Opinion ID: 2599
Heading Depth: 2
Heading Rank: 2

Heading: Direct Liability for Creating the Playback Copies

Text: In most copyright disputes, the allegedly infringing act and the identity of the infringer are never in doubt. These cases turn on whether the conduct in question does, in fact, infringe the plaintiff's copyright. In this case, however, the core of the dispute is over the authorship of the infringing conduct. After an RS-DVR subscriber selects a program to record, and that program airs, a copy of the programa copyrighted workresides on the hard disks of Cablevision's Arroyo Server, its creation unauthorized by the copyright holder. The question is who made this copy. If it is Cablevision, plaintiffs' theory of direct infringement succeeds; if it is the customer, plaintiffs' theory fails because Cablevision would then face, at most, secondary liability, a theory of liability expressly disavowed by plaintiffs. Few cases examine the line between direct and contributory liability. Both parties cite a line of cases beginning with Religious Technology Center v. Netcom On-Line Communication Services, 907 F.Supp. 1361 (N.D.Cal.1995). In Netcom, a third-party customer of the defendant Internet service provider (ISP) posted a copyrighted work that was automatically reproduced by the defendant's computer. The district court refused to impose direct liability on the ISP, reasoning that [a]lthough copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant's system is merely used to create a copy by a third party. Id. at 1370. Recently, the Fourth Circuit endorsed the Netcom decision, noting that to establish direct liability under ... the Act, something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner. CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th Cir.2004). Here, the district court pigeon-holed the conclusions reached in Netcom and its progeny as premised on the unique attributes of the Internet. Cablevision I, 478 F.Supp.2d at 620. While the Netcom court was plainly concerned with a theory of direct liability that would effectively hold the entire Internet liable for the conduct of a single user, 907 F.Supp. at 1372, its reasoning and conclusions, consistent with precedents of this court and the Supreme Court, and with the text of the Copyright Act, transcend the Internet. Like the Fourth Circuit, we reject the contention that the Netcom decision was driven by expedience and that its holding is inconsistent with the established law of copyright, CoStar, 373 F.3d at 549, and we find it a particularly rational interpretation of § 106, id. at 551, rather than a special-purpose rule applicable only to ISPs. When there is a dispute as to the author of an allegedly infringing instance of reproduction, Netcom and its progeny direct our attention to the volitional conduct that causes the copy to be made. There are only two instances of volitional conduct in this case: Cablevision's conduct in designing, housing, and maintaining a system that exists only to produce a copy, and a customer's conduct in ordering that system to produce a copy of a specific program. In the case of a VCR, it seems clear  and we know of no case holding otherwise  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. The district court emphasized the fact that copying is instrumental rather than incidental to the function of the RS-DVR system. Cablevision I, 478 F.Supp.2d at 620. While that may distinguish the RS-DVR from the ISPs in Netcom and CoStar, it does not distinguish the RS-DVR from a VCR, a photocopier, or even a typical copy shop. And the parties do not seem to contest that a company that merely makes photocopiers available to the public on its premises, without more, is not subject to liability for direct infringement for reproductions made by customers using those copiers. They only dispute whether Cablevision is similarly situated to such a proprietor. The district court found Cablevision analogous to a copy shop that makes course packs for college professors. In the leading case involving such a shop, for example, [t]he professor [gave] the copyshop the materials of which the coursepack [was] to be made up, and the copyshop [did] the rest. Princeton Univ. Press v. Mich. Document Servs., 99 F.3d 1381, 1384 (6th Cir.1996) (en banc). There did not appear to be any serious dispute in that case that the shop itself was directly liable for reproducing copyrighted works. The district court here found that Cablevision, like this copy shop, would be doing the copying, albeit at the customer's behest. Cablevision I, 478 F.Supp.2d at 620. But because volitional conduct is an important element of direct liability, the district court's analogy is flawed. In determining who actually makes a copy, a significant difference exists between making a request to a human employee, who then volitionally operates the copying system to make the copy, and issuing a command directly to a system, which automatically obeys commands and engages in no volitional conduct. In cases like Princeton University Press, the defendants operated a copying device and sold the product they made using that device. See 99 F.3d at 1383 (The corporate defendant ... is a commercial copyshop that reproduced substantial segments of copyrighted works of scholarship, bound the copies into `coursepacks,' and sold the coursepacks to students....). Here, by selling access to a system that automatically produces copies on command, Cablevision more closely resembles a store proprietor who charges customers to use a photocopier on his premises, and it seems incorrect to say, without more, that such a proprietor makes any copies when his machines are actually operated by his customers. See Netcom, 907 F.Supp. at 1369. Some courts have held to the contrary, but they do not explicitly explain why, and we find them unpersuasive. See, e.g., Elektra Records Co. v. Gem Elec. Distribs., Inc., 360 F.Supp. 821, 823 (E.D.N.Y.1973) (concluding that, regardless of whether customers or defendants' employees operated the tape-copying machines at defendants' stores, defendant had actively infringed copyrights). The district court also emphasized Cablevision's unfettered discretion in selecting the programming that it would make available for recording. Cablevision I, 478 F.Supp.2d at 620. This conduct is indeed more proximate to the creation of illegal copying than, say, operating an ISP or opening a copy shop, where all copied content was supplied by the customers themselves or other third parties. Nonetheless, we do not think it sufficiently proximate to the copying to displace the customer as the person who makes the copies when determining liability under the Copyright Act. Cablevision, we note, also has subscribers who use home VCRs or DVRs (like TiVo), and has significant control over the content recorded by these customers. But this control is limited to the channels of programming available to a customer and not to the programs themselves. Cablevision has no control over what programs are made available on individual channels or when those programs will air, if at all. In this respect, Cablevision possesses far less control over recordable content than it does in the VOD context, where it actively selects and makes available beforehand the individual programs available for viewing. For these reasons, we are not inclined to say that Cablevision, rather than the user, does the copying produced by the RS-DVR system. As a result, we find that the district court erred in concluding that Cablevision, rather than its RS-DVR customers, makes the copies carried out by the RS-DVR system. Our refusal to find Cablevision directly liable on these facts is buttressed by the existence and contours of the Supreme Court's doctrine of contributory liability in the copyright context. After all, the purpose of any causation-based liability doctrine is to identify the actor (or actors) whose conduct has been so significant and important a cause that [he or she] should be legally responsible. W. Page Keeton et al., Prosser and Keeton on Torts § 42, at 273 (5th ed.1984). But here, to the extent that we may construe the boundaries of direct liability more narrowly, the doctrine of contributory liability stands ready to provide adequate protection to copyrighted works. Most of the facts found dispositive by the district courte.g., Cablevision's continuing relationship with its RS-DVR customers, its control over recordable content, and the instrumental[ity] of copying to the RS-DVR system, Cablevision I, 478 F.Supp.2d at 618-20seem to us more relevant to the question of contributory liability. In Sony Corp. of America v. Universal City Studios, Inc., the lack of an ongoing relationship between Sony and its VCR customers supported the Court's conclusion that it should not impose contributory liability on Sony for any infringing copying done by Sony VCR owners. 464 U.S. 417, 437-38, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). The Sony Court did deem it just to impose liability on a party in a position to control the infringing uses of another, but as a contributory, not direct, infringer. Id. at 437, 104 S.Ct. 774. And asking whether copying copyrighted material is only incidental to a given technology is akin to asking whether that technology has commercially significant noninfringing uses, another inquiry the Sony Court found relevant to whether imposing contributory liability was just. Id. at 442, 104 S.Ct. 774. The Supreme Court's desire to maintain a meaningful distinction between direct and contributory copyright infringement is consistent with congressional intent. The Patent Act, unlike the Copyright Act, expressly provides that someone who actively induces infringement of a patent is liable as an infringer, 35 U.S.C. § 271(b), just like someone who commits the underlying infringing act by us[ing] a patented invention without authorization, id. § 271(a). In contrast, someone who merely sells ... a material or apparatus for use in practicing a patented process faces only liability as a contributory infringer. Id. § 271(c). If Congress had meant to assign direct liability to both the person who actually commits a copyright-infringing act and any person who actively induces that infringement, the Patent Act tells us that it knew how to draft a statute that would have this effect. Because Congress did not do so, the Sony Court concluded that [t]he Copyright Act does not expressly render anyone liable for infringement committed by another. 464 U.S. at 434, 104 S.Ct. 774. Furthermore, in cases like Sony, the Supreme Court has strongly signaled its intent to use the doctrine of contributory infringement, not direct infringement, to identify[] the circumstances in which it is just to hold one individual accountable for the actions of another. Id. at 435, 104 S.Ct. 774. Thus, although Sony warns us that the lines between direct infringement, contributory infringement, and vicarious liability are not clearly drawn, id. at 435 n. 17, 104 S.Ct. 774 (internal quotation marks and citation omitted), that decision does not absolve us of our duty to discern where that line falls in cases, like this one, that require us to decide the question. The district court apparently concluded that Cablevision's operation of the RS-DVR system would contribute in such a major way to the copying done by another that it made sense to say that Cablevision was a direct infringer, and thus, in effect, was doing the relevant copying. There are certainly other cases, not binding on us, that follow this approach. See, e.g., Playboy Enters. v. Russ Hardenburgh, Inc., 982 F.Supp. 503, 513 (N.D.Ohio 1997) (noting that defendant ISP's encouragement of its users to copy protected files was crucial to finding that it was a direct infringer). We need not decide today whether one's contribution to the creation of an infringing copy may be so great that it warrants holding that party directly liable for the infringement, even though another party has actually made the copy. We conclude only that on the facts of this case, copies produced by the RS-DVR system are made by the RS-DVR customer, and Cablevision's contribution to this reproduction by providing the system does not warrant the imposition of direct liability. Therefore, Cablevision is entitled to summary judgment on this point, and the district court erred in awarding summary judgment to plaintiffs.