The Marlowsphere Blog #68
For the last couple of months The Marlowsphere Blog has focused on the growing advent of video streaming in jazz clubs, particularly in the jazz mecca New York City. The posts have particularly targeted the features and benefits of video streaming, but perhaps more importantly, the legal aspects of this trend.
This week’s blog is a conversation with attorney Roger Juan Maldonado, a litigation partner at Balber Pickard Maldonado & Van Der Tuin, PC. 
Maldonado’s practice concentrates on complex civil litigation concerning commercial and real estate transactions, software development disputes, copyright infringement, employment matters and education law. Mr. Maldonado serves as the New York City Bar (“NYCB”) designated member of the Board of Directors of the New York Community Trust and as Chair of the NYCB’s Council on Judicial Administration. Chief Judge Jonathan Lippman recently appointed Mr. Maldonado to serve as Co-Chair of the Committee on Non-lawyers and the Justice Gap; as a member of the Commercial Division Advisory Council; and as a member of the Advisory Group to the New York State and Federal Judicial Council.
Mr. Maldonado also serves as a member of the Departmental Disciplinary Committee for the Appellate Division of the New York State Supreme Court, First Department; as a Vice-President and member of the Board of Directors of United Neighborhood Houses of New York; and as a Referee for the New York State Commission on Judicial Conduct. Mr. Maldonado previously served as a Vice- President of the NYCB; as a member of the Mayor’s Advisory Committee on the Judiciary; and as Co-Chair of the Real Estate and Probate Litigation Committee of the American Bar Association’s Litigation Section. Mr. Maldonado is a graduate of Yale Law School and Yale College.
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MARLOW: Is video streaming legal or not?
MALDONADO: According to the 2nd Circuit, yes it is. The 2nd Circuit recently decided a case called Fox Television vs. Aereo* Inc. It’s the one that’s created the most hullaballoo. It was decided April 1, 2013.
*Aereo is a technology company based in New York City that allows subscribers to view live as well as time-shifted streams of over-the-air television on Internet-connected devices.[1] The service launched in February 2012 and is backed by Barry Diller’s IAC.
This case turns on the concept of what constitutes a “public performance.” Aereo came up with this concept: If what I do is to take a broadcast that the broadcast channels are sending over the airways and I make a copy of that broadcast and I re-transmit that copy to only one person who has asked for it, I am not taking a public performance. What they were doing was setting up thousands and thousands of individual antennas in New York City, each one of which is capturing a transmission. They will then, at the request of individual subscribers, make a copy of that transmission and send it to every individual subscriber either immediately or at a later time—their choice. The 2nd Circuit said, “OK.” Aereo pays zero in royalties. The concept is: as long as you don’t make one copy for more than one person, it is not a public performance.
MARLOW: What medium are they using?
MALDONADO: They make a buffered copy in their own system which they use only for the purposes of sending a copy to an individual subscriber.
MARLOW: You now have several jazz clubs streaming the live performance to subscribers. Is that legal?
MALDONADO: So, I’m a jazz club and there’s a live performance going on and I have a television camera going of the performance and I transmit that to someone?
MARLOW: Yes.
MALDONADO: That’s a public performance. But if I were to transmit it to only one individual, it might not be. According to the 2nd Circuit, what matters is the technology. The performance at a jazz club is always capable of being transmitted to the world. But you don’t look to the jazz club performance. You look to whom the transmission is being directed. If you have a television camera going of the jazz performance and then transmit that all over the airwaves to multiple potential viewers, then that’s a public performance—a performance for which you need a license. If, on the other hand, you tape that session and transmit it to only one individual, that wouldn’t be a public performance. So, if they record it, and sell that one copy to one individual at a time, that’s not a public performance.
MARLOW: But if you’re streaming the performance and a whole bunch of individuals are watching the performance on their laptops as it is occurring. . . .
MALDONADO: That’s a performance for which you need a license.
MARLOW: What kind of license do you need?
MALDONADO: A synch license. Any individual or entity that is streaming something is acting similar to a broadcast network. They are taking copyrighted material and transmitting it for use by others. But the difference that the 2nd Circuit has come up with is “Who is the target receiver?” If the target receiver is just one individual, it’s not a public performance. If the target receiver is a series of individuals, then it is a public performance.
MARLOW: There is one New York City nightclub that is not only streaming jazz performances, it is also recording the performances and archiving them and then selling the archived performances to individuals.
MALDONADO: Does he use that one master copy from which to make other copies that he then sells to other individuals, then that’s definitely a “no-no.” That would run afoul of the 2nd Circuit. Unfortunately, the way the industry works is “catch me if you can.” They come up with new technologies they hope will pass muster in court and they wait until someone sues them.
MARLOW: This particular club is sharing the income from the sale of the archived material of the live performances with the performers.
MALDONADO: If he’s got a license from the performers, then it’s not a no-no. The question is: pursuant to what mechanism is he sharing the proceeds? Is he just making a donation to the various performance societies? Or is there some arrangement by which he has gotten a license to make these copies and then make a payment? If he’s got a contract with BMI or anyone else, then that’s exactly the way the licensing is supposed to work. If he has a contract with the performers, then that’s OK. I’m presuming the performers hold the copyright on the music that is played. Also, in actual practice, presuming the performers are not playing their own original material for which they hold the copyright, they don’t have to worry about licensing the music of others because presumably the jazz club has a license with the performance societies. What is a question, by virtue of having paid a license fee for a public performance of music in the jazz club, does that then give the jazz club the right to record that music and then subsequently, with the permission of the performers, sell that music. And I think the answer is yes if that recorded music is exclusively controlled by the performers. If the performers legally played somebody else’s song in the club, and if that’s turned around and then sold somewhere, I think that’s a violation of the composer’s copyright interest in the music. Any copyright infringement would be against the person or entity who records and sells the public performance.
MARLOW: Is this issue settled?
MALDONADO: I don’t think so. Unfortunately, in order to make sure that the Aereos of the world start paying licensing fees you’re going to need a change in the copyright law. The law is going to have to say that any re-transmission of copyrighted material requires some sort of license–that doesn’t kill the streaming industry but provides some benefit to the copyright holder. There’ll be continuing litigation around the edges. I think there’ll be more litigation around technology to see if the technology meets the test of public performance or not.
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Clearly, with the apparent expanding use of video and computer technology, the 2nd Circuit decision notwithstanding, the copyright issue, i.e., who owns the streamed and archived performances in jazz clubs and who has the income rights, will be further clarified by additional case law.
Please write to me at meiienterprises@aol.com if you have any comments on this or any other of my blogs.
Eugene Marlow, Ph.D.
June 24, 2013
© Eugene Marlow 2013