The Aereo Case Continues

Aereo is an interesting startup.  The company basically re-transmits over the air signals from stations that broadcast in that manner (such as the network stations) to their subscribers.  Each subscriber has their own little antenna that sends and receives the TV signals exclusively.  The advantage of this method of transmission is that the subscriber can watch live network television wherever their phone or tablet gets signal (or can record these transmissions on their devices to watch later).  As you might imagine, the major broadcasters are not thrilled with Aereo or its service.  After winning a case in New York and losing one in California, Fox opted to sue in Utah (here is a helpful map from the Disco Project that shows where Aereo is legal, along with the various holdings).

So why does Aereo get so much legal attention?  A lot of it has to do with a particular right within copyright law called public performance (as well as a general reluctance to pay traditional cable re-transmission fees).  Basically, a rights holder must grant permission for a public performance of their work (private performances do not need such permission).  While that appears to be a straightforward issue, the advent of new entertainment technology greatly complicates what qualifies as a public performance.  The major case dealing with this issue is Cartoon Network v. CSC Holdings (more commonly referred to as the Cablevision case).  In Cablevision, a company ran a DVR service that stored shows customers recorded on the company servers.  A person would set the show to record (creating the master copy), then Cablevision would stream the master copy to the customer’s TV.  The Second Circuit ended up ruling that, since each customer had their own copy, that the streaming of these copies did not constitute a public performance and was thus legal.

This impacts potential legal results for Aereo, because Aereo took the notion of individual copies very literally: every customer has their own antenna to receive transmissions.  Aereo argues that these antennas mean that each performance is essentially private, since the antenna only sends information to one person.  Courts so far have been mixed on whether this qualifies.  The Ninth Circuit, which ruled in a court case with a copycat service (called AereoKiller), ruled that the antennas did not meet Cablevision’s requirements for the uniqueness of the copy because the antenna only re-transmits the signal coming out of Aereo.  The Second Circuit, on the other hand, agreed with Aereo that the single antenna provided a unique transmission for copyright law purposes (since the stream goes to one and only one person).

I’m curious to see how the court system resolves this emerging split.  It likely depends on how the courts draw on Cablevision and its case line.  Sony v. Universal, for example, might lead a court to find that Aereo is still guilty of infringement.  That case involved Sony getting sued for selling home recording devices (such as the VCR and Betamax machines) for contributory copyright infringement.  That Supreme Court case has a two major takeaways.  First, it is not infringement if a company sells a machine that has legitimate non-infringing uses.  Second, “time-shifting” (recording shows for later viewing) constitutes fair use.  This holding impacts Aereo because neither takeaway really applies to them in the way that they applied to Cablevision.  Aereo’s technology only has a non-infringing use if the court deems to re-transmission to be private in nature (which is a tad circular, but Aereo only provides one service).  More important is how judges view the impact of Aereo’s re-transmission to other devices beyond televisions.  One of Cablevision’s rulings was that time shifting does not qualify as a public performance (in addition to being fair use under Sony).  Since Aereo offers the streaming of live television feeds in its service, they can’t really argue for time shifting (even if they allow customers to record the streams locally on the customers’ devices).  This is a big issue since cases relying on Cablevision for precedent tend to delve heavily into how these services or devices work in order to determine whether the defendant ran afoul of copyright law.

Aereo still has a decent shot of winning their remaining court cases.  For me, the more interesting matter is the split and how (or if) the Supreme Court chooses to resolve this split.  I will follow this one very closely to see what happens.





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