What the Aereo Decision Means for Tech and Cloud Computing
As Aereo gropes for a way forward after a U.S. Supreme Court ruling all but shuttered it on June 25, most experts who have followed the case do not seem overly concerned that the decision could have broader repercussions for the tech industry.
Most intellectual-property and technology lawyers I've spoken with since the decision have been quick to praise the majority opinion, written by Justice Stephen Breyer, as having such an extraordinarily narrow focus that it negates interpretations that could stifle cloud-computing companies that facilitate sharing of copyrighted material, such as movies or songs. Such companies are among the hottest pre-IPO tech companies going, and include the likes of Box and Dropbox.
"I think he wrote an opinion that is narrowly tailored to the facts, and will not provide much ammunition to the broadcasters or anyone else to target tech companies that are not mimicking cable TV," said Andrew Baum, a partner at law firm Foley & Lardner in New York, who specializes in intellectual property. Aereo, of course, came up with a workaround to cable TV, by "renting" its customers dime-sized antennas that plucked broadcast TV channels like CBS and NBC as old-school rooftop antennas once did. (The first statement from the company released after the Supreme Court's decision on June 25 revealed a resolve to carry on, albeit without many specifics. But on June 28, the company announced it would "pause our operations temporarily," essentially effective immediately.)
An encouraging sign came two months ago, during oral arguments, when multiple justices expressed concern that a broad ruling could unintentionally affect online file-sharing or storage. And the majority opinion made ample note of areas it was not concerned with dictating.
"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 decision read, suggesting that DVR-type storage-for-playback services are exempted from the decision.
Others say: not so fast. That area not addressed--DVR-in-the-cloud--may need to be sussed out by future court cases, because currently it's a legal grey area.
Who is directly affected? Some services provided by FilmOn, an Aereo competitor in the United States and also operates in Europe, which has also streamed network content over the Internet to customers.
Aereo contends there is a lot to digest from in the decision, and its dissenting opinion, made by three justices, who did not feel Aereo's service in fact constituted an act of "public broadcast" of copyrighted material.
But others think the fear of a ruling stifling cloud-computing companies was always overplayed, and now is extremely low.
"It was 'Chicken Little the sky is falling!'" says Andrew Goldstein, a partner at the firm Freeborn & Peters. "Aereo rallied the tech community behind them and raised the fears, but the majority opinion is as narrow as it could be, and as deferential as it could be to future technology."
And David Wittenstein, a partner at Cooley LLP in Washington, D.C., said the court signaled it would be more sympathetic to other cloud-based services than it was to Aereo, which it regarded as having exploited a legal loophole.
"With respect to Aereo, I think that the cloud-services argument was just an attempt to improve their position," he said. "They recognized that they themselves did not have a sympathetic business model, but that people would not be happy to have other cloud-computing operators shut down."
The case will be back in the hands of the New York District Court soon, where an injunction against Aereo is slated to be issued--unless a settlement happens first. And beyond that timeline, Congress could still decide to take up the issue, as it did with the Millennium Copyright Act in 1998, notes Jason Bloom, a partner at the law firm Haynes and Boone.
"If I was a certain kind of cloud computing company that allowed streaming of videos or music, or remote storage that provided DVR-like playback, I might be a little bit nervous," Bloom said. "They could be open to [lawsuits], and Congress may have to make long-term decisions there."
Of course, if we have to wait for Congress to act, waiting for clarity will be a long-term issue itself.
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.