Supreme Court Discussion In Aereo: At Least The Justices Recognize The Harm They Might Do

The oral arguments in the Aereo case happened this morning before the Supreme Court and you can read the transcript here (it's still a travesty that there is no live broadcasting (or any video recording at all) of the proceedings, but that's a different argument for a different day). As with any such case, this discussion needs to be prefaced with the fact that reading the tea leaves from what Justices say during oral arguments is a unlikely to yield much that is useful. You'll often see large segments of the arguments discuss issues that later don't appear at all in the final ruling. In some cases, Justices are just testing out certain theories or pushing the lawyers to see how they respond. Oral arguments do matter, but not nearly as much as the underlying briefs. We still have a few months (probably) to find out how the Court will rule, but we can at least comment on some of today's discussion.

The important thing to get from the discussion was that the Justices, for the most part, seem to actually recognize that with copyright law the way it is today, finding -- as the broadcasters would like -- that Aereo is engaged in a public performance -- may have long term consequences for all sorts of other industries. It starts off early on, with Justice Sotomayor jumping in with a very different question, concerning whether or not Aereo is a cable company, which would include a different set of issues (in fact, this was exactly the strategy that Aereo competitor/predecessor ivi sought to take -- and ran into trouble). She points out that there may be value in avoiding the whole public performance question all together, since it could get messy:
If we take public performance, maybe we run into what Professor Nimmer saw as a problem. Why isn't what used to be called a phonograph record store that sells phonograph records to 10,000 customers a public performance? It seems to fall within that definition. But if it is, there's no -- no first sale doctrine and it's a big problem. So we could avoid that problem.

Meanwhile, Justice Breyer is clearly concerned about the possible impact on the cloud, again in discussing the possibility that the Court could avoid the issue by calling Aereo a cable company:
And what you've read in their briefs is they, in their supporting amici, have thrown up a series of serious problems not involving them, like the cloud, which the government tells us to ignore, and many others, which make me nervous about taking your preferred group.

Which bounces back to Sotomayor, who notes that the public performance definition the broadcasters want "sweeps up" an awful lot of other businesses where it doesn't make sense:
I mean, Justice Breyer has already asked you -- said he's troubled about the phonograph store, and -- and the Dropbox and the iCloud. I'm also worried about how to define or -- public performance or the performance of a work publicly, which I guess is the better way to do it, according to you. How do I define that so that someone who sells coaxial cable to a resident of a building is not swept up as a participant in this? Or someone who -- the sort of passive storage advisors that -- this is really hard for me.

Justice Kagan, also, quickly gets to the heart of the matter -- the point that we've been raising since the beginning with Aereo -- that this is all about the length of the cable. If someone were to do this at home -- with the same exact electronic setup, it's clearly legal. But the broadcasters want to make Aereo illegal, because the length of the cable between the "DVR" component and the "TV" component is much longer.
Suppose a company just gave the antenna and a hard drive, that's what they sold to the user, and the user was able to use the antenna and the hard drive in her own house or apartment in order to get all these broadcast programs. What would the -- would that be a performance?

When the broadcaster's lawyer pushes back, Kagan points out that it does seem odd that where the hardware sits determines if there's a public performance or not.
But then it really does depend on, like, where the -- where the hardware is. In other words, if -- if Aereo has the hardware in its warehouse as opposed to Aereo selling the hardware to the particular end user, that is going to make all the difference in the world as to whether we have a public performance or not a public performance.

Chief Justice Roberts highlighted the same issue:
Why isn't -- and I don't want to stretch it too -- but why isn't it like a public garage in your own garage? I mean, you know, if you -- you can park your car in your own garage or you can park it in a public garage. You can go to Radio Shack and buy an antenna and a DVR or you can rent those facilities somewhere else from Aereo. They've -- they've got an antenna. They'll let you use it when you need it and they can, you know, record the stuff as well and let you pick it up when you need it

There's then a discussion trying to see if there's a way to distinguish Aereo from the Cablevision decision (in the 2nd Circuit appeals court) saying that Cablevision's remote DVR was legal. The lawyer for the broadcaster says that he thinks the Cablevision decision was decided incorrectly, but the difference is that Cablevision already has a license. This is misleading, because the license in Cablevision was unrelated to the issue of the DVR feature. Furthermore, over-the-air broadcasts (which is what Aereo offers) have an implied license already associated with them (you don't have to pay to watch over-the-air TV for that very reason). So the distinction here is meaningless. Justice Breyer says that, even if that's true, there's still a real risk to cloud computing.
But then the problem is in the words that do that, because we have to write words, are we somehow catching other things that really will change life and shouldn't, such as the cloud? And you said, well, as the government says, don't worry, because that isn't a public performance. And then I read the definition and I don't see how to get out of it.

When asked similar questions, the Deputy Solicitor General, Malcolm Stewart, (again, bizarrely, the US is intervening on behalf of Hollywood for no clear reason), appears to admit that there's no clear line, and that things should be decided on something of a case by case basis:
I think you would have to -- you would have to know both the details of the service and you would have to be making a harder call there about how to draw the line, because I don't pretend that there is a bright line between providing a service and providing access to equipment. If you look, for instance, at the extremes of a person putting a rooftop antenna at his own home, everybody agrees that the rooftop antenna manufacturer is not performing at all and the individual is engaged in a solely private performance.

The other extreme is the cable company, one big antenna, makes transmissions to a lot of people; Congress clearly intended to define that as a private performance. Somewhere in the -- you could come up with lots of hypotheticals that look more or less like one of the other extremes, they are somewhere in the middle. It's an authentically hard call as to where to draw the line. So I don't have a good answer for you.

But that seems rather important, given that this case is asking for that line to be drawn. And the Justices were clearly struggling with that point. Justice Breyer responded:
How do we get out of the example? I mean, how do we get out -- what words do I write to get out of this, throwing into this clause a music store that distributes via Federal Express, a device, or the U.S. Postal Service or even someone over the counter, distributes to 10,000 people a copy of a record which they then will take and play it? They have, to the same degree, transmitted something that will electronically make a performance of the music. So are they when they sell the record violating the display clause?

This isn't to say that the Justices are in agreement with Aereo. They expressed plenty of skepticism about the whole setup, arguing repeatedly that the whole thing seems to have been set up solely to fit within the law, using a technological setup that makes no sense. Aereo, in response, sought to argue that there were technical reasons for its setup, but frankly, that's bogus. The technological setup is insane, but the insanity is not because Aereo is trying to "get around" the law, but the exact opposite. Because it's trying to stay within the law. If the setup of copyright law itself wasn't so insane, there would be much better ways to do what Aereo is doing. But thanks to a bunch of interlocking "rights" buried within copyright law, and caselaw that is basically duct-taped onto the statute every time a new technology comes around, actually innovative requires the Rube Goldbergian-approach that Aereo took just to stay within the law. It's ridiculous that that is seen as a suggestion of illegality...

When the broadcasters lawyer comes back to rebut Aereo's lawyer, he argues that if Aereo loses, it can just get a license or go out of business. But Justice Breyer notes that it's really not that simple:
Once you take them out of the compulsory licensing system, they're going to have to find copyright owners, who owns James Agee's pictures? Who owns something that was written by -- like a French silent film in 1915? I mean, the problem is that they might want to have perfectly good things that people want to watch and they can't find out how to get permission. That is a problem that worries me and it worries me again once you kick them out of the other systems

In the end, I think the Justices were rightly worried about how any ruling might impact the cloud. While there was some skepticism about Aereo's setup, Aereo's lawyer did a good job highlighting why those were wrong. Still -- and again, reading Supreme Court tea leaves is nearly impossible -- if I were going to guess, I'd guess that the Supreme Court will seek some sort of "narrow" ruling that tries to say that Aereo should get a license (possibly just throwing the issue back to the lower courts on the details), while doing everything it can to avoid a ruling that throws the entirety of cloud computing under the bus.

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