This is the third post in my “Applying Aereo” series. In the first post, I walked through the Supreme Court’s holding that Aereo performs publicly with its near-simultaneous transmissions. In the second post, I applied that holding to the public performance issue in the Fox v. Dish litigation over Dish’s Hopper with Sling. In this third post, I’ll look at Aereo’s argument as to why its time-shifted transmissions are not public performances, and I’ll explain why I think Aereo gets it wrong on the merits. While the Supreme Court did not address these time-shifted transmissions directly, I think they are nevertheless clearly infringing under the Court’s rationale.
Aereo’s service offers both near-simultaneous transmissions of broadcasts (its “Watch Now” function) as well as time-shifted transmissions from recordings of broadcasts (its “Record” function), but it’s only the former that the Supreme Court looked at in its Aereo decision since the plaintiffs did not challenge the latter. As Justice Scalia noted in his dissent, which I discussed in my last post, this leaves a very big issue on the table:
Today’s decision addresses the legality of Aereo’s “watch” function, which provides nearly contemporaneous access to live broadcasts. On remand, one of the first questions the lower courts will face is whether Aereo’s “record” function, which allows subscribers to save a program while it is airing and watch it later, infringes the Networks’ public-performance right.
Scalia’s crystal ball was correct. In fact, Aereo filed an emergency memorandum raising that very question on the same day that the Second Circuit remanded the case to the district court. In the memorandum, which for procedural reasons the district court struck from the record the next day, Aereo makes the conclusory claim that the “Supreme Court’s decision recognizes that Aereo’s time-shifted ‘Record’ function does not violate Plaintiffs’ public performance rights.” No explanation of how this is so was offered.
Two weeks later, the plaintiffs filed a memorandum requesting that the court preliminary enjoin Aereo “from streaming, transmitting, retransmitting, or otherwise publicly performing any Copyrighted Programming over the Internet (through websites such as aereo.com), or by means of any device or process throughout the United States of America.” In the memorandum, the plaintiffs take issue with Aereo’s notion that its time-shifted transmissions are not public performances: “Aereo’s suggestion that it can operate without infringing as long as it delays retransmissions so they are not made simultaneously with the original broadcast reflects a serious misunderstanding of Aereo III and the law.” (“Aereo III” refers to the Supreme Court’s opinion.)
The plaintiffs primarily focus on the “different times” language in the Transmit Clause to argue that simply delaying the transmissions doesn’t transform them into private performances:
The Supreme Court’s interpretation of the Transmit Clause makes clear that Aereo’s retransmissions of the same programs to its subscribers are public performances, regardless of whether the retransmissions are made at the “same time” or at “different times.” 134 S. Ct. at 2509-10. Specifically, the Supreme Court held that Aereo publicly performs Plaintiffs’ copyrighted programs when it retransmits their contemporaneously perceptible images and sounds to its subscribers over the Internet. Id. at 2509. And it made clear that Aereo’s retransmissions are a public performance even if they do not occur simultaneously with the broadcast or with each other[.]
The plaintiffs also argue that these time-shifted transmissions involve content to which the user has no “prior relationship,” thus making them public performances:
[T]he Supreme Court has held that Aereo cannot, in the first instance, lawfully retransmit the programming that would be recorded. Thus, while the Aereo III opinion expressly reserves the issue of remote storage DVRs and cloud-storage services in other circumstances, 134 S. Ct. at 2511, this does not assist Aereo. As the Supreme Court held, Aereo’s subscribers’ copies are not lawfully acquired; instead, they are received from Aereo’s unlicensed and infringing service: “Neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the underlying works. . . . [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.” Id. at 2510.
In its opposition brief filed last week, Aereo counters that the analysis for the near-simultaneous transmissions with its “Watch Now” function is different than the analysis for the time-shifted transmissions with its “Record” function: “Plaintiffs’ request is at odds with Aereo III, which identified two different analyses—one for simultaneous, cable-like retransmission, and another for time-shifted playback of user stored copies like Cablevision.” In its opinion, the “Supreme Court was careful to avoid overturning Cablevision, which is still the controlling law in this Circuit” and which “remains good law.” And under Cablevision, it contends, its time-shifted transmissions are private performances:
In addition, under Aereo III, the question of whether an entity performs to the “public” turns in part on the relationship of the user to that which is transmitted. See Aereo III, 134 S. Ct. at 2502 (“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.”). . . . [W]hen Aereo users play back programs they previously recorded, they do so just as users of the Cablevision RS-DVR do. Id. at 2510. An Aereo subscriber who has made a time-shifted recording of a television program broadcast over the public airwaves on Aereo’s servers is the “possessor” of that copy to the same degree as the Cablevision RS-DVR user.
So who’s right? While I think both sides make good points, rather notably, Aereo says nothing about the plaintiffs’ “different times” argument. As the plaintiffs point out, by its own terms, the Transmit Clause applies “whether the members of the public capable of receiving the performance . . . receive it . . . at the same time or at different times.” So the fact that the transmissions occur at “different times” doesn’t take them out of the Clause’s reach. Moreover, based on this “different times” language, the Supreme Court explicitly rejected Aereo’s suggestion that each individual transmission should be considered independently:
The text of the Clause effectuates Congress’ intent. Aereo’s argument to the contrary relies on the premise that “to transmit … a performance” means to make a single transmission. But the Clause suggests that an entity may transmit a performance through multiple, discrete transmissions. That is because one can “transmit” or “communicate” something through a set of actions. Thus one can transmit a message to one’s friends, irrespective of whether one sends separate identical e-mails to each friend or a single e-mail to all at once. *** By the same principle, an entity may transmit a performance through one or several transmissions, where the performance is of the same work.
The Transmit Clause must permit this interpretation, for it provides that one may transmit a performance to the public “whether the members of the public capable of receiving the performance … receive it … at the same time or at different times.” § 101. Were the words “to transmit … a performance” limited to a single act of communication, members of the public could not receive the performance communicated “at different times.” Therefore, in light of the purpose and text of the Clause, we conclude 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.
Thus, it doesn’t matter how many transmissions Aereo makes, nor does it matter whether the transmissions occur “at the same time or at different times.” This means that Aereo cannot escape liability through the simple expedient of staggering its transmissions. And the fact that Aereo doesn’t even attempt to rebut the plaintiffs’ “different times” argument speaks volumes.
Turning to Aereo’s main counterargument, I think Aereo is certainly correct to argue that its “Record” function is noninfringing under the Second Circuit’s reasoning in Cablevision. But the problem with this argument is that Cablevision most certainly does not “remain good law.” The reasoning of the Cablevision court as to why the performances enabled with Cablevision’s remote DVR were private turned on the fact that each transmission arose from a personal copy and could only be received by an individual user. The Supreme Court in Aereo explicitly rejected this approach to the Transmit Clause:
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.” Ibid. And retransmitting a television program using user-specific copies is a “process” of transmitting a performance. A “cop[y]” of a work is simply a “material objec[t] … in which a work is fixed … and from which the work can be perceived, reproduced, or otherwise communicated.” Ibid. So whether Aereo transmits from the same or separate copies, it performs the same work; it shows the same images and makes audible the same sounds. Therefore, when Aereo streams the same television program to multiple subscribers, it “transmit[s] … a performance” to all of them.
Under the Court’s logic, the Transmit Clause’s “different times” language means that multiple transmissions are not to be disaggregated as the Second Circuit and Aereo believe they should be. Instead, as Aereo itself points out, “the question of whether an entity performs to the ‘public’ turns in part on the relationship of the user to that which is transmitted.” Aereo contends that “consumers have the right to record copyrighted programs for the purpose of time-shifting” under Sony. While it’s no doubt true that the Supreme Court in Sony found certain reproductions for time-shifting purposes to be fair uses, that doesn’t mean that the Transmit Clause doesn’t reach Aereo’s time-shifted transmissions. Sony only focused on the reproduction right, not the public performance right, and the Court there never mentioned the Transmit Clause.
Aereo’s argument that its users have acquired a possessory interest in the content under Sony is clever, but ultimately, it’s unpersuasive. Aereo wants to lump its time-shifted transmissions together with those that may occur with a remote cloud storage service. The difference, though, is that the reproductions enabled by Aereo’s service are just part of the “device or process” that Aereo uses to publicly perform. And, as already noted, the Supreme Court stated that it does “not see how the fact that Aereo transmits via personal copies of programs could make a difference.” In the Court’s opinion, the “behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens” doesn’t matter. Nor should it. Furthermore, I agree with the plaintiffs that these copies are “not lawfully acquired,” since Aereo has no privilege to supply its users with the content in the first place.
The plaintiffs’ memorandum in reply to Aereo’s opposition brief is due today, and the district court has agreed to Aereo’s request for oral argument on the plaintiffs’ motion for a preliminary injunction. That hearing will be held on October 15th. It will be interesting to see how the court responds to Aereo’s argument that the plaintiffs cannot now request an injunction over its time-shifted transmissions since they originally only sought to enjoin its near-simultaneous ones. Equally interesting is the issue of whether the plaintiffs have demonstrated irreparable harm. I don’t have an opinion either way on these other issues, but I do think that the plaintiffs are certainly correct to claim that Aereo’s “Record” function directly infringes their public performance rights under the Supreme Court’s holding in Aereo.
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© 2014 Devlin Hartline. Licensed under the Law Theories Public License 1.0.