Supreme Court Shoots Aereo Down

Photo: Kirsten Luce/The New York Times/Redux

An Aereo antenna array is not a substitute for a content license, says the U.S. Supreme Court.

In a 6-3 decision, the U.S. Supreme Court sided with traditional broadcasters and ruled that Aereo, a New York City-based startup that provides TV streaming service based on “personal antennas,” has infringed the copyrights of producers and their licensed distributors.

In 1976, Congress amended the U.S. Copyright Act to explicitly bar cable companies from receiving television programs from the airwaves and rebroadcasting them to their cable service subscribers without a license. Aereo created a system that sought to avoid this legal restriction by renting an individual, postage-stamp-size antenna to each user. The antennas—arranged in vast arrays [pictured above]—are attached to Aereo's servers and pick up TV signals for individual users. Because customers rent their own antennas, Aereo argued, its service did not violate rebroadcasting laws.

The decision rejected Aereo’s argument, and so voided a U.S. Court of Appeals decision that supported Aereo and returned the case “for further proceedings consistent with this opinion.”

Justice Stephen Breyer wrote the decision, in which Chief Justice John Roberts and Justices Anthony Kennedy, Ruth Ginsburg, Sonia Sotomayor, and Elena Kagan concurred.

“In sum,” Breyer concluded, “having considered the details of Aereo’s practices, we find them highly similar to those of the CATV [cable television] systems” already found to violate the Copyright Act. “Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service. We conclude that those differences are not adequate to place Aereo’s activities outside the scope of the Act.”

Reflecting the questions from the bench during the case’s 22 April oral arguments, the dissenters—Justice Antonin Scalia, joined by Justices Clarence Thomas and Samuel Alito—had little sympathy for Aereo’s claims, but worried that the decision would blight development of new communications technologies and business models.

Scalia wrote:

I share the Court’s evident feeling that what Aereo is doing (or enabling to be done) to the Networks’ copyrighted programming ought not to be allowed. But…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.

We came within one vote of declaring the VCR contraband 30 years ago in [Sony Corp. of America v. Universal City Studios]…. The dissent in that case was driven in part by the plaintiffs’ prediction that VCR technology would wreak all manner of havoc in the television and movie industries….The Networks make similarly dire predictions about Aereo. We are told that nothing less than “the very existence of broadcast television as we know it” is at stake…. Aereo and its amici [friend-of-the-court supporters] dispute those forecasts and make a few of their own, suggesting that a decision in the Networks’ favor will stifle technological innovation and imperil billions of dollars of investments in cloud-storage services….

We are in no position to judge the validity of those self-interested claims or to foresee the path of future technological development…. Hence, the proper course is not to bend and twist the Act’s terms in an effort to produce a just outcome, but to apply the law as it stands and leave to Congress the task of deciding whether the Copyright Act needs an upgrade.

Breyer, writing for the majority, saw the issue this way: “Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies…. But we do not believe that our limited holding today will have that effect.” The key terms that define infringement—especially the provision that a rebroadcaster “transmits a performance”—will vary from case to case.

Aereo CEO and founder Chet Kanojia issued a statement calling the decision "a massive setback for the American consumer. We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter. This sends a chilling message to the technology industry." The majority's observation that Aereo is free to seek a Congressional remedy, he said, "begs the question: Are we moving towards a permission-based system for technology innovation?"

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