Court Rulings on the legality of Internet-Based TV Recording Service and Time/Place-Shifting Device Hosting Service – Korea, Japan, Singapore and the U.S.

There exist growing needs for consumers to watch TV broadcastings from any place and by any way they want.  In response to these needs, several new business models have come into; for example, an Internet TV recording and/or streaming service, RS-DVR, SlingBox and any other place/time-shifting devices hosting services.  But the problem is that copyright holders, the TV broadcasting companies, are fiercely objecting to these new business models contending they are infringing their copyrights.  It is quite interesting for an IP lawyer to see how the courts from various countries have found the answer to this legal issue.

Lets’ start with the situation in South Korea, where I’m practicing the law.  Actually there have been two cases related to this issue; Ental TV case and MyTV caseEntal TV was an Internet-based TV recording service.  The registered users paid some amount of fees to the service provider and the service provider recorded TV broadcastings on its server at the request of the individual users with its automated software program, then converted it into the PC file format and sent the file to the user via Internet.  On April 30, 2009, the Seoul High Court ruled this Ental TV service infringed copyright of the TV Broadcasters.  The court found that it was the service provider, not an individual user, who recorded and copied the TV program, because the service provider owned and managed all the facilities used in recording the TV program.  Also the Court added that even though it was the individual user who copied the TV program, the very act of copying could not be defended as a fair use under Korean Copyright Act.  The service provider appealed, but on September 24, 2009, the Supreme Court of Korea refused to reconsider the case.

Once again on September 2010, in the case of MyTV, the Seoul Central District Court ruled the Internet TV streaming/recording service was illegal.  MyTV service had something different from the Ental TV.  It used a third-party hardware device called UTV HUBB, a Korean version of SlingBox.  Basically it hosted and managed 940 UTV HUBBs for the current and prospective registered users.  The users paid some amount of service fees and used one of UTV HUBBs.  Also MyTV provided a recording service to its users by connecting a personal video recorder to each of UTV HUBBs.  Thanks to this combination of UTV HUBB and PVR, the user could watch and record the TV from anywhere an Internet connection is available.  The broadcasting companies filed a lawsuit contending the MyTV service infringed their copyrights.  The Seoul Central District Court sided with the broadcasters.  The court found that, as every facilities including UTV HUBB and PVR was owned and managed by the service provider, it was the service provider, not the individual user, who broadcasted and recorded the TV program without consents from broadcasting companies, which constitutes a copyright infringement under Korean Copyright Act.  The court acknowledged that if the party who copied and transmitted the TV contents were the individual users, the service could be legal because the service provider’s role was just supporting and facilitating the user’s legitimate copying and broadcasting.  However, looking at the its own service structure, especially the ownership of the facilities, the court ruled that the users were not the party who made the copy and the transmission because they did nothing but subscribe to the service and everything, including the ownership and management of the facilities, was done by the service provider, which made the court declare the service was illegal.

In the center of these disputes lies a legal question: “Who makes the copy and transmission?”  If it is the individual user, not the service provider, then the service shall be legal in terms of copyright law as the service itself just does help the individual user’s fair use-watching and copying the broadcast for personal purpose only.  I think it is hard to find the right answer to this question considering there exist various types of service model, which means some services are legal and some are illegal based on its own service structures.  However, I think we should be cautious in judging the service illegal solely based on the issue of who owns and manages the facilities and devices.  As we know well, people have changed their style of  IT consumption from buying and owning an IT device to renting a device or using a service.  And even traditionally the Korean Supreme Court has regarded the party who owns and provides a service platform through which the 3rd parties can copy and transmit the copyrighted work via Internet connection NOT as the direct party who copies and transmits the copyrighted work but as subordinated to the individual user’s act of copying and transmitting.  I think we should not overlook this basic rule when deciding the legality of Internet TV streaming/recording service, RS-DVR service and SlingBox and any other similar time/place-shifting device hosting service.

Picture 22Then, let’s move to Japan.  There have been numerous cases on Internet TV broadcasting and RS-DVR in Japan.  Among them, the most famous cases might be Maneki TV case and Roku-Raku case.  Both services are Internet TV streaming/recording service using an IT device such as Sony’s Location Free (Maneki TV) and Roku-Raku (Roku-Raku service).  Basically the Location Free and Roku-Raku have the same function as SlingBox.  The users buy the Location Free or Roku-Raku, the service provider hosts the device and transmit the TV contents to the individual user who owns the device via Internet connection.

To state the conclusions first, the Highest Court of Japan ruled both services were illegal on January 2011.  It was a big overturning of the lower courts’ decision that it was the individual users of the both services who copied and transmitted the TV contents so that the service provider had no liability in a sense that it just facilitated and contributed to the legal act (fair use) of individual users.  But the Highest Court found that as the service provider managed the facilities and made it available for the users to receive the  broadcasting signal at any time, the service provider was the party who copied and transmitted the broadcasting signal.

Now let’s turn to the U.S.  There is a famous leading case of RS-DVR, Cablevision case where the U.S. court of appear for the 2nd circuit found Cablevision’s remote-storage DVR service was not copyright infringement, because it was not the Cablevision but the individual subscriber who made the copy through RS-DVR.  The copyright holder appealed once again but the Supreme Court declined to hear the appeal.  As I understand, the basic concept of the U.S. court in Cablevision case was that whether a user bought a DVR and made a copy of TV contents at home or a user rent a server in cable TV provider and made a copy remotely was basically the same in a sense that the user made the copy.  The court found the RS-DVR was simply a digital version of the traditional VCR/DVR, which is totally legal.  I think this is very intuitive and straightforward reasoning.

Lastly I’d like to mention a case in Singapore, called RecordTV caseRecordTV was an Internet-based TV recording service which allowed the users to request the recording of broadcaster’s programs through a rs-dvr device called iDVR.  The TV broadcasters alleged RecordTV infringed their copyrights, but the Court of Appeal of the Republic of Singapore court did not buy that argument this year.  The court ruled that RecordTV did not copy the TV programs; instead, it was the registered users requesting the recording of the TV programs using RecordTV’s iDVR who did so.  The court said that RecordTV’s iDVR not only served the same purpose as the traditional DVR/VCR, but was also a significant technological improvement over the latter with tangible benefits to the public, in a sense that RecordTV’s iDVR was more convenient and user-friendly than the traditional DVR/VCR.  Also the court found that as the broadcasters provided the TV program on a free-to-air basis, the broadcasters suffered no loss from RecordTV’s provision of additional and better time-shifting service to the users who were licensed to view the TV shows.

It is quite interesting that, even in cases which look similar, courts of various jurisdictions have handed out divergent opinions.  Should we understand this as it demonstrates how hard it is to strike a fair balance between the private rights of the copyright holder and the public’s general interest in using a more convenient and efficient new technology?  Some might say that current copyright law is unable to catch up with the improvement and innovation of the new technology which benefits the public.  But the aim of the copyright law is to promote creativity and innovation.  So what should we do if the law is not clear as to whether the new technology is infringing the copyright?  Which party should the court interpret the copyright law to favour; the copyright holder or the public’s general interest?  Different positions over this question can be said as one of the causes which made the cases in various courts result in different conclusions.

If you have any question about this article, please contact Mr. Wonil Chung by clicking here.

© 2011 Wonil Chung, a Korean IP/Entertainment Lawyer, Chung & Partners, a Korean Law Firm.  All rights reserved.

Because of the generality of this update, the information provided herein, which may or may not reflect the most current legal development, may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. 

Leave Your Comment