doing the transmitting when they choose which programs to watch, but it doesn’t take much to see that argument as a loser.

A little tricker was Cablevision’s similar line of reasoning that consumers actually do the “copying” as well, another basis for finding copyright infringement. Consumer-copiers can rely on a fair use exception for home use of content, but Cablevision can’t. The court really didn’t like this argument either. It left the door open a crack based on Cablevision’s complex N-DVR architecture, but held that the copies were made on Cablevision equipment maintained by Cablevision personnel in Cablevision facilities, so Cablevision was really the copier.

The place where it all starts to come apart is where the court tries to distinguish “devices” from “services”. Sony’s Betamax is the precedent-setting case here, from 1984. Consumers could install a Betamax machine and have nothing further to do with Sony. The court found that the N-DVR was nothing like a Betamax, because consumers subscribed to the “service” to get the DVR functions.

Of course, this is only a hair removed from every other type of DVR, including the Tivo in my house. Sure, I record content onto my Tivo within the walls of my own house, but my “device” would be useless without the “service” that tells my Tivo what is on which channels.

My own belief is that the judge realized this and the focus on technical operation was his attempt to confine his ruling to the narrow N-DVR issue in front of him rather than come out of left field with an opinion that could be read to say every DVR everywhere (and probably VCR+ scheduling codes as well) are copyright-infringing.

The scorecard, then, is something like this:

Judge Chin gets the law right, even if he doesn’t seem to like the result.
Prof. Eric Goldman sums up the issues nicely.
Mark Cuban gets it right for sure when he says Fox is far better off distributing content this way than to see it pirated, or just losing the distribution channel entirely as the Internet changes video progamming models.
Copyright law is the big loser for foisting arbitrary rulings like this on consumers. Trying to draw a line between hardware and software isn’t going to make for happy caselaw.

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