In American Broadcasting Cos., Inc. v. Aereo, Inc., Appeal No. 13-461 (S. Ct. June 25, 2014), the Supreme Court found that Aereo’s audiovisual content retransmission and delivery service infringed upon the copyrights held by the plaintiffs who are producers, marketers, distributors and broadcasters of over-the-air television content.  The Court’s majority opinion was careful, however, to limit the reach of its decision so that it does not unduly impinge upon the growth of new content storage and delivery technologies not presently before the Court.

The Copyright Act, 17 U.S.C. § 106, provides the copyright owner with a bundle of exclusive rights, one of which (with respect to motion pictures and other audiovisual works) is to “perform the copyrighted work publicly.”  Through the Act’s “Transmit Clause,” the public performance right includes the exclusive right “to transmit or otherwise communicate a performance of … the [copyrighted] work … 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.

For a monthly fee, Aereo offers subscribers broadcast television programming over the Internet, nearly at the same time as the original over-the-air programming is being broadcast.  Much of this programming includes copyrighted works owned by others.  Aereo retransmits this programming without permission by or license from the copyright owners.

With Aereo’s service, the Aereo subscriber visits Aereo’s website and selects, from a list of local programming, a television show he or she wants to view.  One of Aereo’s servers selects a subscriber-dedicated antenna, and tunes that antenna to receive the over-the-air broadcast carrying the selected show.  An Aereo transcoder translates the television show signal received by the Aereo antenna so that it can be transmitted over the Internet.  An Aereo server saves a subscriber-specific copy of the television transmission data to a subscriber-specific folder on Aereo’s computer hard drive.  Aereo’s server then simultaneously (or at a later time chosen by the subscriber) streams the saved copy of the television show to the subscriber over the Internet.  The subscriber can then view the streamed program on his or her personal computer or any other Internet-connected device.

American Broadcasting and its co-plaintiffs, owners of the copyrights to the television content retransmitted via Aero’s service, sued for copyright infringement.  Their request for an injunction was denied by the district court and the Second Circuit Court of Appeals.  The lower courts determined that Aereo’s service did not violate the Copyright Act because the service did not provide content transmissions to the public but rather one-by-one to private subscribers.

The two underlying questions that the Supreme Court believed it had to decide were whether Aereo’s service constituted a “performance,” and if so whether that performance was “public” within the meaning of the Copyright Act.  The Court answered “yes” to both questions.

The Court looked to the history and purpose of the Copyright Act to determine that Aereo’s service constituted a “performance” covered by the Act.  Under the Act’s definitions section, “[t]o ‘perform’ a work means to … either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”  17 U.S.C. § 101.  Combined with Congress’ enactment of the broad language of the Transmit Clause, discussed above, the Court was convinced that Aereo’s technology and retransmission service “performed” the over-the-air television programming captured by Aereo’s antennae.

The Court also found that Aereo’s service is a “public” performance or transmission of the over-the-air television programming.  To a majority of the Court, Aereo’s service was not merely a discrete series of private retransmissions, one-by-one, to Aereo’s subscribers.  Rather, Aereo’s service communicates the same contemporaneously perceptible images and sounds to multiple people who have no prior ownership rights or other relationships to the copyrighted programming; and this is so regardless of the number of discrete communications Aereo’s service makes. 

Having determined that Aereo’s retransmission service constituted a public performance of the plaintiffs’ copyrighted content without permission, the Supreme Court reversed the decisions of the lower courts, and held that Aereo’s activities constituted copyright infringement.  In order to allay the concerns of numerous amici who feared that the Court’s holding for the copyright holders would unduly hinder the development of new content storage and delivery technologies, the Court narrowed the reach of its holding as follows:

  • The Court’s holding does not extend to those who act as owners or possessors of the relevant “product” (content).
  • The Court has not yet considered whether it is an act of infringement when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content.
  • An entity does not “transmit to the public,” thus engaging in infringement, if it does not transmit to a substantial number of people outside of a family and its social circle.
  • The doctrine of “fair use” can assist in inappropriate or inequitable applications of the Transmission Clause.
  • Other presently novel technologies not previously addressed by Congress, such as cloud computing and remote storage DVRs, should await for a case in which they are squarely presented.
  • New technology providers concerned about the Court’s holding can seek their own forms of relief from Congress.

While the majority’s opinion does provide “some” guidance, it appears to be of little comfort to new technology providers in making business decisions.