Court Rules That Video Can Live in the Cloud

As Michael Geist wrote earlier this week, a US appeals court has found that network-based Personal Video Recorder (PVR) systems do not infringe copyright. It is interesting that this decision was made in the context of the DMCA, which sometimes seems to see infringement everywhere it looks.

See, Tivo is a hard drive that sits at your house, so copies are made on site by the customer. There are copyright issues there of course, but those issues got much more complicated with cable companies began suggesting they could store the content at the cable company’s end in a way that customers could pull it down on demand. Networks and broadcasters argued that this would amount to massive copyright infringement by the cable company, which would basically be broadcasting on demand for customers. When Cablevision lost at the lower court, it was a technologically backward decision and, for practical purposes, an arbitrary difference between time shifting to a local hard drive versus to a distant hard drive.

Dean Collins pointed out that the Cablevision decision could effectively lead to the movement of more video and audio data into The Cloud — what he calls the cloudification of content. Dean finishes his post with this comment:

What I find especially interesting about this whole thing is that it can be seen as overturning the trial court decision in the my.MP3.com case. In that situation, if you can cast your mind back to January 2000, MP3.com allowed users to play streaming music from their website once they verified ownership of physical CDs in meatspace. MP3.com thought this protected the labels from copyright infringement since the customer needed to have the physical CD, but it allowed the customer to timeshift the music. It was, in fact, the first major movement of content into the cloud, and the music industry was not pleased.

MP3.com was sued in turn by music distributors and music publishers and lost at trial. Instead of appealing, MP3.com settled for $200 million, and it was all downhill from there.

Is there any substantial difference between Cablevision customers streaming video content on demand to and MP3.com’s customers streaming audio content on demand? Or have we just seen copyright jurisprudence return from a wrong turn it took back in 2000? If my.MP3.com launched today in light of the Cablevision PVR decision, would the music industry even be able to make their case anymore?

And is this reason to be optimistic about the direction of copyright jurisprudence? It is unfortunate that venerable blogger William Patry did not have the opportunity to comment on the Cablevision victory before he ended his longstanding blog last week because, as he wrote, “The Current State of Copyright Law is too depressing”.

UPDATE: Court Rules That Video Can Live In The Cloud, Part 2