Aereo Amici Roundup

Posted By on Apr 7, 2014 | 0 comments

Early last week, after Aereo filed its response brief with the Supreme Court, I got off the fence and predicted that Aereo would win, and win easily, in their case before the Supreme Court.  The disparity in the quality of the arguments presented by Aereo (and by Cablevision in its amicus brief, nominally supporting the broadcasters, strangely enough) vs. those presented by the broadcasters and their amici was so great, I no longer considered it within the realm of the reasonable to believe that the Supreme Court could reach an erroneous result, based on a factual or political contrivance.

Later last week, amici supporting Aereo filed their briefs, several of which further bolstered Aereo’s arguments.  It seems worthwhile to summarize and review some of the most important points made by these amici.

To my view, the most important amici brief was the one written by James Grimmelmann and David G. Post, and attributed as/signed by “36 Intellectual Property and Copyright Law Professors.”  These amici buttress the points Aereo made in its own brief that:

Petitioners brought suit against Aereo and sought a preliminary injunction on the sole ground that Aereo directly infringed their right to “perform . . . publicly” the copyrighted content they broadcast for public reception.  They declined to assert, as a basis for that injunction, any claim that Aereo violated their right “to reproduce . . . in copies” the programming, or any contributory or vicarious theory of infringement.

and that:

As this case comes to the Court, there is simply no basis for the government’s assertion that the recordings made by Aereo’s users are unlawful.

The table of contents of the 36 Professors’ brief drives home the point:

Petitioners Have Pursued the Wrong Theory of Infringement; The Wrong Infringer; The Wrong Exclusive Right; The Wrong View of Fair Use; The Wrong Kind of Liability

And from their summary of argument (legal citations omitted from all excerpts):

The Aereo system is the functional equivalent of the Sony Betamax: consumers use it to record television programs for subsequent playback to themselves. In copyright terms, these are reproductions subject to the Copyright Act, many of which are likely protected as fair uses under Sony Corp. of America v. Universal City Studios. If any consumers do infringe, Aereo might be secondarily liable.

More than this, it is impossible to say on the current record. Petitioners have not pursued before this Court the argument that Aereo’s users infringe, the argument that anyone infringes the reproduction right, or the argument that Aereo is secondarily liable for its customers’ infringements. As a result, the facts that would bear on these questions are not in evidence.  […]

Petitioners instead press a very different theory: that Aereo itself directly infringes the public performance right. The mistake is understandable; as broadcasters, they are accustomed to thinking of their copyright-protected performances. But it is a mistake nonetheless: the public performance right is the wrong tool for the job.

Aereo does not infringe the public performance right for the same reason Sony did not: consumers who play back programs they previously recorded are engaged in private performances. Putting the storage device online rather than in a consumer’s home does not change its essential operation. The Petitioners’ theory to the contrary requires an implausible interpretation of “public performance,” one so broad that it would read “public” out of the statutory definition entirely.

Petitioners are, of course, free to advance whatever theories they wish. But Congress and the courts have spent decades crafting a system to resolve complex infringement suits clearly, fairly, and effectively.  Petitioners’ characterization of this case, if accepted by this Court, would disrupt every part of that system. It would interfere with Congress’s finely crafted machinery of distinct but interlocking exclusive rights. It would abrogate both of Sony’s core holdings: that consumers have a fair use right to time-shift broadcast television, and that companies like Sony and Aereo are not secondarily liable merely because they assist home recording. And it would hopelessly scramble the doctrines of direct and secondary liability.

These consequences would be all the more unfortunate because they are so unnecessary. There is no need to stretch the public performance right when the reproduction right is so closely on point. The Second Circuit’s decision did not give Aereo a “get-out-of-jail-free” card, by placing Aereo beyond the reach of copyright, any more than Sony placed the VCR beyond the reach of copyright.  For decades, the reproduction right has policed illicit use of VCRs; it stands ready to police illicit use of Aereo’s system. And as this Court affirmed in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., secondary liability is always available against those who culpably facilitate infringement.

This case, in sum, is not the Super Bowl of television copyright. It is the halftime show: an overproduced diversion from the real event.

And in fact, in parts of their arguments, the broadcasters and their amici argue that Aereo’s transmissions are public performances, on the basis of an implication that the DVR copies in Aereo’s system are unlawful, even though the broadcasters have not actually challenged those copies as infringing, in this case.

But even if the broadcasters had actually established that the copies were unlawful, the notion that this would render public, transmissions which would otherwise be private, is bizarre.  It is the equivalent of suggesting that if you were to purchase an illegal DVD on the street, and bring it home to play it in your bedroom, that playback in your bedroom would be rendered a public performance, merely because the DVD copy were illegal!  And what’s more, by the broadcasters’ theory, you wouldn’t be the one performing it at all.  Rather, the fellow who sold the illegal DVD to you on the street would be the direct performer, when you play the DVD in your bedroom!

Sticking with arguments from law professors (there were actually three different amicus briefs in support of Aereo, filed by groups of law professors), we turn to a brief filed on behalf of 24 professors and scholars of international and comparative copyright law (from both the US and abroad), and attributed as “Law Professors and Scholars.”  These amici challenge an argument put forward by the broadcasters, and some of their amici, that Aereo’s transmissions should be interpreted to be public performances in order to ensure compliance with certain international copyright treaty obligations.

The Law Professors and Scholars resoundingly debunk this argument.  From their summary of argument:

Petitioners imply, and some supporting amici argue, that in applying Section 106(4) in this case, the Court should turn to international copyright treaties and free trade agreements as interpretive tools. Amici’s arguments rely on the Charming Betsy canon of statutory interpretation, which requires that, where possible, statutes “be construed so as not to conflict with international law or with an international agreement of the United States.”  Invocation of the Charming Betsy canon in this case is misplaced because it would be contrary to Congressional intent and because international copyright agreements do not mandate any holding in this case.

Application of Charming Betsy would be contrary to Congress’s intent to leave U.S. Copyright law free from any international constraint not specifically enacted into the Copyright Act. Congress has repeatedly expressed that international copyright agreements are non-self-executing, intending that unaltered provisions of the Copyright Act, including Section 106(4), are not modified by any international obligation. Congress has been emphatic that United States law is “to prevail in conflict” with any Free Trade Agreement (“FTA”) provision, that no provision of an FTA “nor the application of any such provision . . . which is inconsistent with any law of the United States shall have effect,” and that nothing in an FTA may be “construed” to “modify any law of the United States.” This Court has not applied the Charming Betsy canon in a case involving provisions of a later-in-time non-self-executing agreement. This Court need not reach how Charming Betsy applies here, however, because there would be no conflict between a holding for Aereo and any international agreement.

There would be no conflict between a holding that Aereo does not publicly perform protected works through consumer use of its equipment and the provisions of the Berne Convention for the Protection of Literary and Artistic Works or the World Intellectual Property Organization Copyright Treaty.  These agreements require recognition of a right to authorize “communication to the public,” including the “making available to the public” of protected works “in such a way that members of the public may access these works from a place and at a time individually chosen by them.” Enabling on-demand viewing in itself does not trigger the Article 8 right. If it did, every use of a home video recorder to transmit a copy from the recording device to a viewing device would be subject to copyright control.  The concept of a “public” communication is not defined in international copyright conventions, leaving that concept to be defined by domestic law.  The agreements envisage that “the mere provision of physical facilities for enabling or making a communication” would not render providers directly liable for the transmissions of users of such infrastructure. These characteristics of the international treaty architecture leave U.S. courts and policy-makers free to define the use of Aereo’s equipment as creating only private performances by Aereo’s customers.

The cited FTA provisions are not relevant to this Court’s consideration. There would be no conflict between a holding for Aereo and the cited FTA provisions, which relate solely to the use of statutory licenses to authorize Internet retransmission.

Foreign law further evidences that no controlling international standard is applicable here. The law cited in the Petitioners’ and amici briefs is selective and mischaracterized. The cases cited, and the field viewed as a whole, would not conflict with a holding that Aereo does not publicly perform copyrighted works when its users record and play back content using its equipment. In fact, foreign law, though not controlling, predominantly supports Aereo’s position.

Rounding out the arguments from legal scholars is a brief from 5 antitrust/competition law professors specializing in copyright and communications and a law professor and law student from the Amicus Project at Southwestern Law School.

These scholars argue that Aereo’s system is consistent with communications policy, including the 1992 Cable Act (which established the retransmission consent regime for cable operators), and that what the broadcasters seek would undermine communications policy, and further harm competition in an already anticompetitive market:

The Aereo system is a healthy free-market response to a dysfunctional and anticompetitive television distribution system that raises prices, reduces output, and denies consumers meaningful choice. Petitioners predictably oppose any new technology that could change the status quo that is highly beneficial to them.

Petitioners come before this Court as beneficiaries of two limited government monopolies: Each Petitioner has been granted free access to the public spectrum in return for a commitment to serve the public interest by providing local news and public affairs programming. In addition, Petitioners and their business partners have been granted certain exclusive rights under copyright law that assures a fair return in the free market for creative investment in broadcast television.

Petitioners seek to undermine their public interest obligation to free, over-the-air local television by invoking copyright law. However, their interpretation is at odds with the venerable telecommunications policies established by Congress, implemented by the Federal Communications Commission, and repeatedly recognized by this Court. If accepted, Petitioner’s interpretation will undermine essential First Amendment values of assuring the public has access to a multiplicity of information and opinion.

The relief Petitioners seek is at odds with both copyright and antitrust law. Copyright law supplies the economic incentive to create by granting the author limited exclusive rights of exploitation to ensure a fair return in the free-market. The Aereo system simplifies access to over-the-air broadcast television that ensures a fair return for Petitioners through increased advertising revenue. The Sherman Antitrust Act protects competition and is designed to ensure consumer welfare, a concept that includes maximizing output, quality, and consumer choice. Granting Petitioners’ relief would decrease the output of local television broadcasting and leave consumers with very limited, technologically deficient and expensive choices for obtaining local programming.

The reference to technological deficiency is a reference to the limitations of broadcast technologies, and in particular, the reduction in coverage that came with the transition from analog to digital broadcasting.  These scholars argue that systems such as Aereo’s serve an important purpose in enabling individuals to receive content despite such deficiencies, as well as to limit the impact of anticompetitive blackouts of broadcast channels from MVPD systems:

Aereo strengthens central First Amendment values by expanding public access to essential local news, educational, and public affairs programming. The Aereo system is designed to mirror the operation of a traditional, rooftop antenna that allows the user to control every aspect of a broadcast program from their laptop, tablet, or smartphone. When a user logs onto the system, an individual antenna is automatically assigned to that user and turns to the broadcast channel they select. Because a user watches programming via a remote antenna housed on Aereo’s premises, the broadcast signal is potentially free of many of the technical limitations of the digital spectrum and cannot be “blacked out” because of broadcaster disputes beyond the television viewer’s control.

Other amici, small and independent broadcasters, also argued that by enabling simpler and more effective private reception of broadcast signals, Aereo’s system enhances broadcast:

Contrary to Petitioners’ assertions, not all broadcasters oppose Aereo’s platform for enabling individual audience members to use an antenna to initiate their own recording and reception of over-the-air programming for personal viewing. In fact, many small and independent broadcasters (SIBs) depend heavily on such user-friendly viewing technologies to reach their audiences, especially audiences that cannot afford home viewing equipment, cable, or satellite television, audiences who only watch broadcast content via mobile networks or the Internet, or audiences who may not be technologically sophisticated enough to set up their own antenna, digital receiver, or digital video recorder, and configure their own mobile devices. In addition to furthering technological innovation, platforms such as Aereo provide cost-efficient ways for SIBs to expand their viewing audiences and maximize their content offerings, all in line with the goals of the Copyright Act of 1976.

The Electronic Frontier Foundation, Public Knowledge, the Consumer Electronics Association, and Engine Advocacy filed a brief emphasizing that the issue before the Court is solely the narrow legal question of whether transmissions from Aereo’s system constitute public performances, that the court should not assume the position of a technological regulator (and, in fact, that many new and important technologies were initially dismissed as inefficient and not innovative), and that it is for Congress, not the courts, to rebalance interests under copyright in the face of new technologies:

The question at issue in this case is not whether Aereo will harm the television industry. Nor is it whether there is commercial value in enabling live broadcast TV transmissions. The legal question is just this: does Aereo’s technology make public performances according to the words of the Copyright Act? The Second Circuit answered this question correctly, finding that Aereo’s system of personal antennas and video streams allows individuals to make non-public transmissions of free broadcast channels that they may already access in their private homes independent of anything Aereo does. This Court should do the same.

To be sure, the “Transmit Clause” of the public performance right, 17 U.S.C. § 106(4), is “not a model of clarity.” Cartoon Network LP v. CSC Holdings, Inc. (“Cablevision”). Its application to technologies like Aereo’s has proved difficult because Congress, redrafting the Copyright Act in 1976, did not foresee that TV viewers would be able to transmit signals over a communications medium like the Internet for their own personal use. Nor did Congress foresee a means of transmitting video that was not a dedicated video distribution system regulated by the Federal Communications Commission.

But Congress nonetheless expressed a clear legislative intent. The Transmit Clause embodies two principles: (1) copyright holders have the right and ability to license their content to cable systems and satellite TV services that transmit to the public; but (2) copyright holders do not have a copyright interest in private, personal transmissions by individuals, regardless of the technology involved or the commercial nature of the technology provider.

The second principle was not a legislative oversight. Rather, it reflected Congress’s longstanding policy of giving incentives for creativity while reserving many uses of creative work to the public.

Technological developments have put pressure on these two principles. Fortunately, this Court has an established approach to such challenges. Recognizing that copyright is a limited set of exclusive rights defined by statute, embodying a balance of interests between authors and the public, this Court has long declined to expand the statutory rights based on its own assessment of a new technology’s social or economic worth, absent an express statutory instruction. See Universal City Studios v. Sony
Corp. (“[Where] Congress has not plainly marked our course, we must be circumspect in construing the scope of rights created by a legislative enactment which never contemplated such a calculus of interests.”).

That wise approach should apply here. Instead of attempting to rebalance the various interests raised here based on a slim factual record and litigants’ opinions of what constitutes “real” or “sham” innovation, this Court should decline the copyright expansion the broadcasters seek, and allow Congress to address the matter, if it so chooses. Only “Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.”

Deference to Congress makes sense if copyright is to serve its purpose. Copyright law has never assigned all commercially valuable uses of creative works to rightsholders; many have always been reserved to the public. This creates breathing space for technological and business innovation by entrepreneurs who have no affiliation with rightsholders. As history shows, that leads in turn to new markets for creative work, increasing both rewards for authors and access to creative works in the long term.

By contrast, the predominant interpretive approach suggested by petitioners and their amici—that the Court should construe exclusive rights to include all financially valuable uses of copyrighted works—would strip away the commercial freedom that led to the home stereo, the videocassette recorder, all manner of personal audio and video technologies, and many Internet-based services.  Petitioners would have the Court sit as a bureau of federal technology policy, deciding whether Aereo’s technology offers “real advances” or is “efficient[]” enough to merit the law’s forbearance.

The Court should refuse that invitation. The Court’s longstanding approach in copyright cases has been to avoid acting as a technology regulator, avoid determining the worth of businesses, and leave it to Congress to determine whether a disruptive technology requires rebalancing of express statutory rights. That approach better serves copyright’s purpose, and is the right guide here. The Court should affirm the Second Circuit’s decision.

Finally, the last brief we’ll mention comes from the Computer & Communications Industry Association and Mozilla Corporation, who are predominantly concerned about the potential impact of a ruling against Aereo on the cloud computing industry, generally.  Amici attack each of the proposals put forward by the broadcasters and two of their amici, to attempt to distinguish between Aereo and other cloud computing services.  From their summary of argument:

Petitioners, the United States, and amicus curiae Cablevision admit that cloud computing is an important technology, but claim that their arguments as to why the court below erred will “not threaten the future of ‘cloud computing’ technology.” […] But the tests they propose to distinguish between cloud computing and “other such services” are unworkable and will endanger the thriving cloud computing industry just as it starts to mature. Clarifying the contours of these new tests, moreover, would take years of costly litigation, chilling much valuable innovation in the meantime; by contrast, Congress is well-positioned to draw clear lines that operate prospectively.

First, petitioners and the United States propose to distinguish Aereo’s technology from cloud computing services on the ground that direct copyright liability attaches only to those services that “provide[] a means by which consumers can gain access to copyrighted content in the first instance.” […] But this purported “first instance” test lacks any principled basis, and fails to adequately distinguish Aereo’s model from cloud computing, as many cloud services may be deemed to supply copyrighted content “in the first instance.”

Second, the United States (but not petitioners) suggests that Aereo’s technology (but not cloud computing) satisfies the requirement for direct copyright liability, which depends on “volitional conduct.” That test stems from this Court’s decision in Sony Corp. of America v. Universal City Studios, Inc., and distinguishes a volitional copyist from, for example, “the owner of a traditional copying machine whose customers pay a fixed amount per copy” of a copyrighted work. But the United States would alter the volitional conduct test to hold a service directly liable when it provides equipment that is “integral to the process by which content is transmitted to the subscriber.” And while cloud services should be treated as non-volitional because they automatically provide copyrighted content to third parties without human intervention, the United States’ “integral to the process” test would sweep in cloud services along with Aereo, because any part of a device or service used to transmit copyrighted material can be cast as “integral to the process” of infringing a copyright.

Third, amicus Cablevision, after arguing at length that the Second Circuit properly construed the Transmit Clause, proposes a test that turns on whether “transmissions from the separate copies are better viewed as distinct transmissions or as mere links in a chain of some longer transmission.”  This formulation lacks a basis in the Transmit Clause’s text, fails to sensibly distinguish among devices and cloud services that provide identical capabilities to users, and affords little guidance for innovators attempting to apply the Transmit Clause in arenas remote from broadcast television. By offering such weak safeguards, this test would put legal, billion-dollar business operations in jeopardy.

In sum, petitioners, the United States, and Cablevision offer ambiguous tests unmoored from the statutory language of the Transmit Clause and incapable of charting an administrable path among different technologies. Their tests thus imperil socially beneficial innovations and current businesses that build on the efficiencies promised by cloud computing, and defining the boundaries of these tests, even if possible, would entail massive wasteful and costly litigation.

Given the difficulty that petitioners and their amici have in distinguishing Aereo’s technology from cloud computing, and the reliance the cloud computing industry has placed on the Second Circuit’s interpretation of the public/private performance line, amici respectfully submit that the Court should continue its “consistent deference to Congress when major technological innovations alter the market for copyrighted materials.”  Congress is the branch of government best equipped to balance the competing societal interests at stake and to draw a narrow rule that would eliminate any unintended consequences from the sweeping reinterpretation of the Transmit Clause petitioners propose. Nor is this simply a hypothetical, as Congress has addressed this precise issue no fewer than five times since 1976 to account for new means of retransmitting broadcasters’ content. Congress can do so again here, and petitioners and their supporting amici are well-versed in expressing their substantive policy preferences.

The decision below correctly construes the Transmit Clause in its current form; because any change to the Copyright Act should be made by Congress, not the courts, the decision below should be affirmed.

We are now just two weeks away from oral arguments, scheduled for April 22nd, when we shall get our first indication of how the Supreme Court Justices see the merits of this case.

See also One More Aereo Amicus: Aereo as Cable System.  For complete coverage of Aereo, see our Understanding Aereo page.