Cartoon Network Lp, Lllp v. Csc Holdings, Inc.

536 F.3d 121 (2nd Cir. 2008)

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Nature of the Case

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Facts

Digital video recorders (DVRs) store their recordings on digital hard drives. Usually, those drives were internal to the device. In March 2006, D announced the advent of its new 'Remote Storage DVR System.' As designed, the RS-DVR allows customers who do not have a stand-alone DVR to record cable programming on central hard drives housed and maintained by D at a 'remote' location. RS-DVR customers may then receive a playback of those programs through their home television sets, using only a remote control and a standard cable box equipped with the RS-DVR software. D notified its content providers of its plans to offer RS-DVR, but it did not seek any license from them to operate or sell the RS-DVR. Under the new RS-DVR, a single stream of data is split into two streams. The first is routed immediately to customers. The second stream flows into a device called the Broadband Media Router ('BMR'), which buffers the data stream, reformats it, and sends it to the 'Arroyo Server,' which consists, in relevant part, of two data buffers and a number of high-capacity hard disks. The entire stream of data moves to the first buffer (the 'primary ingest buffer'), at which point the server automatically inquires as to whether any customers want to record any of that programming. If a customer has requested a particular program, the data for that program move from the primary buffer into a secondary buffer, and then onto a portion of one of the hard disks allocated to that customer. As new data flow into the primary buffer, they overwrite a corresponding quantity of data already on the buffer. The primary ingest buffer holds no more than 0.1 seconds of each channel's programming at any moment. Thus, every tenth of a second, the data residing on this buffer are automatically erased and replaced. The data buffer in the BMR holds no more than 1.2 seconds of programming at any time. While buffering occurs at other points in the operation of the RS-DVR, only the BMR buffer and the primary ingest buffer are utilized absent any request from an individual subscriber. Using a remote control, the customer can record programming by selecting a program in advance from an on-screen guide, or by pressing the record button while viewing a given program. A customer cannot record the earlier portion of a program once it has begun. To begin playback, the customer selects the show from an on-screen list of previously recorded programs. Ps sued D for declaratory and injunctive relief. By briefly storing data in the primary ingest buffer and other data buffers integral to the function of the RS-DVR, D would make copies of protected works and thereby directly infringe Ps' exclusive right of reproduction under the Copyright Act. By copying programs onto the Arroyo Server hard disks D would again directly infringe the reproduction right. By transmitting the data from the Arroyo Server hard disks to its RS-DVR customers in response to a 'playback' request, D would directly infringe Ps' exclusive right of public performance. The district court awarded summary declaratory judgment to Ps and enjoined D from operating the RS-DVR system without obtaining licenses from the copyright holders. D appealed.