American Broadcasting Cos. v. Aereo, Inc.
134 S. Ct. 2498, 2014 U.S. LEXIS 4496, 189 L. Ed. 2d 476 (2014)
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Rule of Law:
A company that captures broadcast television signals and retransmits them to paying subscribers over the internet contemporaneously with the broadcast is engaging in a public performance under the Copyright Act. Technological distinctions that make a service functionally equivalent to a traditional cable television provider are insufficient to exempt it from copyright liability.
Facts:
- Aereo, Inc. offered a subscription service for a monthly fee that allowed users to watch broadcast television programs over the Internet.
- The service enabled subscribers to watch programs on various devices, such as computers and smartphones, nearly live as they were being broadcast.
- Aereo's system consisted of a large, centralized warehouse of thousands of dime-sized television antennas.
- When a subscriber selected a program to watch, Aereo's system assigned a unique antenna to that individual subscriber for the duration of the program.
- The system then created a subscriber-specific copy of the program from the over-the-air signals received by that dedicated antenna.
- Aereo streamed this individual copy from its servers to the specific subscriber's device.
- Aereo did not hold a license from the copyright owners of the broadcast programs to retransmit their works.
Procedural Posture:
- Television producers and broadcasters sued Aereo, Inc. in the U.S. District Court for the Southern District of New York, alleging copyright infringement.
- The plaintiffs sought a preliminary injunction to halt Aereo's operations.
- The District Court, as the court of first instance, denied the motion for a preliminary injunction.
- The plaintiffs, as appellants, appealed to the U.S. Court of Appeals for the Second Circuit.
- A divided panel of the Second Circuit, an intermediate appellate court, affirmed the District Court's decision, holding Aereo did not perform 'publicly.'
- The Second Circuit denied a petition for rehearing en banc.
- The plaintiffs, as petitioners, successfully petitioned the U.S. Supreme Court for a writ of certiorari.
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Issue:
Does a company publicly perform a copyrighted work, in violation of the Copyright Act's Transmit Clause, when it sells a service that allows subscribers to watch television programs over the Internet at about the same time they are broadcast over the air?
Opinions:
Majority - Justice Breyer
Yes, a company publicly performs a copyrighted work under these circumstances. Aereo's service is substantially similar to the community antenna television (CATV) systems that Congress intended to bring within the scope of the Copyright Act in its 1976 amendments. Looking beyond the technical details, Aereo's business model is not merely to provide equipment but to sell a service that retransmits copyrighted television programming to the public, which is the functional equivalent of a cable company. Transmitting the same work to numerous, unrelated subscribers constitutes a performance 'to the public,' even if done through individual, one-to-one streams, because the overall audience is the public and the Transmit Clause specifies that members of the public may receive the performance at different times or in different places.
Dissenting - Justice Scalia
No, a company does not publicly perform a copyrighted work under these circumstances. Aereo does not 'perform' at all because it lacks the necessary volitional conduct directed at the copyrighted work; it is the subscriber who selects the content to be transmitted. Aereo merely provides automated equipment that responds to user commands, making it analogous to a copy shop or a provider of remote storage DVRs, not a cable company that curates and selects content. The majority invents an unprincipled and vague 'looks-like-cable-TV' standard that disrupts the settled volitional-conduct rule for direct copyright liability and will create significant uncertainty for future technologies.
Analysis:
This decision solidifies the principle of substance over form in copyright law, particularly concerning retransmission technologies. By classifying Aereo as functionally equivalent to a cable company, the Court signaled that clever technological workarounds designed to exploit perceived loopholes in the Copyright Act will be viewed skeptically. The ruling strongly protects the public performance right of broadcasters in the digital age. However, the Court's reliance on an analogy to cable TV, rather than a clear technological test, created ambiguity for other cloud-based services and technologies that rely on user-initiated actions, leaving their legal status to be determined in future cases.
