Curtains for Aereo: Supreme Court Finds Copyright Infringement

On June 25, 2014, the U.S. Supreme Court ruled 6-3 that upstart Aereo’s TV-over-the-Internet service violates broadcasters’ exclusive right to publicly perform their copyrighted programs. The Court’s decision is expected to shut down Aereo and similar unlicensed services.

The Aereo case raised two legal questions: first, whether Aereo performed the broadcasters’ copyrighted works; and second, whether Aereo transmitted the performance to members of the public. Resolution of these questions turned upon the definitional language in the Copyright Act of 1976, which, as the Court noted, had been adopted to reverse its earlier decisions immunizing CATV and cable systems from copyright liability.

Many interested parties filed “friend of the court” briefs in support of either Aereo or the broadcasters. K&L Gates represented one such party, the American Intellectual Property Law Association (AIPLA), and its brief can be found here. The AIPLA brief urged the Court to answer both of the issues raised—whether Aereo performed and whether it transmitted to the public—in the affirmative, but to frame its decision narrowly lest it limit the development and deployment of truly innovative, non-infringing technologies. And this is what the Court did.

The technology employed by Aereo captures over-the-air broadcasts using thousands of miniature antennas, each assigned to an individual subscriber who chooses the programs. Aereo records the broadcast signals in subscriber-specific folders on its server drives. The signals are then streamed, after a few seconds’ delay, to any internet-connected device of the subscriber’s choosing, whether that be a smart phone, a computer, or a television set.

The Copyright Act states that the exclusive right of public performance includes the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.”

With respect to the question of whether Aereo performs, the Court determined that Aereo does more than merely supplying equipment that enables subscribers to select, record, and transmit performances. Aereo functions much like a CATV or cable television service and, like them, needs a license to retransmit copyrighted content. (The three dissenting justices would hold, rather, that it is Aereo’s subscribers who, through their own volitional conduct, perform the copyrighted works, making Aereo liable, if at all, only for secondary infringement.)

As to whether Aereo performs the copyrighted works publicly, the Court had little difficulty concluding that it does. The Court assumed, for the sake of argument, that the only performance Aereo transmits is that inherent in its transmissions. But the Court rejected Aereo’s argument that such transmissions should be regarded as private because they go to subscribers individually. In addition to the practical similarity between Aereo’s service and cable systems, the language of the Copyright Act encompasses multiple transmissions and their receipt in different places and at different times. These transmissions go to the public, because Aereo’s subscribers are a large group of people outside the normal circle of family and friends.

The Court took pains to distinguish Aereo’s service from other cloud-based offerings. It noted, for example, that Aereo’s subscribers do not have any prior relationship to the copyrighted works in question; they do not receive performances of works that they own or possess. If they did, the performances likely would not be to “the public.” The Court likened this situation to a parking valet’s returning cars to their drivers rather than to the public.

The Court also described its holding as “limited”: The decision focuses on a system functionally equivalent to a cable system; it addresses transmissions, not the distribution of copies (i.e., streaming, not downloading); and it should not be read to apply where a “user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content.”

Finally, the Court pointed out that transmissions are not public if limited to a family and its social circle, and it cited the doctrine of fair use as a check on inappropriate or inequitable applications of the public performance right. The Court concluded: “We cannot now answer more precisely how the... Copyright Act will apply to technologies not before us.” It suggested that those answers would emerge in future cases. To the extent that this is unsatisfactory, the Court advised interested parties that they can seek clarification from Congress.

 

Topics:  Aereo, Broadcasting, Copyright, Copyright Infringement, Internet Streaming, SCOTUS, The Copyright Act

Published In: Art, Entertainment & Sports Updates, Civil Procedure Updates, Communications & Media Updates, Intellectual Property Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© K&L Gates LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »