In an opinion issued today, Judge Nathan denied the motion of several major broadcast television networks to enjoin Barry Diller-backed start-up Aereo from offering its Internet television service to subscribers. This decision follows an expedited spate of briefing and a two-day hearing, which the SDNY Blog has covered in previous posts. Judge Nathan’s decision, which goes deep into the weeds of the various technologies involved in Aereo’s offerings, turns on the applicability of the Second Circuit’s Cablevision decision, which held that a traditional DVR system did not infringe a copyright owner’s public performance rights under the Copyright Act. Judge Nathan summarized each side’s version of the applicability of Cablevision to Aereo’s product:
Aereo characterizes its system as merely allowing users to rent a remotely located antenna, DVR, and Slingbox-equivalent device, in order to access content they could receive for free and in the same manner merely by installing the same equipment at home. Housing this argument more specifically in the terms defined by Cablevision, Aereo contends that, like the RS-DVR system in Cablevision, its system creates unique, user-requested copies that are transmitted only to the particular user that created them and, therefore, its performances are nonpublic. Moreover, Aereo submits that because each of its antennas function independently, even if the Court adopts Plaintiffs’ view that these copies are not legally significant, an injunction still should not issue because each user is receiving a distinct transmission generated by their own individually rented antenna. Plaintiffs disagree, arguing that Cablevision does not control and the Court should view Aereo’s system as a technological gimmick-a “device or process”-through which Aereo passes along Plaintiffs’ copyrighted content to the public. Specifically, Plaintiffs attempt to distinguish Cablevision on its facts, arguing that because Aereo’s subscribers are watching these programs as they are still being broadcast, they are not using the copies Aereo creates for “timeshifting” and these copies therefore do not “break the chain of the [over-the-air] transmission” received by Aereo. (PIs. Br. at 22-23; PIs. Reply at 14). Thus, Plaintiffs contend, Aereo is engaged in a public performance that “emanates from the original broadcast signal” (PIs. Reply at 10), much like a “community antenna” which simply passes along a broadcast signal to the public. In other words, according to Plaintiffs, Aereo’s copies should be viewed as merely facilitating the transmission of a single master copy-in this case, the broadcast signal-rather than as copies from which a distinct transmission is made. Having identified this hook on which to hang their legal position, Plaintiffs advocate that the Court is bound only by Cablevision’s specific holding as applied to its precise facts and is free to depart from the transmit clause analysis of that case to find that Aereo engages in a public performance.
Ultimately, Judge Nathan sided with Aereo, finding that application of Cablevision required the conclusion that the TV networks were unlikely to succeed on the merits, and thus that their motion for a preliminary injunction should be denied.
Despite this creative attempt to escape from the express holding of Cablevision, for the reasons discussed below this Court finds itself constrained to reject the approach Plaintiffs urge. Contrary to Plaintiffs’ arguments, the copies Aereo’s system creates are not materially distinguishable from those in Cablevision, which found that the transmission was made from those copies rather than from the incoming signal. Moreover, Plaintiffs’ attempt to distinguish Cablevision based on time-shifting fails when confronted with the reasoning of that case, particularly considering that the Second Circuit’s analysis was directly focused on the significance of Cablevision’ s copies but did not say one word to suggest that time-shifting played any part in its holding.
In addition, recognizing that the networks had indicated that they would seek interlocutory appeal of her decision if they lost, Judge Nathan ruled that, although mooted by her finding that they were not likely to succeed on the merits, the networks had established that they would be irreperably harmed absent the injunction. Namely, the networks would be harmed by Aereo’s service in ways that would be difficult to measure with damages – it would, for example, impair their ability to negotiate with advertisers and to negotiate retransmission agreements with cable companies or other licensors of the networks’ content. Finally, Judge Nathan rejected Aereo’s and their amici‘s argument that the public interest favored free public access to broadcast television over the public’s interest in maintaining the copyright system.
[A]lthough this argument carries some force to the extent that there is a public interest in access to television broadcast over the free public airwaves and Aereo facilitates such access, it cannot be afforded substantial weight because it proves too much. The same logic would support a finding that the public interest favors imposing no copyright restrictions on any form of redistribution of Plaintiffs’ broadcast television, as unrestrained piracy of that content would also increase public access to content broadcast over the free public airwaves.