Aereo Inc. has reached a proposed settlement with the broadcasters that have sued it for infringing their copyrighted works.  The settlement would result in payment of $950,000 to the broadcasters in satisfaction of their claims seeking over $99 million – amounting to less than a penny on the dollar.

This development follows lengthy legal proceedings that saw the dispute go all the way to the Supreme Court on the issue whether Aereo was publicly performing the plaintiffs’ television shows, originally broadcast over the air for free, by streaming them to subscribers over the Internet.  Section 106 of the Copyright Act reserves to the copyright owner six exclusive rights, including the right to publicly perform literary, musical, dramatic and motion picture works.  In the so-called “Transmit Clause,” the statute provides that “to perform or display a work ‘publicly’ means … To transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”  17 U.S.C. § 101.  The Transmit Clause was added to the Copyright Act when it was amended in 1976 as a result of two Supreme Court cases:  Fortnightly Corp. v. United Artists Television, Inc. and Teleprompter Corp. v. Columbia Broadcasting System, Inc.  In those cases, the Court had held that community cable systems that retransmitted free, over-the-air broadcast signals did not “perform” the copyrighted works in the broadcasts and did not infringe the copyright owners’ public performance rights.  Congress added the Transmit Clause to the 1976 Act to overturn these decisions. Continue reading »