4/1. The U.S. Court of Appeals
(2ndCir) issued its divided
opinion [62 pages in PDF] in WNET v. Aereo and ABC v. Aereo
affirming the order of the U.S. District
Court (SDNY) denying Aereo's motion for a preliminary injunction.
The majority held that Aereo's service, which captures, stores, and almost
immediately retransmits broadcasters' programming, without license, to its own
customers, for a fee, via a multitude of antennas, is not a public performance
with the meaning of the Copyright Act, and hence, does not infringe the
exclusive rights of broadcasters.
The dissent argued that Aereo's system is a sham, functionally equivalent to
a cable system, constructed solely to exploit a perceived loophole in the
Copyright Act, that must be viewed as a public performance in violation of the
exclusive rights of broadcasters.
Outline of this Article.
Judge Droney's Majority Opinion.
Judge Chin's Dissenting Opinion.
Impending Circuit Split.
More Case Information.
Introduction. The District Court issued its
opinion [52 pages in PDF] in WNET v. Aereo and ABC v. Aereo on
July 11, 2012.
This is a pair of copyright infringement cases involving the Aereo online
retransmission service. The two cases are substantially similar, but not
consolidated. The District Court and Appeals Court have considered the two cases
simultaneously, and issued opinions that span both cases.
The key issue in these cases is how to apply broadcasters' public performance
right to Aereo's service. While the public performance right is not important
for many types of works subject to copyright, it is critical for the holders of
entertainment video programming.
Both the District Court and the Court of Appeals held, relying upon the
Second Circuit's 2008 opinion in Cartoon Network v. CSC Holdings, that
Aereo's service, since it retransmits using a large number of antennas, is not a
public performance, and thus is not an infringement of broadcasters' exclusive
right to public performance.
Statute. 17 U.S.C.
§ 106 sets forth the exclusive rights of copyright. Subsection 106(4) provides
that a copyright owner has the exclusive right "to perform the copyrighted work
17 U.S.C. § 101
provides pertinent definitions, written before development of the IT based
technologies at issue in this and other recent cases. The term "perform" means
"to recite, render, play, dance, or act it, either directly or by means of any
device or process".
The term "publicly" means to "to perform ... it at a place open to the
public or at any place where a substantial number of persons outside of a normal circle
of family and its social acquaintances is gathered" or "to transmit or otherwise
communicate a performance ... of the work to a place" specified by the previous
clause, "or to the pubic, 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".
Proceedings Below. WNET and other broadcasters filed their original
complaint [36 pages in PDF] in the
U.S. District Court (SDNY) on March 1, 2012, alleging copyright infringement
The WNET plaintiffs alleged that Aereo offers an unlicensed subscription service
that streams television programming over the internet to paying subscribers'
computers, smart phones and tablets in violation of the broadcaster's exclusive
rights of copyright (pubic performance right and reproduction right).
ABC and other broadcasters filed a second
complaint (alleging violation of
reproduction, distribution, and public performance rights) against Aereo on
March 12, 2012, in the same District Court.
The District Court issued an
opinion [PDF] on July 11 denying the plaintiffs' motions for a preliminary
injunction on the public performance right claim. That opinion is also reported
at 874 F. Supp. 2d 373.
The District Court relied on the 2nd Circuit's 2008
Cartoon Network v. CSC Holdings, 536 F.3d 121. See, story titled "2nd
Circuit Reverses in Remote Storage DVR Copyright Case" in
TLJ Daily E-Mail
Alert No. 1,806, August 5, 2008.
Judge Denny Chin wrote the District Court opinion that was overturned by that
2008 opinion. He is now a Court of Appeals Judge. He wrote the dissent in the
That opinion is also sometimes referred to as the "Cablevision" opinion,
because the defendant, Cablevision Systems Corporation (CSC), provided the
Remote Storage Digital Video Recorder (RS-DVR) system at issue in that case. The
Court of Appeals held that that DVR service does not infringe the rightholders'
(Cartoon Network and others) exclusive rights of reproduction and public
Judge Droney's Majority Opinion. Broadcasters in both cases brought the
present appeals. The 2nd Circuit considered the two cases together, and ordered
expedited briefing and oral argument.
Broadcasters argued that reliance upon the Cablevision opinion is misplaced,
that the Aereo service provides public performance, and that it violates their
exclusive rights to provide public performances. Aereo urged reliance upon the
Cablevision opinion, and affirmance of the District Court. See, story titled
"2nd Circuit Hears Oral Argument in Aereo Case" in
TLJ Daily E-Mail
Alert No. 2,482, December 4, 2012.
Judge Christopher Droney wrote the opinion of the Court, in which Judge
Judge Droney wrote that "Aereo transmits to its subscribers
broadcast television programs over the internet for a monthly subscription fee.
Aereo is currently limited to subscribers living in New York City and offers
only New York area channels. It does not have any license from copyright
holders to record or transmit their programs."
"The details of Aereo’s system are best explained from two
perspectives. From its subscribers’ perspective, Aereo functions much like a
television with a remote Digital Video Recorder (``DVR´´) and Slingbox. Behind
the scenes, Aereo’s system uses antennas and a remote hard drive to create
individual copies of the programs Aereo users wish to watch while they are being
broadcast or at a later time. These copies are used to transmit the programs to
the Aereo subscriber."
"The outcome of this appeal turns on whether Aereo’s service infringes
the Plaintiffs’ public performance right under the Copyright Act."
He continued that the "Plaintiffs claim that Aereo's transmissions of
broadcast television programs while the programs are airing on broadcast television
fall within the plain language of the Transmit Clause and are analogous to the
retransmissions of network programing made by cable systems, which the drafters of
the 1976 Copyright Act viewed as public performances. They therefore believe that
Aereo is publicly performing their copyrighted works without a license."
But, Judge Droney wrote, there is the Cablevision opinion.
He stated that "Cablevision's holding that Cablevision’s transmissions
of programs recorded with its RS-DVR system were not public performances rested
on two essential facts. First, the RS-DVR system created unique copies of every
program a Cablevision customer wished to record. ... Second, 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. Given these two features, 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
He reasoned that "The same two features are present in Aereo's system. When
an Aereo customer elects to watch or record a program using either the ``Watch´´
or ``Record´´ features, Aereo's system creates a unique copy of that
program on a portion of a hard drive assigned only to that Aereo user. And when
an Aereo user chooses to watch the recorded program, whether (nearly) live or
days after the program has aired, the transmission sent by Aereo and received by
that user is generated from that unique copy. No other Aereo user can ever
receive a transmission from that copy. Thus, just as in Cablevision, the
potential audience of each Aereo transmission is the single user who requested
that a program be recorded."
Judge Droney then proceeded to reject the plaintiffs' other arguments, including
that discrete transmissions should be aggregated to determine whether they are
public performances, and that the Aereo system is functionally equivalent to a
cable television provider.
And, he declined to overturn the Cablevision opinion.
Judge Chin's Dissent. Judge Denny Chin wrote in dissent that "by
transmitting (or retransmitting) copyrighted programming to the public without
authorization, Aereo is engaging in copyright infringement in clear violation of
the Copyright Act." (Parentheses in original.)
He explained that Aereo's technology platform is "a sham".
"The system employs thousands of individual dime-sized antennas, but there 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."
He continued that "After capturing the broadcast signal, Aereo makes a copy
of the selected program for each viewer" using a multitude of antennas. However,
"These are very much public performances."
Judge Chin did not argue that Cablevision should be overturned.
However, he argued that it is distinguishable.
Judge Chin wrote that "there are critical differences between Cablevision
and this case. Most significantly, Cablevision involved a cable company
that paid statutory licensing and retransmission consent fees for the content it
retransmitted, while Aereo pays no such fees.
Moreover, wrote Judge Chin, "the subscribers in Cablevision already
had the ability to view television programs in real-time through their
authorized cable subscriptions, and the remote digital video recording service
at issue there was a supplemental service that allowed subscribers to store that
authorized content for later viewing. In contrast, no part of Aereo's system is
authorized. Instead, its storage and time-shifting functions are an integral
part of an unlicensed retransmission service that captures broadcast television
programs and streams them over the Internet."
Hence, "Aereo is doing precisely what cable companies, satellite television
companies, and authorized Internet streaming companies do -- they capture
over-the-air broadcasts and retransmit them to customers -- except that those
entities are doing it legally, pursuant to statutory or negotiated licenses, for
He concluded that "the majority elevates form over substance. Its decision,
in my view, conflicts with the text of the Copyright Act, its legislative
history, and our case law."
Judge Chin has substantially experience with copyright law, both as a trial
court judge and as an appeals court judge.
He presided in the trial court in Google books cases brought by publishers
and the Authors Guild, in which he rejected the proposed class action
He also wrote the 2007
opinion of the District Court in Cartoon Network v. CSC Holdings, 478
F. Supp. 2d 607. Although, the Court of Appeals reversed in its 2008
He also wrote the
opinion [38 pages in PDF] of the Court of Appeals in WPIX v. ivi,
holding that a business that streams copyrighted broadcast TV programming over
the internet without consent is not a "cable system" within the meaning of
17 U.S.C. § 111 that
is entitled to a compulsory license. In that opinion, released on August 27,
2012, Judge Droney joined in the unanimous opinion. See also,
titled "2nd Circuit Rules Internet Streaming of TV Programming is Not a Cable
Service" in TLJ
Daily E-Mail Alert No. 2,439, September 3, 2012.
Impending Circuit Split. The just released opinion of the 2nd Circuit
is in conflict with a District Court opinion in the 9th Circuit. That other case
is on appeal to the 9th Circuit. If the 9th Circuit affirms, then two circuits
will be in conflict.
Circuit splits are a key criteria for the Supreme Court in deciding whether
or not to grant petitions for writ of certiorari.
The defendant in that other case is different, but it also captured and
retransmitting broadcast programming using a multitude of mini antennas. The
U.S. District Court (CDCal)
rejected its argument that this is not a public performance.
Thus, a District Court in another circuit has reached the opposite conclusion
in a case involving the same legal claim and very similar facts. See also, story
titled "District Court in California Enjoins Aereokiller" in
TLJ Daily E-Mail Alert
No. 2,500, December 31, 2012.
That other case is Fox Television Stations, Inc., et al. v. Aereokiller, LLC,
et al., U.S. District Court for the Central District of California, D.C. No.
2-12:cv-06921-GW, Judge George Wu presiding. It is one of two very similar
actions pending in the same court. The other is D.C. No. 2-12:cv-06950.
Reaction. Dennis Wharton of the National
Association of Broadcasters (NAB) stated in a
that the "NAB is disappointed with the Second Circuit's 2-1 decision allowing
Aereo to continue its illegal operations while broadcasters' copyright actions
are heard. We agree with Judge Chin's vigorous dissent and, along with our
members, will be evaluating the opinions and options going forward."
Ed Black, head of the Computer and
Communications Industry Association (CCIA), stated in a
that "This case was not just about broadcast television; it was a test of the
legitimacy of the cloud computing industry. Today, the Second Circuit agreed with us
that users should be able to access their own, lawfully-acquired content in the cloud
without the fear of being branded pirates". The CCIA and Internet Association (IA)
also filed an
amicus curiae brief in support of Aereo.
The Public Knowledge (PK)
stated in a
release that this opinion is a "victory for consumer choice and video
innovation". The PK, Electronic Frontier
Foundation (EFF), and Consumer Electronics
Association (CEA) also filed a amicus
curiae brief in support of Aereo.
More Case Information. This opinion was issued in two cases,
American Broadcasting Company, Inc., et al. v. Aereo, Inc., and WNET, et
al. v. Aereo, Inc., U.S. Court of Appeals for the 2nd Circuit, App. Ct.
Nos. 12-2807 and 12-2786, appeals from the U.S. District Court for the Southern
District of New York, D.C. Nos. 1:12-cv-01540-AJN and 1:12-cv-01543-AJN, Judge
Alyson Nathan presiding. The District Court has not consolidated the two cases.
Judge Christopher Droney wrote the opinion of the Court of Appeals, in which
Judge John Gleeson (USDC/EDNY sitting by designation) joined. Judge Denny Chin wrote
a dissenting opinion.
Both Judge Droney and Judge Chin were appointed to the District Court by
former President Clinton, and elevated to the Court of Appeals by President
Obama. Judge Droney served in the District of Connecticut, while Judge Chin
served in the Southern District of New York.
See also, stories titled "Obama Nominates Judge Chin to 2nd Circuit"
in TLJ Daily E-Mail
Alert No. 1,998, October 7, 2009, and "Obama Nominates Droney for 2nd
Circuit" in TLJ
Daily E-Mail Alert No. 2,233, May 5, 2011.
Judge Gleason was appointed to the District Court by former President
The law firm of Jenner & Block represented
the WNET plaintiffs. The law firm of
Debevoise & Plimpton represented the ABC plaintiffs. The law firms of
Winston & Strawn and
Constantine Cannon represented
The Court of Appeals received numerous amicus curiae briefs.