The public performance right is one of several stress points in the U.S. Copyright Law resulting from changes in technology, in particular from the technologies that make up the internet and all the devices that use it as a transmission medium.

When the public performance right was granted for music in 1897, there was really only one way such a performance could occur. Live performers could gather an audience from the public and sing and play in front of that audience. But over the years, advances in transmission and storage technologies made it possible to extend the reach of a performance.

The owners of the performable works saw their value slipping away from uses without payment and sought to find copyright infringement in the acts of makers and user of the new technologies. A highpoint in the evolution came with the Betamax case. There, the maker of a VCR device individuals used at home to capture broadcast content was accused of infringement. The Supreme Court, based on the facts of 1984 decided that whatever a VCR user did in his/her home to make and playback personal copies of audiovisual content was a fair use. The battle continued when community antennas provided a shared facility to aid home TV broadcast viewing. Because the CATV systems did not store performed content, copyright owners saw the service as a violation of public performance rights. Stress grew up around the proper meaning of “public” and “performance”, with consumer access to TV often being a guiding light.

The various new modes of digital content consumption have caused contention between content owners and content consumers. The consumers claim the right to copy, share and enjoy whatever content they have purchased (and sometimes whatever they can find). The content owners see traditional streams of revenue from copies and performances they once controlled disappearing. Providers of technology to the consumers, both profit-seeking and those claiming to serve the needs, even rights, of consumers, continue to offer devices and facilities that help consumers find, download, store, copy and playback (or “perform”) content.

The Napster cases showed that such facilitators can go too far, particularly when they sponsor or tolerate illegal copying and sharing, notwithstanding some copying and sharing being legal.

With cloud computing, services now allow consumers to store and retrieve content in a private storage area. The Aereo case opened an interesting front in the wars between content owners and consumers. Aereo builds massive antenna arrays tied to storage devices and rents individual antennas with associated private storage, to allow subscribing consumers to select, store and playback local broadcast TV programs. While the subscriber controls antenna tuning and content storage, it seems clear that the individual antennas are not an efficient approach, but rather are used mainly to support that each subscriber rents and controls all facilities needed to select, store and playback desired broadcast content.

Not surprisingly, several broadcast content providers see Aereo as profiting unfairly from their copyrights. After a ruling favoring Aereo in the Court of Appeals for the Second Circuit and split district court decisions involving two Aereo-like providers in other geographies, the broadcast content providers petitioned for cert; Aereo supported the petition, making its grant easier for the Supreme Court. As presented by the broadcast content providers, the question is whether Aereo, in operating its antenna and storage arrays for subscribers performs publicly the copyrighted works.

In the oral hearing on April 22, 2014, representatives of the broadcast content providers and Aereo, as well as the Solicitor General addressed the Supreme Court. The questions provided some possible signals as to the court’s thinking.

A central theme of several Justices’ (e.g., Breyer, Sotomayor) comments and questions was how a decision finding Aereo’s business to involve public performance could affect Dropbox or other cloud storage providers where consumers store performance content. They probed for the unforeseen consequences of a decision against Aereo.

Justice Sotomayor also asked whether the case could be resolved by finding Aereo to be behaving like a cable company, who might enjoy a compulsory license. The broadcaster’s counsel suggested that Aereo would not fit the existing regime for cable carriers.

Justice Ginsberg pressed Aereo’s counsel to explain whether there was a technically sound reason to have the many individual antennas or whether these were just a way to avoid breach of the Copyright Act. Aereo’s counsel offered two somewhat credible reasons, but the motivation for the thousands of individual antennas remained suspicious. In follow-up Justice Ginsberg pointed out that all other broadcast TV transmitters pay royalties, leading Aereo’s counsel to liken Aereo’s role to that of a seller of a home-located receive-record-playback system or to a cloud storage provider, who would be shocked to be seen as performing content publicly, just because multiple customers initiate playback of the same content each had stored separately.

In the end, the basic theme of the plaintiffs was that Aereo is making a profit on their content and paying no royalties, by characterizing itself as a mere consumer equipment provider, despite antenna arrays that appear a mere “gimmick”. On the other hand, Aereo presented itself as a helpful consumer equipment/service provider, acting only under the command and control of consumers, who are freely entitled to do all that Aereo helps them to do.

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[Stuart Hemphill is a Partner in the Intellectual Property and Technology practice group of Dorsey & Whitney. His practice includes acquisition of patent, trademark, copyright and trade secret rights; licensing or other transfers of technology and intellectual property rights, particularly for computer hardware and software businesses, publishing/entertainment businesses and authors; and litigation concerning intellectual property rights and unfair competition. Contact: hemphill.stuart@dorsey.com]

[Image credits: aereo.com and movietimes.com]