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COLUMN-U.S. Supreme Court looks backward in Aereo ruling: Frankel
June 25, 2014 / 10:31 PM / 3 years ago

COLUMN-U.S. Supreme Court looks backward in Aereo ruling: Frankel

(The opinions expressed here are those of the author, a columnist for Reuters.)

By Alison Frankel

NEW YORK, June 25 (Reuters) - Every justice on the U.S. Supreme Court -- the six who joined Justice Stephen Breyer’s majority opinion as well as the three who signed the dissent by Justice Antonin Scalia -- agreed Wednesday that the television streaming service Aereo was doing something that shouldn’t be allowed when it intercepted live broadcast signals and instantaneously relayed them to subscribers’ Internet devices.

Top officials at Aereo and IAC/InterActiveCorp, which backed the service, said the court’s decision was a shame for consumers, but that Aereo’s technological model has clearly been deemed illegal. For that reason, it doesn’t make much sense to belabor the majority’s rationale for holding that Aereo’s banks of teensy, subscriber-directed antennas violate the Transmit Clause of the Copyright Act of 1976.

Aereo’s technology is legally dead, and so is the threat that Aereo will permanently disrupt the business model of TV broadcasters and cable companies.

DECISION‘S LASTING IMPACT

This decision’s longer-lasting impact ought to be in educating other technological innovators about how to avoid copyright infringement -- except that the majority was evidently so worried about inadvertently rendering future tech developments illegal that it completely avoided any such guidance.

The Aereo opinion looks backward, not forward, to 1960s and 1970s Supreme Court cases and the subsequent legislative record they spawned on cable companies that engaged in the same kind of signal interception as Aereo. When Congress amended the Copyright Act in 1976, it prohibited cable companies from selling retransmissions of intercepted broadcast signals without a license. So, according to Justice Breyer and the Supreme Court, Aereo is similarly barred, despite technological innovations -- that permit its subscribers to select particular shows and to receive unique retransmissions of those shows for their own private viewing -- designed to skirt the Copyright Act.

“Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter?” Breyer wrote. “They concern the behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens. They do not render Aereo’s commercial objective any different from that of cable companies. Nor do they significantly alter the viewing experience of Aereo’s subscribers. 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 multi-subscriber antenna or one small dedicated antenna, whether they arrive instantaneously or after a few seconds’ delay, or whether they are transmitted directly or after a personal copy is made?”

Breyer acknowledged at the end of his opinion that the justices hadn’t answered copyright questions about cloud computing and other unforeseen technologies. He said circumstances are different from those in the Aereo case when subscribers are paying for remote storage of copyrighted content, or when they’re downloading content they’ve already paid for. (As a side note, it’s interesting that Breyer wrote the decision, because he appeared to be the least tech-savvy of the justices at oral argument.)

Beyond that, the majority said, the Supreme Court will not yet venture. “We cannot now answer more precisely how the Transmit Clause or other provisions of the Copyright Act will apply to technologies not before us,” Breyer wrote. “To the extent commercial actors or other interested entities may be concerned with the relationship between the development and use of such technologies and the Copyright Act, they are of course free to seek action from Congress.”

AD HOC STANDARD

That’s not really any help at all, as Justice Scalia pointed out in his dissent, for Internet services already in operation and for those that may come later. The “cable-TV-resemblance” test laid out in the majority’s Aereo opinion isn’t really a test at all, Scalia said, but an ad hoc, case-by-case, standard. “It will take years, perhaps decades, to determine which automated systems now in existence ... get the Aereo treatment. (And automated systems now in contemplation will have to take their chances),” Scalia wrote. “The court vows that its ruling will not affect cloud-storage providers and cable-television systems but it cannot deliver on that promise given the imprecision of its result-driven rule.”

Scalia advocates a test for direct copyright infringement that would be based on the active participation of services like Aereo: Those that act entirely at the direction of subscribers would be immune from direct liability but those that influence users’ decisions, like Netflix, could be liable. Even a service like Aereo, Scalia said, might be indirectly liable for its users’ copyright infringement, but that wasn’t the question before the court in this case.

This is hardly the first time that innovators have been left without clear answers after the Supreme Court decides a big case. As a rule, the justices would rather rule too narrowly than too broadly, leaving lower courts to interpret their decisions and reach a consensus. That’s been especially true in the court’s patent decisions in the last few years, including this term’s opinion on software patents.

But that’s little solace for tech start-ups and their investors, for whom Aereo is a cautionary story without much of a moral.

Reporting by Alison Frankel; Editing by Andrea Evans

Our Standards:The Thomson Reuters Trust Principles.
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