Broadcasters Prevail In Aereo

Supreme Court reverses lower court denial of injunction June 25, 2014
WASHINGTON—The U.S. Supreme Court today reversed a lower court decision denying an injunction to broadcasters in American Broadcasting Companies. v. Aereo. The court considered “whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.”

“Aereo performs petitioners works publicly within the meaning of the transmit clause of the Copyright Act,” Amy Howe said in Bloomberg’s live blog of the U.S. Supreme Court.

The court voted 6-3 to overturn a lower court ruling denying the injunction, and found that Aereo was indeed violating the copyright of broadcasters whose signals the company retransmits without permission. Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented. Howe reported that Scalia, in his dissent, said that “he concludes that Aereo dos not perform at all.”

The National Association of Broadcasters issued the following statement after the ruling was handed down:
“NAB is pleased the Supreme Court has upheld the concept of copyright protection that is enshrined in the Constitution by standing with free and local television. Aereo characterized our lawsuit as an attack on innovation; that claim is demonstrably false. Broadcasters embrace innovation every day, as evidenced by our leadership in HDTV, social media, mobile apps, user-generated content, along with network TV backed ventures like Hulu.

“Television broadcasters will always welcome partnerships with companies who respect copyright law. Today’s decision sends an unmistakable message that businesses built on the theft of copyrighted material will not be tolerated.”

Aereo is a two-year-old startup with $97 million in funding from investors led by Barry Diller, former Fox CEO and current chairman and chief executive of Internet empire IAC. The injunctions were sought to shut down the service while the question of copyright was determined. Broadcasters claimed Aereo violated their copyright by reselling TV signals—like a cable operator—without permission. Aereo said it was not reselling signals, but “renting” individual antennas to subscribers, who pay $8 to $12 monthly for the multichannel service targeting second-screen devices.

The crux if the legal question lay with whether or not Aereo’s antennas worked as the company claimed. Aereo executives said they took “the traditional HDTV antenna, and the DVR, and… combined these two technologies, miniaturized them, based it in the cloud so that people can have seamless access to TV from any device that has an Internet connection.”

However, the “HDTV antenna” resembles squared-off paperclip the size of a dime. Several thousand are packed tightly into arrays, which radio frequency engineers say would have to work as a single antenna, meeting the legal definition of a cable operator, and thus be subject to retransmission consent law. The court found that it did.

Justice Stephen Breyer wrote for the majority:
“The Copyright Act of 1976 gives a copyright owner the ‘exclusive right’ to ‘perform the copyrighted work publicly.’ 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. We must decide whether respondent Aereo, Inc., infringes this exclusive right by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over the air. We conclude that it does.”

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