April 23, 2014 | By Parker Higgins

In Aereo, Supreme Court Rightly Skeptical About Becoming Technology Regulators

In the highly anticipated oral arguments of ABC v. Aereo yesterday, the Supreme Court expressed serious concerns about the unintended consequences that their ruling could have on technology and cloud services.

The start-up Aereo provides subscribers online access to a DVR that can hold recordings of over-the-air broadcasts made using dime-sized antennas in local markets where it's available. Broadcasters, which make a portion of their money from charging retransmission fees to cable companies, sued Aereo in New York and elsewhere on the theory that its user-directed transmissions are public performances under the law. As such, the broadcasters argue, it is infringing and need to be licensed.

Aereo's technical set-up may be unusual, but—based on the questions posed to attorneys for both sides—the Court seemed to correctly recognize an evaluation of the technological merits are far beyond its duties. This limit reflects an argument we make in our amicus brief: the Court should refrain from becoming a technology regulator.

Rather than diving into technical details, the justices seemed focused on finding a resolution that would keep them out of the technology regulation business. Perhaps more than in any previous Supreme Court argument, the justices and the attorneys acknowledged the value of media locker services that allow users to upload files to a remote server and then download or stream them later. If the Court deemed Aereo's transmissions a "public performance," the questioning went, how could they prevent sweeping up these kinds of services as well?

The line of questioning is encouraging, and suggests the Court is thinking about these issues on a more sophisticated level than the "if value, then right" theory that the broadcasters hoped to advance. Under that theory, broadcasters have a right to restrict or charge services like Aereo that get any value out of existing copyrighted media.

Such a proposition comes from a fundamentally incorrect understanding of copyright law. Again from our brief, the fact that a certain use of a copyrighted work is valuable does not change the statutory interpretation of the law. Where copyright doesn't restrict a certain use, the public—and not just the rightsholder—gets the benefit. Another brief, this one by a collection of copyright professors, notes that copyright law is "a statutory system of detailed and distinct exclusive rights. “ Our brief points out that outside of those exclusive rights, the public should be free to use creative works.

In that way, this case resembles the seminal Sony v. Universal Studios case from 1984, known as the Betamax case, which cleared up legal uncertainty around videocassette recorders and declared the time-shifting they enable a fair use. The Supreme Court found the Betamax VCR to be legal not because it evaluated the technology and deemed it to be a good implementation, but because the VCR simply did not interfere with exclusive rights. Like Aereo's service, the VCR is more valuable because there are broadcasts to record and watch later, but that is not how copyright cases are decided.

The U.S. government and the broadcasters attempted to argue in their briefs that a ruling in this case need not harm cloud computing. The pointed questions from justices implied that they are at least skeptical. Justice Breyer, in particular, noted that applying too broad an interpretation of the public performance right to cloud services like media lockers could jeopardize consumers’ rights, like the first sale doctrine that allows re-sale of copies, and even give copyright holders an unfair advantage in music licensing negotiations.

The Court will probably decide the case by late June. Yesterday’s oral arguments didn’t give much indication of how the Supreme Court will ultimately rule. But they made clear that the Court is rightfully concerned about side effects of too broad a ruling. It's only in the most narrow sense that Aereo is a case about dime-sized antennas. Fortunately, the Court seems to realize that the issues it raises are much, much larger.

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