COPYRIGHT

Community Television of Utah LLC v. Aereo Inc. Can Aereo enable customers to watch/record broadcast television over the internet without violating the copyright interests of local and national broadcast companies? There is a split between the Second and Tenth Circuits on this decision. The US Supreme Court will hear oral arguments on the Second Circuit Case in late April 2014.

Can Aereo, Inc. enable its Court for the District of Utah4. their copyrighted works to people customers to watch or record Plaintiffs argue that Aereo’s service outside Aereo’s circle of family and broadcast television programs over violates the US Copyright Act5 by social acquaintances.’10 Relying in the internet without violating the ‘publicly performing’ the programs part on the decision in the Second copyright interests of local and without plaintiffs’ permission6. Circuit Case, Aereo argued that its national broadcast companies? Aereo responded that its technology falls outside the scope There is a split between the Second customers’ use of its technology of the Transmit Clause because it and Tenth Circuits on this doesn’t constitute a public ‘merely enables its customers to question. The US Supreme Court performance, and likened such use view the copyrighted work will hear oral arguments on the to a consumer recording a privately.’11 Second Circuit Case1 in late April program with a DVR or similar The court rejected the holding of and render a decision some device7. the Second Circuit Case, and months thereafter. Until then, if In February 2014, the court heard instead interpreted the Transmit those customers are located in arguments on Plaintiffs’ motion for Clause broadly, applying it to Utah or the five other states within a preliminary injunction as well as Aereo’s service: the jurisdiction of the US Court of Aereo’s motion to transfer and ‘The entire clause “whether the Appeals for the Tenth Circuit2, the motion to stay. On 19 February, members of the public capable of answer is ‘no.’ the court in the Utah Case issued receiving the performance or its decision on all three motions. display receive it in the same place Aereo’s subscription service or in separate places and at the Aereo uses circuit boards The ‘Transmit Clause’ same time or at different times” containing many remote dime The court first considered appears to actually be Congress’ sized antennas to capture over-the- Plaintiff’s motion for injunctive attempt to broaden scope of the air broadcasts from local stations. relief and whether plaintiffs could clause, not an effort to distinguish It makes digital copies of programs show a likelihood of success on the public and private transmissions or to stream to its subscription fee- merits of its copyright claim. Aereo otherwise limit the clause’s reach. based customers. When an Aereo did not dispute that Plaintiffs The term “whether” does not customer sends a command to owned or were the exclusive imply that the ensuing clause watch or record a program, one of licensee in the streamed programs. encompasses a limitation. Rather, the antennas is activated and The issue then became whether the introduction of the clause with specifically tuned for that Aereo was violating any of the word “whether” implies an customer. Customers can access Plaintiffs’ exclusive rights under the intent to explain the broad sweep Aereo’s service from any web- Copyright Act, in particular, the of the clause and the many enabled device including public performance right. The different ways it could apply to computers, laptops, tablets and court focused on whether Aereo’s members of the public. Reading smartphones and also view service was subject to the ‘Transmit this final clause expansively is programs on an internet- Clause’ of the Copyright Act: ‘to consistent with Congress’ intent to connected television set or through transmit or otherwise have the entire Transmit Clause a device like Roku or Apple TV. communicate a performance or apply to all technologies developed Aereo first offered its service in the display of the work to a place in the future.’12 New York City area in March 2012 specified by clause (1) or to the Using this analysis, the court before expanding into other US public, by means of any device or reached the ultimate conclusion locations. process, whether the members of that Plaintiffs demonstrated a the public capable of receiving the likelihood of success on the merits The Utah case performance or display receive it in of its copyright claim: Aereo began offering its service to the same place or in separate places ‘Aereo is engaging in copyright customers in Utah in the summer and at the same time or at different infringement of Plaintiffs’ of 2012. Shortly thereafter, times.’8 programs. Despite its attempt to Community Television of Utah, This section also defined ‘device’, design a device or process outside LLC, dba KTSU FOX 13 and ‘machine’ or ‘process’ as ‘now the scope of the 1976 Copyright several other local and national known or later developed.’9 Act, Aereo’s device or process broadcast companies3 filed a Plaintiffs asserted that this transmits Plaintiffs’ copyrighted copyright infringement action language applies to ‘any device or programs to the public. against Aereo in the US District process that is used to transmit Accordingly, the court concludes

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that Plaintiffs have met their until the Supreme Court hears and Network Group LLC, and WNJU-TV 19 Broadcasting LLC. The Second Circuit burden of establishing a likelihood affirms the Second Circuit Case . affirmed the dismissal of plaintiffs’ case of success on the merits.’13 Whether other courts faced with against Aereo by the US District Court interpreting the Transmit Clause for the Southern District of New York. Irreparable harm 2. Those states are New Mexico, for internet based services will Oklahoma, Colorado, Wyoming and The court found that all remaining follow the Utah case ruling Kansas. requirements for injunctive relief remains to be seen. What is certain 3. KUTV Licensee, LLC dba KMYU and were also met. Among these, the is that the decision in the Utah case KUTV, Fox Broadcasting Company and Nexstar Broadcasting Company were court held that plaintiffs showed will not be the final word on this also plaintiffs (collectively, with irreparable harm, despite one subject. Community Television of Utah, plaintiff executive’s statement that If the Supreme Court affirms the ‘Plaintiffs’). Aereo’s infringement was ‘a drop in decision of the Second Circuit 4. Community Television of Utah, LLC 14 dba KTSU FOX 13, et al v. Aereo, Inc., the bucket.’ The court determined Case, Aereo and others will be free Cons. Case No. 2:13CV910DAK (U.S. that Aereo’s continued to offer ‘enabling technology’ Dist. Utah)(‘Utah Case’). infringement ‘will interfere with absent the copyright holders’ 5. The Copyright Act of 1976, 17 U.S.C. § 106(4). Plaintiffs’ relationships and permission without violating the 6. By contrast, cable and satellite carriers negotiations with legitimate Transmit Clause. If, however, the retransmit Plaintiffs’ programming with licensees, impede and effect Supreme Court reverses the consent under paid copyright licences. Plaintiff’s negotiations with Second Circuit Case, Aereo will 7. The court rejected Aereo’s argument that it should follow the reasoning of advertisers, unfairly siphon viewers have to seek Plaintiff’s permission Cartoon Network LP v. CSC Holdings, from Plaintiffs’ own websites...and (which Plaintiffs could deny) and Inc., 536 F.3d 121 (2d Cir. 2008) cause Plaintiffs to lose control of pay copyright licence fees to (‘Cablevision’): ‘In Cablevision, the Second Circuit concluded that the cable quality and potential piracy of its Plaintiffs in order to continue company’s remote-storage DVR system 15 programming.’ offering its service. did not result in an additional public In considering the ‘balance of Either way, the Supreme Court’s performance under the terms of the harms’ between the irreparable decision could also more generally Transmit Clause because each subscriber made a single unique copy. harm to Plaintiffs and the potential impact the offering of internet- Given that the cable company already harm of an injunction to Aereo, based enabling technology beyond had a licence to transmit the the court found that the only harm those falling under the Copyright performance, the only issue was to Aereo’s business would be Act. Lower courts could apply the essentially whether the customer’s ability to record the performance required an limited to ‘its ability to expand into same reasoning to other laws and additional licence.’ The Utah Case at 9. the geographic area of the Tenth regulations whose current (citations omitted). Circuit.’16 application doesn’t extend to such 8. The Copyright Act of 1976, 17 U.S.C. § 101(2). technologies, but where an 9. Ibid. Enjoined during stay argument could be made that the 10 .The Utah Case. at 6, citing See Fox After determining that Plaintiffs statutory language was intended to Television Stations, Inc. v. BarryDriller were entitled to a preliminary cover new internet-based Content Systems, 915 F. Supp. 2d 1138 (C.D. Cal. 2012); Fox Television Stations, injunction against Aereo, the court technologies. Stay tuned for further Inc. v. FilmOn X LLC, 2013 WL 4763414 went on to deny Aereo’s motion to developments! (D.D.C. 5 Sept 2013); WNET v. Aereo, transfer the case to the Southern Inc., 712 F.3d 676 (2d Cir. 2013) (Chin, District of New York17. The court Kathy Ossian Founder and CEO J., dissenting). Ossian Law PC, Michigan 11. Ibid., citing See WNET v. Aereo, Inc., granted Aereo’s motion to stay the [email protected] 712 F.3d 676 (2d Cir. 2013) and Hearst case pending the Supreme Court’s Stations Inc. v. Aereo, Inc., 2013 WL ruling in the WNET case, but 1. WNET v. Aereo, Inc., 712 F.3d 676 (2d 5604284 (D. Mass. 8 Oct 2013). 12. Ibid. at 10. further held that the preliminary Cir. 2013) (Chin, J., dissenting) (‘Second Circuit Case’). Plaintiffs/Appellants were 13. Ibid. at 14. injunction would remain in effect WNET, THIRTEEN, Fox Television 14. Ibid. at 15. during the stay18. Stations, Inc., Twentieth Century Fox Film 15. Ibid. Corporation, WPIX, INC., Univision 16. Ibid. at 16. 17. Ibid. at 18. The impact of the Utah case Television Group, Inc, The Univision Network Limited Partnership, Public 18. Ibid. at 25. As a result of the court’s decision, Broadcasting Service, American 19. Even after a favourable Supreme Aereo was required to suspend its Broadcasting Companies, Inc., Disney Court decision, Aereo will likely have to service in the six states making up Enterprises, Inc., CBS Broadcasting Inc., file a motion before the court in the Utah CBS Studios Inc., NBC Universal Media, case to have the injunctive order. the Tenth Circuit. Aereo cannot LLC, NBC Studios, LLC, Universal assume these operations unless and Network Television, LLC, Telemundo

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