Aereo Stays Airborne! Federal Judge Denies Preliminary Injunction to Cease Operation
On Wednesday, July 11th, a federal district court denied issuing a preliminary injunction against Aereo, Inc., a company whose service allows New York City customers to record broadcast TV and watch it on their computers and mobile devices. For $12 per month, Aereo’s service provides customers with an online listing of TV shows available via broadcast over the air, and customers choose which ones they’d like to watch or record. When a customer selects a show, Aereo’s system automatically coordinates the request by triggering one of many TV antennas somewhere in the city to receive the show and broadcast it back to Aereo, who digitally processes and sends it to the customer to view online. Aereo’s service makes freely available broadcast TV more accessible and improves its audio-visual quality, but the fun part is that Aereo does all of this without paying any copyright licensing or broadcasting fees. Naturally, this irked copyright holders and broadcasters who do pay such things, so they filed a copyright infringement suit against Aereo back in March.
The plaintiffs asserted multiple theories of liability in their complaint, but infringement of their rights to public performance had been narrowed down to the only ground for the preliminary injunction to cease Aereo’s operations. Combine that with how the injunction would only have been granted were the plaintiffs to otherwise “suffer irreparable harm,” (plus other requirements) and the preliminary injunction’s denial is less about the court siding with Aereo on the overall dispute and more about the plaintiffs asking for an extraordinary remedy. Aereo still has work to do defending itself in the full-blown trial down the road, but without getting into all the other legal claims, the court’s disposition of the plaintiffs’ public performance claim needs commentary.
As pointed out in Shyamkrishna Balganesh’s excellent law review article about proprietary rights in broadcast signals, this isn’t the first time that rebroadcasters have been sued for copyright infringement (see pages 35–39). However, jurisdictional precedent and some important facts here differentiate Aereo’s position from that of the defendants in the cases cited by Balganesh. Under the Second Circuit’s precedent from Cartoon Network v. Cablevision, Aereo is not transmitting, i.e., publicly performing, the copyrighted works because the transmissions are private. According to the rule expressed in Cablevision, when each of Aereo’s customers trigger Aereo’s system to record the shows, each recording is unique to its requesting customer and is only viewed by that single requesting customer. As such, it’s a non‑infringing private performance. Cablevision held that such a thing is a private performance even if all the private performances, copied from a single content feed, would in the aggregate seem more like a public performance. As questionable as that may seem, it’s the law of the Second Circuit until judges or legislators feel fit to change it, and the court here relied on this rule to find the plaintiffs not likely to succeed on this claim against Aereo.
Though it may not have changed the disposition of the court, I see an ignored yet important difference between Aereo and Cablevision’s facts. Whereas Cablevision involved a defendant making and broadcasting copies of content it had received through a licensing agreement, Aereo pulled free broadcast content off the air without anyone’s permission. The key distinction is that the copyright holders in Cablevision had behaved in a way in which they thought they had retained control over their content. They negotiated and/or made licensing agreements through which the Cablevision defendant acquired the content. On the other hand, Aereo received content to sell because copyright holders released control of their work by licensing out the right to broadcast it. They sold the right for someone else to send it up into the air, for anyone with a receiver to see.
This perspective only makes sense if we assume that control over a work is yielded once it’s broadcast into the air. However, what if sending something onto the airwaves weren’t a point of no return? What if parties retained proprietary rights not only in creative works but also in their dissemination? This would be different from someone’s contractual right to broadcast specific content, purchased from the content’s copyright holder. That type of right is enforceable only between the parties, for example preventing a copyright holder from selling exclusive broadcast rights of something to someone, only to turn around and sell them again to someone else. Instead, a proprietary right in the broadcast would give a broadcaster a right to prevent others from doing certain things with that broadcast. As opposed to a contract right, this type would be enforceable against everyone, which means it would be in rem.
If the idea of this is foreign to you, you’re probably an American. U.S. law has never recognized an in rem right in broadcasts, but other law has. In 1961, the BIRPI (the predecessor to WIPO), the ILO, and UNESCO created the Rome Convention, which granted certain in rem rights to broadcasters under international law. Such rights include rebroadcasting rights, rights to “fixate” the broadcasts, reproduce broadcasts, and communicating the broadcasts to the public. Now considered defunct, at least regarding this, the treaty to turn to is the WIPO Broadcast Treaty, which grants more rights to more situations. However, this treaty isn’t enforceable yet. In any event, U.S. law doesn’t recognize in rem rights in broadcasts, but it’s not unheard of to do so.
An appealing part of Aereo’s service is that it makes the seemingly regressive medium of over-the-air broadcast accessible and maybe able to compete with cable and satellite transmission, which I associate with higher audio-visual quality. A nifty idea, and though Aereo survived this road bump, there are more to come. Good luck.