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Could Ad-skipping be illegal?
The recent lawsuit against SonicBlue for the sale of the latest "Replay TV 4000" box which includes automatic ad skipping asks the question of whether skipping over ads is legal.
Most people immediately feel it clearly is, due to the famous "Betamax" decision by the supreme court, which ruled that the VCR was legal, in part because copying to do "time-shifting" was an exempt fair use, and because any technology with a substantial non-infringing use like that should be legal.
What many don't know is just how narrow that decision was. It didn't declare it legal to make a library, for example, or to sell or loan the copies made for time-shifting purposes. It didn't declare it was OK to tape and time-shift pay-TV programs. And on top of all this, it was a narrow 5-4 decision, including current chief justice Rehnquist on the dissenting side. (He's out of the picture now, however, so no dissenters remain. O'Connor, who affirmed, will be gone soon. Stevens, who affirmed, is still there.)
So what does it say about commercial elimination?
The court ruled that since the time-shifting actually let more people watch a show, it was hardly hurting the market for the programs and their advertising. In the lower court, a study revealed that, back in the late 70s, most people did not FF over commercials. That's because the typical late-70s VCR made it a royal pain to FF over commercials. No remote control, not on-screen-review to show you when the program started. Since they aren't skipping commercials, the court said, why do you studios have a problem with them time-shifting?
Alas you see the rub. Had there not been the finding of fact that people weren't skipping commercials much on clunkly old VCRs, they might have ruled differently. Indeed 4 of them did, including Rehnquist and 3 who are now retired.
This time-shifted copy is in a special undefined limbo of copyright law. Even though it's in your house and on your tape, you don't really own it in the true sense of copyright law. For example, you probably can't tape a show to sell it or rent it. You were allowed to make it only because your purpose in making it was in the court's view, a fair use. If your purpose in making it is not a fair use, you can't make it.
Remember that the default under coypright law was that you can't legally record a show at all. That's the exclusive right of the copyright holder. The court opened up our ability to do that for certain fair use purposes.
So, alas, the legal question of "Can you record a show if your purpose is to watch a modified version, minus the ads" is, unfortunately, not settled. In the court's decision, they indicated they would (as fair use law requires) consider if there was harm done to the market for the work due to the copying.
It may be answered by the Replay case. In this case we add the question of automatic commercial elimination. The other wonderful doctrine the Betamax case introduced was the idea that a technology should not be liable if it has substantial non-infringing uses, like time-shifting.
So even if the court finds that I personally am violating copyright when I record shows on my Tivo to watch them later commercial free, the Tivo itself should be immune because it's "FF" and even "30 second skip" buttons have other uses besides skipping commercials. (I find the 30 second skip to be great during the Oscars, it moves you from the announcement of the winner right to the speech.)
What they'll consider with the Replay is whether the automatic eliminator has any non-infringing use, and that's an unsettled question.
As I wrote in my essay on the future of TV advertising, regardless of the legal issues, a solution will be found to this problem, for if TV networks can no longer sell to advertisers because everybody has a Tivo, they will find some other way to make money for their product -- the public wants it too much.
The real issue to me is just what answer they will find, and how it will affect the future of technology. Some want Alactraz level DRM, where you can't push "FF" during the ads, just as some DVDs prevent you from doing it during the copyright notice. The public wants other solutions.
Update: The Replay case was settled when they went into bankruptcy, so no court precedent was set.