American Broadcasting Cos. v. Aereo, Inc.
573 U.S. ___ (2014)

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Justia Opinion Summary
The Copyright Act of 1976 gives a copyright owner the “exclusive righ[t]” to “perform the copyrighted work publicly,” 17 U.S.C. 106(4), including the right to “transmit or otherwise communicate ... 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,” section 101. Aereo sells a service that allows subscribers to watch television programs over the Internet. Aereo’s server tunes an antenna, which is dedicated to the use of one subscriber, to the broadcast carrying the selected show. A transcoder translates the signals received by an antenna into data that can be transmitted over the Internet. A server saves the data in a subscriber-specific folder and streams the show to the subscriber, a few seconds behind the over-the-air broadcast. The owners of program copyrights unsuccessfully sought a preliminary injunction, arguing that Aereo was infringing their right to “perform” their copyrighted works “publicly.” The Second Circuit affirmed. The Supreme Court reversed and remanded, holding that Aereo performs the works within the meaning of section 101 and does not merely supply equipment that allows others to do so. The Court noted that the Act was amended in 1976 to make the law applicable to community antenna television (CATV) providers by clarifying that an entity that acts like a CATV system “performs,” even when it only enhances viewers’ ability to receive broadcast television signals. Aereo’s activities are similar; it sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast. That Aereo’s system remains inert until a subscriber indicates that she wants to watch a program is not critical. Aereo transmits a performance whenever its subscribers watch a program. The Court stated that when an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it “transmit[s] ... a performance” to them, regardless of the number of discrete communications it makes and whether it makes an individual personal copy for each viewer. Aero subscribers are “the public” under the Act: a large number of people, unrelated and unknown to each other.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

AMERICAN BROADCASTING COS., INC., et al. v. AEREO, INC., fka BAMBOOM LABS, INC.

certiorari to the united states court of appeals for the second circuit

No. 13–461. Argued April 22, 2014—Decided June 25, 2014

The Copyright Act of 1976 gives a copyright owner the “exclusive righ[t]” to “perform the copyrighted work publicly.” 17 U. S. C. §106(4). The Act’s Transmit Clause defines that exclusive right to include 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.” §101.

          Respondent Aereo, Inc., sells a service that allows its subscribers to watch television programs over the Internet at about the same time as the programs are broadcast over the air. When a subscriber wants to watch a show that is currently airing, he selects the show from a menu on Aereo’s website. Aereo’s system, which consists of thousands of small antennas and other equipment housed in a centralized warehouse, responds roughly as follows: A server tunes an antenna, which is dedicated to the use of one subscriber alone, to the broadcast carrying the selected show. A transcoder translates the signals received by the antenna into data that can be transmitted over the Internet. A server saves the data in a subscriber-specific folder on Aereo’s hard drive and begins streaming the show to the subscriber’s screen once several seconds of programming have been saved. The streaming continues, a few seconds behind the over-the-air broadcast, until the subscriber has received the entire show.

          Petitioners, who are television producers, marketers, distributors, and broadcasters that own the copyrights in many of the programs that Aereo streams, sued Aereo for copyright infringement. They sought a preliminary injunction, arguing that Aereo was infringing their right to “perform” their copyrighted works “publicly.” The District Court denied the preliminary injunction, and the Second Circuit affirmed.

Held: Aereo performs petitioners’ works publicly within the meaning of the Transmit Clause. Pp. 4–18.

     (a) Aereo “perform[s].” It does not merely supply equipment that allows others to do so. Pp. 4–10.

          (1) One of Congress’ primary purposes in amending the Copyright Act in 1976 was to overturn this Court’s holdings that the activities of community antenna television (CATV) providers fell outside the Act’s scope. In Fortnightly Corp. v. United Artists Television, Inc., 392 U. S. 390 , the Court determined that a CATV provider was more like a viewer than a broadcaster, because its system “no more than enhances the viewer’s capacity to receive the broadcaster’s signals [by] provid[ing] a well-located antenna with an efficient connection to the viewer’s television set.” Id., at 399. Therefore, the Court concluded, a CATV provider did not perform publicly. The Court reached the same determination in respect to a CATV provider that retransmitted signals from hundreds of miles away in Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U. S. 394 . “The reception and rechanneling of [broadcast television signals] for simultaneous viewing is essentially a viewer function, irrespective of the distance between the broadcasting station and the ultimate viewer,” the Court said. Id., at 408. Pp. 4–7.

          (2) In 1976, Congress amended the Copyright Act in large part to reject the Fortnightly and Teleprompter holdings. The Act now clarifies that to “perform” an audiovisual work means “to show its images in any sequence or to make the sounds accompanying it audible.” §101. Thus, both the broadcaster and the viewer “perform,” because they both show a television program’s images and make audible the program’s sounds. Congress also enacted the Transmit Clause, which specifies that an entity performs when it “transmit[s] . . . a performance . . . to the public.” Ibid. The Clause makes clear that an entity that acts like a CATV system itself performs, even when it simply enhances viewers’ ability to receive broadcast television signals. Congress further created a complex licensing scheme that sets out the conditions, including the payment of compulsory fees, under which cable systems may retransmit broadcasts to the public. §111. Congress made all three of these changes to bring cable system activities within the Copyright Act’s scope. Pp. 7–8.

          (3) Because Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the Act to reach, Aereo is not simply an equipment provider. Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast. Aereo uses its own equipment, housed in a centralized warehouse, outside of its users’ homes. By means of its technology, Aereo’s system “receive[s] programs that have been released to the public and carr[ies] them by private channels to additional viewers.” Fortnightly, supra, at 400.

     This Court recognizes one particular difference between Aereo’s system and the cable systems at issue in Fortnightly and Teleprompter: The systems in those cases transmitted constantly, whereas Aereo’s system remains inert until a subscriber indicates that she wants to watch a program. In other cases involving different kinds of service or technology providers, a user’s involvement in the operation of the provider’s equipment and selection of the content transmitted may well bear on whether the provider performs within the meaning of the Act. But given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here. Pp. 8–10.

     (b) Aereo also performs petitioners’ works “publicly.” Under the Clause, an entity performs a work publicly when it “transmit[s] . . . a per-formance . . . of the work . . . to the public.” §101. What performance, if any, does Aereo transmit? Petitioners say Aereo transmits a prior performance of their works, whereas Aereo says the performance it transmits is the new performance created by its act of transmitting. This Court assumes arguendo that Aereo is correct and thus assumes, for present purposes, that to transmit a performance of an audiovisual work means to communicate contemporaneously visible images and contemporaneously audible sounds of the work. Under the Court’s assumed definition, Aereo transmits a performance whenever its subscribers watch a program.

     What about the Clause’s further requirement that Aereo transmit a performance “to the public”? Aereo claims that because it transmits from user-specific copies, using individually-assigned antennas, and because each transmission is available to only one subscriber, it does not transmit a performance “to the public.” Viewed in terms of Congress’ regulatory objectives, these behind-the-scenes technological differences do not distinguish Aereo’s system from cable systems, which do perform publicly. Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as from those of cable companies.

     The text of the Clause effectuates Congress’ intent. Under the Clause, an entity may transmit a performance through multiple transmissions, where the performance is of the same work. Thus when an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it “transmit[s] . . . a performance” to them, irrespective of the number of discrete communications it makes and irrespective of whether it transmits using a single copy of the work or, as Aereo does, using an individual personal copy for each viewer.

     Moreover, the subscribers to whom Aereo transmits constitute “the public” under the Act. This is because Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other. In addition, neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the underlying works. This is relevant because when an entity performs to a set of people, whether they constitute “the public” often depends upon their relationship to the underlying work. Finally, the statute makes clear that the fact that Aereo’s subscribers may receive the same programs at different times and locations is of no consequence. Aereo transmits a performance of petitioners’ works “to the public.” Pp. 11–15.

     (c) Given the limited nature of this holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies. Pp. 15–17.

712 F. 3d 676, reversed and remanded.

     Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Ginsburg, Sotomayor, and Kagan, JJ., joined. Scalia, J., filed a dissenting opinion, in which Thomas and Alito, JJ., joined.

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Primary Holding

When an entity communicates the same perceptible images and sounds to multiple people at the same time, it has transmitted a performance to the public within the meaning of the Copyright Act and may be held liable for infringing a copyright.