Not exactly a video game case, but important the world of Copyrights nonetheless. The decision everyone has been waiting for it out. Today the U.S. Supreme Court held that Aereo is equivalent to a cable company, and is performing copyrighted works to the public without paying a license, and therefore they infringe the rights of copyright holders.
The court states:
…we find [Aereo] highly similar to those of the CATV systems in [previous Supreme Court cases]. And those are activities that the 1976 amendments sought to bring within thes cope of the Copyright Act. Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service. We conclude that those differences are not adequate to place Aereo’s activities outside the scope of the Act. For these reasons, we conclude that Aereo “perform[s]” petitioners’ copyrighted works “publicly,” as those terms are defined by the Transmit Clause. We therefore reverse the contrary judgment of the Court of Appeals, and weremand the case for further proceedings consistent with this opinion.
Unless there is a legislation change, that’s the end of the road for Aereo as we know it.
Cloud service provides, however, can breath a sigh of relief. The court interprets the term “the public” to apply to a group of individuals acting as ordinary members of the public who pay primarily to watch broadcast television programs. The court further states:
We have said that it does not extend to those who act as owners or possessors of the relevant product. And we have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content. See Brief for United States as Amicus Curiae 31 (distinguishing cloud based storage services because they “offer consumers more numerous and convenient means of playing back copies that the consumers have already lawfully acquired” (emphasis in original)). In addition, an entity does not transmit to the public if it does not transmit to a substantial number of people outside of a family and its social circle.
The court also states, in the Syllabus of the opinion, that in view of “the limited nature of the Court’s holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies”
So here’s my initial $.02 on this case.
Aereo will have an initial brief dampening effect on technological development, because of the psychological impact that will weigh on technologists as they are developing new technologies. In the back of their minds, they will be thinking “remember what happened to Aereo? They spent all that money and then were shut down. We don’t want that to happen to us.” However, the Court actually goes out of its way in an attempt to prevent the decision from stifling innovation by limiting its decision to the specific technology used by Aereo. The court clearly articulates that cloud service providers in general should remain unaffected by the decision, and the Court further states that in view of “the limited nature of the Court’s holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies.” So while there may be an initial delay as technologists do a sanity check on their innovations, technology should continue to advance as usual.
The Supreme Court took a common sense approach by telling technologists not to put form over substance. This is the second time the Supreme Court has held that you can’t manipulate technology to skirt copyright laws. They said it to Grokster, and now they’ve said it again to Aereo. If you’re sitting in a technology development meeting at your company, and someone asks “how can we deploy this technology to avoid paying a license fee?”, I’d think twice about that approach, and make sure that you have legal counsel weigh in on the risks associated with that technology. Despite this, the ruling is not a death knell for technology development, and in fact reinforces the viability of cloud computing solutions in general. However, just as the Supreme Court has done here, technologists must take a common sense approach when designing new products to determine whether those products will run afoul of copyright law.