Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.

Friday, June 27, 2014

US Supreme Court turns off TV streaming service

By Jesse Gleeson, Senior Associate

The US Supreme Court has just handed down its long-awaited decision in the Aereo case, reversing the 2013 decision of the US Court of Appeals for the Second Circuit. This decision makes Aereo's free-to-air television streaming service illegal under US copyright law.

For a recap of the play thus far (and the internet streaming landscape), please see our post from 2013. Please also see our coverage of the Full Federal Court of Australia's decision in relation to the similar (but not identical, as discussed below) Optus 'TV Now' service in Australia.

In summary, Aereo was a US service that rented tiny television antennas to its customers (with each customer having their own dedicated antenna at an Aereo facility) and streamed live television to the customer over the internet. Aereo also provided dedicated personal video recorder functionality for each customer. Until the Supreme Court's decision, Aereo had been held not to infringe US Copyright Law, mainly as the transmission of the television signal was held not to be to the public – rather just to each individual subscriber from their own aerial.

In reaching their decision, six justices of the US Supreme Court (another three dissented) focused heavily on the strong resemblance between community antenna television (CATV) providers and Aereo. CATV providers provided shared antennas in optimal reception locations and transmitted free-to-air broadcasts to viewers over cables. In response to a US Supreme Court decision that CATV providers did not infringe copyright, in 1976 the US Congress amended the US Copyright Act with the express aim of making CATV transmissions illegal unless licensed pursuant to a statutory licensing regime for re-transmission of broadcasts*.

While the US Supreme Court's decision recognises that Aereo differs from CATV providers in that it had a dedicated aerial per subscriber and did not transmit from that aerial until receiving  a request to do so from a customer, it held that those 'behind the scenes technological differences' did not sufficiently distinguish Aereo. Aereo was held to fall within the US Copyright Act (as amended to catch the CATV providers). The court held that even if Aereo only transmitted the signal from an aerial to a single subscriber, in aggregate it would transmit the same broadcast signal to multiple persons simultaneously – each through their own respective aerials. This was held to be sufficient to constitute public broadcast.

The Supreme Court also held that both the user and Aereo transmitted the television signal, as they both 'show a television program's images and make audible the program's sounds'. Thus Aereo was held to be a direct infringer.

While this means that both Optus TV Now and Aereo have been held to infringe copyright under Australian and US copyright law respectively, the basis for each decision is different. Perhaps anticipating issues in relation to re-transmission of live broadcasts (and likely lacking Aereo's technology for using tiny antennas), Optus TV Now was designed to transmit recordings in progress with a two-minute delay from the live television feed. The key issues in the Full Federal Court were thus whether Optus itself (as opposed to just the customer) made the recording (the Full Federal Court held that Optus and the user made the recording) and whether Optus could rely on the time shifting exception (the Full Federal Court held that Optus could not).

While some Aereo customers may be very disappointed by the Supreme Court's decision (as Optus's customers were by the TV Now decision), given the wide proliferation of free catch-up services, commercial streaming services and online content stores, consumers will not go wanting for legal alternatives to sate their desire for online television content. At the same time, the Supreme Court's decision will make it that little bit easier for the creative minds behind our current golden age of television (the content itself and how it is delivered) to be paid their due.

* The Australian equivalent can be found in Part VC of the Copyright Act 1968 (Cth)

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