Twenty-four years ago in the Sony Betamax case, the Supreme Court declared that using a VCR to "time-shift" — to record a television program for viewing at a later time — was a fair use. Today, the Second Circuit rejected [PDF] an attempt by the content industry to change the rules of the game if your video recorder is stored "in the cloud" on the Internet.

In March 2006, Cablevision announced that it would be launching a "remote storage" DVR (RS-DVR) system that would operate much like a TiVo, except that the recordings would be stored on hard drives in Cablevision buildings rather than on a box under a consumer's television. A collection of studios and networks sued Cablevision, arguing that RS-DVRs would violate copyright.

Wait, doesn't the Sony Betamax case say that time-shifting is legal? Yes, but that's not what the plaintiffs complained about. Indeed, they carefully avoided attacking what the consumers would be doing. They instead argued that an RS-DVR is different, because Cablevision is making the copy, and that somehow makes all the difference.

Cablevision, supported by EFF and other amici, explained that this was the wrong way to think about things. When a consumer presses the record button on a remote control, it's the consumer who's making the copy, regardless of whether the copy is being stored on a hard drive a few feet away, or in a data center miles away. Although the district court agreed with the plaintiffs, the appellate court today resoundingly sided with Cablevision, EFF, and the other amici that supported Cablevision:

In the case of a VCR, it seems clear . . . that the operator of the VCR, the person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine. We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer’s command.

This is exactly the right result. As we pointed out in our amicus brief, a rule holding Cablevision liable merely because it housed and maintained the servers in this case could imperil a wide variety of innovative business models that rely on the use of remote computing, ranging from examples like Internet-enabled self-service photo processing and printing, to cloud computing services offered by companies like Amazon, Apple and Google.

That's not all there was to cheer in the Cablevision decision. The court also reminded everyone that in order to be a "copy" for purposes of copyright law, a work must be "sufficiently permanent or stable to permit it to be . . . reproduced . . . for a period of more than transitory duration" (here, the court concluded that data in temporary buffers in the Cablevision system that would be overwritten in, at the longest, 1.2 seconds were of transitory duration). In the digital age, where routers and caches often make fleeting copies of bytes in the ordinary course, this was welcome news.

And, finally, the court rejected the plaintiffs' argument that Cablevision was engaging in unauthorized public performances. The way the Cablevision system was designed, every time a consumer decided to record a given show, Cablevision would store a separate copy of that program, and each of those copies could be played back only by the consumer who recorded it. The plaintiffs urged the court to hold that if 1000 copies of the season finale of Desperate Housewives are played back in 1000 households, that's a public performance. The court instead correctly concluded that each of those copies is playable in only one household, which means that we're talking about 1000 private viewings, not a public performance.

Just three years ago, in MGM v. Grokster, the Supreme Court proclaimed that copyright law should "leave breathing room for innovation and vigorous commerce," and today the Second Circuit has done just that.