TV Everywhere

Appeals Court Sides With Aereo

2nd Circuit Upholds Lower-Court Refusal to Block Streaming of TV Stations 4/01/2013 8:32 AM Eastern

WASHINGTON —In a decision that could have widespread implications for the distribution of TV station signals in an online video world, a three-judge panel of the 2nd U.S. Circuit Court of Appeals has struck a blow for Aereo TV and against broadcasters' argument that the TV-station streaming service violates their copyright protection.

The court on Monday (April 1) upheld a U.S. District Court denial of an injunction filed by broadcasters seeking to stop the subscription video-streaming service from streaming TV station signals to subscribers without permission from or payment to broadcasters. The District court has yet to rule on the underlying broadcaster challenge, but the denial of the injunction means Aereo can continue to stream the signals. It also means that if the broadcasters were to lose in the district court, they would face an uphill battle on appeal, at least on the copyright argument.

"We conclude that 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,” the court ruled, citing a 2008 case involving that MSO’s networked Remote Storage-Digital Video Recorder (RS-DVR) service. “As such, Plaintiffs have not demonstrated that they are likely to prevail on the merits on this claim in their copyright infringement action."

The same circuit ruled back in August of 2008 in that Cablevision case that cable operator Cablevision Systems could provide digital-video-recorder functionality to its customers by using massive servers at its headends to record programming instead of giving them expensive set-top boxes with hard-disk recorders.

Broadcasters also challenged that decision, saying Cablevision was providing a public performance that violated copyright protections, but the Supreme Court upheld the 2nd Circuit.

Aereo, backed by media mogul Barry Diller, provides PC and mobile device users access to time-shiftable online streams of over-the-air New York TV stations in exchange for a monthly subscription fee.

Broadcasters sued Aereo for copyright violations because the company neither sought permission to retransmit the stations’ signals nor paid the broadcasters for their content.  

A judge in the U.S. District Court for the 2nd District of New York denied a request to shut down the service while the case was heard; broadcasters appealed that ruling to the 2nd Circuit.

"Today’s decision is a loss for the entire creative community," Fox Broadcasting said in a statement."The court has ruled that it is OK to steal copyrighted material and retransmit it without compensation.  While we are disappointed with this decision, we have and are considering our options to protect our programming.

“In the meantime, we plan to move forward towards a trial on the merits of the case, and on claims that were not impacted by this appeal.  We remain confident that we will ultimately prevail.”

"NAB is disappointed with the Second Circuit's 2-1 decision allowing Aereo to continue its illegal operations while broadcasters' copyright actions are heard," said National Association of Broadcasters spokesman Dennis Wharton in a statement. "We agree with Judge Chin's vigorous dissent and, along with our members, will be evaluating the opinions and options going forward."  That could include appealing to the full court, or perhaps trying to get the Supreme Court to weigh in. "It is clearly a deeply flawed opinion," added NAB spokesman Dennis Wharton.

If broadcasters went top the Supreme Court, they could point to the decision in the FilmOn case in December, where a California District Judge rejected the Second Circuit reasoning and upheld an injunction against that company's Aereokiller TV station streaming service, concluding it was indeed a public performance and that the New York court's rejection of an injunction was not binding in the Ninth Circuit. One of the reasons the Supremes will take a case is to resolve circuit splits. .

NAB, inagreeing with the dissent, was pointing to the following passage from Judge Denny Chin: ""Aereo's 'technology platform' is, however, 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."

Aereo saw it quite differently.

“Today’s decision from the Second Circuit Court of Appeals again validates that Aereo’s technology falls squarely within the law and that’s a great thing for consumers who want more choice and flexibility in how, when and where they can watch television,” said Aereo CEO Chet Kanojia in a statement.

Fair use activist group Public Knowledge applauded the majorities' decision.

"Only in the the world of copyright maximalists do people need to get special permission to watch over-the-air television with an antenna," said John Bergmayer, senior staff attorney. "Just because 'the Internet' is involved doesn't change this. It is likely that the broadcasters will try to overturn this decision in the courts or Congress.

But Public Knowledge will continue to argue that any change to the telecommunications and copyright laws that govern the video marketplace should be in a direction that better serves the needs of viewers and not broadcasters or other intermediaries."

Broadcasters who had sought the injunction included Fox, Disney, CBS, NBCU, WPIX and noncommercial WNET, both New York.

Aereo is currently streaming New York stations, with plans to expand to other markets.

March