Aereo in International Perspective: Individualized Access and U.S. Treaty Obligations

Prof. Jane C. Ginsburg, Columbia University School of Law*
February 18, 2014

This column will address the Aereo¹ controversy currently pending before the Supreme Court from an international perspective, in light of the EU Commission’s condemnation of an Italian law authorizing “remote DVR” services, and the Court of Justice for the European Union’s rejection of a retransmission service’s defense that its individualized transmissions to subscribers were not communications to
“the public.”

In general, the Cablevision²/Aereo scheme for creating copyright-free communications to the public, by assigning individual copies of broadcast or cable-transmitted content to requesting subscribers and then retransmitting the content to the subscriber (and only to that subscriber) from “her” copy, has fared less well abroad.  Courts in Europe,³ Australia,⁴ and Japan⁵ have all overturned various elements of the Cablevision/Aereo edifice, either by rejecting the designation of the user as the sole “maker” of the source copy of the transmission, or by concluding that the purportedly “personalized” nature of the transmission is irrelevant.⁶  Where the Second Circuit subscribed to defendants’ characterizations of their services as mere extensions of equipment users employed at home to time-shift or enhance signal reception – virtual DVRs and virtual rabbit ears – the foreign authorities instead largely perceived that the services were offering video on demand or retransmissions in violation of the copyright owners’ exclusive rights.

The legal analysis that followed from this understanding of the defendants’ businesses, moreover, is consistent with the international obligation to implement the “making available” right – a right that the United States, in ratifying the 1996 WIPO Copyright Treaties, asserted was already fully covered by the distribution and public performance rights, and therefore required no legislative intervention to ensure conformity of U.S. copyright law with its international obligations.  The Second Circuit’s caselaw belies that assertion.  Accordingly, and consistently with principles of statutory interpretation in light of treaty norms, the Supreme Court should interpret the scope of the statutory exclusive rights to effect, rather than to frustrate, the international treaty obligations to which the United States purports to adhere.

Making Available in the EU on an ‘Individualized’ Basis

At the end of 2007, the Italian legislature modified the copyright law’s compulsory license regime for private copying to include “remote videorecorder” services within the scope of the copyright limitation.⁷  The EU Commission, Internal Market and Services Directorate General, demanded that Italy rescind the measure.⁸  The Commission’s letter condemned the Italian law as a violation of the reproduction and making available rights in the 2001 EU Information Society Directive.  The Commission rejected Italy’s characterization of the service as merely enabling its customers to make private copies.  The Commission also stated that no other permissible copyright exception could shelter Italy’s weakening of the reproduction and making available rights because “the offer of video on demand services is an important part of the revenue stream of the rightholders” and remote time-shifting services “are in direct competition” with copyright owners’ exclusive rights to license video on demand.  “It is difficult to conceive how an exception for remote videorecording services could not in the last analysis conflict with and reduce the opportunities for commercial exploitation of licensed on demand services.”⁹  As a result of the Commission’s rebuke,¹⁰ the government never implemented the amendment, and an Italian administrative court rejected a service provider’s attempt to compel implementation, observing that the characterization of the remote videorecorder service as engaging in a “making available” of content to end users was consistent with a textual analysis of the Directive.¹¹

Another personalized transmission service fell afoul of EU norms when the Court of Justice for the European Union ruled that TV Catchup, a service that offered streaming over-the-air broadcasts to UK users whose households possessed a television-viewing license, was engaging in unlawful communications to the public.¹²  TV Catchup captured broadcast signals through an aerial and sent the signals to servers, which extracted individual video streams from the received signals.  Upon the user’s request, the streams then were sent to another server that created a separate stream for each user who requested a channel through it.  An individual packet of data leaving the server was thus addressed to an individual user, not to a class of users (CJEU opinion, paras. 13-14).  Unlike Aereo, TV Catchup did not assign each subscriber to a separate antenna, but, like Cablevision, it divided the source transmission into separate streams corresponding to each subscriber.  Pursued by British broadcasters, TV Catchup urged that its service was not communicating the television programming to the public, because each subscriber was receiving individualized transmissions.  The CJEU rejected the defense:

31  In . . . order to be categorised as a “communication to the public” within the meaning of Article 3(1) of Directive 2001/29, the protected works must also in fact be communicated to a “public.”
32   In that connection, it follows from the case-law of the Court that the term “public” in Article 3(1) of Directive 2001/29 refers to an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons . . . .
33   As regards that last criterion specifically, the cumulative effect of making the works available to potential recipients should be taken into account.  In that connection, it is in particular relevant to ascertain the number of persons who have access to the same work at the same time and successively. . . .
34  In that context, it is irrelevant whether the potential recipients access the communicated works through a one-to-one connection.  That technique does not prevent a large number of persons having access to the same work at the same time. . . .

The “communication to the public” right set out in the EU Information Society Directive Art. 3(1) implements, and contains language identical to, Art. 8 of the WIPO Copyright Treaty (WCT), which obliges member states to protect the right of communication to the public, “including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.”  The “public” character of the “making available” turns on whether the defendant has offered the work to a “large number of persons.”   Focusing, as did the Cablevision court, on the restricted audience for an individual transmission of the work misses the mark: As the CJEU stressed, the assessment of the quantity of persons accessing the work is “cumulative.”

Moreover, the WCT’s incorporation of potential access (“may access”) makes clear that “making available” means not just delivering, but also offering to the public on-demand access to a work,¹³ whether as a stream or a download.  In construing the EU Information Society Directive’s identical language, the CJEU very recently reaffirmed that “a work is made available to a public in such a way that the persons forming that public may access it, irrespective of whether they avail themselves of that opportunity,”¹⁴ and that the right therefore extends to providing the public with the means to individually access works.¹⁵  Compliance with the WCT thus requires a member state to cover not only actual transmissions of streams and downloads, but also the offering to communicate the work as a stream or a download.¹⁶

By contrast, as specified in the Agreed Statement to WCT Art. 8, and repeated in Recital 27 of the Information Society Directive, and cited in TV Catchup (para. 3), “the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication.”  Thus, under international treaty norms,¹⁷ a service, such as Dropbox, which provides the servers for storing and/or which provides access to user-stored content, but does not also supply the content that it will allocate to a user’s personal storage space, or thence transmit back to her on demand, would merely be providing facilities, rather than making the content available to the public.¹⁸  Put another way, when the same service stores and plays back to the user content that the service initially offered to provide to the user, that service is doing more than merely providing communications facilities.  But when the user creates the content or acquires it from a source other than the service’s own offerings, and then stores that content on the service’s facilities, then the service’s activities correspond to the “non communications” envisioned in the Agreed Statement.

Conformity With International Norms

Like the EU , the United States ratified the WIPO treaties.  Unlike the EU, the United States did not enact legislation to implement the “making available right” set out in those treaties; the United States claimed already to have the domestic equivalent of a making available right through a combination of the statutory public performance by transmission right and the distribution right.¹⁹  Moreover, as then-Copyright Office General Counsel David Carson has observed, the United States has even imposed the “making available” right on our trading partners through bilateral Free Trade Agreements.²⁰  It would be awkward, to say the least, were crabbed judicial interpretations of the scope of the right of public performance (or of distribution) to result in incomplete compliance with the international norms the United States purports not only to respect but even to demand that other nations enforce.  U.S. courts should be interpreting the statutory rights in the light of, and where possible consistently with, the United States’ international obligations.  This principle of statutory interpretation, known as the Charming Betsy doctrine,²¹ offers a longstanding and generally applicable means of resolving statutory ambiguities.²²

As the disarray in the lower courts attests,²³ the statutory formulation of the public performance right does not clearly and unambiguously foreclose coverage of making works available through communicating content for individualized storage and retransmission of broadcast or cable programming.  Even the District of Massachusetts, in following the Second Circuit in Aereo, admitted that “the Transmit Clause is not a model of clarity.”²⁴  An interpretation consistent with international standards therefore is “possible.”  In fact, as the following analysis shows, such an interpretation is far more natural than the strained interpretation offered by the Second Circuit.   Accordingly, Charming Betsy counsels coextensive interpretation of domestic and international norms.

Arguably, two differences in text between the WCT and the U.S. Copyright Act preclude interpreting the scope of the U.S. public performance right consistently with the scope of the WCT “making available” right.  First, the WCT addresses access to “works,” rather than to “a performance or display of [a] work.”  The United States , however, purports to implement the making available of “works” through a combination of the distribution and the public performance rights, an approach urged by the United States during the drafting of the WCT, and adopted by the diplomatic conference.²⁵  Whether through separate rights, or a single “making available” right, WCT member states are to cover the offering to the public of streams and of downloads of works.²⁶  Thus, “to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process” should mean to communicate the work in a way that members of the public can immediately listen to or view its performance,²⁷ whether or not they are separated in space or time.  The Second Circuit deviated from the international norm by incorrectly reading “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” as a limitation on the scope of the communication, rather than as confirmation of the coverage of individualized transmissions.  The court compounded the error by rewriting “it” to mean a particular transmission from a particular copy of a performance, rather than adhering to the grammatical referent, the statutory phrase performance of the work – that is, a communication that permits the members of the public to view or listen to the work as it is being communicated to them.  Only the latter reading of “it” corresponds to the scope of the right in both the U.S. statute and the WCT.  It should make no difference whether the performances that the service offers to the public emanate from a single source copy or from multiple copies created to enable members of the public to view or listen to the work.

Second, the WCT includes potential communication of the work, while the “to transmit or communicate” language of the U.S. Copyright Act may assume that the transmission will in fact have taken place.  But the U.S. public performance right does encompass potential communications, because the “transmit clause” looks to “members of the public capable of receiving the performance or display.”  Clarifying that the public performance right encompasses capacity to receive the performance “by means of any device or process”²⁸ was essential to ensuring that copyright owners’ rights covered on-demand markets.²⁹  The commercially significant act is the public offer of content on demand, at least as much as the subsequent piecemeal provision of that content.  This understanding is also consistent with the general scope of exclusive rights under Section 106, which covers “to do or to authorize” – language echoed in WCT Art. 8, which states that “authors of literary and artistic works shall enjoy the exclusive right of authorizing any communication to the public of their works, by wire or wireless means, including the making available . . .” (emphasis supplied).  The Aereo litigation, however, does not in fact require the Supreme Court to determine whether the definition of the public performance right extends to offers in the absence of a subsequent actual transmission to the public: There is no dispute either that Aereo’s subscribers do indeed receive transmissions of the broadcast programming, or that, cumulatively, the subscribers constitute “a large number of persons.”

How would an internationally harmonious reading of the public performance right apply to Cablevision and Aereo?  Given the WCT’s Agreed Statement excluding services that merely provide communications facilities, the making available right trains on the public offer of content, rather than solely on the provision of storage or delivery services.  Under this standard, both Aereo’s and Cablevision’s activities would infringe, for both are not only proposing but are in fact providing the programming to the public as near-live retransmissions of broadcast content (Aereo)³⁰ or as deferred-viewing video on demand (Cablevision).  The particular modalities of how the programming is actually delivered (whether by individualized transmissions from individualized copies, or by transmissions from a centralized copy) are ultimately irrelevant: What counts, as the CJEU recognized in TV Catchup, is that the “potential recipients” of the performances of the work as offered by the service provider are a large number of members of the public.

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