Television networks sue maker of digital video recorder

By Seth Sutel and May Wong, The Associated Press
Friday November 02, 2001

NEW YORK — Three major television networks are suing the maker of the first Internet-ready personal digital video recorder, saying the ReplayTV 4000 lets people make and distribute illegal copies of television programs. 

NBC, ABC and CBS filed a lawsuit Wednesday in federal court in California against SONICblue Inc., claiming the ReplayTV 4000 would violate their copyrights by allowing users to distribute copies of programs over the Internet. 

The networks also complained that technology in the personal video recorder can automatically strip out commercials. 

In a joint statement, the networks said the device “violates the rights of copyright owners in unprecedented ways” and “deprives the copyright owners of the means by which they are paid for their creative content and thus reduces the incentive to create programming and make it available to the public.” 

The ReplayTV 4000 has not yet been released for sale to the public, and the networks are asking the court to prevent the device from coming to market. SONICblue, which is based in Santa Clara and acquired ReplayTV Inc. this year, was planning to begin sales in mid-November. 

SONICblue officials said they have not seen the lawsuit but stressed that they took precautions against a Napster-like unfettered distribution of television programming. 

The company limited the number of times — to 15 — in which a user could send a particular show to another ReplayTV 4000 owner, or so-called “TV buddy.” A recorded show could only be sent — or resent to another user — a maximum of 15 times. 

“I think we’ve treaded softly,” SONICblue’s chief executive Ken Potashner said. 

The product also supports a digital rights copy protection technology made by Macrovision, giving broadcast networks the option to use that technology to restrict consumers from sending copies of a show over the Internet. 

The ReplayTV 4000 is a souped-up version of digital video recorders which were first introduced to consumers in 1998 by ReplayTV and rival TiVo Inc. So-called DVRs allow consumers to store hours of TV offerings on built-in hard drives, and while watching live television, users can pause, rewind, even do instant replays. 

The networks, some of which have invested in ReplayTV, did not object to earlier versions of the ReplayTV recorder or devices by TiVo. Both allow users to fast-forward through commercials but — unlike the ReplayTV 4000 — do not include technology to automatically delete the ads or share the files of the recorded shows. 

“We do have an investment. However we never consented or would consent to the misuse of our copyrighted works,” said Michelle Bergman, a spokeswoman for Disney, also a plaintiff. “We made clear we expect the use of copyrighted materials to be licensed and this technology does not allow for that. We’re protecting ourselves.” 

Digital video recorders devices have yet to take off — there are only an estimated 750,000 users. 

Analysts say the lawsuit marks the broadcast networks’ pre-emptive strike against a technology that is expected to flourish and could raise the same kind of thorny piracy issues that plagued the record industry after Napster helped popularize the practice of song-swapping over the Internet. 

The ReplayTV 4000 “is not going to impact the revenues of networks today but they care about what the technology could do to them by 2003 and 2004,” said Carmel Group analyst Sean Badding. 

“The networks will have to figure out a way to adjust to it, or capitalize from it,” he added.