A cable television distributor's method of enabling customers to record programming remotely for later viewing avoids liability for direct copyright infringement under a new decision by the United States Court of Appeals for the Second Circuit ("the Court"). In Cartoon Network v. CSC Holdings, Nos. 07-1480-cv(L) and 07-1511-cv(CON) (2nd Cir. Aug. 4, 2008), the Court analyzed the plaintiff content providers' three theories of copyright infringement, finding all wanting.

Cablevision's Remote Storage Digital Video Recording (RS-DVR) system enables remote copying and storage of programming that is responsive to customer requests made prior to the broadcast. The RS-DVR system differs from typical DVR systems because it employs a standard cable box that does not itself function as a recording device. The RS-DVR system splits the signal into two streams, one delivered to customers and the other to buffers. The buffers capture one second (of programming) (at a time), with each second stored for about 1.2 seconds until overwritten by a new second of programming. If a customer requests time-shifting of the program, it is copied onto servers housed in a remote location, rather than onto a recorder in the viewer's possession, that store the entire program on file for that customer. When the customer requests the program for later viewing, that copy of the program is transmitted to the customer's cable box and displayed on the television screen.

The plaintiffs claimed infringement at three stages of the recording and playback processes: (1) when the data is stored in buffers; (2) when the copy is stored on servers; and (3) when the copy is transmitted to the customer for viewing.

The Court's analysis of the first claim focused on whether Cablevision infringes the plaintiffs' reproduction rights when buffering the data. The opinion emphasizes a bifurcated inquiry of the copy's (a) embodiment and (b) fixation in a tangible medium of expression. The Court concluded that storage on the buffer for "a fleeting 1.2 seconds" before being overwritten failed the duration requirement. The Court rejected other courts' views that the duration element is met if the work is stored long enough for a copy to be made. Thus, the Court held that infringement did not occur at this stage because no copy was fixed.

In its analysis of the second claim, the Court acknowledges that copies stored on Cablevision's remote servers are unauthorized, but held that Cablevision is a direct infringer only if it makes the copies. Since the system automatically makes the copies, the Court found that Cablevision did not intentionally copy, as it was reticent to assign liability for infringement without volition. The Court likened the RS-DVR to a video cassette recorder (VCR) because the customer essentially presses buttons to make a copy, albeit from afar and from a cable box. Thus, the Court viewed this copying as akin to the non-infringement by VCR manufacturers in the Supreme Court's Sony Betamax case, Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), and unlike the situation where a copy shop was held liable for physically making copies at the request of patrons, Princeton Univ. Press v. Mich. Doc. Servs., 99 F.3d 1381 (6th Cir. 1996) (en banc).

The Court held the transmission of the copies to the customer for playback was not infringing because it was not an unauthorized transmission of a public performance. It accepted Cablevision's claim that each transmission is made using a single, unique copy of a work made by the individual subscriber that can be decoded only by that customer's cable box. The fact that the same program is transmitted to many customers at different times did not alter the Court's conclusion.

The Court's analysis only addressed claims of direct copyright infringement, since the plaintiffs did not allege theories of contributory or vicarious infringement. In contrast, contributory infringement was at issue in the Sony Betamax case. That case found no contributory infringement, focusing on (1) the lack of an "ongoing relationship" between Sony and its customers, and (2) the presence of "commercially significant noninfringing uses."

The Court reversed summary judgment for plaintiffs and remanded the case for further proceedings. Following resolution of all issues in the case, there could be a request for en banc review, followed by a possible petition for certiorari to the United States Supreme Court.