Consumer-Directed DVR Service Infringes Copyright–20th Century Fox v. Cablevision

By Eric Goldman

Twentieth Century Fox Films Corp. v. Cablevision Systems Corp., No. 06-Civ. 03390 (SDNY March 22, 2007)

Not infrequently, copyright defendants argue that they are offering a service that passively implements consumer directions to infringe. In some cases, such as web hosts of user content (such as YouTube or many blog service providers), this defense has some bite. In other cases, such as MP3.com’s Beam-It service, the facts may be less supportive, although distinguishing between the two cases isn’t easy. But even when the facts are fully supportive, we’ve repeatedly seen that there is no “passive effectuator” exception to copyright law. Statutory safe harbors, such as 17 USC 512, help a bit in some places, but only a bit, and there remains plenty of uncertainty about what those safe harbors mean.

Cablevision is the latest entity to claim that it’s just passively following its users’ instructions by offering a service that allegedly infringes copyright. Cablevision offered a service that simulated the function of DVRs, but instead of the hardware residing in the users’ homes, Cablevision kept all of the hardware in its central facility and just stored and served files at users’ requests. As Cablevision claimed, “Cablevision sees itself as entirely passive in the RS-DVR’s recording process — it is the customer, Cablevision contends, who is “doing” the copying.” The court’s response is terse and clear: NO. As the court says: “The RS-DVR is clearly a service, and I hold that, in providing this service, it is Cablevision that does the copying.”

While I think the court accurately applied copyright law as it stands today, it’s still anachronistic at best. Does it really matter if the hardware is in the users’ possession or operated as a service for their benefit? It shouldn’t! Few users buy DVRs for their aesthetic beauty or the value of the component parts; instead, most users buy DVRs for the functional output of the device–they just want their programs as requested. Therefore, distinguishing the physical product and the service it provides seems completely out-of-step with the underlying economic dynamics. Nevertheless, copyright law makes such formalistic distinctions, and so does this court.

Other comments on this case:

* Mark Cuban thinks the copyright owners made a mistake shutting down this service because the cable companies pay copyright owners for broadcasting their content, unlike other DVR manufacturers.

* Sherwin Siy said that Cablevision’s service is like an in-the-home DVR with an extra long cable.

* John Murrell says it’s “truly frustrating to see an important legal ruling turn on a question of where a hard drive resides.”

* Mike Madison says the “decision seems to rely on an unsustainable technological distinction”

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