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

Copyright and Advert Hopping

To the avid TV watcher, commercials can be both the bane of their existence, providing a break at the crucial moment of your favorite show just when it got interesting, or giving you the perfect opportunity to make a quick snack or to dash off into the bathroom. Since the advent of digital means to record TV, both through the early years of VCRs down till the modern DVR or even recording live TV on demand when you desperately need to pause the action, consumers have always wanted a way to skip them if they so please. For companies who provide your weekly fix of digital entertainment galore, they're a necessary source of revenue. These two conflicting interests pose a dilemma, and a struggle from both sides to keep their respective interests in front of the other. But could skipping commercials infringe copyright? In a recent decision, the US Ninth Circuit Court of Appeals had to decide this very fact.

Foxes are very protective of their copyright

The case of Fox Broadcasting Company v Dish Network LLC concerned a service offered by Dish called the "Hopper". What this little nifty device was what is commonly referred to as a DVR, a Digital Video Recorder, which can be set to record any given TV show at any given time, much like its analogue cousin back in the era of VCRs. After some years of launching its Hopper device, Dish started to offer a capability in the device called "Autohop", which automatically would skip over commercials, only subjecting the person watching the show to the first few seconds and the last few seconds of any given commercial break. Unlike older versions of similar technologies, the function does not require any action on the viewer's part, but skips the commercials once the feature is enabled, whereas in older iterations of DVRs one would only have the ability to skip a certain time, for example 30 second increments. Fox Broadcasting and Dish had a contract between them, where among other things Dish customers were not to be able to fast-forward through any commercials when recording Fox's shows. Fox subsequently sued Dish for breach of contract and copyright infringement, of which the latter is of more interests to us in this instance.

In seeking a preliminary injunction, stopping Dish's service, Fox would have to prove (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. In analyzing the court's decision at first instance, the Court of Appeals looked through precedent to establish whether Fox's claim would fulfill the above criteria to acquire an injunction. Drawing from the Sony Betamax case (discussed on this blog here) the court had to assess whether Dish's service would fall under fair use, which it did. In their decision the court saw that the District Court had correctly decided that Fox did not have a likelihood of success in their case, as Dish was not the one making the copy of the program; Fox would not have suffered irreparable harm due to Dish's service; nor was there a public interest for the granting of an injunction. In finding that there was no likelihood of success for Fox, the court saw that the scales were not tipping in their favor, which solidified Fox's case as one which did not merit an injunction.

The court did note that Fox did not have a claim to begin with as they do not own the copyright to any of the advertisements shown on its network. Without copyright there cannot really be infringement on that copyright, or at least a claim for such. Arguably the court's view was the correct one, and forcing consumers to watch adverts through technological means seems harsh at best. Technology should be used to enable better consumer experiences as opposed to being force-fed something which they potentially don't want to see. Fox can still claim damages for copies made by Dish for quality assurance purposes, which did infringe copyright, but whether they take action will remain to be seen, although seemingly a point of principle should they opt to do so.

Source: Electronic Frontier Foundation

Retrospective - Betamax and Copyright Infringement

When copyright is concerned there has always been a struggle between two competing interests; copyright owners who wish to benefit from the fruits of their labor, and the consumers who want to utilize copyrighted material, sometimes to the potential detriment of the former party. As new methods have emerged in the consumption of copyrighted works, so have the wishes of the owners to protect their material gotten louder. At the end of that path to equilibrium lies a simple albeit still complex question: do people have the right to use copyrighted material in manners which the owner's object to?

One of the most influential cases of the past few decades, Sony Corporation of America v Universal City Studios, endeavored to tackle that issue in relation to a wholly new piece of technology; Betamax tapes. For those born after the 70s (this writer included), Betamax tapes were akin to VHS cassettes which were used to both view and record movies and TV shows, much like DVDs today. This technology enable the recording and re-watching of content on TV at a later date outside of the broadcast times or releases of commercial copies of those programs. Universal Studios and Disney objected to this new technology as it clashed with their interest in re-releasing content to be sold to consumers, which they clearly would not buy should they have recorded the programs once they were broadcast on TV. Subsequently Universal Studios took Sony to court, eventually ending up in the US Supreme Court.

"What is this 'video cassette' you speak of..?"

What the court had to assess was whether the users of Betamax, who recorded content broadcast on TV, were infringing copyright and whether Sony could be held responsible for that infringement. In essence what was being decided was whether Sony was making the infringement of copyright possible by providing the users with this capability through their Betamax recorders, thus being liable for their infringement. What makes this argument is that at the time no such express provision existed in copyright, however Universal argued that Sony was liable for contributory infringement, a principle relating to patents and not copyright. The court put forth that this would come down to assessing whether "...the product is widely used for legitimate, unobjectionable purposes". What this means is just looking at whether the recorder would be used for recording TV programs for a legitimate, unobjectionable purpose, such as for later viewing for the sake of convenience, and not for example used for commercial copying of content. Clearly one could argue that domestic copying of content in that fashion is a non-objectionable use and wholly legitimate, and at the time was one of the primary uses for the device. There always has to be a balance between the legitimate interests of users and the protection afforded to copyright owners.

For Sony to be deemed to be liable under contributory infringement, the court had to decide whether Betamax recorders are capable of commercially significant non-infringing uses. This could be seen as whether the non-infringing uses would impact Universal Studios, or others, commercially through those uses. The court stated that it would be a matter of exploring all possible uses for the machines and determining whether those uses would be infringing or not, and what amount of uses would be commercially significant. The court did decide that Betamax recorders could be capable of commercially significant non-infringing uses, but for Sony to be liable there still remained the factor of whether those uses would be infringing ones.

How teenagers view older generations and themselves

The court drew its attention to the US fair use provision in deciding whether domestic time-shifting would be an infringing act. The court accepted the District Court's findings and saw that domestic time-shifting of content would fall under fair use. This was due to Sony's evidence as to the licensing of content for broadcasting on free TV, and content providers not objecting to its recording for viewing at a later time, and Universal could not show any actual damage caused due to time-shifting.

The decision swayed 5-4 in favor of Sony, but the dissenting opinion given by Justice Blackmun could've shaped copyright in a wholly different manner should it have been the majority opinion. The dissenting view was one which emphasized the exclusive rights given to copyright owners, noting that in their opinion expanding fair use would take away control for the copyright owners and deprive them of their incentive to create. Justice Blackmun also noted that fair use should apply mainly to 'productive' uses of works, such as for criticism and review, and prohibit their uses for 'unproductive' purposes such as time-shifting. Arguably Justice Blackmun's views come from a wrong approach, one which protects the copyright holder's rights but completely ignores the evolving needs and uses by ordinary consumers, thus creating an imbalance. Justice Blackmun also criticized the majority's approach in deciding contributory infringement through the capability of commercially significant non-infringing uses in stating that "[s]uch a definition essentially eviscerates the concept of contributory infringement. Only the most unimaginative manufacturer would be unable to demonstrate that a image-duplicating product is "capable" of substantial noninfringing uses. Surely Congress desired to prevent the sale of products that are used almost exclusively to infringe copyrights; the fact that noninfringing uses exist presumably would have little bearing on that desire".

All-in-all Sony v Universal Studios made an important mark on copyright and fair use, and has helped in formulating current principles in both. Should Sony have been found liable for contributory infringement, how we record or enjoy media today could be totally different. Manufacturers would have to either pay hefty licensing fees for any recording devices, the cost of which would have been undoubtedly transferred onto the end-consumer, or the manufacturers would have refrained from producing such devices completely. As someone who grew up using VHS recorders to watch content, I can't imagine a World without such a capability.