Guest Post: SCOTUS shoots down Aereo in American Broadcasting Companies Inc v. Aereo Inc.

Aereo_logoAereo is a company in the US which broadcasted television programmes over the internet for a monthly rental fee. On 25th June, 2014, SCOTUS held that Aereo’s model amounted to a “public performance” of the petitioners’ copyrighted works, thereby constituting infringement. The decision can be accessed here. SpicyIP, in this Guest Post by Mr. Manoj Menda, brings you a quick update on the decision. Mr. Manoj Menda is an IP professional with over three decades of experience in handling IP matters and with Educational Organisations. He has also been instrumental in helping tech startups and business with cross-border technology transactions, licensing and IP due diligence. 

In a six-three split decision the United States Supreme Court in American Broadcasting Companies, Inc. v. Aereo  Inc. reversed  the decision of the Second Circuit Court of Appeals.

Writing on behalf of the majority of six Judges, Justice Breyer held that if a service that allows subscribers to watch broadcast television programs over the Internet at about the same time that the programs are broadcast over the air, it is a public performance of the programs that constitutes copyright infringement.

Aereo Inc has a technology platform that involved a system of servers, transcoders and dime-sized antennas. The antennas and transcoders, were used to translate the TV signals into data that can be transmitted over the Internet. This technology allowed an Aereo subscriber to watch a TV show that is currently being broadcast.  The subscriber can then watch the streamed program on his computer, tablet, smart phone, Internet-connected television, or any other Internet-connected device. The subscriber fees for Aereo’s service were in the range of $8 to $12, whereas the cable providers and the broadcasting companies charge a much higher fee.

In his dissenting opinion, Justice Scalia with whom two other Judges, Thomas, J. and Alito, J. agreed is very blunt in stating that “Aereo does not ‘perform’ at all” and that  the Court’s decision today disregards “widely accepted rules for service-provider liability and adopting in their place an improvised standard (‘looks-like-cable-TV’) that will sow confusion for years to come,”.  Justice Scalia goes further and states “It is not the role of this Court to identify and plug loop-holes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes.”   This case has been remanded for the consideration of the remaining claims.

The judgment in this copyright matter has implications on sports broadcasting, television programs, film etc. It has now protected the broadcasting companies and their $4 billion plus in annual fees. It paves the way for copyright owners and also broadcasters to go after infringers and people who are storing copyrighted content in the cloud! This case has been remanded for consideration of the remaining claims of the Petitioners.

Background of Aero Inc:- Aero is a TV startup. The Aereo CEO and founder is one Chet Kanojia who was born in Bhopal and he moved to the United States to study engineering in year 1991. He had spent the past three years building the Aero technology and platform and its fate was decided by nine Justices of the US Supreme Court on June 25th.

Moral :-  The tech industry has also to look at copyright issues, not just patents, before they begin any new business.

We need to watch out for further developments in India for cloud based and broadcasting business.

Spadika Jayaraj

Spadika is a student of the National Law School of India University, Bangalore. Apart from Intellectual Property Law, she is also interested in Law and Technology issues.

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