Last week, a federal district court declined to enjoin Aereo’s “Watch Now” streaming service pending the outcome of a full trial in the copyright infringement law suit filed by the major networks and broadcast stations serving the New York DMA against Aereo. The parties sought to enjoin Aereo from streaming their programming for the duration of the trial because, they argued, they were likely to succeed on the merits. The court’s denial of their request for a preliminary injunction means that Aereo is free to continue with it service for the duration of the trial. The decision adds to the confusion around the degree to which broadcast signals may be streamed online and to mobile devices.

In last week’s decision, the court agreed with Aereo that its “Watch Now” streaming service works much like the remote storage DVR (“RS-DVR”) service offered by Cablevision and which the Second Circuit upheld against claims of copyright infringement in a separate decision last year. The RS-DVR service at issue in that case stored programming designated by consumers for recording on servers maintained remotely by Cablevision. Consumers could playback those programs through their home television sets using a remote control and a standard cable box equipped with the RS-DVR software. Key to the finding that the RS-DVR did not infringe upon copyright was the fact that when a consumer selected a program to be recorded to the RS-DVR, a “unique copy” of the program was saved for the consumer on the RS-DVR server. It was that “unique copy” which in turn was played back to the consumer when he or she requested it ― meaning there was no infringing “public performance.”  The Second Circuit’s decision is legally binding in New York, Vermont, and Connecticut.

The district court found that when a Aereo subscriber selects a channel to “watch now,” he or she turns on a remotely located and individually assigned television antenna which tunes to that channel. According to the court, a unique copy of the program is made from the signals received from that individually-assigned antenna. That copy is stored in a remotely located DVR, and that unique copy is played back to the subscriber on his or her Internet-enabled device, much like the RS-DVR service considered and upheld by the Second Circuit. The networks had argued that the copy made when a consumer tunes in to a channel via Aereo is in fact a “buffer copy,” and thus Aereo operates in the same manner as any other service that retransmits live broadcast signals over the Internet. The court disagreed, pointing out that the Aereo copies “are stored for the duration of the user’s viewing experience, and are not purely fleeting repositories of data as it is immediately passed to the user.”

The district court judge indicated in her opinion that if she were to consider the legal question independently of the Second Circuit decision in Cablevision she likely would have reached a different result.  The opinion invites the Second Circuit to clarify and potentially narrow the scope of the Cablevision decision so that it is not applied so mechanically on appeal.  The networks already have filed an appeal.

As noted above, the decision adds to the confusion around the degree to which broadcast signals may be streamed online and to mobile devices. Pressure will grow on Congress to re-visit the legislative framework governing distribution of broadcast signals (including Sections 111, 119 and 122 of the Copyright Act and the Cable Act of 1992). Next year’s re-authorization of the legislation authorizing some satellite retransmissions of out-of-market television signals (known as “STELA”) provides one opportunity for Congress to do so. In the shorter term, Aereo may be raised at an upcoming Senate Commerce hearing on retransmission consent issues that is scheduled for July 24.