Upcoming Supreme Court decision could shape future of internet video streaming

This year the U.S. Supreme Court will review the Second Circuit’s decision in American Broadcasting Companies, Inc. v. Aereo, Inc The result could affect how and when consumers can receive broadcast television over the Internet.

In its decision to grant certiorari, the Supreme Court agreed to consider the question:

Does a company “publicly perform” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet?

The case involves Aereo, Inc., which allows subscribers to watch broadcast television programs over the Internet for a monthly fee. Aereo’s system uses antennas and a remote hard drive to create individual copies of the programs. Users of Aereo can watch programs while they are being broadcast, or they can record them to watch at a later time, like an online DVR.

Several plaintiffs who held copyrights in programs broadcast on network television sued Aereo for copyright infringement, arguing that Aereo should not be permitted to transmit programs to its subscribers while the programs are still airing because the retransmission infringed their exclusive right to publicly perform their works. The plaintiffs also asserted that Aereo infringed their exclusive right of reproduction of the copyrighted programs, as well as contributory infringement.

The plaintiffs moved for a preliminary injunction, and the district court denied it. The plaintiffs appealed, and the U.S. Court of Appeals for the Federal Circuit affirmed. The plaintiffs have now appealed again to the Supreme Court, which is expected to consider the case in early 2014.

The Second Circuit’s decision found significant the fact that Aereo made individual copies of broadcasts. Rather than being a “public” performance, the Court found Aereo’s system to provide private retransmissions “since the entire chain of transmission from the time a signal is first received by Aereo to the time it generates an image the Aereo user sees has a potential audience of only one Aereo customer.”

The Supreme Court’s decision could be significant regardless of the result. If the Court upholds the decision, depending on the Court’s reasoning the case could make it difficult for over-the-air broadcasters to police against retransmission of their content online.  Or, if the Court reverses, the reasoning may prompt significant changes to the business models of Web-based (and perhaps even in-home) video transmission products.

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