Would it Matter if Aereo were a “Sham?”

Posted By on Apr 24, 2014 | 0 comments

Much has been made of how persistently Chief Justice John Roberts grilled Aereo at oral argument on Tuesday regarding the question of whether there was any reason, other than copyright compliance reasons, for their technological design.  (See our annotated review of oral argument.)

The question is, why was Roberts (and also Justices Ginsburg and Scalia) so interested in the answer to this question?  Would it matter if Aereo acknowledged that, no, there is no other reason?

Let’s start by stipulating that, ultimately, there is no other reason.  As Aereo has said, they are attempting to replicate the unquestionably copyright-compliant in-home approach, just made more efficient using the same transition of technology to the cloud that is used generally to make many technologies more efficient.  So they conceptually move the users’ old in-home equipment to their own facilities, and take advantage of many efficiencies that they can only achieve in a cloud implementation, but they stop short of implementing efficiencies that they believe would render them infringing of copyright.  For example, they don’t consolidate all of the individual antennas into a single antenna, and they don’t consolidate everybody’s individual recordings into a pool of shared recordings.

Does this mean they infringe?

The question arises because of the broadcasters’ view that Aereo’s system represents just a “device or process” to transmit public performances.  The broadcasters tell us that we don’t need to look at the technological details of how Aereo’s system actually functions.  We merely need to look at the system as if it were a black box and ask whether the overall function that it achieves is equivalent to transmission of a public performance.  If so, it’s just a “device or process.”

In the end, that would effectively demand the question of whether the fact that it is possible to implement a system in a way that infringes, there is effectively an obligation to implement it in a way that infringes (or it is tantamount to such an implementation).  Or perhaps we should limit that to only the case where it is possible to more efficiently implement a system in a way that infringes.

Perhaps it is tempting for some of the Justices to view the case in this fashion.

But the one other thing that all observers agreed upon was that many of the Justices were very concerned about potential consequences of the Aereo decision on a wide array of other technologies, and in particular, other cloud technologies.  Justice Breyer, for one, certainly isn’t going to be satisfied to just deem Aereo’s system a “device or process” and leave it at that, without understanding how that interacts with the rest of the transmit clause, and other technologies.

So let’s consider what this would mean to the cloud, by looking at cloud storage locker services.

Cloud storage lockers allocate users some amount of personal storage, hosted in a cloud system, and accessible from popular internet-connected devices.  Typically, users can store files including media files such as songs and videos, and then stream those media files back to themselves, wherever they are, and on any convenient device.  The storage is personal, so the files—and the ability to stream them—are not accessible to the public, but only to that particular user.

The Justices seem to agree that this is quintessential private performance and should not be considered to infringe copyright.

What the cloud storage locker services have done, conceptually, is to move the users’ old in-home storage (e.g., hard disks) to their own facilities, and take advantage of many efficiencies that they can achieve only in a cloud implementation, but they stop short of implementing efficiencies that they believe would render them infringing of copyright.

This sounds an awful lot like Aereo.

The cloud storage services could very easily recognize that a lot of the files that users store are going to be identical.  And given that, they could much more efficiently store a single copy of each of those identical files, and merely keep a list of which users conceptually have stored a copy of each file, without actually creating thousands or even millions of duplicate copies.

In fact, there are a number of services that do exactly this.  Each of Apple, Amazon and Google have implemented precisely this kind of technology, in order to be able to take advantage of the implementation efficiencies of using shared files.  In order to do so, they negotiated agreements with copyright owners to obtain a public performance license that enables them to do so.

What’s more, this approach wasn’t merely an after-the-fact optimization.  The very first service (or at least one of the first) of this nature, MP3.com, used this shared file approach, at a time before it was even economically feasible to use individualized storage in the cloud.

So the question is, does the fact that it’s clearly possible to use a more technologically efficient implementation render it obligatory for cloud storage locker providers to do such (or tantamount to such, even if they don’t)?

This is exactly the same question we asked of Aereo.

The answers are inextricably linked.  If Aereo were to be viewed as merely a “device or process” for public performances because it is possible, or because it would be more technologically efficient, to implement using shared antennas and shared files, then cloud storage lockers also must be merely a “device or process” for public performances, since they too would be more technologically efficient to implement using shared files.

In other words, if Aereo is just a “sham,” then so too are cloud storage lockers.

On the other hand, if cloud storage lockers that use individual storage to avoid copyright infringement are not merely a “sham,” then neither is Aereo.

If the Justices are concerned about impacting the cloud, they can’t escape those impacts by merely declaring Aereo’s technology a “sham” and calling it a “device or process” for transmitting public performances.

For a comprehensive review of Aereo Oral Argument, see Aereo Oral Argument Annotated: The Good, The Bad and The Ugly.  For complete coverage of Aereo, see our Understanding Aereo page.