Supreme Court Sides With Broadcasters Against Aereo

Supreme Court Sides With Broadcasters Against Aereo

Court rules 6-3 service violates copyright law

In a major victory for TV broadcasters, the U.S. Supreme Court ruled 6-3 Wednesday that the online TV service Aereo illegally violates their copyrights.

The move may doom Aereo, an online service that uses millions of tiny antennas to beam broadcasters signals to subscribers’ laptops, tablets and other devices. Aereo's chief investor, Barry Diller, told CNBC the company is “over.” But he seemed to be at odds with founder and CEO Chet Kanojia, who said the company's “work is not done.”

Also read: Aereo Investor Barry Diller Says Company ‘Is Over’

Broadcasters argued that Aereo's transmissions violated their copyrights, since cable companies pay a premium to rebroadcast their content. But Aereo said it was merely harnessing the power of the humble antennae on a massive scale.

The court agreed with broadcasters.

Also read: Aereo CEO Chet Kanojia: ‘Our Work is Not Done’

“The Copyright Act gives a copyright owner ‘exclusive right’ to ‘perform the copyright work publicly.’ We must decide whether Aereo infringes this exclusive right,” wrote Justice Stephen G. Breyer in the majority opinion. “We conclude that it does.”

“Aereo is not simply an equipment provider,” Breyer added. “Rather Aereo and not just its subscribers ‘perform’ or transmit. Aereo's activities are substantially similar to those of [cable]  companies.”

Also read: Broadcasters’ Stocks Rise on Aereo Victory

Broadcasters were jubilant.

“Today's decision is a victory for consumers. The court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended,” the networks’ attorney, Paul Clement, said in a statement.

Because Aereo uses some of the same technology as cloud computing, which is legal, the justices took pains to craft a decision that it would not infringe on users ability to remotely store videos, songs, and other content remotely.

Also read: Aereo Supreme Court Ruling: Fox, Disney and Others React

Justice Antonin Scalia was joined in a dissent by fellow conservatives Justices Clarence Thomas and Samuel Alito Jr. They said Aereo's legality hinged in part on the definition of a “public performance.”

“The key point is that subscribers call all the shots,” the dissent said. “Aereo's automated system does not relay any program copyrighted or not until a subscriber selects the program and tells Aereo to relay it. … And because Aereo does not perform, it can not be held directly liable for infringing the networks’ public performance right.”

Also read: Barry Diller: Aereo ‘Finished’ If It Loses Supreme Court Case (Video)

Before the Supreme Court heard arguments in April, Diller said the company was likely “finished” if it lost.

“If we lose, we're finished… it's very possible that there's some salvage,” Diller told Bloomberg Television. “But Aereo would probably, as I say probably just because I can't — I can't see any path forward. It probably would not be able to continue in business.”

Also read: Aereo CEO ‘Hoping for a Clear Decision’ From Supreme Court

Kanojia also raised the possibility in an interview around the same time that some part of the company could be salvaged in the event of a loss. He told TheWrap the company's technology was “immensely valuable” and said he was “sure somebody will want it” if the company lost.

It was unclear what another company might do with the technology, however.