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Supreme Court Rules Against Aereo Streaming Service 484

Posted by Unknown Lamer
from the tiny-antennas-not-tiny-enough dept.
New submitter Last_Available_Usern (756093) writes that the Aereo saga is likely over. "The U.S. Supreme Court today dealt a potentially fatal blow to Aereo, an Internet service that allows customers to watch broadcast TV programs on mobile devices by renting a small DVR and antennas (in supported cities) to record and then retransmit local programming on-demand over the internet." Ruling (PDF). Aereo was found to be publicly transmitting, according to SCOTUSBlog "The essence of the Aereo ruling is that Aereo is equivalent to a cable company, not merely an equipment provider."
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Supreme Court Rules Against Aereo Streaming Service

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  • by Penguinisto (415985) on Wednesday June 25, 2014 @10:57AM (#47314967) Journal

    Justice Stephen Breyer, writing for the majority, stressed that it was a limited decision that will not “discourage the emergence or use of different kinds of technologies.”

    ...and he's certain of that - how?

    • by Anonymous Coward on Wednesday June 25, 2014 @11:13AM (#47315133)

      Because he's a Supreme and you are... sitting in your mom's basement?

      • Re: (Score:3, Insightful)

        by jedidiah (1196)

        His black robe doesn't allow him to alter the natural laws of the universe or the basic principle that a rule once made applies to EVERYONE.

        Declaring that a file transferred to a single person constitutes a "public performance" applies to EVERYONE.

        That's the way the law works.

        That's what Aereo was depending on. They exploited the rules created by another SCOTUS precedent. They abided by those rules.

        The lower courts will apply this rule. It will have to be litigated all the way to the supremes before they ca

    • by Thanshin (1188877) on Wednesday June 25, 2014 @11:14AM (#47315135)

      Three options :
      A - By divine revelation.
      B - By using his time machine.
      C - He isn't certain, but doesn't care.

      I've personally decided to believe B because I'm a optimistic atheist.

      • by DarkOx (621550) on Wednesday June 25, 2014 @11:19AM (#47315189) Journal

        D - The court actually does mean for the ruling to be narrow; does not see this case as setting a strong precedent and will grant certiorari for what might otherwise be seen as similar media delivery technology cases

        • by Thanshin (1188877)

          I was trying to stick to options within the realm of probability, albeit thinly.

        • by Solandri (704621) on Wednesday June 25, 2014 @12:39PM (#47316171)
          I haven't read through the ruling, but I suspect they just applied the "quacks like a duck" rule. Regardless of the technical nuances, Aereo operates like a rebroadcaster (takes services subscriptions, forwards broadcast transmissions to them). Therefore it must be a rebroadcaster.

          I suspect the ruling may have been different if Aereo had required customers to buy their own antennas, and only charged an installation fee to host the antenna and monthly hardware insurance fee to replace broken ones. To draw from the analogy someone posted below, that'd be like you buying your own antenna and asking to place it on your neighbor's property because he sits on top of the hill blocking your house. Dynamically assigning a micro-antenna to a subscriber on-demand just blurs the line. (The fact that all this is technically stupid when you could just use a single antenna is simply a consequence of Copyright law creating artificial scarcity and giving content producers a monopoly on distribution.)
      • And SCOTUS 2: Justices In Time was a pretty good movie.

        • by MrLint (519792) on Wednesday June 25, 2014 @12:22PM (#47315999) Journal

          As long as the trailer and voiceover bits are done by Nina Totenberg

          • by Quirkz (1206400)

            It may be that her pieces are usually interesting because Supreme Court decisions are almost always important material, but I'm always genuinely enthusiastic every time Nina Totenberg has air time. She does a great job of distilling the information. As I was reading this article today I was looking forward to my drive home and the segment that will surely air.

    • by Beeftopia (1846720) on Wednesday June 25, 2014 @11:18AM (#47315177)

      He's not: "As Stephen Breyer, one of the Supreme Court justices, said in this week’s hearing, “What disturbs me is I don’t understand what the decision for you or against you is going to do to all kinds of other technologies.” [economist.com]

      It seems to me that judges should be ruling based on the law, not perceived ancillary social influences. That's why we have three branches of government: legislative, executive and judicial. Legislative makes the law, and judicial merely determines if actions are legal or not legal? Quaint, no?

      • by bluefoxlucid (723572) on Wednesday June 25, 2014 @11:28AM (#47315305) Journal

        The supreme court is different. They're supposed to look at issues and decide if this is how our country was supposed to work. If certain actions criminalize a religion without just cause (i.e. the criminalized set of acts is representative of a harmless behavior, or a set of non-criminal acts that only happen under this religion in this way), the Supreme Court may interpret not only that religion is a shield (i.e. Peyote for shaman religions), but also that the law has no other reasonable purpose and is thus wholly invalid so it can fuck off.

        That doesn't mean they always do a good job of it; I only intend that the supreme court is tasked with interpreting the standing of the law itself as well as the standing of the law against a person.

        • If certain actions criminalize a religion without just cause (i.e. the criminalized set of acts is representative of a harmless behavior, or a set of non-criminal acts that only happen under this religion in this way)

          It seems to me that if a reasonable interpretation of a law leads to negative unintended consequences, it then becomes the legislative branch's duty to rectify it, not the judicial branch's. Creating an incoherent ruling merely to achieve a desired social outcome severely undercuts the separat

          • It seems to me that if a reasonable interpretation of a law leads to negative unintended consequences, it then becomes the legislative branch's duty to rectify it, not the judicial branch's.

            Rectifying and clarifying the interpretation of the law is basically the job description of the judicial branch as what constitutes reasonable is not only not black and white, but changes over time as technology and social expectations change. That's what makes the whole system of checks and balances work in the first p

        • Also, it seems to me that making rulings in order to achieve desired social outcomes rather than based on reasonable interpretations of the law undermines the rule of law.

      • by sjbe (173966) on Wednesday June 25, 2014 @12:02PM (#47315773)

        It seems to me that judges should be ruling based on the law, not perceived ancillary social influences.

        For lower courts that is (largely) true but for SCOTUS it is not. The Constitution is not 100% black and white and many aspects of it are open to interpretation. The job of SCOTUS (and lower federal courts to some extent) is to provide that interpretation when there is a disagreement. This interpretation effectively is identical to making legislation. Furthermore interpretations over time tend to reflect the morals and social influences of the day. Cases like Dred Scott v Sandford [wikipedia.org] once upheld interpretations of the law that today would be considered reprehensible. At some level the decisions that SCOTUS judges make reflects their belief systems, particularly on hot button topics like abortion where decisions are based more on personal morality than objective evidence. That's why we have 9 judges instead of just one.

        Legislative makes the law, and judicial merely determines if actions are legal or not legal? Quaint, no?

        Each branch of the government makes certain types of laws. The Legislative branch makes statues [wikipedia.org], the Executive branch makes regulations [wikipedia.org] and the Judiciary makes case law [wikipedia.org]. All three are necessary and proper to the functioning of civil society. All three are laws in every sense that matters. If any branch of the government was unable to make laws then that branch of government would be powerless against the other branches. Checks and balances only work if you can make laws.

    • by hendrips (2722525) on Wednesday June 25, 2014 @11:22AM (#47315217)

      He almost certainly means that from a strictly legal standpoint, rather than as a general statement. It's somewhat common for the Supreme Court to put a disclaimer in an opinion stating that the opinion was so narrowly focused that it shouldn't be used as a precedent in other seemingly analogous cases. Presumably, this comment is more of a command to the lower courts, rather than a prediction of the future.

      So, if Company X wants to start a business that is similar to, but not exactly the same as, Aereo's business, any legal challenge against Company X would still have to be upheld on its own merit. Challengers couldn't cite this Aereo decision as legally relevant.

      Now, whether this ruling will have chilling effects, other than its legal precedent, is a different question.

      • Dinah's The Hopper is similar to, but not exactly the same as, this service. The equipment is still owned centrally and rented to each user; it just resides in distributed houses rather than one central location, and is streamed over the user's personal bandwidth instead of a company's. That is, unless The Hopper is installed in an office.

    • by ducomputergeek (595742) on Wednesday June 25, 2014 @11:43AM (#47315503)

      It has nothing to do with the technology. And the law governing copyright and broadcast rights has been pretty clear for a long time. It would be no different than my neighbor on the hill that gets great OTA reception capturing those broadcasts, running a cable down to my house and charging me to "watch" signals he captured. He wouldn't have the rights to transmit that copyrighted broadcast/telecast unless he went to the networks and got a written agreement.

      Or let's say he has a big radio antenna and can get radio broadcasts from say KMOX, then retransmits that signal to an FM frequency of his choosing. (Yes I know FCC licensing and all that, but let's ignore that and just look at the fact that the technology doesn't matter) He'd need a license from KMOX to retransmit their copyrighted broadcasts. Ever listen to a baseball game, especially on the Radio? Somewhere around the 5th to 7th inning I grew up with Jack Buck or Mike Shannon saying: "This broadcast is presented by the authority of Major League Baseball and the St. Louis Cardinals, LLC. Accounts and descriptions of the game may not be retransmitted or broadcast without prior written consent of the St. Louis Cardinals, LLC. And there is a such thing as the "Cardinals Radio Network" in which smaller stations away from KMOX retransmit KMOX's broadcast of the game on their local FM or AM frequency. But they have a license to do so.

      Aereo is no different. You are just replacing radio waves with the internet. Technology for delivery is different, but the legalities are the same. That's why the Justice is saying that it shouldn't have a chilling effect on technology. If Aereo had a license or got a license from the broadcasters to carry their stream over the internet, then no harm no foul.

      • Re: (Score:3, Insightful)

        by Varka (767489)
        What if your neighbor let you put an antenna up on his property, and run a cable from YOUR antenna to YOUR receiver?
      • by SydShamino (547793) on Wednesday June 25, 2014 @12:00PM (#47315749)

        On the other hand, if you contracted with your neighbor to rent a patch of his land, and you ran your own antenna up there so you could get the OTA signals yourself separately from his reception, that should be A-ok. That's even true if he already had a spare antenna installed and you just rent it from him.

    • The same way, if I remember correctly, that he was "sure" that the Citizen's United ruling wouldn't lead to a massive increase in private/corporate money influencing the US election system...

  • Wrong decision (Score:5, Interesting)

    by ArcadeMan (2766669) on Wednesday June 25, 2014 @10:58AM (#47314975)

    If it requires a login/password and a user account, how is that "publicly transmitting"?

    Would the judge also declare that when I'm watching Netflix via wi-fi, I'm also "publicly transmitting"?

    • by gnupun (752725)

      If it requires a login/password and a user account, how is that "publicly transmitting"?

      Aren't Aereo antennas storing TV signal content on servers and retransmitting/uploading that content to multiple members of the public? That's what's prohibited by copyright law, according to the broadcasters.

      Would the judge also declare that when I'm watching Netflix via wi-fi, I'm also "publicly transmitting"?

      What if the content were encrypted so only you can watch it? Would it still be public transmission? Cable TV

      • by sunking2 (521698)
        My understanding was 1 antennae per customer.
      • Re:Wrong decision (Score:4, Insightful)

        by ducomputergeek (595742) on Wednesday June 25, 2014 @11:23AM (#47315229)

        More at the Cable companies have agreed to pay the broadcasters for a per subscriber fee to license those broadcasts. Apparently Aereo was not. Netflix has reached an agreement with content providers to provider broadcast over the internet and has the rights to do so.

        Aereo apparently did not.

        Now if you stream netflix to your computer, then say put a webcam in front to record and then stream to people via a 3rd party site, then you'd be publically broadcasting.

        When you watch netflix on your device over wifi you are simply consuming...

      • Re:Wrong decision (Score:5, Insightful)

        by bluefoxlucid (723572) on Wednesday June 25, 2014 @11:31AM (#47315349) Journal

        Imagine you rent an apartment in San Francisco, hook your DVR up to the antenna, and set up Internet to watch it from New York.

        Now imagine you rent that DVR from an electronics rental company.

        Now imagine you also get an account with LogMeIn as your access method to your DVR.

        Now imagine the landlord, the electronics rental company, and LogMeIn are all the same company.

        That's Aereo.

        • Aereo has Regional locks so you can't get out of market NFL games with out Sunday ticket.

    • by compro01 (777531)

      Blame Congress [wikipedia.org].

    • Wouldn't the ruling also make cable boxes illegal, too?

      The cable network is a public network in the sense that hundreds or thousands of people are on that network.

      • Re:Wrong decision (Score:4, Informative)

        by ducomputergeek (595742) on Wednesday June 25, 2014 @11:19AM (#47315183)

        Yes, but your cable company has a license from the content providers to transmit those channels to you. My understanding is that Aereo did not.

      • Re:Wrong decision (Score:5, Insightful)

        by bobbied (2522392) on Wednesday June 25, 2014 @11:24AM (#47315249)

        Wouldn't the ruling also make cable boxes illegal, too?

        The cable network is a public network in the sense that hundreds or thousands of people are on that network.

        Uh, no... The ruling simply says Areo is operating a cable service and is thus required to obtain rights to retransmit the material (by paying fees). The cable company has already obtained retransmit rights (and paid the necessary fees) and thus can place their box in your home.

        In short, Areo is governed by the SAME laws and rules as the cable company.

    • Re:Wrong decision (Score:5, Informative)

      by RealGene (1025017) on Wednesday June 25, 2014 @11:26AM (#47315283)
      Scalia agrees with you:

      "Unlike video-on-demand services, Aereo does not provide a prearranged assortment of movies and television shows. Rather, it assigns each subscriber an antenna that — like a library card — can be used to obtain whatever broadcasts are freely available. Some of those broadcasts are copyrighted; others are in the public domain. The key point is that subscribers call all the shots: Aereo’s automated system does not relay any program, copyrighted or not, until a subscriber selects the program and tells Aereo to relay it."

    • by Bartles (1198017)
      If your Dish Network receiver requires a decryption key card, how is that publicly transmitting?
    • by Megane (129182)

      Netflix isn't "publicly transmitting" broadcast television, which is what Aereo did. Cable TV companies have to pay for the right to carry local TV channels that are otherwise freely available over-the-air to individuals with antennas.

    • If it requires a login/password and a user account, how is that "publicly transmitting"?

      Public meaning anyone can sign up to and access the service.

      Would the judge also declare that when I'm watching Netflix via wi-fi, I'm also "publicly transmitting"?

      Probably yes, whether it's wifi or two tin cans and a string. But, unlike Aereo, Netflix has purchased licenses to allow them to do so.

    • If it requires a login/password and a user account, how is that "publicly transmitting"?

      Would the judge also declare that when I'm watching Netflix via wi-fi, I'm also "publicly transmitting"?

      And that's exactly why Aereo lost. They claimed that the copyright law didn't cover them because they were just an equipment provider. But they weren't... you could log into their service, you could store data there... etc... they were like a cable TV provider and therefor covered by the law. SCOTUS made it very clear their ruling applies directly to Aereo, and it wasn't a broad ruling against the entire concept.

    • Re:Wrong decision (Score:5, Informative)

      by Anubis IV (1279820) on Wednesday June 25, 2014 @11:53AM (#47315641)

      Here's the actual decision text: http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf [supremecourt.gov]

      It's "publicly transmitting" inasmuch as the people it is transmitted to are "unrelated and unknown to each other", to quote the actual decision. Netflix very likely would be considered to be publicly transmitting as well, but because they've worked out licenses with the content owners, they're not running into any of these problems.

      Mind you, I'm not suggesting by any means that I agree with the decision. I'm merely providing it.

      Disclaimer: IANAL.

  • by CountZer0 (60549) on Wednesday June 25, 2014 @11:05AM (#47315029) Homepage

    Assuming this means Aereo will have to shut down now. That, or raise their rates if they have to start paying some sort of cable access fee.

    As a cord-cutter, Aereo was a nice way to have access to some live broadcasts (sports, voting shows where the voting closes after the show airs, etc). Most of our consumption is delayed, so alternative downloading and a large NAS handles 95% of our needs.

    Guess I'll have to figure out a way to get OTA reception, but from all the research I've done, where I live the signal's aren't very strong / reliable.

  • Predictable (Score:4, Interesting)

    by jythie (914043) on Wednesday June 25, 2014 @11:06AM (#47315045)
    While not the verdict I would have liked, this is not terribly surprising. Tech people often like latching on to literal interpretations, loopholes in language, or novel technological work arounds. However judges take into account the 'spirt' of the law, and are often interested in how something behaves or what it actually does as opposed to the technological implementation.

    Regardless of the clever implementation, Aereo behaved like a subscription cable service. How it collected and stored programming was not relevant to this.
    • Re:Predictable (Score:5, Interesting)

      by am 2k (217885) on Wednesday June 25, 2014 @11:16AM (#47315163) Homepage
      So, why is the spirit of the law ignored when it comes to tax code? Why are there so many companies with their seat in places like the Cayman Islands or San Marino, while 99% of the work force is in other countries like the US or somewhere in the EU? They still don't have to pay any taxes.
    • by Vellmont (569020)

      I'd agree with you, except for two things.

      1. The court agreed to hear the case. They don't agree to hear cases where the law is clear.
      2. 3 justices dissented from the majority opinion. So they must have believed the spirit of the law rather than loopholes and literal interpretations gave some leeway to Aero. I didn't see any links to minority opinions, but reporting on Surpreme Court decisions is normally absolutely terrible. Hell, they didn't even report who dissented, which tells you a lot about the p

    • by Hodr (219920)

      Oh come on now, if there is one place where "technically correct is the best kind of correct" it's the Federal court system.

    • Regardless of the clever implementation, Aereo behaved like a subscription cable service. How it collected and stored programming was not relevant to this.

      Appearances can deceive: The elephant bird may have looked like an ostrich but it's not related to ostriches. It's actually related to kiwis. [nationalgeographic.com]

      From the article: "Launched a year ago in New York and then extended to 10 other U.S. cities, it allows customers to watch over-the-air TV programs on a smartphone, tablet, or computer for as little as $8 a month."

      H [pcmag.com]

    • How is what they do any different than renting a DVR and antenna and installing them in your own home? Aereo offered an individual antenna for each customer, as well as data that was kept separate for each customer. The only thing different about it than standard equipment rentals was that they kept the devices at their location, rather than at yours, so the cable connecting you to your rented devices was a bit longer.

      We already accept that equipment rentals are perfectly legal. Making the cable longer shou

    • by taustin (171655)

      We're taught by television and movies that the law is composed entirely and solely of loopholes, and that everything we want in life it free if we can only find the right loophole.

      Television and the movies are stupid. As are most of the people who watch either (and yes, that includes me).

  • by Deathlizard (115856) on Wednesday June 25, 2014 @11:07AM (#47315053) Homepage Journal

    Figured this was going to be the outcome after Zediva Lost a few years back.

    So apparently, if I VPN into my network using my cellphone, and watch my HDHomerun Prime I'm breaking the law.

    • by gstoddart (321705)

      So apparently, if I VPN into my network using my cellphone, and watch my HDHomerun Prime I'm breaking the law.

      I take this to mean that the cable companies have decided any means of distribution they don't control is illegal.

      I'm sure the cable company would make the argument, but since you're not a commercial service, their chance of knowing about it is slim to none.

    • by Hodr (219920)

      If you were renting that HDHomerun and antenna from a 3rd party.

    • by Megane (129182)
      As someone else analogized it, Aereo was "operating an antenna for other people", which is what a cable company does. (it used to be all they did, before there were cable-only networks) Nobody else is providing you with the antenna to record broadcast TV. (Unless you're recording off of cable/sat, in which case the networks have already been paid off by your cable/sat company.)
    • No. If your neighbor charges you to VPN into his network and "rent" his HDHomerun and storage system, then he is breaking the law. If it's all your own equipment, you're not.
  • I fail to understand how this is a violation of copyright if really what Aereo is doing is capture OTA signals and recording them for their users. I mean anyone can do that for their own personal use anyway! The signals are free right? Its not like they were unscrambling and distributing TWC or Comcast signals.
    • by bobbied (2522392)

      The signals are free right?

      Free to receive and view, but not free as in you can do anything you want with the material. The copyright holder still owns and controls the material so you cannot consider it yours and distribute it for anything beyond acceptable personal use, "fair use" or the other legal exceptions.

      So as I read this, if you personally want to watch OTA signals captured from equipment you own and operate over the internet, fine, you just cannot do it for somebody else and certainly cannot charge anybody if you did.

  • by MobyDisk (75490) on Wednesday June 25, 2014 @11:15AM (#47315151) Homepage

    I've never understood why anyone would want to sue Aereo. They increase the transmission range of local broadcasts. They don't strip the ads, so the advertisers still profit. The stations get increased viewership, which they could as a selling point to advertises. "Hey, not only do we reach 50,000 people in this area, but Aereo increases that by another 10,000 people!" Why would a TV station complain if someone could increase their broadcast range without charging them anything for it? If the station wanted to do that themselves, they would have to buy towers, increase power, deal with FCC regs, etc. Aereo does it for free!

    • Because they were able to successfully extort cable companies for doing the same thing 50 years ago.

    • Because when (I think it was) CBS was in a dispute with the cable companies they didn't let their content be carried over the cable as leverage for insanely higher re-transmission fees. Some desirable sports are only shown on CBS. People got around the CBS action by receiving over-the-air broadcasts. Aereo let everybody in the country who wanted to put it to CBS. CBS didn't like that.

      • by MobyDisk (75490)

        ahhhh! So just let me restate this so I undertsand.

        CBS intentionally does not want their transmissions covering a certain area because the lack of content is leverage they can use against cable companies. So by Aereo solving that problem, they lose their bargaining chip.

        I posted a big thing about advertising, but I see VTBlue's reply saying that they don't make enough money off the ads any longer. So that explains the licensing fees thing.

    • by VTBlue (600055) on Wednesday June 25, 2014 @11:26AM (#47315275)

      Most people think broadcasters still operate under an ad revenue model. This not true today. Cable retransmission deals is where the real money is. If broadcasters were limited to the old ad revenue model, the industry would implode.

      Personally I think we should have the UK model with a TV license. The programming is far superior and enriching to the minds of the citizenry.

    • by Hodr (219920)

      You cant understand why CABLE companies might want to sue a company that increases the value and marketshare of OTA Networks?

    • by JTsyo (1338447)
      Currently cable companies pay the broadcasters to carry their channel. If Aereo was allowed people might cut out the cable company and just receive the programming for free. This would be lost revenue for the cable company and broadcasters. So instead of providing a competing product, they sue to keep their monopoly.
    • The problem is permission. Copyrighted content can be publicly distributed only with permission of the holder. The local TV affiliates have copyright on their content and permission to broadcast other content like movies through licensing. This licensing applies to everyone from Hulu to Netflix. Aereo did not obtain any license. It does not matter if they increase the range or the number of viewers of the station. They didn't have permission to do so.

      The question that SCOTUS had to determine is whether

    • by bobbied (2522392)

      Aereo does it for free!

      Actually the CHARGE for this service, but no matter. The ISSUE is that cable companies are required by law to pay for doing this, Aereo is trying to do an end run around having to pay. Because of how Aereo did it, the issue was murky enough so the courts had to sort it out.

      It was a noble try there guys.... Next time, we are going to have to get the law changed instead of depending on dodgy technicalities in how you do it.

  • Cable is a one-to-many system.
    Aereo is 1-to-1.
    That is a Major difference.
    It's not "streaming" to download your own data across the Internet.
    The Supreme Court are a bunch of technologically backward morons!

  • Is it illegal retransmission for my stepson in New York to VCR a program and mail me the tape?
    If no, then Aereo should be completely legal.

  • by sirwired (27582) on Wednesday June 25, 2014 @11:45AM (#47315539)

    The Supreme Court was (rightfully, IMHO) unimpressed by a technical loophole allowing Aereo to essentially run their own cable provider without paying the fees cable and satellite providers must pay. But...

    Personally, I don't think the retransmission fees should be legal. If a user is within the service area of a broadcast station, anybody should be able to use whatever means necessary to obtain that station; this seems to be a logical extension of the broadcaster's license to use the radio spectrum to service a certain area. After all, somebody with poor reception, but still within the service area, is still excluded from using that spectrum for other uses. (Outside the broadcaster's licensed service area, retransmission fees make a whole lot of sense...)

    But since the fees ARE legal, Aereo's workaround creates an inherently inequitable situation where cable and satellite providers must pay retransmission fees, but Aereo avoided them.

  • by cpt kangarooski (3773) on Wednesday June 25, 2014 @12:03PM (#47315793) Homepage

    This case boiled down to one major issue: Whether the allegedly infringing conduct in this case was engaged in by either Aereo, or by its users. Don't get hung up on the public performance v. private performance issue; it was really certain that if Aereo was liable, that the performance was public; if it were the users, it would be private.

    J. Scalia's dissent does a good job of explaining the issue:

    There are two types of liability for copyright infringement: direct and secondary. As its name suggests, the former applies when an actor personally engages in infringing conduct. Secondary liability, by contrast, is a means of holding defendants responsible for infringement by third parties, even when the defendants âoehave not themselves engaged in the infringing activity.â It applies when a defendant âoeintentionally induc[es] or encourag[es]â infringing acts by others or profits from such acts âoewhile declining to exer- cise a right to stop or limit [them].â

    Most suits against equipment manufacturers and service providers involve secondary-liability claims. For example, when movie studios sued to block the sale of Sonyâ(TM)s Betamax videocassette recorder (VCR), they argued that Sony was liable because its customers were making unauthorized copies. Record labels and movie studios relied on a similar theory when they sued Grokster and StreamCast, two providers of peer-to-peer file-sharing software.

    This suit, or rather the portion of it before us here, is fundamentally different. The Networks claim that Aereo directly infringes their public-performance right. Accordingly, the Networks must prove that Aereo âoeperform[s]â copyrighted works, Â106(4), when its subscribers log in, select a channel, and push the âoewatchâ button. That process undoubtedly results in a performance; the question is who does the performing. If Aereoâ(TM)s subscribers perform but Aereo does not, the claim necessarily fails.
    The Networksâ(TM) claim is governed by a simple but profoundly important rule: A defendant may be held directly liable only if it has engaged in volitional conduct that violates the Act. ...

    A comparison between copy shops and video-on-demand services illustrates the point. A copy shop rents out photocopiers on a per-use basis. One customer might copy his 10-year-oldâ(TM)s drawingsâ"a perfectly lawful thing to doâ" while another might duplicate a famous artistâ(TM)s copyrighted photographsâ"a use clearly prohibited by Â106(1). Either way, the customer chooses the content and activates the copying function; the photocopier does nothing except in response to the customerâ(TM)s commands. Because the shop plays no role in selecting the content, it cannot be held directly liable when a customer makes an infringing copy.

    Video-on-demand services, like photocopiers, respond automatically to user input, but they differ in one crucial respect: They choose the content. When a user signs in to Netflix, for example, âoethousands of . . . movies [and] TV episodesâ carefully curated by Netflix are âoeavailable to watch instantly.â That selection and arrangement by the service provider constitutes a volitional act directed to specific copyrighted works and thus serves as a basis for direct liability.

    The distinction between direct and secondary liability would collapse if there were not a clear rule for determining whether the defendant committed the infringing act. The volitional-conduct requirement supplies that rule; its purpose is not to excuse defendants from accountability, but to channel the claims against them into the correct analytical track. Thus, in the example given above, the fact that the copy shop does not choose the content simply means that its culpability will be assessed using secondary-liability rules rather than direct-liability rules.

    So which is Aereo: the copy shop or the video-on-demand service? In truth, i

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