Applying Aereo: Dish’s Hopper with Sling

This is the second post in my “Applying Aereo” series. In the first post, I walked through the Supreme Court’s reasoning step-by-step. In this second installment, I’ll apply the holding of Aereo to Dish’s Hopper with Sling, and I’ll explain why I think Fox should lose on its new public performance claim against Dish. While some skeptics have complained that Aereo offers no guidance for courts to apply with other fact patterns, I think the Court’s holding can be applied here to show that the place-shifted performances enabled by Dish’s Hopper with Sling are private, not public. Rather than jeopardizing innovation, it seems to me that Aereo offers the type of relatively simple-to-apply bright-line rule that can foster it.

On July 7th, Fox and Dish returned to the Ninth Circuit for yet another round of oral argument in their ongoing copyright and contract battle. The parties had been there once before, with Fox losing its appeal of its denied preliminary injunction motion last year. In that first appeal, Fox challenged two features of Dish’s first-generation Hopper set-top DVR, namely, PrimeTime Anytime, which let subscribers record the prime-time lineup of the four major broadcasters, and AutoHop, which let subscribers watch those recordings back commercial-free. The Ninth Circuit agreed with the district court that Dish should not be enjoined since Fox was not likely to succeed on the merits of its reproduction right claims.

Early last year, Dish came out with its second-generation Hopper set-top DVR, Hopper with Sling, and a companion application, Dish Anywhere. The app lets subscribers stream live and recorded content from their personal Hopper with Sling DVRs to their mobile devices via the internet. Fox added a claim for this new place-shifting feature and sought to have it preliminarily enjoined. The district court denied the motion, bypassing the likelihood of success analysis in finding that Fox had failed to demonstrate irreparable harm—even if its success on the merits were presumed. The brunt of Fox’s second appeal thus concerned whether the district court applied the correct irreparable harm standard.

Even though the district court skipped over the merits of Fox’s new public performance claim, Fox and Dish nevertheless both argued it before the Ninth Circuit in the second appeal. Given that the district court didn’t consider these arguments in the first instance, it’s no surprise that the Ninth Circuit didn’t address them in its memorandum issued early last week. Fox has now lost this second appeal: The circuit panel agrees with Dish that the district court didn’t abuse its discretion in finding that Fox had failed to establish likely irreparable harm. Cross-motions for summary judgment on Fox’s new public performance claim are expected in the district court next month, so the battle over Dish’s Hopper with Sling is far from over.

The crux of Fox’s argument is that Dish itself performs since it causes the transmission to occur when content is streamed from a subscriber’s personal Hopper with Sling to a mobile device. Dish responds that it’s the subscriber who performs here, and it argues that even if Dish itself performs, the performance is private. Fox fires back that Dish “does all of the work”:

It sends the TV signals and copyrighted programs to the set top box (which it leases to the subscriber), converts them to a new format, creates a secure connection between the user’s set top box and their remote computer or device, and delivers the content to the consumer via the Internet so that it can be viewed on the Dish Anywhere website or mobile app.

After the Supreme Court issued its opinion in Aereo, both Fox and Dish filed letters with the Ninth Circuit Clerk of Court pursuant to FRAP 28(j) claiming that the Supreme Court’s interpretation of the public performance right supports their views. Fox’s letter to the Clerk contends:

[T]he Supreme Court rejected Aereo’s argument . . . that a performance is not “public” under the Copyright Act if each subscriber watches a unique, one-to-one stream of the program. Instead, the Court adopted Fox’s argument that the Copyright Act’s definition of public performance broadly encompasses any device or process that transmits Fox’s programming to the public, even if each person receives it at different times or different places.

While Dish’s letter to the Clerk responds:

[T]he Court’s decision relied upon the fact that Aereo “transmits to large numbers of paying subscribers who lack any prior relationship to the works.” . . . But the Court made absolutely clear that the Transmit Clause “does not extend” to a subscriber’s receipt of content she already owns or possesses. . . . “In addition, an entity does not transmit to the public if it does not transmit to a substantial number of people outside a family and its social circle.” . . . That is a direct reference to Sling.

These Aereo claims were reiterated by Fox and Dish during oral argument before the Ninth Circuit earlier this month (audio available here). In one interesting exchange, Circuit Judge Marsha Berzon scoffed at Fox’s lawyer’s suggestion that Dish’s Hopper with Sling was just like Aereo: “No, that’s completely different technology.” While judicial resolution of the merits of Fox’s new public performance claim will have to wait for another day, there’s no reason why we can’t look at how things stack up in light of Aereo.

In my last Aereo post, I went through the Supreme Court majority’s reasoning step-by-step, and it was a fairly lengthy post. However, the test from Aereo can be reformulated much more succinctly: (1) whether the defendant performs, and (2) whether the defendant performs publicly. As to the first element, the Court held that a defendant performs if its service is functionally equivalent to a cable system. As to second element, the Court laid down a bright-line rule:

[A]n entity that transmits a performance to individuals in their capacities as owners or possessors does not perform to “the public,” whereas an entity like Aereo that transmits to large numbers of paying subscribers who lack any prior relationship to the works does so perform.

This key passage establishes a relatively simple test for distinguishing public and private performances. The Court says that even if the service is performing, that performance is private so long as the subscriber has a “prior relationship” to the content. This is a version of the “who supplies the content” test that I have been advocating as the proper way to distinguish infringers from noninfringers in this context (see here, here, here, and here). When a service supplies content to a subscriber in the first instance, the performance is public. And when the subscriber has a “prior relationship” to the content, the performance is private. Aereo teaches that it’s not enough that the defendant transmits to members of the public; the relationship of the members of the public to the content being transmitted has to be taken into account as well.

Applying Aereo to Dish’s Hopper with Sling, I think the first element, i.e., whether Dish performs, is debatable. I’m sympathetic to Fox’s argument that Dish performs when content is streamed from a subscriber’s personal Hopper with Sling to a mobile device, but I’m also sympathetic to Dish’s argument that here it’s the subscriber who performs. I think the correct answer is that it’s both Dish and the subscriber who perform in this scenario, but, for whatever reason, the courts like to say it’s one party or the other. Given the Ninth Circuit’s resolution of the reproduction right claims in the first appeal, I think it will eventually side with Dish on this element. While I’m not convinced this is the right result, I don’t think it really matters in this case: If the performance is private, it’s noninfringing no matter who causes it.

Turning to the second element, i.e., whether Dish performs publicly, Fox is correct that “the Supreme Court rejected Aereo’s argument . . . that a performance is not ‘public’ under the Copyright Act if each subscriber watches a unique, one-to-one stream of the program.” But Dish is also correct that “the Court made absolutely clear that the Transmit Clause ‘does not extend’ to a subscriber’s receipt of content she already owns or possesses,” and the problem for Fox is that this is what counts here. If each transmission from a subscriber’s personal Hopper with Sling to a mobile device involves content to which the subscriber has a “prior relationship,” then under Aereo, each performance is private. Thus, we can apply Aereo’s bright-line rule to deduce whether the performance is public or private—even if we don’t know the identity of the performer.

Assuming Dish performs, how do we determine whether it “transmits a performance to individuals in their capacities as owners or possessors” or whether it “transmits to large numbers of paying subscribers who lack any prior relationship to the works”? The Supreme Court didn’t exactly spell out the contours of what constitutes this “prior relationship,” but it did tell us that Aereo’s subscribers didn’t have it. The Court also provided an analogy which clues us in on the distinction it’s making:

When, for example, a valet parking attendant returns cars to their drivers, we would not say that the parking service provides cars “to the public.” We would say that it provides the cars to their owners. We would say that a car dealership, on the other hand, does provide cars to the public, for it sells cars to individuals who lack a pre-existing relationship to the cars.

In the Court’s opinion, Aereo is like a “car dealership” since it “does provide cars to the public” who have no “pre-existing relationship to the cars.” To me, this indicates that the Court is concerned about the specific car being provided by the dealership. If I happen to already own one certain make and model car, the car dealership is still providing me with a car to which I have no “pre-existing relationship” when I later buy from it a second car of the same make and model. Applying that analogy, it’s not just any “prior relationship” to the content that the Court is concerned with. The question is whether the subscriber has a “prior relationship” to the particular content being transmitted by the particular defendant service.

A quick example illustrates this distinction: Say I purchase a DVD of “Frozen.” I then have a “relationship” to the content on the DVD, but this doesn’t mean I have a “prior relationship” to the content that’s transmitted when I later stream the movie from my cable company’s on-demand service. The on-demand performance offered by my cable company is public whether I own the DVD or not. While I may have a “prior relationship” to the movie since I already own the DVD, I don’t have a “prior relationship” to the particular ones-and-zeroes being transmitted from my cable company. My cable company is analogous to a “car dealership” since it’s selling me content to which I have no “pre-existing relationship.” Contrast this with a Dropbox-like cloud storage service. If I upload the content from my DVD to the cloud, I then do have a “prior relationship” to the content when I stream it back later. The cloud storage service in this scenario acts like a “valet parking attendant,” not a “car dealership.”

Turning back to Dish’s Hopper with Sling, Dish’s core satellite service is functionally equivalent to a cable system. When Dish transmits to its subscribers via satellite, it “transmits to large numbers of paying subscribers who lack any prior relationship to the works” being transmitted. These satellite transmissions are thus public performances, and they are the means by which Dish supplies content to its subscribers in the first instance. With this part of Dish’s service, Dish is like a “car dealership.” But a subsequent transmission from a subscriber’s personal Hopper with Sling to a mobile device is a separate performance, and it occurs only after the subscriber has obtained a “prior relationship” to the particular content being transmitted. With this part of Dish’s service, Dish is like a “valet parking attendant,” and the performance is therefore private. Even if Dish is presumed to be causing this later performance, it’s nonetheless noninfringing since Dish “transmits a performance to individuals in their capacities as owners or possessors,” i.e., it transmits content to which the subscriber has a “prior relationship.”

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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

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The Prior Restraint Issue in Garcia v. Google

The Ninth Circuit’s amended opinion in Garcia v. Google is now out, and the majority is sticking to its guns in granting Garcia preliminary injunctive relief against Google for its alleged copyright infringement. The facts are somewhat strange: Garcia had a minor part in a film, and she claims that she, and not the filmmaker, holds a protectable copyright right in her performance. Once the film appeared on YouTube, Garcia sent Google eight different DMCA takedown notices to have it removed. After Google failed to act on her requests, Garcia filed suit in the district court seeking injunctive relief against Google.

The district court denied that relief, finding that Garcia was unlikely to succeed on the merits of her copyright claim against Google. Garcia then turned to the Ninth Circuit, and in a divided opinion, that court has reversed. In the majority’s opinion, Garcia is likely to succeed on the merits of her copyright claim. In fact, the majority finds that all four preliminary injunction factors favor Garcia, and as such, it leaves in place its order from this past February: “Google, Inc. shall take down all copies of [the film] from YouTube.com and from any other platforms under Google’s control, and take all reasonable steps to prevent further uploads of [the film] to those platforms.”

The case has drawn so much attention that the Ninth Circuit created a webpage devoted to it. The appellate court even made a public request for amicus briefs, which it has added to that page. One of the arguments being made by Google and its amici is that the Ninth Circuit’s injunctive order against Google constitutes a prior restraint in violation of the First Amendment. The Ninth Circuit, in its amended opinion, brushes off this claim with little explanation. In this post, I’ll explain why I think the Ninth Circuit gets it right on the prior restraint issue.

Prior restraint is one of the more confusing—and confused—First Amendment doctrines. The origin of the doctrine is simple enough: Under English licensing schemes, publication of printed materials required the prior approval of a censor. Such schemes eventually fell out of favor, and the press became free to publish without first obtaining permission. As Blackstone noted in his Commentaries:

The liberty of the press is indeed essential to the nature of a free state; but this consists in laying no previous restraints upon publication, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public; to forbid this is to destroy the freedom of the press: but if he publishes what is improper, mischievous or illegal, he must take the consequence of his own temerity.

Thus, even though there was no prior restraint on what the press could publish, the press could nevertheless face subsequent punishment if it published something illegal. This represents the classic dichotomy between prior restraint and subsequent punishment, and it rests on the principle that it’s better to punish people after they’ve spoken than it is to prevent them from speaking in the first place. The notion that freedom of the press equates to freedom from prior restraint was baked right into the First Amendment. That’s what freedom of the press means.

The prior restraint doctrine has evolved quite a bit since Blackstone’s time, and the distinction between prior restraint and subsequent punishment has been rendered all but unrecognizable. Nevertheless, the doctrine still plays an important role in First Amendment analysis. True to its roots, the prior restraint doctrine is concerned with censorship of protected speech. It is not a substantive doctrine for determining whether certain speech is protected by the First Amendment; it instead focuses on the adequacy of any procedures used to restrain speech—even speech that may ultimately be unprotected. The doctrine is invoked in several different contexts, but the common denominator is that prior restraint ferrets out and condemns the unbridled discretion of a censor.

For example, the classic prior restraint is a licensing scheme, where the censor decides whether certain materials can be published in the first place. The Supreme Court has endorsed such a scheme, despite acknowledging that “the censor’s business is to censor,” so long as “it takes place under procedural safeguards designed to obviate the dangers of a censorship system.” The constitutionality of the scheme turns on whether the safeguards employed adequately constrain the censor’s discretion to restrain speech, and the Court finds it important that a restrained speaker has access to swift recourse in the courts so that a neutral party can double-check the censor’s work for error.

The prior restraint doctrine is also invoked in the context of a pretrial seizure of expressive materials. As with a licensing scheme, the issue here is whether the censor’s discretion is adequately constrained by the procedural safeguards employed. When the line between protected and unprotected speech is difficult to discern, such as with obscenity, the Supreme Court permits a pretrial seizure so long as “rigorous procedural safeguards,” such as a prior adversarial hearing, are employed before the seizure takes place. When circumstances dictate, the unbridled discretion of the agent-in-the-field is replaced by the neutral decisionmaking authority of the court, and the censor’s work is again double-checked by a neutral party.

Prior restraint also comes up quite often in the context of an injunction, as we have here in Garcia v. Google. With an injunction, the court itself is the censor, enforcing its speech restraint via its power of contempt. As with the prior restraint doctrine generally, the issue is whether the procedures employed adequately protect against the discretion of the censor. But the fact that the censor is the court changes things a bit. With a licensing scheme or pretrial seizure, the concern is that an agent of the executive branch will have too much discretion in separating protected from unprotected speech. We turn to a court to double-check the censor’s work because we trust its discretion, circumscribed, as it is, both substantively and procedurally.

The concern with an injunction, the Supreme Court has explained, is this:

The special vice of a prior restraint is that communication will be suppressed, either directly or by inducing excessive caution in the speaker, before an adequate determination that it is unprotected by the First Amendment.

Thus, with an injunction, the question becomes whether the court has made an “adequate determination” that the speech at issue is unprotected. Once this has happened, the speech can be enjoined without violating the First Amendment as an unconstitutional prior restraint. But how does this standard apply in a copyright case? As Professors Mark Lemley and Eugene Volokh have noted, when it comes to copyright claims, “preliminary injunctions are granted pretty much as a matter of course.” I think this makes sense, because, at least with wholesale copying, there is very little doubt that the defendant’s speech is unprotected by the First Amendment. To see why this is so requires a bit of unpacking.

When speech infringes a copyright right, that speech is unprotected by the First Amendment. Despite forbidding laws “abridging the freedom of speech,” the First Amendment is not abridged by the copyright laws that grant authors exclusive rights to their works. The Supreme Court has held that copyright rights and the First Amendment are balanced at the definitional level through two doctrines internal to copyright law, namely, the idea/expression dichotomy and fair use. I wrote about this substantive First Amendment analysis of copyright rights in two prior posts (here and here). The idea is simply that, as a matter of law, these two doctrines provide sufficient breathing space for the competing First Amendment values.

When the speech at issue is wholesale copying—by which I mean copying that would be “consumptive infringement,” as Terry Hart has called it, of entire copyrighted works—the court can very easily rule out the two doctrines that internally balance copyright rights with the First Amendment. This is so because a defendant that has engaged in such wholesale copying will usually have no colorable defense based on the idea/expression dichotomy or fair use doctrines. The defendant might have another defense that excuses the copying, such as a license, but then it’s the license that protects the copying—not the First Amendment. If a court enjoins speech that ultimately proves protected only by a license, then it cannot be a prior restraint since the doctrine applies only to constitutionally-protected speech. The licensed speech is simply not protected by the First Amendment—that’s why the licensee needs the license in the first place.

I think the hardest thing for people to keep separated is the fact that the First Amendment interests at issue in a copyright case depend on who the speaker is. For example, if I write a book about copyright law, my speech is fully protected by the First Amendment. If you come along and distribute copies of my book over the internet without my permission, your wholesale-copying-as-speech doesn’t get my full First Amendment protections. The problem for you is that it’s my speech that’s at issue—speech in which I hold a property right to exclude you from speaking. To be sure, your wholesale copying of my speech is to some extent also your speech, but your speech has to stand on its own two feet. And unless you can demonstrate that your wholesale copying of my speech is excused under the idea/expression dichotomy or fair use doctrines, your speech is not protected by the First Amendment.

Thus, I think the prior restraint doctrine is rather simple to apply when it comes to wholesale copying: Unless the defendant has some colorable defense under the idea/expression dichotomy or fair use doctrines, the court can enjoin the allegedly-infringing speech without the risk of restraining constitutionally-protected speech. That speech may turn out to be noninfringing (such as when the defendant can prove a license), but without either of these two First Amendment-grounded defenses, the speech isn’t constitutionally protected. The prior restraint doctrine is concerned with restraining speech that may ultimately turn out to be protected by the First Amendment, not with speech that is constitutionally unprotected yet potentially noninfringing.

But what about when it’s not wholesale copying? What if, to borrow Terry Hart’s terms again, the alleged infringement is “creative,” not “consumptive”? Or, put another way, what if the defendant does have a colorable defense based on the idea/expression dichotomy or fair use doctrines? Here, the situation is obviously different, and it’s possible that constitutionally-protected speech will be restrained. Yet, unlike with a licensing scheme or pretrial seizure, we’re not concerned about agents of the executive branch having too much discretion in separating protected from unprotected speech. The censor is the court, the neutral decisionmaker we entrust to make these difficult decisions.

When the issue is wholesale copying, the court can rule out prior restraint by simply looking to whether the defendant has raised either of the two First Amendment-grounded defenses. The court would then apply that initial merits determination to the rest of the four-factor preliminary injunction test, perhaps granting the injunction if the balance of equities tip in that direction. The same is true when it’s creative copying, only now there’s a chance the court will find that the defendant is likely to succeed on the merits of a First Amendment-grounded defense. Enjoining speech that is likely to be protected by the First Amendment is a prior restraint, and unless some exception based on the balance of equities applies, the injunction is unconstitutional. On the other hand, if the court finds that the defendant isn’t likely to succeed on a First Amendment-grounded defense, then it’s not a prior restraint since no constitutionally-protected speech is likely to be enjoined.

Take, for example, the Suntrust case, where the Eleventh Circuit vacated a preliminary injunction issued by the district court against an alleged infringer who argued a colorable fair use defense. The appellate court found that the alleged infringer was likely to succeed on the merits of her fair use defense, and as such, “the issuance of the injunction was at odds with the shared principles of the First Amendment and the copyright law, acting as a prior restraint on speech because the public had not had access to [the alleged infringer’s] ideas or viewpoint in the form of expression that she chose.” Having found that the use was likely fair, and thus protected by the First Amendment, the Eleventh Circuit struck down the preliminary injunction as a prior restraint.

So where does that leave us with Garcia v. Google? The prior restraint argument has been briefed at length by both of the parties and several amici. Google vigorously argues that enjoining it from providing the film on its platforms violates its own First Amendment rights. Think about this for a minute. Normally, Google would not be arguing that the user-generated content available on its platforms is its own speech. It would instead point to Section 230 or the DMCA to disavow its role as the speaker. But I think it’s true that Google is the speaker when it publicly performs works uploaded to its platforms by its users, so I’m glad to see it acknowledge its role as the speaker of the content here.

In its first motion for a stay, Google argues that the Ninth Circuit’s injunction “infringes on Google’s First Amendment rights because it prevents Google from exhibiting the Film on its websites.” This, Google argues, “is a clear infringement on Google’s First Amendment expression, given that the Supreme Court ‘has long held’ that movies ‘are protected expression.’” Google goes ever farther in its second motion for a stay, arguing that the risk of restraining constitutionally-protected speech here means that “only a particularly strong showing of likely success” can justify the injunction. While the Ninth Circuit did find Garcia likely to succeed on the merits, it nevertheless admitted that the point was “fairly debatable,” and Google claims this measurement of likely success is insufficient under Ninth Circuit prior restraint precedent.

Google makes the same arguments in its supplemental brief and in its petition for rehearing en banc. But all of Google’s hand-waving about its First Amendment rights misses the point. There is no doubt that the film is protected speech, and there is no doubt that enjoining Google will restrain speech that is protected. But that doesn’t mean it’s a prior restraint. Since this is a copyright claim, we have to keep track of whose speech it is—and it isn’t Google’s. While the film is undoubtedly protected speech, those full First Amendment protections belong to the copyright owner, not Google. Whether the owner is Garcia or the filmmaker doesn’t matter, because either way the question to be decided is whether the First Amendment protects Google’s copying of someone else’s copyrighted speech.

Google is arguing the wrong analytical track when it claims that the Ninth Circuit should have found a “strong showing of likely success” instead of the likely-yet-fairly-debatable amount of success it ultimately settled upon. That distinction would make a difference if Garcia were seeking an injunction against the filmmaker, since there the issue of the identity of the true author—i.e., the party with the full First Amendment protections—would be germane. If Garcia weren’t likely to succeed on the merits against the filmmaker, then enjoining the filmmaker’s speech, which would then be likely protected by the First Amendment, would be a prior restraint. But that’s not the case here, and there is no doubt that Google is not the author. Google’s prior restraint argument instead is properly analyzed as with any other instance of wholesale copying: The speech can only be protected by the First Amendment if Google has a colorable defense based on the idea/expression dichotomy or fair use doctrines.

Google, quite naturally, offers no such defense for its wholesale copying, and this has not gone unnoticed by the Ninth Circuit. The appellate court’s entire rebuttal to Google’s prior restraint argument is this:

The problem with Google’s position is that it rests entirely on the assertion that Garcia’s proposed injunction is an unconstitutional prior restraint of speech. But the First Amendment doesn’t protect copyright infringement. Cf. Eldred v. Ashcroft, 537 U.S. 186, 219–220 (2003). “First Amendment protections are ‘embodied in the Copyright Act’s distinction between copyrightable expression and uncopyrightable facts and ideas,’ and in the ‘latitude for scholarship and comment’ safeguarded by the fair use defense.” Golan v. Holder, 132 S. Ct. 873, 890 (2012) (quoting Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985)). Google hasn’t raised fair use as a defense in this appeal, see page 11 supra, so we do not consider it in determining its likelihood of success. This does not, of course, preclude Google from raising the point in the district court, provided it properly preserved the defense in its pleadings.

Thus, the Ninth Circuit comes to the same conclusion—albeit in a much more direct fashion—as I do: Since the issue is Google’s use of someone else’s copyrighted speech, Google’s own speech is not protected by the First Amendment unless it can claim a defense based on the idea/expression dichotomy or fair use doctrines. And since Google has never argued that either of these doctrines excuses its copying, the court can enjoin Google’s speech without the risk of restraining constitutionally-protected speech. By failing to establish that it has even the possibility of First Amendment protection for its wholesale copying of someone else’s copyrighted speech, Google has guaranteed that the injunction against it cannot possibly be a prior restraint. Of course, nothing is stopping Google from spreading whatever messages it pleases, and the marketplace of ideas likewise continues to thrive none the lesser.

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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

Posted in Constitutional Theory, Copyright Theory | Tagged , , , , , , | 2 Comments

Applying Aereo: The Supreme Court’s Reasoning

Since there’s been a lot of concern about how Aereo applies to other services, I thought I’d offer a pair of posts looking at the majority’s reasoning in Aereo and then applying it to a concrete issue that is currently being litigated. In this first post, I’ll walk through the Aereo majority’s thinking step-by-step, adding my own commentary as I go. In the next post, I’ll look at the parties’ arguments in the Fox v. Dish appeal concerning Dish’s Sling service, and I’ll explain why I think Dish should prevail on that narrow public performance issue in light of the majority’s reasoning in Aereo.

Despite some claims that the Aereo majority’s reasoning was atextual, the majority in fact analyzed the relevant statutory text, turning to the statute’s purpose and legislative history to help fill in the gaps. The primary statutes at issue in Aereo were the public performance right under Section 106(4) and the Transmit Clause under Section 101. The former grants the public performance right to authors, while the latter defines one way the public performance right may be infringed: “To perform a work ‘publicly’ means . . . to transmit or otherwise communicate a performance . . . of the work . . . to the public, by means of any device or process.”

The Aereo majority noted that there were two relevant inquiries under the 1976 Copyright Act:

This case requires us to answer two questions: First, in operating in the manner described above, does Aereo “perform” at all? And second, if so, does Aereo do so “publicly”?

As to the word “perform,” the majority remarked that the Act’s text “does not clearly differentiate when an entity ‘perform[s]’ (or ‘transmit[s]’) and when it merely supplies equipment that allows others to do so.” Nevertheless, the majority held that “when read in light of its purpose, the Act is unmistakable: An entity that engages in activities like Aereo’s performs.” By the Act’s “purpose,” the majority was referring to the history of the public performance right and the Transmit Clause with the 1976 Copyright Act.

In the late ‘60s, the Court held that CATV systems, which used antennas to receive broadcasts that were then retransmitted to their viewers, were not publicly performing since they were not acting like broadcasters. The Court thought CATV systems were acting more like viewers, whom it considered not to perform at all. In the early ’70s, the Court reinforced this view when it held that the distance between CATV systems and their viewers was irrelevant. The Aereo majority noted that the 1976 Act was created to legislatively abrogate the Court’s narrow holdings in these two opinions, and it found that the modern Act included three innovations that were relevant to analyzing Aereo’s service.

The majority relied on the text of the 1976 Act and its legislative history to state that there are actually two performances with the current broadcaster-viewer model: It’s one performance when the broadcaster sends the transmission to its viewer, and it’s another performance when the viewer renders that transmission viewable (such as with a television or computer screen). Also relying on the statutory text and history, the majority remarked on the intended breadth of the public performance right, which includes “not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public.”

Given the text, purpose, and legislative history of the Transmit Clause, the majority reasoned that the Clause “makes clear that an entity that acts like a CATV system itself performs, even if when doing so, it simply enhances viewers’ ability to receive broadcast television signals.” Some have ridiculed this test as standing for mere guilt-by-association, but I think that misses the point. It’s not that the Transmit Clause was enacted to capture only cable systems. It was instead worded broadly to include any service that functions the same as a cable system. It’s not guilt-by-association; it’s liability for engaging in conduct the Clause directly and designedly proscribes.

The majority then turned to the text and legislative history of Section 111, which regulates retransmissions of broadcasts by cable systems. In the majority’s view, the purpose of these three innovations was to bring “the activities of cable systems within the scope of the Copyright Act.” But, again, it wasn’t just cable systems that the Transmit Clause was crafted to regulate. The language Congress chose was far broader, covering “any device or process” that transmits “to the public.” This includes cable systems, but it also includes any service that is functionally equivalent to a cable system—such as Aereo’s.

The majority reasoned that Aereo was more than an equipment provider, and that it, “and not just its subscribers, ‘perform[s]’ (or ‘transmit[s]’).” Again citing the legislative history, the majority deduced that “Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the Act to reach.” The majority listed the reasons why Aereo was just like the cable systems the 1976 Act brought within its ambit:

Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, almost as they are being broadcast. In providing this service, Aereo uses its own equipment, housed in a centralized warehouse, outside of its users homes. By means of its technology (antennas, transcoders, and servers), Aereo’s system “receive[s] programs that have been released to the public and carr[ies] them by private channels to additional viewers.” . . . It “carr[ies] … whatever programs [it] receive[s],” and it offers “all the programming” of each over-the-air station it carries.

Thus, relying on the statutory text, purpose, and legislative history, the Court held that Aereo was the functional equivalent of a cable system because of all of the things Aereo did to cause the transmissions to occur. The majority here applied the volitional conduct test, which I have previously argued is the proper analysis for this issue. The test looks at the conduct engaged in by the defendant that caused the particular performance to occur. As Copyhype’s Terry Hart has explained, the law does not “excuse as a legal cause an actor engaged in the factual cause of a harm when its conduct is functionally equivalent to the conduct of an actor clearly within the scope of the Copyright Act.”

Implicit in the majority’s reasoning was the conclusion that Aereo crossed the line from being a passive conduit to being an active participant because it functioned just like a cable system. It provided a service utilizing its centrally-housed equipment to receive broadcasts that were then retransmitted to members of the public. This is the same thing cable systems do, and it’s the same thing the Transmit Clause defines to be an infringement of the public performance right. The majority found that the differences between Aereo and a cable system were not critical. For example, the fact that Aereo didn’t constantly transmit like a cable system didn’t mean that Aereo was not performing when it did in fact transmit.

Having concluded that Aereo performed, the majority then turned to the question of whether these performances were public or private. The majority assumed that the transmissions from Aereo to its users were different performances than the earlier transmissions from the broadcasters to Aereo. Citing the statutory text and the Second Circuit’s holding in a different case, the Aereo majority explained that a performance requires contemporaneous perceptibility:

[T]o transmit a performance of (at least) an audiovisual work means to communicate contemporaneously visible images and contemporaneously audible sounds of the work. . . . Aereo thereby “communicate[s]” to the subscriber, by means of a “device or process,” the work’s images and sounds. . . . And those images and sounds are contemporaneously visible and audible on the subscriber’s computer (or other Internet-connected device). So under our assumed definition, Aereo transmits a performance whenever its subscribers watch a program.

As to why Aereo’s transmissions were “to the public,” the majority disagreed with Aereo that its use of personal copies for individual users meant that the performances were private, and it concluded that the technological details “behind-the-scenes” didn’t change the fact that Aereo’s service was functionally equivalent to a cable system. Moreover, the majority found that the text of the Transmit Clause “suggests that an entity may transmit a performance through multiple, discrete transmissions.” The majority thus held “that when an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it transmits a performance to them regardless of the number of discrete communications it makes.”

The majority then looked at the relationship between Aereo and its users:

[T]he subscribers to whom Aereo transmits television programs constitute “the public.” Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other. This matters because, although the Act does not define “the public,” it specifies that an entity performs publicly when it performs at “any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” . . . The Act thereby suggests that “the public” consists of a large group of people outside of a family and friends.

Having reiterated that Aereo performed, the majority considered whether these performances were public or private. The majority reasoned that since Aereo’s relationship with its users was public, these performances were likewise public. Furthermore, the majority found it important that Aereo’s users were not “owners or possessors of the underlying works,” meaning, the users had no preexisting ownership or possessory interests in the content being transmitted. This was relevant, “because when an entity performs to a set of people, whether they constitute ‘the public’ often depends upon their relationship to the underlying work.”

Thus, the relationship between Aereo and its users, as well as the relationship between its users and the content being transmitted, meant that the performances were public. The majority held that when a service functioned just like a cable system, receiving and then retransmitting content to members of the public who had no prior ownership or possessory interests in that content, the performances were “to the public” under the Transmit Clause. It mattered not whether the members of the public were “situated together, spatially or temporally,” or whether they “may receive the same programs at different times and locations.”

Agreeing with Aereo, the majority stated “that Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies.” And the majority indicated that its holding should not have this negative effect since its analysis focused on functional equivalence to cable systems and did “not extend to those who act as owners or possessors of the relevant product.” Furthermore, the majority emphasized that “an entity does not transmit to the public if it does not transmit to a substantial number of people outside of a family and its social circle.”

In my next post, I’ll look at how the majority’s reasoning in Aereo applies to Dish’s Sling service, an issue currently being considered by the Ninth Circuit in the Fox v. Dish appeal.

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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

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Law Theories Public License 1.0

Now that the Repost plugin is discontinued, I’ve added a public license grant to each of my posts so that others may freely share them. The posts are still copyrighted, and I am the legal titleholder to the copyrights, but I am relieving members of the public of the duty not to engage in the uses listed in Sections 106(1)-(5) of Title 17. This license, of course, does not affect the privileges of others to engage in fair uses of my posts or to use the unprotectable ideas contained therein.

The use-privileges so licensed replace my exclusive rights with no-rights, meaning, I have no legally enforceable claims against those who exercise these licensed privileges. The license is subject to two conditions of attribution, meaning, unless these two conditions are met, there is no license to use my posts. The attribution conditions are that users of my posts must provide my name as the author of the original posts and a link to the original posts on this blog.

The license grant is revocable, meaning, I can change my mind later, even arbitrarily and capriciously, to revoke your license (though I don’t foresee doing this unless circumstances are unusual or extreme). It is nonsublicensable, meaning, you cannot license my posts to anyone else (others can easily get their licenses directly from me under this license). It is nontransferable, meaning, I grant the license to you, but you then cannot transfer your license to someone else. And it is nonexclusive, meaning, I can and do grant this license to people other than you.

Here is the license:

Law Theories Public License 1.0

License Grant: I hereby grant you a revocable, nonsublicensable, nontransferable, and nonexclusive license to reproduce, adapt, publicly distribute, publicly perform, and publicly display this post subject to two conditions of attribution, namely, (1) you must provide my name (“Devlin Hartline”) as the author of the original post, and (2) you must provide a link to the original post on my blog (“lawtheories.com”).

So, in short, you can copy, remix, and freely share my posts with others, so long as you give me credit as the original author and link back to my original posts. If anyone would like the HTML versions of my posts to save time on formatting (or for any other reason), just send an email to devlinhartline@gmail.com and I’ll gladly provide them to you.

Special thanks to Terry Hart for his valuable feedback in drafting this post.

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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

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A Few Thoughts About Aereo…

As all copyright law geeks are surely aware, the Supreme Court ruled 6-3 today that Aereo infringes the public performance rights of the broadcaster plaintiffs. As I have been arguing (here and here), I think the simplest way to separate the Dropbox-like sheep from the Aereo-like goats is to focus on who supplies the content. Dropbox-like cloud computing services are used to access content the users already have a legitimate possessory interest in, such as content legally acquired from iTunes. Aereo-like services, on the contrary, provide that content to users in the first instance. There’s a big difference between storing legitimately-obtained content in the cloud for later retrieval and obtaining that content for the first time.

When content is obtained via cable, satellite, or antenna, those services have licenses to either publicly distribute, publicly display, or publicly perform the content. They need licenses because that content is being transmitted to the public, that is, supplied to members of the public, in the first instance. The majority rejected the argument that it was only the users who performed because they pushed a button to initiate the transmissions. I think this is correct, because focusing solely on the fact that users pushed a button, as the dissent would do, ignores all of the volitional conduct the service itself engaged in that caused the transmissions to occur. Aereo is not in the equipment rental business; it’s in the business of providing an ongoing service that supplies content to its users in the first instance.

Leading up the oral argument, there was much debate about which performance Aereo was transmitting. As the majority noted:

Petitioners say Aereo transmits a prior performance of their works. Thus when Aereo retransmits a network’s prior broadcast, the underlying broadcast (itself a performance) is the performance that Aereo transmits. Aereo . . . says the performance it transmits is the new performance created by its act of transmitting. That performance comes into existence when Aereo streams the sounds and images of a broadcast program to a subscriber’s screen.

I didn’t mention this facet of the case in my prior posts because I didn’t think it made any difference, or for that matter, any sense. The majority assumed “arguendo” that Aereo’s view (that it’s a new performance) was correct, and I happen to agree with Aereo on this point. But ultimately I agree with the majority that whether it’s the original performance or a new performance is irrelevant. The question isn’t which performance is being transmitted, it’s whether any performance is being transmitted. Said the majority:

When an Aereo subscriber selects a program to watch, Aereo streams the program over the Internet to that subscriber. Aereo thereby “communicate[s]” to the subscriber, by means of a “device or process,” the work’s images and sounds. . . . So under our assumed definition, Aereo transmits a performance whenever its subscribers watch a program.

The majority’s analysis as to why Aereo transmits “to the public” should be particularly worrisome to supporters of the infamous Cablevision opinion. Aereo, following Cablevision’s lead, argued that the one-to-one relationship between the source copies and the users meant that the transmissions were private, not public. I looked at this argument in prior posts (here and here), and I argued that there’s no textual basis for it in the Transmit Clause and that the number of source copies is irrelevant. The Clause only looks at who is transmitting to whom, not the source copy of that transmission. The majority agreed:

We do not see how the fact that Aereo transmits via personal copies of programs could make a difference. The Act applies to transmissions “by means of any device or process.” . . . And retransmitting a television program using user-specific copies is a “process” of transmitting a performance. . . . So whether Aereo transmits from the same or separate copies, it performs the same work . . . . Therefore, when Aereo streams the same television program to multiple subscribers, it “transmit[s] … a performance” to all of them.

Recall that the Second Circuit in Cablevision held that the performances were private because of this one-to-one relationship between the source copies and the users. After Aereo, I don’t see how that’s still good law. Moreover, the Second Circuit didn’t actually say who was doing the transmitting, but Aereo makes clear that the service provider is causing the transmissions to occur. Thus, I think the Court has implicitly overruled Cablevision. And, for that matter, it rejected the one source copy theory advanced by the Nimmer on Copyright treatise, which was the genesis of this one-to-one argument in the first place.

But what about my theory that what matters is who supplies the content? The majority adopted that rationale in this passage:

Neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the underlying works. This is relevant because when an entity performs to a set of people, whether they constitute “the public” often depends upon their relationship to the underlying work.

When, for example, a valet parking attendant returns cars to their drivers, we would not say that the parking service provides cars “to the public.” We would say that it provides the cars to their owners. We would say that a car dealership, on the other hand, does provide cars to the public, for it sells cars to individuals who lack a pre-existing relationship to the cars.

Similarly, an entity that transmits a performance to individuals in their capacities as owners or possessors does not perform to “the public,” whereas an entity like Aereo that transmits to large numbers of paying subscribers who lack any prior relationship to the works does so perform.

In other words, when the users are the “owners or possessors of the underlying work,” that is, copies of the work, such as with Dropbox-like services where users upload content they already legally possess, the service is not supplying the content. That content comes from the users themselves. The analogy to the difference between a valet and a car dealership came directly from Paul Clement’s oral argument before the Court, which I wrote about previously (here). Aereo is like the car dealership, and not the valet, because it supplies the content to the public in the first instance. And, as such, it is publicly performing.

All-in-all, I think the majority reaches the right conclusions for the right reasons. I’m sure I’ll have much more to say about the opinion once I’ve had more time to digest it all.

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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.

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