Lead Opinion
Judge CHIN dissents in a separate opinion.
Aereo, Inc. (“Aereo”) enables its subscribers to watch broadcast television programs over the internet for a monthly fee. Two groups of plaintiffs, holders of copyrights in programs broadcast on network television, filed copyright infringement actions against Aereo in the United States District Court for the Southern District of New York. They moved for a preliminary injunction barring Aereo from transmitting programs to its subscribers while the programs are still airing, claiming that those transmissions infringe their exclusive right to publicly perform their works. The district court (Nathan, J.) denied the motion, concluding that the plaintiffs were unlikely to prevail on the merits in light of our prior decision in Cartoon Network LP, LLLP v. CSC Holdings, Inc.,
BACKGROUND
The parties below agreed on all but one of the relevant facts of Aereo’s system, namely whether Aereo’s antennas operate independently or as a unit. The district court resolved that issue, finding that Aer-eo’s antennas operate independently. The Plaintiffs do not appeal that factual finding. Thus the following facts are undisputed.
1. Aereo’s System
Aereo transmits to its subscribers broadcast television programs over the internet for a monthly subscription fee. Aereo is currently limited to subscribers living in New York City and offers only New York area channels. It does not have any license from copyright holders to record or transmit their programs.
The details of Aereo’s system are best explained from two perspectives. From its subscribers’ perspective, Aereo functions much like a television with a remote Digital Video Recorder (“DVR”) and Sling-box.
A. The Subscriber’s Perspective
Aereo subscribers begin by logging on to their account on Aereo’s website using a computer or other internet-connected device. They are then presented with a programming guide listing broadcast television programs now airing or that will air in the future. If a user selects a program that is currently airing, he is presented with two options: “Watch” and “Record.” If the user selects “Watch,” the program he selected begins playing, but the transmission is briefly delayed relative to the live television broadcast.
An Aereo user can also select a program that is currently airing and press the “Record” button. In that case, a copy of the program will be saved for later viewing. However, the “Record” function can also be used to watch a program nearly live, because the user can begin playback of the program being recorded while the recording is being made. Thus the difference between selecting the “Watch” and the “Record” features for a program currently airing is that the “Watch” feature begins playback and a copy of the program is not retained for later viewing, while the “Record” feature saves a copy for later viewing but does not begin playback without further action by the user.
If an Aereo user selects a program that will air in the future, the user’s only option is the “Record” function. When the user selects that function, Aereo’s system will record the program when it airs, saving a copy for the user to watch later. An Aer-eo user cannot, however, choose either to “Record” or “Watch” a program that has already finished airing if he did not previously elect to record the program.
The final notable feature of Aereo’s system is that users can watch Aereo programing on a variety of devices. Aereo’s
Aereo’s system thus provides the functionality of three devices: a standard TV antenna, a DVR, and a Slingbox-like device. These devices allow one to watch live television with the antenna; pause and record live television and watch recorded programing using the DVR; and use the Slingbox to watch both live and recorded programs on internet-connected mobile devices.
B. The Technical Aspects of Aereo’s System
Aereo has large antenna boards at its facility in Brooklyn, New York. Each of these boards contains approximately eighty antennas, which consist of two metal loops roughly the size of a dime. These boards are installed parallel to each other in a large metal housing such that the antennas extend out of the housing and can receive broadcast TV signals. Aereo’s facility thus uses thousands of individual antennas to receive broadcast television channels.
When an Aereo user selects a program to watch or record, a signal is sent to Aereo’s antenna server. The antenna server assigns one of the individual antennas and a transcoder to the user. The antenna server tunes that antenna to the broadcast frequency of the channel showing the program the user wishes to watch or record. The server transcodes the data received by this antenna, buffers it, and sends it to another Aereo server, where a copy of the program is saved to a large hard drive in a directory reserved for that Aereo user. If the user has chosen to “Record” the program, the Aereo system will create a complete copy of the program for that user to watch later. When the user chooses to view that program, Aereo’s servers will stream the program to the user from the copy of the program saved in the user’s directory on the Aereo server. If the user instead has chosen to “Watch” the program, the same operations occur, except that once six or seven seconds of programming have been saved in the hard drive copy of the program in the user’s directory on the Aereo server, the Aereo system begins streaming the program to the user from this copy. Thus even when an Aereo user is watching a program using the “Watch” feature, he is not watching the feed directly or immediately from the antenna assigned to him. Rather the feed from that antenna is used to create a copy of the program on the Aereo server, and that copy is then transmitted to the user. If at any point before the program ends, the user in “Watch” mode selects “Record,” the copy of the program is retained for later viewing. If the user does not press “Record” before the program ends, the copy of the program created for and used to transmit the program to the user is automatically deleted when it has finished playing.
Three technical details of Aereo’s system merit further elaboration. First, Aer-
II. The Present Suits
Two groups of plaintiffs (the “Plaintiffs”) filed separate copyright infringement actions against Aereo in the Southern District of New York. They asserted multiple theories, including infringement of the public performance right, infringement of the right of reproduction, and contributory infringement. ABC and its co-plaintiffs moved for a preliminary injunction barring Aereo from transmitting television programs to its subscribers while the programs were still being broadcast. The two sets of plaintiffs agreed to proceed before the district court in tandem, and the motion for preliminary injunction was pursued in both actions simultaneously.
Following expedited briefing and discovery and an evidentiary hearing, the district court denied the Plaintiffs’ motion. Am. Broad. Cos., Inc. v. Aereo,
The district court then considered the other three preliminary injunction factors. First, the court concluded that the Plaintiffs had demonstrated a likelihood that they would suffer irreparable harm in the absence of a preliminary injunction. Id. at 396-402. But second, the district court found that an injunction would severely harm Aereo, likely ending its business. Id. at 402-03. As such, the balance of hardships did not tip “decidedly” in favor of the Plaintiffs. Id. at 403. Finally, the district court concluded that an injunction “would not disserve the public interest.” Id. at 403-04. Because the Plaintiffs had
DISCUSSION
We review a district court’s denial of a preliminary injunction for abuse of discretion. WPIX, Inc. v. ivi, Inc.,
Our decisions identify four factors relevant to granting a preliminary injunction for copyright infringement. First, a district court may issue a preliminary injunction “only if the plaintiff has demonstrated either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiffs favor.” Salinger v. Colting,
The outcome of this appeal turns on whether Aereo’s service infringes the Plaintiffs’ public performance right under the Copyright Act. The district court denied the injunction, concluding, as mentioned above, that (1) Plaintiffs were not likely to prevail on the merits given our prior decision in Cablevision and (2) the balance of hardships did not tip “decidedly” in the Plaintiffs’ favor. Aereo,
I. The Public Performance Right
The 1976 Copyright Act (the “Act”) gives copyright owners several exclusive rights and then carves out a number of exceptions. The fourth of these rights, at issue in this appeal, is the copyright owner’s exclusive right “in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures
To perform or display a work “publicly” means—
(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or
(2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.
17 U.S.C. § 101. This appeal turns on the second clause of this definition (the “Transmit Clause” or “Clause”).
The relevant history of the Transmit Clause begins with two decisions of the Supreme Court, Fortnightly Corp. v. United Artists Television, Inc.,
These efforts resulted in the 1976 Copyright Act. The Act responded to the emergence of cable television systems in two ways. First, it added the Transmit Clause. The legislative history shows that the Transmit Clause was intended in part to abrogate Fortnightly and Teleprompter and bring a cable television system’s retransmission of broadcast television programming within the scope of the public performance right. H.R. Rep. 94-1476, 1976 U.S.C.C.A.N. 5659, at 63 (1976) (“House Report”) (“[A] sing[er] is performing when he or she sings a song; a broadcasting network is performing when it transmits his or her performance (whether simultaneously or from records); a local broadcaster is performing when it transmits the network broadcast; a cable television system is performing when it retransmits the broadcast to its subscribers; and any individual is performing when he or she plays a phonorecord embodying the performance or communicates it by turning on a receiving set.”). Second, Congress recognized that requiring cable television systems to obtain a negotiated license from individual copyright holders may deter further investment in cable systems, so it created a compulsory license for retransmissions by cable systems.
II. Cablevision’s Interpretation of the Transmit Clause
In Cablevision,
Copyright holders in movies and television programs sued, arguing that Cablevision’s RS-DVR system infringed their reproduction right by creating unauthorized
This Court reversed on all three issues. Cablevision,
The Cablevision court began by discussing the language and legislative history of the Transmit Clause.
In adopting this interpretation of the Transmit Clause, Cablevision rejected two alternative readings. First, it considered the interpretation accepted by the district court in that case. According to that view, a transmission is “to the public,” not based on the “potential audience of a particular transmission” but rather based on the “potential audience of the underlying work (i.e., ‘the program’) whose content is being transmitted.” Id. at 135. The Cablevision court rejected this interpretation of the Transmit Clause. Given that “the potential audience for every copyrighted audiovisual work is the general public,” this interpretation would render the “to the public” language of the Clause superfluous and contradict the Clause’s obvious contemplation of non-public transmissions. Id. at 135-36.
Second, the Cablevision court considered “a slight variation of this interpretation” offered by the plaintiffs. Id. Plain
Finally, the Cablevision court considered Columbia Pictures Industries, Inc. v. Redd Horne, Inc.,
Applying this interpretation of the Transmit Clause to the facts of the RS-DVR, the Cablevision court concluded that Cablevision’s transmission of a recorded program to an individual subscriber was not a public performance. Id. Each transmission of a program could be received by only one Cablevision customer, namely the customer who requested that the copy be created. No other Cablevision customer could receive a transmission generated from that particular copy. The “universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.” Id. at 137. The transmission was therefore not made “to the public” within the meaning of the Transmit Clause and did not infringe the plaintiffs’ public performance right. Id. at 138.
We discuss Cablevision’s interpretation of the Transmit Clause in such detail because that decision establishes four guideposts that determine the outcome of this appeal. First and most important, the Transmit Clause directs courts to consider the potential audience of the individual transmission. See id. at 135. If that transmission is “capable of being received by the public” the transmission is a public performance; if the potential audience of the transmission is only one subscriber, the transmission is not a public performance, except as discussed below. Second and following from the first, private transmissions — that is those not capable of being received by the public — should not be aggregated. It is therefore irrelevant to the Transmit Clause analysis whether the public is capable of receiving the same underlying work or original performance of the work by means of many transmissions. See id. at 135-37. Third, there is an exception to this no-aggregation rule when private transmissions are generated from the same copy of the work. In such cases, these private transmissions should be aggregated, and if these aggregated transmissions from a single copy enable the public to view that copy, the transmissions are public performances. See id. at 137-38. Fourth and finally, “any factor that limits the potential audience of a transmission is relevant” to the Transmit Clause analysis. Id. at 137.
III. Cablevision’s Application to Aer-eo’s System
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.
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.
Plaintiffs offer various arguments attempting to distinguish Cablevision from the Aereo system. First, they argue that Cablevision is distinguishable because Ca-blevision had a license to transmit programming in the first instance, namely when it first aired the programs; thus the question was whether Cablevision needed an additional license to retransmit the programs recorded by its RS-DVR system. Aereo, by contrast, has no license. This argument fails, as the question is whether Aereo’s transmissions are public performances of the Plaintiffs’ copyrighted works. If so, Aereo needs a license to make such public performances; if they are not public performances, it needs no such license. Thus whether Aereo has a license is not relevant to whether its transmissions are public and therefore must be licensed. This argument by the Plaintiffs also finds no support in the Cablevision opinion. Cablevision did not hold that Cablevision’s RS-DVR transmissions were licensed public performances; rather it held they were not public performances. It does not appear that the Cablevision court based its decision that Cablevision’s RS-DVR transmissions were non-public transmissions on Cablevision’s license to broadcast the programs live. Indeed, such a conclusion would have been erroneous, because having a license to publicly perform a work in a particular instance, such as to broadcast a television program live, does not give the licensee the right to perform the work again. That Cablevision had a license to transmit copyrighted works when they first aired thus should have no bearing on whether it needed a license to retransmit these programs as part of its RS-DVR system. Indeed, if this interpretation of Cablevision were correct, Cablevision would not need a license to retransmit programs using video-on-demand and there would have been no reason for Ca-blevision to construct an RS-DVR system employing individual copies.
Second, Plaintiffs argue that discrete transmissions should be aggregated to determine whether they are public performances. This argument has two aspects. Plaintiffs first argue that because Aereo’s discrete transmissions enable members of the public to receive “the same performance (i.e., Aereo’s retransmission of a program)” they are transmissions made “to the public.” Br. of Pls.-Appellants Am. Broad. Cos., et al. at 19. But this is nothing more than the Cablevision plaintiffs’ interpretation of the Transmit Clause, as it equates Aereo’s transmissions with the original broadcast made by the over-the-air network rather than treating Aereo’s transmissions as independent performances. See
Plaintiffs also argue that the Copyright Act requires that all of Aereo’s discrete transmissions “be aggregated and viewed
Plaintiffs’ third argument for distinguishing Cablevision is that Cablevision was decided based on an analogy to a typical VCR, with the RS-DVR simply an upstream version, but Aereo’s system is more analogous to a cable television provider. While it is true that the Ca-blevision court did compare the RS-DVR system to the stand-alone VCR, these comparisons occur in the section of that opinion discussing Cablevision’s potential liability for infringing the plaintiffs’ reproduction right. See
This argument fails for two reasons. First, Aereo’s copies do have the legal significance ascribed to the RS-DVR copies in Cablevision because the user exercises the same control over their playback. The Aereo user watching a copy of a recorded program that he requested be created, whether using the “Watch” feature or the “Record” feature, chooses when and how that copy will be played back. The user may begin watching it nearly live, but then pause or rewind it, resulting in playback that is no longer concurrent with the program’s over-the-air broadcast. Or the user may elect not to begin watching the program at all until long after it began airing. This volitional control over how the copy is played makes Aereo’s copies unlike the temporary buffer copies generated incident to internet streaming. A person watching an internet stream chooses the program he wishes to watch and a temporary buffer copy of that program is then created, which serves as the basis of the images seen by the person watching the stream. But that person cannot exercise any control over the manner in which that copy is played- — -it cannot be paused, rewound, or rewatched later. As a result, the imposition of a temporary buffer copy between the outgoing stream and the image seen by the person watching it is of no significance, because the person only exercises control before the copy is created in choosing to watch the program in the first place. By contrast, the Aereo user selects what program he wishes a copy to be made of and then controls when and how that copy is played.
Finally, Plaintiffs argue that holding that Aereo’s transmissions are not public performances exalts form over substance, because the Aereo system is functionally equivalent to a cable television provider. Plaintiffs also make much of the undisput
IV. The Legislative Intent Behind the 1976 Copyright Act
Plaintiffs also contend that the legislative history of the 1976 Copyright Act shows that Aereo’s transmissions should be deemed public performances of the Plaintiffs’ copyrighted works. They argue that cable retransmissions are public performances under the Transmit Clause and Aereo is functionally equivalent to a cable system. However, this reading of the legislative history is simply incompatible with the conclusions of the Cablevision court.
This view of the legislative history also ignores a contrary strand of the history behind the 1976 Copyright Act. Congress recognized when it drafted the 1976 Act that its broad definition of “performance” could create unintended results. The House Report states that under this definition, “any individual is performing whenever he or she plays a phonorecord embodying the performance or communicates the performance by turning on a receiving set.” House Report at 63. But because Congress did not wish to require everyone to obtain a license from copyright holders before they could “perform” the copyrighted works played by their television, Congress was careful to note that a performance “would not be actionable as an infringement unless it were done ‘publicly,’ as defined in section 101.” id. “Private” performances are exempted from copyright liability. Id. This limitation also applies to performances created by a “transmission,” since, as the Cablevision court noted, if Congress intended all transmissions to be public performances, the Transmit Clause would not have contained the phrase “to the public.”
In the technological environment of 1976, distinguishing between public and private transmissions was simpler than to
V. Stare Decisis
Though presented as efforts to distinguish Cablevision, many of Plaintiffs’ arguments really urge us to overrule Ca-blevision. One panel of this Court, however, “cannot overrule a prior decision of another panel.” Union of Needletrades, Indus. & Textile Employees, AFL-CIO, CLC v. U.S. I.N.S.,
VI. The Other Preliminary Injunction Factors
We now turn to the remaining preliminary injunction factors. See Salinger,
CONCLUSION
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. As such, Plaintiffs have not demonstrated that they are likely to prevail on the merits on this claim in their copyright infringement action. Nor have they demonstrated serious questions as to the merits and a balance of hardships that tips decidedly in their favor. We therefore affirm the order of the district court denying the Plaintiffs’ motion.
Notes
. The two actions, although not consolidated in the district court, proceeded in tandem and the district court’s order applied to both actions.
. A Slingbox is a device that connects the user’s cable or satellite set-top box or DVR to the internet, allowing the user to watch live or
.The technical operation of Aereo's system, discussed below, results in a slight delay in transmitting the program, which means that an Aereo subscriber using the "Watch” feature sees the program delayed by approximately ten seconds.
. Thus if an Aereo user starts watching a program five minutes after it first began airing, he can rewind back to the five-minute mark, but not earlier.
. Thus if an Aereo user starts watching a program five minutes after it first began airing and presses the "Record” button at the twenty-minute mark, the recorded copy will begin from the five-minute mark.
. As mentioned in the text above, the lone factual dispute below was whether Aereo's antennas function independently or as one unit. The district court resolved this dispute in favor of Aereo, finding that its antennas operate independently. Am. Broad. Cos., Inc. v. Aereo,
. Aereo’s system usually assigns these antennas dynamically. Aereo users "share” antennas in the sense that one user is using a particular antenna now, and another may use the same antenna when the first is no longer using it. But at any given time, the feed from each antenna is used to create only one user's copy of the program being watched or recorded. Thus if 10,000 Aereo users are watching or recording the Super Bowl, Aereo has 10,-000 antennas tuned to the channel broadcasting it.
. Put briefly, the statute allows cable systems to retransmit copyrighted works from broadcast television stations in exchange for paying a compulsory license to the U.S. Copyright
. Plaintiffs assert that Aereo’s transmissions of recorded programs when the original program is no longer airing on broadcast television are also public performances and that Aereo’s system infringes other exclusive rights granted by the Copyright Act, such as the reproduction right. Plaintiffs did not, however, present these claims as a basis for the preliminary injunction. They are therefore not before us and we will not consider them.
. The RS-DVR was therefore unlike a video-on-demand service because it did not enable a customer to watch a program that had already been broadcast unless that customer had previously requested that the program be recorded and because it generated user-associated copies instead of using a shared copy or copies.
. Aggregating private transmissions generated from the same copy is in some tension with the Cablevision court’s first conclusion that the relevant inquiry under the Transmit Clause is the potential audience of the particular transmission. This interpretation of the Transmit Clause began with Professor Nim-mer. He notes that it is difficult to understand precisely what Congress intended with the language in the Clause stating that a public performance can occur when the audience receives the work “at different times.” See 2 Melville B. Nimmer & David Nimmer, Nim-mer on Copyright § 8.14[C][3], at 8.192.8 (Matthew Bender rev. ed.). Arguing that this language on its face conflicted with other language in the statute and produced results Congress could not have intended, he proposed that by this language Congress wished to denote instances where the same copy of the work was repeatedly performed by different members of the public at different times. See id. at 192.8(1) — 192.8(6). The Cablevision court's focus on the potential audience of each particular transmission would essentially read out the "different times” language, since individuals will not typically receive the same transmission at different times. But Nimmer’s solution — aggregating private transmissions when those transmissions are
. The Cablevision court concluded in its discussion of the reproduction right that Cablevision's customers, not Cablevision, “made” the RS-DVR copies. See
. And even if such analogies were probative, Aereo’s system could accurately be analogized
. It is true that an Aereo user in "Watch'' mode will often not exercise volitional control over the playback of the program, because the program will automatically begin playing when selected and he will watch it through to the end. But that is not significant because the Aereo user can exercise such control if he wishes to, which means that the copy Aereo’s system generates is not merely a technical link in a process of transmission that should be deemed a unity transmission. Moreover, the "Watch" feature's automatic playback is merely a default rule. The user can accomplish the same thing by using the "Record" feature, save that he must take the additional step of pressing “Play” once enough of the program has been recorded for playback. If this additional step were sufficient to break the chain of transmission, we see no reason why the "Watch" feature’s default in favor of playback should change our analysis.
. We also note that the Aereo system’s use of copies gives it two features that would not be present were it simply to transmit the television programs its antennas receive directly to the user. First, it allows the Aereo user to
. This makes Aereo’s system unlike the early cable TV systems at issue in Fortnightly,
. Because Aereo’s system uses both user-associated antennas and user-associated copies, we need not decide whether a system with only one of these attributes would be publicly performing copyrighted works.
. This is particularly appropriate given that in 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.
. Stare decisis is particularly warranted here in light of substantial reliance on Cablev-ision. As mentioned above, it appears that many media and technology companies have relied on Cablevision as an authoritative interpretation of the Transmit Clause. One example is cloud media services, which have proliferated in recent years. These services, which allow their users to store music on remote hard drives and stream it to internet-connected devices, have apparently been designed to comply with Cablevision. Just like Aereo’s system and Cablevision’s RS-DVR, they seek to avoid public performance liability by creating user-associated copies of each song rather than sharing song files among multiple users. See Brandon J. Trout, Note, Infringers or Innovators? Examining Copyright Liability for Cloud-Based Music Locker Services, 14 Vand. J. Ent. & Tech. L. 729, 746-48 (2012).
Dissenting Opinion
I respectfully dissent.
Defendant-appellee Aereo, Inc. (“Aer-eo”) captures over-the-air broadcasts of television programs and retransmits them to subscribers by streaming them over the Internet. For a monthly fee, Aereo’s customers may ‘Watch” the programming “live” (that is, with a seven-second delay) on their computers and other electronic devices, or they may “Record” the programs for later viewing. Aereo retransmits the programming without the authorization of the copyright holders and without paying a fee.
The Copyright Act confers upon owners of copyrights in audiovisual works the exclusive right “to perform the copyrighted work publicly.” 17 U.S.C. § 106(4). This exclusive right includes the right “to transmit or otherwise communicate a performance ... to the public, by means of any device or process.” Id. § 101. In my view, by transmitting (or retransmitting) copyrighted programming to the public without authorization, Aereo is engaging in copyright infringement in clear violation of the Copyright Act.
Aereo argues that it is not violating the law because its transmissions are not “public” performances; instead, the argument goes, its transmissions are “private” performances, and a “private performance is not copyright infringement.” It contends that it is merely providing a “technology platform that enables consumers to
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. After capturing the broadcast signal, Aereo makes a copy of the selected program for each viewer, whether the user chooses to “Watch” now or “Record” for later. Under Aereo’s theory, by using these individual antennas and copies, it may retransmit, for example, the Super Bowl “live” to 50,000 subscribers and yet, because each subscriber has an individual antenna and a “unique recorded cop[y]” of the broadcast, these are “private” performances. Of course, the argument makes no sense. These are very much public performances.
Aereo purports to draw its infringement-avoidance scheme from this Court’s decision in Cartoon Network LP v. CSC Holdings, Inc.,
Aereo is doing precisely what cable companies, satellite television companies, and authorized Internet streaming companies do — they capture over-the-air broadcasts and retransmit them to customers — except that those entities are doing it legally, pursuant to statutory or negotiated licenses, for a fee. By accepting Aereo’s argument that it may do so without authorization and without paying a fee, the majority elevates form over substance. Its decision, in my view, conflicts with the text of the Copyright Act, its legislative history, and our case law.
For these and other reasons discussed more fully below, I would reverse the district court’s order denying plaintiffs-appellants’ motion for a preliminary injunction.
DISCUSSION
When interpreting a statute, we must begin with the plain language, giving any undefined terms their ordinary meaning. See Roberts v. Sea-Land Servs., Inc., — U.S. -,
I begin, then, by considering the text of the relevant sections of the Copyright Act. To the extent there is any arguable ambiguity in the statutory language, I next turn to its legislative history. Finally, I conclude with a discussion of Cablevision as well as other relevant precedents.
A. The Statutory Text
Section 106 of the Copyright Act sets out six exclusive rights held by a copyright owner; these include the right “to perform the copyrighted work publicly.” 17 U.S.C. § 106(4).
As defined in section 101, “[t]o perform ... a work ‘publicly’ means,” among other things:
to transmit or otherwise communicate a performance or display of the work ... to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.
Id. § 101. “To ‘transmit’ a performance” is “to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent.” Id. Hence, the use of a device or process to transmit or communicate copyrighted images or sounds to the public constitutes a public performance, whether members of the public receive the performance in the same place or in different places, whether at the same time or at different times.
It is apparent that Aereo’s system fits squarely within the plain meaning of the statute. See, e.g., Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC, No. CV 12-6921, — F.Supp.2d -, ---,
Even assuming Aereo’s system limits the potential audience for each transmission, and even assuming each of its subscribers receives a unique recorded copy, Aereo still is transmitting the programming “to the public.” Id. Giving the undefined term “the public” its ordinary meaning, see Kouichi Taniguchi v. Kan Pacific Saipan, Ltd., — U.S. -,
What Aereo is doing is not in any sense “private,” as the Super Bowl example discussed above illustrates. This understanding accords with the statute’s instruction that a transmission can be “to the public” even if the “members of the public capable of receiving the performance, receive it in the same place or in separate places and at the same time or at different times.” 17 U.S.C. § 101. Because Aereo is transmitting television signals to paying strangers, all of its transmissions are “to the public,” even if intervening “devicefs] or processes]” limit the potential audience of each separate transmission to a single “member[ ] of the public.” Id.
By any reasonable construction of the statute, Aereo is engaging in public performances and, therefore, it is engaging in copyright infringement. See id. §§ 106(4), 501(a).
B. The Legislative History
Even if the language of the transmit clause were ambiguous as applied to Aer-eo’s system, see Cablevision,
Just before the passage of the 1976 Copyright Act, the Supreme Court held in Fortnightly Corp. v. United Artists Television, Inc.,
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 only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.
Fortnightly,
But Congress expressly rejected the outcome reached by the Supreme Court in Fortnightly and Teleprompter. See Capital Cities Cable, Inc. v. Crisp,
Congress was not only concerned, however, with the then newly-emerging CATV systems. Recognizing that the Fortnightly and Teleprompter decisions arose in part because of the “drastic technological change” after the 1909 Act, Fortnightly,
The definition of ‘transmit’ ... is broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them. Each and every method by which the images or sounds comprising a performance or display are picked up and conveyed is a ‘transmission,’ and if the transmission reaches the public in [any] form, the case comes within the scope of clauses (4) or (5) of section 106.
H.R.Rep. No. 94-1476, at 64, reprinted in 1976 U.S.C.C.A.N. at 5678. Further anticipating that there would be changes in technology that it could not then foresee, Congress added that a public performance could be received in different places and at different times. This change was meant to clarify that:
a performance made available by transmission to the public at large is ‘public’ even though the recipients are not gathered in a single place, and even if there is no proof that any of the potential recipients was operating his receiving apparatus at the time of the transmission. The same principles apply whenever the potential recipients of the transmission represent a limited segment of the public, such as the occupants of hotel rooms or the subscribers of a cable television service.
Id. at 64-65, reprinted at 1976 U.S.C.C.A.N. at 5678 (emphasis added).
C. Cablevision
Aereo seeks to avoid the plain language of the Copyright Act and the clear import of its legislative history by relying on this Court’s decision in Cablevision. That reliance, in my view, is misplaced.
Cablevision was a cable operator with a license to retransmit broadcast and cable programming to its paying subscribers. See Cablevision,
The RS-DVR worked as follows. Ca-blevision split its licensed data stream, and sent a stream to a remote server, where the data went through two buffers. Cablevision,
Cablevision held that the RS-DVR did not infringe either the reproduction or the public performance rights. Id. at 140. Unlike the majority here, I do not think we can view Cablevision’s analyses of each right in isolation. See Majority Opin., supra, at 687. As Cablevision explained, “the right of reproduction can reinforce and protect the right of public performance.” Cablevision,
With this concept in mind, it is clear that Aereo’s system is factually distinct from Cablevision’s RS-DVR system. First, Ca-blevision’s RS-DVR system “exist[ed] only to produce a copy” of material that it already had a license to retransmit to its subscribers, Cablevision,
Second, subscribers interact with Aer-eo’s system differently from the way Ca-blevision’s subscribers interacted with the RS-DVR. Cablevision subscribers were already paying for the right to watch television programs, and the RS-DVR gave them the additional option to “record” the programs. Cablevision,
These differences undermine the applicability of Cablevision to Aereo’s system. Cablevision found that the RS-DVR was indistinguishable from a VCR or set-top DVR because Cablevision’s system “ex
I note also that in Cablevision this Court “emphasize[d]” that its holding “does not generally permit content delivery networks to avoid all copyright liability by making copies of each item of content and associating one unique copy with each subscriber to the network, or by giving their subscribers the capacity to make their own individual copies.”
Finally, the majority’s decision in my view runs afoul of other decisions of this
In ivi, we addressed the need for a preliminary injunction to enjoin ivi from streaming copyrighted works over the Internet without permission:
Indeed, ivi’s actions — streaming copyrighted works without permission— would drastically change the industry, to plaintiffs’ detriment.... The absence of a preliminary injunction would encourage current and prospective retransmission rights holders, as well as other Internet services, to follow ivi’s lead in retransmitting plaintiffs’ copyrighted programming without their consent. The strength of plaintiffs’ negotiating platform and business model would decline. The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules — all would be adversely affected. These harms would extend to other copyright holders of television programming. Continued live retransmissions of copyrighted television programming over the Internet without consent would thus threaten to destabilize the entire industry.
CONCLUSION
Based on the plain meaning of the statute, its legislative history, and our precedent, I conclude that Aereo’s transmission of live public broadcasts over the Internet to paying subscribers are unlicensed transmissions “to the public.” Hence, these unlicensed transmissions should be enjoined. Cablevision does not require a different result. Accordingly, I dissent.
. A "Slingbox” is a set-top box that permits consumers to shift their television programming to their portable devices. Slingbox describes its service as “placeshifting”: "Placeshifting is viewing and listening to live, recorded or stored media on a remote device over the Internet or a data network. Placeshifting allows consumers to watch their TV anywhere.” See Placeshifting, Slingbox.com, http://www.slingbox.com/gef/ placeshifting (last visited March 5, 2013). The Slingbox thus enables a consumer to view on a remote device content that he is already entitled to receive from a licensed cable company or other authorized source to view on his television.
. Aereo’s contention that each subscriber has an individual antenna is a fiction because the vast majority of its subscribers are "dynamic users” who are randomly assigned an antenna each time they use the system. Although each antenna is used only by one person at a time, it will be randomly assigned to another person for the next use. In other words, this is a shared pool of antennas, not individually-designated antennas.
. Aereo’s web page does contain a conspicuous notice under the "Watch” button that reads, "When you press ‘Watch’ you will start recording this show.” Users thus have no choice but to record the show if they wish to watch it live, making it unlikely that the subscribers are voluntarily “ordering that system to produce a copy.” Cablevision,
. By opposing the grant of certiorari, the government was not embracing Cablevision's construction of the transmit clause. To the contrary, the United States took the position that "scattered language in the Second Circuit's decision could be read to endorse overly broad, and incorrect, propositions about the Copyright Act.” U.S. Cablevision Amicus Br., supra, at 6 (emphasis added). Specifically, the government was concerned with the suggestion "that a performance is not made available ‘to the public’ unless more than one person is capable of receiving a particular transmission” because it might “undermine copyright protection in circumstances far beyond those presented here, including with respect to ... situations in which a party streams copyrighted material on an individualized basis over the Internet.” Id. at 20-21. Despite these "problematic” aspects, id. at 22, the United States considered Cablevision an "unsuitable vehicle” for deciding these issues, due to the absence of any conflicting circuit court decisions at the time and the limitations imposed by the parties’ stipulations, id. at 6.
. There are companies in the market that stream television programming over the Internet pursuant to licenses, such as Hulu, Netflix, Amazon, and channel-specific websites like ComedyCentral.com. See Appellant WNET Br. at 12, 28, 43; Amicus Br. of Paramount Pictures Corp. et al. at 29. In general, however, these “negotiated Internet retransmissions ... typically delay Internet broadcasts as not to disrupt plaintiffs’ broadcast distribution models, reduce the live broadcast audience, or divert the live broadcast audience to the Internet.” WPIX, Inc. v. ivi, Inc.,
. In ASCAP, we left open “the possibility ... that a transmission could constitute both a stream and a download.” United States v. Am. Soc’y of Composers, Authors and Publishers (ASCAP),
