Circuit Split Likely in Broadcast Online Streaming Cases

By Elizabeth Cuttner

Advances in technology can often throw a wrench in the legal system. Even carefully and broadly written laws cannot always evolve to keep up with technological development. Furthermore, as courts struggle to interpret these outdated laws, the result is often disparate rulings in different jurisdictions and ultimately a lack of adequate guidance as to how the law will be applied in the future.

Currently, these interpretation problems have arisen in the area of copyright law, and the troubling technology is Aereo—a service that allows subscribers to live stream and record broadcast channels online.1 Last year, several media corporations with copyright interests in those broadcast channels filed to enjoin the online service from operating in the Second Circuit and Ninth Circuit Courts of Appeals.2 As Aereo rolled out its service in major cities across the United States—seven cities to date3—broadcasters moved fast and filed for a preliminary injunction against the online service in U.S. District Court for the Southern District of New York.4 The petitioner-broadcasters—ABC, CBS, and NBC, just to name a few—and other interested media parties assert that Aereo’s technology illegally distributes their copyright-protected signal over the Internet.5 Aereo claims that their service constitutes a private performance and is therefore not a violation of the broadcasters’ copyright in their over-the-air signal.6 The New York court sided with Aereo and denied the injunction.7 But on the West Coast, broadcasters and other media groups were granted a preliminary injunction in the Ninth Circuit against Aereo’s competitor, Aereokiller, now known as FilmOn X, who utilizes almost identical technology in providing its online service.8 While the Ninth Circuit decision is far from dispositive, the rationale behind the district court’s preliminary injunction suggests that the Ninth Circuit has adopted a different solution to the copyright infringement question regarding online services such as Aereo and Aereokiller. The divergent applications of existing copyright law and differing conclusions as to the potential for technological infringement through the online distribution systems between the two circuit courts of appeal set the stage for what could lead to a Supreme Court resolution of the circuit split in 2015, if certiorari is granted.

At issue in the courts is whether Aereo’s and Aereokiller’s online service constitutes a public performance of the broadcaster’s copyrighted material. Public performance of a copyrighted work is one of the exclusive rights granted to the copyright holder; any such performance of the work that meets the law’s definition of public is an infringement.9 If a copyrighted work is performed privately, however, the performance is not an infringement of the copyright and is legal.10 Aereo relies on the Second Circuit’s decision in Cablevision, which determined that remote storage digital video recorders (“DVRs”) constitute private performances and do not infringe on the television content providers’ copyrights.11 Aereo claims that their service similarly captures the broadcast signal for each subscriber individually and thus, transmits the content over the Internet through private performance.12 Like a DVR in your home that controls a personal file of recorded material on a remote server, Aereo claims that each subscriber accesses content captured through a single antenna, assigned to that subscriber at the exact moment of access.13 Therefore, Aereo posits, from the initial capture of the over-the-air signal to the subscriber’s access to the content online, the technology never transfers from a private performance to a public one.14

The broadcasters, conversely, argue that Aereo’s antennas fail to function separately when receiving the signal, such that the antennas collectively receive one signal.15 The distinction is subtle, yet important: when each subscriber watches or records the content online, Aereo is making copies from that collective signal, which constitutes a public performance of the copyrighted material.16 Therefore, the broadcasters conclude that Cablevision does not control, and Aereo cannot claim the application of its holding.17

To resolve the issue of whether Aereo’s service is a copyright infringement of the broadcast content, one must first determine how the technology actually functions. The U.S. District Court for the Southern District of New York found that each Aereo antenna “separately receives the incoming broadcast signal, rather than functioning collectively with the other antennas.”18 Distinguishing the Second Circuit’s analysis of Aereo’s system, the U.S. District Court for the Central District of California found that Cablevision is not binding in the Ninth Circuit.19 By taking a strictly jurisdictional approach, the Ninth Circuit concluded that, regardless of what the Second Circuit determined regarding Aereo’s antennas, Aereokiller’s service cannot avoid infringement of the public performance right through an application of Cablevision’s rationale.20

Which circuit’s interpretation is correct? Without clear guidance from the U.S. Supreme Court, the two circuits—both leading regions in media production and distribution—will create two very different media landscapes for the future. To avoid the creation of divergent legal systems, the Court must intervene to set a clear path for the courts of appeal to follow. Stay tuned to see what is sure to be an exciting solution handed down from the U.S. Supreme Court in the next couple of years; the decision could change the way you watch television.

1 Aereo. (last visited Oct. 2, 2013).

2 Am. Broad. Co., Inc. v. Aereo, Inc., 874 F. Supp. 2d 373, 376—77 (S.D.N.Y. 2012); Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138 (C.D. Cal. 2012).

3 Aereo. (last visited Oct. 2, 2013). Service is coming soon to an additional twenty cities. Id.

4 Am. Broad. Co., 874 F. Supp. 2d 373.

5 Id at 376—77.

6 Id. at 375.

7 WNET v. Aereo, Inc., 712 F.3d 676, 680 (2d Cir. 2013) (affirming the district court’s denial of the preliminary injunction), reh’g en banc denied, 722 F.3d 500 (2d Cir. 2013).

8 Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138, 1141 (C.D. Cal. 2012). Additionally, the U.S. District Court for the District of Columbia also granted a preliminary injunction against FilmOn X’s service on September 5, 2013. Fox Television Stations, Inc. v. FilmOn X LLC, 2013 U.S. Dist. LEXIS 126543; 2013 WL 4763414 (D.D.C. 2013).

9 See 17 U.S.C. §§ 106, 101 (2013).

10 Id.

11 Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 123 (2d Cir. 2008).

12 Am. Broad. Co., Inc. v. Aereo, Inc., 874 F. Supp. 2d 373, 382 (S.D.N.Y. 2012).

13 Id. at 385.

14 Id.

15 Id. at 379.

16 Id.

17 Id. at 382.

18 Id. at 381.

19 Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138, 1146 (C.D. Cal. 2012).

20 Id.