On December 27, 2012, a federal judge for the Central District of California granted a preliminary injunction ordering the shutdown of AereoKiller, a Los Angeles-based cloud service provider that allowed subscribers to view broadcast television in real time over the Internet, upon a finding that AereoKiller's transmission of the content was likely an infringement of plaintiffs' public performance right. Fox Television Stations, Inc. v. BarryDriller Content Systems PLC, No. CV12-6921, 2012 WL 6784498 (C.D. Cal. Dec. 27, 2012 ).
The preliminary injunction was a significant victory for plaintiff television networks who, just months prior, had been denied a preliminary injunction against Brooklyn-based Aereo (a separate company) under nearly identical facts in the Southern District of New York. American Broadcasting Companies, Inc. v. Aereo, Inc., No. 12 Civ. 1540, 2012 WL 2848158 (S.D.N.Y. July 11, 2012).
The central question in both cases is the same: whether an online service provider, at the request of an individual subscriber, can transmit publicly available (but copyright protected) content over the Internet to be viewed in real time by that individual subscriber. The critical aspect of the dispute is whether the performance is rendered "private," and thus noninfringing, by virtue of the fact that each transmission is uniquely requested by, and directed to, a single individual subscriber. Section 106(4) of the Copyright Act affords a copyright holder the exclusive right to publicly perform a protected work. Thus, whether a particular performance of a work is deemed public or private can be determinative as to whether an infringement has occurred.
The technology at issue in both cases is also essentially the same. Each defendant operates a large array of micro antennas that receive television broadcast signals. Each individual subscriber is assigned a unique antenna amongst the remote array, and when a subscriber (using an Internet-enabled device) selects a television show for viewing, the subscriber's antenna is tuned to receive the signal carrying that show. A single copy of the content is then captured, digitized, and transmitted over the Internet as it airs to that individual subscriber's device. When 500 subscribers request the same show at the same time, 500 separate antennae process the request, and 500 separate transmissions are sent. And this is by design, because a single transmission that reached multiple subscribers would be "public" and, therefore an infringing public performance.
The difference between the two cases is that the Second Circuit, already poised to rule on plaintiffs' appeal, is ostensibly bound to affirm the denial of the preliminary injunction, based on its own recent (and separate) holding that a remotely accessible Digital Video Recording (DVR) system which recorded and transmitted unique copies of television shows for viewing by individual subscribers constituted a non-infringing private performance. See Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (aka "Cablevision"). The U.S. Court of Appeals, Ninth Circuit – if an appeal is taken in AereoKiller – will be bound by no such precedent, as the district court in AereoKiller has already noted.
Historically, any company that has wanted to retransmit broadcast television has been required to pay licensing fees to the broadcasters. This type of arrangement will be impacted if online service providers can legally transmit the same broadcasts, to paying subscribers, without a license. At the same time, many cloud storage and streaming services permit their individual subscribers to store and transmit all varieties of audio-visual content. Those business models rely heavily on Cablevision's authority, and many will become non-viable if Cablevision is rejected, limited, or overturned. Whether the circuits split or align, the eventual outcome of these cases will have broad ramifications for the content industry, cloud services, and consumers alike.