Monday, June 29, 2009

Court Won't Hear Cablevision Case

The Supreme Court on Monday said it would not hear a case in which Hollywood studios and some cable networks sued Cablevision for providing a remote digital video recorder service where the copy of the recorded program resides on the cable operator's servers rather than on a hard drive in the home. The studios alleged that the so-called "buffer copies" and the copies residing on Cablevision's servers were a violation of its right to reproduce the program and that the recordings sent to the customer infringed on its public performance right. A lower court in New York City sided with the studios but an appeals court reversed that decision.

Since there is no further litigation pending in this case, Cablevision is now free to implement the remote DVR service and other providers will likely follow suit, Stifel Nicolaus analysts said in an e-mail. The remote functionality saves Cablevision storage costs, reduces expensive truck rolls, and allows their customers greater flexibility, they wrote. The issue could arise again in a later suit by the content owners against another cable company that implements its own remote DVR and could wind up back at the Supreme Court, the analysts added. Consumer Electronics Association President Gary Shapiro lauded the ruling, saying it was a "slam dunk" from a common sense standpoint.

Cablevision Chief Operating Officer Tom Rutledge called the action "a tremendous victory" but said he remains mindful of the potential implications for ad skipping and the concerns this has raised in the programming community. "We believe there are ways to take this victory and work with programmers to give our customers what they want -- full DVR functionality through existing digital set-top boxes -- and at the same time deliver real benefits to advertisers," he said in a statement. Copyright Alliance Executive Director Patrick Ross said the high court's ruling "is unfortunate and potentially harmful to creators and creative enterprises across the spectrum of copyright industries."