United States: Slings And Aereos Of Outrageous Fortune: Supreme Court Rules That Aereo Infringes

The United States Supreme Court cut the cord on Aereo, Inc.'s unauthorized retransmission of over-the-air television programs in American Broadcasting Companies v. Aereo, Inc., ____ U.S. ____ (2014), finding that Aereo infringed content owners' copyrights. Aereo uses thousands of dime-sized antennae to capture copyrighted broadcast television content and retransmit it to thousands of subscribers over the Internet, enabling them to watch the content essentially in real time. Though the Court awarded copyright owners this victory, it was careful to leave the door open for other emerging technologies and services.

Aereo's service allows subscribers to watch television virtually live over the Internet on mobile devices, computers, and tablets. To do so, Aereo assigns an antennae to the subscriber, captures the broadcast content, stores it on its server in a file directory associated exclusively with that subscriber, and then retransmits the content to the subscriber over the Internet either nearly concurrently with the live broadcast or at a later time.  Aereo claims it  simply assists its subscribers in doing what they could legally do since the days of black & white televisions and rabbit ear antennas.

American Broadcasting Companies, Inc. (ABC) and other owners of the copyrights in the content Aereo retransmitted disagreed. They sued Aereo for copyright infringement and moved for a preliminary injunction seeking to prohibit Aereo from transmitting programs to subscribers while those programs were still airing on the ground that such (virtually) concurrent transmission violated the exclusive right to publicly perform copyrighted works. The district court's denial of the motion was upheld on appeal, and the Supreme Court granted certiorari when ABC and others sought review.

Aereo argued that it does not perform the copyrighted works, but instead supplies equipment to subscribers who direct the retransmission of copyrighted works. Furthermore, it argued that because a separate copy was used to transmit content to each subscriber, the transmission was private, and not public. The majority of the Court disagreed. Although the Court acknowledged that private individuals control what is transmitted and stored, this did not change the Court's opinion that Aereo's transmission constitutes a public performance. The Court also found the fact that Aereo's system remained dormant until a subscriber indicated a desire to watch a program to be irrelevant. The Court found that Aereo's series of single transmissions constituted a public performance. This is because Aereo communicates the same contemporaneously perceptible images and sounds to multiple people. Because the transmission was to people unknown and unrelated, the performances are public.

In a nod to those concerned about the implications for cloud computing, the majority acknowledged that in other cases involving different kinds of services or providers, the result could be different. The user's participation in the operation of the provider's equipment and selection of the content could distinguish another technology from the one at issue in Aereo.

All is not lost for those in the cloud computing industry. The Supreme Court noted that Congress did not intend to discourage development of new technologies and that the Court does not intend for this holding to have that effect either. The Court emphasized that its construction of the word "public" depended in part on the relationship of Aereo's customers to the content and that the term "public" did not extend to those who own or possess copies of the relevant content. The Court also recognized that the doctrine of fair use may come into play in some circumstances. Though Aereo feels the ruling is a massive setback and detrimental to the technology industry, the Court went to great lengths to note that the ruling against Aereo was limited and that the Court would not discourage the use or development of other emerging technologies.

Today's decision is an important victory for copyright owners, but it does not sound the death knell for emerging technologies or cloud computing in general.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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