Copyright Act Preempts State Law Private Performance Claims: SDNY | Practical Law

Copyright Act Preempts State Law Private Performance Claims: SDNY | Practical Law

On May 21, 2012, in WNET v. Aereo, Inc., the US District Court for the Southern District of New York granted Aereo's motion for judgment on the pleadings on the plaintiffs' unfair competition claim. The plaintiffs brought the claim as an alternative to its copyright infringement claims, if the district court decides that Aereo's retransmission of broadcast television signals from New York area television stations over the internet to Aereo subcribers involves private performances, rather than public performances protected under the Copyright Act.

Copyright Act Preempts State Law Private Performance Claims: SDNY

Practical Law Legal Update 7-519-5824 (Approx. 3 pages)

Copyright Act Preempts State Law Private Performance Claims: SDNY

by PLC Intellectual Property & Technology
Published on 22 May 2012 • USA (National/Federal)
On May 21, 2012, in WNET v. Aereo, Inc., the US District Court for the Southern District of New York granted Aereo's motion for judgment on the pleadings on the plaintiffs' unfair competition claim. The plaintiffs brought the claim as an alternative to its copyright infringement claims, if the district court decides that Aereo's retransmission of broadcast television signals from New York area television stations over the internet to Aereo subcribers involves private performances, rather than public performances protected under the Copyright Act.

Key Litigated Issue

In WNET v. Aereo, Inc. the key litigated issue before the court was whether the plaintiffs' unfair competition claim based on the the private performance of their copyrighted works involves rights that fall within the general scope of the rights created by the Copyright Act.

Background

The plaintiffs are a group of corporate entities engaged in the production, marketing, distribution and transmission of television programs. Aereo takes broadcast television signals for the New York-area television stations and retransmits them over the internet to Aereo's subscribers. The plaintiffs sued Aereo for:
  • Infringement of plaintiffs' exclusive rights under the Copyright Act of:
    • public performance; and
    • reproduction.
  • Unfair competition under New York law.
The plaintiffs brought the unfair competition claim as an alternative to the copyright claims if the district court concludes that Aereo's service involves only private performances and therefore does not infringe the plaintiffs' copyrights. Aereo moved for judgment on the pleadings, arguing that the unfair competition claim is preempted by Section 301 of the Copyright Act. The Copyright Act preempts state laws governing activities that are equivalent to any of the exclusive rights within the general scope of copyright. The plaintiffs argued that because the performance right under the Copyright Act only protects public performances, the unfair competition claim based on private performances is not preempted.

Outcome

The district court held that Section 301 of the Copyright Act preempts the plaintiffs' unfair competition claim.
In its analysis, the district court assumed, but did not decide, that Aereo's service involves a private performance not actionable under the Copyright Act. The district court applied a two prong test articulated by the Second Circuit that considers whether:
  • The state law claim asserts rights in the types of works protected by copyright.
  • The rights provided by the state law claim are equivalent to one of copyright's exclusive rights.
Because there was no dispute about the first prong, the court's analysis focused only on the second prong. Specifically, the court considered the question, characterized as one of first impression, of whether a private performance is equivalent to the general scope of the Copyright Act's public performance right. The court concluded it is, focusing on:
  • The Copyright Act's extension of preemption to rights "equivalent to" the "general scope" of its exclusive rights, instead of only the specific rights it protects.
  • Congress's careful definition of what constitutes a public performance and decision not to create an exclusive private performance right.
  • The Copyright Act's legislative history, highlighting Congress' intent to provide a nationally uniform system of copyright and avoid the development of any vague borderline areas between state and federal protection.
  • Related Second Circuit law, which has not restricted preemption to the precise scope of the protections provided by the Copyright Act.

Practical Implications

The court's reasoning is consistent with Second Circuit precedent concerning the scope of copyright preemption in other contexts. By limiting the plaintiffs' potential relief to their copyright claims, the decision highlights the concern for copyright owners that advances in technology may affect their recourse against unauthorized performances and displays of their protected works if the uses can be structured as private, rather than public, performances or displays.

Court Documents