In a case that could have a broad impact on how companies deliver content to consumers, the Supreme Court heard oral argument on April 22 in American Broadcasting Companies, Inc. v. Aereo, Inc. (No. 13-461). At issue is whether Aereo’s service engages in public performances under the Copyright Act in transmitting broadcast television content to its subscribers’ wired and wireless devices. While the Justices questioned both parties on a variety of issues, a clear focus for the Court was the potential impact of its decision on other technologies not at issue in this case.
Aereo provides broadcast television streaming and recording services to its subscribers, who can watch selected programing on various Internet-connected devices, including televisions, mobile phones and tablets. Aereo provides its service through individual antennas that pick up local television broadcast signals and transmit those signals to a server where individual copies of programs embedded in such signals are created and saved to the directories of subscribers who want to view such programs. A subscriber can then watch the selected program nearly live (subject to a brief time-delay from the recording) or later from the recording. No two users share the same antenna at the same time, nor do any users share access to the same stored copy of a program.
In 2012, various broadcasting companies sued Aereo for copyright infringement in the Southern District of New York claiming, among other things, that Aereo’s transmission of the plaintiffs’ copyrighted content to Aereo’s subscribers violated the copyright owners’ exclusive right to publicly perform those works. That public performance right, codified in the 1976 Copyright Act, includes (1) any performance at a place open to the public or any gathering with a substantial number of people outside the “normal circle of family and social acquaintances,” and (2) the transmission of a performance to the public whether or not those members of the public receive it in the same location and at the same time. This latter provision, commonly referred to as the Transmit Clause, was added to the Copyright Act by Congress in part to overturn prior Supreme Court precedent that had previously allowed cable companies to retransmit broadcast television signals without compensating the broadcaster.
The district court denied the broadcast companies’ preliminary injunction requests, finding that, based on Second Circuit precedent, Aereo’s transmissions were unlikely to constitute public performances. The Second Circuit affirmed the decision, relying on the court’s earlier decision in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”), which found that a cable company’s remote-storage DVR system did not run afoul of the public performance right because each transmission was sent only to an individual user. The Second Circuit held that Aereo does not engage in public performances because, as in Cablevision, Aereo’s system makes unique copies of every recording, and each transmission of a program to a customer is generated from that customer’s unique copy.
Aereo has been sued by other broadcasters in other jurisdictions as well. The District of Massachusetts reached the same result as the Second Circuit, while the District of Utah came to the opposite conclusion. Further, both the D.C. District Court and the Central District of California have issued preliminary injunctions against FilmOn X, a company that offers a service similar to Aereo’s.