American Broadcasting Cos., Inc. v. Aereo, Inc., 573 U.S. ____ (June 25, 2014)

In one of the most widely reported decisions of this session, the Supreme Court held that Aereo—a seller of a service that allows subscribers to watch television programs over the Internet at the same time the programs are broadcast over the air—infringed ABC’s performance rights in the programs.

Aereo offers subscribers the ability to view television programs, including those produced by major television networks. However, Aereo, which began offering its services in 2012, offered its subscribers even more: the ability to stream broadcasts at almost the same time the programs are broadcast over the air and store the programs to cloud DVR storage, all for only $8 a month. Offering programming at rates drastically lower than those charged by the cable companies, Aereo quickly gained popularity, expanding from its original market of New York to ten additional markets.

Arguing that Aereo was sidestepping its obligation to pay retransmission fees, the major TV networks, along with the National Football League and Major Baseball League, sued Aereo and sought a preliminary injunction. The district court denied the preliminary injunction, holding that Aereo’s activities did not constitute a public performance within the meaning of the Copyright Act’s Transmit Clause because Aereo does not perform “publically,” but instead sends a private transmission each time it streams a program to a subscriber. The Second Circuit affirmed.

The Supreme Court, however, reversed. Reasoning that Aereo performed the broadcasts when transmitting the programs to subscribers to watch. Further, the Court rejected Aereo’s argument that because each user had an antenna that was dedicated to that user alone and streamed content only to him the transmission was private. Holding that the differences in the method of transmission did not distinguish Aereo’s system from cable systems, which do perform publicly, the Court found that Aereo’s performances are in fact public.

Mindful of the potential implications of the opinion, the Court noted that it does not believe that its “limited holding” would have the effect of discouraging or controlling the emergence or use of different kinds of technology. Commentators are divided as to the potential effect of the opinion, with some agreeing that it is sufficiently limited to the technology at issue so as not to discourage innovation, with others speculating that the decision could chill cloud-storage providers.