USCA Second Circuit, August 4, 2008

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The Second Circuit reversed summary judgment for the plaintiffs, holding that Cablevision was not liable for direct copyright infringement by offering a remote storage digital video recording system to its subscribers.

Cablevision announced that it planned to offer a remote storage digital video recording (“RS-DVR”) system to its subscribers, but did not obtain a license from the plaintiffs who are owners of the copyrights in motion pictures and television programs provided to Cablevision. The plaintiffs filed suit against Cablevision, seeking a declaration that Cablevision’s proposed RS-DVR system would directly infringe their rights in the works that would be copied and played back to subscribers. The district court granted summary judgment for the plaintiffs and ordered an injunction against Cablevision.

Cablevision’s RS-DVR system involves a series of processes. When the plaintiffs transmit their programs and movies to Cablevision for broadcast, the stream of digital data is divided in two: one stream of data is broadcast in real-time to subscribers while the other stream of data is sent to a router where it is buffered and reformatted. If a subscriber has requested a recording of the program, the data is sent to a high-capacity server and the program is transmitted to the subscriber when he or she wants to view it.

The plaintiffs alleged that Cablevision directly infringed their copyrights in three ways: when the programs were “buffered” by being copied to the router; when the programs selected by subscribers for recording were copied to a server; and when the program was transmitted to the subscriber who had requested the play-back.

The court made three key holdings that addressed, and, ultimately, rejected, each of the plaintiffs’ three main theories of direct liability. First, the court held that Cablevision was not liable for “buffering” the plaintiffs’ copyrighted works in the course of providing its RS-DVR service. The Copyright Act defines a copy as a material object in which a work is “fixed in a tangible medium” for “a period of more than transitory duration.” The parties did not dispute that the digital data that made up each program were fixed in a tangible medium. But the defendants argued that the data – which resided on the buffering router for no more than 1.2 seconds and which were immediately overwritten by new data – were not there for more than a transitory duration. The Second Circuit held that both prongs of the Copyright Act’s definition – embodiment and duration – must be met and that the district court erred by not considering the duration element. In this case, the court concluded that the copyrighted works were not embodied in a tangible medium for more than a period of transitory duration. The court also rejected the defendants’ argument that the data were embodied long enough for Cablevision to make a copy which means it is more than a transitory duration; the court said such reasoning reads the duration requirement out of the statute.

Regarding the plaintiffs’ second claim – that Cablevision “made” copies of the plaintiffs’ copyrighted works that were selected by subscribers for recording when those programs were copied onto Cablevision’s servers – the court said the key issue was who authored the copies. The court held that there needs to be some volitional conduct to hold someone liable for direct infringement and that Cablevision did not have such volitional control because the copies were “made” by and at the request of Cablevision’s subscribers, not by Cablevision itself. The court likened Cablevision to a proprietor of a copy shop who allows customers to use its copy machines to make copies, but the proprietor himself does not make the copies.

Regarding the plaintiffs’ third theory of liability, the court held that Cablevision’s transmission of the copies to its subscribers was not a “public performance” of plaintiffs’ works because Cablevision transmitted each subscriber-created copy only to a single subscriber, which does not constitute a performance to the public.

The court stated that Cablevision might be liable for contributory infringement but the plaintiffs did not allege contributory infringement, so the court vacated the injunction against Cablevision and reversed and remanded the district court’s decision.