Canada: The Aereo Decision – Canadian Content?

Careful observers of the United States Supreme Court's 6-3 decision yesterday in American Broadcasting Cos., Inc. et al v. Aereo, Inc. may have detected a small Canadian flavour in the majority's reasoning. As will be revealed, this was no coincidence, and McCarthy Tétrault played a small role by filing an amicus brief on behalf of a coalition of international rights holders and copyright scholars that drew the Court's attention to the need to interpret the US Copyright Act in a technologically neutral way, as similar copyright laws have been construed by the Supreme Court of Canada and the European Court of Justice to conform to international copyright treaty law.1

Aereo, a disruptive Internet-based service provider, had successfully argued in the Southern District of New York and the Second Circuit that it owed no copyright royalties relating to its transmission of television broadcasts over the Internet to its subscribers. Unlike a traditional broadcaster, Aereo employed thousands of individual dime-sized antennas, each of which sent a unique broadcast to a unique account over the Internet. Thus, although its technology could transmit the same programming at the same time to thousands of individuals, just as a cable company could, Aereo successfully convinced each court that it was not "transmit[ting] or otherwise communicat[ing] a performance... to the public, by means of any device or process" in the meaning of §101 of the U.S. Copyright Act. This argument drew a vigorous dissent from Judge Denny Chin of the Second Circuit:

Aereo's "technology platform" is, however, a sham... [T]here is no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.

When the U.S. Supreme Court granted certiorari to hear the broadcasters' appeal, the question then became whether Aereo's technical reading of the U.S. Act would prevail, or whether the Court would interpret the Act to fill the perceived gap. This was an issue of powerful importance with ramifications well beyond television, and indeed well beyond the borders of the United States. By their nature, Internet technologies disrupt established modes of communicating – and when copyright legislation is read technically to apply only to older pathways of reaching out to the public, the danger is that the copyright laws will be left completely behind even when the end result is essentially the same: the funneling of content to a broad swath of the public.

While, in many respects, U.S. copyright law is light-years ahead of Canadian law, the Canadian Supreme Court had actually already grappled with this very issue in the Rogers v. SOCAN case from 2012. This case dealt with the question of whether musical streams sent by online service providers to individual members of the public at different times and different places constituted, in their totality, a communication to the public. The Supreme Court of Canada held that they did.

In so finding, Justice Rothstein for a unanimous Court gave a detailed explanation of the doctrine of technological neutrality. He concluded that viewing the question from the perspective of the recipient of each transmission would "produce arbitrary results," and thus create an incentive to avoid copyright simply by executing a task serially rather than through a mass transmission. In his view, "If the nature of the activity in both cases is the same, albeit accomplished through different technical means, there is no justification for distinguishing between the two for copyright purposes." He added that: "Focusing on each individual transmission loses sight of the true character of the communication activity in question and makes copyright protection dependent on technicalities of the alleged infringer's chosen method of operation."

Yesterday's majority reasoning, drafted by Justice Breyer, adopts the very same approach. Two key passages demonstrate his technologically neutral approach, which looked for the true character of the communication activity as opposed to its technological exigencies:

Given Aereo's overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies [that users initiate the process by requesting programs from Aereo] does not make a critical difference here. The subscribers of the Fortnightly and Teleprompter cable systems also selected what programs to display on their receiving sets. Indeed, as we explained in Fortnightly, such a subscriber "could choose any of the . . . programs he wished to view by simply turning the knob on his own television set." 392 U. S., at 392. The same is true of an Aereo subscriber. Of course, in Fortnightly the television signals, in a sense, lurked behind the screen, ready to emerge when the subscriber turned the knob. Here the signals pursue their ordinary course of travel through the universe until today's "turn of the knob"—a click on a website—activates machinery that intercepts and reroutes them to Aereo's subscribers over the Internet. But this difference means nothing to the subscriber. It means nothing to the broadcaster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes a traditional cable system into "a copy shop that provides its patrons with a library card".


Viewed in terms of Congress' regulatory objectives, why should any of these technological differences matter? They concern the behind-the-scenes way in which Aereo delivers television programming to its viewers' screens. They do not render Aereo's commercial objective any different from that of cable companies. Nor do they significantly alter the viewing experience of Aereo's subscribers. Why would a subscriber who wishes to watch a television show care much whether images and sounds are delivered to his screen via a large multisubscriber antenna or one small dedicated antenna, whether they arrive instantaneously or after a few seconds' delay, or whether they are transmitted directly or after a personal copy is made? And why, if Aereo is right, could not modern CATV systems simply continue the same commercial and consumer-oriented activities, free of copyright restrictions, provided they substitute such new technologies for old? Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies.

The result is a "substance over form" approach: it ensures that courts will be focused on the effect of a communication activity, not its apparent form. It means that Canada, the United States, and other major trading partners (like the European Union, Japan, and Australia) are aligned in discouraging attempts to "game the system" with activities that fall into traditional broadcasting categories.

For a more detailed look at the Aereo decision and its implications, see Barry Sookman's blog here.

To view the original article please click here.


1 Disclosure: I helped draft the amicus brief, which was signed by leading copyright scholars from around the world including my partner Barry Sookman, and which was filed by my partner Steven Mason, a member of the Bar of the U.S. Supreme Court.

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