September 27, 2012
Last month, I wrote about a ruling out of the Second Circuit Court of Appeals that upheld a preliminary injunction against ivi, Inc., a company that provided live streaming TV over the Internet for a flat monthly fee.
Back in July, the district court for the Southern District of New York (which is within the Second Circuit) denied a motion for a preliminary injunction against Aereo, a company that (also) provides live streaming TV over the Internet for a monthly fee.
The plaintiffs seeking this injunction – another group of major broadcasters (such as ABC, NBC, CBS, and Disney) – appealed this ruling earlier this month, and, unsurprisingly, cited the ivi case as supporting the issuance of an injunction.
Unfortunately for the plaintiffs, ivi isn’t really that on-point.
How can that be, when both involve almost the same set of facts and within the same circuit?
Actually, the slight difference in facts is significant, since it can invoke an entirely distinct legal argument from that found in ivi.
Here’s how Aereo differs from ivi:
Where ivi provided, essentially, a broadcast of cable TV to its subscribers, Aereo only “rents” the necessary equipment to its subscribers to receive and record (à la DVR) over-the-air broadcast TV, and to further stream video over the Internet to their mobile device.
Here’s where the facts are central to Aereo’s legal argument: the antenna and the hard disk storage space used for DVR recordings are personalized for each individual user.
That is, a given antenna is only rented to one subscriber at a time, and each subscriber has his or her own directory on Aereo’s storage servers.
The court refused to issue the injunction against Aereo because the company merely rents remote equipment to its customers “they could receive for free and in the same manner merely by installing the same equipment at home” – all of which was lawful.
As noted above, the legal arguments used in ivi differ from Aereo, and here’s how.
ivi centered on whether a provider that streamed cable TV content over the Internet was a “cable system” under § 111 of the Copyright Act of 1976, which would qualify it to use the federal compulsory license scheme.
Aereo’s case is different in that it relied heavily on Cartoon Network LP, LLLP v. CSC Holdings, Inc., a 2008 decision from the Second Circuit (commonly referred to for simplicity’s sake as “Cablevision” after one of the named defendants).
At issue in Cablevision was whether a remotely-stored DVR service violated copyright laws – namely, that Cablevision was engaging in an unauthorized “public performance” with every DVR recording and re-transmission of TV broadcasts.
The appeals court held that it did not, finding that a “public performance” does not occur merely because a number of people are transmitted the same television program, and that the transmissions to each individual user were “private,” in that each recording was individually unique.
Cablevision also mirrored Aereo in that both systems were found to be lawful because they merely provide remote equipment rental that would be lawful if the same equipment were installed in the subscriber’s home instead.
Thus, although ivi certainly represents a major victory for the broadcast industry, it probably won’t be of much help in its Aereo appeal.
Nevertheless, it’s altogether possible that the Second Circuit could narrow the Cablevision ruling and side with the broadcasters; it’s hard to predict these David v. Goliath-type cases.
If the ruling stands, however, it would be a major victory for Internet freedom, and would hasten the migration from traditional broadcast media to the Internet.
That, of course, is the eventuality that traditional broadcasters like the plaintiffs are trying to avoid (or at least delay).
Unfortunately, though, this delay comes at the cost of consumer freedom.