28 June, 2014

Aereo's Streaming Service Infringes Copyright, Says Supreme Court

Having discussed the Aereo saga quite extensively through its litigation life cycle (speculation on the Supreme Court decision can be found here, discussion on the District Court decision here), this writer for one bated his breath waiting for the US Supreme Court decision on the case. Arguably the outcome of the Justices' deliberation is important, especially as the Internet is slowly overtaking traditional means of media distribution all over the world. Netflix alone has over 30 million subscribers, showcasing how the paradigm is shifting towards a more convenient, on-demand consumption of media. In the end the final word was the Supreme Court's.

For the uninitiated, the American Broadcasting Companies Inc v Aereo Inc case dealt with the web-based service Aereo, which offered, for a subscription fee, the streaming, recording and live watching of TV programming. This was done on an individual basis, and relied on the subscribes' request to watch a given show, live or not. Subsequently several broadcast companies objected to this as the service potentially infringed on their copyright, and took Aereo to court. Initial judgments have gone Aereo's way, and the final word fell on the Supreme Court.

The question for the court boiled down to whether Aereo's service was a public performance of copyrighted works under 17 USC section 106, or in other words a transmission of a performance, and as such, infringed the provision. In the vein of the historical decisions of Fortnightly and Teleprompter, the court equated Aereo's service to those of cable providers, with Justice Breyer (in the majority's opinion) stating that "[t]he subscribers of the Fortnightly and Teleprompter cable systems also selected what programs to display on their receiving sets... The same is true of an Aereo subscriber". Through this likeness the court decided that Aereo was indeed performing for the purposes of the provision, and Congress' intent was to prevent just that with the amendments after the aforementioned cases. The latter part of whether this performance was public remained in the Justices' deliberation.

Justice Breyer's decision assessed whether the performance was a transmission to the public mostly through the court's view on Congress' legislative intent, largely ignoring technological differences of the transmissions. Whether the transmissions are made to individuals makes no difference as "...the members of the public capable of receiving the performance... receive it in the same place or inseparate places and at the same time or at different times", which does not make a difference to whether it is to 'a public'. As long as several people have the potential to watch those programs, the transmission is to a public within the scope of the provision.

Sharon was distraught after the decision
Justice Breyer summarized the judgment well: "...having considered the details of Aereo's practices,we find them highly similar to those of the CATV systems in Fortnightly and Teleprompter. And those are activities that the 1976 amendments sought to bring within thescope of the Copyright Act. Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technologicalmanner in which it provides the service. We conclude that those differences are not adequate to place Aereo's activities outside the scope of the Act". Aereo therefore infringed the copyright of the TV broadcasts it transmitted, and was held liable.

Justice Scalia in the dissenting opinion saw things differently, and equated the service to more of a library card rather than an on-demand video service, as users access freely available content through a small antenna. The service is not automatic, and wholly relies on the user, furthering Justice Scalia's opinion. He outright rejects the majority's opinion on Aereo's potential performance, stating that "...Aereo does not “perform” for the sole and simple reason that it does not make the choice of content. And because Aereo does not perform, it cannot be held directly liable for infringing the Networks’ public-performance right".

The majority's opinion is an odd one, at least from the stand-point of argumentation. It relies heavily on Congress' intent, rather than the wording of the provisions. As was presented by Mitch Stoltz from SCOTUSBlog: "...the majority’s approach in Aereo transformed interpretation of the transmission clause into a common-law-style exercise in judicial discretion", leaving the provision very open to future application. Mr. Stoltz further argues that "[t]he opinion sets out guidelines that more closely resemble the open-ended fair use analysis, or perhaps the proximate cause analysis in a tort case", which one can wholly agree with. The future of the Transmit Clause remains less certain after the ruling, and its future effects on Internet service like Aereo will remain to be seen. Aereo for one will have to take steps and modify its service to remain usable.

Source: The Verge

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