Let Cable Companies Store Programming, Supreme Court Urged

Published August 1, 2009

The Obama administration’s solicitor general is urging the U.S. Supreme Court to let stand a copyright decision allowing cable subscribers to store television programming on cable company servers for viewing later.

The Second U.S. Circuit Court of Appeals last year lifted an injunction against Bethpage, New York-based Cablevision Systems. The injunction had blocked the company from offering customers a recording service that stores programming on Cablevision’s own servers instead of viewers’ in-house digital video recorders (DVRs).

The plaintiffs, Hollywood and television programmers, maintain Cablevision’s service infringes on their exclusive rights to reproduce and publicly perform their copyrighted works.

The trial court in the case had agreed with Hollywood and blocked Cablevision’s service, ruling Cablevision had to get distribution licenses for the programs. The appeals court in August 2008 ruled no license was required.

Copyright Conflict

In their pending appeal to the Supreme Court, the plaintiffs argue the copyright case is enormously significant because of the proliferation of technology enabling the digital copying of copyrighted material. Cablevision argues it is not actually carrying out the copying or performing of the works but merely holding them for later use by its customers.

Mark Simpson, a partner at Saul Ewing LLC, a law firm in Philadelphia, says the case is very similar to the 1984 case involving Sony and VCRs—which the entertainment industry lost.

“The court said it was fair use,” Simpson said of the Sony case. “We come to this new case, and it’s very similar. Buttons are still being pushed by the consumer, but the buttons are being controlled by the cable company.

“This case really focuses on one issue: Is the cable company making the recording, or is the consumer making the recording?” Simpson added. “It appears the Second Circuit made the right decision. It was a very well-crafted and well-reasoned opinion that will make it hard to appeal.”

Protecting Copyright

Carole E. Handler, an intellectual property attorney with Wildman Harrold Allen & Dixon LLP in Beverly Hills, California, says on these kinds of “close calls” the courts should come down on the side of copyright holders.

She noted the protection of intellectual property, which includes entertainment, is a bedrock free-market principle.

Also, “In stressful economic times, entertainment is the one growing area of the market,” Handler said. “Even with the anti-Americanism around the world, American entertainment is above that. Spider-Man is a world-famous character. Retention of [copyright] is very important.”

Striking a Balance

That said, Handler adds, fair use and copyright laws have to be balanced.

“Part of the problem is that we’re in uncharted waters in the use of these technologies,” Handler said. “There are no established principles. They need to strike a balance that is fair to everyone.”

Handler says consumer advocacy groups, entertainment companies, and other interested parties could probably negotiate a more acceptable agreement on fair use than would ever be handed down by the courts.

Phil Britt ([email protected]) writes from South Holland, Illinois.