The Supreme Court’s denial of cert. in the Cablevision remote-DVR case has launched countless column inches of commentary and analysis already, much of it focused on the problems it poses for the Hollywood studios and TV networks worried about its impact on ad-skipping (see here, here and here). But the studios and networks aren’t the only losers in the case.
By letting the Second Circuit’s opinion stand, at least for now, the court has dealt a serious set back to the designs of the performance rights societies like ASCAP and BMI to bring cloud recording and playback within the scope of public performances subject to performance royalties.
According to the plaintiffs in the Cablevision case, the playback of programs stored in MSO’s head-end servers constituted a performance of the work by Cablevision that was not authorized by its basic distribution agreements with program provided and thus needed to be separately licensed.
The Second Circuit disagreed, however, finding that as a legal matter the customer “performed” the work since the copy used for playback was accessible only to that customer.:
In sum, we find that the transmit clause directs us to identify the potential audience of a given transmission, i.e., the persons “capable of 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; thus, Cablevision is entitled to summary judgment on this point.
In other words, according to the Second Circuit, there is indeed such a thing as a non-infringing private performance of a work transmitted over the Internet. Assuming the reasoning applies to musical works as well, the ruling is going to make it much harder for ASCAP and BMI to compel providers of online music lockers and other types of user-directed cloud storage facilities to take out licenses and pay royalties on transmissions.
(Although not directly on point, it probably doesn’t help ASCAP’s efforts to license mobile-phone ring tones, either). — TMW