With the end of this session near, the Supreme Court sided with television broadcasters in a decision that effectively kills internet TV startup Aereo.
The justices decided that Aereo – with its thousands of tiny antennas – violates copyright law by streaming content, without compensating its creators and broadcasters, to subscribers who pay $8 a month to watch on their computer or smartphone. In a 6-3 ruling, the court rejected Aereos’s argument that the service is a private performance so it doesn’t have to pay ABC, Fox and other channels for their content.
The ruling was rather narrow, according to telecommunications lawyer Tim Cohen in Telecom Law Monitor.
The Court limited its decision to Aereo’s “watch” function which provides programming in almost real-time, as opposed to the site’s “record” function, which allows viewers to watch a program after it airs. The Court specifically noted that it was not addressing how “provisions of the Copyright Act will apply to technologies not before us.” The case now returns to the lower court where a preliminary injunction will be imposed on Aereo’s “watch” service and other issues in the case will be considered.
In this much watched case, there are a few key questions that do need to be addressed.
Is this end of TV?
Broadcast TV is staying the same, but Aereo – and similar services – are more than likely going away. Prior to the ruling Aereo CEO Chet Kanojia said that a ruling against would kill the service but eventually decided that he’ll find alternatives to keep his business alive.
While this ruling is a huge win for broadcasters, alternatives do exist according to Wiley on Media – particularly if companies want to be classified as a cable provider.
Interestingly, the decision opens the possibility that new services will attempt to qualify for the cable statutory license, or that Congress will attempt a legislative fix to bring such systems under the scope of a statutory license as it has in the past.
By declaring that Aereo is a “public performance,” the court upholds the transmission clause of the Copyright Act. Unless Congress amends the transmission clause, cable providers and services like Netflix will have to keep paying broadcasters for their content or risk being shuttered like Aereo.
The decision also has no effect on DVR technology.
The Court did not expressly overrule the Second Circuit’s Cablevision decision (which held that performance of a copy made for a specific user by that user in a network DVR does not infringe the public performance right), but the ruling is likely to lead to additional litigation over the significance of the Cablevision analysis as applied to other technologies.
Does this decision affect the cloud?
The decision mainly focused on how Aereo is similar to cable companies, but Timothy Lee of Vox calls the ruling a “legal minefield for cloud storage.”
The real question has always been whether a ruling against Aereo would have implications for other online services. Many of the arguments broadcasters made against Aereo could just as easily be made against conventional cloud storage services such as Google Music and Dropbox, which also transmit copyrighted content to consumers. … [C]loud storage services have relied on [the Cablevision decision’s] “volitional conduct” principle to avoid copyright liability. If you upload a pirated movie to your Dropbox account or fill your Google Music account with pirated music, you might be guilty of copyright infringement. But Dropbox and Google don’t have to worry. It’s probably not a coincidence that cloud music services blossomed a couple of years after the Cablevision decision.
The future of cloud service (or remote data storage) came up in Aereo’s oral argument since the service routed broadcast signals to a cloud before a subscriber watched a show on their computers. The justices, however, did not rule against cloud services and purposefully avoided including non-Aereo technology in their ruling, according to patent lawyers Craig Whitney and Whitney McCollum for Socially Aware.
The Court expressly dismissed concerns over how its decision will affect other areas of technology, and stated that it did not see this dispute as a cloud or remote storage case, but rather, a cable company “equivalent” situation. (Op. at 16.)
Indeed, the Court specifically stated that it did not believe its “limited holding” would “discourage” or “control the emergence or use of different kinds of technologies.” The Court even laid out areas that its decision did not reach, including “whether different kinds of providers in different contexts also ‘perform’” and “whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyright works, such as the remote storage of content,” and encouraged entities concerned about these areas to “seek action from Congress.”
According to Wiley, Justice Antonin Scalia fears that other technologies will eventually be targeted.
Justice Scalia argues, in a strongly-worded Dissent, that the Majority’s Opinion does not decide the fate of those other technologies and provides no criteria for determining when this expanded public performance rule applies.
The narrowness of the court’s opinion also provides a work around to critics who worked that a pro-broadcasters ruling would squash innovation.