The concept of building an entire business model around the language in a single court decision got a workout in New York on Nov. 30 as judges at the U.S. Court of Appeals for the Second Circuit peppered a lawyer for AEREO with questions about why the Internet start-up TV company shouldn't be shut down for copyright infringement.
R. David Hosp of Goodwin Procter told a three-judge panel that AEREO, which grabs broadcast signals and puts them on a website that allows its subscribers to download programs to their computers, does not infringe because it is the customers making the copies—all in conformance with the Second Circuit's own decision in the "Cablevision case," Cartoon Network v. CSC Holdings, 536 F.3d 121 (2008).
As to AEREO's structure, he said, "This court decided what the law is and AEREO is following it to a T."
But Judges Denny Chin, Christopher Droney and, sitting by designation, Eastern District Judge John Gleeson were receptive to the arguments of lawyers for WNET, CBS and other broadcasters that AEREO had failed to match its technology to the language of Cablevision.
Paul Smith of Jenner & Block for WNET and Bruce Keller of Debevoise & Plimpton for CBS, said AEREO, a Barry Diller-led start-up with thousands of New York subscribers, is stealing content pure and simple.
In Cablevision, the Second Circuit found no infringement by Cablevision through use of its RS-DVR, which allows customers to record programming on hard drives kept by the company at a remote location and not on a set-top box.
On Nov. 30, Smith and Keller said AEREO, regardless of how it characterizes its technology, is infringing their public performance rights under 17 U.S.C. § 106(4) of the Copyright Act.
"What you have here is an entirely unlicensed service," Smith said.
Although Hosp claimed that AEREO is not involved in the "retransmission" of public performances because it is the consumer doing the downloading, Keller said it was clearly retransmission and "In every case that has [dealt] with retransmission of radio or television broadcast" the court "has concluded it's a violation of the transmit clause" of the Copyright Act.
AEREO captures broadcast signals from the Empire State Building with thousands of small "antennas" at a building in Brooklyn. Subscribers who pay $12 per month for the service merely access one of these "antennas" and download programs on computers and mobile devices within seconds of the broadcast. The programs can be viewed immediately or at their leisure.
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