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Aereo to Face Uphill Battle in Supreme Court, Experts Say (Analysis)

Nonetheless, the company's challenge, several experts agreed, will be to control the larger narrative.

"While perhaps technologically innovative, Aereo's mode of operation could well strike the Justices as too clever by half," said Shah. "If so, I would expect Aereo's counsel to be on the hot seat at argument."

For a preview, flash back to a Ninth Circuit case last August involving a similar service, Filmon, formerly called Aereokiller: a judge remarked to the company’s lawyer, "your system is pretty damn clever... it's a system that was arrived at for the sole purpose of avoiding the statute" – but he then added, "maybe you have." The Ninth Circuit has not yet ruled, and is presumably waiting until the Supreme Court does.

"From a thematic standpoint," Shah continued, "it will be important for Aereo to provide a convincing counter-narrative to that of a clever circumventer. It needs to persuade the Court that it is the precisely the type of innovator – vital to our modern technology economy – that our laws should be protecting from stifling legal threats by established media giants desperate to retain control of their age-old broadcasting dominance." 

(A starting point for that narrative might be the fact that the company has 14 patent applications pending, a fact oddly omitted from its brief and most news reports.)

"You’re looking to craft a larger narrative," agreed Williams & Connolly's Kannon Shanmugam, who has argued 14 cases before the Court and clerked for Justice Antonin Scalia. In the Supreme Court, advocates are "much more concerned that (their) position makes sense as a matter of first principles." Shanmugam represents networks, but is not involved in the Aereo case.

"Which narrative prevails may well determine the outcome in this case," concluded Shah.

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In legal terms, the broadcaster's brief says the question presented by the case is "Whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet." Aereo’s brief, in contrast, frames the question as "Whether Aereo 'performs publicly' by supplying remote equipment that allows a consumer to tune an individual, remotely located antenna to a publicly accessible, over-the-air broadcast television signal, use a remote digital video recorder to make a personal recording from that signal, and then watch that recording."

Aereo has tied its fortunes to legal precedents supporting both set-top recorders and newer RS-DVRs, which store and transmit recorded content from a central server. The company warns that an adverse ruling would imperil RS-DVRs and a burgeoning industry, cloud computing – the ever more common movement of data and processing capabilities to Internet-based servers as seen in services like Apple iCloud, Google Docs and Microsoft's enterprise-centric Azure. Tech and telecom industry associations are concerned enough that they filed urgent briefs echoing Aereo's arguments, although some stopped short of endorsing Aereo itself. The prospect of stalling the progress of a multi-billion dollar technology is bound to give the Justices pause.

One way or another, the Court will have to grapple with precedent. "The big question likely to sway the judges is whether  there is a principled legal distinction between the Aereo case and Cablevision (which is a lot like the Sony Betamax case from years ago)," said Berkeley's Samuelson, citing several of the authorities Aereo is relying on. "Most (of the Justices) will want to preserve Sony as they did in the Grokster case."

Not for nothing did Aereo first roll out in New York, home of the Second Circuit. That court's Cablevision ruling upheld the legality of RS-DVRs and became the foundation for its pro-Aereo decision now on appeal. Grokster imposed liability on companies that take "affirmative steps... to foster infringement." All of these decisions cite back to the Supreme Court’s 1982 landmark Sony v. Universal City Studios, which upheld the legality of VCRs notwithstanding a claim by Hollywood that the devices would destroy the entertainment industry. As we now know, the opposite happened – home video became a vital cash cow – and the digerati have been skeptical ever since of Hollywood arguments against new technology.

The Supreme Court case has prompted a flood of about 40 amicus briefs, all of which agree only that the stakes are high. NFL and Major League Baseball threaten that Aereo will drive sports off the air, entertainment unions are concerned that Aereo will devalue content and thereby cost jobs and depress wages, economist-types argue variously that content companies or tech innovators have spent vast sums in reliance on the law as they think it is, consumer groups say Aereo will help decrease cable prices, large broadcasters assert that Aereo will undermine their ability to finance programming, while small broadcasters and cable companies believe Aereo will foster freedom of choice, and law professors on both sides implore the Justices to just get it right.

Bombarded with dire warnings from all directions, the Court will be mindful of the consequences of whatever decision it reaches. If Aereo wins, there will be more proceedings below and probably a second appeal, perhaps again to the Supreme Court. That's because the current appeal is from a preliminary injunction hearing, not a trial, and the broadcasters have other, albeit perhaps weaker, copyright claims still pending. The plaintiffs, in other words, might get a second bite at the apple – and that prospect may make the Court more willing to rule against them now if that’s the result that logic dictates. Indeed, a brief by law professors presses the Court to take this very option.

If Aereo loses, on the other hand, the subsequent proceedings below would probably be all but foretold by the Court's decision.

Either way, the Justices will presumably want to preserve RS-DVRs as well as cloud computing, but "there’s some risk that if Aereo loses, the Cablevision decision goes down with the ship," said Greg Castanias, a Jones Day intellectual property and Supreme Court litigator. One possibility may be that the Court holds against Aereo, overrules Cablevision, but upholds RS-DVR’s on different grounds. But what those grounds would be is unclear.

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Alternately, the Court might preserve Cablevision but try to distinguish between RS-DVRs and Aereo. That too may be difficult. The Solicitor General’s office's brief points out one difference: "In Cablevision, the cable company already possessed the necessary licenses to transmit copyrighted television programs to its subscribers." But that distinction is hardly compelling, because Cablevision didn't possess licenses for the challenged technology, which was its RS-DVR, not its linear cable system. In addition, the presence or absence of a license sheds little obvious light on the issue at hand – whether a performance is public or private – and seems to miss Aereo's point, which is that in its view no license is required. Another characteristic noted in the brief – that Aereo’s service "provides a means by which consumers can gain access to copyrighted content in the first instance" – differentiates Aereo from much cloud computing, but not from cable companies (nor from Amazon content lockers).

Cablevision itself has submitted an amicus brief, which vigorously defends the eponymous decision with reasoning that seems to apply equally well to Aereo, then limps to the finish line with an argument that Aereo "so closely replicates the essential function" of a cable system that the Court should disregard the DVR elements of Aereo's technology and deny it the benefit of the RS-DVR precedent. That may provide scant guidance to judges and technologists on where the line is drawn and sounds uncomfortably like the late Justice Potter Stewart’s infamous definition of hard core pornography, often derided as vague and unworkable: "I know it when I see it."

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Judges are supposed to make principled distinctions, but in this case "I don’t think you can make it principled," said Post. And maybe it won't be. There's something different about the Supreme Court, after all: although Congress can always revise the copyright statute if it sees the need and musters the will, there is no higher court to second guess the Justices.

"It would be possible to resolve this case against Aereo and pretend that cloud services (and possibly RS-DVRs) are different," said Georgetown's Tushnet, a copyright expert who clerked for then-Justice David Souter. "I am hoping either for a win for Aereo or a loss that pretends, in some way, that Aereo is different from other online innovators. One benefit of being the Supreme Court is that you get to make distinctions that other bodies might not be able to make."

Email: jhandel99 at gmail dot com

Twitter: @jhandel