The Aereo anti-climax

So, where do we go from here?

The Supreme Court decided, by 6 to 3, that Aereo directly infringes broadcasters’ copyrights by publicly performing their copyrighted programming without permission. The blow is likely fatal to Aereo itself, which admitted to having no “plan B” should it lose int he Supreme Court. But Justice Stephen Breyer’s majority opinion does nearly as much to muddy the issues raised by the case as to clarify the status of Aereo. As a result, the TV industry is likely to face many more years of legal warfare between technology developers and rights owners over how TV content is accessed, recorded, stored and viewed.

In the view of the majority, Aereo was simply a cable TV service by another name, and its painstaking efforts to distinguish itself from a cable system by designing and engineering its system to shift the volitional responsibility for recording and transmitting content onto users were irrelevant — a mere bit of “behind-the-scenes” technical legerdemain meant to evade the purposes of the Copyright Act that carried no legal weight.

“In terms of the Act’s purposes, these [technological] differences do not distinguish Aereo’s system from cable systems, which do perform ‘publicly,’” Breyer wrote. “Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter? … They do not render Aereo’s commercial objective any different from that of cable companies.”

On its face, that would seem directly to contradict the Second Circuit Court of Appeal’s reasoning in Cartoon Network LP 
v. CSC Holdings, Inc. (the Cablevision RS-DVR case), and the Supreme Court’s own seeming acceptance of that reasoning when it denied the broadcasters’ petition to review the Second Circuit’s ruling. In that case, the court ruled that the technological and volitional particulars of the Cablevision’s RS-DVR system were directly relevant to the question of whether the operator was publicly performing broadcaster’s works without a license and concluded it was not.

The distinction is not merely academic in the case of Aereo, which unabashedly designed its system to comply with the Cablevision standard. By rejecting the relevance of those design details in Aereo the Supreme Court was at least implicitly rejecting their relevance after the fact in Cablevision.

Justice Breyer’s opinion doesn’t actually say that, however, which is part of the problem. Instead, he meekly grabs for the life preserver thrown the court’s way by the U.S. solicitor general in an amicus brief, insisting “that ‘[q]uestions 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.’”

By leaving the contradiction hanging, however, the opinion all but assures that lower courts will soon be confronted with cases in which those questions will be squarely presented, with effectively no guidance from Breyer and his colleagues as to how to resolve them or what standard to apply. Some courts, in fact, already are, such as the district and circuit courts currently grappling with challenges to Dish’s AutoHop and Hopper With Sling DVRs.

Perhaps more confounding, the Aereo opinion throws a cloud over Cablevision without actually grappling with what many legal scholars and lower court judges have identified as the critical legal weakness in the Second Circuit’s holding in Cablevision (and by implication in Aereo): the court’s conflating of the Copyright Act’s definitions of what it means to “perform” a work and what it means to “transmit” it.

“The Cablevision court’s analysis also appears to have changed the wording of the Transmit Clause from reading ‘members of the public capable of receiving the performance’ to ‘members of the public capable of receiving the transmission,”  Salt Lake City district court judge Dale Kimball wrote in February in a separate case involving Aereo. “Therefore, instead of examining whether the transmitter is transmitting a performance of the work to the public, the Cablevision court examined who is capable of receiving a particular transmission… This court agrees with Plaintiffs that the language of the Transmit Clause does not support such a focus.”

Instead, Breyer concludes that Aereo publicly performs in the manner of a cable TV system, and therefore infringes, before he gets around to addressing whether it is also transmitting those performance – the latter a somewhat superfluous exercise, as Justice Antonin Scalia mockingly noted in his dissent, as all cable systems, of necessity, engage in transmitting performances.

There is a long-standing tension in copyright cases, dating back at least to the Betamax case in 1984 (some might argue to the White-Smith player piano case in 1908) over how much control a technology provider and the user must have over the conduct in question for it to be considered infringing (or whether directly or secondarily infringing). It would be unreasonable (and perhaps unwise) to expect the court to fully resolve that tension in a single case. But the result in the Aereo case has arguably made the tension worse.

While the court has seemingly settled the fate of Aereo, the company, it didn’t really resolve anything.

 

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Paul Sweeting

Principal Concurrent Media Strategies

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