Source: http://www.copyhype.com/2013/08/fox-v-filmon-x-hearing-suggests-yet-another-reason-aereos-public-performance-logic-is-flawed/
Timestamp: 2019-04-18 22:30:14+00:00

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posted August 29, 2013 by Terry Hart.
On Tuesday, a Ninth Circuit panel heard oral arguments in a case brought by television broadcasters against internet retransmission service FilmOn X (née Aereokiller). You can listen to audio of the hearing. The appeal arose over a preliminary injunction against FilmOn that was granted late last year by district court judge George Wu, who held that there was a likelihood that FilmOn X infringed the broadcasters’ public performance rights through its operation of a subscription based service that retransmits broadcast television over the internet.
On appeal, FilmOn X argues, essentially, that the Ninth Circuit should reverse the lower court’s decision and instead follow the lead of the Second Circuit, which, earlier this year, affirmed similar service Aereo as not infringing the public performance right. That decision followed the Circuit court’s Cablevision precedent, which adopted a non-statutory “unique copy” element to distinguish between non-infringing private performances and infringing public performances.
What we’re really talking about is the definition of “to the public” in the Transmit Clause, and we know that “to the public” includes receipt of the performance at different times and at different places. I understand your point is “this is one antenna per person.” But let me give you two hypotheticals and ask you if they come out differently. One is the antenna goes to a house full of people, friends, alright, so it’s kind of public, it seems to me. And the other is it goes to a bar, which charges admission for everybody to come in and watch your signal from that one antenna to the bar. Are you still okay in that, even though the ultimate recipients of your retransmitted signal may not be? When I say “are you okay”, I mean are you violating the statute at that point, because you’re sending something to, in my extreme example, a commercial establishment, which is then selling it to the public?
Baker begins by correctly pointing out that the bar would be liable for publicly performing the broadcast, but then speculates that the worst FilmOn X could face is secondary liability, depending on its level of awareness of the bar’s activities and whatever specific facts are present.
Baker is wrong on this second point. FilmOn X would be liable for publicly performing works under Judge Cogan’s hypothetical. What’s more, it would be liable even under the Cablevision/Aereo “unique copy” interpretation of the Copyright Act’s public performance provisions that FilmOn X is relying on to escape liability. This is just one more reason why the Ninth Circuit should reject the argument.
Prior to the 1976 Copyright Act, the Supreme Court had held that CATV services, which picked up broadcast television signals and retransmitted them to subscribers, did not implicate the broadcasters’ public performance rights. 1Fortnightly v. United Artists Television, 392 U.S. 390, (1968);Teleprompter v. Columbia Broadcasting System, 415 U.S. 394 (1974). Congress changed this with the new Act, bringing retransmissions within the scope of public performance (subject to several limitations and exceptions). Since then, courts have consistently held that this covers every intermediary that retransmits a performance.
The earliest and leading case comes from the Seventh Circuit. In WGN Continental Broadcasting v. United Video, the court began its analysis of the dispute by disposing of a threshold argument: whether United Video, a satellite common carrier, could be liable for publicly performing television superstation WGN’s works even though it was only an intermediary retransmitting the signal to other cable providers. 2693 F.2d 622 (7th Cir. 1982). The court said it could, in part because the Copyright Act contained a passive carrier exemption that would be rendered superfluous if all intermediary carriers were exempt from liability as a matter of rule. WGN ultimately held that a service “cannot be immune just because [it] does not retransmit [a] signal directly to the public” but instead transmits the signal to an actor who, in turn, publicly performs the broadcast.
The Second Circuit came to the same conclusion in NFL v. PrimeTime 24 Joint Venture. 5211 F.3d 10 (2nd Cir. 2000). There, it said that “the most logical interpretation of the Copyright Act is to hold that a public performance or display includes ‘each step in the process by which a protected work wends its way to its audience.'” 6Quoting David v. Showtime/The Movie Channel, 697 F.Supp. 752, 759 (S.D.N.Y.1988).
That gives us three circuits (and at least one additional district court in a separate circuit 7National Cable Television v. Broadcast Music, Inc., 772 F.Supp. 614, 651 (D.DC 1991). who have considered the issue and come to the same conclusion.
But what about the Ninth Circuit, whose holdings are binding on the FilmOn X litigation? The Circuit does not appear to have weighed in on the topic. Unless you ask the Second Circuit.
But the Second Circuit read Allarcom wrong. According to the Second Circuit, when Allarcom was considering whether the Copyright Act preempted the state law at issue, the court said that “copyright infringement does not occur until the signal is received by the viewing public.” That’s not what Allarcom said. Allarcom actually said that the Copyright Act does not preempt extraterritorial acts of infringement. And under Ninth Circuit precedent, an act of infringement that does not occur entirely within the United States is considered extraterritorial. In other words, Allarcom didn’t say the retransmission was not infringing because it was not a public performance, it said it was not infringing because it was not received within the United States. Luckily, the Ninth Circuit is not bound to follow the Second Circuit’s interpretations of its own precedent.
[U]nder the transmit clause, we must examine the potential audience of a given transmission by an alleged infringer to determine whether that transmission is “to the public.” And because the RS-DVR system, as designed, only makes transmissions to one subscriber using a copy made by that subscriber, we believe that the universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.
Cablevision assumes that the single subscriber equals a single person, making the transmission a private performance. But as Judge Cogan noted in the above quote, that single subscriber could be a bar full of people from the general public — and under WGN, Hubbard, and PrimeTime 24, that makes Cablevision, Aereo, and FilmOn X’s performances public ones.
So FilmOn X cannot escape liability for public performances even under the convoluted, inexplicably narrow interpretation of the public performance provisions that it wants the Ninth Circuit to accept. This provides only all the more reason for the court to instead rely on the plain meaning of the Copyright Act.
1. ↑ Fortnightly v. United Artists Television, 392 U.S. 390, (1968);Teleprompter v. Columbia Broadcasting System, 415 U.S. 394 (1974).
2. ↑ 693 F.2d 622 (7th Cir. 1982).
3. ↑ 593 F.Supp. 808 (D. Minn. 1984).
4. ↑ 777 F.2d 393 (8th Cir. 1985).
5. ↑ 211 F.3d 10 (2nd Cir. 2000).
6. ↑ Quoting David v. Showtime/The Movie Channel, 697 F.Supp. 752, 759 (S.D.N.Y.1988).
7. ↑ National Cable Television v. Broadcast Music, Inc., 772 F.Supp. 614, 651 (D.DC 1991).
8. ↑ 69 F.3d 381 (9th Cir. 1995).
9. ↑ Cartoon Network v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008).
So if I buy a Slingbox, install it at home, and use it to watch A’s games while I travel, no one’s infringing. But if I move that Slingbox to my bar and hook it to a TV, Sling (Dish) is now a direct infringer. Isn’t that the result of your interpretation?
No, Dish has a license to publicly perform the programming it retransmits.
Aren’t the networks claiming that the Slingbox is infringing, as part of the Ad Hopper suit? Anyway, leave licenses aside and assume Sling only sells the box. Does Sling’s liability then depend on where its customers install the box and who the customers allow to use it?
Fox argued in its complaint that Dish “exceeded the scope of its license agreements with Fox by streaming and/or distributing copies of the Fox programs over the Internet via the Sling Adaptor in direct contravention of Fox’s contractual rights” — and a licensee infringes the owner’s copyright if its use exceeds the scope of its license (I don’t believe the claims relating to the Slingbox were briefed for the preliminary injunction motion, so they haven’t been addressed by the court yet).
If Sling only sells the box, then it would not be the one transmitting a performance. If it is instead providing a service where it transmits performances to customers using a Slingbox, then it would be liable for the public performance absent a license. There are only limited circumstances where a business can employ the legal fiction that it is merely “standing in the shoes” of its customers.
Well, that’s one of the real questions in the Internet TV cases. Nothing in the words of the Copyright Act – including the public performance right and the “transmit clause” – distinguishes a product from a service. What you seem to be saying is that any transmission from point A to point B is a public performance if it’s done as a commercial service. But that’s not what the statute says, it says “to the public.” Any correct interpretation of the transmit clause has to allow for the possibility of a “transmission” that is not “to the public,” or else those words are superfluous. And “to the public” is not the same as “for profit.” The statute allows for private, personal transmissions done as a commercial service on behalf of a customer from a legal source. No matter whether you call it a bug or a feature, copyright just doesn’t touch those transmissions.
The Copyright Act doesn’t explicitly distinguish between a product and a service, but it’s implicit since “performing” is an act, and it is rarely the case that someone who sells a product that is used in an act is said to be engaged in that act. For example, employees at a carwash use a hose when they wash a car. But it would be weird to say the company that sold the hose they use is also washing the car.
And while I agree that the statute obviously recognizes private or personal performances, I disagree that there is such a thing as “private, personal transmissions done as a commercial service on behalf of a customer from a legal source.” If you’re transmitting to yourself, that’s private. If you’re transmitting to your family, your friends, or your intimate social group, that’s private. But if you’re transmitting to customers — to anyone who signs up for your service — that’s public. Your service is available to any member of the general public. To say otherwise is just very clever legal gymnastics.
But “sign up for service” is a critical aspect of the situation. Aerokiller and similar services do not simply say “hey anyone in the world, point your browser to http://www.aereokiller.com/foxtv to see what’s on FOX right now”. To return to the bar example, saying that Aerokiller is responsible for infringing behavior by the participants is like saying that a bar owner is responsible for drunk people on the sidewalk in front of his shop.
This is great, Terry! I love the public performance right, though it can be really confusing at times. Just look at Judge Posner’s opinion in Flava Works or the Second Circuit’s opinion in Cablevision for examples of reasoning that leaves you scratching your head and wondering what the heck is going on.
I finally listened to the oral arguments, and I think that the lawyer for the plaintiffs did a good job but that he should have better driven home the point why Cablevision is just plain wrong. And it’s not just wrong as a matter of policy, it’s wrong as a matter of statutory construction. The defendants just can’t get around the “separate places” and “different times” part of the Transmit Clause which proves that what matters is the performance of the work, not the individual transmissions. It’s counterintuitive, but several distinct transmissions can constitute one performance.
The Second Circuit in the Aereo appeal had to do some impressive mental gymnastics to get around the plain meaning of the Transmit Clause, reading into the statute Nimmer’s unfounded “unique copies” argument. I think the Clause is simply referring to video-on-demand services, which is exactly what services such as Aereo and FilmOn X are. It matters not how many copies are used in their Rube-Goldberg machinces since infringement turns on the performance of the work. Whether the work is embodied in one copy or ten thousand copies is irrelevant.
Your post is great too because it brings home another aspect of the public performance right that I think is wildly misunderstood. I think of a performance as a chain, and whether it’s public or not depends on the last link in the chain. If the last link in the chain is a public performance, then every link in the chain is a public performance. But the chain can be broken such that upstream links in the chain aren’t publicly performing the work even if someone downstream is.
Working off of Mitch’s example, if I use my Dish DVR to record a game at home and then use a Slingbox to transmit the game to my private office computer, that’s a private performance. I’m privately transmitting the game to myself. But if I instead use the Slingbox to transmit the game to the televisions in my bar that’s full of patrons, then I’m publicly performing the game. I agree with Terry that Dish wouldn’t be an infringer for this since it has a public performance license, but I also think that it’s possible for the chain to have been broken such that Dish is no longer in the particular chain at issue.
For example, if the game was recorded three months earlier, it’s hard to see how Dish is still a link in the chain of my public performance. Dish’s chain ended when it publicly performed the work to me, and I began a new chain of public performance when I used a Slingbox to transmit the work three months later to my bar patrons. I think the example the judge gave during the oral argument was that of a chain that had not been broken since the transmissions were all contemporaneous, in which case Terry is correct that Dish’s license absolves it of liability that it would otherwise have for directly infringing the public performance right.
And this is exactly Terry’s point when it comes to FilmOn X. Even if we buy their argument that they’re not publicly performing a work when they transmit it to their subscribers, they nevertheless would be a link in the chain should that subscriber turn around and publicly perform that work. I’m not really sure how or if FilmOn X’s contractual agreement with its subscribers could relieve it of liability, which is what their lawyer alluded to during oral arguments. They would be publicly performing the work without a license, and their contract with their subscribers wouldn’t and couldn’t change this fact. The subscriber might indemnify them, I suppose, but they would still be an infringer.
Anyway, great post as always, Terry!
Congratulations, you’ve proven that all cable internet service providers are liable for contributory infringement and should be shut down, because there’s nothing that stops me getting a Comcast subscription and then using Hulu or some similar service to let people in my restaurant watch TV.
Oh, radio stations are infringing too, because they don’t do anything to ensure that I’m not tuning the radio in my restaurant to their station and allowing the customers in the restaurant to hear it.
The ISP would be a truly passive conduit, so under Netcom and its progeny, codified in the DMCA, it wouldn’t be liable. Radio stations have blanket licenses.
Radio stations have blanket licenses for rebroadcast to individual listeners in a private setting, not for rebroadcast wherever whenever and under any circumstances the radio owner chooses.
And yes, some rightsholders have sued shops for playing the radio.
How are Aereo and FilmOnX not a “passive conduit”? They don’t do anything but hold the data until the subscriber requests their release.
That doesn’t seem right to me since I would think the blanket license just says the licensee can broadcast the covered works publicly. Do you have a particular example of a blanket license in mind?
Right, because those shops presumably were publicly performing the works without a license. But I don’t see how a bar that tunes in a radio station for its customers without a license could lead to liability for the radio station that has a license to broadcast publicly.
Your ISP provides dumb tubes that have no control over the selection of the content that travels over them. Aereo and FilmOn X have control over the content they provide. In fact, their entire business model is to provide that very content.
Because unless I’ve completely misunderstood Aereo’s business model–unless Aereo is stripping out commercials and similar content, or adding in its own content in such a way that it seems to be part of the original work–all Aereo does is time-shift. The service does nothing your DVR doesn’t already do. Indeed, most modern cable services let you watch recorded content from your DVR on a mobile device; isn’t that exactly what Aereo is doing?
Unless what’s happening is that content providers are saying “over-the-air broadcasts are not intended for receipt by the general public, but are in fact only licensed for subscribers to a cable-TV service”, which seems to be kind of a bold statement.
The argument brought up by the judges is if you charge patrons to see the public performance. Not necessarily having a public performance available, and then charging for concessions (i.e.: beer, wine, peanuts, and dates).
The big kick I got from the audio was all of the snickers, and quite laughs, in the background when the counsel for FilmOn X claimed that subscribers would have to abide by their Terms of Service; hence, at that point FilmOn X is not liable.
I think both FilmOn X are liable. In Aereo’s case, Bloomberg Television grants their broadcast by contract; however, because of that, Bloomberg Television, as a news-source, comports the silencing of opinions against (while all of the other stolen signals have no agreements)—and that’s not good.
Right, but I don’t think the money part matters. A bar could charge no admission and could give out food and drinks for free, but it would still be a public performance to show the copyrighted telecast of a game to a group of patrons.
That’s true. Therefore, public performances, like restaurants, bars, pool-halls, etc., must have a licensed agreement with Direct-TV or a local cable provided to do so. Otherwise it’s an analog rabbit ear (like in “Rocky” when Apollo Creed hit the mat and the reaction in the fictitious Philly bar). But now the analog signal has been removed, the televisions for analog have all been destroyed….the signals are now digital, and a decoder box (or a new monitor) is required.
Thus FilmOn X and their “Terms of Service” excuse for a “third-party” unauthorized public performance (while pirating the digital signals claimed as “freely over-the-air”, and then charging to have the service without licensing the copyrighted content) really holds no moment.
So charging admission could make a difference.
Isn’t that the same thing that the DMCA argues when it defines the Safe Harbor provision for service providers?
If I don’t put up a sign saying “no trespassing”, and someone moves onto my unused land and builds a house, then I can’t come along later and say “hey wait I didn’t say you could build a house here”. Adverse Possession. If the broadcasters didn’t want people viewing their broadcasts for free, then, well, maybe they shouldn’t have made them available for free.
On the other hand, all I *have* to do is put up a sign saying “no trespassing” and I’m legally protected. And all the broadcasters need to do is put a blipcard after the credits for each show saying “this broadcast presented by so-and-so under license from such-and-such. Unauthorized rebroadcasting , retransmission, or storage are prohibited.” Bam, Aereo’s killed.
Adverse possession has no application whatsoever to copyright law. The broadcasters do want people viewing their broadcasts for free, which is why they broadcast them, but what they don’t want is people rebroadcasting them publicly without a license. There’s no need for the broadcasters to explicitly withhold the rights as you suggest since those rights are already withheld by default.

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