Simpsons Solicitors

Aero fails to fly: online TV service not “fair use”

August 19th 2014

The Supreme Court in the United States (equivalent to the Australian High Court) has decided that an online service known as “Aero” – that allowed people to stream (and then record) TV programs over their computers moments behind the “over-the-air” broadcast – cannot rely on the “fair use” defence to run its business.

The US decision hinged in large part on technical aspects of the way the service operated, but the result bears a lot of similarity to an Australian case in 2012 (“TV Now”) relating to an online service where people could request programs to be recorded for them for later viewing.

At the time of the TV Now decision, a lot of Australian commentators were concerned that the decision would handicap Australian companies and consumers from taking advantage of emerging technologies – and cloud technologies in particular. Similarly, a number of commentators called for the Australian Copyright Act to be amended to permit “fair use”, on the basis that the Australian TV Now service would likely be permissible under US law, which has a “fair use” exception.

In both the Aero and TV Now cases, the rights holders who brought or supported the action were concerned that the new technologies were unfairly piggy-backing on top of their investments, and undermining their ability to profit from them.

In the case of TV Now, large amounts of money paid for sporting rights were at stake – and had TV Now been successful, TV stations would likely have lost interest in paying as much for exclusive rights (with a consequent potentially dramatic drop in the amounts of money that sports would be able to leverage to promote and run their organisations and sports).

In the Aero case, Aero was charging consumers far less than cable channels, and hence large amounts of money were at stake that would otherwise go to the cable companies (and then, presumably, to the producers, writers, actors and other creative industries producing content for TV and, particularly, for cable).

The US Supreme Court was careful in its decision to point out that the Court did not believe that its decision would discourage the emergence or use of different types of technology, the case may become directly relevant to the development of Australian copyright law if the current Australian Act is amended – as recommended by the Australian Law Reform Commission – to include a “fair use” defence.

Congratulations also to Jeffrey Cunard of Debevoise & Plimpton who successfully represented the plaintiffs and with whom Simpsons worked on the Google Books case.

The Aero case is available here:

http://supreme.justia.com/cases/federal/us/573/13-461/

You can read about the Australian TV Now decision here:

http://simpsons.com.au/rights-holders-defeat-optus-in-tv-now-appeal/

If you have any questions as to whether what you or your competitors are doing may raise copyright issues – whether in Australia or overseas – contact copyright lawyer Adam Simpson or Ian McDonald (Special Counsel) at Simpsons Solicitors.