Can Cable Companies Store Shows For Us?

NewYorkCountryLawyer writes "Last August I reported that the US Court of Appeals for the 2nd Circuit had defeated the MPAA's attempt to label as copyright infringement a cable operator's storing video for later reuse at the request of its subscribers, in Cartoon Networks v. CSC Holdings. The MPAA has petitioned the US Supreme Court to review that holding. According to a recent interview with Gigi Sohn of Public Knowledge, the High Court has not yet decided whether to grant the MPAA's petition seeking review. What I found odd about the 2nd Circuit decision (PDF) is that (a) although 'fair use' was the most logical defense to be employed in view of the Supreme Court's holding in SONY Betamax, upholding a VCR's 'time shifting' of a broadcast television show as a 'fair use,' the defendant in Cartoon Networks has stipulated to waive 'fair use,' and (b) although the easier legal theory for plaintiff to prove would have been secondary, rather than primary, copyright infringement (i.e. Cablevision's encouraging and inducing its customers to make unauthorized copies), the MPAA has stipulated to waive that line of attack. I.e. neither plaintiffs nor defendants seized the 'low hanging fruit.' In her interview, Ms. Sohn discusses the fair use defense, but I'm not sure why she does, since as I recall the defendant has waived it."

Comments

Targets that can fight back

[causality]

Cable companies tend to be large media conglomerates. Surprisingly, it looks like the *AAs finally picked a target that can afford to defend itself. It'll be interesting to see how they fare when the playing field isn't asymmetric.

Fair use

[GrifterCC]

If I'm either party, and I want the Supreme Court to decide an issue for me that I think I'll win, I'm going to work with the other side to waive the legal doctrines which best protect me. I don't want them to say "fair use" or "secondary infringement." Perhaps Cablevision wants to set up a decision granting more protection to content providers, just as the MPAA wants to set up a decision expanding the definition of primary infringement to include what Cablevision did.

With the Supremes taking so few cases, it makes sense to give them an extremely narrow legal issue, on a platter, freed, as much as possible, of its factual trappings.

Re:Fair use

[NewYorkCountryLawyer]

If I'm either party, and I want the Supreme Court to decide an issue for me that I think I'll win, I'm going to work with the other side to waive the legal doctrines which best protect me. I don't want them to say "fair use" or "secondary infringement." Perhaps Cablevision wants to set up a decision granting more protection to content providers, just as the MPAA wants to set up a decision expanding the definition of primary infringement to include what Cablevision did. With the Supremes taking so few cases, it makes sense to give them an extremely narrow legal issue, on a platter, freed, as much as possible, of its factual trappings.

1. I'm not sure I understand your theory as to why both sides waived their best arguments. But I sure would love to have been a fly on the wall when those decisions were made.

2. The issues were narrowed by stipulation earlier in the case, before it got to the Second Circuit. The Second Circuit had to take the case; it was an appeal as of right. So this narrowing had nothing to do with getting Supreme Court review.

Re:Fair use

[mea37]

Maybe I don't understand the service in question, but this is an on-demand service right?

Doesn't such a service actually decrease the need for the end-user to make a copy? i.e., with traditional scheduled programming I set my DVR to make a copy, but with on-demand scheduling I don't have to because I can just have it streamed to me when I actually want to watch it?

I guess I'm having trouble seeing the secondary infringement angle.

The fair use angle, on the other hand... I can see where providing a commercial service whereby I time-shift material on my customers' behalf might not get the same treatment as a costumer time-shifting for personal use; maybe the cable company just didn't want to go there?

Re:Fair use

[GrifterCC]

NYCL, as I understand it, the case in question doesn't even involve damages yet; it's basically a declaratory judgment action. So there's no money on the line. It's a pure question of law.

Here's what I'm thinking: Cablevision knows that users can time-shift, under SONY Betamax. So they know that if they sell users a TiVo, it's not secondary infringement.

If Cablevision is looking to provide this on-demand player as a value-added service without paying for it, being able to charge for that feature without having to lease out a bunch of TiVos saves them money; users will presumably pay the same amount regardless of whether there's another box in their entertainment center. So consolidating the service into a central repository is just free money for Cablevision.

The only question left is whether the consolidation itself is infringement. Maybe not, but why take the chance, given how litigious MPAA is?

As for the MPAA, they know they can get secondary infringement in certain situations, but probably not this one, given the end users' right to timeshift. But the MPAA may see this as an opportunity to expand "primary infringement" and secure their position, as digital timeshifting becomes more common, in future negotiations with the midstream providers.

Re:Fair use

[russotto]

Perhaps they've colluded in order to get the courts to arrive at a decision that is anti-consumer.

If so, they've done a pretty poor job. The circuit court decision is pretty good

1) It rejects the notion that buffering a work necessarily infringes on the reproduction right. (that doctrine would make playing most digital media a reproduction, giving legal teeth to playback restrictions)
2) It rejects (following Netcom) direct liability for the operator of a system which makes copies automatically at the request of someone else.
3) It rejects broad readings of the "public performance" clause which says that all commercial performances are public, and that multiple performances of the a work to individuals, even if based off different copies of the same work, constitute public performance. (Remember the claims that Kindle text-to-speech constitutes public performance? This decision cuts the legs out from most such arguments)

I don't see how this works at all..

[plasmacutter]

Previous decisions have ruled in favor of personal time shifting.

Cable companies are licensed distributors over their networks, this includes on demand.

I don't get how their "case" even got this far.

Re:I don't see how this works at all..

[AmaDaden]

It's all business mess. Interesting note on this topic. I was talking to someone who worked for Cablevision about DVRs. He told me that they were thinking of moving storage in house so that you would not need a HD in your cable box. The obvious way to do this is to just record all channels at all times and then just keep records of what people want to watch later. They could not do this however since this would make them a broadcaster or content provider or something like that. So the current plan to implement this is to just record the same thing once per person. So if 20,000 people want to see the same episode of MythBusters they will have 20,000 copies of it on their servers.

they know

[Lord Ender]

They know they can win with the "fair use" defense, but they're going for an even stronger ruling. If that fails, they will appeal on fair use grounds. That's my guess, anyway.

Re:they know

[mea37]

I don't think you can say "I'm not going to use this argument" and then appeal a ruling you don't like to introduce that argument. As I understand it, appeals are to correct errors in the judicial process; you don't get to bring new arguments about the original case to the table.

Besides, you can't appeal past the Supreme Court.

Re:they know

[Lord Ender]

I know in criminal courts, prosecutors often "hold things back" so that they can launch a different line of prosecution in case their primary line is defeated. I do not know if similar techniques are used in tort cases.

To reduce this to simpler terms.........

[jonnycando]

Bad enough my cable company can figure out what I watch: I don't want them storing my stuff for me. Even if it's legal to do so, it is not wanted, and I am sure the cable company will figure out how to make mincemeat of privacy once I allow them to store my TV shows and movies. The more you allow others to do for you, the more you let others control you.

Re:To reduce this to simpler terms.........

[Chabil Ha']

The more you allow others to do for you, the more you let others control you.

You already surrendered by using the cable company's DVR in the first place.

Just think of your DVR as an abstraction layer--since they already know *what* you're storing, whether it's stored locally or on a remote system, it matters not.

tortured analysis

[gravesb]

We had a symposium on this issue, and a lawyer talked from the plaintiff's side. Much of their theory dealt with the length of the cable, based purely on a statutory reading. While I understand he has a duty to attempt to apply the statute in his client's best interests, his construction made little sense. Still, he had to rely on that construction to get around Sony. Essentially, it is legal for me to time shift in my house. So why can't I put my time shift device outside of my house, say in a warehouse with a lot of other time shift devices? And what if I make those time shift devices virtual devices on a single server? His point was that moving the device outside of my house was the difference-it became a transmission. He could not provide a length of cable that would trigger that definition, though. And, of course, he was speaking for his client at the time. I will be curious to see how this case works out if SCOTUS does take it. The statutes need some re-writing, honestly.

Re:tortured analysis

[NewYorkCountryLawyer]

We had a symposium on this issue, and a lawyer talked from the plaintiff's side. Much of their theory dealt with the length of the cable, based purely on a statutory reading. While I understand he has a duty to attempt to apply the statute in his client's best interests, his construction made little sense. Still, he had to rely on that construction to get around Sony. Essentially, it is legal for me to time shift in my house. So why can't I put my time shift device outside of my house, say in a warehouse with a lot of other time shift devices? And what if I make those time shift devices virtual devices on a single server? His point was that moving the device outside of my house was the difference-it became a transmission. He could not provide a length of cable that would trigger that definition, though. And, of course, he was speaking for his client at the time. I will be curious to see how this case works out if SCOTUS does take it. The statutes need some re-writing, honestly.

Yes but the whole time-shifting issue has to do with fair use, which was taken out of the case by stipulation. Note that the 2nd Circuit decision doesn't discuss that issue at all other than to mention that the issue is not before them.

Re:tortured analysis

[kilgortrout]

According to the Second Circuit's opinion(yes, I did read it), this is not a transmission issue per se. The time shifted program was clearly transmitted within the meaning of the Copyright Act; that was not disputed. The issue is whether the that transmission was to the public as is required by the relevant provision of the Copyright Act at issue in this case. Considering the technology used by the defendant, the Court held that it was not a public transmission relying heavily on the fact that the program is recorded at the customer's direction and the customer's requested program is encoded on the server so only the customer's cable box can retrieve it. So the scenarios you spin would all seem permitted by this holding as there is no transmission to the public in any of them that I can see.

MPAA incentive to limit access

[Glass Goldfish]

The MPAA has every intention of limiting your access so it can sell you it bit by bit. They want to sell you a different copy for each medium you use it in. If they can sell you more than one copy in a given medium (standard edition and then 2 years later director's cut), they certainly will. They want you to pay for a movie ticket, buy it on Blu-Ray, pay for DRM protected copy for your laptop and then pay for higher resolution DRM protected copy for your next laptop. Of course different countries will have different price scales.

It's not just piracy that threatens this, it's DRM free content. The reason they don't want the cable company to buffer content is that you should pay extra for that, preferably in a Blu-Ray box set. And then again for a DRM-protected version for portable use.

Re:MPAA incentive to limit access

[Gizzmonic]

The MPAA has every intention of limiting your access so it can sell you it bit by bit. They want to sell you a different copy for each medium you use it in.

If this is true, then why are almost all new movies coming out with free MPEG4 copies now?

Sorry, I have grave concerns about the MPAA but your knee-jerk cynicism is unwarranted. DRM is already out of the equation WRT online music. I don't know if it will disappear from movies, but including a free MPEG4 with new movies is a step in the right direction.

Re:MPAA incentive to limit access

[SirGarlon]

They want you to pay for a movie ticket, buy it on Blu-Ray, pay for DRM protected copy for your laptop and then pay for higher resolution DRM protected copy for your next laptop.

Optimist. They want Blu-Ray and all physical media to become obsolete, so they can implement a strong DRM regime where you have to pay for the movie every 10 times you view it, or every 6 months just to keep it around (or both).

Re:MPAA incentive to limit access

[cool_story_bro]

Optimist. They want Blu-Ray and all physical media to become obsolete, so they can implement a strong DRM regime where you have to pay for the movie every 10 times you view it, or every 6 months just to keep it around (or both).

Optimist. ... where you have to pay for the movie EVERY time you see it. And, as icing, your device tells them who watched it so they can send them marketing to get them to watch more things you have to pay for.

Optimist... they want you to have to pay and get ABSOLUTELY NOTHING in return

Could it be they want a definitive ruling?

[SirGarlon]

Could it be that the reason both parties have waived their most obvious arguments is that they really want to the court to address the deeper questions and create a landmark ruling? In the long run such a ruling would reduce the amount of litigation surrounding (re)distribution of movies & music.

Could this, in fact, be a cry for help? Could both parties be saying, "Please, your Honor, give us a ruling that makes sense! Let us understand where the limits of copyright law really are!"

Nah. Sounds too logical to be true.

This isn't Personal USE, this is redistribution.

[barfy]

When I save something on my DVR, that is for personal use. It is by me for me.

When I get something from the cable company, that is distribution. If that is not distributed in the manner as the owner of the copyright desires, that is a copyright violation on face. Copyright is ABOUT distribution.

There are grey areas, like hold and release, 5 second delay, in-between servers, but this use of a private fair-use technology as a distribution technology, is definitely worth suing over.

It changes the value that the audience aggregator is charging the advertiser. The audience aggregator is unable to charge for another ad, and is unable to control the distribution method. When Adult Swim is on, they want you to watch Adult Swim. GO SHAKE!

Re:Amicus curiae

[NewYorkCountryLawyer]

I wonder what would have happened if someone had filed an Amicus curiae in this case stating either (or both) of the low hanging fruit defenses.

That would be out of the question. If the parties stipulated to waive certain issues, an amicus could not re-inject it.

Is this a real case?

[AnotherBlackHat]

I thought the US supreme court only heard cases that were real.
If both sides in this case waived reasonable arguments, then it sounds to me like a show trial designed specifically to get a ruling.

MP3.com

[GigsVT]

Why is it OK for cable companies to "store video for later use by subscribers"... but MP3.com was shut down for doing the exact same thing?

I guess MP3.com needed better lobbyists.

Re:This is why I have ~10 VCRs

[GigsVT]

I don't know if you were joking or not but...

You could have used a analog capture card instead and encoded it to whatever format you wanted, and even done inverse telecine and deinterlacing to make it look really nice.

I guess with a nickname like yours, you are nostalgic for the 80s.

My 'writings' on the subject

[NewYorkCountryLawyer]

By the way, here's an article I wrote for the Journal of Internet Law, which discusses, at page 19, the main issue in the Cartoon Networks case which is "When is a copy transitory?" And here's an editorial comment I wrote for my blog after learning of the Cartoon Networks decision.

Re:My 'writings' on the subject

[HBI]

Ray:

I read your article. I hope you feel good about the work you are doing in this area, because you are rendering a significant service to your fellow countrymen. You are moving the United States closer to justice on this particular issue with your efforts.

Thank you.

They do already ...

[Purity Of Essence]

... but the first rule won't allow me to elaborate.

Fair Use?

[jvkjvk]

I think that they probably waived fair use because they, themselves don't want to strengthen fair use case laws.

Perhaps they have some content themselves that they don't want other people sharing [full, entire] version of their stuff through time shifting mechanisms.

I mean, if it's fair use that a cable network can time shift stuff for you then logically other companies and individuals can also get into that game.

And let me tell you, my friends, that way least to anarchy! Or at least a lot less profit for both cable operators as well as content holding companies.

VOD vs DVR

[vlm]

The situation is really pretty simple and depends entirely on contract law.

The cableco's sign one contract to redistribute live TV. They sign another contract (possibly involving another hefty fee) to redistribute video on demand, VOD. The revenue streams are separate starting at the contract and flowing all the way through the business to the customer's bill which has separate line items for HBO and HBO-On-Demand.

Obviously, the cableco's should want to scrap the extra contract and extra cost of the VOD contract and just give us all "virtual DVRs". Or perhaps they could scrap the VOD contract, and continue to charge the customers the same amount of money for their "DVR with infinite rewind", keeping the money that would have gone to the channel for VOD. Or perhaps, since VOD is kind of a pain, the cablecos would get to embrace and extinguish the entire product all at once by changing the numerous VOD relationships into an insourced DVR product which can later be scrapped.

Also its a control issue. The channels want to control their product. Just because the SciFi channel used to broadcast science fiction a long time ago, does not mean they want to now. Now, they want to broadcast ghost hunters, wrestling, and horror flicks. They would not appreciate a cablecos "DVR with infinite rewind" messing up their current oh so carefully designed marketing message that they like the name, but no longer have any interest in scifi content.

Finally its liability. If CBS had the superbowel halftime on some cableco's virtual-infinite-rewind-DVR, who is liable when its played back over and over? CBS because the cableco didn't delete it? The cableco because they're a common carrier? The local franchise because they are easier to sue? If a channel screwed up and transmitted something they didn't pay for, can they force the big corporate virtual DVRs to delete it? Or if they screwed up their perfect record of bland mediocrity and accidentally broadcast something that generated complaints, could they force the big corporate virtual DVRs to delete it to limit complaints?

Re:This isn't Personal USE, this is redistribution

[characterZer0]

Everybody agrees that I can have a DVR in my house. Is it okay if I move it to my garage?

Is it okay if I buy a plot of land and get satellite and put my DVR there, and relay to my house over the Internet?

Is it okay if I let a friend put his dish and his DVR on my plot of land?

What if I charge some strangers to put their dishes and DVR on my land?

What if I have 200 people, but I rent DVRs to them?

What if I replace the hard drives in individual DVRs with a huge RAID array?

What if I virtualize the DVRs?

What if I sell the satellite connection to begin with?

At what point is it no longer legal?

Hotel-related cases

[Animats]

I think there was at least one case on this involving hotels. Back in the early VHS era, many hotels provided VHS players for guests, and lent out tapes at the front desk. No problem there, at least in the US; that's just the "first sale" doctrine.

Better hotels would deliver tapes via room service. This was labor-intensive. Some hotel then realized that it would easier to centralize all the VCRs, and just have someone in an office put the requested tape in the VCR when requested. This was the beginning of "video on demand".

That was held not to be a copyright infringement, even though the hotel was in a sense "distributing" the content.

Now, of course, there are "video on demand" systems for hotels. But they usually have contractual relationships with all their sources; they're not just buying VHS tapes at retail.

Re:This is why I have ~10 VCRs

[LordKazan]

I was going to moderate this thread, but the egregiously wrong information in your post made me stop and comment.

And how well do analog capture cards work when folks like the MPAA turn-on the "don't record" flag? Not at all

WRONG. The "Broadcast Flag" was never instituted - it is a purely optional (and almost universally ignored by non-cable-company-hardware) standard. Furthermore it was digital only - so all your NTSC adapters that work with cable continue to work fine. Second no ATSC/QAM tuner i've ever seen even offered support for this hardly-implemented non-mandated anti-fair-use idea.

My mythBox is about the size of two VCRs, has 1 TB of storage, is attached to my 100base ethernet, I can manage my recordings over the web. I can use Hulu on it. I could (and might) install Boxee (i'd prefer to use mythVodka if they ever get that plugin working well). And has numerous other abilities that your two VCRs just cannot do.... MAME anyone?

Follow the money!

[rickb928]

This is probably not about fair use, or rights, or anything mundane. It's about the money.

Which is, admittedly, a facile argument. But, if these on-demand services are to thrive, they need to be more universal, and that means essentially storing all the content the cable cos can possibly identify. And that means the providers will have to sign off on viewers being able to time-shift, repeat, and edit (skip commercials). This is about money. Does the SciFi Channel get more $ per subscriber when it allows on-demand delivery? Should it? Will I pay more?

And though this is not thought of often, the cable cos don't want us to have hard-drive-based DVRs. These things are going to become a nightmare support issue when the hard drives start failing, like every few years. And new software causes more problems, stranding weeks' worth of shows I wanted to watch, and encouraging me to bitch out my cable co rep for losing my shows... And new features make them obsolete by the many thousands. A set-top without a hard drive has many advantages. Spinning things are not desireable.

This is all about the money, and maybe both sides think they have a good case to compel the other side to give in. We'll see, but in the end one thing is certain.

We pay.

Apparently "On Demand" isn't protected

[msobkow]

Apparently the "On Demand" part of cable services isn't protected at this point in time. That actually makes sense, as it's a "new" service being offered by the cable cos that bypasses the whole idea of prime-time scheduling.

I don't blame them for skipping the time shifting argument. Prior cases against web companies haven't succeeded in using that argument to justify their provisioning of torrent caps of TV shows for members to view.

I believe the *AA wants to ensure they get another licensing slice for allowing VOD. I doubt they're actually foolish enough to want to make the practice illegal, so they're not using the "big guns" that might force the cable cos to drop the service.

Personally I still think direct subscription to shows over the internet is the way the future will go. Rather than subscribing to a "channel", you'll subscribe to the particular show you want. Channels will only exist in the future if they provide a heavily discounted bundle of shows to be watched on demand.

Let's face it -- with PVRs, VOD, and torrents, we're already half way there. They just need to figure out how to monetize it, and standardize the streaming services so they can be built into TVs.

I'm surprised at the programmers here!

[NewYorkCountryLawyer]

I'm surprised that there isn't more interest in the main issue in the case, the question of what is a "transitory" copy.... especially among you software developers out there!

Re:I'm surprised at the programmers here!

[NewYorkCountryLawyer]

Well I personally think you're all missing the point here.

There was a bad case, the MAI Systems case -- which most lawyers knew was wrong legally, and most programmers and other tech people knew was very very wrong in the real world -- which held that even a copy which existed nowhere except in RAM was a "copy" within the meaning of the Copyright Act. In MAI

defendant Peak Computer, Inc., performed maintenance and repairs on computers made and sold by MAI Systems. In order to service a customer's computer, a Peak employee had to operate the computer and run the computer's copyrighted operating system software. See MAI Sys., 991 F.2d at 513. The issue in MAI Systems was whether, by loading the software into the computer's RAM,1 the repairman created a "copy" as defined in 101. See id. at 517. The resolution of this issue turned on whether the software's embodiment in the computer's RAM was "fixed," within the meaning of the same section.

The Ninth Circuit concluded, in my view unfairly, that

by showing that Peak loads the software into the RAM and is then able to view the system error log and diagnose the problem with the computer, MAI has adequately shown that the representation created in the RAM is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration"

and that the RAM version was therefore a "copy" even though it existed nowhere in a fixed format.

The Cartoon Networks case, as I read it, greatly limits the damaging effect of the MAI case. Do you disagree?

Re:I'm surprised at the programmers here!

[NewYorkCountryLawyer]

The law lags so far behind software development, I don't consider any of it relevant.

Well you'd find it highly relevant if you got skewered, like the defendant in MAI, because the 9th Circuit judges just didn't understand. You should be aware of the fact, and appreciate the fact, that the 2nd Circuit judges in the Cartoon Networks case took the time to be a little better informed and make a little bit more realistic assessment. Like it or not, the law is relevant to all of our lives, so we all have an interest in helping it to become as rational and fair as possible. (Unlike the MPAA and RIAA whose apparent goal in life these days is to distort the law, and make it as irrational and unfair as possible.).

Re:This isn't Personal USE, this is redistribution

[fm6]

You can morph any innocuous action (politely telling somebody you can't talk to them right now) by small steps (being rude, being angry and insulting, making threats if they don't leave you alone) to stuff that's totally illegal (using force to make them go away, using deadly force...) and downright heinous (setting off a bomb that kills them and a lot of other people). It can be hard to define precisely the boundaries between legal, illegal, really illegal, and crimes against humanity — hence all the legal hairsplitting. But they do exist.

Which is not to defend the legal abuses that owners of IP have indulged in. But that comes from legal principles based on assumptions about the technology that no longer apply. (Plus, of course, their extreme influence over the people who make and interpret the law involved.) But there's no "slippery slope" situation here.

Re:This isn't Personal USE, this is redistribution

[cstdenis]

> Everybody agrees that I can have a DVR in my house. Is it okay if I move it to my garage?
[citation needed]

> Is it okay if I buy a plot of land and get satellite and put my DVR there, and relay to my house over the Internet?
MPAA: No, You need special (expensive) licensing.

> Is it okay if I let a friend put his dish and his DVR on my plot of land?
MPAA: No, You need special (expensive) licensing.

> What if I charge some strangers to put their dishes and DVR on my land?
MPAA: No, You need special (expensive) licensing.

> What if I have 200 people, but I rent DVRs to them?
MPAA: No, You need special (expensive) licensing.

> What if I replace the hard drives in individual DVRs with a huge RAID array?
MPAA: No, You need special (expensive) licensing.

> What if I virtualize the DVRs?
MPAA: No, You need special (expensive) licensing.

> What if I sell the satellite connection to begin with?
MPAA: No, You need special (expensive) licensing.

> At what point is it no longer legal?
MPAA: Whenever we say.