ABC v. Aereo: What The Supreme Court Decided - And What It Did Not

On June 25, 2014, a 6-3 majority of the Supreme Court held that Aereo's service that allows customers to view over-the-air TV broadcasts via the internet violated the public performance right under the Copyright Act. Applying what the dissent characterized as "an improvised standard ('looks-like-cable-TV')," the majority held that Aereo infringed copyrights owned by television networks. The Court was extraordinarily careful in attempting to restrain the reach of its holding, leaving many issues as to different technologies unanswered. But however those questions are resolved, the Supreme Court's decision appears likely to doom the "view" functionality of Aereo's internet/mobile device transmission service. American Broadcasting Companies v. Aereo, Inc. (U.S., No. 13-461, June 25, 2014).

The bottom line: Notwithstanding Aereo's deployment of a complex transmission system carefully designed to avoid copyright infringement, the High Court found Aereo liable for direct infringement on the ground that it was Aereo, not merely its users, that had "performed" the copyrighted works, and that Aereo's performances were "public." That conclusion was substantially driven by the Court's sense that Aereo's viewing service was functionally equivalent to cable TV and therefore that a contrary result would be inconsistent with Congress's intent, when it amended the Copyright Act in 1976, to apply copyright restrictions to cable.

Although the outcome may be a huge defeat for defendant Aereo, its ultimate implications for other internet-based services will be much debated. On the one hand, the majority sought to downplay fears that its "limited holding" would discourage the emergence or use of new technologies such as cloud computing, expressly disclaiming any conclusion as to remote DVR or cloud storage services. On the other hand, the dissent argued that the Court's analysis would sow confusion and generate uncertainty regarding the application of the well-established "volitional act" standard and the distinction between direct and secondary liability for copyright infringement. Stay tuned for a more detailed Fenwick & West program that addresses these issues after the dust settles, in July 2014.

Factual Background

The plaintiffs included television networks that broadcast copyrighted programs over the public airwaves for all to see. Defendant Aereo set up an automated system that allowed its subscribers to receive, on internet-connected devices, such programming when they selected it.

After a subscriber chose a television program at Aereo's website, that...