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Aereo at the Supreme Court: Justices Confused by Technology, Wary of Implications

At oral arguments on Tuesday, broadcasters appear to have an edge, but the justices want to know how their ruling will impact others in the tech sector.

 Aereo CEO Chet Kanojia - P 2013
Aereo CEO Chet Kanojia

WASHINGTON – U.S. Supreme Court hearings may never be televised -- not as long as comedians like Jon Stewart are around to make fun of them -- but on Tuesday, the justices of the high court were given the opportunity to get television.

Appearing on behalf of the broadcasting petitioners, attorney Paul Clement went first to make the case that Aereo represented an extreme threat to the TV industry and why the upstart digital company should be stopped from transmitting over-the-air broadcast signals to its customers' digital devices.

STORY: Aereo Fight: Supreme Court Justices Worried About Tech Impact of Decision

The attorney stood in the packed house of justice and began to tell the nine justices all about copyright holders' public performance rights. After all, it was that precise issue that had originally been presented to the high court. The justices had agreed to review a lower appellate circuit's decision, which held that because Aereo provides each of its subscribers individualized transmissions from distinct antennas, Aereo wasn't making a public performance but rather tens of thousands of private performances.

In a hearing that lasted an hour, the issue of public versus private performance was discussed, but seemingly in the context of the justices' worries about the consequences of their highly anticipated ruling in the Aereo case.

Justice Stephen Breyer was the most vocal on this topic, telling Clement that the existence of cloud computing made him "nervous" about taking the broadcasters' preferred route. Later, when attorney David Frederick appeared on behalf of Aereo, Breyer told him that he was disturbed by what Aereo was doing before making an admission that could be true of other justices as well.

"And then what disturbs me on the other side is I don't understand what the decision for you or against you when I write it is going to do to all kinds of other technologies," said Breyer. "I've read the briefs fairly carefully, and I'm still uncertain that I understand it well enough. That isn't your problem, but it might turn out to be."

STORY: Aereo Backstory: One Supreme Court Case, Three Recusals, One 'Unrecusal,' Much Uncertainty

Other Supreme Court justices expressed their own reticence about going too far.

Mentioning digital services like Dropbox and iCloud, Justice Sonia Sotomayor said she worried about how to define public performance and not sweep up others doing services like "passive storage." Justice Elena Kagan got back to something she addressed when she was Solicitor General when she advised the high court not to touch a precursor case (Cablevision) because it wasn't ripe for discussing fair use. Today, Kagan asked multiple questions about companies that allow its users to share content. And even Justice Samuel Alito demanded that Clement explain to him the differences between remote-storage DVRs and what Aereo was doing, so as to understand "what effect it will have on these other technologies."

Justice Anthony Kennedy said he had the same question.

"Does the difference have to do with the way in which the cable company that has the remote storage DVR system versus Aereo acquires the program in the first place?" asked Alito. "Does it have to do with the number of people who view this program that's been recorded?"

At certain times, Clement tried to dodge the questions, saying that they didn't need to be addressed today. Other times, Clement tried an analogy to distinguish between a service providing content to end-users and a service allowing customers to store.

"I think it's the difference between a car dealer and a valet parking service," said Clement. "I mean, if you look at it from 30,000 feet, you might think, hey, both of these things provide cars to the public. But if you looked at it more closely, you'd understand, well, if I show up at the car dealership without a car, I'm going to be able to get a car. If I show up at the valet parking service and I don't own a car, it's not going to end well for me."

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Few of the justices were as explicit about the dangers of a broad opinion against Aereo as Breyer was. The justice, for instance, talked about his concern that a decision against Aereo might destroy the First Sale Doctrine. But certainly, it seemed that the justices had gotten the message from Aereo's amici to tread cautiously.

That's not to say that Aereo is going to prevail.

In fact, if odds favored the broadcasters headed into the hearing thanks to the support from the U.S. government, they probably remain favorites to prevail now. Many of the justices registered an almost visceral dislike of a technology that mimics cable and satellite operators in some respects but without paying for content.

"Is there any reason you need 10,000 of them?" asked Chief Justice John Roberts, referring to Aereo's antenna farm, to Frederick. "I mean, there's no technological reason for you to have 10,000 dime-sized antenna, other than to get around the copyright laws."

"If every other transmitter does pay a royalty maybe it's under compulsory license and you are the only player so far that doesn't pay any royalties at any stage," said Justice Ruth Bader Ginsburg to Aereo's attorney. (Earlier, she asked U.S. Deputy Solictor General Malcolm Stewart whether legalizing Aereo would implicate the country's international treaty obligations.)

Justice Kennedy and Justice Antonin Scalia pushed Frederick to discuss how far Aereo might go: Could Aereo transmit distant signals? Could it strip out commercials?

ANALYSIS: Aereo to Face Uphill Battle in Supreme Court, Experts Say

Frederick ably deflected these questions and pushed the justices to see the wider implications of the ruling.

"Every time somebody stores something in the cloud, whether it's a song, a video image or the like, if it happens to be something that somebody else has stored in the cloud, the act of one person initiating it and perceiving it is going to implicate the public performance right," argued the attorney. "And that's why the cloud computing industry is freaked out about this case, because they've invested tens of billions of dollars on the notion that a user-specific, user-initiated copy when perceived by that person is a private performance and not a public performance."

Although Aereo was given a win at the 2nd Circuit Court of Appeals on the basis of individualized copies constituting private performances and not public performances, Frederick pressed some of the volitional issues -- in other words, what users are directing Aereo's system to do. In Frederick's opinion, Aereo's system merely is an equipment-leasing system and no copies made by their subscribers are exactly alike. A viewer who hits record a few seconds after another won't be getting the same thing.

"But that's the reason we call them copies, because they're the same," countered Justice Roberts to laughs from the viewers' gallery.

A ruling is expected sometime in June.

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner