10 TVBEurope Opinion & Analysis
finding it to be ambiguous, and instead relying on legislative history and inductive reasoning to discover Congress’s intent. This is a substantially different approach than prior copyright decisions of the Court, which have adhered closely to literal textual analysis. See, for example, Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1358 (2013) (“The language of § 109(a) read literally favours Kirtsaeng’s non-geographical interpretation, namely, that ‘lawfully made under this title’ means made ‘in accordance with’ or ‘in compliance with’ the Copyright Act.”). The Court used the same reasoning by analogy to conclude that Aereo’s performances were public. Aereo argued that its performances of the programmes were private because each performance is only capable of being received by one and only one subscriber. The Court rejected this argument on grounds that the performances did not differ from CATV systems’ transmissions to the public. The Court found that Aereo’s technological architecture did not distinguish its services from CATV transmissions, at least from the subscribers’ perspective, and that Congress did not intend to exempt similar services on the basis of technological differences that make no difference to the consumer of television programming: “Why would a subscriber who wishes to watch a television show care much whether images and sounds are delivered to his screen via a large multi- subscriber antenna or one small dedicated antenna, whether they arrive instantaneously or after a few seconds’ delay, or whether they are transmitted directly or after a personal copy is made? And why, if Aereo is right, could not modern CATV systems simply continue the same commercial and consumer-oriented activities, free of copyright restrictions, provided they substitute such new technologies for old? Congress
would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies.” In finding Aereo’s
performances to be public, the Court gave no weight to the fact that each subscriber received a different transmission. It held that the Act suggests that an entity may transmit a performance through multiple discrete transmissions to more than one person, and that a performance need not be a single transmission. Aereo’s model is no different than “one transmit[ting] a message to one’s friends, irrespective of whether one sends separate identical e-mails to each friend, or a single e-mail to all at once.” Thus, the Court concluded that “when an entity communicates
legal issues such as fair use, that could differentiate cloud-based systems from the Aereo system. But the Court’s definition of “public performance” may be broad enough to reach cloud computing and Internet streaming services, which use their own equipment to retransmit content to their customers, and often retransmit unique copies of the same programme to the individual users who uploaded them — like Aereo, and Cablevision’s RS-DVR system. Because a cloud computing service arguably “communicates the same contemporaneously perceptible images and sounds to multiple people,” there is likely to be future litigation by content owners against such services, at least where the copies stored in
and cloud storage and retrieval is a public performance will soon make its way through the federal courts and up to the Supreme Court.
The fallout: Aereo’s new legal strategy However, shortly after its highly publicised loss, Aereo shifted to a new legal strategy which it hopes will save its business from extinction. The company has asserted in federal district court that it is entitled to a compulsory licence to carry over-the-air broadcasts under § 111 of the Copyright Act. Such a licence, which is available to cable systems, could be a complete defence to copyright infringement claims by broadcasters. Aereo bases its claim on the Supreme Court’s ruling that the Aereo
“Shortly after its highly publicised loss, Aereo shifted to a new legal strategy which it hopes will save its business from extinction”
the same contemporaneously perceptible images and sounds to multiple people, it transmits a performance to them regardless of the number of discrete communications it makes.” While the Aereo case is now concluded, and the Aereo model has now been rejected as a copyright infringement, there is an important open question: how the Court’s definition of “to transmit … a performance,” will affect the legality of other Internet-streaming and cloud- based systems. Many of the amici, and the US government, devoted portions of their brief to the impact of a decision in the Aereo case on cloud storage. The Court essentially avoided the issue, saying that it was not prejudging the legality of such systems, and pointing out facts such as a user purchasing rights to play a recording or movie before storing it in the cloud, and
the cloud have not been licensed. Lower courts may struggle to determine whether cloud computing services transmit performances to the public when users upload and retransmit copies of protected works. The majority of cloud computing users upload purchased, or licensed, copies of content that they wish to retransmit at some other time, or in some other place. But purchasing a copy of a protected work does not necessarily entitle the purchaser to publicly perform that work, and, under a reasonable interpretation of Aereo, a cloud computing service’s retransmission of that work is a public performance. So, what then? Fair use, the Court said, is available to defendants to “help prevent inappropriate or inequitable applications of the [Transmit] Clause.” It’s fair to say that the question of whether streaming,
service is “highly similar” to that of a cable system. The Copyright Office has since rejected Aereo’s theory, reaffirming its view that § 111 does not apply to internet retransmission services. Nonetheless, Aereo’s strategy presents interesting new issues, which may substantially prolong its litigation, and which may mean that the case ultimately returns to the Supreme Court. Once the Supreme Court granted the broadcasters’ petition for certiorari, the New York federal district court presiding over ABC, Inc. et al v. Aereo, Inc., 12-cv-1540-AJN-HBP, stayed all proceedings until the Supreme Court decided the appeal. It also ordered that after the Supreme Court ruled, the parties must submit a joint letter stating their position on whether the stay should be lifted, and if so, how discovery should proceed. The parties have now filed their
joint letter with the district court, stating how each of them believe the case should proceed. The broadcasters plan to submit a proposed order, consistent with the Supreme Court’s decision, that permanently enjoins Aereo from infringing their public performance rights. They say that any additional proceedings depends upon what Aereo plans to do with its service. After claiming throughout the litigation that its service was not at all like a cable television system, Aereo has reversed course. It now claims that, like cable systems, Aereo is entitled to a compulsory licence to retransmit over-the-air broadcasts under Copyright Act § 111, because the Supreme Court held that the Aereo service is highly similar to cable systems. With such a licence, Aereo would no longer infringe broadcasters’ copyrights and the service could not be enjoined. The broadcasters
responded that Aereo’s new position is “astonishing… given its prior statements to this Court and the Supreme Court.” For example, the broadcasters note, Aereo distinguished itself from a cable system under § 111 in its briefing to the district court, and again at oral argument before the Supreme Court. Aereo, however, says that it has always “been careful to follow the law”— first under the Second Circuit precedent (i.e., Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (Cablevision) and WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir. 2012) (ivi)). In ivi, the Second Circuit held that a service that retransmits television programming live over the internet, like Aereo, is not eligible for § 111’s compulsory licence. It based this conclusion on the fact that neither Congress, nor the Copyright Office, has ever expressly permitted § 111’s definition of “cable system” to cover internet retransmission services. Aereo asserts that the
www.tvbeurope.com August 2014
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