Aereo, Inc. provided an Internet service allowing subscribers to watch broadcast television programs on their computer.  American Broadcasting Company and others asserted copyright infringement.  The Supreme Court held that Aereo performed the works publicly, infringing an exclusive right of the copyright owner.  American Broadcasting Cos., Inc. v. Aereo, Inc., 573 U.S. ____, 2014 WL 2864485 (Jun 25, 2014). 

A copyright owner has the exclusive right to “perform the copyrighted work publicly”.  17 U.S.C. § 106(4).  In response to Supreme Court cases addressing the development of cable television,[1] Congress amended the Copyright Act in 1976 to define perform “publicly” to mean “transmit … a performance … to the public by means of any device or process, whether the members of the public capable of receiving the performance … receive it in the same place or in separate places and at the same time or at different times.”  17 U.S.C. § 101.  To “transmit” a performance means “to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.”  Id.  To “perform” an audiovisual television program means “to show its images in any sequence or to make the sounds accompanying it audible.”  Id

Aereo has installed thousands of small antennas and related equipment in a central warehouse.  Each antenna is dedicated to the use of one subscriber to receive the subscriber’s selected broadcast.  The broadcast signal received by the antenna is stored on an Aereo server and transmitted over the Internet.  The streaming is delayed a few seconds after the program is broadcast.

The Second Circuit Court of Appeals (over a dissent) held Aereo did not infringe the copyright of the owners of the broadcast programs. The Supreme Court reversed the Second Circuit and held Aereo performs the works publicly.

The Supreme Court found that Aereo’s activities are similar to those of the community antenna television providers addressed by the 1976 Amendments to the Copyright Act.  Aereo uses its equipment to provide broadcast programming at the request of a subscriber.  Aereo transmits a performance when its subscribers watch the program.

The Supreme Court further found that using a separate antenna to create a copy available only to one subscriber does not distinguish Aereo’s system from the cable systems subjected to the Copyright Act by the 1976 amendment.  The performance of the same work may be transmitted through multiple transmissions irrespective of the number of copies or number of discreet communications involved.  Aereo’s subscribers constitute the public.  Aereo communicates the same audio visual images and sounds to a large number of unrelated people who are not owners or licensees of the underlying work.

Three dissenting Justices argued that the subscriber, not Aereo transmits the work because Aereo does not continuously broadcast and the subscriber must initiate the process by selecting the desired program.  Initiation by the subscriber is the type of volitional act the dissent would require for copyright infringement. 

The majority rejected this distinction because the cable subscriber always chooses the desired program for their personal viewing.  According to the majority, whether the signal was transmitted continuously before the viewer’s selection “means nothing to the subscriber” or “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 . . . .

In other cases involving different kinds of service or technology providers, a user’s involvement in the operation of the provider’s equipment and selection of the content transmitted may well bear on whether the provider performs within the meaning of the Act.  But the many similarities between Aereo and cable companies, considered in light of Congress’ basic purposes in amending the Copyright Act, convince us that this difference is not critical here.  We conclude that Aereo is not just an equipment supplier and that Aereo “perform[s].” 

District Court cases involving Aereo[2] and a competitor, FilmOn X LLC,[3] had granted injunctions in conflict with the holding in the Second Circuit.[4]  Indeed, Aereo had joined in the request for the Supreme Court to grant certiorari to resolve the conflicting rulings.  Presumably these injunctions will stand.  The more difficult question is whether the Supreme Court decision will affect the “different kinds of service or technology providers” the court expressly excluded from its ruling.