In March of this year, major American television broadcasters brought a preliminary injunction motion in the U.S. District Court for the Southern District of New York, attempting to immediately stop Aereo, Inc. from transmitting real-time Internet access to their copyrighted programming contemporaneously with their over-the-air broadcasts.

On July 11, 2012, the federal court denied the broadcasters’ and content owners’ request, relying on the Second Circuit’s (New York federal appellate court’s) decision in the “Cablevision” case [Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)]. Both the Cablevision and Aereo cases interpret the “public performance” clause of the Copyright Act in light of emerging technologies that facilitate new means of delivering television programming.

In Cablevision, the court held that the cable operator’s RS (Remote Storage) DVR did not infringe the public performance right of the cable networks whose content was being recorded. The analysis was that a unique transmission was essentially being made to a single subscriber. Unlike traditional DVRs, which record programs on a hard disk in the home like old-time VHS, the Cablevision customer’s dedicated disk resided at the cable system’s head-end, reducing deployment expense.

Aereo’s system uses dime-sized antennas to pick up over-the-air television signals at subscriber request. Programming is copied in a server that performs DVR functions, and is then sent to the subscriber via Internet. The subscriber may view the programming on a variety of devices. For the user, Aereo’s system is like a DVR where playback may be elected to be nearly real-time or delayed. Unlike other DVR services, however, Aereo did not obtain copyright or retransmission licenses to provide the broadcasts.

The Aereo court found that a given Aereo antenna can be used by only one user at a time, each antenna functioning independently. The opinion’s rationale was that, under the unique and limited Aereo fact set, unique copies created by Aereo subscribers do not differ substantively from those made by the remote-storage DVRs approved in Cablevision. The court thus far has found that Aereo copies do not constitute performances made “to the public” under the Copyright Act, because only the individual subscriber is capable of receiving a particular downstream transmission of a performance. Aereo’s system thus falls within the “one-copy-per-transmission” test (as opposed to one copy of the content being the source basis of many transmissions), though many viewers can see the same underlying work through the system at different times and places.

The Aereo case has deep policy and economic ramifications. Ninety percent (90%) of viewers today get programming from cable or digital broadcast service distributors rather than over-the-air signals, generating enormous retransmission consent fees for broadcasters. Some cable operators see the Aereo technology as a way to circumvent tedious and costly battles over this pot of money (to reiterate, unlike a cable operator’s relay of content under color of broadcaster consent, Aereo does not seek permission to use the broadcaster’s signal). At the same time, online video distributors may see Aereo’s effort as a means of circumventing cable by providing popular DVR-enabled programming and supplementary Internet-based content.

The District Court in Aereo actually agreed that the plaintiff broadcasters had demonstrated irreparable harm arising from Aereo’s service (and that a public interest would be served by issuing an injunction against Aereo), but did not believe that harm outweighed the economic peril faced by Aereo if the preliminary injunction was issued. The case will thus proceed on the merits.

This early lower-court ruling is viewed as an advancement for interests seeking to expand access to copyrighted materials without requirement of traditional licensing. At a minimum, it preliminarily and potentially recognizes the legitimacy of a means of streaming broadcast signals over the Internet without obtaining copyright permission or retransmission consent.

In terms of copyright law and Internet law, of course, the battle has no more than commenced. The Second Circuit (the same court that decided Cablevision) is next to speak. After that guidance issues, it is a certainty that similarly situated parties will seek to have their respective stances confirmed by courts in other jurisdictions.

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