Broadcasters Lose Their Copyright Infringement Appeal

Plaintiffs ABC and WNET head a list of Broadcasters who appealed from an Order of the New York Federal District Court denying their request for a preliminary injunction against Defendant Aereo, Inc. (“Aereo”) for copyright infringement claiming that its transmission of their broadcasts, while their programs are still airing, infringes upon their exclusive right to publicly perform their works. In WNET, Thirteen v. Aereo, Inc.; Am. Broad. Cos., Inc. v. Aereo, Inc., the Court of Appeals for the Second Circuit affirmed this decision. Aereo enables its subscribers to watch broadcast television programs over the internet for a monthly fee. It is currently limited to subscribers living in New York City and offers only New York area channels. It does not have any license from copyright holders to record or transmit their programs. As the Court noted, Aereo functions much like a television with a remote Digital Video Recorder and Slingbox.
Behind the scenes, Aereo’s system uses antennas and a remote hard drive to create individual copies of the programs Aereo users wish to watch while they are being broadcast or at a later time. These copies are used to transmit the programs to the Aereo subscriber. Having large antenna boards at its facility in Brooklyn, Aereo uses thousands of individual antennas to receive broadcast television channels.

The infringement claimed is the exclusive right of public performance under The Copyright Act of 1976 with respect to broadcast transmissions. The law states that Plaintiffs’ have the exclusive right to “transmit or otherwise communicate a performance or display of the work to a place …… or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.” Here, the Appeal’s Court viewed the Aereo technology in question as being similar to a time-shifting device such as the Digital Video Recorder used by Cablevision that was found to be non-infringing in a prior case. The Aereo user watching a copy of a recorded program created by request, whether using the “Watch” feature or the “Record” feature, chooses when and how that copy will be played back. The Court differentiated this from a buffered internet stream that has been held to be a public performance. Also during the entire chain of transmission, from the time a signal is first received by Aereo to the time it generates an image to the Aereo user, the potential audience is only one Aereo user account. This was significant to the Court since it mattered little whether the subscriber owns an antenna or rents the one on Aereo’s rooftop as each user-associated copy of a program is generated from a unique antenna and assigned only to the user account making the request. Because the feed from that antenna is not used to generate multiple copies of each program for different Aereo users, Aereo’s system does not create a public performance subject to the exclusive rights of the Plaintiffs.

Justice Chin authored a Dissent castigating the Defendant’s technology. He states, “Aereo’s ‘technology platform’ is, however, a sham. The system employs thousands of individual dime-sized antennas, but there 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.” Expect more sparks to fly in the coming months as the Washington Post reports today that Aereo plans to expand to other major U.S cities this summer. As the Broadcasters have much at stake, and deep pockets, expect either Congressional action or an appeal to the United States Supreme Court.