Aereo Wins Again: Appeals Court Says Its System Is Not Infringing

from the a-good-win dept

As you may recall, Aereo has been in an ongoing legal dispute with the TV networks, who seem to be arguing that anything that disrupts their coveted business model simply must be illegal. While they've won against others, Aereo actually won the first round at the district court level, blocking an attempted injunction. The networks quickly appealed. On appeal, it seemed clear that the judges realized just how insane the situation is. If you don't recall, Aereo sets up a separate individual antenna for each customer, and then streams TV broadcasts to that customer over the internet. This setup makes no technological sense whatsoever. It's inefficient and stupid. But because of the wacky way copyright is interpreted, it's believed to be necessary to avoid being guilty of infringement for doing the same damn thing much more efficiently.

Today, on appeal, the appeals court affirmed the district court ruling, once again blowing a big hole in the networks' arguments. The full ruling (linked above and embedded below) is well worth a read, as it's nice to see the court really try to do its best to truly understand the technology at play, rather than resorting to simplistic and inaccurate analogies, as copyright maximalists often desire. The key to the networks' argument here is that those individual antennas that Aereo sets up are a myth. They claim that it's really one giant antenna. The court disagrees. This issue plays into the big question of whether or not Aereo's service is functionally the same as the (legal) Cablevision remote DVR system, or if it goes too far and is a tool for infringement. The distinguishing factor in that Cablevision case was that Cablevision made a unique copy for every user who requested it (again, stupid and inefficient from a technological standpoint, but this is the life we lead under bad copyright laws). Bizarrely, even Cablevision argued against Aereo here, trying to distinguish its own case (perhaps to handicap a potential competitor).

The court, thankfully, doesn't buy Cablevision's own wacky interpretation, but rather relies on what the court in is case actually said, mainly, that having a unique copy means that it's not doing a "public performance" of the work.
As discussed above, 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. 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 public.”

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.
The court rejects the networks' argument that Cablevision was different because Cablevision had a license for its initial transmission, noting that the case has nothing to do with transmission, but is solely based on the question of whether or not this is a public performance under the Copyright Act. As it notes, if there is no public performance, the license question is moot, as Aereo only needs such a license for the public performance.

The court also responds nicely to the bizarre argument of the networks that because Aereo specifically designed its system to be legal within the confines of the Cablevision ruling, that proves it's infringing. As we noted at the time, this argument doesn't help the networks at all. After all, the courts found Cablevision legal, so it makes sense that Aereo would design with that in mind for the purpose of staying on the right side of the law. The networks' basic argument is, directly, that if you try hard to stay within the law, you must be breaking the law. That's crazy, and the court, rightly, rejects it:
Plaintiffs also make much of the undisputed fact that Aereo’s system was designed around the Cablevision holding, because it creates essentially identical copies of the same program for every user who wishes to watch it in order to avoid copyright liability, instead of using a perhaps more efficient design employing shared copies. However, that Aereo was able to design a system based on Cablevision’s holding to provide its users with nearly live television over the internet is an argument that Cablevision was wrongly decided; it does not provide a basis for distinguishing Cablevision. Moreover, Aereo is not the first to design systems to avoid copyright liability. The same is likely true of Cablevision, which created separate user associated copies of each recorded program for its RS-DVR system instead of using more efficient shared copies because transmissions generated from the latter would likely be found to infringe copyright holders’ public performance right under the rationale of Redd Horne.... Nor is Aereo alone in designing its system around Cablevision, as many cloud computing services, such as internet music lockers, discussed further below, appear to have done the same...
In other words, no, designing your system in accordance with the law doesn't mean you're trying to violate the law. As the court later notes, it appears that the networks really want to overrule Cablevision, which is made clear by their claims that Aereo designing within the confines of Cablevision must be infringing. The court notes that even if that's what the networks want, barring a Supreme Court decision in the alternative, they can't change their earlier ruling.
Though presented as efforts to distinguish Cablevision, many of Plaintiffs’ arguments really urge us to overrule Cablevision. One panel of this Court, however, “cannot overrule a prior decision of another panel.” ... We are “bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court or by the Supreme Court.” ... There is an exception when an intervening Supreme Court decision “casts doubt on our controlling precedent,” ... but we are unaware of any such decisions that implicate Cablevision.
There is a dissent from Judge Denny Chin, who argues that because Aereo had to go through the technologically inefficient process it does, that shows why it's infringing.
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.
That argument is really troubling, and it's good that the majority overruled it. If that were true, any inefficient or convoluted process required by the law to remain consistent with copyright law would be seen as evidence of infringement. And that's just wacky. You'd effectively create veto power for any new innovation that way.

Anyway, the case is far from over, but so far Aereo is 2 for 2 and the networks have come up empty. Let's hope that trend continues.


Reader Comments (rss)

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  • This comment has been flagged by the community. Click here to show it
     
    identicon
    out_of_the_blue, Apr 1st, 2013 @ 11:02am

    "the networks have come up empty"?

    Really? When by your own admission (and prior emphasis) Aereo is forced into this wacky work-around to stay within copyright?

    I think "the networks" set this up for win-win whatever was decided.

     

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      Anonymous Coward, Apr 1st, 2013 @ 11:44am

      Re: "the networks have come up empty"?

      They only have to use the workaround until the cable companies collapse from the mass exodus of customers moving to better services like Aereo. Then they can fix these laws without dinosaurs dying allover the drafting table.

       

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    Rikuo (profile), Apr 1st, 2013 @ 11:07am

    "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. "

    Is that judge one of the trolls? They frequently say we here at Techdirt are in the wrong, then quote the very things that prove us right.
    Well of course its a Rube Goldberg machine. That's the fucking problem. They have to be a Goldberg machine in order to not get sued.

     

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      Anonymous Coward, Apr 1st, 2013 @ 12:14pm

      Re:

      Yes, it makes no sense that studying what the court deemed legal, then trying really hard to do that very thing would be seen as a sign of illegal actions.

      The court, via cablevision, said to do this so naturally any company entering the same/similar market would pay attention.

       

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      Anonymous Coward, Apr 1st, 2013 @ 4:11pm

      Re:

      one scary judge!

       

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    DannyB (profile), Apr 1st, 2013 @ 11:08am

    Fair Use == Infringement

    Using the networks' argument, if you make fair use of a work, and it is later found to indeed be fair use, then you are guilty of infringement because it is clear that you were trying to avoid copyright liability.

     

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      Anonymous Coward, Apr 1st, 2013 @ 11:25am

      Re: Fair Use == Infringement

      Heck, why stop there.
      If you actually pay for products then you're stealing because all your doing is exploiting a loophole to make the theft legal.

       

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    DannyB (profile), Apr 1st, 2013 @ 11:10am

    Promoting the useful arts and science

    Yet another fine example of copyright fulfilling its constitutional purpose of promoting the useful arts and science by requiring a bizarre Rube Goldberg machine in order to comply with the law.

     

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    Sneeje (profile), Apr 1st, 2013 @ 11:16am

    This is not unlike tax law

    If I work really, really hard to reduce my tax burden (take all my applicable deductions, keep track of receipts, pay a tax preparer, etc.), I guess that means I must be infringing, er, I mean dodging taxes.

     

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      Chosen Reject (profile), Apr 1st, 2013 @ 11:43am

      Re: This is not unlike tax law

      This also works with jaywalking. If I double check with an officer that the two lines I'm about to walk between are indeed indicators that I am going to be walking in a marked crosswalk, then it proves that I am jaywalking. The officer shouldn't even have to wait for me to begin crossing the street.

       

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        Sneeje (profile), Apr 1st, 2013 @ 2:02pm

        Re: Re: This is not unlike tax law

        You sound like you have spent quite some time studying pedestrian legal codes. Your speculative conversation is a sham and you are clearly an ambulatory terrorist.

         

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          Chosen Reject (profile), Apr 1st, 2013 @ 2:24pm

          Re: Re: Re: This is not unlike tax law

          I am indeed. I like to walk right next to the crosswalk lines. Sometimes..go ahead, keep reading, if you dare...my feet even touch the line!!! Like Aereo, I deserve the full scorn of society, but I have the law on my side no matter how wrong it is.

          Muahaha!

           

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          tqk (profile), Apr 2nd, 2013 @ 11:21am

          Re: Re: Re: This is not unlike tax law

          You sound like you have spent quite some time studying pedestrian legal codes.

          What's this say about lawyers and law schools? Obviously, it's a criminal conspiracy, for money, intended to teach people how the law works. RICO?

           

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    6, Apr 1st, 2013 @ 11:25am

    not even close to finished? lulz

    Unless you think that the en banc panel will pick this up then I'd say the case is very close to over, indeed, completely done save for some formalities at the district court.

     

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    Anonymous Coward, Apr 1st, 2013 @ 11:28am

    That argument is really troubling, and it's good that the majority overruled it. If that were true, any inefficient or convoluted process required by the law to remain consistent with copyright law would be seen as evidence of infringement. And that's just wacky. You'd effectively create veto power for any new innovation that way.

    Thar paragraph identifies their real intent, the copyright industry wants absolute control over all copies of the works that they have ppurchased.

     

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      jackn, Apr 1st, 2013 @ 11:42am

      Re:

      copyright isn't (shouldn't be) an industry.

       

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        Anonymous Coward, Apr 1st, 2013 @ 11:47am

        Re: Re:

        Shouldn't be but it most assuredly is. If you are part of the industry you can infringe and generally do what you want with copyrighted material. If you are not part of the boys club they will all come after you if you step into their market.

         

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    bschmalz (profile), Apr 1st, 2013 @ 11:35am

    Just moved to Aereo coverage

    Looked cool till I look at the channel line up and realize nothing is on any of the channels they offer I would watch.

    I am sure some folks like the service and I hope they do well but it makes me think there is no way anyone soon will be offering real Web TV with actual content the people want, that makes me sad.

     

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    kenichi tanaka, Apr 1st, 2013 @ 11:49am

    Then, according to these networks, every person who subscribes to cable or satellite provider, is guilty of copyright infringement because they use some kind of antennae to accept a broadcast signal. Let's see, satellite disks are illegal, television antennaes are illegal, receiving any kind of signal that receives video/audio transmissions are illegal.

    Beware, every cable and satellite subscriber could be sued for copyright infringement, even if you legally purchase a subscription from a provider.

     

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    MAC, Apr 1st, 2013 @ 12:05pm

    Absurd

    Next thing they will sue over having a bunch of buddies over to watch the super bowl, i.e. public performance...

     

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    Brent (profile), Apr 1st, 2013 @ 12:45pm

    so this business model is now viable in the rest of the US as well, correct? Or just New York?

     

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    Richard (profile), Apr 1st, 2013 @ 11:26pm

    If that were true, any inefficient or convoluted process required by the law to remain consistent with the law would be seen as evidence of breaking the law. And that's just wacky.

    There, I fixed it for you.

     

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    Anonymous Coward, Apr 2nd, 2013 @ 1:13am

    The networks arn't coming up empty...

    I'm suprised at you Kike- the networks cant lose this fight- either they win and win big, or lose and cost aereo tons of money they cant afford...

     

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    Spaceman Spiff (profile), Apr 2nd, 2013 @ 5:24pm

    The proper term is

    Hoist with his own petard... IE, blown up by your own bomb. :-)

     

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