Reversal of fortune? public performance rights

There is currently a war between (i) internet broadcast stations that do not pay licensing fees for their transmitted programs and (ii) the program copyright owners. This conflict will soon be resolved when the U.S. Supreme Court interprets U.S. copyright law for a Second Circuit decision. In the meantime there is disagreement in the federal courts on whether certain technology for transmittal of unlicensed media violates exclusive public performance rights.

The case before the Supreme Court is American Broadcasting Co. et al [ABC] v. Aereo et al. [Aereo]. Aereo is a service that transmits broadcast television programs over the internet for a monthly subscription fee to its customers. Aereo’s antennas and remote hard drive create individual copies of each program which are then broadcast to customers. Consequently, Aereo’s technical systems provide the ability to view live television, pause/ record live television, and view of recorded programming with internet connected mobile devices. To implement this service, Aero owns antennae boards with thousands of individual antennas. The feed from a single antenna creates a copy of a specific program which is then transmitted to a requesting customer. No two users share the same single antenna simultaneously, even if more than one customer simultaneously watches or records the same program. Furthermore, a separate copy of a single program is created for each customer, and this copy is only accessible by that customer.

WNET, a party to the litigation, originally requested a preliminary injunction against Aereo’s internet broadcasts of its copyrighted works based upon infringement theories, especially the right to publicly perform (transmit) the works. The lower court denied the preliminary injunction, so WNET and other copyright owners filed an immediate appeal to the appellate court. The appellate court reviewed the factors for granting a preliminary injunction, based upon the alleged infringement of WNET’s public performance right under the U.S. Copyright Act. The court addressed the definition of ‘transmittal’ and concluded that it had previously resolved the public performance issue under the transmission provision in the Act. Under this previous interpretation the correct inquiry is whether (i) a transmission (ii) sent exclusively to a single person(iii) constitutes a public performance. The answer was no, because the potential audience of each transmission is a single user. Consequently, the appellate court affirmed the denial of a preliminary injunction, because there was no copyright infringement, and therefore WNET would not succeed on the merits of its lawsuit.

The copyright holder of the programs maintain that the underlying copyrighted WORK, and not the nature of the TRANSMISSION, is the basis on which public performance is resolved. Consequently, if Aereo creates more than one copy of the underlying work (in this case a program) then the electronic program is publicly performed and infringes WNET’s copyright in the program. According to this view, that each customer has a unique single copy is irrelevant, because the court properly looks at (i) a collection of unauthorized copies and (ii) not the manner in which they are sent to customers electronically. The underlying work approach has gained substantial judicial support outside the Second Circuit. For example, in Fox Television Stations, Inc. et al v. FilmOn X LLC a federal judge from the District of Columbia embraced the underlying work interpretation. She then granted a preliminary injunction against FilmOn X, a business that operates in a manner virtually identical to Aereo. Similarly, a California federal district has also adopted the underlying work interpretation against FilmOn X. The Ninth Circuit has postponed a decision on FilmOn X’s appeal from the California decision until the Supreme Court has the final say.

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