Am. Broad. Cos. v. Aereo, Inc.

• Citation: 189 L.Ed.2d 476,134 S.Ct. 2498,573 U.S. 431
• Decision Date: 25 June 2014
• Docket Number: No. 13–461.,13–461.
• Parties: AMERICAN BROADCASTING COMPANIES, INC., et al., Petitioners v. AEREO, INC., fka Bamboom Labs, Inc.
• Court: United States Supreme Court

573 U.S. 431

134 S.Ct. 2498

189 L.Ed.2d 476

AMERICAN BROADCASTING COMPANIES, INC., et al., Petitioners

v.AEREO, INC., fka Bamboom Labs, Inc.

No. 13–461.

Supreme Court of the United States

Argued April 22, 2014.

Decided June 25, 2014.

Paul D. Clement, Washington, DC, for Petitioners.

Malcolm Stewart for the United States as amicus curiae, by special leave of the Court, supporting the Petitioners.

David C. Frederick, Washington, DC, for Respondent.

Paul M. Smith, Matthew E. Price, Jenner & Block LLP, Paul D. Clement, Counsel of Record, Erin E. Murphy, Bancroft PLLC, Washington, DC, Richard L. Stone, Amy M. Gallegos, Jenner & Block LLP, Los Angeles, CA, Bruce P. Keller, Jeffrey P. Cunard, Debevoise & Plimpton LLP, New York, NY, for Petitioners.

Brenda M. Cotter, General Counsel, Daniel Brown, Deputy General Counsel, Aereo, Inc., Boston, MA, David C. Frederick, Counsel of Record, Aaron M. Panner, Brendan J. Crimmins, Caitlin S. Hall, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC, R. David Hosp, Mark S. Puzella, Fish & Richardson P.C., Boston, MA, Seth D. Greenstein, Constantine Cannon LLP, Washington, DC, for Respondent.

Justice BREYER delivered the opinion of the Court.

The Copyright Act of 1976 gives a copyright owner the " exclusive righ [t]" to "perform the copyrighted work publicly." 17 U.S.C. § 106(4). The Act's Transmit Clause defines that exclusive right as including the right to

"transmit or otherwise communicate a performance ... of the [copyrighted] work ... to the public, by means of any device or process, whether the members of the public capable of receiving the performance ... receive it in the same place or in separate places and at the same time or at different times." § 101.

We must decide whether respondent Aereo, Inc., infringes this exclusive right by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over the air. We conclude that it does.

I

A

For a monthly fee, Aereo offers subscribers broadcast television programming over the Internet, virtually as the programming is being broadcast. Much of this programming is made up of copyrighted works. Aereo neither owns the copyright in those works nor holds a license from the copyright owners to perform those works publicly.

Aereo's system is made up of servers, transcoders, and thousands of dime-sized antennas housed in a central warehouse. It works roughly as follows: First, when a subscriber wants to watch a show that is currently being broadcast, he visits Aereo's website and selects, from a list of the local programming, the show he wishes to see.

Second, one of Aereo's servers selects an antenna, which it dedicates to the use of that subscriber (and that subscriber alone) for the duration of the selected show. A server then tunes the antenna to the over-the-air broadcast carrying the show. The antenna begins to receive the broadcast, and an Aereo transcoder translates the signals received into data that can be transmitted over the Internet.

Third, rather than directly send the data to the subscriber, a server saves the data in a subscriber-specific folder on Aereo's hard drive. In other words, Aereo's system creates a subscriber-specific copy—that is, a " personal" copy—of the subscriber's program of choice.

Fourth, once several seconds of programming have been saved, Aereo's server begins to stream the saved copy of the show to the subscriber over the Internet. (The subscriber may instead direct Aereo to stream the program at a later time, but that aspect of Aereo's service is not before us.) The subscriber can watch the streamed program on the screen of his personal computer, tablet, smart phone, Internet-connected television, or other Internet-connected device. The streaming continues, a mere few seconds behind the over-the-air broadcast, until the subscriber has received the entire show. See A Dictionary of Computing 494 (6th ed. 2008) (defining "streaming" as "[t]he process of providing a steady flow of audio or video data so that an Internet user is able to access it as it is transmitted").

Aereo emphasizes that the data that its system streams to each subscriber are the data from his own personal copy, made from the broadcast signals received by the particular antenna allotted to him. Its system does not transmit data saved in one subscriber's folder to any other subscriber. When two subscribers wish to watch the same program, Aereo's system activates two separate antennas and saves two separate copies of the program in two separate folders. It then streams the show to the subscribers through two separate transmissions—each from the subscriber's personal copy.

B

Petitioners are television producers, marketers, distributors, and broadcasters who own the copyrights in many of the programs that Aereo's system streams to its subscribers. They brought suit against Aereo for copyright infringement in Federal District Court. They sought a preliminary injunction, arguing that Aereo was infringing their right to "perform" their works "publicly," as the Transmit Clause defines those terms.

The District Court denied the preliminary injunction. 874 F.Supp.2d 373 (S.D.N.Y.2012). Relying on prior Circuit precedent, a divided panel of the Second Circuit affirmed. WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2013) (citing Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2008) ). In the Second Circuit's view, Aereo does not perform publicly within the meaning of the Transmit Clause because it does not transmit "to the public." Rather, each time Aereo streams a program to a subscriber, it sends a private transmission that is available only to that subscriber. The Second Circuit denied rehearing en banc, over the dissent of two judges. WNET, Thirteen v. Aereo, Inc., 722 F.3d 500 (2013). We granted certiorari.

II

This case requires us to answer two questions: First, in operating in the manner described above, does Aereo "perform" at all? And second, if so, does Aereo do so "publicly"? We address these distinct questions in turn.

Does Aereo "perform"? See § 106(4) ("[T]he owner of [a] copyright ... has the exclusive righ[t] ... to perform the copyrighted work publicly" (emphasis added)); § 101 ("To perform ... a work ‘publicly’ means [among other things] to transmit ... a performance ... of the work ... to the public ..." (emphasis added)). Phrased another way, does Aereo "transmit ... a performance" when a subscriber watches a show using Aereo's system, or is it only the subscriber who transmits? In Aereo's view, it does not perform. It does no more than supply equipment that "emulate[s] the operation of a home antenna and [digital video recorder (DVR) ]." Brief for Respondent 41. Like a home antenna and DVR, Aereo's equipment simply responds to its subscribers' directives. So it is only the subscribers who "perform" when they use Aereo's equipment to stream television programs to themselves.

Considered alone, the language of the Act does not clearly indicate when an entity "perform[s]" (or "transmit[s]") and when it merely supplies equipment that allows others to do so. But when read in light of its purpose, the Act is unmistakable: An entity that engages in activities like Aereo's performs.

A

History makes plain that one of Congress' primary purposes in amending the Copyright Act in 1976 was to overturn this Court's determination that community antenna television (CATV) systems (the precursors of modern cable systems) fell outside the Act's scope. In Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), the Court considered a CATV system that carried local television broadcasting, much of which was copyrighted, to its subscribers in two cities. The CATV provider placed antennas on hills above the cities and used coaxial cables to carry the signals received by the antennas to the home television sets of its subscribers. The system amplified and modulated the signals in order to improve their strength and efficiently transmit them to subscribers. A subscriber "could choose any of the ... programs he wished to view by simply turning the knob on his own television set." Id., at 392, 88 S.Ct. 2084. The CATV provider "neither edited the programs received nor originated any programs of its own." Ibid.

Asked to decide whether the CATV provider infringed copyright holders' exclusive right to perform their works publicly, the Court held that the provider did not "perform" at all. See 17 U.S.C. § 1(c) (1964 ed.) (granting copyright holder the exclusive right to "perform ... in public for profit" a nondramatic literary work), § 1(d) (granting copyright holder the exclusive right to "perform ... publicly" a dramatic work). The Court drew a line: "Broadcasters perform. Viewers do not perform." 392 U.S., at 398, 88 S.Ct. 2084 (footnote omitted). And a CATV provider "falls on the viewer's side of the line." Id., at 399, 88 S.Ct. 2084.

The Court reasoned that CATV providers were unlike broadcasters:

"Broadcasters select the programs to be viewed; CATV systems simply carry, without editing, whatever programs they receive. Broadcasters procure programs and propagate them to the public; CATV systems receive programs that have been released to the public and carry them by private channels to additional viewers." Id., at 400, 88 S.Ct. 2084.

Instead, CATV providers were more like viewers, for "the basic function [their] equipment serves is little different from that served by the equipment generally furnished by" viewers. Id., at 399, 88 S.Ct. 2084. "Essentially," the Court said, "a CATV system no more than enhances the viewer's capacity to receive the broadcaster's signals [by] provid[ing] a well-located antenna with an efficient connection to the viewer's television set." Ibid. Viewers do not become performers by using "amplifying equipment," and a CATV provider should not be treated...