Published by LawTechie - June 25, 2014 - LawTechie

The Supreme Court just released its decision in American Broadcasting v. Aereo, 573 U.S. ___ (2014), holding the internet service illegal for violating the broadcasters’ exclusive right to publicly perform their copyrighted works.

The ruling seems to indicate that the Court cares less about how Aereo’s technology is setup to technically avoid violating the Copyright Act, and more that the service just doesn’t smell right.

How Aereo Works

A brief refresher, since I’ve written about this many times before: Aereo is setup to mirror the DVR model, which was ruled legal in Cartoon Network v. CSC Holdings (2’d Cir. 2008). By pairing up each Aereo user with his own Aereo antenna to capture, record and stream public airway television programming, the service hoped to avoid infringing the public performance right of the broadcasters since one user:one antenna should not equate to a “public” performance.

This is identical to what DVR does when the cable company pairs each user with his own DVR box to record and replay cable content.

Back in 2008 the 2nd Circuit ruled in Cartoon Network that DVR’s model was legal and did not run afoul of the Copyright Act 1976 amendments which were passed by Congress to prevent cable companies from publicly rebroadcasting television channels without paying licensing fees to the TV broadcasters. The Cartoon Network case has never been overruled by the Supreme Court (otherwise we would not have DVRs) and presumably still holds valid today.

The Supreme Court Just Doesn’t Like Aereo

Reading through today’s Aereo holding, I can only conclude that the Supreme Court just really does not like Aereo.

Rather than analyze how, if at all, Aereo is different from DVR, the Court begins it’s analysis by pointing out “Aereo’s overwhelming likeness to the cable companies targeted by the 1976 [Copyright Act] amendments.” The Court then goes on to analyze the “intent” of the 1976 amendments to conclude that Aereo’s technical model, which according to Cartoon Network should be legal, “[does] not render Aereo’s commercial objective any different from that of cable companies. Nor [does it] significantly alter the viewing experience of Aereo’s subscribers.”

And the Court goes on, “Why would a subscriber who wishes to watch a television show care much whether images and sounds are delivered to his screen via a large multisubscriber antenna or one small dedicated antenna?”

In other words, regardless of how Aereo models it technology, the Supreme Court would rule against it because the Supreme Court knows what Aereo is really up to.

As the dissent succinctly put it, “The Court’s conclusion that Aereo [infringes] boils down to the following syllogism: (1) Congress amended the Act to overrule our decisions holding that cable systems do not perform when they retransmit over-the-air broadcasts; (2) Aereo looks a lot like a cable system; therefore (3) Aereo performs.”

IMO, this is just bad jurisprudence.

The Supreme Court’s Ad-Hoc Analysis Creates Rather Than Dispels Uncertainty

Ideally, a court ruling, especially a Supreme Court ruling, is meant to dispel the uncertainty in law and provide society an understanding of how to act in the future to remain within the confines of the law. Today’s Aereo ruling does the opposite.

For example, several Amici parties raised the concern that a ruling against Aereo could make all sorts of new technologies, such as Cloud-Computing, illegal. No problem, says the Supreme Court, we will limit our ruling to Aereo: “Questions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which ‘Congress has not plainly marked [the] course,’ should await a case in which they are squarely presented.”

So does this mean that today’s decision singles out a single party (Aereo) and does not otherwise give us a broader understanding of what is and isn’t legal under the Copyright Act? Seems so.

The broadcasters did not like that Aereo was utilizing a legal loophole to stream their content so they raised a fuss and the Supreme Court singled out Aereo to plug the loophole. Of course the dissent points out, “It is not the role of this Court to identify and plug loopholes.” Clearly the majority differs.

Today the Court seemed to have created a brand new, ad-hoc system of deciding whether or not a new technology violates the Copyright Act: sue the startup and eventually the Court will decide.

Or as Justice Scalia’s dissent put it: “Perhaps the Court means to adopt (invent, really) a two-tier version of the Copyright Act, one part of which applies to ‘cable companies and their equivalents’ while the other governs everyone else.”

 

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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