On April 1, 2013, the United States Court of Appeals for the Second Circuit held in WNET v. Aereo that Aereo, a start-up company located in New York City, which streams broadcast programs and allows its users to watch or record them from their computer, telephone, or tablet, does not infringe the Plaintiffs’rights of public performance.
Plaintiffs were broadcasters of some of the programs streamed by Aereo. They had unsuccessfully tried to bar Defendant from transmitting broadcast television programs to its subscribers during the broadcast of these programs. The lower federal court, the Southern District of New York, denied their motion. Plaintiffs appealed, and the Second Circuit affirmed the order of the SDNY.
Aereo Business Model
Aereo is a start-up company located in New York City. It is only available in New York City for the moment, but the company has plans to expand soon to twenty-two other cities in the U.S.
This is how it Aereo works. Instead of using a roof antenna to receive publicly broadcasted channels, Aereo subscribers lease a tiny TV antenna, which is also connected to the Internet. All the leased antennas are all hosted in Aereo’s facility, not at the subscribers’ homes.
When a particular subscriber decides to watch or record a particular program, a signal is sent to Aereo’s antenna server. The server tunes the antenna assigned to the subscriber to the broadcast frequency of the channel chosen by him. A transcoder, well, transcodes data received by the antenna and sends it to another Aereo server, which saves the program chosen by the subscriber on her directory in a large hard drive.
The subscriber watches the program streamed from the copy of the program in the subscriber’s directory, either live, or by recording it, from her computer, phone or tablet, by accessing her account on Aereo’s site.
Is is an infringement of the plaintiff’s exclusive right of performance? The Court of Appeals said no. Here is why.
Public Performance Right
Plaintiffs claimed that Aereo was publicly performing their protected work without a license.
One of the exclusive rights provided to the owner of a copyright by § 106 of the Copyright Act is the exclusive right to publicly perform the work. Transmitting or communicating a performance using any device or process to the public is also a performance the under the ‘Transmit Clause’ of the Copyright Act.
The district court had found that the case could not be distinguished from the Second Circuit 2008 decision in Cartoon Network v. CSC, and the Second Circuit agreed with that view.
In the Cartoon Network case, Cablevision, a cable company, provided its subscribers with a Remote Storage Digital Video Recorder System (RS-DVR).The Second Circuit had found that each of the RS-DVR playback transmissions to a particular subscriber were using a single unique copy made for that subscriber, and therefore such transmissions were not public performances under the Copyright Act. That is because the subscriber was the only potential audience for that unique copy, and thus the transmission was not made to the public.
The fact that in Cablevision each copy was made for a distinct user and was not shared among users was important, because the Second Circuit found relevant, when applying the Transmit Clause to a particular case, to consider whether a copy is distinct or shared. If a copy is shared, the transmission is a public performance as the transmission can be received by the general public. If a copy is not shared, the transmission is not a public performance as only one subscriber can receive that performance.
The facts in the Aereo case were very similar, as each subscriber is assigned his own tiny antenna. The Second Circuit noted that an antenna does not generate multiple copies of each program but that only the user who requested a copy to be made can watch that copy. Therefore, the court concluded that:
“Aereo’s transmissions of unique copies of broadcast television programs created at its users’requests and transmitted while the programs are still airing on broadcast television are not “public performances” of the Plaintiff’s copyrighted works under Cablevision.”
Therefore, it is legal for consumers to stream a broadcast program that is available to them in their local market instead of watching it on their television, even if the company providing the streaming does not pay a licensing fee to the broadcasters. The broadcasters will probably try to have the case reviewed by the Supreme Court. Stay tuned…
Image is Antenna schmantenna courtesy of Flickr user rednuht pursuant to a Creative Commons CC BY-2.0 license.
by 
