On Wednesday the Supreme Court ruled that Aereo’s streaming television service, which allows its subscribers to watch television programs over the Internet, violates copyright law.   

For a monthly fee (basic membership is $8 per month), Aereo offers subscribers broadcast television programming over the Internet, as the programs are being broadcast with only a slight delay.  Aereo’s system is made up of thousands of dime-sized antennas housed in a central warehouse.  When a subscriber wants to watch a show that is currently being broadcast, he visits Aereo’s website and selects the show he wishes to see.  One of Aereo’s servers then selects an antenna, which it dedicates to that subscriber’s use for the duration of the selected show.  A server then tunes the antenna to the over-the-air broadcast carrying the show.  As the antenna receives the broadcast, an Aereo transcoder translates the signals received into data that can be transmitted over the Internet.  Rather than directly sending the data to the subscriber, a server saves the data in a subscriber-specific folder on Aereo’s hard drive, creating a subscriber-specific copy—a “personal” copy. Once several seconds of programming have been saved, Aereo’s server begins to stream the saved copy of the show to the subscriber over the Internet.  Aereo neither owns the copyrights in the television programs it streams nor has a license from the copyright owners to publicly perform the programs. 

At issue was whether Aereo was infringing the copyright owners’ exclusive right to “publicly perform” the television programming. A majority of six Supreme Court justices concluded that Aereo’s activities constituted a public performance and thus infringed the broadcasters’ copyrights.

After noting that the 1976 Copyright Act was designed to bring cable companies within the folds of U.S. copyright law, the Court concluded that Aereo’s activities constituted a performance because it found Aereo’s activities to be “substantially similar” to those of the cable companies.  That Aereo’s subscribers selected the program to be performed (and not Aereo) made no difference to the Court, given Aereo’s “overwhelming likeness” to the cable companies targeted by the 1976 Copyright Act.  This “sole technological difference” did not make a critical difference where, in the Court’s view, the difference was invisible to subscribers and broadcasters.

Having concluded that Aereo performed the television programs, the Court next had to grapple with whether such a performance was public within the meaning of the Copyright Act as only “public” performance is prohibited.  The Court concluded that when Aereo streams the same television program to multiple subscribers it transmits the program to the public, and that the public does not need to be situated together—either spatially or temporally.

In response to concerns that the Aereo decision would limit technological innovation in ways that could not yet be seen or predicted, the Court attempted to limit the reach of its opinion in a couple of ways.  First, the Court was careful to note that its ruling was based on the specific history of cable broadcast transmissions that had led to provisions in the 1976 Copyright Act specifically directed towards cable companies. Second, the Court took pains to note that it has not considered whether the public performance right was infringed when the user of a service pays primarily for something “other than the transmission of copyrighted works, such as remote storage of content.” Specifically, the Court noted that questions involving cloud computing, remote storage DVRS, and other novel issues were not before the Court and, unlike cable services (and cable-like services), Congress had not “plainly marked the course.”  Therefore, questions involving these technologies should await a “case in which they are squarely presented.”

In the dissent, Justice Scalia accused the majority of adopting a “looks-like-cable-TV” approach to find Aereo directly liable for copyright infringement.  Aereo could not be found to have publicly performed the work without an affirmative act (volitional conduct), which is required by both the text of the Copyright Act and the case law interpreting it.  Because Aereo’s subscribers call all of the shots when choosing content, Aereo cannot be directly liable.  According to the dissent, the better claim to have considered would have been whether Aereo was secondarily liable because of the actions of its subscribers.  

In summary, the Court found Aereo’s service infringing because, in the Court’s view, the differences between Aereo’s service and cable companies’ services are not different enough to place Aereo’s activities outside the scope of the Copyright Act.  However, in finding direct infringement, the Court potentially disrupted the traditional bright-line test for direct liability, which prior to the Aereo decision required volitional conduct.