C ompanies such as Hulu, Netflix, and Amazon have changed how many people watch television programming by offering on-demand, online streaming to their computers, mobile devices, and gaming consoles. Aereo and FilmOn X were also created to stream television programming over the Internet for a monthly subscription fee. Unlike the other companies, however, the technology of Aereo and FilmOn permitted subscribers to watch both live broadcast television and already-aired programming without licenses. This development in technology triggered multiple lawsuits alleging copyright violations by these companies. The litigation revealed not only multiple interpretations of copyright law and its application to new and developing technologies, but also a possible "loophole" in the law, which some accused Aereo and FilmOn of exploiting. The Copyright Act of 1976 provides copyright holders with the exclusive right to control how their work is reproduced, adapted, distributed, publicly displayed, or publicly performed. The issue before the courts in the lawsuits against Aereo and FilmOn X is whether a retransmission of copyrighted broadcasts over the Internet without a prior agreement with the copyright holder violated the copyright holder's right of public performance. In 2012, the U.S. District Court for the Southern District of New York, in ABC v. Aereo, denied certain broadcasters' request for a preliminary injunction against Aereo. The plaintiffs argued that Aereo's service of transmitting copyrighted television programs contemporaneously with over-the-air broadcasts violated their right of public performance. The defendant, Aereo, in turn argued that the performances were not public but private because each user could access only his/her specially made copy of the program. The district court agreed with Aereo's argument. That same year, the plaintiffs appealed to the U.S. Court of Appeals for the Second Circuit in WNET v. Aereo. The Second Circuit, in a split appellate panel, affirmed the district court decision ruling that the transmissions by Aereo did not infringe the plaintiffs' public performance right. FilmOn X modeled its system on Aereo and its initial endorsement by the courts. However, FilmOn did not enjoy the same initial legal success as Aereo, despite the similar arguments made by both the plaintiffs and defendant in the Aereo cases. In the 2012 case Fox Television Stations v. BarryDriller Content Systems , the U.S. District Court for the Central District of California found that FilmOn's retransmission of certain television programs violated the copyrights of several broadcasters. In 2013, the U.S. District Court for the District of Columbia found, in Fox Television Stations v. FilmOn X , that FilmOn's retransmission of the plaintiffs' copyrighted programs over the Internet violated their right of public performance because FilmOn retransmitted copyrighted works to members of the public without the plaintiffs' prior permission. In a 2014 decision in ABC v. Aereo , the U.S. Supreme Court overturned the Second Circuit ruling in WNET v. Aereo and held that Aereo infringed upon the broadcasters' exclusive right of public performance when it retransmitted a broadcast of a program to paid subscribers over the Internet. The Court found that Aereo's similarity to cable television providers, which Congress specifically targeted with the 1976 Copyright Act, supported the conclusion that Aereo publicly performs under copyright law. Following the Supreme Court's decision, Aereo suspended its service, and in November 2014, filed for bankruptcy. Aereo states that it is currently reconsidering other business and technology options. Relying on licensed content from media sources, FilmOn has adapted its business model and is continuing to defend litigation in the district courts. This report will examine the courts' interpretation of the public performance right in the context of the Aereo and FilmOn cases. The report begins with a discussion of the technology used by Aereo and FilmOn. The report then examines the public performance right, specifically the "transmit clause," in the Copyright Act. Next, the report discusses the interpretation of the transmit clause and public performance right by the courts in the Aereo and FilmOn cases, including the U.S. Supreme Court. The report concludes with a brief overview of related legislative proposals in the 113 th Congress. Competitors Aereo and FilmOn X used similar technology, with only minor distinctions but no legally meaningful differences, to retransmit broadcast television to their subscribers. Both companies allowed subscribers to view and/or record live broadcast programming. Unlike most other digital video recorders (DVR) that require a television, Aereo and FilmOn allowed users to view programming on their computers or mobile devices, similar to services offered by Hulu and Netflix. However, Aereo, unlike Hulu and Netflix, did not negotiate any licensing agreements with the content providers. Content providers even accused Aereo of "stealing content" while Aereo defended its service as a new player in the media market. In order to watch a program, the Aereo subscriber would first log into an account on the website. The subscriber then either would select to watch a program as it is aired or would choose to record a program that would be aired later. When a subscriber would select to watch a currently airing program, Aereo would transmit to the subscriber a webpage from which he/she could watch the television program at roughly the same time as the current broadcast. While viewing this program, the subscriber could pause, rewind, and record the program with the system retaining a copy until the subscriber watched it later. These features would allow the subscriber to watch a program even after the over-the-air broadcast has ended. The Aereo system, therefore, provided the functionality of both a television antenna and a DVR. When a subscriber selected to watch or record a program, the web browser would send a request to the Aereo application server. The application server then sent information about the subscriber and the selected program to the antenna server. The antenna server allocated a specific antenna to that subscriber. These antennas received the broadcast television channels, from which the subscriber selected the programming. Depending on the type of subscription, most of the subscribers were assigned a different antenna each time they selected a program. However, no two subscribers were using a single antenna at the same time. The selected antenna then received the incoming broadcast signal. The antenna server received the data from the antenna and then sent it to another server where a copy of the program was saved to a large hard drive in a directory reserved for that particular subscriber. Regardless of whether the subscriber had selected to watch or to record a program, the system streamed the program from the hard drive copy of the program in the user's directory on the server. The difference between the two viewing modes was when the streaming occured: after six-seven seconds of programming has been saved on the hard drive for the "watch" option or when the subscriber chooses to view the program. The courts have highlighted three technical details of significance. First, Aereo assigned individual antennas to each subscriber even if two or more subscribers were watching or recording the same program. Second, the system created a separate copy of the program, stored in the subscriber's personal directory. Third, each subscriber could only access and watch the copy specifically made for his/her account. No other subscriber could view that particular copy. The 1976 Copyright Act provides copyright holders with exclusive rights to control certain uses of their works. These exclusive rights include "in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works" the right to do and to authorize the public performance of the copyrighted work. The Copyright Act defines "public performance or display" as (1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. The second part of the above definition, known as the "transmit clause," is the focus of the courts' legal analysis in the Aereo and FilmOn cases. Congress added the "Transmit Clause" during the 1976 revisions of the previous copyright laws in order to accommodate developing technologies. The transmit clause identifies four elements that trigger a public performance: (1) a transmission or other communication, (2) of a performance of the work, (3) to members of the public who are capable of receiving the performance, and (4) where the transmission either is to a public or semi-public place, or is to members of the public who may be separated geographically or temporally or both. The first element incorporates the Copyright Act's definition of "transmit." Under the Copyright Act, a transmission of a performance or display is a "communicat[ion] by any device or process whereby images or sounds are received beyond the place from which they are sent." Congress intended this broad definition "to include all conceivable forms and combination of wired or wireless communications media, including but by no means limited to radio and television broadcasting as we know them." Similarly, the U.S. Court of Appeals for the Ninth Circuit, in Columbia Pictures Industries, Inc. v. Professional Real Estate Investors, Inc. , held that to transmit a public performance "at least involves sending out some sort of signal via a device or process to be received by the public at a place beyond the place from which it is sent." The second element requires the transmission to involve a performance of the work.