Aereo’s second defense to copyright infringement of the exclusive right to public performance was that the performance occurs not at Aereo’s will, but at the will of the viewer – it is he/she who controls the operation of Aereo’s system and initiates the performances. In its decision denying the broadcasters’ request for preliminary injunction, the court went into a very detailed analysis of whether Aereo’s technological setup and transmission of plaintiffs’ content, amounts to a public performance and did not reach Aereo’s “willful performance” argument.

At stake in this stage of the litigation was whether the court should pull Aereo’s plug before the conclusion of the case to prevent any further copyright infringement of plaintiffs’ content. The broadcasters’ motion for a preliminary injunction was based on the part of Aereo’s functionality which allows contemporaneous viewing of copyrighted programs – in other words – the service allowing Aereo subscribers to view programs at the same time as viewers watching them on their televisions.

A major disputed point was the tiny antennas’ ability to function independently of each other, which is essential to showing that every Aereo transmission to a subscriber is unique, and therefore private. The broadcasters contended that the antennas are too small to be able to handle the bandwidth necessary to provide the service and their expert claimed that the antennas function in unison and multiple antennas need to be engaged to deliver content to each subscriber. Aereo’s expert, on the other hand, insisted that each time a subscriber uses its service, a dedicated antenna is ascribed and that antenna alone is doing all the heavy lifting necessary.

The court was not persuaded by the broadcasters’ expert witness who performed a number of experiments on the antennas concluding that they could not function independently. For the court, Aereo’s proposition that a sufficiently strong signal may overcome the obstacles associated with the size of the antennas was more persuasive. The seemingly insignificant factual finding in Aereo’s favor, that its antennas function independently, may prove quite important because it would affect not only the decision on the preliminary injunction but, if it stands on appeal, but it may also strongly tilt the outcome of the ultimate question – whether Aereo is engaging in unauthorized public performance of copyrighted content.

To determine whether it should grant a preliminary injunction for the broadcasters, the court also looked to its controlling precedent – Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision“). In Cablevision, the technology in question allowed customers who did not have DVRs to record cable programs at Cablevision’s remote facilities and view them at times and locations of their choosing. Similarly to Aereo’s position, Cablevision’s argument was that each of its customers wishing to record a program had a unique copy of that program created and only that customer could play the program back from that copy. Like Aereo, Cablevision also argued that its technological setup privately performed the copyrighted content and did not infringe the copyright owner’s exclusive right to public performance.

In Cablevision, the Second Circuit clearly defined how it interprets the meaning of “public performance” within the copyright framework. The court reasoned that it did not matter that the same copy of the content broadcasted was then transmitted to multiple viewers because each such transmission was a separate performance of the content.  Thus, the inquiry as to whether that performance was public should be focused on the manner in which the re-transmission reaches the viewer and not on the manner in which the content reaches the re-transmitter. In other words, the relevant question is: who is capable of receiving the re-transmitted performance? If it is multiple people, then the performance is public, if it is one person, then it is private. In the Cablevision context, the court concluded that a performance of a unique copy of a program sitting on the Cablevision system, which may only be viewed by one customer was a private performance and did not infringe the copyright owners’ exclusive right to publicly perform it.

The broadcasters in Aereo’s case argued that Cablevision should not apply because Aereo is merely using a “technological gimmick” to re-transmit the very copy the broadcasters are transmitting because the customers are able to watch the content at “real-time” – with minimal or no delay. The court rejected this argument stating that Aereo’s transmissions, like Cablevision’s, are of a unique copy on Aereo’s system and the viewer’s ability to watch the program contemporaneously with its broadcast was not legally significant. To reach this conclusion, the court distinguished the process of “buffering,” which merely serves as a fleeting repository for the copyrighted content, with Aereo’s storing of the content, even when the “watch” function is engaged. The significance of this is that Aereo’s system makes a copy from which the content is separately performed for the viewer, as opposed to a “buffer” which would effectively retransmit the “master” copy broadcasted by the plaintiffs.

The court further rejected plaintiffs’ contention that, for Aereo to be effectuating a performance separate from the broadcasted performance, there needs to be a “break in the chain of transmission” or “complete” time-shifting (meaning that a complete copy of the program must be stored before it is performed for the viewer). Even if this was an inquiry relevant to other issues, such as  Aereo’s use amounted to fair use or whether it copied copyrighted content without permission, it was not an inquiry relevant to the determination whether there was an unauthorized public performance of copyrighted content. Finally, the ability to view Aereo’s transmissions on a number of different devises, such as smart phones and iPads, as opposed to a television set or a single devise was immaterial to the discussion.

Having concluded that plaintiffs would not likely prevail on the merits of the public performance claim, the court runs through the remaining preliminary injunction factors to facilitate the anticipated appeal of its decision which promptly followed. Once again the the stakes in this case have been raised – it not only gives the federal courts an opportunity to precisely define the meaning of “public performance” within the copyright framework, but it is also representative of the times we live in – another battle between the technological titans of yesterday with those of tomorrow.

Aereo is one of several startups that pioneered the concept of streaming TV over the Internet and making it viewable on every available gadget, including smart phones, tablets, and even good old computers. However, Aereo and other similar services never bothered to request licenses or offered to pay anything to the content owners of the broadcasted programming, and they were all promptly sued. Unlike other companies, though, an injunction has not yet been placed on Aereo, and the company has been seamlessly offering online television since March of this year. The plaintiffs in the case, which include Fox, CBS, NBC, and PBC, are claiming that Aereo infringed upon their copyrights by publicly performing and reproducing copyrighted works. They are also claiming unfair competition under state law. (Complaint available at https://www.eff.org/document/wnet-v-aereo-complaint)

Aereo has brought a number of novel concepts to the technological and legal discussion in this highly litigated area. First, according to its pleadings, unlike other similar services, Aereo does not provide access to cable-subscription-only networks such as CNN, USA, and TNT, which has allowed it to argue that it is not offering its subscribers any content they were not already entitled to. Second, it has devised a very cheap to manufacture tiny antenna, which every subscriber would install on his or her rooftop. Unlike other over-the-air signal intercepting antennae, these are not shared among subscribers; each one is dedicated to a single consumer. Third, the programming is not streamed directly to a subscriber’s device, rather, the signals are intercepted by the miniscule antenna and retransmitted to and stored on Aereo’s remote infrastructure. Then the signal is encoded for streaming over a digital device and transmitted back to the subscriber. (Aereo’s Pre-hearing Memorandum of Law available at: http://archive.recapthelaw.org/nysd/392874/)

According to the defendant, no “streaming” takes place, even when the subscriber requests the “watch now” option of its service. Indeed, Aereo claims that the “record” and “watch now” functions trigger exactly the same mechanism of recording the signal on Aereo’s infrastructure. The only difference between the two functions is that the “watch now” option plays back the content while it is still being recorded, causing a short delay for the subscriber. Another legally significant detail of Aereo’s setup is that only one subscriber would have access to and ability to play the stored content. Even if another subscriber requests the same content at that same time, a unique copy of the program would be stored for that subscriber.

This technological setup may be capable of skillfully bending around many of the obstacles Aereo’s brethren have tripped over. Aereo is hoping to defeat the public performance claim by arguing that no public performance takes place when each subscriber is playing his or her unique copy of recorded programming which is exclusive and unique for this subscriber. If this argument sways the court, Aereo would have its cake and eat it too, because from a subscriber’s perspective, he or she is watching live, streaming television; while from a legal perspective, subscribers are watching pre-recorded programs, and enjoying the same functionality as provided by DVR or TiVo.

This week, the Southern District of New York dismissed the plaintiffs’ state law claim for unfair competition. The court noted that the question of whether private performances of copyrighted works are actionable under New York’s unfair competition statute is one of first impression. Concluding that the claim is preempted by the Copyright Act, the court agreed with Aereo that imposing liability on private performances of copyrighted works would extend copyright protection beyond the scope of the Copyright Act. The court reasoned that Congress specifically excluded from copyright protection performances to “a normal circle of a family and its close social acquaintances,” to indicate its intent to not impose liability for this type of activity. (Opinion available at: http://www.mediabistro.com/tvspy/aereo-scores-legal-victory-over-broadcasters_b49496)

Stay tuned, because the “season finale” on the copyright infringement claims under the theories of public performance and reproduction of copyrighted works, is coming up next…