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.

Follow me on Twitter: @devlinhartline

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

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One thought on “A Few Thoughts About Aereo…

  1. The problem is that you aren’t just saying Cablevision was bad law; you’re also saying that the DMCA’s safe harbor provisions are bad law as well.

    When you write things like “…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…” then you’re suggesting that a service provider can indeed be liable for making unauthorized copies on a subscriber’s behalf! You’re saying that the only way for a provider to be free of liability is for the provider to not monitor the hosted content in any way at all, doing nothing to handle unauthorized (or illegal) material beyond responding to properly-formatted DMCA takedown notices (or to requests by law enforcement).

    This hardly seems like a recipe for a well-operated service-provider market.

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