Legal Memo by Michael D. Berg

Lots Of Action Soon In SC's 'Aereo' Case

February has been a busy month in the pending ABC v. Aereo Supreme Court (SC) case and there's plenty on tap for March and April. Here's a summary of the activity and a preview of what's next in the case that will decide whether Aereo’s TV station retransmission business is legal or not.

As Aereo Inc. readies the March 3 Austin, Texas, rollout of its paid subscription broadcast signal retransmission business, without broadcasters’ consent or compensation, February has been a busy month in the pending ABC v. Aereo Supreme Court (SC) case (ABC). This column summarizes briefly the February activity and updates the next steps in and around ABC, which will decide, for the whole country, whether Aereo’s business is legal or illegal.

Background on the Aereo and related FilmOn court cases is available in my three earlier columns: ABC-Aereo Set For Supreme Court Showdown, The Two Court Rulings Rocking Aereo, FilmOn and The 411 On Aereo's Many Legal Challenges.

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In order of occurrence:

Feb. 3: Aereo competitor FilmOn, which like Aereo has spawned federal court rulings about its legality, filed a motion for leave to intervene (i.e., participate) in ABC. FilmOn, which offers an Aereo-like service, told the high court that its Aereo ruling will have a significant impact on its business and that its interests won’t be adequately represented in the Supreme Court by Aereo, its primary competitor.

Feb. 10: Aereo opposes FilmOn’s motion to intervene. Why? Because, said Aereo, FilmOn neither identifies any deficiencies in Aereo’s legal arguments nor articulates any additional contribution it would make if permitted to intervene, and Aereo will fully represent FilmOn’s interests. (As noted in my September 2013 “411” column, the federal district court in New York found FilmOn and its CEO to be in contempt of court last September).

Feb. 18: FilmOn filed its reply to Aereo’s opposition to its motion to intervene.

Brand Connections

Feb. 24: ABC, WNET New York, Disney, PBS and other petitioner broadcasters filed their brief advocating why they should win on the merits of the case. Main arguments are:

  • Aereo’s unauthorized retransmissions are prohibited by the plain text of the Transmit Clause of the U.S. Copyright Act. It provides that a “performance” [in this case, making broadcast programming available to Aereo subscribers] is “public” “whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.” Aereo therefore violates broadcasters’ Copyright Act public performance rights by providing the same performances to “tens of thousands” of individual consumers.
    • Congress adopted the Transmit Clause to apply broadcasters’ public performance right to cable television systems and future technologies that retransmit broadcasts to subscribers. The SC should not adopt a reading of the Transmit Clause that allows Aereo to effectively retransmit to the public using technology designed for the express purpose of avoiding the Transmit Clause.
    • The Second Circuit’s federal appeals court’s 2008 Cablevison interpretation of the Transmit Clause should be overturned. The Second Circuit’s reading violates standard principles of statutory interpretation (in that it renders a portion of the statutory language superfluous) and conflicts with the language of the statute, which focuses on the audience capable of receiving a particular performance or display, not who is capable of receiving a particular transmission. The Second Circuit focused excessively on the technical details of Aereo’s system, despite the law’s language that the precise “device or process” by which the public receives the performance does not matter.
    • Aereo’s model violates the spirit of the Copyright Clause of the Constitution, which seeks to encourage innovation by allowing inventors to secure a fair return for their creative labor. By allowing Aereo to freely appropriate content that broadcasters spend billions of dollars to create and acquire, Aereo threatens to chill the very innovation that copyright protection is intended to foster. Aereo also endangers the basic right of every copyright holder to determine if, when and how to make its copyrighted work available to the public.

    Feb. 25: In the case Community Television of Utah v. Aereo Inc., a federal district court in Utah (the 10th federal judicial circuit, also including Colorado, Kansas, New Mexico, Oklahoma and Wyoming) granted KSTU and other broadcasters a preliminary injunction stopping Aereo from operating in the 10th Circuit. The same court postponed the rest of the case pending SC resolution of the ABC v. Aereo case. Last Tuesday, however, the Utah court granted a temporary stay of the injunction for 14 days — until March 11 — while Aereo seeks an emergency stay of the injunction from the 10th Circuit Court of Appeals.

    Feb. 27: SC receives record, part of it sealed, from the 2nd Circuit. 

    Feb. 27:  The Media Institute files an amicus brief supporting broadcasters, arguing that Aereo's model relies on "technological contrivances that serve no purpose other than to provide a pretext of legal cover, allowing Aereo to traffic in copyrighted content without paying for it," and that Aereo's practices amount to "manipulative exploitation."

    Today, Feb. 28: The SC (minus Justice Samuel Alito, who recused himself from (declined to participate in) ABC, meets to discuss the FilmOn motion to intervene.


    Comments (6) -

    Ted Hearn Nickname posted over 3 years ago
    Under the cashcasters' legal theories about Aereo, credit cards and travellers checks should be banned because they violate counterfeiting laws. Sorry I couldn't quote SIX times, as the Media Institute did in its Aereo amicus brief yesterday, the lawyer/daughter of a sitting Supreme Court Justice.
    iowatvman Nickname posted over 3 years ago
    So you don't see any problem with requiring broadcasters to allow their product--which they paid to create--forcibly taken from them without compensation, and given to a company which took none of the risk, simply so that company may profit?
    RustbeltAlumnus2 Nickname posted over 3 years ago
    Forcibly? You send the signal out for free to anyone with a private (one use per home) antenna. How is what Aereo does any different than a tower guy hooking up your home antenna because you can't do it? Is the installer stealing if he chooses to charge a monthly antenna fee to make sure your get your signal. Aereo is providing a service, not retransmitting beyond what the law already allows Slingbox to do with an over-the-air signal.
    PlasmaMan Nickname posted over 3 years ago
    The installer does not charge you a monthly fee for what you get off the antenna he put up.
    TVMN Nickname posted over 3 years ago
    Aereo and Slingbox are fundamentally different. Aereo is renting, not unlike cable, the equipment necessary to receive the signals. They own the entire infrastructure to do that. PLUS they added Bloomberg TV to the mix, which effectively makes them an MVPD. As for Slingbox: You personally own the equipment. You control the boxes, antennas, etc. It is already inherently private and no one is profiting monthly off of it.
    OTAexpert Nickname posted over 3 years ago
    Here's the applicable clause in Copyright law: To perform or display a work “publicly” means— (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. That pretty much describes what Aereo does. No other argument or justification matters.
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