Oral arguments are scheduled to be heard on April 22 at the U.S. Supreme Court in a case that pits ABC and other TV networks against Aereo.

Aereo is a relatively new company that claims to have found a legal way to avoid paying licensing fees to the networks while still showing their programs through a new form of technology related to small antennas.

The case is being carefully watched by attorneys who specialize in diverse technologies, according to Craig Whitney, an intellectual property attorney with Morrison & Foerster.

“It could be ground-breaking,” Whitney confirmed about the case in an interview with InsideCounsel. “It all depends on what the Justices focus on and what language they use in their decisions,” he said. 

The decision in the Aereo case also may impact such fields as cloud computing, cloud lockers, cable television and broadcast television, he adds. “It could be incredibly broad when it comes to technology and industries,” Whitney said.

One reason the case was accepted by the Supreme Court is that related lower-court rulings across the nation were conflicting. That can lead to confusion. “It’s appropriate there is a consistent ruling that applies nationwide,” Whitney said.

Meanwhile, TV networks want the case to be decided in their favor. “Quite simply, Aereo takes copyrighted material, profits from it and does so without compensating copyright holders,” Gordon Smith, the president of the National Association of Broadcasters, told The Washington Post. And cable television wants to keep its bundle offerings in place – which are at risk if the decision goes against them.

But Aereo claims it should be able to provide access to programs found on public airwaves. Aereo lets consumers get access to local broadcast TV channels through tiny antennas and use of the Internet.

“Aereo has a shot at changing the TV business model,” Gene Kimmelman, president of Public Knowledge, told The Post. “Behind the technical and legal arguments of the case is a fundamental question of whether consumers will be able to take advantage of new technology to access programming in a convenient and low-cost fashion.” For instance, if the case is decided in favor of Aereo, sports programs could wind up being offered cheaper via the Internet. Also, now a cable TV package for a typical family can cost around $100 a month. Internet, Aereo and Netflix will cost the same household less than $60, news reports said.

When it comes to relevant laws, under current copyright regulations, broadcast programs can only be reshown by paying the owner of the content, and getting the owner’s permission. One of the key issues in the law relates to “public” vs. “private” performances. 

“The law distinguishes between material used for ‘public’ performances, shown to multiple people at once, and ‘private’ performances, shown to a single individual,” The Post explains.

“When a cable company rebroadcasts an ABC show, it is offering a ‘public’ performance and therefore must pay the network retransmission fees. But because licensing payments are not required for private performances, people without cable can continue to use antennas to capture and record over-the-air television programs for their personal viewing.”

Aereo says its technology relates to private performances. Also, because Aereo wants to expand, the decision in the case could have a major financial impact. Aereo now operates in Atlanta, Austin, Baltimore, Boston, Cincinnati, Dallas, Detroit, Houston, Miami, New York and San Antonio.

In addition, the ruling in the Aereo case could also impact an earlier decision on the Cablevision case, which was decided by the Second Circuit Court of Appeals, Whitney said. The Cablevision case, decided in 2008, found that Cablevision’s Remote-Storage Digital Video Recorder (RS-DVR) does not infringe on the copyright owners’ rights to public performances.

“The RS-DVR does not publicly perform any works, the court reasoned, because the only person who can play back a recording is the one person who made it. That principle – that a technology provider does not engage in a public performance merely because subscribers can store and play back their own separate copies of the same works – has become a cornerstone of the cloud computing industry,” Cablevision explained in a whitepaper.

When considering copyright law, Whitney also points out that the nation’s copyright law was written in 1976 and there is a struggle how to apply it to new technology. Plus, when the act was written, much of the current technology did not even exist, he adds.

Looking at the bigger picture, Whitney says Congress may want to come up with a new copyright act. The problem is that “takes a really long time” to accomplish, he said. That is because of competing interests and the overall complexity. Still, there have been some revisions along the way such as the Digital Millennium Copyright Act (DMCA). 

In addition, potential for more tech innovation is another concern that could be impacted by the Supreme Court decision in the Aereo case. “This case could ultimately affect how flexible business models will be, as well as companies’ ability to build online services around consumers’ fair use of copyrighted material,” Jon Healey, an editorial board member for The Los Angeles Times, wrote in the newspaper recently. “If the justices decide how to treat Aereo by ignoring its technology and looking only at the market segment it occupies, that would be troubling news for innovators.”


Further reading:

Technology’s disruptive effect on copyright law

Broadcasters denied preliminary injunction against Internet TV company