Aereo was built around a technicality. Some have called it a gimmick—Judge Chin called it a “Rube Goldberg contraption”—but here it is: if your gut reaction is “This is ridiculous,” it’s because copyright law is ridiculous. Aereo relied on the law to build its business. Today, the Supreme Court said that wasn’t enough.
The Cablevision “exception”
In 2008, cable networks sued Cablevision over what was essentially a cloud-based TiVo. In presenting their case, Cablevision analogized their service to a long-distance VCR. This struck a chord with the Second Circuit Court of Appeals—or at least, made it seem very, very awkward to rule against Cablevision.
The thing is, in 1984, the Supreme Court ruled that the manufacturers of the Sony Betamax (a device that was later succeeded in the market by VHS technology) were not liable for copyright infringement, since the Betamax was capable of “substantially noninfringing uses.” The Cablevision case is about an entirely different theory of liability, but you can see how the comparison to the VCR made the idea of a verdict against Cablevision feel wrong.
In writing their decision, the Second Circuit created a bit of a legal fiction. Sure, the networks’ copyrighted content was getting copied when Cablevision wrote the video files to their remote servers, but since they were doing it at the direction of their consumers, it wasn’t Cablevision that was doing the copying.
It’s not that Cablevision is an incorrect reading of copyright law, it’s that there’s enough wiggle room in the law to read it both ways. But there’s a stark difference between a world with Cablevision and a world without. An entire industry of cloud-based services flourished under this reading of the law. Timothy B. Lee writes:
If you upload a pirated movie to your Dropbox account or fill your Google Music account with pirated music, you might be guilty of copyright infringement. But Dropbox and Google don't have to worry. It's probably not a coincidence that cloud music services blossomed a couple of years after the Cablevision decision.
On the internet, everything is copies and performances
The Copyright Act is primarily premised on the idea of “copies.” As we all know, the internet has wreaked havoc with that distinction. Just moving a file from one place to another technically means a copy has been made. Even streaming a video makes temporary buffer copies. The law has had to adjust little by little, making exceptions one after another in order to keep itself from looking ridiculous.
One of the bizarre things that happened as copyright law went digital is that in streaming cases, rights-holders would claim that both an infringing copy had been made and that an infringing performance had occurred—just through the single act of streaming. (The exclusive right to perform is also protected under the Copyright Act). Where, in the non-digital world, would this logic also apply? How we understand the legal meanings of “copies” and “performances” on the internet is a mess.
And is it any wonder? The law was written in the 1970s. Its fundamental premises might have worked great in the world of bookshops, movie theaters, and record stores, but it wasn’t built for what the world looks like today. The best we can do is keep tweaking it, hoping that we don’t get ridiculous outcomes. That was what Cablevision was about.
A limited holding, but not limited enough
The Supreme Court knew it was delving into dangerous territory, which makes this decision all the more heart-breaking. The court tried to make its decision as low-impact as possible, but it’s not enough. James Grimmelmann says in Vox, “The reasoning of Cablevision is dead.” The Court didn’t explicitly overrule Cablevision. In fact, the majority opinion does not address it at all, even though it is the core of this case. But this is damage enough. Even if a cloud service can succeed in court despite Aereo, the mere fact that Aereo exists paints a target on them all.
Just like Cablevision encouraged innovation, Aereo will chill it. The motto of Silicon Valley might be “Move fast and break things,” but as the last couple of decades have demonstrated with respect to music, entrepreneurs would rather move fast and break things in sectors that lawsuits haven't turned into scorched earth.
Aereo will probably result in startups being sued into the ground. But that’s not the real tragedy. We will never know the technologies that could have existed, the services that could have been. We will never know the internet we lost today.
Video: Aereo's Chet Kanojia speaks about why he started Aereo instead of retiring after his prior success:
