Cartoon Network v. CSC Holdings

Citation: The Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008).

Factual Background
Owners of copyrighted television programs brought suit against a cable television company (Cablevision) seeking a declaratory judgment as to whether the cable company's digital video recorder (DVR) system would violate their copyrights and an injunction prohibiting Cablevision from making the system available without appropriate copyright licenses.

In March 2006, Cablevision, an operator of cable television systems, announced the advent of its new "Remote Storage DVR System". As designed, the RS-DVR allows Cablevision customers who do not have stand alone DVR (similar to a VCR but instead they store recorded programming on an internal hard drive rather than a cassette, and customers can play them back later at their convenience) to record cable programming on central hard drives housed and maintained by Cablevision at a "remote" location. RS-DVR customers may then receive playback of those programs through their home television sets, using only a remote control and a standard cable box equipped with the RS-DVR software. Cablevision notified its content providers, including plaintiffs, of its plans to offer RS-DVR, but it did not seek any license form them to operate or sell the RS-DVR.

Plaintiffs, Cartoon Network, which hold the copyrights to numerous movies and television programs, sued Cablevision for declaratory and injunctive relief. They alleged that Cablevision's proposed operation of the RS-DVR would directly infringe their exclusive rights to both reproduce and publicly perform their copyrighted works. Plaintiffs only alleged theories of direct infringement, not contributory infringement, and defendants waived any defense based on fair use.

The U.S. District Court for the Southern District of New York granted summary judgment in favor of copyright owners. Cable company appealed.

Discussion:

I) The Buffer Data

Given that the data reside in no buffer for more than 1.2 seconds before being automatically overwritten, and in the absence of compelling arguments to the contrary, we believe that the copyrighted works here are not "embodied" in the buffers for a period of more than transitory duration and are therefore not "fixed" in buffers. The act of buffering does not create copies, as the Copyright Act defines that term.

II) Direct Liability for Creating the Playback Copies

On the facts of this case, copies produced by the RS-DVR system are "made" by the RS-DVR system are "made" by the RS-DVR customer, and Cablevision's contributions to this reproduction by providing the system does not warrant the imposition of direct liability. Therefore, Cablevision is entitled to summary judgment on this point, and the district court erred in awarding summary judgment to plaintiffs.

III) Transmission of RS-DVR Playback

The Court found that the transmit clause directs us to identify the potential audience of a given transmission, i.e., the persons "capable if receiving" it, to determine whether that transmission is made 'to the public". Because each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances "to the public," and therefore do not infringe any exclusive right of public performance.  We base this decision on the application of undisputed facts.

Holdings:

The Court of Appeals held that: 1) cable company's embodiments of copyrighted programs were not "fixed," as required to qualify as a "copy" under Copyright Act; 2) copies were "made" by cable company's customers, and therefore cable company was not directly liable under the Copyright Act; and 3) playback transmissions of copies were not performances "to the public," and therefore did not infringe any exclusive right of performance under the Copyright Act.

Reversed, vacated, and remanded.