American Broadcasting Co. v. Aereo and its Aftermath
The U.S. Copyright Act in 17 U.S.C. § 106 specifically gives copyright owners the exclusive right to control “performances” of their works. 17 U.S.C. § 101 defines public performance as including “transmission” of the work. In 17 U.S.C. § 111, the Act also exempts from this exclusivity certain types of retransmission, including compulsory licensing of certain cable systems. Aereo’s legal problems have highlighted how these provisions apply to a service whereby users were able to stream over-the-air television programs to Internet devices and led to Aereo filing for bankruptcy.
Aereo provided a service whereby customers could rent their own individual digital television antenna. The antenna was connected to a web service that provided DVR-like functionality that users directed to record certain programs. Customers could access their individual recordings remotely via streaming. This service included the ability to stream live television programs with a short delay. Aereo did not own the copyright in the television shows it recorded and had no licenses from the copyright holders, which brought suit.
Certain television networks, led by ABC, complained of copyright infringement by the Aereo service, particularly that the streaming of live television violated their exclusive right under 17 U.S.C. §106(4) to perform their copyrighted works publicly. Under §101, that right includes the Networks’ right to transmit their works to the public by any device or process whereby the public can receive the performance in the same place or in separate places and at the same time or at different times.
In the lower court, the Networks’ motion for a preliminary injunction was denied.1 The Second Circuit affirmed.2 The Networks then appealed to the Supreme Court. In June of 2014, the Supreme Court ruled against Aereo and in favor of the television networks.3 On remand, in October, the district court granted a preliminary injunction against Aereo’s retransmittal of the Networks’ broadcasts.4 However, the injunction was not expanded in scope to cover Aereo’s DVR-like service.
The Supreme Court Decision
The Supreme Court ruled on June 25, 2014, in American Broadcasting Cos., Inc., et al. v. Aereo, Inc. The 6-3 decision, authored by Justice Breyer, was against Aereo and in favor of the Networks. Joining the majority opinion were Chief Justice Roberts, and Justices Kennedy, Ginsburg, Sotomayor, and Kagan. Writing in dissent was Justice Scalia, joined by Justices Thomas and Alito.
The Court analogized Aereo’s service to those of community antenna television (CATV) systems, which were the precursor to modern cable systems. As part of the Copyright Act of 1976, Congress overturned two prior Supreme Court decisions which had held that these CATV systems did not “perform” the work. The 1976 Act clarified that these systems “performed” the works when a show was recorded and when the user viewed the programs. Since the Aereo system resembled these CATV systems which had been specifically made infringing by Congress under the 1976 Act, the majority believed it could do nothing other than to follow the mandate of Congress to find such systems to be infringing. The majority held that it does not matter that the system emulates a DVR system that a user might already have in their homes, as the system does so by performing the work publicly without a license. The case was then remanded for further proceedings.
Aereo’s Response to the Supreme Court Decision
Aereo’s immediate reaction to the ruling was to suspend all service and to call for the public to raise awareness with legislators. Aereo also tried to pay a statutory license to the networks like a cable system would pay, but was rebuffed by the Copyright Office.5 Merely being treated like a CATV system was not enough to be one for the purpose of the license. As part of the filing, though, Aereo revealed it only had less than 80,000 subscribers across 10 cities.6
Remand to the District Court
In its briefs upon remand, Aereo continued to try to be considered a cable company, enumerating all the points in oral argument and in the opinion where it was compared to a cable company. After all, cable companies are eligible for a compulsory license from broadcasters.7 However, as the district court noted in its October 23, 2014, opinion, the fact that it was compared to a cable company does not make it one. While all cable systems perform works publicly, not all who perform works publicly are cable systems. The Second Circuit has previously ruled in other cases that streaming content online does not make one a cable system, most notably in WPIX, Inc. v. ivi, Inc.8 There is nothing in the Supreme Court decision to change its precedent, and so the district court was bound to deny the request for a license.
Similarly, the court denied Aereo’s request for treatment under the safe harbor provisions of Section 512(a) of the Copyright Act, as Aereo had not met the requirements for eligibility. For example, it does not have a procedure for terminating repeat infringers.
In Aereo’s favor, though, the court also refused to expand the scope of the injunction, which only covered live transmission over the Internet. The court noted that while the Networks may ultimately prevail on their claims that the DVR component of Aereo’s service infringes, the Networks are bound by their prior decision not to include that element in the initial request for an injunction.
Applicability to Other Jurisdictions
Aereo likely would face a similar future under UK law, but for different reasons. The decision is unlikely to have any major impact in the United Kingdom because of its particular facts and the interpretation of the statutory provision which has no equivalent in UK law. The United Kingdom has already had similar litigation with the TVCatchup case decided by the High Court in 2013 where UK broadcasters successfully prevented an on-line streaming service provider from retransmitting the broadcasters’ TV programs to users’ mobile devices via any mobile telephony network. This is not the same fact pattern as the Aereo case, but a similar conclusion was reached. The UK case dealt with technical issues where the Aereo case focused primarily on what was intended by Congress in its 1976 amendment to the Copyright Act.
The Supreme Court majority opinion was quite clear to limit the applicability of its decision to those services providing over-the-air television broadcasts, similar to a CATV system. Still, there is some concern that creative arguments will try to stretch its applicability to other cloud-based services. As a practical matter, Aereo’s technology-based workaround to U.S. copyright law was inspired, but was ultimately found lacking. Remote DVR systems have been found to be acceptable in other contexts, so it is possible that Aereo’s service could continue as a DVR-only service, should it re-emerge from bankruptcy. Or, someday, perhaps another streaming-type service with DVR-like functionality will emerge to take its place.
1 874 F. Supp. 2d 373 (S.D.N.Y. 2012). [https://www.casetext.com/case/am-broad-cos-v-aereo-inc#.U9fh8EAlnfk]
2 712 F.3d 676 (2d Cir. 2013). [http://www.copyrightcodex.com/wnet-v-aereo-inc-712-f-3d-676-2nd-cir-2013-streaming-tv-broadcasts-online/2013/06/06]
7 17 U.S.C. § 111.
8 WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 279 (2d Cir. 2012).
9 17 U.S.C. § 512.