12-2786-cv; 12-2807-cv
`WNET, Thirteen v. Aereo, Inc.; Am. Broad. Cos., Inc. v. Aereo, Inc.
`
`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
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` August Term, 2012
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`(Argued: November 30, 2012 Decided: April 1, 2013)
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`Docket Nos. 12-2786-cv, 12-2807-cv
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`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
`
`WNET, THIRTEEN, FOX TELEVISION
`STATIONS, INC., TWENTIETH CENTURY FOX
`FILM CORPORATION, WPIX, INC., UNIVISION
`TELEVISION GROUP, INC., THE UNIVISION
`NETWORK LIMITED PARTNERSHIP, AND
`PUBLIC BROADCASTING SERVICE,
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`Plaintiffs-Counter-Defendants-Appellants,
`
`v.
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`12-2786-cv
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`AEREO, INC., F/K/A BAMBOOM LABS, INC.,
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`Defendant-Counter-Claimant-Appellee,
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`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
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`AMERICAN BROADCASTING COMPANIES, INC.,
`D I S N E Y E N T E R P R I S E S,
`I N C., CBS
`BROADCASTING INC., CBS STUDIOS INC.,
`NBCUNIVERSAL MEDIA, LLC, NBC STUDIOS,
`LLC, UNIVERSAL NETWORK TELEVISION,
`LLC, TELEMUNDO NETWORK GROUP LLC,
`AND WNJU-TV BROADCASTING LLC,
`
`Plaintiffs-Counter-Defendants-Appellants,
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`

`
`v.
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`12-2807-cv
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`AEREO, INC.,
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`Defendant-Counter-Claimant-Appellee,
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`- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X
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`Before:
`CHIN and DRONEY, Circuit Judges, GLEESON, District Judge.*
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`Appeal from an order of the United States District Court for the Southern District of New
`York (Nathan, J.) denying Plaintiffs’ motion for a preliminary injunction barring Defendant Aereo
`from transmitting recorded broadcast television programs to its subscribers while the programs are
`airing on broadcast television. The district court correctly concluded that Aereo’s system is not
`materially distinguishable from the system upheld in Cartoon Network LP, LLLP v. CSC Holdings,
`Inc., 536 F.3d 121 (2d Cir. 2008). We therefore AFFIRM the order of the district court.
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`Judge CHIN dissents in a separate opinion.
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`PAUL M. SMITH, Steven B. Fabrizio, Scott B. Wilkens,
`Matthew E. Price, Jenner & Block LLP, Washington, DC;
`Richard L. Stone, Amy M. Gallegos, Jenner & Block
`LLP, Los Angeles, CA, for Plaintiffs-Appellants WNET,
`Thirteen, et al.
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`BRUCE P. KELLER, Jeffrey P. Cunard, Michael R. Potenza,
`Debevoise & Plimpton LLP, New York, NY, for
`Plaintiffs-Appellants Am. Broad. Cos., Inc., et al.
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`R. DAVID HOSP, John C. Englander, Mark S. Puzella,
`Yvonne W Chan, Erin M. Michael, Goodwin Procter
`LLP, Boston, MA; Michael S. Elkin, Thomas P. Lane,
`Winston & Strawn LLP, New York, NY; Seth D.
`Greenstein, Constantine Cannon LLP, Washington, DC;
`Jennifer A. Golinveaux, Winston & Strawn LLP, San
`Francisco, CA, for Defendant-Appellee.
`
`*The Honorable John Gleeson, United States District Court for the Eastern District of
`New York, sitting by designation.
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`

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`Robert Alan Garrett, Lisa S. Blatt, Stephen M. Marsh, R.
`Stanton Jones, Arnold & Porter LLP, Washington, DC,
`for amici curiae National Basketball Association, NBA
`Media Ventures, LLC, NBA Properties, Inc., National
`Football League, National Hockey League, Office of the
`Commissioner of Baseball, and MLB Advanced Media,
`L.P. in support of Plaintiffs-Appellants.
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`Kelly M. Klaus, Munger, Tolles & Olson LLP, Los
`Angeles, CA; Samantha Dulaney, I.A.T.S.E. In House
`Counsel, New York, NY; Duncan W. Crabtree-Ireland,
`Chief Administrative Officer & General Counsel, SAG-
`AFTRA, Los Angeles, CA; Anthony R. Segall, Rothner,
`Segall & Greenstone, Pasadena, CA; Susan Cleary, Vice
`President & General Counsel, Independent Film &
`Television Alliance, Los Angeles, CA, for amici curiae
`Paramount Pictures Corporation, Warner Bros.
`Entertainment Inc., Directors Guild of America, Inc.,
`Alliance of Theatrical Stage Employees, Moving Picture
`Technicians, Artists and Allied Crafts of the United
`States, Its Territories and Canada, AFL-CIO, CLC,
`Screen Actors Guild-American Federation of Television
`and Radio Artists, Writers Guild of America, West, Inc.,
`Independent Film & Television Alliance, Lions Gate
`Entertainment, Inc., and Metro-Goldwyn-Mayer Studios
`Inc. in support of Plaintiffs-Appellants.
`
`Robert A. Long, Matthew S. DelNero, Daniel Kahn,
`Covington & Burling LLP, Washington, DC, for amici
`curiae The National Association of Broadcasters, The
`ABC Television Affiliates Association, The CBS
`Television Network Affiliates Association, The NBC
`Television Affiliates, and The Fox Television Affiliates
`Association in support of Plaintiffs-Appellants.
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`Jeffrey A. Lamken, Robert K. Kry, MoloLamken LLP,
`Washington, DC, for amicus curiae Cablevision Systems
`Corporation in support of Plaintiffs-Appellants.
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`Steven J. Metalitz, Eric J. Schwartz, J. Matthew Williams,
`Mitchell Silberberg & Knupp LLP, Washington, DC; Paul
`V. LiCalsi, Mitchell Silberberg & Knupp LLP, New
`York, NY, for amici curiae The American Society of
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`Composers, Authors and Publishers, Broadcast Music,
`Inc., The National Music Publishers Association, The
`Association of Independent Music Publishers, The
`Church Music Publishers Association, The Nashville
`Songwriters Association International, The Recording
`Industry Association of America, the Recording Academy,
`SESAC, Inc., The Society of Composers & Lyricists, The
`Songwriters Guild of America, Inc., and Soundexchange,
`Inc., in support of Plaintiffs-Appellants.
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`Ralph Oman, The George Washington University Law
`School, Washington, DC, for amicus curiae Ralph Oman,
`Former Register of Copyrights of the United States in
`support of Plaintiffs-Appellants.
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`Jonathan Band, Jonathan Band PLLC, Washington, DC,
`for amici curiae The Computer & Communications
`Industry Association and The Internet Association in
`support of Defendant-Appellee.
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`Michael C. Rakower, Law Office of Michael C. Rakower,
`P.C., New York, NY, for amici curiae Intellectual
`Property and Copyright Law Professors in support of
`Defendant-Appellee.
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`Mitchell L. Stoltz, Electronic Frontier Foundation, San
`Francisco, CA; Sherin Siy, John Bergmayer, Public
`Knowledge, Washington, DC; Michael Petricone,
`Consumer Electronics Association, Arlington, VA, for
`amici curiae The Electronic Frontier Foundation, Public
`Knowledge, and The Consumer Electronics Association
`in support of Defendant-Appellee.
`
`Peter Jaszi, Kate Collins, Seth O. Dennis, Sarah K.
`Leggin, Bijan Madhani, American University Washington
`College of Law, Washington, DC, for amici curiae The
`Consumer Federation of America and Consumers Union
`in support of Defendant-Appellee.
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`DRONEY, Circuit Judge:
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`Aereo, Inc. (“Aereo”) enables its subscribers to watch broadcast television programs over
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`the internet for a monthly fee. Two groups of plaintiffs, holders of copyrights in programs broadcast
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`on network television, filed copyright infringement actions against Aereo in the United States
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`District Court for the Southern District of New York. They moved for a preliminary injunction
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`barring Aereo from transmitting programs to its subscribers while the programs are still airing,
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`claiming that those transmissions infringe their exclusive right to publicly perform their works. The
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`district court (Nathan, J.) denied the motion, concluding that the plaintiffs were unlikely to prevail
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`on the merits in light of our prior decision in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536
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`F.3d 121 (2d Cir. 2008) (“Cablevision”). We agree and affirm the order of the district court denying
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`the motion for a preliminary injunction.1
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`BACKGROUND
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`The parties below agreed on all but one of the relevant facts of Aereo’s system, namely
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`whether Aereo’s antennas operate independently or as a unit. The district court resolved that
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`issue, finding that Aereo’s antennas operate independently. The Plaintiffs do not appeal that
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`factual finding. Thus the following facts are undisputed.
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`I.
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`Aereo’s System
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`Aereo transmits to its subscribers broadcast television programs over the internet for a
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`monthly subscription fee. Aereo is currently limited to subscribers living in New York City and
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`1The two actions, although not consolidated in the district court, proceeded in tandem and
`the district court’s order applied to both actions.
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`offers only New York area channels. It does not have any license from copyright holders to
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`record or transmit their programs.
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`The details of Aereo’s system are best explained from two perspectives. From its
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`subscribers’ perspective, Aereo functions much like a television with a remote Digital Video
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`Recorder (“DVR”) and Slingbox.2 Behind the scenes, Aereo’s system uses antennas and a
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`remote hard drive to create individual copies of the programs Aereo users wish to watch while
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`they are being broadcast or at a later time. These copies are used to transmit the programs to the
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`Aereo subscriber.
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`A.
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`The Subscriber’s Perspective
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`Aereo subscribers begin by logging on to their account on Aereo’s website using a
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`computer or other internet-connected device. They are then presented with a programming guide
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`listing broadcast television programs now airing or that will air in the future. If a user selects a
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`program that is currently airing, he is presented with two options: “Watch” and “Record.” If the
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`user selects “Watch,” the program he selected begins playing, but the transmission is briefly
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`delayed relative to the live television broadcast.3 Thus the user can watch the program nearly
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`live, that is, almost contemporaneously with the over-the-air broadcast. While the user is
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`watching the program with the “Watch” function, he can pause or rewind it as far back as the
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`2A Slingbox is a device that connects the user’s cable or satellite set-top box or DVR to
`the internet, allowing the user to watch live or recorded programs on an internet-connected
`mobile device, such as a laptop or tablet.
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`3The technical operation of Aereo’s system, discussed below, results in a slight delay in
`transmitting the program, which means that an Aereo subscriber using the “Watch” feature sees
`the program delayed by approximately ten seconds.
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`point when the user first began watching the program.4 This may result in the user watching the
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`program with the “Watch” feature after the over-the-air broadcast has ended. At any point while
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`watching the program with the “Watch” feature, the user can select the “Record” button, which
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`will cause Aereo’s system to save a copy of the program for later viewing. The recorded copy of
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`the program will begin from the point when the user first began watching the program, not from
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`the time when the user first pressed the “Record” button.5 If a user in “Watch” mode does not
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`press “Record” before the conclusion of the program, the user is not able to watch that program
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`again later.
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`An Aereo user can also select a program that is currently airing and press the “Record”
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`button. In that case, a copy of the program will be saved for later viewing. However, the
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`“Record” function can also be used to watch a program nearly live, because the user can begin
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`playback of the program being recorded while the recording is being made. Thus the difference
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`between selecting the “Watch” and the “Record” features for a program currently airing is that
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`the “Watch” feature begins playback and a copy of the program is not retained for later viewing,
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`while the “Record” feature saves a copy for later viewing but does not begin playback without
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`further action by the user.
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`If an Aereo user selects a program that will air in the future, the user’s only option is the
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`“Record” function. When the user selects that function, Aereo’s system will record the program
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`4Thus if an Aereo user starts watching a program five minutes after it first began airing,
`he can rewind back to the five-minute mark, but not earlier.
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`5Thus if an Aereo user starts watching a program five minutes after it first began airing
`and presses the “Record” button at the twenty-minute mark, the recorded copy will begin from
`the five-minute mark.
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`when it airs, saving a copy for the user to watch later. An Aereo user cannot, however, choose
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`either to “Record” or “Watch” a program that has already finished airing if he did not previously
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`elect to record the program.
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`The final notable feature of Aereo’s system is that users can watch Aereo programing on
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`a variety of devices. Aereo’s primary means of transmitting a program to a user is via an internet
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`browser, which users can access on their computers. Aereo users can also watch programs on
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`mobile devices such as tablets or smart phones using mobile applications. Finally, Aereo
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`subscribers can watch Aereo on an internet-connected TV or use a stand-alone device to connect
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`their non-internet TVs to Aereo.
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`Aereo’s system thus provides the functionality of three devices: a standard TV antenna, a
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`DVR, and a Slingbox-like device. These devices allow one to watch live television with the
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`antenna; pause and record live television and watch recorded programing using the DVR; and
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`use the Slingbox to watch both live and recorded programs on internet-connected mobile
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`devices.
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`B.
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`The Technical Aspects of Aereo’s System
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`Aereo has large antenna boards at its facility in Brooklyn, New York. Each of these
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`boards contains approximately eighty antennas, which consist of two metal loops roughly the
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`size of a dime. These boards are installed parallel to each other in a large metal housing such that
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`the antennas extend out of the housing and can receive broadcast TV signals. Aereo’s facility
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`thus uses thousands of individual antennas to receive broadcast television channels.6
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`6As mentioned in the text above, the lone factual dispute below was whether Aereo’s
`antennas function independently or as one unit. The district court resolved this dispute in favor
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`When an Aereo user selects a program to watch or record, a signal is sent to Aereo’s
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`antenna server. The antenna server assigns one of the individual antennas and a transcoder to the
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`user. The antenna server tunes that antenna to the broadcast frequency of the channel showing
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`the program the user wishes to watch or record. The server transcodes the data received by this
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`antenna, buffers it, and sends it to another Aereo server, where a copy of the program is saved to
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`a large hard drive in a directory reserved for that Aereo user. If the user has chosen to “Record”
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`the program, the Aereo system will create a complete copy of the program for that user to watch
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`later. When the user chooses to view that program, Aereo’s servers will stream the program to
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`the user from the copy of the program saved in the user’s directory on the Aereo server. If the
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`user instead has chosen to “Watch” the program, the same operations occur, except that once six
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`or seven seconds of programming have been saved in the hard drive copy of the program in the
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`user’s directory on the Aereo server, the Aereo system begins streaming the program to the user
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`from this copy. Thus even when an Aereo user is watching a program using the “Watch” feature,
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`he is not watching the feed directly or immediately from the antenna assigned to him. Rather the
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`feed from that antenna is used to create a copy of the program on the Aereo server, and that copy
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`is then transmitted to the user. If at any point before the program ends, the user in “Watch” mode
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`selects “Record,” the copy of the program is retained for later viewing. If the user does not press
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`“Record” before the program ends, the copy of the program created for and used to transmit the
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`program to the user is automatically deleted when it has finished playing.
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`of Aereo, finding that its antennas operate independently. Am. Broad. Cos., Inc. v. Aereo, 874 F.
`Supp. 2d 373, 381 (S.D.N.Y. 2012). The Plaintiffs do not contest this finding on appeal.
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`Three technical details of Aereo’s system merit further elaboration. First, Aereo assigns
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`an individual antenna to each user. No two users share the same antenna at the same time, even if
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`they are watching or recording the same program.7 Second, the signal received by each antenna
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`is used to create an individual copy of the program in the user’s personal directory. Even when
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`two users are watching or recording the same program, a separate copy of the program is created
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`for each. Finally, when a user watches a program, whether nearly live or previously recorded, he
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`sees his individual copy on his TV, computer, or mobile-device screen. Each copy of a program
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`is only accessible to the user who requested that the copy be made, whether that copy is used to
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`watch the program nearly live or hours after it has finished airing; no other Aereo user can ever
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`view that particular copy.
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`II.
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`The Present Suits
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`Two groups of plaintiffs (the “Plaintiffs”) filed separate copyright infringement actions
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`against Aereo in the Southern District of New York. They asserted multiple theories, including
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`infringement of the public performance right, infringement of the right of reproduction, and
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`contributory infringement. ABC and its co-plaintiffs moved for a preliminary injunction barring
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`Aereo from transmitting television programs to its subscribers while the programs were still
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`7Aereo’s system usually assigns these antennas dynamically. Aereo users “share”
`antennas in the sense that one user is using a particular antenna now, and another may use the
`same antenna when the first is no longer using it. But at any given time, the feed from each
`antenna is used to create only one user’s copy of the program being watched or recorded. Thus if
`10,000 Aereo users are watching or recording the Super Bowl, Aereo has 10,000 antennas tuned
`to the channel broadcasting it.
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`being broadcast. The two sets of plaintiffs agreed to proceed before the district court in tandem,
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`and the motion for preliminary injunction was pursued in both actions simultaneously.
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`Following expedited briefing and discovery and an evidentiary hearing, the district court
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`denied the Plaintiffs’ motion. Am. Broad. Cos., Inc. v. Aereo, 874 F. Supp. 2d 373, 405
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`(S.D.N.Y. 2012). The district court began its analysis with the first factor relevant to granting a
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`preliminary injunction: whether the Plaintiffs have demonstrated a likelihood of success on the
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`merits. Id. at 381 (citing Salinger v. Colting, 607 F.3d 68, 80 (2d Cir. 2010)). The district court
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`found that this factor was determined by our prior decision in Cablevision, 536 F.3d 121. Aereo,
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`874 F. Supp. 2d at 381-82. After a lengthy discussion of the facts and analysis of that decision,
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`the district court concluded that Aereo’s system was not materially distinguishable from
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`Cablevision’s Remote Storage Digital Video Recorder system, which we held did not infringe
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`copyright holders’ public performance right. Id. at 385-86. The district court found unpersuasive
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`each of the Plaintiffs’ arguments attempting to distinguish Cablevision. See id. at 386-96. Thus
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`the court concluded that the Plaintiffs were unlikely to prevail on the merits. Id. at 396.
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`The district court then considered the other three preliminary injunction factors. First, the
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`court concluded that the Plaintiffs had demonstrated a likelihood that they would suffer
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`irreparable harm in the absence of a preliminary injunction. Id. at 396-402. But second, the
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`district court found that an injunction would severely harm Aereo, likely ending its business. Id.
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`at 402-03. As such, the balance of hardships did not tip “decidedly” in favor of the Plaintiffs. Id.
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`at 403. Finally, the district court concluded that an injunction “would not disserve the public
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`interest.” Id. at 403-04. Because the Plaintiffs had not demonstrated a likelihood of success on
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`the merits or a balance of hardship tipping decidedly in their favor, the district court denied their
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`motion for a preliminary injunction. Id. at 405. The Plaintiffs promptly filed an interlocutory
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`appeal, and this case was briefed on an expedited schedule.
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`DISCUSSION
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`We review a district court’s denial of a preliminary injunction for abuse of discretion.
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`WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 278 (2d Cir. 2012). A district court abuses its discretion
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`when its decision rests on legal error or a clearly erroneous factual finding, or when its decision,
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`though not the product of legal error or a clearly erroneous factual finding, cannot be located
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`within the range of permissible decisions. Id.
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`Our decisions identify four factors relevant to granting a preliminary injunction for
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`copyright infringement. First, a district court may issue a preliminary injunction “only if the
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`plaintiff has demonstrated either (a) a likelihood of success on the merits or (b) sufficiently
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`serious questions going to the merits to make them a fair ground for litigation and a balance of
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`hardships tipping decidedly in the plaintiff’s favor.” Salinger v. Colting, 607 F.3d 68, 79 (2d Cir.
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`2010) (internal citation and quotation marks omitted). Second, a plaintiff seeking a preliminary
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`injunction must demonstrate “‘that he is likely to suffer irreparable injury in the absence of’” an
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`injunction. Id. at 79-80 (quoting Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008)). A
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`court may not presume irreparable injury in the copyright context; rather the plaintiff must
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`demonstrate actual harm that cannot be remedied later by damages should the plaintiff prevail on
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`the merits. Id. at 80 (citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)). Third,
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`a district court “must consider the balance of hardships between the plaintiff and defendant and
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`issue the injunction only if the balance of hardships tips in the plaintiff’s favor.” Id. Fourth and
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`finally, “the court must ensure that ‘the public interest would not be disserved’ by the issuance of
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`a preliminary injunction.” Id. (quoting eBay, 547 U.S. at 391).
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`The outcome of this appeal turns on whether Aereo’s service infringes the Plaintiffs’
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`public performance right under the Copyright Act. The district court denied the injunction,
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`concluding, as mentioned above, that (1) Plaintiffs were not likely to prevail on the merits given
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`our prior decision in Cablevision and (2) the balance of hardships did not tip “decidedly” in the
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`Plaintiffs’ favor. Aereo, 874 F. Supp. 2d at 405. Plaintiffs’ likelihood of success on the merits
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`depends on whether Aereo’s service infringes Plaintiffs’ copyrights. And, as we discuss further
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`below, the balance of hardships is largely a function of whether the harm Aereo would suffer
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`from the issuance of an injunction is legally cognizable, which in turn depends on whether Aereo
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`is infringing the Plaintiffs’ copyrights. See ivi, 691 F.3d at 287. As a result, a preliminary
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`injunction can only be granted if Plaintiffs can show that Aereo infringes their public
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`performance right. We now turn to that issue.
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`I.
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`The Public Performance Right
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`The 1976 Copyright Act (the “Act”) gives copyright owners several exclusive rights and
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`then carves out a number of exceptions. The fourth of these rights, at issue in this appeal, is the
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`copyright owner’s exclusive right “in the case of literary, musical, dramatic, and choreographic
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`works, pantomimes, and motion pictures and other audiovisual works, to perform the
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`copyrighted work publicly.” 17 U.S.C. § 106(4). The Act defines “perform” as “to recite, render,
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`play, dance, or act [a work], either directly or by means of any device or process or, in the case
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`of a motion picture or other audiovisual work, to show its images in any sequence or to make the
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`sounds accompanying it audible.” 17 U.S.C. § 101. The Act also states:
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`To perform or display a work “publicly” means-
`(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.
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`17 U.S.C. § 101. This appeal turns on the second clause of this definition (the “Transmit Clause”
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`or “Clause”).
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`The relevant history of the Transmit Clause begins with two decisions of the Supreme
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`Court, Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968), and
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`Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974). These
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`decisions held that under the then-current 1909 Copyright Act, which lacked any analog to the
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`Transmit Clause, a cable television system that received broadcast television signals via antenna
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`and retransmitted these signals to its subscribers via coaxial cable did not “perform” the
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`copyrighted works and therefore did not infringe copyright holders’ public performance right.
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`Teleprompter, 415 U.S. at 408; Fortnightly, 392 U.S. at 399-401. Even before these cases were
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`decided, Congress had begun drafting a new copyright act to respond to changes in technology,
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`most notably, cable television.
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`These efforts resulted in the 1976 Copyright Act. The Act responded to the emergence of
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`cable television systems in two ways. First, it added the Transmit Clause. The legislative history
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`shows that the Transmit Clause was intended in part to abrogate Fortnightly and Teleprompter
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`and bring a cable television system’s retransmission of broadcast television programming within
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`the scope of the public performance right. H.R. Rep. 94-1476, 1976 U.S.C.C.A.N. 5659, at 63
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`(1976) (“House Report”) (“[A] sing[er] is performing when he or she sings a song; a
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`broadcasting network is performing when it transmits his or her performance (whether
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`simultaneously or from records); a local broadcaster is performing when it transmits the network
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`broadcast; a cable television system is performing when it retransmits the broadcast to its
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`subscribers; and any individual is performing when he or she plays a phonorecord embodying
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`the performance or communicates it by turning on a receiving set.”). Second, Congress
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`recognized that requiring cable television systems to obtain a negotiated license from individual
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`copyright holders may deter further investment in cable systems, so it created a compulsory
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`license for retransmissions by cable systems.8 See 17 U.S.C. § 111(d).
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`Plaintiffs claim that Aereo’s transmissions of broadcast television programs while the
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`programs are airing on broadcast television fall within the plain language of the Transmit Clause
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`and are analogous to the retransmissions of network programing made by cable systems, which
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`the drafters of the 1976 Copyright Act viewed as public performances. They therefore believe
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`8Put briefly, the statute allows cable systems to retransmit copyrighted works from
`broadcast television stations in exchange for paying a compulsory license to the U.S. Copyright
`Office calculated according to a defined formula. The fees paid by cable systems are then
`distributed to copyright holders. See ivi, 691 F.3d at 281; E. Microwave, Inc. v. Doubleday
`Sports, Inc., 691 F.2d 125, 128-29 (2d Cir. 1982).
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`that Aereo is publicly performing their copyrighted works without a license.9 In evaluating their
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`claims, we do not work from a blank slate. Rather, this Court in Cablevision, 536 F.3d 121,
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`closely analyzed and construed the Transmit Clause in a similar factual context. Thus the
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`question of whether Aereo’s transmissions are public performances under the Transmit Clause
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`must begin with a discussion of Cablevision.
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`II.
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`Cablevision’s Interpretation of the Transmit Clause
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`In Cablevision, 536 F.3d 121, we considered whether Cablevision’s Remote Storage
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`Digital Video Recorder (“RS-DVR”) infringed copyright holders’ reproduction and public
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`performance rights. Cablevision, a cable television system, wished to offer its customers its
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`newly designed RS-DVR system, which would give them the functionality of a stand-alone DVR
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`via their cable set-top box. 536 F.3d at 124-25. Before the development of the RS-DVR system,
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`Cablevision would receive programming from various content providers, such as ESPN or a
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`local affiliate of a national broadcast network, process it, and transmit it to its subscribers
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`through coaxial cable in real time. Id. With the RS-DVR system, Cablevision split this stream
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`into two. One stream went out to customers live as before. The second stream was routed to a
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`server, which determined whether any Cablevision customers had requested to record a program
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`in the live stream with their RS-DVR. If so, the data for that program was buffered, and a copy
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`of that program was created for that Cablevision customer on a portion of a Cablevision remote
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`9Plaintiffs assert that Aereo’s transmissions of recorded programs when the original
`program is no longer airing on broadcast television are also public performances and that
`Aereo’s system infringes other exclusive rights granted by the Copyright Act, such as the
`reproduction right. Plaintiffs did not, however, present these claims as a basis for the preliminary
`injunction. They are therefore not before us and we will not consider them.
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`hard drive assigned solely to that customer. Thus if 10,000 Cablevision customers wished to
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`record the Super Bowl, Cablevision would create 10,000 copies of the broadcast, one for each
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`customer. A customer who requested that the program be recorded could later play back the
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`program using his cable remote, and Cablevision would transmit the customer’s saved copy of
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`that program to the customer. Only the customer who requested that the RS-DVR record the
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`program could access the copy created for him; no other Cablevision customer could view this
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`particular copy.10 See 536 F.3d at 124-25.
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`Copyright holders in movies and television programs sued, arguing that Cablevision’s
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`RS-DVR system infringed their reproduction right by creating unauthorized copies of their
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`programs and their public performance right by transmitting these copies to Cablevision
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`customers who previously requested to record the programs using their RS-DVRs. The district
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`court granted the plaintiffs’ motion for summary judgment and issued an injunction against
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`Cablevision. See Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F. Supp. 2d
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`607 (S.D.N.Y. 2007). The court found that the RS-DVR infringed the plaintiffs’ reproduction
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`right in two ways: (1) by creating temporary buffer copies of programs in order to create a
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`permanent copy for each of its customers on its hard drives and (2) by creating a permanent copy
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`of the program for each customer. Id. at 617-22. The court also found that Cablevision’s
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`transmission of a recorded program to the customer who had requested to record the program
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`10 The RS-DVR was therefore unlike a video-on-demand service because it did not enable
`a customer to watch a program that had already been broadcast unless that customer had
`previously requested that the program be recorded and because it generated user-associated
`copies instead of using a shared copy or copies.
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`was a public performance under the Transmit Clause and therefore was infringing on that basis
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`as well. Id. at 622-23.
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`This Court reversed on all three issues. Cablevision, 536 F.3d at 140. Because the
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`Plaintiffs in the present cases did not