<i>Aereo</i> Analysis: What Does the U.S. Sup. Ct.'s Ruling Mean?

The bottom line: Notwithstanding Aereo's deployment of a complex transmission system carefully designed to avoid copyright infringement, the Supreme Court found Aereo liable for direct infringement on the ground that Aereo had “performed” the copyrighted works and that Aereo's performances were “public.” That conclusion was substantially driven by the court's sense that Aereo's viewing service was functionally equivalent to cable TV, and therefore a contrary result would be inconsistent with Congress's intent when it amended the Copyright Act in 1976 to apply copyright restrictions to cable.

Although the outcome was a huge defeat for defendant Aereo, its ultimate implications for other Internet-based services will be much debated. On the one hand, the majority sought to downplay fears that its “limited holding” would discourage the emergence or use of new technologies such as cloud computing, expressly disclaiming any conclusions as to remote DVR or cloud storage services. On the other hand, the dissent argued that the court's analysis would sow confusion and generate uncertainty regarding the application of the well-established “volitional act” standard and the distinction between direct and secondary liability for copyright infringement.