Copyhype

Cross-posted on the Law Theories blog.

The petitioners have filed their reply brief in the Aereo appeal, and I’m thrilled to see their focus on who supplies the content—a standard for differentiating cloud computing sheep from goats that I’ve been advocating (see here and here).

Right out of the gate, the petitioners note that Aereo supplies the content:

Congress could hardly have been clearer that it did not want technological advances (or, in Aereo’s case, gimmicks) to undermine its basic policy judgment that a third party should not be able to build a business model out of supplying performances of the copyrighted works of others to the public without authorization. ¹Reply Brief for Petitioners, American Broadcasting Companies, Inc. v. Aereo, Inc., No. 13-461, 2014 WL 1430768 at *1 (U.S. April 14, 2014).

And the petitioners point out that this makes Aereo different than other cloud computing services:

Nor is there any merit to Aereo’s suggestion that its service is indistinguishable from legitimate cloud computing services. There is an obvious difference between providing storage for content that the end-user independently possesses and making the content itself available to anyone who pays a fee. ²Id. at *3.

Aereo is not just like any other cloud computing service. Aereo’s subscribers utilize its service to obtain content in the first instance—content that Aereo itself supplies via its tens of thousands of tiny antennae. It doesn’t matter how Aereo supplies the content (uploads, cameras, antennae, etc.). It matters whether Aereo supplies the content. And obviously it does—that’s the very service Aereo provides. Subscribers pay Aereo eight or twelve bucks a month because they want the content Aereo supplies. Without that content, there is no Aereo. In fact, the only content available on Aereo’s service is the content that Aereo itself supplies.

This concept of who the supplies the content is nothing new. If I buy and download a song from iTunes, there is no doubt that iTunes is publicly distributing the content that it supplies. If I use Spotify to stream one of my favorite songs, there is no doubt that Spotify is publicly performing the content that it supplies. And if I look up a law review article on Westlaw, there is no doubt that Westlaw is publicly displaying the content that it supplies. And the fact that I press a button to initiate things doesn’t change the public nature of the distribution, performance, or display.

The difference between all of these services and the kind of passive cloud computing service that Aereo erroneously likens itself to is that these services supply the content in the first instance. Aereo is nothing like, say, Microsoft’s OneDrive, where I have been saving drafts of this post. Aereo instead—like iTunes, Spotify, and Westlaw—supplies the content to members of the public who wish to obtain that content in the first place.

An amicus brief supporting Aereo, filed by a group of thirty-six intellectual property and copyright law professors, argues that Aereo’s service is just like Sony’s VCR:

The Aereo system is the functional equivalent of the Sony Betamax: consumers use it to record television programs for subsequent playback to themselves. ³Brief of 36 Intellectual Property and Copyright Law Professors as Amici Curiae in Support of Respondent, American Broadcasting Companies, Inc. v. Aereo, Inc., No. 13-461, 2014 WL 1348474 at *1 (U.S. April 2, 2014).

In their opinion, Aereo lacks the necessary volitional conduct to be held directly liable:

As in Sony, consumers are using a technology to record copyrighted works for their later enjoyment. As in Sony, consumers make every specific decision about how to use the technology. They choose which television programs to record, for how long to record them, when to watch those programs later, for how long to watch them, and when to discard previously stored programs. Consumers call all of the shots. On the present record, if anyone here is a direct infringer, it is the consumers. Aereo lacks the necessary “aspect of volition” to be held directly rather than secondarily liable.

This rule—the “volitional conduct” doctrine—has an impeccable pedigree. Every Court of Appeals to have considered the volitional conduct doctrine has adopted it. In addition, District Courts in another three circuits have endorsed the doctrine. ⁴Id. at *6 (internal citations omitted).

I wholeheartedly agree that the volitional conduct test has an “impeccable pedigree” and that it should be applied here to determine whether Aereo is a direct infringer. Properly understood, the volitional conduct test simply looks at the actions taken by the defendant that brought about the particular copying (in the broad sense) at issue. The test, in other words, is causation. And the notion that liability turns on causation is not some special rule applicable only to copyright infringement. It’s foundational to tort law generally.

As with all torts, the question is whether the defendant’s tortious conduct was the legal cause—a term of art—of the violation of the plaintiff’s legal right:

The words “legal cause” . . . denote the fact that the causal sequence by which the actor’s tortious conduct has resulted in an invasion of some legally protected interest of another is such that the law holds the actor responsible for such harm unless there is some defense to liability. ⁵Restatement (Second) of Torts § 9 (1965).

In order for the defendant’s conduct to be the legal cause of the injury, ⁶An “injury” is simply the “violation of another’s legal right, for which the law provides a remedy.” Black’s Law Dictionary (9th ed. 2009). “the act or omission must be a substantial factor in bringing about the harm.” ⁷Restatement (Second) of Torts § 9, cmt. a (1965). “Substantial” denotes “the fact that the defendant’s conduct has such an effect in producing the harm as to lead reasonable men to regard it as a cause.” ⁸Restatement (First) of Torts § 431 (1934). The law is not interested in all conduct that brings about the injury, i.e., the factual causes of the injury. Indeed, such causes could conceivably “stretch back to the dawn of human history.” ⁹Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 235 (2d Cir. 1999). The law instead focuses on proximate causation, which is “shorthand for a concept: Injuries have countless causes, and not all should give rise to legal liability.” ¹⁰CSX Transp., Inc. v. McBride, 131 S.Ct. 2630, 2637 (2011).

But where to draw the line between those factual causes that are proximate and those that are not? As with perhaps all line drawing, there’s a certain arbitrariness to it:

What we do mean by the word ‘proximate’ is that, because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point. This is not logic. It is practical politics. ¹¹Palsgraf v. Long Island R. Co., 248 N.Y. 339, 352 (1928) (Andrews, J., dissenting); but see Laborers Local 17, 191 F.3d at 235 (“Proximate cause is an elusive concept, one always to be determined on the facts of each case upon mixed considerations of logic, common sense, justice, policy and precedent.”) (internal quotations and citations omitted).

I take a less cynical view, but I think the arbitrariness is easy to misunderstand. There’s nothing arbitrary about holding a defendant liable for an injury that he factually caused. The arbitrariness comes from not holding a defendant liable for an injury, even though he factually caused it. And the reason proximate causation analysis is somewhat arbitrary in nature is because it has to be:

[T]he infinite variety of claims that may arise make it virtually impossible to announce a black-letter rule that will dictate the result in every case. Instead, previously decided cases identify factors that circumscribe and guide the exercise of judgment in deciding whether the law affords a remedy in specific circumstances. ¹²Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 535-37 (1983).

Since it’s impossible to create a rule that encompasses every possible way of causing an injury, it’s left to the courts to fashion the contours of the proximate causation analysis. This common law tradition applies in copyright law as it does in all tort law. Copyhype’s ever-brilliant Terry Hart has identified a list of factors that courts have considered while analyzing causation, such as the location of the equipment and who supplies the content. These factors are relevant because they go to whether the defendant is a substantial cause of the copying.

This proximate causation analysis should not be misperceived as a balancing test, such as the one employed when a court determines whether a given use by a defendant is fair. These factors are not relevant because they’ve survived some ad hoc or categorical balancing of the plaintiff’s and defendant’s interests. They are relevant, where applicable, because they represent commonly-occurring conduct by a defendant that goes to whether the defendant caused the copying at issue to occur.

Getting back to the amicus brief submitted by the thirty-six intellectual property and copyright law professors, I think their analogy between Sony’s VCR and Aereo’s service is unpersuasive because the volitional conduct with each is significantly different. Of course, Sony concerned the reproduction right, while Aereo concerns the public performance right. But, more fundamentally, Sony’s liability was ultimately analyzed under the rubric of indirect infringement—and not direct infringement as we have here with Aereo—because Sony’s conduct was sufficiently remote such that it was not directly causing the copying at issue.

While we may tend to think of Sony as a contributory liability case, the fact is that the copyright owner plaintiffs also argued for direct liability in the district court. In support of this claim, the plaintiffs cited Elektra, ¹³Elektra Records Co. v. Gem Elec. Distributors, Inc., 360 F.Supp. 821 (E.D.N.Y. 1973). a case that is eerily on point here with Aereo. There, the defendants operated a store where blank tapes, coin-operated tape-duplicating machines, and prerecorded copyrighted works were offered to the public for in-store use. The district court found that the plaintiffs had demonstrated a strong likelihood of success on the merits as to their claim for direct infringement.

But, in analyzing the legality of the VCR, the district court in Sony found Elektra inapposite because the “involvement of the defendants in the infringing activity” there “was much more substantial and direct than that alleged against defendants here.” ¹⁴Universal City Studios, Inc. v. Sony Corp. of Am., 480 F.Supp. 429, 458 (C.D. Cal. 1979). And central to this finding was the fact that Sony did not supply the content:

“Defendants Sony and Sonam manufacture and market the Betamax and blank tapes. They do not, however, loan or otherwise provide the copyrighted work.” ¹⁵Id.

Thus, even though the defendants in Elektra and Sony both supplied the blank tapes and the copy machines, the cases were distinguishable because, among other things, the defendants in Sony did not also supply the content.

Later in the litigation, this factor was also invoked by the Supreme Court: “Petitioners in the instant case do not supply Betamax consumers with respondents’ works; respondents do.” ¹⁶Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 436-37 (1984). Other factors, such as “the range of [the VCR’s] potential use” and the fact that Sony was not “in a position to control the use of copyrighted works by others” played a part in the Court’s analysis as well. ¹⁷Id. at 437. The Court found it relevant that Sony’s only contact with the users of its VCRs happened at the point of sale. Subsequent to that sale, Sony maintained no direct control over the allegedly infringing activity of those users.

Aereo thus stands in stark contrast to Sony. Like the defendants in Elektra, Aereo does more than simply supply the modern equivalent of blank tapes and copy machines—Aereo supplies the content as well. And unlike Sony’s VCR, Aereo’s service does not have a wide range of potential uses. In fact, the only content that can be reproduced and performed with Aereo’s service is the content that Aereo itself supplies. Moreover, in contrast to Sony, Aereo maintains an ongoing relationship with its subscribers, retaining direct control over its entire service at all times. These differences are significant, and they’re relevant here because they go to causation.

The Aereo petitioners similarly rebut the Sony argument in their reply brief:

Aereo nonetheless attempts to liken itself to a . . . VCR manufacturer, insisting that it is not performing because the user “presses the button to make the recording[]” that Aereo uses to retransmit broadcast television. But Aereo ignores . . . the multiple features that distinguish its examples – including that the . . . VCR manufacturer suppl[ies] only the equipment for copying content, while users supply the content. ¹⁸Reply Brief for Petitioners, supra note 1, at *16.

The petitioners point out that a VCR is worthless without access to content, and in contrast to Sony’s VCR, “the whole point of Aereo’s service is to provide access to the content.” ¹⁹Id. at *17. The petitioners note that Aereo markets itself as providing a means of watching live television, and the only content available with Aereo’s service is the content that Aereo itself supplies. By arguing that it’s just like a VCR—or even a remote DVR for that matter—the petitioners remind us that Aereo “elides the question of where the content being recorded came from.” ²⁰Id.

Furthermore, as the petitioners rightly indicate:

[W]ithout the content the antenna receives, Aereo’s DVR functionality would be useless. And where a service like Aereo provides the users with content, it cannot coherently argue that the user is the only one performing that content. ²¹Id. at *18.

This is the same rule that applies with services such as iTunes, Spotify, and Westlaw, mentioned above. These services are the ones publicly distributing, performing, or displaying the content because the content made available to the public is supplied by the services themselves. And the same holds true for Aereo:

Because Aereo is offering not just a piece of equipment, but an integrated service that includes access to copyrighted content, its efforts to suggest that it is a mere equipment supplier and only its subscribers perform are doomed. ²²Id.

This case isn’t about the legality of a DVR or even of the cloud itself. The petitioners are not challenging the notion that time-shifting is fair use or that legally-possessed content can be stored and accessed in the cloud. The petitioners instead are simply arguing that Aereo is a direct infringer because Aereo itself supplies the content to its subscribers. By doing so, Aereo’s conduct is sufficiently proximate such that it has substantially caused the performance to occur. What Aereo does with the content it supplies is no different than what iTunes, Spotify, and Westlaw do—except for the fact that those services have licenses to supply the content, of course.

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