Time Warner Cable v. Viacom, or, How a Cable Company Can Get Sued for Making Television Content Available to Subscribers in Their Own Homes

April 11, 2011Article
Law Law Land Blog

We all agree that iPads are awesome, not least because they are probably the greatest procrastination tool ever invented.  Sure, you could play Angry Birds on your iPhone, or your Mac, or your Conan O’Brien talk show stage, but there’s something about spending hours mindlessly tapping and swiping away on your iPad that really captures that special feeling you first discovered when your mom finally broke down and bought you the Atari system you’d been begging for for months.  And if you don’t yet own an iPad, it’s safe to assume that you wish you did, as the recent launch of the iPad 2 has made people of all levels of technological savvy more excited than ever to discover new apps to help them complete tremendously difficult, hugely important life tasks, such as holding their fingers in one place for an extended period of time, tossing pretend cows at pretend objects, and playing with zippers.  Naturally, every company wants to make their services iPad relevant.

Clearly anxious to join life after iPad, on March 15th, Time Warner Cable became the first cable service to launch an iPad app that allows viewers to watch live television on their iPads.  Sounds pretty cool, right?  That is, until you read the fine print:  the app only works for people who subscribe to TWC’s cable television and Internet service, and it only works in the subscriber’s home, when the iPad is connected to TWC’s cable modem via a WiFi router, and only for the channels to which the specific user actually subscribes.  (The app may or may not also require the user to softly whisper a benediction to TWC CEO Glenn Britt, while premium channels possibly require the user to submit a photograph of themselves burning a Verizon FiOS marketing circular.)  So now I have a picture in my head of my kids sitting on our couch — in front of our 60” flat screen — trying to tune in to iCarly on a 9.7” iPad, while the same episode plays in HD in the background.  Very useful, indeed.  It’s like picture-in-picture, the innovation that everyone thought would revolutionize television viewing, only even more obviously useless from the outset.

Setting aside the obvious limited utility of TWC’s app (which inexplicably has already been downloaded 360,000 times), Viacom is not happy.  Viacom contends that the app, which allows viewers to watch several of Viacom’s channels and programming, constitutes unlicensed distribution of its copyrighted material and is a breach of its agreement with TWC.  Viacom has demanded that TWC remove its content from iPad viewing, including Viacom channels Comedy Central, MTV, Nickelodeon and CMT.

Following the theory that your best defense is always a good offense (especially when you’re thisclose to getting sued anyhow), TWC filed a complaint for declaratory relief (a.k.a., the preemptive lawsuit soon-to-be-sued parties often file so that they can call themselves the plaintiff), asking a judge in the Southern District of New York to rule that its iPad viewing app is authorized under its agreements with Viacom and does not infringe Viacom’s copyrights.  Viacom responded with its own lawsuit (because, again, everyone knows the plaintiffs are the cool kids in any given lawsuit), asserting a slew of copyright, trademark and unfair competition claims against TWC, and seeking hefty damages and injunctive relief to prevent TWC from continued iPad distribution of Viacom’s content.

TWC contends that its app is nothing more than a means to allow its subscribers to view TWC-provided content on the display device of their choosing, and that its agreements with Viacom “do not in any way limit the types of video display devices upon which TWC subscribers may view programming provided through TWC’s cable system.”  TWC points out that it was previously doing the same exact thing by allowing subscribers to view programming on their home computers through its broadband service, and Viacom did not object.  Viacom, on the other hand, claims TWC is not permitted distribute its programming through TWC’s broadband service, and that its agreements with TWC limit distribution to TWC’s cable television service.  Viacom also claims its ability to reach agreements with other wireless carriers to stream its content has been hindered.

While the specifics of this case may seem kind of byzantine, copyright law is perfectly designed to set up just this kind of dispute.  Generally, the owner of a copyright owns the exclusive right to, among other things, control the distribution of the copyrighted work, including the right to reproduce and distribute copies of the work, to publicly perform the work, to publicly display the work, and to create derivative works based on the original copyrighted work.  A copyright in a work is divisible — that is, a copyright owner’s exclusive rights can be chopped up into ever finer pieces, and divvied out to certain parties on exclusive terms.  Want to exclusively license only the Bulgarian Betamax rights in your copyrighted work?  Good luck with that in practice, but in theory, the law is happy to oblige.

So if copyright law is perfectly willing to allow Viacom to slice up its rights and grant them to TWC (and elsewhere) as narrowly and specifically as Viacom’s lawyers could write Viacom’s grant of rights language, the main question in this case will be, just how narrowly and specifically did Viacom’s lawyers write Viacom’s grant of rights language?  These disputes often arise whenever technology develops faster than the language lawyers can come up with to describe it — which is to say, all the time (this, in short, explains why every entertainment lawyer’s favorite phrase is “throughout the universe, in perpetuity, in any and all media now known or hereafter devised”).

Naturally, each side’s lawyers are projecting perfect confidence that its interpretation of the agreements will prevail.  In reality, the agreements now in dispute were probably drafted in a world in which the question, “Who gets the iPad transmission rights?” would have been met with the response, “Who gets the what in the where now?”  The Court will look at the particular language of the Viacom/TWC carriage agreements, and engage in an inevitably mind-numbing technical analysis of how cable, broadband, iPad, and other signals are actually transmitted, to determine whether iPad transmission rights are or are not included in the Viacom/TWC agreements.  (Whichever side is still awake at the end probably wins.)

The more interesting question is why Viacom is choosing to prevent TWC subscribers from viewing its content on iPad devices even though the viewing is limited to in-home use.  Although Viacom claims that it has been irreparably damaged, it is difficult to imagine how it has sustained any actual damage when the iPad user can literally walk over to his or her television set, turn it on, and receive the same programming, in the same location, at the same time.  And, since viewing is limited to in-home use, query how Viacom is prevented from entering into deals with other wireless providers that would make the content available in a more useful way — that is, outside the home and through general Internet distribution, i.e., in the only way that seems really useful at all.

Most likely, Viacom is seeking to either negotiate a higher fee from TWC, or is digging in its heels to prevent a further expansion of live television streaming outside of the home.  (Dish Network, for example, apparently allows its subscribers to stream live television on iPads both in-home and via any public Internet connection, though Viacom seemingly has not complained.)  Slowly but surely, though, entertainment companies are learning that they can make a lot more money by exploiting Internet and mobile technologies than by litigating over them.  Despite the strong rhetoric and platitudes in Viacom’s complaint, I wouldn’t be surprised if the parties end up reaching an agreement long before this case goes to trial.

What this dispute does tell us, though, is that live streaming television via the Internet, and specifically through iPads and other tablet computers, is closer to becoming mainstream.  Pretty soon, there will be a legitimate contender to compete with Facebook for the title of Biggest Work Distraction.  Keep an eye out for coworkers with business-hours Facebook statuses about the latest happenings on Days of Our Lives sometime soon.