Aereo “Watch now” mode: public performance or private performance?

On March 14th, 2012 a new tech company backed by Barry Diller, Aereo, launched a cloud-based broadcasting device. The company rents users in the New York City area antennas and software based VCR’s and delivers the over-the-air (i.e. free) programming to the Internet for a $12 month subscription.

Aereo does not pay the TV networks or stations for retransmission, which has led to the broadcasters filing a complaint before the launch, on March 1st 2012, to stop the new service alleging that Aereo’s services are unlawful.

In its complaint, the TV networks, the Plaintiff, asserts three causes of action, which are (1) infringement of Plaintiff’s exclusive right of public performance, (2) infringement of Plaintiff’s exclusive right of reproduction, both under the Copyright Act, 17 U.S.C., (3) Aereo’s conduct constitutes unfair competition under the common law of the State of New York.

In opposition to the Plaintiff’s complaint, Aereo argues that (1) anyone has the right to watch free broadcast television using an antenna, (2) anyone has the right to record these shows and (3) anyone has the right to play the copy they made back to themselves.

Aereo moved to dismiss the unfair competition count, arguing that the federal public performance right should preempt according to section 301 of the Copyright Act, 17 U.S.C. The New York District Court granted the motion on May 21, 2012.

The most interesting issue in this case is whether there is a violation of the Plaintiff’s exclusive rights of public performance.

While the Plaintiff argued that, by transmitting one of their broadcasts, Aereo is engaging in a public performance which requires under copyright law a license; Aereo claimed that what it does is not a public performance.

Any physical act taken to make a work perceivable to the viewer or listener, or cause a work to be reproduced is a performance. As such, a television broadcast is a performance even though no one may watch it at all or if people watch it at home.

The legal standard for determining whether a performance is public is set forth in the 2008 “Cablevision” decision. In that case, the Court ruled that “because each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances “to the public”, and therefore do not infringe any exclusive right of public performance.”

The two relevant issues to consider are (1) the source of the transmission and (2) the potential audience for that specific transmission.

The Aereo device works this way: the customer can use the “Watch now” mode and thus activates an individual antenna exclusively assigned to her and makes a unique single copy accessible only to that customer and that she can play back to herself.

The source of the transmission is the copy that is recorded by the consumer and the potential audience is that same consumer only. It seems pretty clear that playing back one unique copy solely to oneself is a private performance, out of the scope of the US Copyright Act.

What is important to note here is that each consumer can play back her unique copy from her unique antenna. Had there been a same antenna for different customers, the question of public performance would have been stronger.

In trying to prove there is a public performance at stake, the plaintiffs argued that the Cablevision case was limited to time-shifted performances and that Aereo consumers do not time shift “live play”. However, Aereo explained that its device is a time-shifting technology because the consumer transmits to herself a recording, not a “live” signal. She can choose to watch it whenever she wants, including live with a Tivo-like pause option.

In deciding whether to issue an injunction, the Judge will have to consider the likelihood of success for the plaintiffs. She also will need to weigh whether broadcasters will suffer irreparable harm if an injunction isn’t issued versus the harm that a young company like Aereo will suffer if ordered to stop its primary business activity.

It seems pretty clear to me that the Cablevision analysis should apply to the Aereo technology and that by providing a unique antenna to subscribers, Aereo does nothing more than make it easier for subscribers to access a broadcaster’s free service. Aereo is just trying to make free TV better and does not disrupt the television industry. Anyone has a right to watch free air TV and Aereo strives to preserve that goal. Shutting down Aereo would stifle innovation and restrict consumers’ right to use new technologies. In the Cablevision decision, the Court rejected this attempt and hopefully will do the same in the present case.

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