8 TVBEurope Opinion & Analysis Aereo: the fallout
The recent decision by the United States Supreme Court that online video start-up Aereo was operating in violation of copyright law appeared to have drawn a line under a case that has held the attention of the international TV broadcast community. Yet, Aereo has come out fighting with an “astonishing” new legal strategy. Here, Andrew L Deutsch, Marc E Miller and Melissa A Reinckens of DLA Piper in New York offer their analysis of the case
Background to the case THE UNITED States Supreme Court held that Aereo infringes broadcasters’ copyrights in on-air programming when transmitting programmes to its Internet subscribers. The ruling on 25 June held that such transmissions are a public performance, and thus infringe the exclusive right to publicly perform a work protected by copyright. The Court rejected the argument that Aereo is only an equipment provider, and that subscribers, rather than Aereo, “perform” each transmission.
The Court held that Congress, in enacting the Copyright Act, had intended to prohibit cable TV companies from rebroadcasting copyrighted programmes without the copyright owner’s permission, and that to carry out this congressional purpose, Aereo’s system, which operates
without such permission, must be enjoined. The Court’s holding will doom Aereo’s business in its current form. Broadcasters’ ability to protect their content, and to require cable TV operators to pay large retransmission fees for over- the-air programming, has been reinforced. The most important future question, however, is how the Aereo decision will affect Internet streaming and cloud-based services. The way in which
copyrighted works are stored and retrieved from such systems falls uncomfortably close to the definition of “public performance” as given in Aereo. Although the Court was careful to say that it was not prejudging the legality of such services, future copyright litigation directed to cloud storage and retrieval is almost inevitable,
and the issue is likely to be back before the Court within several years.
Aereo’s business model Although users can receive over-the-air broadcasts for free, cable TV companies, in order to retransmit the same programmes on their systems, must pay billions of dollars each year to the copyright owners. Aereo was an attempt to find a legal route around this requirement. Aereo’s system uses thousands of tiny antennas, each assigned to a single subscriber, to receive over- the-air broadcasts, and a remote server that creates individual copies of broadcast programmes that its subscribers wish to watch live or at a later time. A group of broadcasters sued Aereo, claiming that the transmissions infringed the public performance right, and
sought a preliminary injunction. Aereo maintained that because each transmission of this system was actuated by a subscriber, not by Aereo, those transmissions were not public performances, and were no different than a user receiving the same signals through a home digital antenna. A New York federal court denied the broadcasters’ initial demand for a preliminary injunction against Aereo, finding that the plaintiffs had not established a likely infringement of their public performance rights. The Second Circuit affirmed the denial of relief, then turned down the broadcasters’ request for en banc rehearing. Meanwhile, Aereo expanded its services to a number of other US cities. It encountered lawsuits in other cities from the local broadcasters; Aereo defeated a preliminary injunction
in Massachusetts, but a Utah federal court enjoined Aereo from launching its service in the states of Utah, Colorado, Montana, New Mexico, Oklahoma and Wyoming. The losing broadcasters in the Second Circuit petitioned the Supreme Court to review the question, “Whether a company ‘publicly performs’ a copyrighted television programme when it retransmits a broadcast of that programme to thousands of paid subscribers over the internet,” and, unusually, Aereo also joined in the request for the Court to grant review. Given the interest and importance of the case, the Court decided to accept the appeal.
The Court decides On 25 June 2014, a six-justice majority reversed the Second Circuit and concluded that the Aereo service did infringe the public performance rights of the plaintiffs. Justice Stephen Breyer wrote the majority opinion; Justice Antonin Scalia issued a dissent for himself and Justices Clarence Thomas and Samuel Alito. The Court concluded that Aereo both “performs” in transmitting programming to its subscribers over the internet, and that the performance is public. Aereo argued that it did not perform, because it “does no more than supply equipment that emulates the operation of a home antenna and digital video recorder (DVR).” It contended that only Aereo’s subscribers ‘perform’, when they use such equipment to stream television programmes to themselves. The Court rejected
Aereo’s argument, reasoning that Aereo’s transmission is a performance because it is similar in nature to the old community antenna television (CATV) services which Congress intended to address with its 1976 amendment to the Act’s definition of ‘perform’. Prior decisions of the Court, Fortnightly Corp. v. United Artists Television, Inc. and Teleprompter Corp. v. Columbia Broadcastings System, Inc, had held that CATV systems did not perform broadcasters’ copyrighted television programmes when they transmitted local television broadcasting to subscribers outside of the broadcast antennas’ range. The 1976 Act’s legislative history, the Court held, showed that Congress intended to overturn these cases, and “make clear that an entity that acts like a CATV system itself performs.” The Court avoided interpreting the Act’s literal language,
www.tvbeurope.com August 2014
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76