WASHINGTON, June 27, 2014 — The Supreme Court ruled Wednesday that Aereo, a firm that captures broadcast programming and lets subscribers stream it to digital devices, is in violation of copyright laws. The court reached its decision by concluding that regardless of the technology it uses, Aereo looks like a cable company, and therefore the law should treat it like a cable company.
The plaintiffs in this case were several large broadcasters, including ABC, Fox and Univision. Plaintiffs’ attorneys argued that Aereo’s services “infringed on their right to ‘perform’ their copyrighted works ‘publicly.’” The court held that “Aereo performs petitioners’ works publicly within the meaning of the Transmit Clause” of the Copyright Act.
In other words, the court ruled that Aereo infringes on broadcasters’ copyrights.
Justice Breyer, writing for the majority, noted, “Aereo’s activities are substantially similar to those of the CATV (community antenna TV) companies that Congress amended the (Copyright) Act to reach. … Aereo’s equipment may serve a ‘viewer function’; it may enhance the viewer’s ability to receive a broadcaster’s programs. It may even emulate equipment a viewer could use at home. But the same was true of the equipment that was before the Court, and ultimately before Congress, in Fortnightly and Teleprompter” (earlier cases involving CATV, which Congress amended the Copyright Act to regulate).
Justice Scalia mockingly paraphrased Breyer in his dissenting opinion: Aereo is in violation of the copyright law because, “(1) Congress amended the Act to overrule our decisions holding that cable systems do not perform when they retransmit over-the-air broadcasts; (2) Aereo looks a lot like a cable system; therefore (3) Aereo performs.”
Disregarded by the majority was an important difference between Aereo and cable: Aereo subscribers, not Aereo, select the content that will be broadcast to them. Unlike cable and CATV services, Aereo’s services leave the subscriber in control of the content they receive and transmit only when subscribers request it. And unlike video-on-demand providers, Aereo doesn’t even select the content that will be available for subscribers to select; they provide anything that is transmitted over the airwaves.
An analogy would be a copy shop. You can go to the copy shop and make copies of your child’s artwork, a perfectly legal thing to do. You can also go there and make copies of copyrighted art. If you do the latter, who is responsible? The copy shop? The firm that made the copier? The person who made the copy?
The majority essentially argued that the technology doesn’t matter, nor does the process that produced the copy. What matters is the existence of the copy, that the copy shop is driven by a commercial motive, and that the copy shop made the copy possible.
Breyer wrote, “In terms of the Act’s purposes, these differences do not distinguish Aereo’s system from cable systems, which do perform ‘publicly.’ Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter? … They do not render Aereo’s commercial objective any different from that of cable companies.”
Because Aereo’s commercial objective is to make money by allowing people to watch TV programming, the truth of that observation is undeniable. But the logic that says that all that matters are the commercial motive to provide a product, and that the product looks like the product provided by cable, regardless of how it is actually provided, is astonishing.
Referring to the appearance of Aereo’s product, Breyer wrote, “Nor do they significantly alter the viewing experience of Aereo’s subscribers.” A show streamed to your screen via Aereo looks just like a show put there via cable. It would be difficult to utter a more irrelevant truth.
The Supreme Court’s decision will create serious problems for new technology firms offering audio and video services. The reason for this isn’t so much the decision to stop Aereo as in the court’s reasoning; it was incoherent to the point of nonsense, and so it provides no guidelines to anyone who might want to predict whether they might run afoul of the rules.
As Scalia put it, “the Court provides no criteria for determining when its cable-TV-lookalike rule applies.” Regardless of Breyer’s protests to the contrary, this decision puts a wide variety of existing technologies, from remote-access DVRs to cloud storage, in jeopardy of violating the law.
Because it offers no guidelines for what is illegal other than “looks-like-cable-TV,” the court’s opinion throws the legal viability of new technologies into serious doubt, and will probably force a great deal of research and development out of the United States. The court exhibited an unusually low level of technological savvy in this opinion.
Worse, the court stepped in to take on the job of the legislative branch, closing a loophole in the law that should have been closed by Congress.
Quoting Scalia again, “what we have before us must be considered a ‘loophole’ in the law. It is not the role of this Court to identify and plug loopholes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes. Congress can do that, I may add, in a much more targeted, better informed, and less disruptive fashion than the crude ‘looks-like-cable-TV’ solution the Court invents today.”
The court concluded in an earlier case that “it is not our job to apply laws that have not yet been written.” That is precisely what the court did with Aereo. This was judicial activism of the highest degree.
The 6-3 decision effectively kills Aereo, whose owners admitted that they have no alternative plan to provide services.
Justice Breyer wrote the opinion of the court, joined by Justices Kennedy, Ginsburg, Sotomayor, Kagan, and Chief Justice Roberts. Justices Scalia, Thomas and Alito dissented.