"Digital Betamax": Replay TV Owners Stand Up to Hollywood to Defend Digital VCRs

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What Is the ReplayTV Case About?

In 2001 28 major movie studios television networks and cable companies sued the creator of an innovative new digital video recorder (DVR) that allows you to skip through commercials and send recorded television programs to a limited number of other DVRs. The studios asked the court to ban the sale of the ReplayTV DVR because it gave ReplayTV owners "unprecedented new tools for violating [the Studios'] copyright interests." In June 2002 five people who own ReplayTVs represented by EFF and attorneys Ira Rothken and Richard Wiebe filed their own lawsuit. They asked the court to rule that using their ReplayTVs to skip commercials record shows for later viewing and send shows is fair use not copyright infringement.

What's at Stake?

Your fair use rights! In particular your right to use technology to skip commercials "time-shift " and "space-shift" television programming that you've already paid for (after all 85% of American consumers pay for cable or satellite television service).

In many ways the ReplayTV case is a digital re-run of the 1984 Sony Betamax case (Sony Corp. v. Universal City Studios Inc. 464 U.S. 417) in the Supreme Court found that it is fair use (and not copyright infringement) for consumers to use VCRs to tape television programs for later non-commercial viewing in their homes. This time around it's a digital video recorder.

The case also has implications for the future of innovative media technology. In their lawsuits against the ReplayTV's creators the studios asked the court to overturn the Supreme Court's Sony Betamax ruling which found that new technologies that interact with copyrighted works can't be outlawed by copyright law if they are capable of substantial non-copyright-infringing uses. By asking the court to overwrite the Sony standard for technological innovation the studios would have achieved their real goal: control over technological innovation. If the court had ruled as the studios requested technology innovators would be required to seek Hollywood's permission before creating new products to record and view copyrighted works. Of course neither the VCR nor the ReplayTV DVR would have made it to market in that world because the studios would never have agreed to the VCR's recording and fast-forwarding capabilities nor the ReplayTV's "commercial advance" and "send show" features.

What Happened?

The creators of the ReplayTV SONICblue Inc. and its subsidiary ReplayTV Inc. were the first casualties of this copyright battle. After defending themselves through two years of expensive litigation the ReplayTV creators filed for bankruptcy in March 2003 and sold off their assets. Fearing a similar fate the purchaser of the ReplayTV technology Digital Networks North America announced in June 2003 that it was removing the contentious "commercial advance" and "send show" features in all future ReplayTV models to "address concerns of content copyright holders."

Shortly afterward the entertainment companies dismissed their lawsuit against ReplayTV and SONICblue. Then in an unprecedented retreat and after a year of litigation the studios gave "covenants not to sue" the five original consumer ReplayTV owners for copyright infringement.

After the studios failed to give a similar covenant not to sue the other estimated 5 000 owners of ReplayTV DVRs with commercial advance and send show features EFF asked the court to convert the existing consumer lawsuit into a class action to obtain a court ruling that would benefit all owners of legacy ReplayTV DVRs. Unfortunately on January 9 2004 the court denied that request. It ruled that there was no longer a live issue between the studios and the five original ReplayTV owners because of the studios' promise not to sue them and because the studios' lawsuit against the former owner of ReplayTV had been dismissed.

But that's not the end of this story. Although EFF was able to secure protection for our five original clients earning this hard-fought victory reminded us of an important truth; our rights as digital consumers are only as real as our willingness to stand up and defend them. Corporate copyright owners like the studios have no economic or other incentive to protect consumers' rights and no reason to foster the development of innovative technologies that may challenge their existing business models.

The ReplayTV case is a cautionary tale for our times. The Hollywood studios used expensive litigation and an unproven threat of copyright liability to bankrupt two companies and to force another to remove an innovative technology that threatened to disrupt their existing business models from the marketplace. As a result there has been a noticeable chilling effect on technological innovation and a corresponding reduction in consumer technology products.

However the news is not all bad. From a legal perspective the ReplayTV case was a tremendous victory for users of new technologies. For too long fights about whether new technologies violate copyright law have excluded the voices of people who use these technologies. With this case EFF established the right of people using new technologies to join lawsuits brought against the creators of those technologies when the creators are charged with contributory copyright infringement. That important precedent is now in the law books (Newmark v.Turner Broad. Network 226 F. Supp. 2d 1215 (2002)) and available online.