Published by LawTechie - April 28, 2014 - LawTechie

internet lawIn anticipation of my panel participation at the TVNewser Show Conference, where I will be discussing developments in the Aereo appeal, I have been jotting a few notes on side developments that I thought were interesting during last week’s Supreme Court hearing.

Setting aside for a moment the big picture debate for and against judicial restraint in this matter (e.g., “Is it better to have Congress or the Supreme Court plug the loophole that Aereo is allegedly exploiting?”), I thought it was interesting how Justices Breyer and Sotomayor noted that a ruling against Aereo could potentially harm Cloud Computing.

Specifically, where counsel for the plaintiff broadcasters argued that Aereo’s digital transmission of programming to viewers is an unlicensed “public performance” of the copyrighted content, Justice Breyer responded that defining such a transmission as a public performance would mean defining the digital transmission done by Cloud Computing services a public performance as well.

Certainly, as counsel for Aereo noted, not all media stored on Cloud servers such as DropBox are validly licensed by their users. So DropBox’s streaming of that content back to users could be illegal if such digital transmission were defined as a public performance.

Recall that Aereo is attempting to take advantage of a “loophole” created by Cartoon Network v. CSC Holdings, a 2008 Second Circuit decision which held that DVR transmission of movies stored by a home viewer on the DVR service to that single home viewer’s TV was not a “public performance” within the meaning of the Copyright Act. To this end, Aereo setup a system where each Aereo user is assigned an individual antenna which that user employs to transmit and watch the broadcasters’ content.

Thus, if a digital transmission to a single user from a single antenna (much like a single DVR box) is deemed a public performance, then so is a DropBox transmission to a single user the contents of a single illegally downloaded video stored by that user. DropBox then becomes liable for every such transmission made by its users whether it knows about it or not.

Of course, the reality is that DMCA notice-takedown measures would provide a certain amount of immunity to Cloud Computing services. But, given the latest rulings in Viacom v. Youtube (where there were questions on whether Youtube did “enough” to ensure that users did not employ the service mainly for copyright infringement), the Cloud Computing industry — which is a relatively young industry — could be forced to spend an unworkable amount of resources monitoring and anti-piracy measures in order to fully take advantage of DMCA protections.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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