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US Supreme Court holds that internet streaming services to broadcast TV to subscribers without license violates copyright law.

US Supreme Court holds that internet streaming services to broadcast TV to subscribers without license violates copyright law.

American Broadcasting Cos. V. Aereo, Inc.

Certiorari to the United States Court of Appeals for the Second Circuit

Before: Roberts C. J., Kennedy J, Ginsburg J, Sotomayor J, Kagan, JJ., Scalia, J., Thomas J, Alito, JJ., Breyer J

June 25, 2014

Brief Facts.

The Respondent Aereo, Inc., sold a service that allowed its subscribers to watch television programs over the Internet at about the same time as the programs were broadcasted over the air. When a subscriber wanted to watch a show that was airing, he selected the show from a menu on Aereo’s website.

Aereo’s system, which consisted of thousands of small antennas and other equipment housed in a centralized warehouse, responded roughly as follows: A server tuned an antenna, which was dedicated to the use of one subscriber alone, to the broadcast carrying the selected show. A transcoder translated the signals received by the antenna into data that could be transmitted over the Internet. A server saved the data in a subscriber-specific folder on Aereo’s hard drive and began streaming the show to the subscriber’s screen once several seconds of programming had been saved. The streaming continued, a few seconds behind the over-the-air broadcast, until the subscriber had received the entire show.

The Petitioners, who were television producers, marketers, distributors, and broadcasters that owned the copyrights in many of the programs that Aereo streams, sued Aereo for copyright infringement. They sought a preliminary injunction, arguing that Aereo was infringing their right to “perform” their copyrighted works “publicly.” The District Court denied the preliminary injunction, and the Second Circuit affirmed.

Issues:

  1. Whether the Respondents ‘performed’ the Petitioners works ‘publicly’ within the meaning of the transmit clause under the Copyright Act, 1976.
  2. Whether the respondent infringed copyrights by selling to its subscriber’s service that allowed them to watch television programs over the Internet at about the same time as the programs were broadcast over the air.

Intellectual Property Law-copyright-infringement of copyright-whether the respondent infringed copyrights by selling to its subscribers service that allowed them to watch television programs over the Internet at about the same time as the programs were broadcast over the air-transmit clause-Copyright Act,1976

Statute Law-interpretation of statute-transmit clause-right of owner to perform copyrighted work publicly-whether the Respondents ‘performed’ the Petitioners works ‘publicly’ within the meaning of the transmit clause under the Copyright Act, 1976

The Copy right Act,1976

17 U. S. C. §106(4).

The Act gives a copyright owner the

“exclusive right” to “perform the copyrighted work publicly.”

17 U. S. C. §101.

The Act’s Transmit Clause defines that exclusive right as including 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 capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.

Held:

  1. One of Congress’ primary purposes in amending the Copyright Act in 1976 was to overturn the Court’s holdings that the activities of community antenna television (CATV) providers fell outside the Act’s scope. In [Fortnightly Corp. v. United Artists Television, Inc., 392 U. S. 390], it was determined that a CATV provider was more like a viewer than a broadcaster, because its system only enhanced the viewer’s capacity to receive the broadcaster’s signals by providing a well-located antenna with an efficient connection to the viewer’s television set. Therefore, it was concluded that, a CATV provider did not perform publicly. The same determination was reached in respect to a CATV provider that retransmitted signals from hundreds of miles away in [Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U. S. 394]. The reception and rechanneling of broadcast television signals for simultaneous viewing was essentially a viewer function, irrespective of the distance between the broadcasting station and the ultimate viewer.
  2. The Congress amended the Copyright Act in 1976 in large part to reject the holdings in Fortnightly and Teleprompter. It overturned the narrow construction of the Act .It enacted new language that erased the Court’s line between broadcaster and viewer, in respect to “performing” a work.
  3. The amended statute clarified that to “perform” an audiovisual work meant “to show its images in any sequence or to make the sounds accompanying it audible; defining “audiovisual works” as “works that consisted of a series of related images which were intrinsically intended to be shown by the use of machines, together with accompanying sounds”. Under this new language, both the broadcaster and the viewer of a television program performed because they both showed the program’s images and made audible the program’s sounds. A broadcasting network was performing when it transmitted a singer’s performance of a song and any individual is performing whenever he or she communicated the performance by turning on a receiving set.
  4. Congress also enacted the Transmit Clause, which specified that an entity performed publicly when it transmitted a performance to the public. It defined to transmit a performance as to communicate it by any device or process whereby images or sounds were received beyond the place from which they were sent. Cable system activities, like those of the CATV systems in Fortnightly and Teleprompter, lay at the heart of the activities that Congress intended the language to cover.
  5. A cable television system was performing when it retransmitted a network broadcast to its subscribers. The concept of public performance covered not only the initial rendition or showing, but also any further act by which that rendition or showing was transmitted or communicated to the public. The Clause thus made clear that an entity that acted like a CATV system itself performed, even if when doing so, it simply enhanced viewers’ ability to receive broadcast television signals.
  6. Congress further created a new section of the Act to regulate cable companies’ public performances of copyrighted works. Section 111 created a complex, highly detailed compulsory licensing scheme that set out the conditions, including the payment of compulsory fees, under which cable systems would retransmit broadcasts. Section 111 was primarily directed at the operation of cable television systems and the terms and conditions of their liability for the retransmission of copyrighted works. Congress made these three changes to achieve a similar end: to bring the activities of cable systems within the scope of the Copyright Act.
  7. Because Aereo’s activities were substantially similar to those of the CATV companies that Congress amended the Act to reach, Aereo was not simply an equipment provider. Aereo sold a service that allowed subscribers to watch television programs, many of which were own equipment, housed in a centralized warehouse, outside of its users’ homes. By means of its technology, Aereo’s system received programs that have been released to the public and carried them by private channels to additional viewers.
  1. There was one particular difference between Aereo’s system and the cable systems in Fortnightly and Teleprompter: The systems in those cases transmitted constantly, whereas Aereo’s system remained inert until a subscriber indicated that she wanted to watch a program. In other cases involving different kinds of service or technology providers, a user’s involvement in the operation of the provider’s equipment and selection of the content transmitted would well bear on whether the provider performed within the meaning of the Act. But given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, the sole technological difference between Aereo and traditional cable companies did not make a critical difference.
  2. Aereo also performed petitioners’ works “publicly.” Under the Clause, an entity performed a work publicly under §101 when it transmitted a performance of the work to the public.The performance Aereo transmitted was the new performance created by its act of transmitting. To transmit a performance of an audiovisual work meant to communicate contemporaneously visible images and contemporaneously audible sounds of the work. Under the assumed definition, Aereo transmitted a performance whenever its subscribers watched a program.
  3. The Clause had a further requirement that Aereo transmitted a performance to the public. Aereo claimed that because it transmitted from user-specific copies, using individually-assigned antennas, and because each transmission was available to only one subscriber, it did not transmit a performance “to the public.” Viewed in terms of Congress’ regulatory objectives, the behind-the-scenes technological differences did not distinguish Aereo’s system from cable systems, which did perform publicly. Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies.
  4. The text of the Clause effectuated Congress’ intent. Under the Clause, an entity would transmit a performance through multiple transmissions, where the performance was of the same work. Thus when an entity communicated the same contemporaneously perceptible images and sounds to multiple people, it “transmitted a performance to them, irrespective of the number of discrete communications it made and irrespective of whether it transmitted using a single copy of the work or, as Aereo did, using an individual personal copy for each viewer.
  5. The subscribers to whom Aereo transmitted constituted “the public” under the Act. This was because Aereo communicated the same contemporaneously perceptible images and sounds to a large number of people who were unrelated and unknown to each other. In addition, neither the record nor Aereo suggested that Aereo’s subscribers received performances in their capacities as owners or possessors of the underlying works. This was relevant because when an entity performed to a set of people, whether they constituted “the public” often depended upon their relationship to the underlying work. Finally, the statute made clear that the fact that Aereo’s subscribers would receive the same programs at different times and locations was of no consequence. Aereo transmitted a performance of petitioners’ works “to the public.”

Dissenting opinion of JUSTICE SCALIA with whom JUSTICE THOMAS and JUSTICE ALITO joined.

  1. There were two types of liability for copyright infringement: direct and secondary. The former applied when an actor personally engaged in infringing conduct. [Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417, 433 (1984)]. Secondary liability, by contrast, was a means of holding defendants responsible for infringement by third parties, even when the defendants had not themselves engaged in the infringing activity. It applied when a defendant “intentionally induced or encouraged infringing acts by others or profits from such acts while declining to exercise a right to stop or limit them. Metro-[Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U. S. 913, 930 (2005)].
  2. The Networks claimed that Aereo directly infringed their public-performance right. Accordingly, the Networks ought to have proved that Aereo “performs” copyrighted works under §106(4), when its subscribers logged in,s elected a channel, and pushed the “watch” button. That process undoubtedly resulted in a performance; the question was who did the performing. [Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F. 3d 121, 130 (CA2 2008)]. If Aereo’s subscribers performed but Aereo did not, the claim necessarily failed.
  3. Aereo offered access to an automated system consisting of routers, servers, transcoders, and dime-sized antennae. Like a photocopier or VCR, that system lay dormant until a subscriber activated it. When a subscriber selected a program, Aereo’s system picked up the relevant broadcast signal, translated its audio and video components into digital data, stored the data in a user-specific file, and transmitted that file’s contents to the subscriber via the Internet—at which point the subscriber’s laptop, tablet, or other device displayed the broadcast just as an ordinary television would. The result of that process fit the statutory definition of a performance to a tee: The subscriber’s device showed the broadcast’s images and made sounds accompanying the broadcast audible. The question on whether those performances were the product of Aereo’s volitional conduct was answered in the negative.
  4. Unlike video-on-demand services, Aereo did not provide a prearranged assortment of movies and television shows. Rather, it assigned each subscriber an antenna that like a library card could be used to obtain whatever broadcasts were freely available.
  5. Aereo did not “perform” for the sole and simple reason that it did not make the choice of content. And because Aereo did not perform, it could not be held directly liable for infringing the Networks’ public-performance right. That conclusion did not necessarily mean that Aereo’s service complied with the Copyright Act.
  6. The conclusion that Aereo performs boiled down to the following syllogism: Congress amended the Act to overrule the decisions holding that cable systems did not perform when they retransmitted over-the-air broadcasts; Aereo looked a lot like a cable system; therefore Aereo performed. That reasoning suffered from defects.
  7. The reasoning failed on its own terms because there were material differences between the cable systems in Teleprompter and Fortnightly on the one hand and Aereo on the other. The former which were then known as CATV systems captured the full range of broadcast signals and forwarded them to all subscribers at all times, whereas Aereo transmitted only specific programs selected by the user, at specific times selected by the user. This distinction was acknowledged but blithely concluded that it did not make a critical difference. Even if that were true, no account was made for other salient differences between the two technologies.
  8. Though cable systems started out essentially as dumb pipes that routed signals from point A to point B, , by the 1970’s, that kind of service no longer existed, At the time of the Teleprompter decision, cable companies performed the same functions as ‘broadcasters’ by deliberately selecting and importing distant signals, originating programs, and selling commercials, thus making them curators of content—more akin to video-on demand services than copy shops. So far as the record revealed, Aereo did none of those things.
  9. Even accepting that the1976 amendments had as their purpose the overruling of the cable-TV cases, what they were meant to do and how they did it are two different questions and it was the latter that governed the instant. The injury claimed was not violation of a law that provided that operations similar to cable TV were subject to copyright liability, but violation of §106(4) of the Copyright Act. And whatever soothing reasoning was used to reach its result, the consequence of its holding was that someone who implemented this technology performed under that provision.

The Court of Appeal judgment was reversed.

The case was remanded for further proceedings consistent with the opinion.

 Kenyan context

Copyright Act

Works eligible for copyright under the Act include:literary works, musical works, artistic works, audio-visual works, sound recordings and broadcasts.

Under Section 22(2), a broadcast shall not be eligible for copyright until it has been broadcast.

The Act under Section 2 defines the term broadcast as the transmission, by wire or wireless means, of sounds or images or both or the representations, in a manner that causes such images or sounds to be received by the public. This includes transmission by satellite.

Any act done without the consent of the copyright owner amounts to an infringement.

Section 35(1),(3)

1)     Copyright shall be infringed by a person who, without the licence of the owner of the copyright—

a)    does, or causes to be done, an act the doing of which is controlled by the copyright; or

b)    imports, or causes to be imported, otherwise than for his private and domestic use, an article which he knows to be an infringing copy.

2)  …………………………………………..

3)     Copyright and related rights shall be infringed by a person who—

a)    circumvents any effective technical measure designed to protect works; or

b)    manufactures or distributes devices which are primarily designed or produced for the purpose of circumventing technical measures designed to protect works protected under this Act; or

c)    removes or alters any electronic rights management information; or

d)    distributes, imports, broadcasts or makes available to the public, protected works, records or copies from which electronic rights management information has been removed or has been altered without the authority of the right holder.

Jurisprudence set in this case seeks to protect intellectual property owners. It sets legal implications on content acquired via cable, satellite, or antenna. The services must have licenses to either publicly distribute, publicly display, or publicly perform the content.

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