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This week, the US Court of Appeals essentially ended Flo and Eddie’s New York case against Sirius XM where it tried to establish a public performance royalty in pre-1972 sound recordings. The Court of Appeals sent the case back to the US District Court with instructions that it be dismissed, finding that a December decision by New York’s state Court of Appeals resolved all issues in the case. As we wrote just before Christmas, the New York Court of Appeals determined that there was no public performance right in pre-1972 sound recordings under New York state law. That decision resulted from a certified question from the US Court of Appeals which was reviewing the decision of a federal District Court which had found that such a right exists. An issue in a Federal case is certified or referred to a state court when there are issues of state law that control the determination of the Federal case. As pre-1972 sound recordings are not covered under Federal law, state law controls the rights accorded to such recordings, thus the certified question was necessary in this case to determine the state of the law on this issue in New York state (see our article about the referral of the public performance issue in this case to the NY Court of Appeals, here, an article that also discusses more broadly the status of pre-1972 sound recording litigation and related issues).

This week’s federal Court of Appeals order was very direct, relying on the state court decision that there was no public performance right to end the case. It did briefly address the remaining arguments of Flo and Eddie by finding that no issues still remained as to liability for copies of the sound recordings made during the digital transmission process (server, buffer and cache copies) or on any claim of unfair competition. Basically, the Court found that any copies made in the transmission process were fair use necessary to engage in the legal performance, and there was no unfair competition issue as the performance was legal, hence not unfair in the eyes of the law.
Continue Reading Flo and Eddie NY Suit on Pre-1972 Sound Recordings Ordered Dismissed By Court of Appeals – No Issues with Copies Made in the Transmission Process

The Supreme Court heard the oral arguments in the Aereo case yesterday, it has received all the briefs, and now we all just wait for a decision – to probably be released late in June before the Court’s summer recess.  The transcript of yesterday’s oral argument has been released and is available here.  It makes for interesting reading, as the questions from the Court seemed to be dubious of Aereo’s claims that it can retransmit the signal of a broadcast television station over the Internet, to the public for a fee, without the consent of or any payment to the stations.  While dubious about the Aereo service, the Court was also concerned about the potential impact of any decision against Aereo on cloud services and even on other distributors of media content.  Lots of issues came up during the course of the argument, and it will be very interesting to see how the Court resolves these in its final decision.  Keep reading, and I’ll make my prediction. 

While Court arguments can never be relied on to predict the decision, they can at least provide insight into the questions that the Justices are considering.  One question that recurred throughout the argument was raised by Justice Sotomayor in the first question that was asked – why wasn’t Aereo a cable system under Copyright law, as it retransmits television programming to consumers for a fee?  Counsel for both parties contended that it was not a cable system, though neither gave an entirely satisfactory reason for that position.  The definition of a cable system in Section 111 of the Copyright Act, which governs the compulsory license granted to cable systems to retransmit over-the-air TV stations and all of the content that they broadcast, defines a “cable system” as:

a facility…that in whole or in part receives signals transmitted or broadcast by one or more television stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals by wires, cables, microwave or other communications channels to subscribing members of the public who pay for such service.

As the Justices said, this sure looks like what Aereo is doing.  As we have written before, the FCC is looking at whether an IP based video-programming service should be classified as a cable system.  It might well have been easier for the attorney representing the broadcasters to concede that Aereo was very much like a cable system, as if it was so classified, it would have proved the argument that they broadcasters were trying to make – that its retransmission of television programming was a public performance that required the permission of the broadcaster.
Continue Reading Supreme Court Hears Oral Argument in the Aereo Case – A Summary of the Issues and a Prediction

Aereo finally lost a court decision.  The US District Court in Utah released a well-reasoned decision finding that the service, by transmitting via the Internet over-the-air TV programming to subscribers without any consent from the TV stations or their program suppliers, violated the copyrights that the stations have in their programming.  Specifically, the Court found that the transmissions were public performances, the very issue to be determined later this year by the US Supreme Court when it considers the decision of the Second Circuit Court of Appeals in New York finding that no public performance was involved in the Aereo transmissions.  (See our summary of the NY decision here).  The Utah Court issued an injunction preventing Aereo from operating in Utah until the issue is decided by the Supreme Court. 

This is the first case that Aereo itself has lost, also winning a favorable decision from a District Court in Boston which essentially followed the Second Circuits reasoning (see our summary of the Boston decision here).  But the Aereo copycat service, FilmOn X, which presented essentially the same legal issues to Courts, has lost two decisions, one in California and one in Washington DC (see our summary of the DC decision here), both courts finding that the public performance right was implicated by Aereo’s transmissions.  Oral arguments in the Supreme Court are to be held in April, with a decision in the case expected before the Court adjourns for its summer recess in July.  Does this Utah decision serve as a preview of the upcoming Supreme Court decision?
Continue Reading Utah Court Enjoins Aereo Service – A Preview of the Supreme Court Decision? Could It Find Aereo to Violate Copyright Law Without Overturning the Cablevision Decision?