Stay Tuned: Whether Cloud-Based Service Providers Can Have Their Copyrighted Cake and Eat It Too

November 1, 2014

Copyright owners have the exclusive right to perform their works publicly and the ability to license their work to others who want to share that right. Subsections 106(4) and (5) of the Copyright Act govern this exclusive public performance right, but neither subsection elaborates on what constitutes a performance made “to the public” versus one that remains private. This lack of clarity has made it difficult for courts to apply the Copyright Act consistently, especially in the face of changing technology.

Companies like Aereo, Inc. and AereoKiller, Inc. developed novel ways to transmit content over the internet to be viewed instantly by their subscribers and declined to procure the licenses that would have been required if these transmissions were being made “to the public.” However, while these companies claimed that their activities were outside of the purview of § 106(4) and (5), their rivals, copyright owners, and the U.S. Supreme Court disagreed. Likening Aereo to a cable company for purposes of § 106(4) and (5), the Supreme Court determined that the company would need to pay for the material it streamed. Perhaps more problematic for Aereo (and other similar companies) is the fact that the Court declined to categorize Aereo as an actual cable company, such that it would qualify to pay compulsory licensing fees—the more affordable option given to cable companies under § 111—to copyright holders.

This Comment shows that, while the Court correctly ruled that companies like Aereo and AereoKiller should pay for the content transmitted, its failure to address whether Aereo is a cable company could frustrate innovation to the detriment of the public. It suggests, therefore, that these companies should be required to pay for the content that they transmit in the same way that cable companies do until Congress develops another system.

November 2014

No. 2

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