In American Broadcasting Companies, Inc. et al. v. Aereo, Inc., the U.S. Supreme Court held today by a margin of 6 to 3 that an unlicensed online broadcast television retransmission service infringed copyrights owned by television networks. In reversing an earlier Second Circuit ruling, the Supreme Court noted that Aereo's system functioned almost identically to traditional cable television retransmission services, which engage in public performances as defined in the Copyright Act’s "Transmit Clause" and must therefore license those retransmissions from the copyright owners of the programs.

Aereo offers viewers of live "over-the-air" television broadcasts a website subscription, capturing network broadcasts via antennas and then retransmitting the broadcasts online and "live" to each customer's computer. Aereo used complex technology that connected customers to their "own" miniature television antennas and digital retransmission systems, and argued that the personalized technology made the retransmissions "private" performances instead of "public," and thus not subject to licensing by copyright owners.

Instead of being led by the technology as the Second Circuit arguably had been, the Supreme Court focused on Aereo's "commercial objective" and Congress's "regulatory objectives," asking: "Why should any of these technological differences matter?" The Supreme Court ruling may represent the view that technology cannot trump traditional copyright ownership principles by creative technological "loopholes" in the law.

The Court was careful to point out that today's holding applied only to the facts of the case, and did not have any specific negative implication regarding other technologies, such as cloud computing. The Court said it preferred to await a case in which those other technologies are "squarely presented."

Dissenting, Justice Antonin Scalia agreed that Aereo was taking advantage of technological loopholes, and even opined that what Aereo was doing "ought not to be allowed." But the dissent felt the majority was "plugging loopholes" in the law, which should be the domain of Congress, not the courts.

Ballard Spahr’s Intellectual Property Department includes copyright attorneys who help our clients develop, license, buy, and sell copyrighted works, both alone and through collaborative arrangements with our clients’ business partners. Our attorneys negotiate agreements for the commercialization of copyrighted works and derivative works, and devise and implement copyright policies. Our lawyers also litigate copyright infringement cases in courts throughout the country.

For more information, please contact Jamie B. Bischoff at 215.864.8207 or bischoff@ballardspahr.com.


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