Justice Department could hold key to Aereo outcome

The surprise move last week by Supreme Court Justice Samuel Alito to un-recuse himself from the Aereo case, which is set for oral arguments on April 22, removes the threat of a 4-4 decision that would have left the tangle of conflicting lower-court rulings to stand without establishing any definitive precedent and leaving Aereo itself and Aereo-like services legal in some parts of the country and illegal in others. But even a clear majority decision one way or the other could still leave a legal muddle behind and create uncertainty about the future development of cloud-based remote-access media services, depending on how exactly the court reaches its conclusion.

The key line of questioning on Tuesday is likely to be addressed to deputy U.S. solicitor general Malcolm Stewart, who on Friday was granted permission by the court to participate in oral arguments.

As anyone who has followed the case knows, the central legal question in the case concerns what it means to publicly perform a work as defined in the Copyright Act. The broadcasters claim that Aereo’s system for capturing and streaming their programming to its subscribers amounts to an unlicensed public performance of their copyrighted works. Aereo counters, citing the Second Circuit Court of Appeals’ 2008 ruling in the Cablevision network-DVR case that served as a blueprint for the design of Aereo’s system, that the remote recording, storage and accessing of discrete copies of broadcast programming does not result in a public performance at all, and therefore is not infringing.

The U.S. Justice Department filed an amicus brief in the case supporting the broadcasters’ argument that Aereo’s service violates their public performance right.

Although the current Supreme Court is closely divided ideologically, copyright cases tend not to break along ideological lines, so the result in Aereo is as likely to be a 7-2 ruling as a 5-4 split. And while Aereo has a strong rooting section within the tech industry, many copyright experts expect it to face a much tougher time proving its case than the broadcasters face.

While no copyright scholar myself, my guess is the outcome will turn on whether a majority of the justices can get comfortable distinguishing Aereo from Cablevision, allowing them to craft an opinion that finds Aereo to be illegal without disturbing the result (and legacy) of the Cablevision case or threatening cloud computing generally. If they can, I think that’s how it will go; if not, we could end up with multiple opinions that establish no clear precedent for cloud-based media services to follow.

That’s why I expect the questions directed to the deputy solicitor general to be critical, as the justices probe for a sound legal basis for distinguishing Aereo from Cablevision.

The Justice Department’s amicus brief, in fact, goes to considerable lengths to provide the court with a roadmap for ruling against Aereo without disturbing the result of Cablevision. Here are the key paragraphs:

Contrary to respondent’s suggestion (Resp. Br. 2122), reversal of the decision below need not call into doubt the general legality of cloud technologies and services. One function of such services is to offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired. Respondent’s service performs a wholly different function. That service provides a means by which consumers can gain access to copyrighted content in the first instance—the same service that cable companies have traditionally provided. There is consequently no sound reason to suppose that a decision holding respondent liable for copyright infringement will threaten the use of different technologies that assist consumers in hearing or viewing their own lawfully-owned copies [snip].

Reversal of the decision below also need not disturb the RS-DVR service upheld in Cablevision. The Second Circuit’s reasoning in Cablevision, which treated the performance created by the act of transmission as the only relevant performance for purposes of the infringement analysis, reflected an erroneous interpretation of the Transmit Clause… It does not follow, however, that the court in Cablevision reached the wrong result [sic.]…In Cablevision, the cable company already possessed the necessary licenses to transmit copyrighted television programs to its subscribers. The RS-DVR system simply allowed subscribers to engage in “time shifting” by recording, for later viewing, programs they received through their authorized cable subscriptions… The court in Cablevision reasonably concluded that the copies so created were made by the subscribers rather than by the cable company itself.

In Sony Corp. of America v. Universal City Studios, Inc. [i.e. Betamax],  this Court recognized a fair-use right to engage in time shifting when the consumer copies programs that she is already authorized and able to view in real time, and when the relevant copy is created locally on an analog videocassette recorder in the consumer’s home. There is no evident reason to reach a different result under fair-use principles merely because the relevant personal copy is created and stored remotely in digital form, as it was in Cablevision. And if the stored copy has been lawfully made by the consumer herself, the subsequent playback of that copy to the consumer through the RS-DVR system may reasonably be understood as a private performance.

If a majority of the court buys that line of reasoning Aereo is toast. Even if it does, however, it may not result in as clean an outcome as the Justice Department seems to think.

A ruling against Aereo that left Cablevision standing would imply that, going forward, operators that have obtained some sort of retransmission license from content owners would be free to innovate new means of storing and transmitting that content, whereas startups without any such license would not.

It’s a very lawerly distinction that’s not likely to turn out to be quite the easily recognized, bright line rule its authors might hope. More likely, it’s a recipe for future litigation over the scope of retransmission licenses and whether a new service (or operator) falls on the Aereo side of the line or the Cablevision side.

It’s possible neither copyright owners nor technology developers will be happy with the result.

 

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Paul Sweeting

Principal Concurrent Media Strategies

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