U.S. Supreme Court Will Hear Aereo Dispute

US Supreme Court Building - H 2012
Getty Images

US Supreme Court Building - H 2012

The U.S. Supreme Court has agreed to review television broadcasters' bid to stop Aereo.

The upstart service which uses an antennae farm to capture over-the-air TV signals and transmits broadcasts to subscribers' digital devices has been in a legal fight since launching in March, 2012.

After being denied an injunction at the 2nd Circuit, broadcasters asked the high court to review whether Aereo's system is a violation of their public performance rights. Aereo, which contends that its service is "private" in nature, had agreed that the case should be taken up to avoid needless litigation around the nation.

CBS, NBC, Fox and ABC are among the broadcasters arguing that the 2nd Circuit ruling "threatens to upend" the billions of dollars that the TV industry has invested in programming "by blessing a business model that retransmits 'live TV' to paying customers without obtaining any authorization or paying a penny to the copyright owners."

The case is arguably the biggest entertainment industry case to be considered by the nine Supreme Court justices since 2005, when the court considered whether Grokster, the owner of file sharing technology, should be held liable for their users' copyright infringements.

This time, Congress' intent in establishing the transmit clause of the Copyright Act will be examined.

Aereo has fought back a preliminary injunction in large part on precedent from a 2008 2nd Circuit decision concerning Cablevision's remote-storage DVR that held that because "each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber ... such transmissions are not performances 'to the public.'"

Similarly, Aereo believes that its service is not "to the public" because after capturing public broadcasts, unique copies for each customer are transmitted distinctly. To hold such transmissions as "public performances," believe Aereo and its supporters, would not only threaten Aereo but many new technologies in the cloud computing and storage realm.

Broadcasters don't believe the ramifications of the case go that far. They assert that a decision to stop Aereo just means a stop to unlicensed digital streaming of TV broadcasts. Still, they are undoubtedly pleased that the Supreme Court will tackle the topic of public vs. private less than five years after a review of the Cablevision case was denied. An oral hearing will be held sometime this spring.

“We believe that Aereo’s business model, and similar offerings that operate on the same principle, are built on stealing the creative content of others," says CBS in a statement. "We are pleased that our case will be heard and we look forward to having our day in court.”

"We are confident the Court will recognize that this has never been about stifling new video distribution technologies, but has always been about stopping a copyright violator who redistributes television programming without permission or compensation," adds Fox.

In the past, broadcasters have signaled that they intend to go pay-only and stop transmitting on public airwaves should they lose at the high court.

Aereo CEO Chet Kanojia said his company is looking forward to presenting its case.

"We believe that consumers have a right to use an antenna to access over-the-air television and to make personal recordings of those broadcasts," he said. "The broadcasters are asking the Court to deny consumers the ability to use the cloud to access a more modern-day television antenna and DVR.  If the broadcasters succeed, the consequences to consumers and the cloud industry are chilling."

E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner