Cable DVRs are legal: Supreme Court denies appeal of Cablevision decision

The last possible effort by movie studios such as 20th Century Fox and cable television producers, including CNN and Cartoon Network, to forestall cable service providers such as Cablevision from providing their customers with DVRs with full commercial-skipping control, was silently shot down this morning in the final session of this year's US Supreme Court term. As a result, last year's ruling by the Second Circuit Court of Appeals stating that Cablevision's DVR service did not violate copyright law, stands.

That August 2008 ruling had overturned an earlier District Court ruling in March that had been a victory for the studios. Their argument was that when a cable service provider lets its customers record and play back shows at the headend -- using the provider's own storage rather than a local DVR -- that constituted a retransmission, which was contrary to the terms of service.

But Appeals Court Judge John M. Walker took a hard look at the technology behind Cablevision's RS-DVR service, and came to the conclusion that the District Court judge was in error: Since Cablevision's servers never stored programs or movies in a form that could themselves be copied and played like programs or movies, they weren't copies in the strictest sense. In other words, they could only be replayed in the context of each customer's DVR service.

Yet even if they were copies -- even without having determined that Cablevision buffered programming in a manner specific to the customer's own needs and no one else's -- the motivation for violating copyright law wasn't there, Judge Walker reasoned. In his ruling at the time, Walker cited earlier case law -- especially the Supreme Court's decision that made the use of VCRs legal -- to ascertain whether the creation or use of RS-DVR constituted volitional conduct on the part of Cablevision, with the intention of violating copyright.

"There are only two instances of volitional conduct in this case: Cablevision's conduct in designing, housing, and maintaining a system that exists only to produce a copy, and a customer's conduct in ordering that system to produce a copy of a specific program," Judge Walker wrote last August. "In the case of a VCR, it seems clear -- and we know of no case holding otherwise -- that the operator of the VCR, the person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine. 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."

CNN led the other plaintiffs in the case in filing a petition for a writ of certiorari, which would have been the high court's way of dismissing the appeals court ruling with due haste. That petition was denied this morning, with only the notice that Chief Justice John Roberts and Justice Samuel Alito -- who may have had legal experience with similar matters earlier in their careers -- did not participate in the denial process.

Today's dismissal could result in a dramatic new legal precedent, by effectively sealing into US law the notion that a copy of a digital work must be whole, or in Judge Walker's terms, "embodied" in the medium that stores it. If it's sliced in pieces and being moved around in buffers all around the Internet, it may not actually be a copy. A clever attorney may wish to conclude from this the notion that a stream does not constitute a copy, and therefore any reproduction made from that stream can only be attributed to the volition, if you will, of the person who ordered the stream.

Such an argument may be used in the future to propose that a streaming Internet broadcaster, for instance, may not be responsible for reproduction royalties, if it is not truly responsible for the reproduction. There's several viable counter-arguments to this, which could conceivably win the day if that argument were ever tried, but don't think that attorneys are blind to this new opportunity...or have been blind since last August.