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Internet Streaming of Live Broadcast Television

By Rachele Morelli

In a recent decision, American Broadcasting Companies, Inc. v. Aereo, Inc., the Supreme Court of the United States granted to television broadcasters a sigh of relief under the Copyright Act of 1976. 573 U.S. __ (2014). The Supreme Court held Aereo, the internet-based broadcast television streaming service, infringed copyright holders' exclusive right to "perform" their works "publicly" within the meaning of the Transmit Clause of the 1976 Copyright Act. Id.

Prior to the 1976 amendment, the 1909 Copyright Act (the 1909 Act) granted copyright owners the right to publicly perform their works. Am. Broad. Cos. v. Aereo, Inc., 874 F. Supp. 2d 373 (S.D.N.Y. 2012). However, under the 1909 Act, to perform a copyrighted work publicly required a literal performance of the work. Id. The United States Supreme Court decided two cases under the 1909 Act that discussed cable television systems which received broadcast signals through antennas and then retransmitted those signals to its subscribers via coaxial cable. Id. Ultimately, the Court found that the defendants, the cable television systems, were not infringing the copyright holders' exclusive right to publicly perform, because the systems were not actually "performing" the copyrighted works through their transmittals. Id. Congress was extremely dissatisfied with the outcome of these cases and began efforts to amend the 1909 Act to account for the rapid advances in technology. Id.

In 1976, the Copyright Act (the 1976 Act) was amended with the intention of encompassing cable system providers within its scope. The 1976 Act provided that a copyright owner has the exclusive right to perform his/her copyrighted work publicly. See 17 U.S.C. §101; 17 U.S.C. §106(4). Further, the 1976 Act clarified that to "perform" an audiovisual work means "to show its images in any sequence or to make the sounds accompanying it audible." Id. Further, the addition of the Transmit Clause clarified that an entity performs a work "publicly" when it transmits or otherwise communicates a performance of the copyrighted work to the public. Id.

A significant case decided under the 1976 Act was "Cablevision". Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). There, the court found that Cablevision's transmission of a recorded program to an individual customer through its remote server Digital Video Recorder (RS-DVR) system was not a public performance, but rather more similar to a private performance. Id. at 137-40. The court premised its holding on two major facts: 1) that the RS-DVR system created unique copies of every program, and 2) that the transmission of the recorded program to each specific customer was produced solely from that unique copy. Id. at 137. The court reasoned that each private performance created a one-to-one relationship, because each user made an individual copy that was viewable only by that user. Id. The court found that the RS-DVR's private performances did not violate any rights because the 1976 Act only protects the right to make a public performance of a copyrighted work. Id.

In light of the Cablevision holding and the explosion of innovative portable Internet enabled devices, numerous services have emerged that offer online streaming of live broadcast television. Most services have formulated their streaming in accordance with the Cablevision case rationale and have devised systems that attempt to create a one-to-one relationship with each user to ensure that the performances would remain "private" rather than "public." These novel progressive services have produced widespread implications for the future of all broadcast television.

Aereo, Inc. is a part of this group of services that allows users to stream live broadcast television from any Internet-enabled device without giving proper compensation to the owners of the copyrighted material it transmits. The television producers, marketers, distributors and broadcasters that own the copyrights in many of the programs Aereo streams sued Aereo for infringing on their right to "perform" their copyrighted works "publicly." Aereo, Inc., 134 S.Ct. 2498, 2503 (2014). The case was first decided in July 2012 by the District Court for the Southern District of New York (Aereo, Inc., 874 F. Supp. 2d at 373), and affirmed in April 2013 by the Second Circuit (WNET, THIRTEEN, Fox Television Stations, Inc. v. Aereo, Inc., 712 F.3d 676). Both lower courts declined to find infringement because they analogized Aereo's service to the RS-DVR in Cablevision. Aereo, Inc., 874 F. Supp. 2d at 382-96; Aereo, 712 F.3d at 684-95.

The Supreme Court granted certiorari and heard Aereo unsuccessfully argue that its streamed Internet transmissions were not made "publicly" under the 1976 Act. Aereo, Inc., 573 U.S. at __. Aereo attempted to persuade the Court that its streams were not "public," and similar to the RS-DVR in Cablevision, because Aereo's system generated separate copies of each program and the transmission to each individual subscriber was created solely from those unique copies. The Court relied heavily on Congress' regulatory objectives and refused to allow the "behind the scenes" technological differences to distinguish Aereo from an ordinary cable provider that does publicly perform. Overall, the Court ruled in a 6-3 decision that Aereo transmits a performance of the copyrighted works to the public within the meaning of the Transmit Clause of the 1976 Act. Id. As a result of the Supreme Court's decision, the case was remanded to the lower court and Aereo suspended its services on June 28, 2014.

In coming to its decision, the Supreme Court predominantly focused on the actual purpose of Aereo's service: To provide live broadcast television in the same manner as a cable provider while circumventing the statutory obligations that are inherent in being a cable provider. Today, there is still great debate as to whether the streaming of websites marks an infringement under the 1976 Act. Regardless of the Supreme Court's ruling, it is highly unlikely that any of the website streaming services, like Aereo, will completely cease to exist. This case and many others in history have proven that there are often consequences when one attempts to combat technology rather than embrace it. The next step to resolve this issue, which stems from our society's inevitable advances in technology, would be statutory reform.

The primary issue presented in this matter is whether these online streaming services should be considered "cable system providers" under the 1976 Act. If these services are indeed viewed as cable system providers, as the Supreme Court found, then the statute should be amended to indicate their inclusion. The 1976 Act allows cable system providers to retransmit copyrighted works from broadcast television stations in exchange for paying a compulsory license fee, which is then distributed accordingly to the copyright holders. Aereo, 712 F.3d at 685. The statutory decision to include these online streaming services under the umbrella of "cable system providers," thereby allowing them to pay the ordinary license fees associated with retransmitting, may be the solution to the technological challenges we are confronted with today.

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This page contains a single entry from the blog posted on October 28, 2014 6:14 PM.

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