No Such Thing as Free Content: Copyright Lessons for Kenya from “Aereo” US Supreme Court Decision

Aereo-Logo

In the recent case of American Broadcasting Cos. v. Aereo, Inc., the Supreme Court of the United States (SCOTUS) held, by majority (6 to 3), that the Aereo streaming service is a “public performance” within the meaning of US Copyright law and therefore amounts to an infringement of copyright in the underlying content. The case concerns Aereo, a US company which retransmits TV programs to its subscribers via the internet without the permission of the owners of copyright in the broadcasts or their underlying content.

Aereo CEO termed the SCOTUS decision as a “massive setback to consumers” arguing that its streaming service was the culmination of a journey to improve the consumer television experience, using technology to create a smart, cloud-based television antenna that consumers could use to access live over-the-air broadcast television. Following the SCOTUS decision, Aereo published a letter to its customers, which reads in part:

“The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.”

A simple illustration of how the Aereo service works is available below:

how aereo works

The petitioners, who were television producers, marketers, distributors, and broadcasters that own the copyrights in many of the programs streamed by Aereo, sued the latter for copyright infringement. They argued that Aereo was infringing their right to “perform” their copyrighted works “publicly.” The majority opinion of SCOTUS held in favour of the petitioners that Aereo performs the petitioners’ copyright works within the meaning of the Transmit Clause within the US Copyright Act of 1976.

This blogger believes that the Aereo decision is instructive for Kenya for many reasons including the following.

The two issues dealt with by the majority judges were whether Aereo’s service amounted to a “performance” within the meaning of the Copyright Act and secondly, whether it was “public”.

The exclusive rights of the copyright owner under US Copyright law includes “the right to perform the copyrighted work publicly”. This includes the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether 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.” Interestingly, under Kenyan Copyright law, the right to perform in public and to communicate to the public are two parts of the “communication to the public” right.

It had been argued that Aereo did not perform e.g., did not communicate, the sounds and images that viewers watched and listened to when they used the Aereo service. The claim was that Aereo merely provided the equipment that was used by subscribers to watch TV. This “volitional defense” argument, which the three dissenting Justices were prepared to adopt, was rejected by the majority of the Court. The majority held that by operating its service, Aereo was not merely supplying equipment, as it contended, but was “performing” within the meaning of the Copyright Act. In this regard, the majority held that:

“When an Aereo subscriber selects a program to watch, Aereo streams the program over the Internet to that subscriber. Aereo thereby “communicate[s]” to the subscriber, by means of a“ device or process,” the work’s images and sounds. §101. And those images and sounds are contemporaneously visible and audible on the subscriber’s computer (or other Internet-connected device). So under our assumed definition, Aereo transmits a performance whenever its subscribers watch a program.”

This is an important point for content owners since users of copyright works in Kenya tend to employ business models that are “designed solely to avoid the reach of the Copyright Act and to take advantage of perceived loopholes in the law”.

In order to answer the question whether Aereo’s service amounted to a public performance, the majority first had to identify the relevant performance. For example, was it the underlying broadcast being retransmitted by Aereo or did the transmission of the television programs by Aereo amount to performance in itself? The majority proceeded on the basis that “to transmit a performance of (at least) an audiovisual work means to communicate contemporaneously visible images and contemporaneously audible sounds of the work.” It therefore held that Aereo transmits a performance whenever its subscribers watch a program.

The majority then turned to consider whether the fact that each transmission was to a single Aereo subscriber preceded it from being “public”.

“As we have said, an Aereo subscriber receives broadcast television signals with an antenna dedicated to him alone. Aereo’s system makes from those signals a personal copy of the selected program. It streams the content of the copy to the same subscriber and to no one else. One and only one subscriber has the ability to see and hear each Aereo transmission.”

Having considered the facts, the majority stated:

“Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter? They concern the behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens.”

The majority did note that a difference between the Aereo business model and traditional cable companies. That is, rather than transmit programs constantly, the Aereo system is activated by a subscriber. However the Court ruled that the public performance right applies even if the content is streamed to individual users at different times and to different places. The right is broad enough to cover a myriad of on demand services now being provided over the Internet.

An important talking point around the Aereo case concerns what implications, if any; the SCOTUS decision could have for the development of cloud computing technologies. The majority addressed this concern:

“We agree that Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies. But we do not believe that our limited holding today will have that effect.”

From a content perspective, it is important to distinguish between the Dropbox-like services from the Aereo-like services. Dropbox-like cloud computing services are used to access content the users already have a legitimate possessory interest in, such as content legally acquired from iTunes. Aereo-like services, on the contrary, provide that content to users in the first instance. The difference between storing legitimately-obtained content in the cloud for later retrieval and obtaining that content for the first time is clear: when content is obtained via cable, satellite, or antenna, those services must have licenses to either publicly distribute, publicly display, or publicly perform the content.

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