Aereo – the little Brooklyn David that would slay broadcaster Goliaths – got its day in court yesterday (0). All nine justices considered whether or not Aereo’s business, which allows subscribers to access one of Aereo’s dime-sized antennas to capture local broadcast transmissions, violates US copyright law. In particular, the court pondered whether or not Aereo is engaged in the impermissible public performance of copyrighted material or whether it was doing, well something else.
And that seems to be the rub; the court seemed to struggle with exactly how to categorize what Aereo is doing. More specifically, the justices tried to do what all lawyers do: find an analogy that helps them fit the facts of the present case into the factual bucket of a prior case. There are two, strong potential prior case candidates: Sony Corp. v. Universal (Betamax) and Cartoon Network v. CSC Holdings (CableVision).
In the Betamax case, the Supreme Court decided that Sony did not violate the copyright laws by selling a video recording device to an individual who used the device to record video transmissions or play back material that may or may not have been illegally copied. The CableVision case — decided by the Second Circuit and therefore not binding on the justices – involved the use of a remote storage digital video recorder or RS-DVR. Although similar to Betamax, unlike Sony, which sold a Betamax and was no longer involved in the process, CableVision’s RS-DVR allowed CableVision customers to record the broadcast of their choosing. These selections are then stored on CableVision’s own hard drive and made available to the customer when requested. The Second Circuit found that this too did not violate the copyright law because CableVision did not transmit these performances to the public but rather to a single person – it was still a private performance.
The Second Circuit relied heavily on its own CableVision case in deciding in favor of Aereo, but both the Tenth and Ninth Circuits rejected similar arguments. So now it’s up to the Supreme Court to figure out what exactly is Aereo. Is it Betamax or is it CableVision? The analogies started to fly almost the moment oral argument began. Here are a few highlights with rough translations:
J. Sotomayor: Why aren’t they [Aereo] cable companies? … everybody’s been arguing this case as if for sure they’re not. But I look at the definition of a cable company, and it seems to fit.
Translation: Aereo should pay royalties like everyone else.
Paul Clement (attorney for the broadcasters), arguing that Aereo is like a car dealership: If I show up at the car dealership without a car, I’m going to be to get a car. If I show up at the valet parking service and I don’t own a car, it’s not going to end well for me.
Translation: Cablevision had already paid royalties for the transmissions (bought the car) so they were just “parking” the car for their customers.
J. Breyer: I don’t understand what the decision, for [Aereo] or against [Aereo], when I write it is going to do to all kinds of other technologies. I’ve read the briefs fairly carefully, and I’m still uncertain that I understand it well enough. That isn’t your problem, but it might turn out to be.
Translation: I don’t want to write an opinion that criminalizes legitimate cloud computing.
M. Frederick (attorney for Aereo) in response: Let me try to make it their problem.
Translation: He’s funny.
M. Frederick explaining further: With Aereo’s technology, if I’m making a copy using Aereo’s system, no one else can look at it.
Translation: Aereo emphasizes that each broadcast is copied by the individual consumer. In other words, Aereo facilitates thousands of “private” performances and these should not be legally aggregated to meet the copyright prohibition on “public” performances.
J. Roberts: [You’re saying] your copy is different than my copy.
M. Frederick: Yes.
J. Roberts: But that’s the reason we call them copies because they are the same.
Translation: He’s funny too.
P. Clement (in closing): [Aereo] provides thousands of paying strangers with public performances over the TV but they don’t publically perform at all. It’s like magic.
Translation: Copyright law should not hinge on a business model designed to exploit potential loopholes.
Like all Supreme Court oral arguments there was something for everyone. Predicting the outcome is like reading tea leaves. There did seem to be emphasis on Aereo’s lack of payment of royalties at any point of the distribution – a different business model than CableVision or Netflix. This might be the easiest way for the justices to distinguish Aereo from the Second Circuit’s CableVision case.
The only prediction that will likely hold true is that the justices will heed the warning of the federal government who filed an amicus brief and argued in support of the broadcasters. The decision will be as narrow as the justices can manage to hold the precedent to the facts of this particular case. They do not want to jeopardize future innovation — the true magic of content transmission, both public and private.