American Broadcasting Cos v. Aereo Case Study

In addition to posting about patent cases the Supreme Court hears, I pay attention to the other intellectual property cases the high court decides on. Back in April the Supreme Court heard arguments on the basis for a preliminary injunction against Aereo for its service to let people watch broadcast television over the internet. Last week the Court decided 6-3 that Aereo was liable for direct copyright infringement of the broadcast television companies’ content. The case involves the key rights granted by copyright and questions about controlling content, so I think I should provide my own explanation on the ruling.

The Court held that Aereo’s service was a public performance of the broadcaster’s content and thus an infringement. Aereo set up its service so that each of its subscribers could tell Aereo to record a broadcast. To distinguish itself technologically, Aereo set up a separate antenna for each subscriber and saved a copy of the broadcast on its server only for the subscriber to view. This is different than a cable company rebroadcasting one copy of a piece of television content to multiple subscribers after receiving one copy from the broadcasters. However, the majority did not think the technical detail distinguished itself from statutory rebroadcasting rules. Cable companies initially were allowed to rebroadcast content without infringing copyright because they were retransitting without editing the material what was publicly available on the broadcast spectrum. After the broadcasters lost in court, Congress changed the law to set up a system in which cable companies paid the broadcasters to retransmit the content. Since Aereo’s service is similar enough to cable rebroadcasting, it should be treated as a public performance under copyright law.

The dissenting opinion makes clear that the technological difference is enough to distinguish this case as not being a public performance for the purpose of a direct infringement copyright suit. In his opinion Justice Scalia claims that Aereo is between a copy shop that copies anything copyrighted or otherwise and a video-on-demand service that chooses what content can be transmitted to the user based on the ownership of the content. In other cases, the decision to transmit the content made the difference between who would be infringing any copyright. Since Aereo’s customers choose when to transmit to them, Aereo should not be liable for direct copyright infringement, but they may still have secondary liability for aiding their customers in copyright infringement. However, the Court did not rule on this issue because they thought the requirements were met for direct infringement.

The bigger question relates to the application of the Aereo case to other technologies. The federal government argued that the comparison to cable rebroadcasting should apply to any system that depends enough on physical equipment its subscribers generally use. The Court narrows this by saying that Aereo’s service is a performance in the context of broadcasting and a public performance because it applies to people in the public who pay to watch broadcasts. The dissent calls this approach bad precedent because it does not provide rules that explain how internet service providers and cloud storage providers can avoid direct infringement if their customers download copyrighted content through them. The longstanding Betamax ruling is supposed to allow technologies that have enough legal uses to avoid broad accusations of copyright infringement, and the Aereo ruling chips away at this precedent by saying a party may be liable for directly infringing content if it provides a service the court finds similar enough to cable rebroadcasting regardless of who owns or does not own the copyright on the broadcast. The majority opinion cites fair use precedent as preventing this case from being abused. Recent holdings on copyright on fair use, like in the Google book scanning case, will be subjects for another time.

 

SCOTUSBlog Link

Supreme Court Opinion

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About Simon Linder

I am a registered patent agent in the Silicon Valley area. I specialize in local intellectual property issues and talk about them on my blog.
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