Network LP v. CSC Holdings, Inc., the issue of copying

Network LP v. CSC Holdings, Inc., — F.3d —, 2008 WL 252614 (August 4, 2008). Instead of taking a satellite signal and broadcasting it straight into your home at the time dictated by the broadcaster, your local cable company sets up a very fancy digital box (Digital Video Recorder or “DVR”). A DVR permits you to use your remote control, point it at the television, and program that digital box to copy a future broadcast. When the broadcast comes in, the digital box copies the broadcast for you. When you want to view the broadcast at a different time, you and your family can access the copy on the digital box.

Most of us think of a DVR as something we buy, put underneath the television, puff out our chests and think “fair use” as we make a personal use copy.

But what if the box is miles away from your home, is owned by your local cable company, and is a massive computer monster that invites everyone to make copies from it. Has the cable company made a copy? Or did you make a copy? And if you play your copy by hitting the remote and putting the copy in the digital box in motion, did you infringe?

Well, one would have guessed that the cable company had engaged in copyright infringement, one way or another. And that’s what the local district court found. But on appeal, in an August 4, 2008 decision that will make happy those who really dig the technological questions involved in litigation over devices that make copies, the Second Circuit Court of Appeals reversed.

Why? Well, most of us acting as a plaintiff who owned a copyright would have alleged that the cable company had engaged in both direct copying and indirect or contributory infringement. Really, that DVR seems like a very Napster-like infringing mechanism that permits people who pay the cable company to make infringing copies and for the cable companies to profit.

But in a very thoughtful decision that really delves into the technology involved and the legislative history involved, the Second Circuit really digs into the question of what constitutes a copy, what is necessary for fixation of the copy and how much time a copy must exist to be a copy, with a very thorough survey of the law related to various ephemeral copies, such as a copy of a program made that boots up into your computer’s RAM. The Second Circuit found that “fixation” of the copy imposes both an “embodiment” requirement and a “duration” requirement. The Second Circuit found that the machine’s buffering system, which made a copy of .1 seconds of each channel’s programming at any one time and such content did not last for more than 1.2 seconds. The Court found that the plaintiff’s copyrighted material was not “fixed” in the buffers for an amount of time sufficient to satisfy the “duration” aspect of fixation and therefore that the buffers did not make an infringing copy.

The most interesting part of the decision discusses the question of whether or not the cable company is directly liable for creating the copies. And in a discussion of copy shop cases and the Supreme Court’s Sony v. Universal Films case, the Second Circuit emphasized that the U.S. Supreme Court and the Copyright Act really make a distinction between direct copying and contributory liability for someone who actively induces an infringement.

So the court found that it is the actual consumer who makes the copy by pre-programming the digital box to capture the incoming broadcast for later use. In the case, the plaintiffs for some reason did not allege that the cable company engaged in contributory infringement, so the lower court’s decision was reversed. The Second Circuit explicitly kept open the question of whether the cable company was liable as a contributory infringer.

On the issue of whether playing the new copy at a different time by the consumer constituted a “performance” which required a license from the plaintiff copyright owners, the court’s answer was “no”.

This is an important, difficult and complex case, and worth reading. It is likely to be influential in litigations involving services that make potentially copyrighted materials available to consumers.

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