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With respect to the exclusive right to distribute the work in copies or phonorecords (17 U.S.C. sec. 106(3)), the U.S. encounters the danger of insufficient international compliance even though it has long been recognized in the U.S., as a matter of statute and caselaw, that the right applies to digital files as well as to material copies.   But the authorities are inconsistent as to whether the distribution right extends both to offers as well as to actual deliveries of digital copies.  For the moment, only federal district courts have ruled on the question, but their rulings have ranged from simply asserting that the distribution right includes a making available right, to assimilating making available to “publication” (whose statutory definition encompasses offers to distribute), to requiring actual downloads.   The last group of decisions thus leaves a gap in U.S. coverage of the full range of the making available right.

With respect to the public performance right, the Second Circuit’s decisions in Cartoon Network v Cablevision and WNET v Aereo seriously compromised U.S. compliance with the WIPO Treaties because the court’s interpretation of the definition of “to perform publicly” excluded on-demand transmissions of broadcast and cable television content offered by remote storage and retransmission services, thus effectively reading asynchronous transmissions out of the statute.  In ABC v Aereo, which involved retransmissions of broadcast television programming captured by individualized antennas on Aereo’s premises and digitized and stored on Aereo’s servers, A 6-3 majority of the Supreme Court reversed the Second Circuit.  Justice Breyer’s opinion held that Aereo was “performing” the broadcast programming when the service captured the programming through the users’ individually-assigned antennas, then digitized, momentarily stored in individualized copies and retransmitted the programming to its subscribers at their request.  The majority also ruled that the performances were “to the public” notwithstanding each transmission’s origin in a separate subscriber-assigned copy.  The Court’s ruling on this point is consistent with the CJEU’s decision construing the making available right in TV Catchup, a 2014 controversy involving a similar technology.  What matters is not how many people are capable of receiving a particular transmission, but whether members of the public may receive the performance of the work.  The majority emphasized Aereo’s resemblance to cable retransmission operators, a service Congress in the 1976 Copyright Act unambiguously brought within the scope of the exclusive right of public performance.  Although the majority distinguished less cable-like transmission services, notably “cloud storage” models such as Dropbox, and RS-DVR services, it declined to elaborate on the implications of its holdings for these other kinds of internet-based enterprises.   Finally, the majority posited that in appropriate cases, even if the service is deemed to be “publicly performing” third party content, the fair use doctrine might excuse the transmission.

The dissenters (Scalia, joined by Thomas and Alito) did not address the “public” character of the performance because they contended that Aereo lacked sufficient volition to be “performing” the programming.   The dissenters distinguished video on-demand services, which exercise volition in the selection of content offered to consumers, from automated retransmission services, which simply relay an upstream transmission entity’s (in this case, the broadcasters’) selection of programming proposed to users.

The Supreme Court’s Aereo decision alleviates some concerns about the conformity of U.S. copyright law with international norms, but the limited scope of the decision allows other shortcomings to persist.  Thus, the court has reaffirmed the reach of the public performance right with respect to:

near-real time individualized digital retransmissions to members of the public of broadcast content (akin to cable retransmissions);

a-synchronous transmissions to members of the public when the primary value of the service to its customers is to transmit performances of content the customers did not themselves store with the service, or regarding which the customers did not enjoy some possessory relationship to a copy or right to access

Although the Court did not expressly state that the public performance right encompassed offers to transmit performances as well as actual performances, the logic of the decision points toward the broader (and internationally harmonious) interpretation.

The majority did not apply a specific “volition” predicate to determine whether a retransmission service “performs” the content it communicates, but it acknowledged the possibility that in some instances the end-user might be deemed the “performer.”

The Court has not directly spoken to the following issues:

Whether remote storage services are publicly performing content stored at the direction of their customers (but the opinion strongly suggests those services are not publicly performing);

Whether “volition” is a predicate to determine whether a remote storage service “makes” the consumer-requested copies created and retained on its servers;

Perhaps most importantly, because Aereo concerned only the public performance right, the Court did not have occasion to address whether the distribution right encompasses offers to distribute digital copies, or is limited to actual distributions of digital copies.  As a result, the greatest gap in U.S. compliance with its international obligation to implement the “making available” right remains unremediated.

Jane C. Ginsburg is the Morton L. Janklow Professor of Literary and Artistic Property Law at Columbia University School of Law, and Faculty Director of the Kernochan Center for Law, Media and Arts.

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The case involved a copyright dispute between a number of television networks and the provider of a new television viewing service AEREO.  AEREO was held not to have interfered with any rights of the television networks through their unique service, described as an amalgamation of services each of which the court did not find contravened any rights.

The service AEREO offers is quite unique. It first uses antenna boards to pick up broadcast signals in the New 91��ɫ area. A customer can then select to either “watch” or “record” a broadcast program. In either case, AEREO - upon request - will record a unique copy of the broadcast program, either to be buffered and immediately transmitted to the customer over the internet (or mobile device), or stored as a copy for later viewing. AEREO argued therefore that their service (for which they charge a monthly fee) could be described as a consumer owning a combination of a TV antenna, a DVR, and a slingbox.

In the determination of whether the AEREO service violated any of the rights of the networks, Justice Droney, writing for the majority, focused on the similarity between AEREO’s system and other services that have been litigated on. Being a decision from the same court and concerning a nearly identical service, the court particularly relied upon the case of . Cablevision used a device called an RS-DVR to make individual copies of broadcasts for customers upon request.  In the same way as with AEREO’s system, these copies were only reproduced for the customers who actually ordered them. The Court of Appeal was clear that this service did not infringe any networks’ reproduction, public performance or transmission rights. Faced with that decision, the networks decided to give up its claim that AEREO’s making of copies was infringement, but they maintained that the service still infringed both their rights related to and .

The following are the four main points on which Justice Droney based upon:

1. If an individual transmission is "capable of being received by the public" the transmission is a public performance; if the potential audience of the transmission is only one subscriber, the transmission is usually not a public performance.
2. Private transmissions (not capable of being received by the public) should not be aggregated. It is therefore irrelevant to the "Transmit Clause" analysis whether the public is capable of receiving the same underlying work or original performance of the work by means of many transmissions.
3. There is an exception to this no-aggregation rule when private transmissions are generated from the same copy of the work. In such cases, these private transmissions should be aggregated, and if these aggregated transmissions from a single copy enable the public to view that copy, the transmissions are public performances.
4. Any factor that limits the potential audience of a transmission is relevant to the Transmit Clause analysis.

The AEREO set-up was found not to be a public performance, mainly because it failed to fall within the exception to an "aggregate transmission" in the same way that a cable transmission does.

From the foundational principle of stare decisis, the decision in AEREO can be viewed as only an extension of the same legal principles which were discussed in Cablevision. In my opinion, Justice Droney's analysis was somewhat flawed when he engaged in a comparison of a cable transmission to AEREO’s system. With former case law against them, the networks had argued that AEREO’s system should nonetheless be considered a public broadcast because of its similarity to cable transmissions, which were specifically legislated against in 1976. In Justice Droney’s discussion of this argument, he did make an analysis of legislative intent behind the , but only briefly.  He also stated clearly that the AEREO system is similar in many ways to a cable transmission system, but failed to explain why the legislature would not have considered the AEREO system infringement, if they had been aware of it.  In my opinion (and likely in the opinion of the networks), it is clear that cable broadcasts were specifically addressed in the 1976 Copyright amendments due to the potentially massive financial impact they would have on the networks, and therefore, it is strange that a similar system wouldn’t be considered infringing.

Naturally, there is always the argument that the decision is correct because the AEREO service is simply an amalgamation of devices that a private consumer can secure for themselves.  The significant difference, from my perspective, is that it may not be considered infringement because it would be private consumers gaining benefits from the combined use of these devices; that is simply not the same situation as with the AEREO service, which is offered on an ongoing basis and for a fee.

The networks may have actually been better served in this decision if they had advanced a reproduction rights claim.  Although apparently settled by the Cablevision decision, continuing to press the issue would force the court to do a “Fair Use” analysis, since copying is arguably being done. In that analysis a series of market factors would have been considered and the court may have ruled in favour of the networks without needing to overrule Cablevision. Since those arguments were not presented and the court found that there was no public performance, there waso need to consider "Fair Use" factors as a part of the legal analysis.

Therefore we are left with a decision that it technically in keeping with the law, but seems inconsistent with the policy which underlies that law. Copyright law has always been a balance between protecting rights and increasing public access. That is the reason why the test for "Fair Use" in American Copyright law specifically considers market impact of a particular use. In my opinion, the courts are making a clear statement with decisions like these.  That statement is “If you can find a find a loophole in copyright law, you can exploit it”. While it may be acceptable to accept that mentality in a tax law context, it is not appropriate in a system like copyright which is based on a balance between the rights of individuals.

It is my sincere hope that the court wants to use this decision to prompt action from the legislature to specifically address this case as they did in 1976 in reaction to cable television. It is because of decisions like these that we get statements like the one from FOX COO talking about the possibility of turning FOX into a pay channel which is no longer broadcast. In my view, this is a different scenario, on a fundamental level, than a single person buying an antenna or a DVR.  AEREO is a transmission business - just like the cable television industry - and their operation will have a significant financial impact network television.

Adam Stevenson is an IPilogue Editor and a JD Candidate at Western University.

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