Online streaming and copyright infringement: Aereo heads for Supreme ruling

The IPKat and Merpel do their best to follow events, but they rely very much on the eyes and ears of their friends and relations in order to supplement their own efforts.  This is because, like all keen IP bloggers, they are in a state of perpetual catch-up: the moment we take time off to read a piece of news, give it some thought and then write it up, something else suddenly crops up while we're not looking.

The following note appears courtesy of journalist and Mediabeak blogmeister Edgar Forbes, who has been casting a penetrating gaze on events in the United States, a jurisdiction which is paradoxically both ahead of Europe and behind it: several hours behind in terms of time zones, but many years ahead in terms of innovative means of making money out of other people's intellectual efforts by finding new ways of delivering it.  What is happening in the US and how might EU law apply in similar scenarios?  Writes Edgar:

Online streaming and copyright infringement: US Supreme Court to hear broadcasters’ battle over retransmission rights 

The increasing availability of online services, offering viewers flexibility of choice and method for watching TV programmes, is seeing broadcasters becoming protectionist over their content and seeking to assert their copyright through the US courts. 

Background 

Taken in small quantities, this Aero
can enhance the TV viewer's experience

Just as Napster had the music industry up in arms over a decade ago, various operators such as TV Catchup and Aereo (not to be confused with the chocolate bar with the sound-alike name (right) are challenging the broadcasting status quo when it comes to content. The difference however is that, whereas Napster paved the way for legal debate and reform in relation to file sharing, the current battle-lines are drawn around retransmission or streaming of broadcasts where there is or may be no file or fixed copy and only the transient display of sound and images. 

The new year saw the US Supreme Court agree to hear the ongoing dispute between US broadcast networks (such as Fox and CBS) and a relatively small internet company, Aereo, which uses tiny transmitters to stream television programmes over the internet. In streaming their programmes over the internet, Aereo is feeding a growing audience that wants the flexibility of watching their preferred programmes over laptop, ipad or smartphone. While this is good news for consumer choice, it poses a significant revenue threat to the broadcasters who are losing out on their ability to control the use of their content in this way through highly lucrative retransmission rights. 

Retransmission rights in Europe 

In the UK and Europe, the courts have already been asked to consider the scope of copyright control over the making available of broadcasts through TV decoding devices. Here we saw the Portsmouth pub landlady Karen Murphy take her fight for the right to stream football matches in her pub via a foreign decoding device (to get around the expensive subscriptions of broadcasters due to the Premier League levies for allowing matches to be televised) to the Court of Justice of the European Union (CJEU) in Case C-403/08. While the case related to whether Murphy had been lawfully prosecuted under section 297(1) of the Copyright, Designs and Patents Act 1988 (CDPA) for intending to avoid programme reception charges (which the CJEU and then High Court confirmed she had not, as she had not intended to avoid but merely to pay less via use of a foreign decoder), it opened up the wider issue of retransmission rights. 

What came out of the Murphy case was the distinction between a copyright holder’s right to control the unauthorised use of their content on the one hand and the right to control the medium or channels through which their content is accessed. 

Is merely making otherwise available content through retransmission via another medium an infringement of the underlying work or broadcast itself? 

This question was considered further by the CJEU last year in a similar case to Aero, involving various UK broadcasters and TV Catchup. Here the question arose whether, in using streaming technology to make regular terrestrial television programmes available over the internet, TV Catchup had infringed the broadcasters’ rights. The case made its way through the High Court for England and Wales, where it was argued that the streaming was only transmitting or retransmitting what was publicly available to viewers, the argument being that the service was only offering viewers another medium through which to view programmes and was not an interference with or ‘use’ of the underlying work. However that argument did not get around the rights reserved to the broadcasters under section 20 CDPA to make communications of their work to the public. There was some scope under section 73 CDPA which provides a defence that allows for unlicensed retransmission provided the transmission is within the area where the original transmission was received and it does not infringe wider rights around reproduction or duplication of content. 

Mr Justice Floyd decided [see Katnote here] to refer the case to the CJEU as to the scope and meaning of ‘communication to the public’ and whether that extended to being allowed to retransmit broadcasts that had been provided ‘free-to-air’ within the original transmission area. The CJEU came back with its ruling in March 2013 in Case C-607/11 [noted by the IPKat here] and confirmed that ‘communication to the public’ did cover the retransmission of programmes even though they may have been free-to-air and available to the public in the same area as the retransmission took place. 

Back in the High Court, on 7 October 2013 Lord Justice Floyd (as he now was) issued an order that restrained TV Catchup from retransmission via its streaming services without obtaining a licence from the broadcasters (ITV, Channel 4 and Channel 5). In relation to the internet however (but excluding mobile devices) the judge accepted that the section 73 defence did apply. 

So the position in the UK is that, insofar as a provider offers services over the internet in such a manner as not to infringe wider rights in the broadcast, this would fall under the section 73 defence. Pure retransmission however would not and as affirmed by CJEU, ‘communication to the public’ does extend to retransmission. 

Retransmission rights in the US: the Aero case 

Moving across the pond to the US, a similar question has been working its way through the District Court and Second Circuits and, following acceptance of a petition for certiorari, is due before the Supreme Court later this year. The US approach has been formed through the Cablevision and now Aereo cases, which currently take the opposite view to Europe in that they do not find retransmission over the internet to infringe the underlying broadcast and broadcasters’ rights. But this opposing view could be down to how the laws are framed. While the European approach give more weight to the communication element in terms of ‘communication to the public’, the US approach has been more literal and views ‘public’ as being global in its construction rather than allowing for it to mean any individual of ‘the public’.
In Cablevision (Cartoon Network LP v CSC Holdings 536 F3d 121 – 2008) the service being provided worked in similar fashion to the likes of Skybox in that it allowed viewers to record broadcasts and then access copies to view when they chose. What this meant, and what seems to have informed the courts’ reasoning, is that those using the service recorded and therefore had their own recording of a particular broadcast. 

Under US Copyright Law, broadcasters (as content owners) have an exclusive right to perform their material publicly. Perform is defined as to ‘recite, render, play, dance or act’ a work ‘directly or by  means of any device or processor in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible’. So this would seem to cover off any form of retransmission but does it? As was seen in the Cablevision case, the courts focused on the word ‘public’. 

Under the Copyright Act, a broadcast (as a work) would be performed publicly if it were (1) performed in public (where substantial numbers of persons would be present) or (2) transmitted or otherwise communicated to the public through a device or process, irrespective of whether members of the public were indeed capable of receiving the broadcast in the same place or a different place and at the same or at different times. This latter provision is what is known as the ‘Transmit Clause’ under US Copyright law, which was included in the 1976 Copyright Act. The clause was introduced against a backdrop of expanding cable networks and was accompanied by a licensing scheme for retransmission via cable. 

What the 1976 law did however not foresee or have in contemplation was the emergence of the internet and online streaming, in relation to which the licensing scheme does not apply. So, in applying the law to online retransmission or streaming, the courts need to apply the Transmit Clause principles. Here the focus is on what is meant by ‘public’ and the Act and associated guidance notes seem to suggest it does require the presence of multiple persons rather than a person who is a member of the public. This therefore clarifies the law in one sense but creates difficulty in the other. On the one hand it would seem to follow that live streaming online would amount to a performance to the public and, as such, to be in breach of the Act. On the other hand, where retransmission is not to a large audience all at once but merely reaches a member of that potential large audience, the courts have taken the view that the limitations of the Act do not apply. 

In Cablevision the Second Circuit Court of Appeals held that the transmissions to a set top box recording device were not ‘pubic’ performances in that they produced an individual copy of every programme a viewer recorded and the transmission of that recording to the viewer was not a transmission to the public at large. 

So this takes us to the current Aereo case. The service provided by Aereo is similar to that offered by Cablevision save insofar as Aereo operates purely online without a box-type recording device and it has no underlying licensing arrangement to transmit any broadcasts. Cablevision did have licensing arrangements in place to allow it to transmit the broadcasts and it was the recording and playback of these broadcasts using the Cablevision recorder that gave rise to the infringement claim. 

Interestingly, when it came to Aero the court did not concern itself whether there was any form of underlying licence in place and focused purely on whether the making available was capable of being a public performance and therefore infringement. In similar manner to the Cablevision functionality, the Aereo system also resulted in individual recordings and downloads being created that were unique to the user who requested a particular programme and then viewed that programme. 

Aereo therefore follows and strengthens the Cablevision approach that interprets public performance as being a performance to the public at large. This results in an unsatisfactory position in that you could have thousands of individual downloads and views that would not be caught by the public performance restrictions, while one individual may download a broadcast -- but if they then allowed it to be viewed by hundreds of people at a community event etc, this would then be a public performance. Jurisprudential arguments aside, this poses a major threat to broadcasters who levy multimillion dollar revenues from the licensing of their broadcasts for retransmission across various platforms. If Aereo can get around the public performance restriction through a nuance that each download and view is actually a private performance (albeit publicly available), then we go full circle back to the Napster scenario whereby the only way for broadcasters (as was the case with music publishers) to protect their content and revenue streams is to create their own services online. 

Given the size of the industry and revenues at stake as well as the ever-increasing consumer demand for flexible access to content across any medium, it is good news for the broadcasters and arguably also for Aereo that this legal lacuna will be clarified at Supreme Court level. Dates have not yet been fixed, but arguments will be submitted during the first half of this year with a decision likely later in the year.

Ben Challis breaks news of Aereo's rabbit ears on the 1709 Blog here