Copyhype

Two court decisions involving online services transmitting broadcast television have recently been released. Both — WPIX v ivi in the Second Circuit and ABC v Aereo in the Southern District Court of New York — involve companies sued by television broadcasters for providing,in essence, the same type of service. However, the technology behind the scenes of each differs, as well as the legal issues involved.

And while both involved preliminary injunctions, they each resulted in different outcomes — Aereo succeeded in convincing the district court to deny an injunction while the Second Circuit upheld an earlier-granted injunction against ivi.

But while the differences in the two cases may outweigh the similarities, they do share one thing in particular that is, perhaps, most relevant: in both cases, the court reiterated the public’s strong interest in ensuring effective copyright protection.

WPIX v ivi

Billed as “the first internet cable network,” ivi launched in 2007. The service captures broadcast television from several markets, offering live viewing over the internet for a monthly fee. The company was sued in 2010, and the district court granted a preliminary injunction against it last year. On Monday, the Second Circuit upheld the injunction.

ivi argued that it is a “cable system” under the Copyright Act. Section 111 of the Act creates a compulsory license for “cable systems”, as defined in the Act, to retransmit television broadcasts — so long as a “cable system” complies with the statute and pays rights holders according to rates set by law, it can retransmit broadcasts without the consent of broadcasters.

Because the definition of “cable system” is not entirely without ambiguity, the Second Circuit turned to the legislative history of the section, as well as the Copyright Office’s interpretation of the law. Both clearly showed that the definition of “cable system” was never intended to encompass services like ivi. This conclusion is strengthened by the fact that, as the court notes, the definition of “cable system” must be read narrowly since it involves government intrusion into the marketplace and acts in derogation to the exclusive property rights granted by the Copyright Act.

ABC v Aereo

Aereo provides paid online access to New York City television stations broadcast over the air, including all the major networks (the service is currently only available to New York City residents). Unlike ivi, however, the service offers both live viewing and DVR-style functionality, allowing users to pause and record programs. Aereo operates an array of tens of thousands of antennae, each the size of a dime. When users access the service, Aereo dynamically assigns them a unique antenna.

Aereo hinges its defense on the nature of its setup. Relying on the Second Circuit’s Cablevision decision, Aereo argues that it essentially acts as a remote device controlled by its users. Because any individual transmission is going to a unique individual, says Aereo, any performance of television broadcasts is not public and thus not within the scope of any copyright holder’s exclusive rights. The district court concluded that Aereo’s arguments were strong enough to defeat the necessary likelihood of success on the merits that the television broadcasters must show in order to succeed on a motion for a preliminary injunction.

The Public Interest

To grant a preliminary injunction, courts consider four factors: the plaintiff’s likelihood of success on the merits, the irreparable harm that would result in the absence of an injunction, the balance of hardships between the plaintiff and defendant in the presence or absence of an injunction, and the public interests at stake. Despite the different legal issues involved, and despite the injunction in Aereo being denied because plaintiffs did not demonstrate a likelihood of success on the merits, both courts noted that the public interest favored granting an injunction.

The Aereo court puts it this way: “There is a strong public interest in the copyright system’s function of motivating individuals to make available their creative works and increase the store of public knowledge.”

The court also knocked down arguments that the public interest would be served by keeping the Aereo service running. Said the court, “There is a logical gap—one that Aereo and amici fail to bridge— between any public interest in receiving broadcast television signals generally and the public interest in receiving them from Aereo’s particular service.”

Interestingly, the court addresses arguments raised by the EFF and Public Knowledge in their amicus brief. “[A]mici argue that there is a public interest in the free access to and reception of broadcast television. The Court notes, however, that even setting aside the other lawful methods through which consumers may access broadcast television even in Aereo’s absence, Aereo is a business and does not provide ‘free’ access to broadcast television [Emphasis added].” The court continues even more stringently, “Amici‘s argument thus bears an unacceptable resemblance to advocacy that copyright infringement of broadcast television is generally in the public interest, a point on which this Court cannot agree.”

In ivi, the Second Circuit explores the public interests involved at length, in a section worth repeating in full:

Here, streaming television programming live and over the Internet would allow the public — or some portions of the public — to more conveniently access television programming.

On the other hand, the public has a compelling interest in protecting copyright owners’ marketable rights to their work and the economic incentive to continue creating television programming. Inadequate protections for copyright owners can threaten the very store of knowledge to be accessed; encouraging the production of creative work thus ultimately serves the public’s interest in promoting the accessibility of such works.

Plaintiffs are copyright owners of some of the world’s most recognized and valuable television programming. Plaintiffs’ television programming provides a valuable service to the public, including, inter alia, educational, historic, and cultural programming, entertainment, an important source of local news critical for an informed electorate, and exposure to the arts. Plaintiffs’ desire to create original television programming surely would be dampened if their creative works could be copied and streamed over the Internet in derogation of their exclusive property rights.

Further, there is a delicate distinction between enabling broad public access and enabling ease of access to copyrighted works. The service provided by ivi is targeted more toward convenience than access, and the public will still be able to access plaintiffs’ programs through means other than ivi’s Internet service, including cable television. Preliminarily enjoining defendants’ streaming of plaintiffs’ television programming over the Internet, live, for profit, and without plaintiffs’ consent does not inhibit the public’s ability to access the programs. A preliminary injunction, moreover, does not affect services that have obtained plaintiffs’ consent to retransmit their copyrighted television programming over the Internet.

What’s next

ivi has indicated in the press that it doesn’t plan on giving up just yet. That could mean an appeal or, more likely, continuing in litigation at the district court level. Though with its service still offline — the lower court last year denied its motion to stay the injunction while its appeal was pending, meaning it hasn’t been able to operate for over a year — it is uncertain how much longer it will stick with its plan.

The Aereo decision has been appealed to the Second Circuit. The appeal will be closely watched since Aereo is the first internet rebroadcaster to survive past the preliminary injunction stage. For example, earlier this month, Filmon.com, a similar service that was sued in October 2010, agreed to shut down its internet broadcasting service as part of a settlement with broadcasters. Within the past couple years, other services like VuiVision and iCraveTV have been quickly shuttered by courts. ¹H/T to Andrew Berger for making those decisions available at IP in Brief.