Small Screen, Bigger Picture

The following is a piece written by Eleanor M. Lackman of Copyright Alliance Legal Advisory Board member Cowan DeBaets Abrahams & Sheppard LLP.  For more from CDAS, be sure to visit their Entertainment & Media Law Blog.   

On December 27, 2012, the U.S. District Court for the Central District of California issued a preliminary injunction against Aereokiller (formerly known as, a service founded by Alki David, someone not unfamiliar with television transmission and the law.  Previously, in conjunction with rulings involving a similar technology at issue in WPIX v. ivi in New York, David’s prior television-over-the-Internet service known as FilmOn had been enjoined for making unauthorized public performances in violation of television networks’ copyright rights under Section 106(4) of the Copyright Act.  This time around, David’s Aereokiller service was set up to create unique copies of broadcast television streams, one per user, so that the transmission of those streams would be a private – not public – performance to that particular user. 

Important to the facts of the case is the outcome in ABC v. AEREO, involving a service on which David claimed Aereokiller was modeled.  In mid-2012, Aereo had prevailed in the Southern District of New York against a motion for a preliminary injunction against its broadcast-to-Internet service, on the ground that a 2008 Second Circuit decision known as Cartoon Network v. Cablevision insulated a retransmitter of copyrighted content from liability if the transmissions were made from individualized copies requested by the user.  In Cablevision’s case, the transmissions came from hard drives stored at Cablevision’s facility that were set up in such a way as to allow the service to appear to the consumer to function just like an in-home DVR.  With the “RS-DVR” system in Cablevision, subscribers would choose a show, hit “record,” and play the show back from the copy saved in Cablevision’s facilities.  In Aereo’s case, the technology captured television broadcast signals on a series of dime-sized antennas, with one antenna assigned to each subscriber, located on a rooftop in Brooklyn.  From there, the broadcasts would be streamed to subscribers on an individualized basis.  The Aereo court found the architecture legally indistinguishable from that in Cablevision.  At the end of November, the parties argued the copyright owners’ expedited appeal of the district court’s Aereo ruling.  A decision remains pending.

Just like the defendant in the Aereo case claimed that its system was designed in part to follow Cablevision “to a T,” the defendant in theAereokiller case claimed heavy reliance on Aereo, stating that it was “technologically analogous” to the system that the New York court found to be non-infringing.  Much of the briefing focused on whether this was actually the case; the plaintiffs argued in the alternative that the technology likely was essentially the same as the FilmOn technology.

Despite the parties’ focus on the system’s architecture, Judge Wu avoided the issue entirely.  Rather than distinguishing the cases on their facts, the court rejected the reasoning in Cablevision and Aereo, indicating that the current Copyright Act was subject to a different interpretation than the Second Circuit courts had reached.  In the Second Circuit, the judge explained, cases “have held that where a transmission of a work over the internet is made from a copy of a work made at the direction of and solely for use by a single user, there is no public transmission.”  But, the court noted, “that Second Circuit law has not been adopted in the Ninth Circuit, and this Court would find that the Ninth Circuit’s precedents do not support adopting the Second Circuit’s position on the issue.”  As if to underscore the division between the Second and the Ninth Circuits on the question, Judge Wu expressly relied upon a Northern District of California case, On Command v. Columbia Pictures, a case that the district judge in Cablevisiondiscussed extensively, and which the Second Circuit criticized in reversing the lower court’s ruling.

In concluding its analysis on plaintiffs’ likelihood of success on the merits, the court did find some analogous copyright precedent, but it was not the precedent from Cablevision.  Instead, Judge Wu found Aereokiller’s arguments reminiscent of the arguments cable retransmitters made four decades ago in the Fortnightly andTeleprompter cases – rulings that Congress overturned by enacting the 1976 Copyright Act with the inclusion of broad definitions of what it means to “transmit” a work and to perform a work “publicly,” including by transmission.  The court further explained that the revisions to the copyright laws confirmed that whatever an individual might lawfully do for herself, the legality as to the individual has no bearing on the legality of what a commercial provider could do for a group of people.  Finding that in this case, as with cable operators, copyright royalties must be paid for retransmission of copyrighted material, the court refused to find Cablevision and Aereo to be binding.

Despite the pointed holding, the court’s ruling is limited geographically so as to not interfere with Cablevision or Aereo’s reach.  Conscious of the differing interpretations between Judge Wu and his east-coast counterparts of the statutory language, the court found that the Aereokiller service could be limited to avoid reach into the Ninth Circuit and, as a matter of comity, issued its order accordingly.  Thus, depending on what happens on appeal both in this case and in Aereo, we could see the geographic scope of the injunction flip or disappear entirely.  And if the Aereokiller and Aereo decisions are either both affirmed or both reversed, it may be the Supreme Court’s task to resolve the circuit split and again take up the question of copyright in the age of evolving television distribution.  Stay tuned.