WNET v. Aereo: Is renting a TV antenna copyright infringement?

Aereo, Inc. allows subscribers to watch broadcast television over the internet.  The Aereo system also allows subscribers to record content and watch is later.  Owners of the television content sued Aereo for copyright infringement.

After filing suit, the content owners moved for a preliminary injunction to shut down the Aereo service.  The district court found in favor of Aereo and the content holders appealed to the United States District Court for the Second Circuit.

The Second Circuit noted that the outcome of this case comes down to whether Aereo violated the content holder’s public performance right.  The court found the Cablevision case dispositive of this issue. In Cablevision, a cable company offered its customers a remove DVR system accessible through their cable box.  For each program which a customer selected to record a separate copy of that program would be stored.  The second circuit in Cablevision held that the remote DVR did not violate copyright law and the recording and replaying of content was not a “public performance.”

the Cablevision court concluded that Cablevision’s transmission of a recorded program to an individual subscriber was not a public performance. Id. Each transmission of a program could be received by only one Cablevision customer, namely the customer who requested that the copy be created. No other Cablevision customer could receive a transmission generated from that particular copy. The “universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.” Id. at 137. The transmission was therefore not made “to the public” within the meaning of the Transmit Clause and did not infringe the plaintiffs’ public performance right. Id. at 138.

The court held that the Aereo system where an individual antenna was allocated to each subscriber was similar to the facts in Cablevision.

When an Aereo customer elects to watch or record a program using either the “Watch” or “Record” features, Aereo’s system creates a unique copy of that program on a portion of a hard drive assigned only to that Aereo user. And when an Aereo user chooses to watch the recorded program, whether (nearly) live or days after the program has aired, the transmission sent by Aereo and received by that user is generated from that unique copy. No other Aereo user can ever receive a transmission from that copy. Thus, just as in Cablevision, the potential audience of each Aereo transmission is the single user who requested that a program be recorded.

The content holders attempted several arguments at distinguishing Aereo’s service from Cablevision.  Including the fact that Cablevision had a license to transmit programming where Aereo had no license.

The court, however, rejected all of these arguments, including the license argument, holding that Aereo’s transmission are not “public performances” and therefore Aereo does not require a license.

Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not “public performances” of the Plaintiffs’ copyrighted works under Cablevision.

Moreover, the Aereo panel was unwilling to overrule Cablevision another panel decision by the Second Circuit.

Though presented as efforts to distinguish Cablevision, many of Plaintiffs’ arguments really urge us to overrule Cablevision. One panel of this Court, however, “cannot overrule a prior decision of another panel.” Union of Needletrades, Indus. & Textile Employees, AFL-CIO, CLC v. U.S. I.N.S., 336 F.3d 200, 210 (2d Cir. 2003). We are “bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court or by the Supreme Court.” United States v. Wilkerson, 361 F.3d 717, 732 (2d Cir. 2004).

The Second Circuit therefore affirmed the district court’s order denying the preliminary injunction and allowed Aereo to continue to operate while the content holder’s action proceeds in court.

One of the judge’s dissented finding Aereo’s technology platform 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. After capturing the broadcast signal, Aereo makes a copy of the selected program for each viewer, whether the user chooses to “Watch” now or “Record” for later. Under Aereo’s theory, by using these individual antennas and copies, it may retransmit, for example, the Super Bowl “live” to 50,000 subscribers and yet, because each subscriber has an individual antenna and a “unique recorded cop[y]” of the broadcast, these are “private” performances. Of course, the argument makes no sense. These are very much public performances.

In contrast to the authorized cable TV service at issue in Cablevision, the dissenting judge found that Aereo’s service is not authorized by the content providers and therefore runs afoul of the copyright act.

Aereo is doing precisely what cable companies, satellite television companies, and authorized Internet streaming companies do — they capture over-the-air broadcasts and retransmit them to customers — except that those entities are doing it legally, pursuant to statutory or negotiated licenses, for a fee. By accepting Aereo’s argument that it may do so without authorization and without paying a fee, the majority elevates form over substance. Its decision, in my view, conflicts with the text of the Copyright Act, its legislative history, and our case law.

The dissenting judge would have enjoined Aereo finding that, “Aereo’s transmission of live public broadcasts over the Internet to paying subscribers are unlicensed transmissions ‘to the public.'”

The content providers have appealed the panel decision to the full Second Circuit.  The content providers ask for a reconsideration of the panel decision based on their interpretation of the Copyright Act.  It will be interesting to see what the Second Circuit decides to do.