Supreme Court Agrees to Hear Aereo Case, Drawing Aereo’s Praise

The U.S. Supreme Court has granted cert on broadcasters’ appeal of their case seeking a preliminary injunction against streaming TV service Aereo, according to a court order released Friday. Justice Samuel Alito took no part in considering or issuing the decision, the order said, without disclosing why.

Though the broadcasters’ petition asked the court to overturn a decision of the 2nd U.S. Circuit Court of Appeals that was in Aereo’s favor, Aereo had also asked for cert to be granted, and Aereo CEO Chet Kanojia said he welcomed the chance to bring the case before the justices. “We said from the beginning that it was our hope that this case would be decided on the merits and not through a wasteful war of attrition,” said Kanojia in a released statement. Aereo’s case is “critically important” not only for streaming TV over the Internet but for the cloud computing and storage industries, Kanojia said. Broadcasters disagreed with Aereo’s framing of the case. “We are confident the Court will recognize that this has never been about stifling new video distribution technologies, but has always been about stopping a copyright violator who redistributes television programming without permission or compensation,” said a statement from plaintiffs Fox, Univision, WNET and PBS.

The possible effects of a Supreme Court ruling in the case have a wide range because the matter being considered is a preliminary injunction, rather than a case on the merits, said Fletcher Heald appellate attorney Harry Cole. Such a ruling could narrowly involve the law behind the injunction or decide much more fundamental pieces of copyright law, Cole said. Any Supreme Court ruling is likely to involve the 2008 Cablevision decision, in which the 2nd Circuit ruled individual digital recordings of broadcast content were private rather than public performances, and therefore not subject to copyright law, Cole said. Broadcasters have argued that Aereo’s system of tiny, individual antennas is designed expressly to comply with the Cablevision decision and subvert copyright laws, and Aereo’s release said the decision “helped foster massive investment, growth and innovation” in the “cloud industry.” The broadcasters’ arguments “make clear that they are using Aereo as a proxy to attack Cablevision itself and thus, undermine a critical foundation of the cloud computing and storage industry,” said Kanojia.

The granting of cert is likely to have implications for the several ongoing court cases involving Aereo and its similar competitor FilmOn, Cole said. The 2nd Circuit copyright case from which the cert petition stems has been proceeding on the merits, while a Massachusetts district court’s denial of another broadcaster preliminary injunction against Aereo is on appeal in the 1st U.S. Circuit Court of Appeals, and broadcasters are also seeking an injunction against Aereo in Utah. Either side in those cases may use the upcoming Supreme Court decision as grounds to ask for a stay, but such a decision would be up to individual judges, said Cole. FilmOn is currently appealing a nearly nationwide injunction -- excepting only the jurisdiction of the 2nd Circuit -- to the U.S. Court of Appeals for the D.C. Circuit and is awaiting a 9th Circuit decision on another injunction. It’s likely that the 9th Circuit would not wait for the Supreme Court to issue a decision, since that case has already been fully argued, Cole said.

If the Supreme Court decides in Aereo’s favor, “broadcasters could feel compelled to seek a legislative fix,” said Stifel Nicolaus in an email to investors. Such a decision could have a huge effect on the media industry, giving multichannel video programming distributors more leverage in retransmission consent negotiations with broadcasters, the analysts said. The 2nd Circuit decision in Aereo’s favor “has the effect of creating perverse incentives for companies to deploy lawyer-engineered, ‘Rube Goldberg’ like technology” that evades copyright laws “without benefitting either the public or returning just compensation to creators,” said the Copyright Alliance in an emailed statement. “Enshrined in the Constitution is the concept that content creators deserve to be protected from product theft,” said NAB.

No information about the timing of the case or a briefing schedule has been released, but Cole said that cert being granted in January makes it likely the case will be argued and decided during the court’s current session, which lasts until April. More information on the timing of the case will be released in a letter, Cole said, which may also state “what question the court is hoping to answer” by deciding the case, Cole said.