In 1984, the Supreme Court rejected Hollywood's argument that the record button on the Betamax VCR made its manufacturer, Sony, liable for copyright infringement. The high court ruled that consumers were allowed to record television shows by copyright's fair use doctrine. The decision became a legal foundation of the modern consumer electronics industry.
Technology has evolved dramatically in the last three decades, yet there have been few rulings exploring how the Sony precedent affects modern media technologies. On Wednesday, the United States Court of Appeals for the Ninth Circuit issued a landmark ruling that modern digital video recorders with the ability to automatically skip commercials are permitted under copyright's fair use doctrine.
The case pitted the satellite TV company Dish against the Fox television network. Dish had introduced a line of DVRs with two key features. The "Hopper" allows consumers to automatically skip over commercials. And the "Prime Time Anytime" feature allows consumers to automatically record prime-time shows for later viewing. In its ruling, the Ninth Circuit held that the Prime Time Anytime feature was legal under copyright's fair use doctrine. And it held that commercial-skipping didn't even raise copyright issues, since the features didn't involve making copies of Fox's content.
James Grimmelmann, a professor at the University of Maryland Law School, commented on the significance of the decision in a Wednesday phone interview. The transcript has been edited for length and clarity.
Timothy B. Lee: Why was this an important case for the future of copyright law?
James Grimmelmann: [Since the 1984 Sony decision], the courts have largely managed to avoid making similar fair use rulings because the issues are very rarely presented to them. The cases have almost always been litigated on theories that don't squarely raise whether home uses are fair.
We could have had this in the first wave of DVRs, but none of those cases went through. People expected this to be part of the fight in the lawsuit against ReplayTV in 2001, but the bankruptcy of Sonic Blue, [the maker of the ReplayTV] wound up taking that off the table.
[Fox thought this would be a strong case for them] because Dish's taping was so wholesale. [A 2008 ruling involving Cablevision] assigned responsibility for creating the copy to the consumer [instead of the manufacturer]. But Fox said "because Dish's Hopper tapes everything when you press the button, the Hopper is making the copy rather than the consumer, and therefore we can sue them for direct infringement."
That claim went against them in today's ruling, which threw the fair use issue squarely into play. And the content owners got (from their perspective) a horrible fair use ruling out of it. The court was completely unconcerned that consumers can tape all of prime time at one time. There was no requirement to pick individually the things that you need to record. Scale is no longer at issue. Making large archives of stuff for your own purposes looks like a fair use. I assume that this is green light for online life-logging apps.
Timothy B. Lee: What effects will this ruling have on technology companies?
James Grimmelmann: I think a lot of this is going to matter not so much in creating whole new technologies that are legal as in giving a lot of other companies another leg to stand on. The Ninth Circuit treated this as an easy case, and I think the people at Pinterest have got to be jumping up and down about that. They've got other arguments they can make [against future copyright lawsuits], but the fair use holding makes it cleaner and easier way to win.
The other can of worms this opinion opens up is ad skipping. The court said ad-skipping doesn't even count [for purposes of copyright law]. If the consumer can legally watch later, they don't even consider [how ad-skipping affects the market]. So pick your favorite technology to skip ads. I'm thinking of web ad-blockers. I'm wondering if you could make a Spotify ad blocker. People will try a bunch of these things now that they've got this opinion on the books.
TBL: Will this ruling change the relationship between content creators and distributors?
JG: This is a nice step toward what I would consider a more rational system of copyright law. In an article last year about the legality of online video streaming, I argued that worrying about public performances and counting copies is a really confused way of coming at it. Fair use is much better because it puts honestly on the table the real parties in interest: consumers making copies. This is both an alternative to the whole mess about determining who makes a transmission, and a more honest way of asking the fundamental question, which is what rights do consumers have with media.
But [this ruling is] going to exacerbate the push toward closed ecosystems. The broadcasters are going to renegotiate their contracts with Dish. Dish will get some goodies out of this result because they've got a better baseline now. But the broadcasters are going to be increasingly reluctant to license content unless they have a path to consumers that's technically locked down the whole way. Hulu is a good platform for them because they control the terms, and you can't extract media with it without crossing one of the other laws, such as the Digital Millennium Copyright Act, that have held up better for them.
[Content companies will] lock down cable channels and other channels with contractual restrictions. There will be a gradual erosion of unrestricted, ad-supported broadcasts.
TBL: Today's ruling held that ad-skipping is completely irrelevant to the legality of Dish's products. Do you think that went too far?
JG: Fair use is supposed to be an all-things-considered weighing the costs and benefits of a practice under all of the circumstances around it. To arbitrarily [exclude] the fact that consumers skip commercials takes some things out of the analysis. It turns fair use into a most-things-considered analysis.
I think it's cleaner to say that if a consumer is watching a program, there's no legal requirement that a consumer has to pay attention to or watch the ads in real time. That would have the exact same legal effect. This is just something that consumers have traditionally been able to do with other media. You could make all kinds of arguments [in support of a right to skip ads] and I think the court is clearly sympathetic to those arguments. Better to have those out honestly as the basis of the opinion. Especially because the effect from copyright owners' point of view would be exactly the same.