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Supreme Court May Decide Future Of More Than Just Television Reception In Aereo Case

Posted  January 13, 2014

By Seth D. Greenstein

On Friday, the Supreme Court granted certiorari in American Broadcasting Companies v. Aereo, Inc. (“Aereo”), the case that is now slated to decide the question of whether a company “publicly performs” a copyrighted television program by providing consumers a technology to receive and record a broadcast of that program via antenna and then transmit that recording to themselves over the internet.

To Supreme Court mavens, certiorari seemed unlikely under the Court’s rules.  There is no split of opinion among the federal circuit courts of appeals over the legality of Aereo’s business model.  Although broadcasters have sued Aereo in multiple jurisdictions, courts have denied the broadcasters’ requests for a preliminary injunction.  It is debatable whether the case involves a question of exceptional importance, given that Aereo is a small company and the courts disagree as to whether Aereo’s business might cause multibillion dollar networks irreparable harm.

But the unconventional Aereo took an unlikely step after broadcasters sought Supreme Court review of Aereo’s victory in WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), in which the U.S. Court of  Appeals for the Second Circuit affirmed the district court’s denial of broadcasters’ motion for a preliminary injunction seeking to bar Aereo consumers from accessing recorded broadcast television programs while the programs are airing on broadcast television.  Aereo responded to the petition for certiorari by agreeing that the Court should take the case.  As Aereo observed, although it has thus far prevailed in litigation, it continues to be sued whenever it launches in a new city.  Certiorari was needed, Aereo told the Court, to stop the war of attrition that threatened both Aereo and, in its view, all modern technology systems that store and give consumers access to their content in the internet “cloud.”

The Aereo case could redraw the line between personal rights and the rights of copyright owners in the context of new technology.

Broadcasters accuse Aereo of retransmitting their copyrighted programming without paying the type of license fees required of cable and satellite service providers.  By contrast, Aereo describes itself as a technology company that provides consumers a convenient and inexpensive way to access broadcast programming on equipment located on Aereo’s premises using the oldest mode of television reception – the antenna.  Aereo’s antennas, however, are not the classic rooftop or “rabbit ears” antennas that adorned big-box, small-screen TVs back in the days of Dragnet and I Love Lucy.

A consumer logs in to the Aereo website and schedules recording of a broadcast program.  At the appointed time, he or she is assigned an individual miniaturized antenna no bigger than a thumbnail. Only that consumer can get access to the unique recording made from the signal received through that particular antenna  Consumers can choose to watch that recording beginning a few seconds after reception, or at a later time.  Aereo contends that no license is needed since consumers always have had the right to over-the-air television antenna reception.

While one judge (in a dissent) has described Aereo’s antennas as a “Rube Goldberg” contrivance, most courts considering such systems have found that they comply with existing copyright law.

Notably, in the landmark opinion of Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision“), the Second Circuit held that cable service provider Cablevision could provide consumers with digital video recording capability remotely located at Cablevision’s cable plant rather than in the consumer’s home.  Television networks contended that Cablevision’s remote DVR was tantamount to a video on demand service, which under copyright law would be a “public performance” that required a license from the networks.  Cablevision countered that the transmissions were, rather, private performances by and for only a particular subscriber.  Cablevision emphasized that each subscriber determined whether a recording was made, and the recording was accessible only to that subscriber at a time and place of the subscriber’s choosing.

The Second Circuit agreed with Cablevision.  Copyright infringement requires an element of volition, the court held, and the consumer, not Cablevision, controlled whether a copy was made of a particular program.  Moreover, a “public” performance under copyright law must be capable of being received by multiple unrelated members of the public.  Because the transmission from each consumer’s copy was available only to that consumer, the court held Cablevision made only permissible private performances.

The networks petitioned the Supreme Court to take the Cablevision case, but to no avail.  After receiving an amicus brief from then Solicitor General (now Justice) Elena Kagan suggesting denial of the petition, the Court denied certiorari.

Not just Aereo took note of the Cablevision precedent.  Companies like Amazon, Apple, and Google began offering cloud services that give consumers the ability to store their copies of copyrighted music, videos, and ebooks remotely on those companies’ servers, and to playback or display the content on their desktops, laptops, mobile phones and tablets.  A 2012 study suggests that over five years cloud services will grow in revenue by more than $100 billion, save U.S. businesses more than $625 billion, and add more than 200,000 jobs in the U.S. and abroad.

The Aereo case is likely to decide important issues about consumers’ rights to use efficient video recording and playback technologies for private, personal uses.  So it is fitting that the Court’s decision to take the Aereo case comes nearly 30 years to the day when the Supreme Court decided, by a 5-4 vote, that Sony could sell consumers the Betamax VCR, and that consumers had the right to time-shift, free from claims of copyright infringement.

But much more is at stake in the Aereo case than just whether consumers get a low-cost alternative to their cable subscription. In a case about television antennas, the Court could recalibrate the future balance between copyright and innovation.

Constantine Cannon is one of the law firms representing Aereo in the Aereo case.

— Edited by Gary J. Malone

Tagged in: Antitrust Litigation, Intellectual Property Law and Antitrust,

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