Recently, The New York Times ran a story bearing the provocative headline “Locast, a Free App Streaming Network TV, Would Love to Get Sued.”

Now, on the one hand, apparently, none of the broadcasters in the cities where this mobile app is available — including NYC, Boston, Dallas, and Denver, so far —have initiated legal action against it. Users of the service can enjoy streaming access to live (over-the-air, OTA) television broadcasts via their phones. A television in every pocket, as it were.

On the other hand, should any of the broadcasters in those cities move to shut down or require a license of the service, the providers of the Locast service might have a difficult time distinguishing their offering from that of the original Aereo, a service which was shut down as a result of a Supreme Court decision only a few years ago. Aereo lost that case on the basis of infringing the copyright holders’ retransmission right, which, arguably, Locast also makes unauthorized use of.

The New York Times article points out that Locast is structured as a donation-supported non-profit. Which is good. David Goodfriend, a principal of Locast who was interviewed for the article, seems to be relying on this structure to aid his positioning – which is that Locast is not threatening the broadcasters’ profits. So long as Locast’s entire operation qualifies under the narrow non-profit exception spelled out in Title 17, Section 111 (a)(5), all should be well. Otherwise, students of copyright know that the first fair use factor —purpose and character of the use (in connection with which Locast’s corporate structure as a non-profit might have significance) — is only one among several considerations that courts have to weigh under the law before deciding whether an infringement took place and is not excused by fair use.

Some commenters have used the word “loophole,” suggesting that Locast may skirt the edges of the retransmission right, or that its services may not ‘rise to the level’ of actionable infringement. (Others conclude the opposite.) Possibly, the Locast service will be tolerated as small and harmless, but (from my own perspective) the notion of a loophole here is illusory. Aereo claimed the benefit of a loophole, too: it used a million tiny antennas so that each of its customers had his or her own – just as if it was a set of rabbit ears on his/her own TV. The Court was not amused.

Locast seems a nice service, and I’m sure its users like it. But students of copyright are well aware of the significance (and, some courts have said, the predominant significance) of the fourth fair use factor – the potential for market harm from the allegedly infringing activity. In the particular facts of this case, any court that evaluates Locast’s fair use claim is going to ask itself, “What if the local broadcasters wish to bring up their own broadcast apps, but Locast is there already? Doesn’t that interfere with the copyright holder’s right to sell or license its intellectual property without having a ‘competitor’ giving it away for its own profit (or even for free)?”

I do not have enough information to know whether there is more to Locast’s case than what has been reported byThe New York Times.  However, if there is nothing more to Locast’s argument (which The New York Times headline hints there is), and if a court asks itself the question I’ve posed immediately above, it could well decide that Locast is in fact interfering with the broadcaster’s statutory right to retransmit its own signal and that that interference produces a conclusion that Locast’s use is actually not a fair use…

Author: Dave Davis

Dave Davis joined CCC in 1994 and currently serves as a research consultant. He previously held directorships in both public and corporate libraries and earned joint master’s degrees in Library and Information Sciences and Medieval European History from Catholic University of America. He is the owner/operator of Pyegar Press, LLC.
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