A U.S. appeals court on Monday ruled that Cablevision's DVR service does not infringe on the rights of content holders.
"We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer's command," according to the U.S. Court of Appeals for the Second Circuit.
Cablevision's RS-DVR Paradigm
Cablevision offers a different type of DVR than the traditional TiVo. The company is pushing what's called RS-DVR, or remote storage digital video recorder, service. From the customer's end, the service works just like a TiVo. But the shows aren't stored on a hard drive within a set-top box. Rather, the shows are stored on Cablevision's servers and transmitted to customers when they decide to watch them.
Cablevision's approach to DVR came under fire by some heavy hitters in the entertainment world, who filed a lawsuit against the company. CNN, Twentieth Century Fox, Cartoon Network, Paramount, Universal, Disney and the major TV networks joined forces, alleging the RS-DVR service worked like a video-on-demand (VOD) offering. The companies wanted Cablevision to get licenses from each of the content holders before allowing customers to watch the programming. The appellate-court judge did not oblige.
"The content industry, in suing Cablevision, once again overreached in its goal to limit the personal uses of increasingly popular technology," said Gigi Sohn, president and CEO of Public Knowledge, a party to an amicus brief supporting Cablevision in the case. "We hope this case will be another signal to Hollywood to scale back its attacks on consumer-friendly technologies."
Behind the Ruling
Cablevision lost the first round of its legal battle when a judge in the Southern District of New York agreed with the content holders. In March 2007, a judge ordered Cablevision to stop offering RS-DVR until it obtained licenses for the content. The judge decided RS-DVR infringed on the content holders' copyrights in several ways.
First, the judge ruled, copying the programs to Cablevision servers violated reproduction rights. Second, the way Cablevision stored recorded content violated the Copyright Act. And, third, beaming data from the servers to customers' set-top boxes infringed on the right to public performance. The appeals court overturned this reasoning.
"Cablevision has no control over what programs are made available on individual channels or when those programs will air, if at all," Monday's ruling asserted. "In this respect, Cablevision possesses far less control over recordable content than it does in the VOD context, where it actively selects and makes available beforehand the individual programs available for viewing."
The Impact on DVR Usage
Phil Leigh, senior analyst at Inside Digital Media, said the ruling could lead to some acceleration in the acceptance of the DVR concept. RS-DVR is more like an on-demand service, he said, that doesn't require an additional set-top box to install. The question is, how will this impact TiVo?
"The cable companies have done just about all they can to damage TiVo by keeping them outside the fraternity," Leigh said. "People who are buying TiVo are doing it despite all the obstacles the cable-TV companies are putting in front of them, and I don't think this will much change that."
As Leigh noted, TiVo has climbed an uphill battle because cable companies want to offer their own boxes and services. But, Leigh said, people still buy TiVo because the company is innovative and its products, features and capabilities are in front of the curve.
"With TiVo I can get things off the Internet, put them on my computer, and then switch them over to TiVo, or I can watch them on my television," Leigh said. "That's not something cable companies encourage. People will keep buying TiVos."
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