Supreme Court deals setback to cable TV firms on video recording

Supreme Court deals setback to cable TV firms on video recording
Companies want to offer customers a service that doesn't require a set-top box. The court asks the Justice Department to determine whether it would violate the Copyright Act.
By David G. Savage
January 13, 2009

Reporting from Washington -- The Supreme Court declined Monday to clear the way for cable TV companies to offer their customers a new, easier way to record broadcasts for later viewing -- and without needing a video recorder in their homes.

Instead, the court asked the Justice Department to weigh in on whether this new video recording service would violate the copyrights of the TV networks and Hollywood film studios.

Three years ago, the networks and studios went to court in New York, seeking to block Cablevision Systems Corp. from introducing its Remote Storage-Digital Video Recorder. They said the Copyright Act gave them "exclusive rights" to control and profit from their copyrighted works.

The court's move will delay for months a final decision. Lawyers for the incoming Obama administration will be asked to study the legal question and then advise the court on their conclusion.

The pending case could have a wide effect on the emerging era of video on demand. In 1984, the Supreme Court cleared the way for the use of home videocassette recorders when it rejected a copyright challenge from the TV and film industry.


Afterward, VCRs became standard equipment in most homes. Now the cable TV companies want to go a step further and record shows for their customers at their request. The copies would be stored in companies' central computers rather than in a digital record at home.

Cablevision's chief operating officer, Tom Rutledge, called it a "tremendous victory for consumers" last year when a U.S. appeals court rejected the TV networks' copyright challenge. "This is a real opportunity to transform television," he added.

Fearing that prospect, the networks and studios appealed to the Supreme Court in October. They said Cablevision was violating the law because it did not plan to pay a licensing fee to make copies of their TV shows.

The legal debate has turned on a simple question: Who is doing the copying? A federal judge ruled against Cablevision in 2006 and said it was copying television shows for consumers. Last year, the appeals court ruled for Cablevision and said consumers would be copying their favorite shows for themselves.

Comcast Corp. and Time Warner Cable Inc. said they planned to introduce a similar service if Cablevision prevailed in the legal battle.

The Supreme Court appeal was led by Cable News Network and joined by the all the major network and film studios. Other groups, including Major League Baseball, the National Football League and the Screen Actors Guild, separately urged the court to hear the case.

They said the case could be the most important ruling on copyright law since the 1984 decision in the case of Sony Corp.'s video recorder.

On Monday morning, the court issued a one-line order in Cable News Network vs. CSC Holdings, saying the solicitor general "is invited to file a brief in this case expressing the views of the United States."

Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr. said they took no part in this decision, apparently because they own stocks in the affected companies.

If the solicitor general advises the court to take up the issue, the case would not be heard until the fall.

In a second closely watched business case, the justices cleared the way for consumers in California and elsewhere to sue grocery stores on suspicion of violating federal food-labeling laws.

Usually, the Food and Drug Administration enforces these laws. But several consumers, led by Jennifer Kanter of Los Angeles, sued grocery stores and asserted they had not disclosed that farm-raised salmon were being given a dye that gave them the reddish appearance of wild salmon.

Over the objections of the major supermarket chains, the California Supreme Court allowed this suit to proceed.

The supermarket chains appealed to the Supreme Court and argued that the law makes clear the FDA has the authority to enforce the food-labeling law, not private plaintiffs who file lawsuits. The court turned away the appeal in Albertsons vs. Kanter and allowed the suit to go forward.