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William Fisher, CopyrightX: Lecture 8.2, The Right to Distribute, Perform, & Display: Performances

William Fisher, CopyrightX: Lecture 8.2, The Right to Distribute, Perform, & Display: Performances


Hello. I’m Terry Fisher. This at the second segment of
the eighth lecture in a series of lectures on copyright law. I’ll be focusing here on the rights
of public performance and display. This part of the lecture was
originally prepared in 2013 but was revised in October
of 2014 to take into account some recent developments
in this sector of the law. The statutory provisions that govern
the rights of performance and display are relatively few,
but they’re slippery. So it’s important to be
attentive to nuances here. The primary provisions are subsections
4, 5, and 6 of section 106. As you can see, subsection
4 gives the owner of the copyright in a literary,
dramatic, musical, choreographic, pantomime, or audiovisual
work the exclusive right to perform that work publicly. Subsection 5 is analogous. It applies to the same
types of copyrighted works, plus pictorial, graphic, or sculptural
works and the individual images of an audiovisual work. It gives the owner of such things
the right to display them publicly. Finally, subsection 6. This was added quite recently,
specifically in 1996. As I hope you’ll recall
from lecture number 3, before 1996 the owners of copyrights and
sound recordings in the United States did not enjoy any rights
in public performance. At that time, the only provision
dealing with public performances was subsection 4. And if you look back at
that subsection, you’ll notice that sound
recordings do not appear in the list of types of
works that are covered. Musical works appear. As you know by now, that means musical
compositions but not sound recordings. As I explained in lecture
number 3, the record companies that hold the copyrights in most
commercially valuable sound recordings have long complained about
this state of affairs. In 1996 and then with a little
bit of adjustment in 1998, Congress responded partially
to the record companies’ pleas and granted them a limited,
very limited, public performance right, which is now
embodied in subsection 6. As you can see, it only
applies to performances, quote, “by means of a digital
audio transmission.” In just a minute, I’ll
give you some examples of transmissions that
fit within this phrase. The crucial terms in these
three statutory provisions are performance, display, and public. Fortunately, all three are defined
in Section 101 of the statute. As you can see, perform means
to recite, render, play, dance, act, either directly or by
means of any device or process, or, in the case of a motion picture, to
show any of its images in any sequence or to make the sounds
accompanying it audible. This is a very capacious definition. I’ll give some examples
of its reach shortly. Display is defined as, quote,
“to show a work, either directly or by means of a film, slide, television
image, or other device or process.” The key word here is show. Both performances and
displays of copyrighted works can only give rise to liability
if they’re done publicly. Section 101 defines publicly
as one of two things. The first of these two
subsections is sometimes called the Public Place Clause. It classifies as public a performance
or display, quote, “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
or social acquaintances is gathered.” This is the more intuitively
plausible meaning of public. The second subsection is sometimes
known as the Transmit Clause. It says that another way in which
you can perform or display a work publicly is, quote, “to transmit or
otherwise communicate the performance or display to a place specified
in clause 1 or to the public by means of any device or process,
and whether the members of the public are capable of receiving the performance
or display receive it in the same place or in separate places, in the
same time or at different times.” That, as we’ll soon see, is a
very generous definition of public that sweeps within it many ways
in which copyrighted materials are made available today. Those are the main statutory provisions. Now let’s turn to some examples to
give these provisions a bit of shape. Here’s a hypothetical but
not implausible scenario, the purpose of which is to
illustrate these concepts. Suppose A sings a copyrighted
musical composition into a microphone in a recording studio. Record company B records
A’s rendition on a record. I know these technologies
are quaint, but bear with me. Suppose C purchases a copy
of the record and plays it on a turntable in his
or her living room. Sounds are generated, either from
the turntable directly or more likely from an amplifier and a set of
speakers connected to the turntable. Those sounds spread
through C’s living room. Another copy of the record
is purchased by radio station D. A disc jockey working for the radio
station plays the record on a turntable there. The signal generated by the radio
station is broadcast over the airwaves. The broadcast is
represented in this diagram by the dotted line on the slide. More specifically, this is a traditional
analog, over the air transmission. It’s received in the home of
E, who, in her living room, plays another stereo,
depicted by a boombox. Sound comes out of the
speakers into E’s living room. The next day, the disc jockey
plays the record again, broadcasting it again
through an analog signal. This time, it’s received by a
tuner and an associated stereo system located in a restaurant. The sounds generated by the stereo
spread through the restaurant. The customers, eating
their meals, hear it. The next month, the radio station shifts
to a digital broadcasting technology. The DJ plays the record again. Suppose cable system G
picks up the digital signal and relays it, through
a cable of course, to homeowner H, who plays it
through a stereo in her home. Finally, suppose that the station
abandons over the air broadcasting altogether and shifts to
webcasting over the internet. Yet again, the DJ plays the record. The owner of a laptop residing in
another state receives that webcast and listens to it in her living room. Now let’s consider
the legal significance of this sequence of events. My suggestion, when you’re confronted
with a real or hypothetical story of this sort, is that you
analyze it in three steps. Breaking the issues down this way
may seem needlessly laborious, but it will help alert you
to some hidden landmines. Step number 1 is to identify
all of the performances. Keep in mind the capacious definition
of performance in the statute. Also keep in mind that
when dealing with music, you have to look for both
performances of musical compositions and performances of sound recordings. Let’s start with the musical work. Here are all the places in the
hypothetical story where and when the musical work, abbreviated
with MW, was performed. When A sings the song,
that’s a performance. When the sound emerges from the record
player in the living room of C’s home, that’s also a performance
of the musical work. When the radio station plays
the record the first time, it too is performing the musical work. This is slightly less
obvious, but remember that the term performance includes
to render a work either directly or by means of any device or process. That has been construed to include
sending signals of this sort. When E receives the
signal in her living room and sends the sound out
into her living room, that’s yet another separate performance. Same thing happens with the restaurant. When the station sends the signal
containing a rendition of the song, that’s a performance. When the restaurant receives that
signal and plays it for its customers, that’s another performance. Things get even more complicated
when we get to the cable system. Here there are three
performances, by the station when it broadcasts the rendition of
the song, by the cable system when it relays that signal,
and by the homeowner who receives the relayed signal
and plays it in her home. With respect to the webcast,
there are only two, by the station and by the recipient when she plays it. Each time A’s rendition
of the musical work is performed, the sound recording
embodying that rendition is also performed, except of course when A sang
it, because there’s no recording yet. Why differentiate the
performance of the musical work and the performances
of the sound recording? Because the copyrights in these things
may well be held by different parties and because, as you already know,
they’re governed by different rules. All right. That’s step 1 of the analysis. Having identified all
of the performances, the next step is determine
which of them are public. If they’re not public, we don’t
have to worry about them anymore. If they are, we’ll have
to proceed to step 3. This one is not public, because it’s
done in the studio without an audience. And this doesn’t fit either of
the two definitions of public. Neither of these two
performances, of the musical work or of the sound recording, is public,
because they occur in C’s living room. The same is of course true of E’s living
room, H’s living room, and I’s living room. The radio station, however, is
in a very different position. Every time it broadcasts a
signal containing the song, it is publicly performing both the
composition and the sound recording. The relevant definition of public
is, of course, the Transmit Clause, specifically this part of the clause. Quote, “to transmit a performance
of the work to the public, even if the members of the public
capable of receiving the performance receive it in separate places
or at different times.” The result is that, even if
all of the station’s listeners are home alone in their living rooms,
the transmission of the signal to them is still public. The same is true of the
transmission by the cable company. This may not be altogether obvious
to you, but in a few minutes I’ll return to the special
legal status of cable companies. What about the performance
in the restaurant? That’s not a transmission, so the
Transmit Clause is not relevant. But the other definition of public, the
so-called Public Space Clause, applies. What if there’s only one patron
eating dinner when the song is played, or indeed no customers at all? Doesn’t matter. So long as the restaurant is open to
the public, the performance is public. The third and last step is to survey
the public performances we’ve identified and determine if there any
grounds for exempting them from the reach of the statute. There are several possible exemptions,
one of which you already know. If the work performed
is a sound recording and if the way in which it is performed
is not a digital audio transmission, then it’s not covered by
either 106(4) or 106(6). So all of these performances escape,
either because they are analog or they are not transmissions. For the time being,
anyway, these do not. This concludes our survey of the basics. Now let’s consider some refinements. Focus on the upper right-hand
corner of the diagram. You’ll recall that the way in
which the music got into E’s ears is that singer A sang the
composition, record company B recorded A’s rendition, radio
section D played the record and broadcast the signal
over the airwaves. E’s radio, located in her living
room, picked up that signal and converted it into sound waves. If E listens to the music
while alone in her living room, the two performances that
occur within the red rectangle are surely not public. Now let’s alter the facts slightly. Suppose that E’s dining room
is adjacent to her living room. She has a dinner party
in the dining room, and the invitees are able to hear
the music coming out of the radio. Is that a public performance? The answer is no. The guests are social
acquaintances gathered together in a room that’s not open to the public. Suppose that E is a professor. She invites the students in one of
her seminars to her house for dinner. The radio is playing in the background. Is that a public performance? This is closer to the line. The answer is still probably no. But an argument might be made
that E’s home is now, quote, “a place where a substantial
number of persons outside of a normal circle of a
family and its social acquaintances is gathered.” Change the facts once again. The personnel are the same. But instead of hosting
her students in her house, E holds a party in a semi-separate
room of a restaurant. The radio in the room
plays A’s rendition. Is that a public performance? Yes. The restaurant is a place
that’s open to the public. And therefore, under the
first of the two clauses, would clearly be considered public. Now suppose that E takes her radio
to a public park at 5 o’clock in the morning, tunes
it to the D station, and listens to it while
doing some exercises. The park is otherwise empty, so
no one but E hears the radio. Is that a public performance? Strictly speaking, yes, because
the place is open to the public, even though she’s the only listener. The chances of copyright owners
pursuing her for infringement are tiny, but at least technically
that’s a public performance. It’s still possible
that it may nevertheless be excused by one of the exceptions
we’ll consider later in this lecture. But E is at least
presumptively in trouble. For the past few minutes, we’ve been
considering possible applications of the first and more intuitive of the
definitions of public, the Public Place Clause. The more serious and economically
important puzzles in this area arise under the second branch,
the so-called Transmit Clause. Here are three illustrative cases. The first is Redhorn, one of the
old chestnuts of copyright law. It involved a very early
application of VCR technology. The defendant operated a somewhat
shady operation that rented VHS tapes but also provided small, carpeted
rooms in the back of the facility where you could have a VHS tape played. Here’s how the system worked. The customer would walk into
the front of the store, where he’d see many tapes displayed. He’d select one. The attendant would place it
into a VCR and activate it. The customer would retire to a
room in the back, where he alone, or with a companion or
two, would watch it. The court of appeals ruled that this
system entailed public performances of the audiovisual works on the VHS
tapes for two independent reasons. First, because the facility
is open to the public. This again is a bit counterintuitive. After all, it’s only open to a couple of
members of the public at a given time. But as a whole, it’s open
to the public and that’s enough to render the performances
public under clause number 1. The second reason is more
interesting for our purposes. The performances are also public
because they involve transmissions. Short transmissions, to be sure,
presumably from the front desk to the room in the back, but
transmissions nevertheless. And members of the public are capable
of receiving those transmissions in the same place or separate
places at different times. The court didn’t spell
this out in great detail. But its analysis seems to be
that a given audiovisual work is shown to successive customers
or groups of customers in the same room at different times
through the same transmission facility. That’s enough to make it public
and to make the proprietor liable for some $44,000. The second case is the
important recent decision in Cablevision, one aspect of which
I discussed in the previous lecture. The essential facts are
depicted on this slide. If this is mysterious
to you, please pause to review the pertinent
section of lecture number 7. As you’ll recall, I hope,
the owners of the copyrights in the works that would be stored
and then replayed by Cablevision challenged this technology
on three grounds. A, that the brief retention of
slices of each work in the BMR buffer constituted in the aggregate an
unauthorized reproduction of the work. B, that the more durable retention of
a copy on the hard drive of the Arroyo server also violated 106(1). And C, that the transmission from
the Arroyo server to the customer, when the customer asks to watch
one of his saved programs, constitutes a public
performance of the work. The trial court, as we saw,
accepted all three claims. But the court of appeals
rejected all three. How did the court of appeals
reject the third argument? It might have done so by ruling that
even if the transmission involved a public performance, that transmission
is initiated by the subscriber when he presses the button on his
remote control in his living room, not by Cablevision. But it did not. The court assumed, for
the sake of argument, that Cablevision is responsible
for the transmission. Nevertheless, it ruled that
the transmission did not violate Section 106(4). Crucial to this ruling are two
facts– that the transmission is only delivered to one person at a time
and that each subscriber receives his transmission from
the unique copy the work. If Cablevision transmitted the work
to multiple subscribers seriatim from the same copy, then in
the court of appeals’ judgment, this case would resemble Redhorn, which,
as we saw, gave rise to liability. But the fact that each subscriber
received a transmission from his own personal copy
made all the difference. Here’s the crucial
language from the opinion. “Because each RS DVR
playback transmission is made to a single subscriber
using a single unique copy produced but that subscriber, we conclude that
such transmissions are not performances to the public and
therefore do not infringe any exclusive right of
public performance.” This fact was also emphasized
by the solicitor general when advising the Supreme Court
not to review the decision. As we saw in lecture number
7, the ruling in Cablevision catalyzed a great deal of
investment in cloud-based services– several billion dollars. However, the aspect of the
court’s ruling I just emphasized renders that investment less
efficacious than it could be. Why? Because constructing systems
that store individual copies of works for individual
subscribers is very inefficient. The Cablevision ruling also catalyzed
considerable innovation with respect to technologies and business models
in the entertainment industry. When those innovations have been
challenged by copyright owners, some have been held to
be lawful, while others have been ruled to run
afoul of the owner’s rights. The most important of the
innovations that came to grief was the service briefly offered by
Aereo, an ingenious but risky startup. To understand the nature and
novelty of the Aereo system, you need a bit of background. For a long time, as you probably
know, television stations have been broadcasting
entertainment and sports programming free over
the public airwaves. This system has worked well
for consumers located in metropolitan areas with
good television reception, but less well for consumers in
rural areas with poor reception. For several decades, the
latter group of consumers has overcome this impediment by
subscribing to cable television services such as Comcast
in the United States. Among the many channels that
cable companies typically carry are over the air broadcasts
that the cable systems pick up in major cities and then we
redistribute through their cables. Do the cable companies
have to pay the owners of the copyrights in the programs
that they relay in this fashion? When cable systems
were first introduced, the Supreme Court answered
no, on the grounds that the cable companies neither
reproduced nor publicly performed the programs. In 1976, Congress repudiated
that position and in the process adopted the expansive
definition of public performance with which we’ve been wrestling. Since then, the cable
companies have been obliged to pay copyright owners
whose programs they retransmit, although the amount they pay is
capped by a special compulsory license of the sort
I’ve mentioned before and we’ll consider again in the
final segment of this lecture. Nowadays, a growing
group of consumers get access to audiovisual entertainment
not through over the air broadcasts or by subscribing to expensive cable
systems, but through the internet. This arrangement works fine
if the programming they want is available either for free,
from sites like YouTube, or from various fee-based
on-demand or subscription services now accessible through the internet. But what if the programming they want
to watch is broadcast over the airwaves by television stations
located in distant cities? Until recently, there was
no convenient way for them to gain access to that material. Enter Aereo. For consumers of the
sort I’ve just described, located in the New
York metropolitan area, Aereo set up a new subscription service. Here’s how it worked. Suppose, counterfactually, that
I live in Westchester County. I’m a fan of the New York
Yankees baseball team. And I don’t subscribe to cable TV. A subset of Yankees games are broadcast
on WWOR, an over the air television station based in northern New
Jersey, which operates a broadcast tower on the top of the
Empire State Building. When I’m at home, I watch
the broadcast for free. But I often travel for
work, and I want to watch the games when I’m on the road. For a fee of $12 per month,
Aereo would, at my request, pick up the broadcast of a particular
game, convert it to packets, and stream those packets
to me over the internet, enabling me to watch the
game on my laptop or tablet. Now if the way that Aereo
picked up the program was by building and operating a
single big TV receiver on Long Island, then it would have been working
very much like a cable company and thus would have
been obliged to pay fees to the owners of the copyrights
in the broadcast of the games. But it didn’t. Instead, Ariel obtained thousands
of tiny TV antennas, each the size of a dime, which
it arranged in arrays. Then, when I asked to
see a particular game, Aereo would rent me one of
those tiny, individual antennas and tune it to the free,
over the air broadcast. One more potentially important
feature of Aereo’s system. The game would not be shown to me live. Instead, like Cablevision, Aereo
captured and recorded the live program. The packet sent to me would be
from that personal recording. However, the resultant lag
time was tiny, a few seconds. A different service offered
by Aereo, not considered in the judicial opinion
that I’m about to describe, allowed subscribers like me to
time-shift programs– for example, to replay the recording
of the game hours or days after it was first broadcast. But for the time being, keep your
focus on the nearly live broadcasts. By now, it should be
obvious that the reason why Aereo used this seemingly bizarre
technology was to make its system resemble, as closely as possible,
the system created and upheld in the Cablevision
decision and thus to avoid having to pay for the material it
was supplying to its subscribers. At first it seemed that
Aereo had succeeded. When copyright owners
challenged the system, the trial court ruled in favor
of Aereo, relying heavily on the Cablevision doctrine. So did the court of appeals for the
Second Circuit, by a vote of 2 to 1. But the Supreme Court granted
certiorari and in July of 2014 reversed by a vote of 6 to 3. The basis for the
Supreme Court’s ruling, unfortunately, is not completely clear. Justice Breyer, writing
for the court, repeatedly stressed that Aereo’s business
looked a lot like a cable television service, which Congress had made
clear both A, performed programs they relayed, and B, made those
performances to the public. But what about the aspect
of the Aereo system that differentiated from a cable system? Namely, that each Aereo subscriber
received an individual transmission from an individual copy
of the program at issue. Breyer’s answer, in brief, was that
neither the subscribers nor the owners of the copyrights in the programs cared
about what was going on under the hood, and so neither should the law. Breyer’s analysis is distilled in the
sentence set forth on your screen. “In light of the purpose and
text of the [Transmit] Clause, we conclude that when
an entity communicates the same contemporaneously perceptible
images and sounds to multiple people, it transmits a performance
to them regardless of the number of discrete
communications it makes.” This language is quite broad. Among other things, it
seems to render irrelevant the factor that the court of appeals
treated as so important in Cablevision. Namely, whether a transmission is
made to a single subscriber using a single unique copy
produced by that subscriber. Does this then mean that
RS DVR services are doomed? Some copyright owners and
commentators think so. My own view is no. Most RS DVR systems remain
lawful in the United States. The principal reason is that, although
Justice Breyer did not expressly endorse the Cablevision
decision, he went out of this way to emphasize several limitations on the
Supreme Court’s ruling against Aereo. For example, Breyer stressed the fact
that neither Aereo nor its subscribers had paid for access to the
programs that Aereo streamed. And Breyer strongly suggested that the
case would have come out differently otherwise. Here’s the crucial sentence,
quote, “”[A]n entity that transmits a performance to individuals in their
capacities as owners or possessors does not perform to ‘the public,’ whereas
an entity like Aereo that transmits to large numbers of paying subscribers
who lack any prior relationship to the works does so perform.” This sentence, although
not a model of clarity, would seem to leave a safe harbor for
cloud locker services and arguably for services like Cablevision that
allow consumers who have already paid for programming to watch
those programs at later times or in different places. Finally, Breyer pointedly
emphasized, quote, “”[T]he doctrine of ‘fair use’ can help
to prevent inappropriate or inequitable applications of the [Transmit] Clause.” The potentially expensive safe harbor
that might be built on that sentence will become apparent next week. Sadly, the net effect of the
Supreme Court’s ruling in Aereo is to reduce considerably the clarity
that in the wake of Cablevision stimulated so much investment
in cloud-based technologies. For the next few years, lower
courts confronted with challenges to businesses that offer consumers
new kinds of streaming services will have to determine whether
they are more like Cablevision or more like Aereo. Until the dust settles, entrepreneurs
and technology innovators will have some trouble predicting
what they can and cannot do. An additional source of instability
is the divergence between the United States and Europe with respect
to the permissibility of services of this general sort. As I hope you’ll call from the
first lecture in this series, one of the multilateral treaties to
which the United States is a party is the WIPO Copyright Treaty of 1996. Articles 6 and 8 of that
treaty require member countries to provide copyright owners a generous
version of the right of distribution and a right of
communication to the public. Both provisions use the
phrase, quote, “make available to the public,”
which arguably encompasses more activities than
are reached by US law. Nevertheless, after the
treaty was ratified, the United States took the
position that this language did not require any adjustment in US law
because sections 106(3) and 106(4), as construed by the US
courts, already adequately provided such a so-called
make available right. That contention was dubious
when it was first made and has become more so over time. In Europe, as professor Jane Ginsburg
of Columbia Law School has shown, the right to make works
available to the public is construed more broadly
than in the United States and in particular is less forgiving
of cloud-based services of the sorts we have been considering. As you can see on your screen, the
Information Society Directive of 2001, which implemented in the EU
the WIPO Copyright Treaties, requires EU member states
to, quote, “provide authors with the exclusive
right to authorize or prohibit any communication to the public of
their works by wire or wireless means, including the making available to the
public of their works in such a way that members of the public
may access them from a place and at a time individually
chosen by them.” In 2013, the European
Court of Justice ruled that a British company
called TVCatchup, which had offered a service that
resembled that provided by Aereo, violated this particular entitlement. The ruling forced a
redesign of TVCatchup, and that company is now
in financial trouble. Even more striking was the
insistence by the European Commission that Italy rescind a law that had
granted partial immunity to an RS DVR service analogous to that
offered by Cablevision. The United States is not
likely in the near future to adopt the EU’s more
restrictive interpretation of the so-called make available right. But the gap between the US and the EU
on this score is not good for business. In particular, it’s likely
to bedevil enterprises that seek to provide novel cloud-based
services not just to US customers but to users of the
internet in other countries. I’ve concentrated in this lecture
entirely on section 106(4) and have paid no attention to section
106(5), the right of public display. The reasons are that the bulk of
the economic and litigation action involves performances, not displays,
and that the definition of display is clearer and more intuitive
than that of performance. As you can see, the statute
defines display pretty much the way you’d expect, as
to show a copy of the work either directly or by means
of a film, slide, television image, or other device or process,
or in the case of a motion picture or other audiovisual work,
to show the individual images nonsequentially. That definition creates few
interpretive difficulties with respect to real space displays. Now recently, information
technology such as the practice of framing websites have generated
some interesting interpretive problems. But I’ll leave such
matters to the discussions that will accompany this lecture. This concludes our discussion of the
rights of performance and display. After the break, we’ll examine some
statutory limitations on those rights.

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