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)

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

[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.

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.

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.

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?

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!