United States: U.S. Supreme Court Decides Aereo Internet Broadcast Television Case

Yesterday, the U.S. Supreme Court released its widely-anticipated decision in American Broadcasting Cos., Inc. et al. v. Aereo, Inc., wherein it reversed and remanded for further consideration a decision by the U.S. Court of Appeals for the Second Circuit that held that Aereo's "watch" feature was not a "public performance" under copyright law, and thus did not directly infringe upon the public performance rights of the owners of that content, namely certain broadcast networks. In reversing the 2013 Second Circuit decision, the Supreme Court noted that because the revisions to the Copyright Act in 1976 were, in the majority's opinion, largely directed toward rejecting certain U.S. Supreme Court decisions that had held that services that "enhanced" a viewers' ability to receive broadcast television signals (through cables connecting giant antennae with viewers television sets) were not "public performances," those services did not run afoul of the copyright law prior to its 1976 revisions. The majority, led by Justice Breyer held that the Copyright Act was then revised to reject the import of these decisions, thus setting the stage for the Court's present decision.

While more in-depth analysis of this decision and the far-ranging implications it may have not only on broadcast television but also on cloud computing will no doubt take time to unravel and understand, what seems clear at this point is that the Court has tried to establish a beachhead with respect to its interpretation that even individually assigned antennae through which user-selected content is received should qualify as a public performance under the Copyright Act. This element of its analysis will no doubt be a big part of any future space/time shifting issues in future cloud computing cases.

As a quick background on the basic technology at issue, Aereo offers an online service whereby a user can watch near-simultaneous over-the-air broadcast television via an internet-enabled device (i.e. without having their own television and antenna). Basically, when a user selects a program to watch through the Aereo service, Aereo engages one of a number of thumbnail-sized antenna, located en masse in a warehouse, to pull in the requested television signal and make a copy of that content from which it streams the program to the requesting user. While there are other parts of the service that the Court declined to address (as they were not at issue before the Court, such as the copies that are made during the streaming process, or "secondary" liability for providing the tools to enable the user to initiate this transmission), this basic "watch" feature forms the heart of the Aereo service (at least currently). Aereo had argued that because one antenna is dedicated to pulling in and providing that programming to one user for use while watching that one live program, this was not a public performance of the programming (which is protected by copyright), and thus should not be direct infringement and the Second Circuit's decision should be upheld.

In its opinion the Supreme Court discussed the history of the public performance right, including the revisions in 1976 to reject certain cases that had held that similar services were not public performances (though in those cases relating to physical antennae that ran cables to subscribers who could not generally get good television reception). The Court broke down the analysis into two basic parts, was Aereo's watch service a "performance," under the current Copyright Act and was the way in which it did so, a "public" performance, thus prohibiting Aereo's actions? The majority held yes in both cases.

The Copyright Act grants copyright owners certain exclusive rights, including the right to publicly perform that copyright. Prior to the 1976 revisions to the Copyright Act, the Court had held that "[t]he reception and rechanneling of [broadcast television signals] for simultaneous viewing is essentially a viewer function." Meaning that the companies that were selling the re-transmission services were simply acting like viewers, and even though there was some discretion as to what they were rechanneling, they weren't acting like broadcasters in the traditional sense such that they could be considered to be "performing" the work. The Court relied heavily on the theory that Congress's intent when it revised the Copyright Act in 1976 (the weight of this reliance being a point dissenting Justice Scalia took issue with) made it clear that "both the initial broadcaster and the viewer "perform" the work when a television program is broadcast, and when a viewer turns on a television."

The second part of the analysis involves whether the performance was "public" in light of the fact that there is a one-to-one relationship between the physical antenna owned by Aereo and the user watching that program. No antenna simultaneously broadcasts to more than one user at a time. So, Aereo argued, no program was broadcast to the public and thus the watch service isn't prohibited by the Copyright Act. The Court disagreed and again relying on Congress's intent, held that multiple discreet transmissions (i.e. one show being broadcast via one dedicated antenna to one user) can constitute a performance, which, unless the viewer is an owner of that content or within a normal circle of family or social acquaintances (as defined in the Copyright Act), necessarily means the performance is "public." Essentially the "public" under the Copyright Act does not need to be "situated together, spatially or temporally" according to the Court.

While not directly disagreeing with the ultimate result, dissenting Justice Scalia had several issues with the majority's opinion. Namely, there may have been more direct ways to analyze the issues, but those other ways were not before the Court in this case, specifically the secondary liability claims for the watch services and the direct and secondary copyright infringement claims related to Aereo's remote recording service. Additionally, Justice Scalia was troubled by the Court's comfort with appearing to remove what he considered to be a determinative element, namely that of the "volitional" aspect of the service, or more accurately, the lack of an intent on the part of Aereo to edit or tell viewers what to choose to watch. Specifically Justice Scalia disagrees with the majority on the threshold issue of whether Aereo performed because, "[i]n sum, Aereo, does not 'perform' for the sole and simple reason that it does not make the choice of content." Without a performance, liability for direct infringement could not lie and thus there would be no basis to reverse by the Court. Justice Scalia was also uncomfortable with the Court's reliance on analogizing Aereo's service with that of the companies who the majority held had forced Congress to amend the Copyright Act.

We will post more on this very interesting case after further analysis.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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