American Broadcasting vs. Aereo – Landmark Copyright Infringement case

This post was first published on Jun 27, 2014

On June 25th, 2014, the prolonged legal battle between Aereo, Inc. (Defendant) and the American Broadcasting Companies Inc. (Plaintiffs) – ABC, CBS, NBC and Fox, came to a screeching end. The US Supreme Court decided against the legitimacy of Aereo’s service on the grounds of Copyright Infringement. This is a landmark judgment in the Copyrights world since, if decided otherwise, there could have been a drastic impact on the market of television broadcasters.

Aereo Inc. was founded in 2012 with its Head Office in New York City. They offered a service that would allow their subscribers to view broadcast television at a menial $10-$12 a month. A subscriber could watch the broadcast on a cell phone or a computer and even record for viewing later.

Aereo provided each subscriber with a small antenna and a server tuned the antenna to the show that the subscriber desired to watch. A transcoder translated signals that the antenna received into data that could be transmitted over the internet. Although the streaming would run a few seconds behind the over-the-air-broadcast, it essentially served the purpose of a television broadcaster.

The Plaintiffs (American Broadcasting), who are major players in the TV Broadcasting stage, initiated the dispute and filed a suit against the Defendant (Aereo) on grounds that re-transmission of over-the-air broadcast was a violation of the copyrights on television content. They sought an injunction which was denied by the District Court and the Defendant was given a go-ahead to continue broadcasting.

The Second Circuit affirmed the decision of the District Court. It was held that the Defendant’s right to perform the Plaintiffs’ work publicly was within the scope of the Transmit Clause of the Copyright Act of 1976, which gives a copyright owner the “exclusive right” to “perform the copyrighted work publicly.” The Act’s Transmit Clause defines that exclusive right as inclusive of the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether the members of the public are capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.”

The Defendant contended that the work actually fell within the scope of private performance and not public performance and therefore did not infringe any copyright. In regard to public performance of such works, it was held by the Second Circuit Court that the Defendant’s re-transmission was private performance, since it did not just give access to the original broadcaster’s signal, but created unique copies for each customer; that the Defendant used its own equipment which was set up in a centralized warehouse.

The Plaintiffs appealed to the Supreme Court against the Second Circuit Court’s decision. They continued to contend that the material being streamed through the antennas and watched by the Defendant’s subscribers was well within the definition of public performance and was therefore tantamount to copyright infringement. They further contended that billions of dollars were spent to ensure that these broadcasting companies were in line with the copyright regime and a service such as those offered by the Defendant, which only re-transmitted the signal for a menial cost was desired by many viewers and therefore posed a threat to companies and that online broadcasting took away the platform for advertisements.

The Defendant stuck with its contention that the technology used to re-transmit the signal through their small antennas was built from scratch and was sent through private channels. They emphasized that the data their system streamed to each subscriber was the data from their own personal copy, made from the broadcast signals received by the particular antenna allotted to them. Their system did not transmit data saved in one subscriber’s folder to any other subscriber.

The Judgment:

In a 6-3 Ruling, the Supreme Court held that there was an infringement. The two questions that the Court decided to answer were, whether the manner that the Defendant is described to operate in is performance at all. Second, whether this performance is public. The Supreme Court answered the questions in the affirmative and therefore held that despite the Defendant’s case having a slight difference from the Fortnightly Corp. vs. United Artists Television, Inc., it still falls under the same category as that which was amended by the Congress in 1976, with regard to the Transmission Clause. It was therefore held that Aereo’s re-transmission amounted to an infringement of copyright.


Contributed by Shreya Rajahamsa.

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