With the Supreme Court鈥檚 Aereo decision finally out, the digital industry is struggling with its impact, if any, on various products and services, particularly with regard to cloud computing. However, the Supreme Court narrowly tailored the Aereo decision to services that closely resemble cable TV. Thus, suggestions that 鈥渢he sky is falling鈥 for cloud computing or other services that might re-transmit copyrighted content may be premature.
In American Broadcasting Cos., Inc. v. Aereo, Inc., 573 U. S. __ (2014), the Supreme Court held that Aereo infringed broadcasters鈥 copyrights by providing customers access to public TV programming over the Internet via individualized antennas owned and operated by Aereo. Aereo鈥檚 business is built around two products: mini-antennas assigned to each customer and stored at Aereo鈥檚 warehouses, and a digital video recorder with a large storage capacity on Aereo鈥檚 servers, which acts as a private cloud service. At a user鈥檚 request, Aereo captures the signal from a specific over-the-air television broadcast, saves the data into a user specific folder on Aereo鈥檚 server, and then streams it to a user鈥檚 computer, mobile phone or other device with only a few seconds of delay. If the user wishes to watch the recorded program at a later time, Aereo stores the recording on its server and streams it to the customer at a requested time.
The essence of the legal issue in Aereo was whether Aereo鈥檚 capturing and streaming of local TV programs to its users constituted a 鈥減ublic performance鈥 which, without authorization, would violate the broadcasters鈥 copyrights. The Copyright Act of 1976 clarified that 鈥渢ransmission鈥 of a copyrighted work to the public 鈥渂y means of any device or process鈥 constitutes public performance of that work and further requires cable companies to pay broadcasters for the transmission of their programing to subscribers. Despite differences in the respective technologies, the Supreme Court held that Aereo鈥檚 streaming services were very similar to the transmission services of cable companies and therefore, too, constituted 鈥減ublic performance.鈥 Because Aereo did not obtain licenses from the broadcasters, its streaming service was held to infringe. (For a more detailed overview of the Supreme Court鈥檚 decision in Aereo, see .)
The Aereo decision is a serious blow to Aereo and other providers who transmit, in real or near-real time, over-the-air television broadcasts to their customers without paying broadcasters. Mindful of the potential implications of its decision for the digital industry, the Supreme Court tried to limit its ruling to technologies that closely resemble cable television transmission and expressly excluded Aereo鈥檚 other services, i.e., the remote digital video recorder and storage functionality, from the reach of its ruling. Yet, the Court left many questions unanswered, such as what it means to perform digital content, when such performance is public, or how the 鈥渇air use鈥 doctrine might affect the analysis.
Because of the decision鈥檚 narrow focus, digital content delivery services such as cloud based storage and digital video recorder (DVR) technologies should not be directly affected. For example, the Court expressly carved out from the scope of the Aereo decision services 鈥渨here the user 鈥 pays primarily for something other than the transmission of copyrighted works, such as the remote storage of a content.鈥 As long as the stored content is owned or has been legally acquired by the user, storing it remotely and playing it back should not raise copyright concerns under Aereo.
Similarly, remote digital video recording services seem not to be directly implicated by Aereo. Since the 2008 ruling by the Second Circuit in Cartoon Network LP v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008), cloud recording and storage services have been deemed compliant with copyright law. At issue in that case was Cablevision鈥檚 service that allowed customers to record TV programming for later viewing using Cablevision鈥檚 remote storage digital video recording devices. The Second Circuit held that Cablevision did not violate the broadcasters鈥 copyrights. Despite the similarities of Cablevision鈥檚 services to those of Aereo, the Supreme Court did not overrule the Second Circuit鈥檚 ruling in Cablevision and instead expressly exempted from the reach of its decision 鈥淸q]uestions involving cloud computing, [remote storage] DVRs and other novel technologies not before the Court.鈥
While time and future litigations will show the whole impact of the Aereo ruling, for now the major players in the cloud computing industry should be able to breathe a sigh of relief.