The Aereo Decision & Cloud Computing

In American Broadcasting Companies, Inc. v. Aereo, Inc. the U.S. Supreme Court recently held that Aereo's service, which converts and subsequently (re)transmits over-the-air television broadcasts in near real time to Aereo's customers via the internet, effectively constitutes "transmitting performances of copyrighted works to the public", which in turn requires Aereo to pay over-the-air broadcasters a fee for doing so, pursuant to the Copyright Act.

Although the ruling may seem fairly limited, and according to the text of the decision the ruling is indeed fairly limited, various commentators question the impact of the ruling on copyright law in the cloud computing context, including the following:

The problem is that the court never provides clear criteria for this "looks-like-cable-TV" rule. As Justice Scalia puts it in his dissent, "it will take years, perhaps decades, to determine which automated systems now in existence are governed by the traditional volitional-conduct test and which get the Aereo treatment. (And automated systems now in contemplation will have to take their chances.)"

...

The Supreme Court says its ruling shouldn't dramatically change the legal status of other technologies. "We have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content," the court said, concluding that those issues should be dealt with in future cases.

In other words, although the decision did settle a fairly limited issue, i.e. if (re)transmitting broadcasts in near-real time constitutes "transmitting performances of copyrighted works to the public", it did not address the much broader issue of third-party recording/gathering and storage of copyrighted works for later on-demand consumption by users.

Although service providers that permit users to upload content, which may or may not be infringing, can take some solace in the provisions of the Digital Millennium Copyright Act ("DMCA"), the law is still quite unsettled for those service providers that remotely gather content for later consumption by service users1.

This brief overview of some important considerations associated with American Broadcasting Companies, Inc. v. Aereo, Inc. is by no means comprehensive. Always seek the advice of a competent professional when making important financial and legal decisions.

1 In 2008, the Second Circuit Court of Appeals addressed the issue of a cable company remotely storing recorded for its users in Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)

Steve Cook is an attorney at Cook & Cook. Although his office is located in Mesa, Arizona, he represents clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.

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