Aereo and Cablevision: How Courts Are Struggling to Harmonize the Public Performance Right With Online Retransmission of Broadcast Television

• Citation: Vol. 9 No. 3
• Publication year: 2014

Washington Journal of Law, Technology and Arts Volume 9, Issue 3 Winter 2014

Aereo and Cablevision: How Courts Are Struggling to Harmonize the Public Performance Right with Online Retransmission of Broadcast Television

Sam Mendez (fn*)© Sam Mendez

ABSTRACT

Americans increasingly turn to the computer instead of the television to gain access to their favorite shows. With this in mind, Aereo allows its subscribers to stream broadcast television content to their computers, but does not compensate the broadcasters for these retransmissions. The broadcasters argue this violates their public performance right under the Copyright Act's Transmit Clause, but because of Aereo's curious technology platform, in which thousands of tiny antennas are each assigned to a unique subscriber, infringement is uncertain. The Supreme Court will soon hear American Broadcasting Companies, Inc. v. Aereo, Inc., arising out of the Second Circuit, and decide whether Aereo's retransmissions on the Internet constitute public performances. This Article argues that Aereo is infringing the broadcasters' public performance right and that by expanding on the earlier decision Cartoon Network LP, LLLP v. CSC Holdings, Inc., the Second Circuit misinterpreted the text and the spirit of the Copyright Act.

TABLE OF CONTENTS

Introduction..................................................................................240

I. Understanding Streaming......................................................243

II. Setting the Stage for Aereo...................................................244

A. Cablevision and the Reproduction Right.........................245

B. Cablevision and the Public Performance Right...............247

C. Redd Horne and the Single Copy Requirement...............250

III. Aereo.....................................................................................252

IV. Differing Viewpoints in Other Circuits................................256

A. Fox Television Stations v. BarryDriller...........................257

B. Fox Television Stations v. FilmOn X...............................260

V. Looking Forward: Legislative Action and the Future of Television.............................................................................262

Conclusion...................................................................................265

Practice Pointers...........................................................................266

INTRODUCTION

In early 2012, a new technology company called Aereo sprouted in New York City amid much controversy.(fn1) Its content distribution model was novel. For a monthly membership fee, Aereo subscribers are assigned one of thousands of tiny antennae that can receive broadcast television airwaves.(fn2) Via these antennae, Aereo streams television content to subscribers over the Internet.(fn3) Aereo also allows subscribers to copy these streams for later viewing with the use of remote hard drives. Aereo does not have any authorization from broadcast television providers to do so, and it does not provide any compensation to broadcasters for these transmissions. As a result, many major broadcasters brought suit, arguing that Aereo was liable for infringing their rights to public performance and retransmission.(fn4) In April 2013, the United States Court of Appeals for the Second Circuit in WNET, Thirteen v. Aereo, Inc. (Aereo) affirmed the district court's denial of the plaintiffs' motion for a preliminary injunction(fn5) and subsequently denied en banc review.(fn6) In the wake of that denial Aereo has rapidly expanded beyond New York City.(fn7) The Aereo court's reasoning indicated that had it not been for an earlier Second Circuit decision, Cartoon Network LP, LLLP v. CSC Holdings, Inc. ("Cablevision"),(fn8) Aereo would have been liable.(fn9)

Aereo convinced the Second Circuit that because it was assigning a unique antenna to each subscriber and transmitting the broadcast directly to that subscriber's home, no public performance occurred for purposes of the exclusive rights granted under the Copyright Act.(fn10) The plaintiffs appealed the case to the United States Supreme Court, which recently granted certiorari.(fn11) The Court's eventual decision has the potential to change our conception of what it means to publicly perform. Specifically, the Court must address what constitutes an online public performance.

The issue has gained prominence as Aereo and similar companies have expanded across the country. Aereo faced other suits over its expansion into Salt Lake City, where it lost,(fn12) and Boston, where it won.(fn13) Another company with a business model and technology nearly identical to Aereo's was found to be infringing by a California district court in late 2012.(fn14) This company lost in the District of Columbia as well.(fn15) The judicial fortunes of these companies have diverged, but the upcoming Supreme Court decision will hopefully provide much-needed guidance.

We live in a time of unprecedented technological development, enjoying convenient access to copyrighted work that our forefathers could hardly have dreamed of. When Congress enacted the current Copyright Act, most Americans consumed television content that was broadcast by the major networks. The Internet changed that. Today the Internet is ubiquitous and people can easily stream and download copyrighted content at their convenience, with or without the permission of the copyright holders. This threatens the traditional business models of aging corporations like the major broadcasters.

Can the statutory definition of public performance in the Copyright Act provide guidance in today's technological landscape, or does the law need to be revised? This Article will examine how the Second Circuit treated these issues in Cablevision and Aereo and how it answered the central question of whether the services sold by the defendants in both cases infringed the public performance copyrights of broadcasters. The Second Circuit's ruling in Cablevision set the stage for a ruling in Aereo against the broadcasters. This Article will argue because the court relied on an outdated common-law doctrine and a misreading of the Copyright Act, both Aereo and Cablevision were decided incorrectly. Aereo's business of retransmitting copyrighted material to its subscribers violates the public performance right of broadcasting companies, and that the consequences of the Aereo decision may be further-reaching than the court intended.

This Article will proceed by analyzing Cablevision and earlier precedent in detail. It will then turn to Aereo and the expansion of Cablevision's interpretation of the public performance right, followed by district courts' subsequent analyses of the issue in the Ninth and D.C. circuits. Ultimately, this Article will set the stage for the forthcoming Supreme Court review and attempt to forecast what is in store for broadcast television and the public performance right in a rapidly evolving technological landscape.

I. UNDERSTANDING STREAMING

Background on the definition of Internet "streaming" may help contextualize these cases. The Copyright Act does not define "streaming," but Webster's Dictionary defines it as "relating to or being the transfer of data (as audio or video material) in a continuous stream especially for immediate processing or playback."(fn16) For example, when a computer user streams a television show for immediate playback on his computer, there is a continuous transfer of data between that user's computer and the video or song host. Once the streaming has finished, the data are no longer on the streamer's computer. Streaming must be distinguished from downloading, which allows the data to be stored on the computer for later access.

Internet connections can be prone to intermittence, and streaming can be easily interrupted or slowed. To counteract this and allow a person to view streamed content uninterrupted, the computer "buffers" the content. It gathers the data a few seconds ahead of time before it is shown on a screen; if the continuous stream should be interrupted, there will be a few seconds as back-up to allow the computer a chance to catch up without having to interrupt the performance. The buffer data are not stored like downloaded data, but are temporarily accessible by a streaming program.

The distinction between downloading and streaming is important in copyright law. Streaming implicates two statutory rights: the right of reproduction and the right of public performance.(fn17) The former concerns the tangible copying of copyrighted works (such as bootlegged records or downloaded material), while the latter is concerned with the performance of copyrighted works.(fn18) There has been much discussion about whether non-permissive streaming of copyrighted content violates one or both rights.(fn19)

While there is no statutory definition of streaming in the Copyright Act, the Act includes language defining public performance and transmission of works. The Copyright Act's definition a public performance contains what is known as the Transmit Clause, which describes when transmission of copyrighted content should be considered a public performance.(fn20) However, without further guidance from Congress or the Supreme Court, lower courts have had to construe the definition of a public performance as new technologies have challenged the boundaries of that...