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DOJ Says High Court Should Not Hear Cablevision DVR Case

2 Jun, 2009 By: Erik Gruenwedel

In a case that shares similarities with the ongoing RealDVD litigation, the Department of Justice has recommended the U.S. Supreme Court not hear a legal challenge over a proposed digital video recording (DVR) service from New York-based Cablevision Systems Corp.

The Solicitor General, in a 27-page report released May 29, said Cablevision’s RS-DVR service essentially offered “the same functionality” as a VCR or a set-top DVR and thereby was not in violation of license agreements. To date, studios and content owners have never filed a lawsuit against a set-top DVR.

The high court, which breaks for the summer at the end of June, has until then to decide whether to hear the case.

In 2006 a group of entertainment studios and TV networks filed a lawsuit against Cablevision alleging that its planned DVR service violated their copyrights.

Unlike TiVo and other cable-based DVR services, Cablevision's service would allow subscribers to record and store programming on the company's server instead of a set-top box.

The plaintiffs, which include 20th Century Fox, Universal Studios, Paramount Pictures, The Walt Disney Co., and TV networks ABC, CBS and NBC, claimed such an arrangement circumvented “simultaneous broadcast” license agreements that forbid cable companies from storing content and repurposing it for a fee without a separate license.

Last summer a Philadelphia appeals court overturned a previous ruling disallowing Cablevision from commencing with its service.

“We’re obviously pleased with the Solicitor General’s recommendation and continue to believe in the legality of remote-storage DVRs, as validated by the unanimous Second Circuit decision,” Cablevision said, in a statement.

Fred von Lohmann, senior intellectual property attorney with the Electronic Frontier Foundation, a San Francisco-based civil liberties group, said the Cablevision matter differed from RealDVD in that tenets of the Digital Millennium Copyright Act are not in question.

A federal judge in San Francisco is expected to rule shortly whether the RealDVD software from RealNetworks could differentiate between a rented or purchased DVD, thereby opening the door for alleged “rent, rip and return” copyright infringement abuse, according to the studios.

Regardless, studios potentially could file a new copyright infringement case against Cablevision, claiming contributory infringement, said Richard Greenfield, analyst with Pali Capital.

Contributory infringement, versus the direct infringement alleged in the current case, means the RS-DVR enables consumers to violate copyright and could prompt the courts to re-examine the landmark 1984 Sony Betamax fair use case that opened the door for video rentals.

Greenfield said a positive outcome for Cablevision would be a boon for the cable industry and, to a lesser extent, content owners, as consumers with DVRs watch more television, in addition to fewer ads.

“We believe the rapid rise in DVR usage would create an even darker cloud over the television advertising business, the analyst said in a note. “While this issue is already playing out with current DVR technology, only 35% of multichannel homes have a DVR and the vast majority only has a DVR in one room of the house.”


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