Aereo, FilmOn, Aereokiller . . . A Copyright Thriller! a tale of 2 countries, 4 companies and (more than) 13 cases Jonathan Handel
October 26, 2013 2013 Jonathan Handel – 1 Aereo
Chet Kanojia, Barry Diller, investor Founder & CEO
2013 Jonathan Handel – 2 FilmOn
Also known as FilmOnX Formerly known as Aereokiller and as BarryDriller Content Systems Alki David, Founder & CEO
2013 Jonathan Handel – 3 TVCatchup (UK)
2013 Jonathan Handel – 4 Functionality
Graphic: Aereo website 2013 Jonathan Handel – 5 Aereo’s Business Model
• Cost to co.: < $2 per month per subscriber • Price: $8-$12/mo./sub. • Per Aereo CEO (via Variety 9/24/13)
2013 Jonathan Handel – 6 Constitution
• “The Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” • U.S. Constitution, Art. I, Sec. 8 (the Intellectual Property Clause).
2013 Jonathan Handel – 7 Statute
• “[T]he owner of copyright under this title has the exclusive rights to do and to authorize any of the following: . . . (4) in the case of . . . motion pictures and other audiovisual works, to perform the copyrighted work publicly.” • 17 U.S.C. § 106 (exclusive rights).
2013 Jonathan Handel – 8 “Perform”
• “To ‘perform’ a work means . . ., in the case of a motion picture or other audiovisual work, to show its images in any sequence. . ..” • 17 U.S.C. § 101 (definitions)
2013 Jonathan Handel – 9 “Publicly”
• “To perform or display a work 'publicly' means . . . to transmit or otherwise communicate a performance or display of the work . . . 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.” • 17 U.S.C. § 101 (the “Transmit Clause”).
2013 Jonathan Handel – 10 Directive 2001/29
• “(23) This Directive should harmonise further the author’s right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts. ... (27) The mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Directive.” • EU Directive 2001/29, preamble recitals 23 & 27.
2013 Jonathan Handel – 11 Directive 2001/29
• “1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them. ... 3. The rights referred to in paragraphs 1 and 2 shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article.” • EU Directive 2001/29, Art. 3.
2013 Jonathan Handel – 12 Directive 93/83/EEC
• “2. Member States shall provide an exclusive right for the author to authorise the communication to the public by satellite of copyright works .... 8. (1) Member States shall ensure that when programmes from other Member States are retransmitted by cable in their territory the applicable copyright and related rights are observed and that such retransmission takes place on the basis of individual or collective contractual agreements between copyright owners, holders of related rights and cable operators.” • Council Directive 93/83/EEC of 27 September 1993, Arts. 2, 8. 2013 Jonathan Handel – 13 Statute
• “1. The communication to the public of the work is an act restricted by the copyright in (a) a literary, dramatic, musical or artistic work, (b) a sound recording or film, or (c) a broadcast. 2. References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include (a) the broadcasting of the work; (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.” • Copyright, Designs and Patents Act 1988 (UK), Sec. 20. 2013 Jonathan Handel – 14 Aereo Technology
Graphic: The Register 2013 Jonathan Handel – 15 Technology – Another Look
2013 Jonathan Handel – 16 The Antennas
2013 Jonathan Handel – 17 Aereokiller Technology
Graphic: Court decision 2013 Jonathan Handel – 18 Aereo Patent Applications
• System and method for providing network access to antenna feeds (Appl. No. 13/299,186) (Nov. 17, 2011) • System and method for providing network access to individually recorded content (Appl. No. 13/299,191) (Nov. 17, 2011) • Antenna system with individually addressable elements in dense array (Appl. No. 13/299,194) (Nov. 17, 2011) • Method and system for processing antenna feeds using separate processing pipelines (Appl. No. 13/299,198) (Nov. 17, 2011)
2013 Jonathan Handel – 19 U.S. Broadcast Network Business Model
• Advertising (Nielsen ratings) ($27 bn network in 2012; excls. spot, syndication, Spanish language and cable) • Retransmission fees ($0.80 to $2.00 per subscriber per month) ($2.4 bn in 2012) • Network owned stations (O&Os) vs. affiliates • Importance of regionalized NFL football and of local news • Effect on content creators
2013 Jonathan Handel – 20 Hollywood Reaction to Aereo/FilmOn • “We will move to a subscription model if that's our only recourse. This is not an ideal path we look to pursue, but we can't sit idly by and let an entity steal our signal. We like the broadcast business, and if we can affirm our rights, that is a path we prefer to pursue.” 21st Century Fox president Chase Carey.
• “As the value of the creative works is diminished or eliminated by new technologies that subvert recognized distribution models, so too are the incomes and benefits of SAG-AFTRA’s members.” Amicus brief filed by four main Hollywood unions (DGA, IATSE, SAG- AFTRA, WGA) against Aereo. 2013 Jonathan Handel – 21 Syncbak
Graphic: The Register 2013 Jonathan Handel – 22 The Legal Issues
• Do discrete individualized transmissions of user- initiated, unique copies of the same underlying work violate the public performance right, even when done on a mass scale? • (phrasing courtesy Prof. Jonathan Barnett, USC Gould School of Law) • Does technical architecture matter? • Is this a matter for Congress or the courts? • Appropriate geographic scope of injunction, if any? • Circuit split on preliminary injunction Supreme Court? 2013 Jonathan Handel – 23 U.S. Federal Judicial System
Graphic: Wikipedia 2013 Jonathan Handel – 24 Preliminary Injunction Standard
Plaintiff must establish: • “that he is likely to succeed on the merits, • “that he is likely to suffer irreparable harm in the absence of preliminary relief, • “that the balance of equities tips in his favor, • “and that an injunction is in the public interest.” • Winter v. NRDC, 555 U.S. 7, 20, 24 (2008).
2013 Jonathan Handel – 25 Alternate Preliminary Injunction Std.
• “(1) serious questions going to the merits, (2) a balance of hardships that tips sharply towards the plaintiff, (3) a likelihood of irreparable injury, and (4) the injunction is in the public interest.” • Fox v. Dish (9th Cir.); see also Metro. Taxicab Bd. of Trade v. City of New York, 615 F.3d 152, 156 (2d Cir. 2010) (similar).
2013 Jonathan Handel – 26 District Court Precedent in the 9th Cir. On Command Video • On Command Video v. Columbia Pictures, 777 F.Supp. 787, 790 (ND Cal. 1991) • Hotel system – bank of VCRs – discrete individualized transmissions of non-unique copies • Studio prevails • Transmission is public “because the relationship between the transmitter of the performance, On Command, and the audience, hotel guests, is a commercial, ‘public’ one regardless of where the viewing takes place.”
2013 Jonathan Handel – 27 2nd Cir. Precedent – Cablevision
• Cartoon Network v. CSC Holdings, 536 F.3d 121, 139 (2nd Cir. 2008) (Cablevision), rev’g 478 F.Supp.2d 607 (S.D.N.Y.2007) (Chin, J.) • Remote-storage DVR (RS-DVR) • Tech company (cable provider) prevails • “[T]he transmit clause directs us to identify the potential audience of a given transmission, i.e., the persons ‘capable of receiving’ it, to determine whether that transmission is made ‘to the public.’ Because each RS– DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances ‘to the public,’ and therefore do not infringe any exclusive right of public performance.” 2013 Jonathan Handel – 28 LA Federal District Court – Aereokiller
• Fox v. BarryDriller Content Sys. [now Fox v. Aereokiller & FilmOn], 915 F. Supp.2nd 1138 (C.D. Cal. 2012) • Broadcasters prevail • Focus is on the underlying work, and not the potential audience for the particular transmission. Hence, aggregates discrete transmissions of the same work. Cites On Command and WNET Thirteen v. Aereo (S.D.N.Y. 2012); rejects Cablevision (2nd Cir. 2008) & Aereo (S.D.N.Y.). Injunction issued but limited to the 9th Cir.
2013 Jonathan Handel – 29 Analysis
• “The Second Circuit believed On Command wrongly decided, but also distinguished On Command on the basis that the hotel system at issue there made multiple successive transmissions to different members of the public from a single copy of the work, whereas Cablevision's system used a separate copy of each work to make the transmission. That is only a relevant distinction if one focuses on whether the transmission is publicly performed. Precedent in the Ninth Circuit instead properly looks at public performance of the copyrighted work.”
2013 Jonathan Handel – 30 (cont’d)
• Rejects formalistic analysis – Copyright Act does not require a "performance of the performance.“ • Rejects analogy to stringing a long wire to one’s own antenna (legislative history)
2013 Jonathan Handel – 31 Holding
• Injunction granted b/c performance/transmission is to public • Scope limited to 9th Cir. for reasons of comity
2013 Jonathan Handel – 32 New 9th Cir. Precedent – Hopper
• Fox v. Dish Network, 723 F.3rd 1067, petn. For reh’g en banc filed (9th Cir. 2013) • “Hopper” case – RS-DVR with ad skipper • Tech company prevails • Cites Cablevision • “commercial-skipping does not implicate Fox's copyright interest because Fox owns the copyrights to the television programs, not to the ads aired in the commercial breaks. . . . any analysis of the market harm should exclude consideration of AutoHop because ad-skipping does not implicate Fox's copyright interests” 2013 Jonathan Handel – 33 9th Circuit – Aereokiller
• Fox v. BarryDriller Content Sys. [now Fox v. Aereokiller & FilmOn] • Winner tbd (soon) • “Your system is pretty damn clever. It’s a system that was arrived at for the sole purpose of avoiding the statute. Maybe you have.” – Judge Cogan at oral argument.
2013 Jonathan Handel – 34 NY Federal District Court – Aereo
• WNET Thirteen v. Aereo, 874 F.Supp.2d 373 (S.D.N.Y. 2012), aff’d 712 F.3d 676, reh’g en banc den. 722 F.3d 500 (2nd Cir. 2013), pet’n for cert filed (Oct. 11, 2013) • Tech company prevails • Focus is on the potential audience for the particular transmission, not the underlying work. Hence, does not aggregate discrete transmissions of the same work. Cites Cablevision; rejects BarryDriller and On Command.
2013 Jonathan Handel – 35 District Court’s Analysis of Cablevision • “A transmission of a performance is itself a performance” for infringement purposes. • Thus, in determining whether there has been a public performance, courts are to look to the transmission being made as the performance at issue, rather than simply to whether the public receives the underlying work. • “[W]e believe that when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission.” • “‘[T]ransmittal of a work’ is distinct from a transmittal of ‘a performance’—the former being a transmittal of the underlying work and the latter being a transmittal that is itself a performance of the underlying work.” • The transmit clause directs courts to “examine who precisely is ‘capable of receiving’ a particular transmission of a performance” to determine if a performance is public. 2013 Jonathan Handel – 36 (cont’d)
• Cablevision viewed the transmissions in that case as made from each unique playback copy, even though those playback copies could arguably have been viewed as merely part of a “device or process” through which a large-scale transmission to the public was accomplished.
2013 Jonathan Handel – 37 (cont’d)
• The transmit clause “speaks of people capable of receiving a particular ‘transmission’ or ‘performance,’ and not of the potential audience of a particular ‘work.’”
2013 Jonathan Handel – 38 (cont’d)
• Cablevision distinguishes Redd Horne and On Command, in large part because each of those cases involved the retransmission of a copyrighted work from a single “master copy,” rather than unique copies created for each viewer, as in Cablevision.
2013 Jonathan Handel – 39 (cont’d)
• “HBO transmits its own performance of a work when it transmits to Cablevision, and Cablevision transmits its own performance of the same work when it retransmits the feed from HBO” • “[I]t is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors or to inventors.” • Parties’ reliance interests
2013 Jonathan Handel – 40 Holding
• “[F]aithful application of Cablevision requires the conclusion that Plaintiffs are unlikely to succeed on the merits of their public performance claim.”
2013 Jonathan Handel – 41 2nd Circuit – Aereo
• WNET Thirteen v. Aereo, 712 F.3d 676, reh’g en banc den. 722 F.3d 500 (2nd Cir. 2013), pet’n for cert filed (Oct. 11, 2013) • Tech company prevails • Focus is on the potential audience for the particular transmission, not the underlying work. Hence, does not aggregate discrete transmissions of the same work. Cites Cablevision.
2013 Jonathan Handel – 42 Test – Part 1 of 4
• The Transmit Clause directs courts to consider the potential audience of the individual transmission. If that transmission is “capable of being received by the public” the transmission is a public performance; if the potential audience of the transmission is only one subscriber, the transmission is not a public performance, except as discussed below.
2013 Jonathan Handel – 43 Test – Part 2 of 4
• Private transmissions—that is those not capable of being received by the public— should not be aggregated. It is therefore irrelevant to the Transmit Clause analysis whether the public is capable of receiving the same underlying work or original performance of the work by means of many transmissions.
2013 Jonathan Handel – 44 Test – Part 3 of 4
• There is an exception to this no- aggregation rule when private transmissions are generated from the same copy of the work. In such cases, these private transmissions should be aggregated, and if these aggregated transmissions from a single copy enable the public to view that copy, the transmissions are public performances.
2013 Jonathan Handel – 45 Test – Part 4 of 4
• “Any factor that limits the potential audience of a transmission is relevant” to the Transmit Clause analysis.
2013 Jonathan Handel – 46 Summary of Cablevision
• 1. The RS–DVR system created unique copies of every program a Cablevision customer wished to record. • 2. The RS–DVR's transmission of the recorded program to a particular customer was generated from that unique copy; no other customer could view a transmission created by that copy. Id. • Thus, the potential audience of every RS–DVR transmission was only a single Cablevision subscriber, namely the subscriber who created the copy. And because the potential audience of the transmission was only one Cablevision subscriber, the transmission was not made “to the public.” 2013 Jonathan Handel – 47 Application of Cablevision
• Facts 1 and 2 are true of Aereo also; thus, the transmissions are private. • Both Aereo and Cablevision are making multiple private transmissions of the same work, so adopting the Plaintiffs' approach and aggregating all transmissions made by the same entity would require us to find that both are public performances.
2013 Jonathan Handel – 48 Plaintiffs’ Unsuccessful Attempts to Distinguish Cablevision • Cablevision had a license – irrelevant • Discrete transmissions should be aggregated b/c it’s the “same performance” – precluded • Discrete transmissions should be aggregated b/c Copyright Act so requires – precluded • Cablevision was decided based on an analogy to a typical VCR – not true of relevant section of decision • Cablevision's RS–DVR copies “broke the continuous chain of retransmission to the public” in a way that Aereo's copies do not – not true, b/c user can exercise control and b/c individual antennas create separate streams for each user
2013 Jonathan Handel – 49 Holding
• “Aereo's transmissions of unique copies of broadcast television programs created at its users' requests and transmitted while the programs are still airing on broadcast television are not ‘public performances’ of the Plaintiffs' copyrighted works under Cablevision.”
2013 Jonathan Handel – 50 Cloud Computing
• Nor is Aereo alone in designing its system around Cablevision, as many cloud computing services, such as internet music lockers, appear to have done the same.
2013 Jonathan Handel – 51 Remorse
• “Perhaps the application of the Transmit Clause should focus less on the technical details of a particular system and more on its functionality, but this Court’s decisions in Cablevision and NFL, 211 F.3d 10, held that technical architecture matters.”
2013 Jonathan Handel – 52 Dissent • Circuit Judge Chin (formerly district judge – was reversed in Cablevision) • “Aereo's ‘technology platform’ is . . . a sham. [T]here is no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” • “[T]he majority elevates form over substance.” 2013 Jonathan Handel – 53 (cont’d)
• Cablevision is distinguishable b/c of license and other factors • Cites C.D.Cal. Aereokiller • “The ‘performance or display of the work’ is then received by paying subscribers ‘in separate places’ and ‘at different times.’” • Definition of “public” • Legislative history
2013 Jonathan Handel – 54 NY Federal District Court – Aereo
• Aereo v. CBS (S.D.N.Y.), 1:13-cv-03013- AJN (2013) • Nationwide declaratory relief action by Aereo • Winner tbd
2013 Jonathan Handel – 55 NY Federal District Court – Aereokiller
• CBS v. FilmOn, 1:10-cv-07532-NRB (S.D.N.Y. 2010) • Broadcasters prevail – settlement agt. • Re a prior version of Aereokiller technology; not directly relevant to current cases
2013 Jonathan Handel – 56 DC Federal District Court – Aereokiller
• Fox v. Aereokiller and FilmOn (D.D.C. 2013), 1:13-cv-00758, 2013 WL 4763414 • Broadcasters prevail • Plain language of Copyright Act • Legislative history requires broad interpretation of statute • Also, agrees w/BarryDriller and with Aereo dissent
2013 Jonathan Handel – 57 Scope of DC Injunction
• Copyright infringement injunctions “’shall be operative throughout the United States’” 17 U.S.C. §§ 502(a) & (b). • But, respect 2nd Cir. Precedent • So, grant injunction nationwide except 2nd Cir.
2013 Jonathan Handel – 58 Boston Federal District Court – Aereo
• Hearst Stations d/b/a WCVB-TV v. Aereo, 1:13-CV-11649-NMG (2013) • Tech company prevails • Broadcasters’ reading of statute would read “a performance or display of the work” as “the work.” Violates canon against surplusage. • So Aereo prevails on performance claim
2013 Jonathan Handel – 59 Boston – Other Claims
• Right to reproduce – volitional conduct is that of the user, not Aereo, so Aereo prevails • Right to distribute – Aereo is streaming (a performance) not making a copy available (reproduction) • Right to create derivative works – transcoded digital format is not a derivative work
2013 Jonathan Handel – 60 Scope of DC Injunction – Part 2
• In the wake of Aereo’s victory in Boston, FilmOn asked that DC injunction be lifted as to 1st Cir. • DC court refused
2013 Jonathan Handel – 61 Utah Federal District Court – Aereo
• KSTU, KUTV, KMYU & Fox v. Aereo, No. 2:13-cv-00910 (Utah 2013) • Winner tbd • Complaint filed October 7, 2013. Reply papers not yet due.
2013 Jonathan Handel – 62 Utah Federal District Court – Aereo – 2
• Nexstar Broadcasting v. Aereo, No. 2:13- cv-00975 (Utah 2013) • Ptf owns KTVX (ABC affiliate) and KUCW (CW affiliate) • Winner tbd • Complaint filed October 24, 2013. Reply papers not yet due.
2013 Jonathan Handel – 63 Court of Justice of the European Union
• ITV v. TVCatchup, case no. C-607/11 (EU Ct of Justice 2013) • Broadcasters prevail • 9 pp. decision, not 30-35 pp. • TVC requires that users have a TV license • Separate streams are sent, but unclear if separate copies are used or the same copy
2013 Jonathan Handel – 64 Analysis • The principle objective of the directive is “to establish a high level of protection of authors” and “‘communication to the public’ must be interpreted broadly.” • Because the retransmission of a terrestrial TV broadcast over the Internet uses a different technical means of communications delivery, the retransmission must be considered a “communication” and not a “technical 2013 Jonathan Handel – 65 t i ti f Holding
• TVC streams are a “’communication to the public.’”
2013 Jonathan Handel – 66 Germany
• A similar case arose but defendant could not afford to litigate, and instead went out of business
2013 Jonathan Handel – 67 Policy Issues
• Scope of public v. private transmission • Future of RS-DVR • Impact on cloud computing • Form v. substance • Authors v. inventers • Incumbents v. innovators • Effect on TV business (crying wolf?) • Effect on creators (talent)
2013 Jonathan Handel – 68 U.S. Scorecard
• Aereo prevailed in S.D.N.Y., 2nd Cir. and D. Mass. (Boston) • Aereokiller/FilmOn lost in C.D.Cal. and D.D.C. • Pending: 9th Cir. Appeal (Aereokiller), D.Utah (Aereo x 2), S.D.N.Y. (dec relief) and cert pet’n (Aereo)
2013 Jonathan Handel – 69 U.S. Supreme Court
Graphic: Variety / Oliver Munday 2013 Jonathan Handel – 70