In 1999 there was much debate over the release of digital recording devices. After a series of debates, a coalition of top television programmers threatened to sue makers of digital recorders for not obtaining license agreements for using their content. However, the suit was never filed. Recently three entertainment companies, including Viacom Inc., Walt Disney Co., and General Electric Co.’s NBC sued the makers of ReplyTV digital video recorder.
SonicBlue Inc., the manufacturers of ReplayTV, have just announced the release of their newest product: ReplayTV 4000. SonicBlue’s new digital recorders offer several new features that have alarmed many entertainment companies.
Of particular interest to the entertainment industry is ReplayTV’s Commercial Advance and Video Sharing Over the Internet. The Commercial Advance feature allows consumers to play back recorded shows and enjoy commercial-free TV.
The second controversial feature is Video Sharing Over the Internet. This feature allows individuals to share recorded programs with others through the use of an Ethernet connection.
In their complaint, the entertainment trio stated that this type of digital recording device disrupts two sources of revenue: advertising and subscription fees.
In contrast, Tivo, one of the most successful and senior manufacturers of digital recording devices, has not implemented these features. Tivo responded to the lawsuit against ReplyTV by stating that “we have looked at these capabilities – they are not hard to implement, but we have decided there is no reason to antagonize media companies in this way.”
The filing of this suit raises several controversial issues in the copyright legal arena. Of course one of these is the issue of fair use and time-shifting under Sony Corp. of America v. Universal City Studios, Inc. In Sony, the Supreme Court was presented with the issue of whether the sale of copying equipment, namely VCRs, violated the rights of copyright owners of broadcasted TV programming.
In order to be successful, the copyright owners had the burden of proving that VCR users directly infringed their copyrights. The Court held that consumer time-shifting of copyrighted programming was fair use under Section 107 of the Copyright Act.
The Court determined that although the home user copied the entire program, the private non-commercial viewing did not harm the market for the copyrighted work. Furthermore, Sony was not found guilty of contributory infringement, due to the substantial non-infringing uses of the equipment.
The Sony decision has left many with a false sense of security in the copyright arena. However, digital recording devices raise several other copyright issues not addressed in Sony. While the actual copying of the copyrighted programming onto a digital recorder’s hard-drive could be considered fair use, and thus be exempted from licensing conditions, the transmission of copyrighted programming over the Internet is likely to be subject to copyright law as a public performance. Under 17 U.S.C., Section 106(4), the exclusive right to publicly perform a work extends to motion pictures and audiovisual works, including copyrighted TV programming. Moreover, the public performance no longer needs to be for profit in order to violate copyright law as a direct infringer.
The Third Circuit in Columbia Pictures Industries, Inc. v. Aveco, Inc. held that a performance is public if it occurs at a place open to the public or at a place where a substantial number of persons outside the normal circle of family and it acquaintances is gathered.
Likewise, under Twentieth Century Fox Film Corporation v. iCraveTV, the Court issued a preliminary injunction against a company that retransmitted broadcast TV programming into a digital format and offered it on the Internet in the form of streaming media. The Court held that the defendant violated the plaintiff’s exclusive right of public performance.
The Court also held that the defendant’s products caused irreparable harm to the plaintiff’s copyrighted programming.
Similarly, in MGM Studios, Inc. v. RecordTV.com, the defendant provided a website for consumers to select and record copyrighted TV programming in which they could view at a later time.
The case was settled out of court due most likely to the defendant’s inability to show that its website did not violate the plaintiffs exclusive right to public performance. Additionally, in Playboy Enterprise v. Frena, the Court found that a transmission of an image from a computer bulletin board, an online service or the Internet constituted a public performance that violated the exclusive rights of copyright owners.
Moreover, under more recent and binding precedent, Religious Technology Center v. Netcom On-line Communication Services Inc., an Internet service provider was found not be a direct infringer of copyrighted works posted on the Internet as it did not take any affirmative action that directly resulted in the copying.
But, an Internet access provider may be a contributory infringer for the infringing activity of its subscribers once the company has been put on notice of the infringing activity.
In conclusion, recent developments in the case law shed serious doubt on whether manufacturers can now legally create technological innovations for digital devices relying singularly on the results of Sony. In general, many manufacturers have the misperception that Sony governs all aspects of copyright law. Given that, they attempt to push the limits of the Supreme Court’s narrow ruling and apply it broadly to advance their agendas. Nonetheless, a preponderance of the evidence is against ReplyTV as either a direct, contributory, or vicarious infringer of copyright owner’s exclusive rights in public performance rights. Regardless, ReplyTV will likely find itself in the position of either eliminating the controversial and potentially infringing features or preparing itself for a lengthy litigation process that may end up in the Supreme Court.
