...future cases, involving different technologies, will require fact-specific inquiry into a number of issues, including: whether a specific content provider “performs” a copyrighted work; if a transmitted image or sound is “contemporaneously perceptible”; whether the public performance right is implicated when the service at issue is not streaming of data, but merely storage; and if the fair use doctrine applies.

The Supreme Court recently issued its opinion in American Broadcasting Companies Inc. et. al. v. Aereo Inc., finding that Aereo’s unauthorized content streaming service infringed the copyrights of television broadcasters, producers, marketers, and distributors. While the decision is ostensibly limited to Aereo’s particular service, it offers some guidance on how broadcast networks, cable-alternative companies like Aereo, and other content providers can innovate within the bounds of copyright law.

The 6-3 decision, reversing the Second Circuit’s denial of a preliminary injunction, concludes that the technological configuration of Aereo’s system does not shield the company from copyright liability. Citing Congress’ intent that the public performance right and the Transmit Clause of the Copyright Act apply to cable companies, and classifying Aereo as “substantially similar” to a cable company, the Court determined that by transmitting the petitioners’ copyrighted programs, Aereo “performs” the works.

As to “public performance”, Aereo contended that, even if transmissions were found to constitute “performances”, the  functionality of its service would render each performance private, not public. Aereo utilizes an “antenna farm” consisting of thousands of dime-sized antennas, each capable of capturing and transmitting one signal to one subscriber. Aereo argued that because recordings are made only at the behest of individual subscribers, and sent directly to those subscribers, Aereo does not itself infringe the public performance right.

The decision clarifies that the manner of delivery is not dispositive of whether a performance is public or private.

However, the Court was not persuaded. Rather, the decision clarifies that the manner of delivery is not dispositive of whether a performance is public or private. The Court stated that “when an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it transmits a performance to them regardless of the number of discrete communications it makes.”  ABC v. Aereo, Slip Op. at 14.

In dissent, Justice Scalia, joined by Justices Thomas and Alito, criticized the majority’s choice to base Aereo’s illegality on its similarity to traditional cable companies, describing the argument as “guilt by resemblance.”  Although the dissenting justices agreed that Aereo’s services “ought not to be allowed”, they would rest the holding on secondary liability, or alternatively, Aereo’s potential primary and secondary liability for violating the petitioners’ reproduction rights. Id., SCALIA, J., dissenting, at 7, 12.

Notably, the Court cautioned that the Aereo holding is limited in scope, and that the decision does not expressly consider how the public performance right relates to other services, namely, cloud-based content storage. The Court further explains that future cases, involving different technologies, will require fact-specific inquiry into a number of issues, including:  whether a specific content provider “performs” a copyrighted work; if a transmitted image or sound is “contemporaneously perceptible”; whether the public performance right is implicated when the service at issue is not streaming of data, but merely storage; and if the fair use doctrine applies. While the Aereo decision will likely bar Aereo and similar instant-streaming services from operating in their current form, it leaves the door open for innovation.