Analyzing the Menell-Nimmer Brief on Aereo

Posted By on Mar 7, 2014 | 0 comments

The Aereo amicus brief filed by the Solicitor General’s office on Monday has generated considerable media interest and attention. We laid out our criticisms of the Solicitor General’s argument—in particular, noting that it contradicted itself—in our earlier posts US Government Sides With Broadcasters on Aereo, Contradicting Itself in the Process and Aereo and the Solicitor General’s Strange Conception of Rentals.

Less discussed has been the amicus brief filed last week by law professors Peter Menell and David Nimmer, which also argued that Aereo infringes the public performance right.

Menell and Nimmer are pre-eminent copyright scholars, and for the last three decades, David Nimmer has taken responsibility for revising and updating Nimmer on Copyright, a leading copyright treatise originally authored by his father, Melvin NimmerNimmer on Copyright was cited by the Second Circuit in both the Aereo decision and the Cablevision decision that underlies the Aereo case, and according to Wikipedia, has been cited in at least 2500 US judicial opinions.

Quite plausibly, then, Menell’s and Nimmer’s brief could carry more weight with the Supreme Court than the Solicitor General’s.  Accordingly, we think it worthwhile to examine their argument.

Menell and Nimmer did us the great favor of providing their own succinct summary of their argument, so we’ll take advantage of that here.  According to them, the rationale of the Second Circuit majority in Aereo amounts to three points (citations omitted throughout):

(1) Plaintiffs’ “reading of the legislative history is simply incompatible with the conclusions of the Cablevision court.”

(2) “[I]n 1976, when cable TV was still in its infancy, many Americans used rooftop antennas. Thus Congress would have certainly wished to avoid adopting language that would make millions of Americans copyright infringers because they transmitted broadcast television programs from their personal rooftop antennas to their own television sets.” and

(3) “In the technological environment of 1976, distinguishing between public and private transmissions was simpler than today. . . . Thus unanticipated technological developments have created tension between Congress’s view that retransmissions of network programs by cable television systems should be deemed public performances and its intent that some transmissions be classified as private. Although Aereo may in some respects resemble a cable television system, we cannot disregard the contrary concerns expressed by Congress in drafting the 1976 Copyright Act.”

In their summary, they proceed to rebut these in turn.  We’ll go through their rebuttals one at a time.

(1) Beyond Cablevision not being binding on this Court, the majority below was mistaken to root consideration of the structural relevance of Section 111 in the legislative history of another provision. To the contrary, the incompatibility of Aereo’s position with governing law unfolds over 41 pages of the Copyright Act itself. Having focused its attention exclusively on the Transmit Clause, the majority below blinded itself to the larger meaning of Congress’s handiwork.  That myopia results in an opinion that traduces whole swathes of governing law.

In case you need help like I did, traduces effectively means defames.

Menell and Nimmer are certainly correct that the Supreme Court is not bound by the Second Circuit’s holding in Cablevision.  The remainder of what they argue in the above amounts to a very strange argument, indeed:

In essence, the majority’s interpretation of the few lines of the Transmit Clause sets at naught 41 pages of the Copyright Act that Congress has devoted to the regulation of satellite and cable television.

This conclusion is perplexing.  Menell and Nimmer are, in essence, arguing that the amount of effort Congress invested the creation of an elaborate compulsory licensing scheme for cable operators’ public performances of broadcast signals somehow compels classification of performances within Aereo’s system as also public.

Of course, no such logical inference can reasonably be made.  The fact that Congress felt it important to create a detailed compulsory licensing scheme for cable’s public performances says nothing to reduce or eliminate the fact that they also sought to differentiate and protect the right of individuals to engage in private performances.  And if the transmissions of Aereo are, in fact, private performances by Aereo users, the compulsory licensing scheme, in all its 41 pages of detail, is simply not relevant to Aereo.  That conclusion wouldn’t traduce the compulsory licensing scheme, in any way.

On point (2), Menell and Nimmer respond:

(2) The majority’s rationale is that anyone could set up a rooftop antenna, so commercial services doing effectively the same thing should rest beyond liability. That rationale exactly matches the above quotation from Fortnightly concluding that the “only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.”  Yet Congress deliberately rejected that standard by adopting Section 111, as the dissent below emphasized.

This mischaracterizes the undisputed point the Second Circuit majority was making in Aereo: that, by the transmit clause, Congress was clearly distinguishing private performances from public performances, and that it is beyond dispute that, under the transmit clause, individuals retain the right to privately receive and retransmit to themselves broadcast television signals.

This does not answer the question as to whether the transmissions of Aereo’s system are public or private, but it does underscore the point that any interpretation of the transmit clause that would render private reception and retransmission by an individual a public performance, in need of licensing, is obviously incorrect.

If Aereo’s system is one of renting television reception and retransmission equipment to individuals, as Aereo claims it to be, then a finding that those retransmissions are public performances would quite clearly threaten all private reception by individuals.  The Copyright Act provides absolutely no basis for distinguishing between reception where equipment is owned vs. rented, or for distinguishing between cases where the reception equipment (i.e. the antenna) is located close to or far from the location where the individual ultimately displays the retransmitted signals, or for distinguishing between a commercial arrangement involving rental of a single set of equipment to a single individual, vs. an arrangement involving many sets of equipment rented to many individuals.

Accordingly, if a mass rental of remotely-located reception equipment were deemed to constitute a public performance, the only way to distinguish it from the traditional case of an individual using an antenna located at their home would be for the Court to fabricate some arbitrary criteria to distinguish those cases.

It is simply not the proper role of the Court to do such.  Creation of such arbitrary distinctions is the role of Congress (assuming that Congress believes such is required).

Menell and Nimmer argue that Congress “deliberately rejected” the Second Circuit position (or rather, Menell’s and Nimmer’s characterization of such), based on Congress having revised the copyright statute to overturn Fortnightly, a 1968 Supreme Court case which, as they note, had concluded that the “only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.”  However, a different light is shed on the situation when we look at that quote in context (as shown earlier in their own brief):

If an individual erected an antenna on a hill, strung a cable to his house, and installed the necessary amplifying equipment, he would not be “performing” the programs he received on his television set. The result would be no different if several people combined to erect a cooperative antenna for the same purpose. The only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.

Here we see that the “antenna system” being compared to CATV in Fortnightly is actually a hypothetical cooperative antenna erected by multiple individuals to serve themselves as a group, not an individual antenna erected by an individual to serve himself.

It is far more reasonable to believe that what Congress was doing in rejecting Fortnightly was not attempting to classify any reception and retransmission system involving any commercial aspect to be public in nature, but rather, attempting to classify cooperative systems for reception and retransmission as public in nature, regardless of whether they were commercial in nature, or not.

This interpretation draws strength both from the absence of any basis in the statute, or evidence whatsoever that Congress intended, for retransmissions from a rented antenna to be treated differently from an owned antenna, or to be inherently public performances.  It draws further strength from Menell’s and Nimmer’s own observation of the legislative history, whereby a 1965 report went on at length about the importance of bringing even nonprofit systems within the purview of copyright law, summed up by saying:

…we believe the day is past when any particular use of works should be exempted for the sole reason that it is “not for profit.”

Accordingly, it seems clear that the presence or absence of profit in retransmission was not a particular concern for Congress.  Rather, it makes much more sense to conclude that, in rejecting Fortnightly, Congress was focused on the structural element of CATV systems using a shared antenna to serve multiple members of the public vs. a system where an individual antenna were used to serve an individual user.  It’s hard to imagine that any serious observer would suggest that Congress intended to foreclose the rental of individual antennas to individual users, without first securing a public performance license.

On the third and final point, Menell and Nimmer respond:

(3) The majority looks to “the technological environment of 1976” to conclude that there have been “unanticipated technological developments” in the interim, but expressed its obligation as being to follow the “concerns expressed by Congress in drafting the 1976 Copyright Act.” As revealed in Parts I and II of this brief, Congress’s specific and general statements as well as the structure of the 1976 Act compel the opposite conclusion. Furthermore, Congress reinforced those concerns to accommodate the progress of technology by amending the Act in 1988; then further reinforced those concerns as technology marched forward by again amending the Act in 1994; and did the same yet again in 1999; and likewise in 2004; plus yet another time in 2010.

It’s not clear if Menell and Nimmer somehow mean to suggest by this that Congress did, indeed, anticipate the specific technological developments.  Earlier in their brief they excerpt a 1966 Congressional report and say:

The italicized text above comes eerily close to describing Aereo’s technology. By specifying that the public performance right is implicated when a transmission is “capable of reaching different recipients at different times, as in the case of sounds or images stored in an information system and capable of being performed or displayed at the initiative of individual members of the public,” the drafters effectively described an on-demand DVR device providing access to over-the-air signals.

This is not to say that Congress foresaw all aspects of the Aereo service more than four decades before it reached the market. The report did not specifically refer to separate recording devices for each subscriber – more than a decade prior to the emergence of the household video cassette recorder (VCR) – but nonetheless presciently described “an information system” that could be activated “at the initiative of individual members of the public.” It also refers to Congress’s desire to be “doubly clear” that it viewed the provision very broadly. It is difficult to imagine the drafters not considering Aereo to fall comfortably within their conception of a public performance right when they describe both cable services and recording devices that can deliver performances to individual members of the public on demand as falling within the public performance right.

But of course, it is quite significant that we can be fairly confident that Congress wasn’t able to foresee the development of DVRs more than three decades later, let alone network-based individual-storage DVRs, fully four decades later.  (And if Congress had, then surely they would have undertaken to resolve such much more clearly in the statute, rather than leaving us to divine such.)

Given that even Menell and Nimmer acknowledge that Congress was surely envisioning a conventional on-demand video system, where single copies of programs would be used to serve multiple members of the public—much like the shared antenna reception systems of CATV of the day—it is far more compelling, again, to believe that Congress’s view was focused on a system where, structurally, the critical elements (in this case, the storage and the copy of the content, itself) to serve multiple members of the public were shared.

Furthermore, the fact that Congress has repeatedly revisited the copyright law to amend and update it to accommodate technological advancements, including revisiting it multiple times since the Betamax decision, multiple times since the advent of the in-home DVR, and at least once since the Supreme Court let stand the Cablevision RS-DVR decision in Second Circuit, nearly 5 years ago now, leads to a conclusion opposite that which Menell and Nimmer suggest: that even upon seeing how the technology was unfolding, and how the courts had handled the public vs. private performance issue in Cablevision, Congress was, quite clearly, not alarmed that the meaning of the law had been badly misinterpreted, or that the results threatened the very integrity of the copyright system.

While Menell and Nimmer (as well as many other commentators) argue—perhaps even compellingly—that the Congress which adopted the transmit clause would have classified transmissions in the Aereo system as public performances, had they foreseen them, their argument that the intentionally technology-neutral language of the transmit clause, therefore, must be interpreted to include such, is far less compelling.  As we noted earlier, any interpretation that calls into question the right of individuals to conventional home reception of broadcast television signals is obviously incorrect.  And the interpretation that Menell and Nimmer propose would do just that.  Absent the judicial fabrication of some arbitrary criteria to distinguish a system like Aereo from conventional home reception, the interpretation they propose implies that home reception also requires a license.  Likewise, absent the judicial fabrication of such arbitrary criteria to distinguish conventional in-home DVRs from remote-storage DVRs, the interpretation they propose implies that home DVR use requires a license.

But as we observed before, it is not the proper role of the Court to do that.  If an arbitrary distinction is to be drawn, it can only properly be drawn by Congress—they, and they alone, must weigh the pros and cons for where and how to draw such a line, just as they did in 1976 when they drew the original line between public and private performances.

Though not included in their own summary, in the detailed discussion, Menell and Nimmer additionally assert that if the transmissions in the Aereo system are found to fall outside of the public performance right of copyright holders, then a parade of horribles shall ensue:

The ramifications are dramatic. When a cablecaster wishes to send its subscribers a rebroadcast of the Super Bowl, not only must it remit the royalties discussed above, but it is also under an obligation not to alter the advertising, pursuant to the exquisitely worded statutory mandate. By contrast, Aereo is under no such disability. Once Aereo has been deemed not to implicate the copyright owner’s public performance right by rebroadcasting material, it is trivial to conclude that it violates no cognizable rights by omitting material. Thus, if Aereo chooses to send a hit television show to its customers with the deletion of authorized commercials, it cannot incur liability. Indeed, if it wished to go further and sell its own commercials in substitution for the aired material, that conduct, too, might well escape liability. After all, Aereo’s own advertisers would have consented to the transmission of their proprietary material, and the copyright owner of the show has already been rendered powerless to complain of the violation of its public performance right.

But that is not all. The decision below arose in the context of over-the-air transmissions. Nonetheless, altering our focus to cable-originated programming, there is no reason to conclude that the opinion below somehow fails to reach that conduct as well.  HBO charges each of its subscribers for the privilege of receiving its programming; let us imagine that Aereo were to configure its system to offer the same functionality regarding HBO that it currently affords to over-the-air broadcasts. It could do so simply by enlisting an HBO subscriber to route his signal through Aereo’s instrumentality. Thereafter, Aereo could offer all of its subscribers the full panoply of HBO programming – after all, if the majority rule below stands, then it does not implicate copyright owners’ public performance right for their content to be sent to Aereo’s subscribers. It is immaterial to that conclusion whether the programming in question started out on free television or on cable television – if the public performance right is not implicated, then there is no infringement about which HBO can complain. To that extent, the opinion below threatens to decimate multiple industries.

But these imagined ramifications are a canard.  Menell and Nimmer fail to identify the theory by which they believe that Aereo might simultaneously edit and intermingle their own advertising with the retransmission of a broadcast signal while still qualifying as an equipment rental system where the user receives and retransmits the signal to herself.  On its face, it would seem obvious that undertaking to modify the content of the transmission would introduce an element of volition by Aereo incompatible with the conclusion that their system functions as a mere equipment rental, and rendering Aereo (rather than the individual subscriber) the performer in what would, therefore, presumably be rendered a public performance.

And for their HBO example, Menell and Nimmer fail to explain how the HBO signal could be transformed from a single signal received by Aereo, to multiple signals received by individual users, without infringing HBO’s exclusive rights as a copyright holder.  If Aereo simply replicated the signal for retransmission to each user, there’s no theory by which such could qualify as an equipment rental model, where the individual users were the transmitters.  Aereo would clearly be the transmitter, and the transmissions would clearly be public performances, infringing HBO’s public performance right.  If, on the other hand, Aereo attempted to use an intermediate RS-DVR to render the transmissions private performances by the individual users, they would first have to make copies on that RS-DVR.  But with neither Aereo nor the users having any right (by either license or fair use) to make such copies, this could not happen without infringing HBO’s reproduction right.  We could debate whether Aereo would be directly liable or secondarily liable for that particular infringement, but there’s no question that Aereo would be liable, in such case.

Furthermore, the frequency by which Congress has revisited copyright law to amend and revise it argues against the notion that such dramatic supposed future ramifications should deter the Court from finding Aereo compliant with the transmit clause.  After all, if Congress concludes that the existing law has or might create unforeseen problems, they can easily act to revise it to address such, just as Congress did previously, to address the perceived problems of cable television retransmissions that the Fortnightly Court had ruled didn’t require a license.

(If it were actually appropriate that the Court should allow a parade of horribles to influence its decision, it would follow that the Court should be far more concerned by the immediate impact of a determination that the transmissions of Aereo and Cablevision require a license.  After all, the purported ill consequences of a decision upholding Aereo as legal are, at worst, still some time off in the future, allowing Congress an opportunity to intervene first, and plan an orderly transition in the law.  On the other hand, striking down Aereo as illegal would presumably force an immediate and disorderly shutdown of numerous cloud services now in use, without allowing Congress an opportunity to intervene, first.)

At most, by citing this parade of horribles, Menell and Nimmer have provided cause to question the Second Circuit’s view that they could determine the performances in Cablevision and Aereo to be private in nature without actually making a determination as to whether the service provider or the individual were the performer.  If one treats the individual copy as sacrosanct, and asserts that any action taken with respect to an individual copy is always, necessarily, a private performance, perhaps it would be possible to reach the first horrible that they present.

However, any such problem is easily avoided simply by recognizing that, just as it is the individual user who makes the copy in these systems, it is that same user who also performs when playing back the copy she made from her own personal storage space. And as an individual transmitting a performance to herself, the performance couldn’t more clearly be private in nature.

So while there may be cause to question some of the details by which the Second Circuit reached its conclusion, Menell and Nimmer have presented nothing to call into serious question the ultimate conclusion that the Second Circuit reached.  On the contrary, rather than presenting an argument where “the case for liability becomes airtight,” the legislative history that Menell and Nimmer have supplied actually weighs in favor of the conclusion that the Second Circuit got the outcome right.

In short, we can only conclude that Menell’s and Nimmer’s view that Aereo’s legality “cannot stand” is simply not supported by a logical application of the facts and the very evidence that they present regarding the legislative history of the copyright statute.

See also Revisiting the Menell/Nimmer Parade of Horribles for further discussion.  Or for complete coverage of Aereo, see our Understanding Aereo page.