This past summer the Supreme Court ruled against Aereo, Inc. in the case of American Broadcasting Companies, Inc. v. Aereo, Inc. The decision hinged on the meaning behind two critical terms of the Copyright Act (17 U.S.C.): “perform” and “publicly”. The Court first had to decide whether the actions by Aereo constitute a performance as described within the Copyright Act. Secondly, the Court had to determine, if there was a performance by Aereo, whether this performance was a public one. This case was, and still is, very important for the Intellectual Property community, especially with regards to Copyright.
What is Aereo?
Aereo is a company that provides recordings of broadcast television to individual subscribers who pay Aereo a monthly fee. The company owns a large warehouse which contains thousands of small antennas, and each antenna is assigned to one, and only one, subscriber. The subscriber uses the Aereo website to select which programming they would like to see and the subscriber’s antenna then begins to transmit the recording to “an Aereo transcoder [that] translates the signals received into data that can be transmitted over the Internet.” The data is then saved on Aereo’s hard drive within a folder specific to the particular subscriber. Next, after a few seconds have been recorded, the recording begins to stream the saved copy from the folder to the subscriber over the Internet. Aereo has explained that each subscriber has his or her own antenna as well as a personal folder where their recordings are saved, and no personal recording is shared with anyone except the individual subscriber who requested it.
Was there a Performance by Aereo?
The Copyright Act states that the copyright owner is given the sole right to “perform the copyrighted work publicly.” The Court determined that Aereo does in fact perform the copyrighted work. Performance, within the Copyright Act, is defined as “to transmit … a performance … of the work … to the public …” Aero argued that it did not perform, that it merely provides the equipment for subscribers to use to record; however, the Court did not agree with this argument.
The Court noted that in 1976 Congress amended the Copyright Act to clarify the definition of “perform.” Under the 1976 Act, to “perform” an audiovisual work means “to show its images in any sequence or to make the sounds accompanying it audible.” The Court ruled that under this definition of “perform”, Aereo was actually performing. The Court stated, “Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, almost as they are being broadcast…It ‘carr[ies] … whatever programs [it] receive[s],’ and it offers ‘all the programming’ of each over-the-air station it carries.” Aereo argued that their service should be permitted since each subscriber has its own antenna and folder on Aereo’s hard drive. Yet, the Court determined that this difference between Aereo and traditional cable companies did not make a “critical difference” in the decision. The Court concluded that Aereo is not just an equipment provider and that the company does indeed perform.
Was the Performance Public?
After the Court determined that Aereo does perform, they addressed the issue of whether the performance was public. The Court asserted that under the Transmit Clause of the Copyright Act an entity performs a work publicly when it “transmit[s] … a performance … of the work … to the public.” Aereo made two major arguments as to why there was not a public performance. First, they argued, their transmission of the programming was not a prior performance, as ABC asserted, but a new performance that was created by their act of transmission. The Court decided to assume arguendo that this first argument by Aereo was correct and moved on to Aereo’s next point.
Second, Aereo argued that the performance was not public because each subscriber had their own private copy of the programming they chose to view. The Court again ruled that this “technological difference” between Aereo and traditional cable companies should not matter. The Court went on to point out that this “behind the scenes” difference did not change the commercial objective of Aereo and that a performance may be transmitted “through multiple, discrete transmissions.” The Court held that under the Transmit Clause it does not matter if the members of the public receive the transmission all at once or at different times.
Ultimately, the Court ruled that Aereo was performing and that their performance was public. This means Aereo’s actions were in violation of the Copyright Act of 1976 and its Transmit Clause. Currently, the company’s website states that since the decision they “have since paused operations nationally and have been working diligently to create a path forward for the company.”
It is interesting to note that the Court made clear they were only ruling that Aereo’s particular actions constituted a public performance. They were not addressing “[q]uestions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which “Congress has not plainly marked [the] course,” and that these subjects “should await a case in which they are squarely presented.”
Am. Broad. Companies, Inc. v. Aereo, Inc., 134 S. Ct. 2498, 2503, 189 L. Ed. 2d 476, 82 USLW 4568, 2014 Copr. L. Dec. P 30620, 110 U.S.P.Q.2d 1961, 42 Media L. Rep. 1885, 14 Cal. Daily Op. Serv. 7056, 2014 Daily Journal D.A.R. 8209, 60 Communications Reg. (P&F) 1156, 24 Fla. L. Weekly Fed. S 913, 2014 WL 2864485 (2014).
 Id. at 2503.
 17 U.S.C. § 106(4).
 17 U.S.C. § 101.
 Am. Broad. Companies, Inc. v. Aereo, Inc. at 2507.
 Id. at 2505.
 17 U.S.C. § 101.
 Am. Broad. Companies, Inc. v. Aereo, Inc. at 2506.
 Id. at 2507.
 Id. at 2507-08.
 Id at 2508.
 Id. at 2509.
 Id. at 2511.
 https://www.aereo.com/ (Last accessed Nov. 3, 2014).
 Am. Broad. Companies, Inc. v. Aereo, Inc. at 2511.