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IP/Entertainment Case Law Updates

American Broadcasting Cos., Inc. v. Aereo, Inc.

Second Circuit denies petitions for en banc rehearing of ruling that Aereo’s streaming service does not infringe plaintiffs’ copyrights, but Judge Denny Chin forcefully dissents, arguing that capture and retransmission of over-the-air broadcasts is “public performance” under Copyright Act, regardless of technological means of retransmission.

Following earlier appeals in the actions WNET, Thirteen v. Aereo, Inc. and American Broadcasting Cos., Inc. v. Aereo, Inc., the Second Circuit held that Aereo, Inc.’s internet-based broadcast television service did not infringe the copyrights of the plaintiff broadcast networks. The networks argued that the Aereo service – which captures over-the-air broadcast television content on thousands of dime-sized antennae and streams the content to subscribers over the internet – constituted unauthorized public performance of the broadcasts without permission. Relying on its earlier decision in Cartoon Network LP, LLP v. CSC Holdings, Inc. (known as Cablevision), the Second Circuit held that the Aereo service did not constitute copyright infringement because it transmits a unique recording of the broadcast content to each subscriber, which was a private, not a public performance. Read our previous summary here.

The networks filed petitions for a rehearing en banc, which the Second Circuit denied. Judge Denny Chin dissented from the decision denying the rehearing, however. In his dissent, Judge Chin first argued that the Aereo decisions involve questions of “exceptional importance.” Among other things, these decisions allow services such as Aereo to retransmit public television broadcasts without paying a retransmission fee or any other fee to the networks, which already impacts the market for broadcast television content. These decisions also represent a departure from the Second Circuit’s pre-Cablevision rulings that retransmission of copyrighted content to the public without permission constituted infringement, and that no principled reason existed to make an exception when the retransmitter uses thousands of antennae to transmit thousands of unique copies to individual subscribers.

Second, Judge Chin argued that the Second Circuit’s decision was not consistent with the language of the Copyright Act, which includes in its definition of a “public” performance “to transmit or otherwise communicate a performance . . . [at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered] or to the public.” Aereo’s service constitutes a public performance, and the number of individual copies it produces or the technological means by which it retransmits content is not relevant under the Copyright Act.

Finally, Judge Chin argued that Cablevision was wrongly decided. There, the Second Circuit held that Cablevision’s Remote Storage Digital Video Recorder System (RS-DVR) – which allowed subscribers to have copies of copyrighted content stored remotely and transmitted to their homes at a later time – did not constitute a separate public performance of the content. The decision has been much criticized on the grounds that it improperly conflates the term “performance” under the Copyright Act with the term “transmission.” The decision further assumes that the use of unique copies somehow limits the potential audience of a transmission, an assumption that advancements in technology have rendered false. Even if Cablevision were correctly decided, the decision should not be extended to approve of Aereo’s service. Unlike Cablevision, Aereo does not pay any retransmission or licensing fees to the networks, which makes retransmission its entire service, not an add-on feature.

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