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Why Aereo encourages the wrong kind of innovation

Peter Leung

The Aereo decision may be a technically correct application of US copyright law, but the line drawn seems to be a distinction without a difference for all parties involved

In denying the broadcasters’ request for a preliminary injunction against the TV streaming service, the Second Circuit Court of Appeals in New York relied heavily on its 2008 Cablevision ruling. There, it found that Cablevision’s online DVR service, which recorded television programmes and streamed them to subscribers per the users’ requests, did not constitute a public performance because an individual copy was made for each user. In Aereo, the Court found that the system, which recorded over-the-air (OTA) broadcasts, functioned in the same way using thousands of individual antennae to record each user’s request. In fact, it is undisputed that Aereo specifically engineered its system with Cablevision in mind.

Aereo's aerial array - try saying that 10 times quickly

Judge Denny Chin slammed Aereo’s system in dissent, saying that it has “no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna” and is a “Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act”. He noted that if 50,000 viewers chose to record the Super Bowl using Aereo, it would be considered 50,000 private uses involving 50,000 copies, though he considers such a performance “very public”.

Chin, coincidentally, was the judge who granted the preliminary injunction vacated on appeal in Cablevision.

Chin’s observations again illustrate how the law rarely if ever can keep up with technology. For the users, there is no difference whether Aereo used one antenna or one million. For rights holders, the fact that Aereo had some additional costs in buying extra antennae and data storage space is no consolation. Aereo also presumably would have liked have built a simpler and less expensive system to achieve the same effect.

Although IP law is generally supposed to promote innovation, it is strange to think that Aereo’s business plan largely involves creatively engineering its way around the law rather than solving an actual technical problem. Other than Aereo, the clear winners in this are manufacturers of server hard drives and tiny antenna arrays.

Given the technical and somewhat arbitrary line delineated here, an interesting question is whether Aereo’s system would be legal in other jurisdictions.

In NRL v Optus, the Full Federal Court in Australia ruled last year that a service similar to Aereo’s constituted infringing rebroadcasts of OTA signals. Though Optus’s TV Now service did not use thousands of antennae, it did make recordings specific to each user.

Similarly, the Ental TV case in South Korea found a service that allowed users to reserve and record free TV channels and watch or download for ten days after broadcast infringed both reproduction and transmission rights.

The Japanese Supreme Court in 2011 also held that an Aereo-like service was infringing. The Maneki TV case involved a service which used Sony’s commercially available Location Free device that allows users to stream OTA broadcasts. Maneki TV’s service required users living abroad to supply her own Location Free, but otherwise sounds similar to Aereo if the user was required to supply her own antenna.

An interesting mental exercise is whether Aereo’s service, with its specific methods for capturing, storing and streaming shows, is legal in other jurisdictions. That said, ultimately, these services all perform largely the same function, and the Aereo ruling confirms that the form of the service behind the scenes is much more important than the function. Of course, the law often turns on minutiae and requires precision, but ideally on details and subtleties that matter to the parties involved beyond the legal result. In Aereo, that doesn’t seem to be the case.


Article Comments

Innovation is innovation. In this case "getting around" the laws actually help innovation by freeing us a stagnant market that has not innovated to the customers benefit because the law unreasonably protected them at the expense of everyone else. Welcome to the future is innovate of die...your choice.

Rick159 Sep 18, 2013

The issue isn't whether Aereo's system is useful, the issue is that the most innovative (or at least most notable) feature, the antenna array, is there only to fit the service within the Cablevision ruling. That's not a critique of Aereo's ability to innovate, but rather of a copyright law that isn't well suited to deal with technological developments, leading to a decision that appears to care more about form rather than function.

Peter Leung Apr 24, 2013

How can innovation be of the "wrong kind" when it brings a valuable service to consumers who are otherwise left out?

Plenty of people simply can not pickup a decent digital broadcast signal with their own antenna. Renting an antenna from Aereo is a reasonable and fair option for the public.

HuckFinn Apr 23, 2013

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