The US Supreme Court ruled last week that Aereo, an online video streaming service, violates the federal Copyright Act by performing copyrighted works publicly without the permission of the copyright owners. The decision in American Broadcasting Companies, Inc. v. Aereo, Inc. resolves one of the most contentious issues in copyright law and hands a major victory to television broadcasters, who argued that a ruling for Aereo would undermine the copyright licensing framework that has governed cable television for almost four decades.
Aereo offers subscribers broadcast television content over the Internet. The system works by redirecting television signals from tiny TV antennas — each assigned to an individual subscriber — through a digital conversion process and then onto the subscriber’s computer or mobile device. Notably, the service only lets subscribers watch “free-to-air” programming, meaning that they could watch the same programming for free with a TV and an old-fashion “bunny-ears” antenna. Nonetheless, the television broadcasters argued that Aereo violates their exclusive right under the Copyright Act to publicly perform their copyrighted TV programs. Aereo countered by arguing that it can’t be held liable for copyright infringement because it never “performs” the copyrighted work (as that term is used in the Copyright Act). Instead, according to the company, it merely provides equipment for subscribers to perform the works for their own personal viewing, much like a DVD manufacturer provides consumers with a DVD player. Aereo also argued that the performances are not “public” because each subscriber views their own unique copy of the content.
The Court largely rejected Aereo’s arguments, ruling that despite its novel design, Aereo’s service falls squarely within the intended scope of the Copyright Act. In the Court’s reasoning, Aereo does not merely supply equipment. Rather, it uses “its own equipment, housed in a centralized warehouse, outside of its users’ homes” to receive programs that have been released to the public and carry them by private channels to additional viewers. Thus, Aereo is more akin to a cable TV company than to a passive technology provider. Although it acknowledged the technological difference between Aereo and the cable companies, it determined that the difference is not critical under the facts of the case.
The Court also rejected Aereo’s argument that it was not publicly performing the content. Just because subscribers can watch the content by themselves does not mean the performances are private. Rather, by communicating the content to “a large number of people who are unrelated and unknown to each other,” the company was performing the work “to the public.”
The Supreme Court’s decision could have significant implications for copyright owners, particularly with regards to controlling the online distribution of video content and the legality of certain forms of online video streaming. The Court cautioned, however, that its decision is a narrow one and that it does not believe the Copyright Act was intended to “discourage or control the emergence or use of different kinds of technologies.” Arent Fox will continue to monitor the impact of the Aereo decision. In the meantime, please contact Anthony V. Lupo, Sarah L. Bruno, Matthew R. Mills, Amy E. Salomon, or Daniel B. Jasnow with questions.