Cablevision’s DVR system functioned, in essence, like a Tivo with a very long wire. As Cablevision sent out programming to subscribers, the remote DVR allowed consumers to select certain programs to record and play back later. The actual copying and storage, though, was done off-premises on systems operated by Cablevision. (Cablevision, of course, had a license to send the programs out to subscribers, and the content providers and Cablevision agreed that the license did not authorize the new remote DVR service).

From the content standpoint, then, someone is making unlicensed copies (setting aside arguments about fair use)… but who? Cablevision, or the consumer? The consumer chooses which buttons to push—but Cablevision operates the physical equipment. If Cablevision is the legal actor, Cablevision faces direct liability; but if it is the consumer, Cablevision faces only indirect liability—contributory infringement, as did Grokster. The content companies opted for the argument that Cablevision was directly liable, won in the court below, but lost the appeal.

The court below had ruled, first, that Cablevision’s remote DVR system violated copyright directly in holding the stream of programming in RAM briefly in the ordinary course of operations. The Second Circuit rejected this; the Copyright Act requires that a copy be “fixed,” or embodied in the buffer for more than a transitory period, and Cablevision’s system held the data for no more than 1.2 seconds.

The Second Circuit next examined the argument that Cablevision should be directly liable for creating the playback copies. Earlier cases involved remote copying over the Internet, the question of whether an ISP would be liable when its system automatically copied a work posted by a customer. The answer then was “no.” Cablevision’s remote DVR is like the ISP, in that it supplies the system, but doesn’t push the button. The Court explained that what mattered was whose volition was exercised in making the copy. Here, the volitional acts were Cablevision’s, in designing the system, and the consumers’, in pushing the buttons to order a copy be made.

The court in this case found an analogy to the VCR persuasive: the key volitional act is the consumers’, not Cablevision’s. The district court had compared the remote DVR analogous to a copy shop that made copies for professors. The professors supplied the material, and the copy shop copied it; the copy shop was directly liable. Here the Second Circuit again focused on volition. Because the copy shop employed a human being to make the copies, the copy shop had exercised its volition. Cablevision’s system responded automatically, and thus did not.

But Cablevision also supplies the content, making the choice of programming and licensing it. Is that enough to make a difference? Here the Second Circuit made a judgment call: “This conduct is indeed more proximate to the creation of illegal copying than, say, operating an ISP or opening a copy shop . . . Nonetheless, we do not think it sufficiently proximate to the copying to displace the customers as the person who ‘makes’ the copies.” The court here emphasized that ruling otherwise would blur the line between direct and indirect copyright infringement.

Finally, the court considered whether Cablevision “performed” the work for the “public” in playing it back for the consumer. The answer was again no. The work had been copied by a single consumer, and was played back for that single individual at his request. The performance was not to the “public.” The bottom line was that Cablevision might be indirectly liable for copyright infringement, but was not directly liable.

A number of amici curae had filed briefs below (including this author), either in support of or against liability. Some warned that the lower court’s holding Cablevision liable threatened the future of remote storage, the Internet, innovation, or the balance of the copyright system as a whole. But, if anything, the opinion supports the contrary view, that Cablevision’s involvement with the system is significantly different from that of an ISP or from the equipment maker in the landmark Sony v. Universal ("Betamax") case that established consumers' rights to time-shift video in the first place..

Other amici warned that a failure to hold Comcast liable undermined incentives to negotiate further distribution licenses with content producers. This point, perhaps, is addressed by the Second Circuit’s hints that Cablevision might have run into more trouble against a different result against a theory of contributory infringement.

On the whole, the case’s language is less of a victory for the “tech” side than the bare result suggests. Remote DVR has escaped the frying pan, to find itself uncomfortably close to the Grokster fire. Recall that the 2005 Supreme Court opinion extended liability for indirect infringement to those who induce infringement by others. Last week's decision leaves room for another content owner to press that theory in future litigation.

Solveig Singleton is a lawyer, an adjunct with the Convergence Law Institute and an adjunct fellow with the Institute for Policy Innovation. She is the author of an amicus brief filed in this case on behalf of the Progress and Freedom Foundation.