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ABC v. Aereo Case Note
Angelique Hill
Dr. Travis
MBA 630
Introduction
American Broadcasting Company v. Aereo will discuss ulterior motive of Aereo and weather they have breached the Copyright Act of 1976. ABC has a right as owner of its content to perform their copyrighted work publicly. This case is important because previous cases against the defendant have failed to prevent Aereo from future obstruction of copyrighted content in the television broadcasting industry. Therefore, this case can prevent Aereo and other companies like it from continuing to use their platform for distribution of networks such as ABC. Aereo has developed a new form of television distribution that consist of millions of small antennas put together in a warehouse and connected to DVR machines. This technology used by Aereo affects the traditional television broadcasting business and the probability of other television broadcasting companies in the industry.
Facts
American Broadcasting Company is an American television network owned by Walt Disney Company. ABC provides multiple sources for their viewers to access their content such as cable channels, website and app steaming, as well as partnerships with media service providers such as Netflix and Hulu. They have been one of the major companies in the industry for over 70 years, maintaining their high percentage of viewers over generations.
Broadcasting is the distribution of video content to the general public via any electronic mass communications medium, but typically via radio waves (over-the-air), in a “one to many” model. This is known as traditional terrestrial television, in which the television signal is received by the television antenna attached to the specific television set.

Cable television is a system of distributing television programs to subscribers. These programs are acquired via radio frequency (RF) signals, and retransmitted through coaxial cables or fiber-optic cables.

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Internet television providers such as Netflix and Hulu started by offering television content and movies for consumers to stream on their platforms. This content was first aired in theaters or broadcasting networks before being released on their platforms. These internet television providers weren’t content with waiting to acquire what broadcasters provide. Therefore, instead of waiting for content from broadcasters they decided to create original productions for their own steaming platforms.
Aereo, Inc. provides technology for consumers to receive live television broadcasts. The Company offers proprietary remote antenna and DVR that consumers can use to access network television on web-enabled devices such as smartphones and tablets, and through internet TV solutions devices. Aereo, Inc., provides a service that allows its subscribers to watch programs that are currently airing on network television or record programs such as ABC that will air in the future on the networks websites or partnered streaming companies.
Aereo serves three functions: that of a regular television antenna, a recording device, and an application that makes these services work on devices other than televisions and computers. These functions allow subscribers to watch live television as well as record and watch shows on Internet-enabled devices including mobile phones. Aereo was only available to subscribers in the New York City area and offers only New York City local channels in the beginning. Aereo does not have a license from the copyright holders of the programs to record or transmit their programs.

Holding
Broadcasters v. Aereo first went to the District Court of New York. The court ruled that Aereo did not perform publicly according to the previous cases of transmitting clause. On July 11, 2012, The District Court of New York denied the plaintiffs request for a preliminary injunction against Aereo.
Disappointed in the results of the District Court, the plaintiff transitioned to the Second Circuit for an injunction against Aereo. On April 1, 2013, the Second Circuit ruled in favor of Aereo, similar to the District Court of New York.

On March 8, 2014, the district court of Utah had a different perspective of the transmit clause from the 1976 Copyright Act. It ruled differently from the other courts and granted a preliminary injunction against Aereo. As a result, Aereo had to halt its service in Utah.

After several cases later the Supreme Court heard American Broadcasting Company v. Aereo and the question presented to the Court was if Aereo “publicly perform” a copyrighted television program from ABC when it transmits the program to paid subscribers over the Internet? The United States Supreme Court ruled that because Aereo is functionally similar to community antenna television (CATV), which Congress specifically amended the Copyright Act to cover, the Copyright Act regulates Aereo’s actions in a similar manner.
Roadmap
This note will argue the unlawfulness of Aereo’s broadcasting access of ABC’s network. Part one will define the Copyright Act of 1976 and its relation to this case. It will also include information about past cases against the defendant Aereo. Part two will discuss and answer the following questions: First, did Aereo “perform” the illegal act? Second, did they perform them publicly? This case study also goes through United States Supreme Court’s decision process and reasoning in order to fully justify the lawfulness of Aereo’s services. Concluding this case by arguing a position and providing recommendations to the Supreme Court. Overall this case will review information about Aereo, Inc.’s innovative technology, business strategy, and its legal disputes surrounding its operation.
Analysis
Part One
The Copyright Act of 1976 gives a copyright owner the right to all public performances of their copyrighted work. The act allows the copyright owner tsso have rights to the information put out about their work, whether it’s received from the same place or not. Copyright Disclaimer under Section 107 of the Copyright Act 1976, focuses on the “fair use”. Fair use is a use permitted by copyright statute that might otherwise be invading if not used for purposes such as criticism, comments, news reporting, teaching, scholarship, and research.
In the past, two separate broadcasting companies have filed copyright infringement suits against Aereo and moved for a preliminary injunction to prevent Aereo from transmitting programs to its subscribers while the programs were still being broadcast. The transmission of the programs violated the owners right to “publicly perform” their copyrighted works.
The court mentioned the 1976 Copyright Act, which requires a copyright owner’s permission for “public performances” of their work. In concluding that Aereo’s broadcasts are not public performances, the court said that Aereo’s system is similar to the RS-DVR system that the Second Circuit previously validated in another case. As in Cablevision, the court held that the potential audience for each Aereo transmission is the single user to whom each antenna is assigned. The Second Circuit held that Aereo’s transmission of unique copies of television programs did not add up to a public performance, but instead to thousands of private performances. The court concluded that the complainants did not demonstrate a likelihood of prevailing on the values in their copyright violation act. The Supreme Court granted certiorari on January 10, 2014.

Part Two
The Supreme Court ruled six-to-three that Aereo’s service infringes the public performance right and remanded the case back to the Second Circuit. Upon that decision, Aereo shut down its website and terminated all services. The Supreme Court, held that Aereo “performed” copyrighted works within meaning of the Copyright Act, and performed the works “publicly” within meaning of the Act’s transmit clause.

With the Supreme Court’s decision, they also went into debt of their reasoning to back up the majority opinion on the issue. The Court noted the similar functions of CATV and Aereo to use technology outside of the home to provide television broadcast signals to additional viewers, concluding, Aereo is one of the companies Congress amended the act to reach. Aereo only transmits on demand, an attribute that Aereo (and the dissent) likened to a copy shop that allows customers to copy only what they select. Due to the fact that subscribers actually “perform” the works, the Court turned to whether those performances are “public.
Aereo argued to the Court, as it did in the various lower courts, that because each of its performances is dedicated to a particular subscriber, no performance was made by its service made available to the public. Chin, Circuit Judge respectfully dissent because the defendant Aereo retransmits the programming without the authorization of the copyright holders and without paying a fee. Again, the Court compared Aereo to CATV and cable systems in light of the congressional intent underlying the 1976 Copyright Act. In terms of the Act’s purposes, these differences do not distinguish Aereo’s system from cable systems, which do perform “publicly.” The Court’s main concern is the behind-the scenes way in which Aereo delivers television programming to its viewers’ screens.

Part Three
After multiple cases against Aereo, The Supreme Court made a good decision to charge Aereo for illegally performing content publicly. Aereo’s system is corrupt because it allowed consumers to access broadcast television, defeating the purpose and threatening the millions of dollars broadcasters receive from cable companies for the right to carry their programs. The court claimed that Aereo overstepped the public performance right, specifically under the “transmit clause,” which treats transmissions of a work to “the public” as public performances.

Also under the definitions Congress established in the Copyright Act, Aereo performs copyright works because it shows images in sequence with the accompanying audio, and it does so publicly because those images and sounds are received beyond the place from where they were sent by a large number of unrelated people. Therefore, Aereo, like CATV, is not just an equipment provider but rather a broadcaster and had violated copyright laws by capturing broadcast signals on miniature antennas and delivering them to subscribers for a fee.
Aereo’s intentions when providing its subscribers ABC’s or other broadcasting networks programs aren’t good because they claim they don’t “perform” for the sole and simple reason that it does not make the choice of content. Aereo argues that it does not perform, therefore it cannot be held directly liable for infringing the Networks’ public-performance right.

Aereo subscribers don’t know and don’t care how things work behind the curtain, they just want to receive the content. Therefore, Aereo gains an unfair advantage over cable systems that provide the same content because it is able to avoid paying the broadcasters for their content. Therefore, the court justifiably ruled Aereo to be guilty of invading ABC’s right to its programs.
Part Four
Although The Supreme Court has voted against Aereo and they have stated they would shut their website down they plan on finding more innovative ways to keep their platform running as of September 2014. Therefore, Aereo should be put under investigation for their airing process, as well as possible be seen by a consultant to best come up with a solution that will keep Aereo out of court and networks programs protected from illegal broadcasting.
In a letter posted on their website to Aereo’s users after the court made a decision, Knojia wrote “We are disappointed in the outcome, but our work is not done. We will continue to fight for our consumers and fight to create innovative technologies that have a meaningful and positive impact on our world”. If all fails and Aereo is brought back to court for their “innovative technologies”, The Supreme Court needs to require Aereo to have permission from television networks, inform them that they have accesses to their content before providing network as an option for their subscribers, and or permanently shut down the company.
United States Supreme Court’s ruling can make an impact on the future of media streaming technologies, and other media sharing services. The results of this case can set the tone for future companies like Aereo to follow the guidelines of the Copyright Act of 1976. The Supreme Court could also adjust the Copyright Law to make the transmit clause more clear to prevent the new technology innovation of steaming copyrighted content publicly.
If Aereo should lean towards creating original content to stream on their platform like Netflix and Hulu. They could also create partnerships with broadcasting companies rather than working against them. With their technology and innovation they can change internet television streaming for the good of consumers. Although Aereo has been illegally successful, they already have an audience that’s seeking a new innovative source of television streaming. Thus, using their platform to properly change their business model to meet the standards of the Copyright Act 1976.
Conclusion
The Supreme Court’s decision in ABC v. Aereo, Inc. was made justifiably with the clarity of one dispute: Aereo publicly performs copyrighted works. The functions of Aereo’s system allow subscribers to watch live television as well as record and watch shows on Internet-enabled devices including mobile phones. However, Aereo does not have a license from the copyright holders of the programs to record or transmit their programs. Aereo was rejected for a statutory license for cable systems and contained no exception in the Copyright Act to excuse the infringement they have made. With no further choice, Aereo filed for Chapter 11 bankruptcy protection and expects to pay millions of dollars in damages to copyright owners.
In conclusion the court previously has been cautious about shutting down disruptive technologies. However, their outlook on the result of this case is that the decision does not affect new technologies coming it but rather a warning about illegal disruptions.

Endnotes

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