Slingbox place shifting IP right threat?

The legal issues being considered in association with Slingbox devices

What is the "Slingbox"?

The "Slingbox", produced by Californian company Sling Media Inc, is causing quite a storm in the media world. The Slingbox is a TV streaming device that can redirect up to four live TV streams from a cable box, satellite receiver or personal video recorder (PVR) to an Internet-enabled computer located anywhere in the home or, when using a broadband Internet connection, anywhere in the world. Software on a user's PC connects to the Slingbox and provides the user interface for viewing the video stream and changing channels. It is predicted that eventually the Slingbox will be able to transmit to mobile phones, PDAs and other portable devices that connect to the Internet.

This method of accessing content from any location has become known as "place shifting" and it could be set to become the subject of the entertainment and advertising industries' next heated debate over intellectual property rights. The Slingbox is also not the only product available that offers place-shifting – Sony's Location-Free Portable Broadband TV and TV2Me products are also on the market. TiVo's new TiVoToGo offering also allows subscribers to send programming to a portable platform and set-top box makers are also starting to incorporate place-shifting into their devices.

Why is this important from a legal perspective?

The main legal issue likely to arise so far as devices such as the Slingbox are concerned is whether a consumer has the same right to "place-shift" content as they do to "time-shift" it. Under the Copyright, Designs and Patents Act 1988 as amended, making a copy of a copyright work is generally an infringement. However, with time-shifting, the defence under section 70 may apply whereby the making for private and domestic use of a recording of a broadcast solely for the purpose of enabling it to be viewed or listened to at a more convenient time does not infringe any copyright in the broadcast or in any work included in it.

Could this defence also apply to "place-shifting"? On a narrow interpretation, it may not as devices such as the Slingbox are not necessarily used for the purpose of viewing at a more convenient time. Further, would recording to a device outside the home be considered "domestic use"?

Place-shifting is problematic to many copyright holders because it sidesteps what many refer to as "proximity control" – the restriction of the distribution of content to specific regions. Many organisations, particularly sports bodies, consider geographic limitations as vital to negotiating lucrative television deals all over the world. Millions are spent for exclusive territorial rights to all kinds of programming. For example, DirecTV in America reportedly paid the NFL $3.5 billion over five years for the exclusive right until 2010 to deliver out-of-market games to consumers and in Europe similar lucrative deals are struck where football fixtures are concerned. Broadcasters who pay substantial sums for transmission rights in their areas are therefore in danger of losing out.

In response, manufacturers of such place-shifting devices such as the Slingbox raise the argument that these devices do not undermine copyrights: rather they extend the range within which an individual can watch programmes sent to their home, in the same way that making a video recording for personal use does.

The main issues of concern to the entertainment and advertising world with place-shifting devices are therefore:

1. Problems could be caused for local advertisers who are trying to provide targeted commercials for a particular market and who then find that those commercials have been distributed to a much wider audience than intended.
2. Where advertisers and their agencies incorporate third party material into TV advertising materials, they could find themselves to be in breach of territorial limitations contained with the licence agreements entered into with such third parties. The same risk could also apply with the territorial limitations contained with talent agreements entered into with the actors and other individuals appearing within the TV commercials.
3. The risk that commercials could be distributed to additional territories could also change the risk profile of advertising material. It could be that content intended for only the UK (and therefore cleared in accordance with applicable UK legislation and codes of practice) finds its way into the USA and therefore falling within the US court jurisdiction where applicable legislation could be very different.
4. There is a great potential for piracy of content with devices such as the Slingbox (although the Slingbox does not appear designed to permit file sharing as videos cannot be sent to more than one device at a time);
5. Problems could also arise for syndicators, whose content comes with strings attached related to timing and exclusivity.

What could happen next?

The producers of the Slingbox have argued that today's use of the Internet has changed the meaning of proximity/geography and that rights owners need to acknowledge this and work alongside, not against, the manufacturers of place-shifting technology. Indeed, some rights owners have already been seen to be relenting to this fact. When TiVoToGo was announced, it was denounced by organisations in America such as the Motion Picture Association of Ameria and the NFL as a copyright violation, but both later relented once TiVo agreed that TiVoToGo would only transmit programs that already were recorded.

Whether legal cases will be lodged against Sling Media Inc and others for intellectual property and other rights infringements caused by their devices remains to be seen but the notion of place-shifting is certainly something rights holders, distributors, advertisers and lawyers to keep an eye on and be aware of. Advertisers should certainlty think in more detail about what territories they want to clear third party materials for when content can be distributed in the future by such devices.