Cablevision has obtained a major victory against film studios and television networks, after the United States Court of Appeals for the Second Circuit in New York ruled that the services offered by Cablevision do not infringe copyright law.

In March 2006, Cablevision revealed plans for a new service that would allow its customers to record TV programs, store them on Cablevision servers, and watch them at a later date. However, copyright owners felt that the service violates their rights to reproduce and perform their copyrighted work.

Monday’s decision came to overturn a decision issued in March 2007, when a court ruled against Cablevision, prohibiting it from “copying plaintiffs’ copyrighted works and engaging in public performance of plaintiffs’ copyrighted works, unless it obtains licenses to do so.”

While copyright owners, including Cartoon Network, Twentieth Century Fox, Universal City Studios, Paramount Pictures, Disney Enterprises and others, claimed that there was no license agreement between them and Cablevision to authorize Cablevision to transmit and reproduce copyrighted programming through Remote Storage DVR (RS-DVR), Cablevision contented a license was not necessary, as the customers will be the ones choosing the content to be recorded, for personal viewing.

This time, the court ruled that Cablevision’s services do not infringe plaintiffs’ copyrights, a decision that is likely to dramatically change the face of DVR services. Until now, DVR customers were allowed to record, store and playback TV programs on their set top boxes.

With the new RS-DVR service, even customers who do not own DVRs will be able to benefit from the same functionality through their cable boxes. Furthermore, this is likely to also lower prices for DVR services.

Tom Rutledge, Cablevision chief operating officer, called it a “tremendous victory for consumers,” adding that this will allow them to “make DVRs available to many more people, faster and less expensively than would otherwise be possible.”

The judge panel concluded “on undisputed facts,” that “Cablevision’s proposed DVR system would not directly infringe plaintiffs’ exclusive rights to reproduce and publicly perform their copyrighted works," and granted summary judgment in favor of Cablevision with respect to both rights.

The court found that the service is intended for transmission to individual subscribers, while there is not much of a difference compared to VCRs or TiVo services. The case will be sent back to the U.S. District Court in New York for further proceedings.

Cablevision believes the service they offer is nothing different than the classic DVR services, highlighting that the service is a victory for consumers. We might also add that this is a victory for cable operators, who will no longer need to invest in DVR set top boxes. At the same time, the number of customers who will benefit from DVR services will significantly increase.

However, the legal battle may not be over yet, as the networks may continue their case and file an appeal. And they have a good reason for it too, as DVR services lead to less revenue from advertising.