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In brief, Aereo Inc., is an
innovative internet based video distribution company that uses individual
antennas to receive locally broadcast TV transmissions then retransmits them to
subscribers over the internet one a one to one basis. The content of the transmission is not
altered and is merely passed on to an individual subscriber that elects to request
and receive the retransmitted stream for his viewing. ABC and other broadcasters sued Aereo
alleging copyright infringement. In
June, 2014, the US Supreme Court ruled that Aereo violated the Copyright Act of
1976 because Aereo infringed on a copyright owner’s exclusive right to perform the
copyrighted work. The Court relied on
amendments to the Copyright Act that were introduced nearly 40 years ago when
Congress took aim at Community Access Television (CATV) providers. CATV providers were organizations that erected
large antennas clusters to capture weak TV signal transmissions and retransmit
them to underserved viewers in communities. The Congress revised the Copyright Act to specifically
state that the act of retransmission is a right reserved to copyright owners,
reversing an earlier line of court decisions that held that merely retransmitting
a broadcast without altering its content was not a performance protected under
copyright laws. Making an analogy to
CATV providers, the Court essentially found that Aereo was performing the same
function and therefore the Congress must have meant to prohibit Aereo’s
activities.
In reality, the Supreme Court made
a decision on gut feel, effectively concluding Aereo had created some kind of
“infernal machine” that beat the system.
In so many words, the Court divined that a 1970s Congress would have
been offended by the outcome of Aereo’s technology rather than its substance.
In making its decision, the Supreme
Court rejected several Aereo arguments that sought to distinguish it from a
CATV provider. These arguments included
that unlike a CATV provider, Aereo was a one antenna to one viewer retransmission. Whereas a CATV provider essentially
rebroadcasts to anybody within its reception range, an Aereo subscriber, if it
chooses to watch a show, must request the show and then when it does, a single
antenna is enlisted to pick up the signal which is then converted to IP,
temporarily stored and then forwarded to the requesting viewer. In essence, Aereo argued that a one to one
retransmission was not a public performance.
Aereo further argued that it was not a transmission within the meaning
of the Copyright Act because it was not a broadcast transmission, meaning that
it was not simultaneously transmitted in a wide area or a large number of
viewers. Calling upon poor analogies, the court
rejected these arguments, and, most importantly, stated it was deferring to Congress’s
intent.
When interpreting a law, deferring
to the lawmaker’s intent, that is- determining what lawmakers meant when they
enacted a law, has been recognized as the standard of proper judicial review
since our founding. However, despite the
appearance of deference in this case, the Supreme Court, in reality, did the
opposite. Essentially, the Court took a
nearly forty year old law that could not possibly have conceived or foreseen
the technology at issue and speculated what Congress’ intent would have been if
it understood the technology. At some
point, extrapolating intent to new circumstances moves beyond reasonable
assumptions to activist speculation. This is the case here.
One of the fundamental principles
underpinning the validity of any law is its certainty and clarity. When a law is vague, it deprives all citizens
of substantive due process, because a citizen cannot reliably determine whether
an act is lawful or unlawful. Not knowing which the case is, a citizen must
either forbear from an activity in fear that it may subsequently be determined
unlawful or engage in activity under the threat of potential future jeopardy. This is often referred to in the law as having
a “chilling” effect.
When the Aereo defendants claimed
that the Court, if it sided with the plaintiffs, would chill innovation, the
Court cast aside this concern while gratuitously acknowledging that Congress
does not want to dissuade innovation. Rather
than undertake any substantive analysis, however, the Court merely ordained
that the decision would have no adverse impact.
In justifying its determination, the Court emphasized that its ruling was
limited and pointed to legislative history that the “[transmit amendment] does
not determine whether different kinds of providers in different contexts also
‘perform’.” But, this precisely what
Aereo is. A different kind of provider
in a different context. To this point, It
should not go unnoticed that Court employed used car analogies and “knobs” in
its decision to elucidate its technology analysis. To prop up its finding, the Court turned to
legislative history and selectively chose the history which best suited its
decision. Yet, by its own admission, it
recognized that Congressional history specifically cautioned that new
technology would not necessarily fall within the strictures of the
retransmission amendment.
So, how did the Aereo Court get it wrong?
[iv] I
would argue it simply did not understand technology to a degree necessary to
appreciate the substantive technology issues in question. The Court was fumbling
with and failed to grasp the concept of transmission. A digital broadcast signal is encoded and
then decoded when it is received. This
is the case with every TV with a digital receiver. Once the signal is received, it is decoded
and then “retransmitted” across a bus (a carrier) to a processor that then runs
an application or function to visually display the data on a screen. Aereo is simply distributing the same
functions over space.[v] Instead of using an internal bus, it is using
the internet to deliver the signal to a computer viewer. It is as if Aereo removed the box around the
TV, and then separated and spread its components over distance and then reconnected
the components with very long wires. Is
their a substantive difference merely because a passive box encloses the
retransmission function? Or, is it that
the retransmission occurs within some undefined proximity to a viewer that the
Court intuitively senses but never articulated?
As for the antenna aspect, again by viewing the function, Aero is no
different from a viewer that rents a TV with a digital antenna, except the
viewer just rents the antenna component in the Aereo case. Again, we come to not so much to function as
much as packaging and form factor.
When viewed within a comparative functional
analysis, the court is simply off base.
The only valid argument one could raise is that transmitting a signal beyond
is natural extent (i.e., the receivable coverage area) is exercising a
transmission right more broadly than what the content owner intended. Considered
in this light, the question must be put whether any content owner or
broadcaster that permits or engages in a broadcast over licensed spectrum to
the general public at large is, by the very act itself, waiving its right to
select who and how viewers may receive a signal. It is as if an author dumped an unlimited
number of copies of his book into the public square with a “free as long as you
don’t tear out or add pages” sign, and then complains if Mr. Smith picks a few
up and delivers them to the convalescent home.
If the format is generally
decodable and the medium is receivable in the public airwaves, it certainly
defies logic that a one-to-one re-transmission does anything more than the
original act itself, assuming the viewer had the ability to or ought to have
received the signal to start with. But the Court never reaches this level of
inquiry in its decision.
Even assuming that Aero was engaged
in something analogous to CCTV, the next question is what substantive harm has
occurred if the content is unchanged and the content is broadcast for
free. If anything, the act of
retransmission in unadulterated form advances the commercial interests of the
broadcaster and owner. It could be
argued that the broadcaster suffers harm because the presentation has a
particular placement in a series of presentations whereby if the presentation
in question is not seen in series it diminishes its value. This argument would be specious at best,
because viewers have the unfettered ability to change channels, nor has any
broadcaster attempted to impose a license condition that requires a viewer to
be tethered to a channel for a series of programs. Quite the opposite. Each “show” is advertised and promoted as a
separate work or performance such that no broadcaster adds any transformative
value by showing a series of shows in any particular combination.
Further, to the extent retransmission
reaches a larger set of eyes and delivers the original advertising, it seems
inexplicable how any broadcaster can claim harm. If anything, retransmission furthers the
economic interests of the broadcaster, and thus the owner of the work. If the answer is “just because the owner is
the copyright holder”, then the question must be whether there is a legally and
morally sufficient basis to warrant the chilling of innovation when there is no
readily apparent harm. To this point,
it is granted that an artist can control the distribution of his works. For example, a private painting made for a
person or special viewing may very well warrant protection because it was created
with the specific purpose of a limited distribution. The limited or private distribution is part
of the original work itself. It has a
creative intimacy in its purpose. On the other hand, by allowing broad public
dissemination of a work to any and all who might view it, the work has lost its
intimacy with its creator and there can be no compelling reason why it should
be controlled as long as it does not cause economic harm.
As technology accelerates and
provides increasingly more ways in which viewers may receive, view, interpret,
interact and enhance works, the courts need to recognize that technology is
forcing courts to dig deeper into the substantive nature of intellectual
property and understand precisely what is protectable and why a work is
protected. Simply dithering and fudging
around the edges with narrow holdings and vague notions does not advance the
interests of society, and harms innovation and creativity because of
uncertainty. They create vast uncertainty,
because it is impossible to distill any rational boundaries that can be applied
by a technologist.
Our judiciary is in desperate need
of qualified jurists with a sound understanding of technology, otherwise the ingenuity
and creativity that drives our economy will suffer in the morass of legal uncertainty.
Disclosure: The author has
no direct or indirect interest in Aereo or any party related or affiliated with
Aereo.
[i] American Broadcasting Cos. v. Aereo, Inc.,
134 S. Ct. 2498 (2014) (Web Link: http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf)
[ii] See,
for a discussion of aging judges: http://www.slate.com/articles/news_and_politics/jurisprudence/2011/01/the_oldest_bench_ever.html
[iii]
See, discussion of general expertise of judges:
http://www.libertylawsite.org/2014/02/05/posners-tyranny-of-expertise/
[iv]
See, Copyright: ABC, Inc. v. Aereo, Inc., 128 Harv. L. Rev. 371 (Nov.
2014), for an interesting discussion of “purposivism and textualism”.
[v]
Id. Some describe this as raising uncertainty with “cloud” implementations. Again, it misses the point. Even the NIST definition of what a cloud
service is ambiguous at best. See, NIST
Special Publication 800-146 which contemplates hybrid implementations. An understanding of how technology is doing a function is essential as what it is doing in any substantive analysis, because the "how" informs the "what."
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