NEW YORK — A ruling by the 2nd U.S. Circuit Court of Appeals regarding the limitations for Internet Service Provider (ISP) in copying and storing copyrighted content on behalf of subscribers is being hailed as far-reaching and important, though it will likely be appealed by Hollywood producers.

The ruling in Cartoon Network vs. CSC Holdings, issued Monday, allows Long Island-based Cablevision to proceed with its plans to roll out its new Remote Storage DVR System.

Instead of recorded content being stored on individual set top boxes in subscriber's homes, which is currently the predominant method, Cablevision would house and maintain the content on central hard drives kept at remote locations.

Cablevision announced the advent of its new system in March 2006, and Hollywood immediately sued, claiming that Cablevision’s proposed operation of the RS-DVR would "directly infringe their exclusive rights to both reproduce and publicly perform their copyrighted works."

The lower court agreed, finding that Cablevision had infringed on the producer's rights “to reproduce the copyrighted work in copies,” and “to perform the copyrighted work publicly.” It had infringed the first right by buffering the data from its programming stream and copying content onto the Arroyo Server hard disks to enable playback of a program requested by an RS-DVR customer, and infringed the public performance right by transmitting a program to an RS-DVR customer in response to that customer’s playback request.

On Monday, the appeals court reversed, arguing, "on undisputed facts, that Cablevision’s proposed RS-DVR system would not directly infringe plaintiffs’ exclusive rights to reproduce and publicly perform their copyrighted works."

In a Aug. 5 blog posting, Los Angeles Times John Healy hailed the decision as a rare "leap into the Web 2.0 world without tripping over 32-year-old provisions of the main federal copyright statute. It's an important ruling that has intriguing implications for products and services with recording features, potentially extending to Web-based companies the protection that the Supreme Court gave to home recorders."

He added, however, that he'd be surprised if Hollywood does not take it to the next level.