Wednesday, 25 June 2014 17:31

SCOTUS Rules Aereo More like Comcast than Tivo; Streaming Service Violates Copyright Act

Written by 

In a 6-3 decision, the Supreme Court of the United States held that Aereo “performs” the copyrighted works “publicly” as those terms are defined by the Copyright Act, thus infringing the copyrights of the content owners.

The majority opinion, delivered by Justice Breyer, first tackled the question of whether Aereo “performs” at all as that term is defined by the Copyright Act. Aereo argued that it merely supplies equipment that emulates the operation of a home antenna and DVR – the subscribers “perform” when they direct Aereo’s equipment to begin streaming. However, the Court was not persuaded. As a result of the amendments to the 1976 Copyright Act, which legislatively overruled SCOTUS’ decision that community antenna television (CATV) systems did not violate the Copyright Act, the Court found that “[a]n entity that engages in activities like Aereo’s performs.” CATV systems provided banks of television antennas to which subscribers could connect via a coaxial cable. A bit of the legislative history surrounding the amendments drove the point home for the Court:  A House Report from the amendment process indicated “[a] cable television system is performing when it retransmits [a network] broadcast to its subscribers.”

“Aereo is not simply an equipment provider. Rather, Aereo, and not just its subscribers, performs or transmits. Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the Act to reach. “

One difference relied on by the dissent is that Aereo’s system remains inert until a subscriber indicates that she wants to watch a program. Thus, Aereo is like “a copy shop that provides its patrons with a library card. A copy shop is not directly liable whenever a patron uses the shop’s machines to reproduce copyrighted materials.” The majority was unconvinced, however, as “this sole technological difference between Aereo and traditional cable companies does not make a critical difference here.”

The majority then turned to the question of whether Aereo performs “publicly”. Aereo’s technology provides a unique antenna for each subscriber. When a subscriber selects a program, Aereo’s technology creates a personal copy from the data received by the unique antenna. It then streams the copy, a few seconds behind the live broadcast, to the same subscriber and no one else. Aereo argued that this system does not transmit a performance to the public because each transmission is to only one subscriber.

The Court, again, was unconvinced. The text of the Copyright Act “suggests than an entity may transmit a performance through multiple discrete transmissions.” Furthermore, the Transmit Clause explicitly provides that one may transmit a performance to the public “whether the members of the public capable of receiving the performance … receive it … at the same time or at different times.” Lastly, the Act provides that the term “public” comprises “a substantial number of persons outside of a normal circle of a family and its social acquaintances.” Thus, because Aereo communicates the same “contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other,” Aereo’s subscriber’s constitute “the public.”

Aereo attempted to salvage its position with resort to the slippery slope, which is usually a non-starter in front of the Supremes. “Aereo … argue[s] that to apply the Transmit Clause to Aereo’s conduct will impose copyright liability on other technologies, including new technologies, that Congress could not possibly have wanted to reach.”  The Court characterized its holding as “limited” and was unwilling to believe it will have such an effect.  “We believe that resolution of questions about cloud computing, remote storage DVRs and other novel matters not now before us should await a case in which they are clearly presented.” To the extent that the decision could have unforeseen consequences, the Court opined, “commercial actors or other interested entities … are of course free to seek action from Congress.”

The decision is not necessarily the end of the road for Aereo. Aereo’s services comprise two distinct aspects in the eyes of the Court. The first is the user’s ability to watch a broadcasted stream “a mere few seconds behind the over-the-air broadcast.” The second is the user’s ability to direct Aereo to stream the program “at a later time, but that aspect … is not before [the Court].”  Perhaps then, Aereo need only wait until the broadcast transmission is complete before streaming the personal recording to its subscribers, in order to avoid the Court’s ruling. 

Read 2920 times Last modified on Wednesday, 25 June 2014 17:41
W. John Eagan

Mr. Eagan earned his bachelor’s degree in Mechanical Engineering from Lehigh University and his law degree, with honors from the University of Miami. While at the University of Miami he served as the Inter-American Citator and an Articles and Comments Editor for the Inter-American Law Review. Mr. Eagan is admitted to practice law in the State of Florida and concentrates his practice in Intellectual Property litigation.