In New York City, for less than $13 a month you can watch live broadcast television via the Internet on all of your various devices. How does that work technically? Aereo, the company providing the service and backed by media mogul billionaire Barry Diller, brags that it has “made the TV antenna unbelievably small. So small it fits on the tip of your finger. But it still gets awesome HD reception.” OK, so one places a really small antenna on a device and watches broadcast television on their iPad? No, not quite.
Aereo places these small antennas in data centers filled with powerful computers, and connects the antenna to the Internet, so to speak, which allows a customer to control what they watch and when they watch it.
So how does that work legally? The short answer is it doesn’t. Copyright law defines as infringement a transmission of a copyrighted work “to the public” without authorization. The problem here is that Aereo did not gain the consent of broadcasters and other copyright owners.
But, perhaps expectedly, Aereo denies that it is infringing. The company’s defense? Tiny antennas. Aereo claims that since it is using thousands of antennas the broadcast is no longer a “public performance” but rather thousands of private performances. But when a commercial service retransmits a signal to a public audience that is a public performance, not a private one, regardless of whether one large antenna is used or thousands of small antennas.
In the end, had Aereo sought and received copyright licenses for the signals it might very well have a successful legal business, even though it would not have kept the entire amount it charged. But of course that is the nature of a legal business—one must pay for the raw materials that go into the product.
Aereo should stick to legal innovation. To hear some great examples of how intellectual property owners and others are innovating legally, please join us for IPI’s 7th Annual World IP Day Forum on 26 April, 2012, which will feature the panel, “New and Emerging Business Models in IP.” Intellectual property and technology have long been in a symbiotic role with one another and today is no different, as is made obvious in more business models with technology delivering content to consumers in even more ways.