The US Supreme Court has ruled against TV-streaming biz Aereo in its copyright case with US broadcasters.
Aereo essentially has data centers in ten US cities, each fitted with miniature antennas and hardware that pick up broadcast TV signals. Programs and movies are stored in a cloud-based digital video recorder (DVR), which streams material over the internet to subscribers.
The company argues that this is no different from an individual using their own aerial to pick up transmissions.
But, crucially, the Supreme Court decided Aereo is not merely an equipment provider, but a streaming service rebroadcasting content from networks.
"Aereo performs the petitioners' works publicly within the meaning of the Transmit Clause," the court held. "Aereo 'performs', it does not merely supply equipment that allows others to do so."
The case had pitted the American Broadcasting Company against Aereo Inc in what was considered a major challenge to how copyrighted content could be broadcast over streaming services.
Aereo had argued that its small antennas allowed users who accessed its streaming service to legitimately get broadcasts over the air, meaning that the company was not rebroadcasting any content, but rather providing equipment and cloud DVR service to folks.
The television networks argued, successfully, that Aereo was taking broadcasts without paying and retransmitting to users for a charge.
At the heart of the matter was the argument over public versus private performance. The two sides debated whether Aereo was simply enabling users to view an allowed private airing of broadcasts or whether it was in effect capturing and retransmitting content for a public rebroadcast.
"Aereo is not simply an equipment provider," the court said.
"Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast."
The majority opinion was declared by Chief Justice Roberts along with Justices Ginsburg, Sotomayor, Kagan and Breyer, who wrote the opinion. Dissenting Justices Scalia, Thomas and Alito argued that the Aereo service falls into a gray area and that the decision puts in place "an improvised standard that will sow confusion for years to come."
"Aereo does not 'perform' for the sole and simple reason that it does not make the choice of content," the dissenting trio wrote.
"And because Aereo does not perform, it cannot be held directly liable for infringing on the networks' public performance right."
Not surprisingly, Aereo backed the dissenting opinion. CEO and founder Chet Kanojia said the decision was a "massive setback for the American consumer".
"We’ve said all along that we worked diligently to create a technology that complies with the law, but today’s decision clearly states that how the technology works does not matter," Kanojia said.
"This sends a chilling message to the technology industry." ®