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Aereo/Aereokiller Update: The Ongoing Battle Over What Constitutes a Public Performance Under the Copyright Act

08 May 2013
Recap

When we last checked in on our combatants, federal district courts in New York and California had come to contrary conclusions as to whether the unlicensed delivery of copyrighted content to subscribers over the Internet by companies that used virtually identical technologies constituted a public performance under the Transmit Clause of the Copyright Act.[1] In both cases, the companies (Aereo and Aereokiller) devised retransmission systems that employed individual, dime-sized antennas to create a separate, unique copy of copyrighted broadcast programming for each of their subscribers who wanted to watch the programming.

 

Relying on the Second Circuit’s prior opinion in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 135 (2d Cir. 2008) (“Cablevision”), which instructed that the focus of the “public performance” inquiry should be on “the people capable of receiving a particular ‘transmission’ or ‘performance,’ and not [on] the potential audience of a particular ‘work,’” the New York district court refused to preliminarily enjoin Aereo’s service. American Broadcasting Companies, Inc. v. Aereo, Inc., 874 F.Supp.2d 373 (S.D.N.Y. 2012). By contrast, the district court in California preliminarily enjoined Aereokiller’s service because it determined that the focus should be on “the performance of the copyrighted work, irrespective of which copy of the work the transmission is made from.” Fox Television Stations, Inc. v. BarryDriller Content Systems, Plc, 2012 WL 6784498, at *4 (C.D. Cal Dec. 27, 2012) (emphasis in original). 

Both decisions having been appealed, the battlefronts then shifted to the Second and Ninth Circuits.

Aereo Wins the First Battle at the Court of Appeals

On April 1, 2013, a Second Circuit panel in a 2-1 ruling affirmed the denial of a preliminary injunction against Aereo. WNET v. Aereo, Inc., 2013 WL 1285591 (2d Cir. April 1, 2013).  In so doing, the court determined that “just as in Cablevision, the potential audience of each Aereo transmission is the single user who requested that a program be recorded.” Id. at *9.  Accordingly, after rejecting the plaintiff copyright owners’ various attempts to distinguish their case from Cablevision, id. at *9-12, the court concluded that “Aereo’s transmissions of unique copies of broadcast television programs . . . are not ‘public performances’ . . . .” Id. at 14.[2]

The majority ruling, however, was over a sharp and lengthy dissent by Judge Chen, the same judge who had previously authored the district court opinion that was subsequently reversed by the Cablevision decision. Instead of taking direct issue with Cablevision, however, the dissent distinguished the two cases and called Aereo’s technology platform a “sham,” which he likened to “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” Id. at *15.

The War is Not Over

In the meantime, the Aereokiller ruling is still on appeal to the Ninth Circuit. If the district court’s decision is affirmed, the resulting split between the circuits could result in the war shifting to yet another battlefront -- the Supreme Court.

Another possibility, however, is that the Second Circuit could decide to grant the plaintiffs’ request for an en banc rehearing of the Aereo appeal.[3] Indeed, the panel’s opinion almost seems to have invited such review, not only of its decision, but possibly of the underlying Cablevision decision, (i) by observing that “[p]erhaps the application of the Transmit Clause should focus less on the technical details of a particular system and more on its functionality, but . . . Cablevision . . . held that technical architecture matters, id. at *12; and (ii) by further expressly (and somewhat gratuitously) noting that the panel was bound by Cablevision until that decision was overruled either by an en banc panel of the Second Circuit or by the Supreme Court. Id. at *13.[4]

Stay tuned.

                                                                             

[1] The two cases were previously discussed in the TMT Blog.

[2] The plaintiffs argued (i) that Cablevision, unlike Aereo, had a license to transmit the programming in the first instance, (ii) that Aereo’s discrete transmissions should be aggregated to determine whether they are public performances, (iii) that Cablevision’s RS-DVR system was analogous to a typical VCR, whereas Aereo’s system was analogous to a cable television provider (which is required to pay retransmission fees), (iv) that Cablevision’s RS-DVR copies “‘broke the continuous chain of retransmission to the public’ in a way that Aereo’s copies do not,” and (v) that while Aereo was the functional equivalent of a cable television provider, it had designed an inefficient retransmission system that created numerous identical copies of the same program for the admitted purpose of exploiting the Cablevision ruling to avoid copyright liability. Id.

[3] Four major sports leagues (the NBA, NFL, NHL and MLB) also recently joined in the request as amici curiae.

[4] The plaintiffs’ requests for rehearing continue to contend that Cablevision can be distinguished, but they also assert that Cablevision’s analysis was “plainly wrong” and “needs to be rejected” to the extent it is found to compel the holding of the two-judge majority.

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