Court’s Aereo Decision Narrow Enough for Some, Continues to Raise Questions for Others

Posted July 9, 2014 at 6:04pm

When the Supreme Court ruled last month that the television streaming service Aereo had violated the copyrights of major broadcasters, the justices also cautioned that their ruling was limited in nature.

“The Court,” wrote Justice Stephen G. Breyer for the majority, “does not believe its decision will discourage the emergence or use of different kinds of technologies.”

But some people worry the Aereo decision could still be unclear for other technologies, like those involving “cloud” computing where data is stored and transferred among remote computer servers.

Others think the decision is narrow enough to not have sweeping implications on these technologies.

Nevertheless, one legal scholar says the big problem is that the court’s narrow ruling has left too much to the imagination.

James Grimmelmann, a law professor at the University of Maryland who signed onto an amicus brief in support of Aereo, said if a court wants a narrow case, it has to do more than just say “this is a narrow holding.”

The Supreme Court, he said, should have explained why its decision doesn’t apply to other cases with certain features in common.

The central question in the Aereo case was whether the tech startup violated the exclusive right of television broadcasters to publicly perform their copyrighted works.

Aereo was designed to comply with this law with its unique operating setup: Subscribers could go to the company’s website and choose a broadcast show to watch, and in doing so, would “rent” one of Aereo’s thousands of dime-sized antennas housed in the company’s facilities. Data would be stored for the specific customer on an Aereo hard drive, and would be streamed over the Internet to the customer.

Aereo said it only provided equipment and that its policy of one-antenna-per customer, generating personal copies of shows, meant that it wasn’t publicly performing copyrighted works, but enabling private performances.

A majority of the court, though, agreed with the networks that Aero was not materially different from cable and satellite companies, which pay rebroadcasting fees when they provide customers with content from networks such as ABC, CBS and NBC.

The justices also said they had not considered the question of whether the public performance right is infringed with technology like the remote storage of content. Questions involving cloud computing, remote storage digital video recorders and other novel technology that Congress hasn’t addressed, wrote Breyer, “should await a case in which they are squarely presented,” quoting a brief from the solicitor general.

Cautious Optimism

The Center for Democracy and Technology and several technology trade groups had worried before the ruling that a broad decision would seriously hamper mainstream services and threaten the future of cloud computing.

Later, David Sohn, the CDT’s general counsel, said he was “pretty optimistic” the decision was sufficiently narrow and that new services that don’t really resemble cable TV would be well positioned to argue they are distinct from Aereo and the court decision doesn’t apply to them.

On the other hand, Sohn said, the court missed an opportunity to clarify the legal environment that different services might be subject to. For example, it didn’t specify exactly why Aereo should be considered performing, other than that it looks like cable.

But the case largely succeeded in not placing the legal environment that the cloud computing operates in doubt, he said.

Similarly, Emery Simon, counselor for the Business Software Alliance, saw the decision as a narrow one. He didn’t see “direct or very imminent” impacts on computers and software.

The court’s decision that Aereo looks like a cable service affected a “pretty narrow segment of businesses,” he said.

The Business Software Alliance had also filed an amicus brief in support of neither party, but only expressing concern over the potential impact on cloud computing.

The concern, Simon said, was that the case would somehow undermine cloud computing’s architecture, but the court came up with a pretty narrow holding, he said.

And while there might be a desire for more clarity, the decision doesn’t create “new kinds of risks,” he said.

But Grimmelmann sees a lack of clarity as a problem. The majority didn’t provide clear answers, he said, to the question of how to limit the holding to things that attempt to imitate cable. They didn’t articulate what would differentiate other technologies, he said.

Grimmelmann contended the decision could have unintended consequences for cloud services and other consumer devices.

For example, the majority gave a set of arguments on why something like Dropbox, which allows users to store material for access on multiple devices, might be different, but they’re confusing, he said.

Grimmelmann also said the court majority wasn’t clear on the question of direct and indirect infringement of copyright, but regardless, if, as the majority says, Aereo was performing, why wouldn’t that also apply to a pending case dealing with Dish’s Hopper DVR?

Matthew Schruers, vice president of law and policy at the Computer & Communications Industry Association, of which Aereo is a member, said the justices were clear they didn’t intend for there to be broad implications, but it’s difficult to say how lower courts will interpret the opinion.

The decision somewhat validated concerns the CCIA laid out in a joint amicus brief with Mozilla in support of Aereo, he said.

“I don’t think Dropbox has serious legal liability,” he said at a panel event, but with more features getting added to existing cloud services, he said he’s increasingly concerned that someone could say that “under Aereo, you kind of look like you’re exercising a right, therefore you’re liable.”