Aereo Oral Arguments

Yesterday, the Supreme Court heard oral arguments for American Broadcasting Companies, Inc. v. Aereo Inc. (or the Aereo case).  I’ve covered the specifics of the Aereo case a few times at this point, so instead I’ll focus on what the justices said and what that potentially means for the case.  

Not surprisingly, a good deal of the justices’ questioning fell on Aereo’s technical aspects.  A lot of how the Supreme Court rules hinges on whether Aereo’s system infringes on the public performance rights in copyright law, which allow for the rights holder to control public performances of their work.  In the Aereo’s case, this means that the television companies (and the various other companies that own the rights to various television programs) can claim infringement if the Court feels that Aereo’s retransmission and storage of recorded programs is not private.  Chief Justice Roberts, for example, expressed his notion that Aereo was simply attempting to engineer around Cablevision’s holding and (according to SCOTUSBlog) the rest of the bench appeared to share this sentiment.  Ginsberg, in particular, seemed rather put off by the fact that Aereo is avoiding retransmission fees through their business model.  Sotomayor explicitly compared Aereo’s services to Netflix and Hulu, adding that those services have to pay rights holders for their content.   

However, the Court appeared to be very cautious about any unintended consequences in various burgeoning technological fields.  Aereo’s technology involves cloud storage and streaming technology, and the justices seemed to worry that their ruling could negatively impact a number of other services that utilize similar technology to different ends (iCloud and Dropbox got specific mentions in that regard, by Justice Sotomayor).  This represents a legitimate concern in the case, given how some of these services (particularly Google Music or any cloud storage service) rely heavily on the Cablevision case for their legal underpinnings.  The legality of services like Google Music and Dropbox becomes much more tenuous without Cablevision (and its holding that an item stored remotely on a company’s servers can still be protected from copyright liability as long as it only has an intended audience of one).  The Justices quite wisely recognized that aspect of the case, and appeared to spend quite a bit of time hashing out these issues with both parties’ attorneys.

As predicted, the Supreme Court’s ruling will likely hinge on how they choose to interpret Cablevision.  There was a rather interesting exchange between the two sides attorneys, where both attorneys pointed out that the Court would likely have to rule in Aereo’s favor if they viewed the end user as being the one who “performed” by selecting the particular program to view (this was obviously something of a concession on the broadcasters’ part).  Basically, the attorneys both said that if the Court views the end user as being the one performing the copyrighted work through their decision to play back a certain show or file as what constitutes a “performance” under Cablevision, then that performance must be private.  Such a ruling would provide greater clarity without altering the current precedent substantially, which appears to be a goal of the justices given their questioning.   

 Now, predicting Supreme Court rulings based on oral arguments is foolish.  The oral arguments only provide insight into what the justices think about the particular issues surrounding the case, as well as give them a chance to poke and prod the attorneys to see if the legal arguments in the briefs hold up under scrutiny.  However, there appear to be two takeaways from these oral arguments.  First, the justices appear to possess a degree of skepticism that Aereo’s service does not infringe on copyright law.  Second, they appear to want to avoid harming other services that might utilize cloud computing or streaming technology.  This might mean that the justices will try to construct a narrow holding that states that Aereo violated copyright law while otherwise leaving the Cablevision precedent untouched.  The justices may also decide that such a narrow ruling is impossible, and hold in Aereo’s favor as a result.  There may also be no solid holding, particularly since Justice Alito opted to recuse himself.  It should be interesting to see what the justices decide upon.

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Some Updates on Aereo

First, I’m going to need to adjust my posting schedule.  My current responsibilities take up more of my time, so I’m going to cut back to one post a week.  From now on, I’m going to post on Fridays.

Now, on to the news.  The first big development is that the Aereo case will begin oral arguments in the Supreme Court on April 22.  In addition, Justice Alito opted to recuse himself from the case.  How the Supreme Court rules on this case has some interesting implications for the Copyright Act, due to Aereo’s rather interesting use of individual antennas to allow users to stream live television on mobile devices.  This use of individual antennas prevents the transmission from being public and keeping Aereo within the reach of the Cablevision case.  I’ve provided more information about the legal issues surrounding Aereo here.  

Anyway, enjoy the weekend everyone.

Implications of FTC v. Wyndham

I apologize for not posting anything the last week or so.  I’ve been inordinately busy, between some family issues and work.  I should be back on schedule for the foreseeable future.

FTC v. Wyndham represents one of the more important recent cases, at least in the realm of cybersecurity.  The case arises from an FTC lawsuit against Wyndham, claiming that the hotel chain failed to properly implement its own security policies.  As a result of these poor security practicies, hackers managed to break into Wyndham’s network and steal customers’ credit card information on three separate occasions (in 2008 and 2009).  The FTC seeks the ability to regulate cybersecurity, mostly by holding companies to their their own data security policies and procedures.  FTC v. Wyndham recently experienced a major movement forward, as the US District Court in New Jersey recently rejected Wyndham’s motion to dismiss.

In some ways, this case has the greatest implications on cybersecurity regulation of any active US government effort.  By seeking to hold Wyndham responsible for the data breach, the FTC is claiming a rather broad regulatory authority under its consumer protection mandate.  Specifically, the FTC claims that their authority to establish or enforce existing data security policies derives from a rule prohibiting “unfair or deceptive acts in or affecting commerce” in Section 5 of the FTC Act.  The FTC argues that failing to adhere to data security policies results in considerable consumer harm, rendering the lack of effective data security policies “unfair.”  For those interested, this Lexology article contains a rather detailed run down of both the FTC an Wyndham’s arguments.  If the FTC possessed this authority, they could become the major entity for cybersecurity regulation in the US government.  The current Cybersecurity Framework is mostly advisory, and only really applies to entities engaged in a great deal of government contracting (since the agencies can use the Framework when making contracting decisions).  That leaves a significant gap in the government’s regulatory authority, since the Framework possesses no power over private sector entities not engaged in government contracting.  

The final result of this case remains to be seen.  However, the FTC has survived an important hurdle in the form of a motion to dismiss.  It should be interesting to see how the court rules in this case.