Supreme Court Uses The Bizarre 'Looks Like A Cable Duck' Test To Outlaw Aereo

from the well-that's-unfortunate dept

As you may have heard, this morning, the Supreme Court effectively killed off Aereo with an unfortunate and terribly problematic 6 to 3 ruling that can be summarized simply as the "looks like a duck" test. If you're not familiar with the history, decades back, when cable companies were first around, they started rebroadcasting network TV to cable subscribes, and the Supreme Court (rightly) ruled that this was perfectly legal. The broadcasters ran screaming and crying to Congress, who changed the law to create a retransmission setup, saying that if cable companies wanted to retransmit broadcast TV they had to pay fees. Aereo got around that by setting up a very different system -- or so we thought. The majority decision, written by Stephen Breyer, really just keeps going back to the fact that Aereo looks just like what those cable companies used to do... and therefore, given that Congress changed the law to outlaw that, Congress must have meant that Aereo should be illegal as well. The majority seems to view things as a black box, ignoring everything in the box. It just says "well, to end users and to networks, this is identical to the old cable systems." As for the very careful steps that Aereo took to comply with the law? The majority just brushes that off as meaningless.

Given Aereo's overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here. The subscribers of the Fortnightly and Teleprompter cable systems also selected what programs to display on their receiving sets. Indeed, as we explained in Fortnightly, such a subscriber “could choose any of the . . . programs he wished to view by simply turning the knob on his own television set.” ... The same is true of an Aereo subscriber. Of course, in Fortnightly the television signals, in a sense, lurked behind the screen, ready to emerge when the subscriber turned the knob. Here the signals pursue their ordinary course of travel through the universe until today's “turn of the knob”—a click on a website—activates machinery that intercepts and reroutes them to Aereo’s subscribers over the Internet. But this difference means nothing to the subscriber. It means nothing to the broadcaster. We do not see how this single difference, invisible to subscriber and broadcaster alike, could transform a system that is for all practical purposes a traditional cable system into “a copy shop that provides its patrons with a library card.”

Of course, that's NOT the "single" difference between the systems, and that's only part of why the majority ruling is so troubling. The second part of the ruling -- and the one that will have serious consequences for many other technologies -- is the determination that Aereo's service is not just a "performance" but a public performance. As we've discussed, this is the key part of the case, as it will determine just how badly it will impact cloud computing. The majority tries to indicate it shouldn't impact others by adding an important clause that might actually give Aereo (or others) a roadmap to get around this ruling. See if you can spot it:

Moreover, the subscribers to whom Aereo transmits television programs constitute “the public.” Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other. This matters because, although the Act does not define “the public,” it specifies that an entity performs publicly when it performs at “any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” The Act thereby suggests that “the public” consists of a large group of people outside of a family and friends.

Yeah, that "contemporaneously perceptible" tidbit could become pretty damn important. It seems like Aereo could just take away live TV viewing and basically become more DVR-like, requiring people to watch things on their own schedule starting with a brief delay, such that no one is really watching contemporaneously and potentially this no longer becomes a "public performance."

Still, that seems like a pretty ridiculous standard for what is and what is not public. The majority, unfortunately, brushes off concerns about how this might impact other cloud providers by going back to that "looks like a duck" test:

For one thing, the history of cable broadcast transmissions that led to the enactment of the Transmit Clause informs our conclusion that Aereo “perform[s],” but it does not determine whether different kinds of providers in different contexts also “perform.” For another, an entity only transmits a performance when it communicates contemporaneously perceptible images and sounds of a work....

Further, we have interpreted 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, many of which are copyrighted. 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

Still, there are serious concerns about this. At the very least, it's going to lead to a lot of litigation as people try to determine if other sorts of cloud storage systems are engaged in "public performances." The dissent, written by Justice Scalia, highlights how problematic this ruling is on many levels. Rather than simplifying things down to a "looks like a cable duck" test, Scalia actually looks at copyright law, and the question of whether what Aereo does is direct infringement (in fact, he later says that even though it's clearly not direct infringement, Aereo might be liable for secondary infringement), and points out that there's no reasonable way to find Aereo guilty of direct infringement.

Aereo offers access to an automated system consisting of routers, servers, transcoders, and dime-sized antennae. Like a photocopier or VCR, that system lies dormant until a subscriber activates it. When a subscriber selects a program, Aereo’s system picks up the relevant broadcast signal, translates its audio and video components into digital data, stores the data in a user-specific file, and transmits that file’s contents to the subscriber via the Internet—at which point the subscriber’s laptop, tablet, or other device displays the broadcast just as an ordinary television would. The result of that process fits the statutory definition of a performance to a tee: The subscriber’s device “show[s]” the broadcast’s “images” and “make[s] the sounds accompanying” the broadcast “audible.” §101. The only question is whether those performances are the product of Aereo’s volitional conduct.

They are not. Unlike video-on-demand services, Aereo does not provide a prearranged assortment of movies and television shows. Rather, it assigns each subscriber an antenna that—like a library card—can be used to obtain whatever broadcasts are freely available. Some of those broadcasts are copyrighted; others are in the public domain. The key point is that subscribers call all the shots: Aereo’s automated system does not relay any program, copyrighted or not, until a subscriber selects the program and tells Aereo to relay it. Aereo’s operation of that system is a volitional act and a but-for cause of the resulting performances, but, as in the case of the copy shop, that degree of involvement is not enough for direct liability.

Scalia further calls out Breyer for using a questionable "resemblance" test based on nothing in the actual law. He points out that it's not illegal to be "similar to cable TV," but rather you have to look at the actual law and see if Aereo violates it. He further notes that the majority ruling relies heavily on taking a few snippets of the Congressional record out of context, and then leaping to the conclusion that Aereo is too similar to those old cable systems, rather than really exploring the differences within the blackbox:

The former (which were then known as community-antenna television systems) captured the full range of broadcast signals and forwarded them to all subscribers at all times, whereas Aereo transmits only specific programs selected by the user, at specific times selected by the user. The Court acknowledges this distinction but blithely concludes that it “does not make a critical difference.” ... Even if that were true, the Court fails to account for other salient differences between the two technologies. Though cable systems started out essentially as dumb pipes that routed signals from point A to point B, ... by the 1970’s, that kind of service “ ‘no longer exist[ed],’ ” ... At the time of our Teleprompter decision, cable companies “perform[ed] the same functions as ‘broadcasters’ by deliberately selecting and importing distant signals, originating programs, [and] selling commercials,”... thus making them curators of content—more akin to video-on-demand services than copy shops. So far as the record reveals, Aereo does none of those things.

Because of all of this, Scalia points out that the majority decision is not only self-contradictory, but part of it actually makes a huge part of the rest of it entirely superfluous... and then creates tremendous uncertainty.

The rationale for the Court’s ad hoc rule for cablesystem lookalikes is so broad that it renders nearly a third of the Court’s opinion superfluous. Part II of the opinion concludes that Aereo performs because it resembles a cable company, and Congress amended the Act in 1976 “to bring the activities of cable systems within [its] scope.” .... Part III of the opinion purports to address separately the question whether Aereo performs “publicly.” .... Trouble is, that question cannot remain open if Congress’s supposed intent to regulate whatever looks like a cable company must be given legal effect (as the Court says in Part II). The Act reaches only public performances, see §106(4), so Congress could not have regulated “the activities of cable systems” without deeming their retransmissions public performances. The upshot is this: If Aereo’s similarity to a cable company means that it performs, then by necessity that same characteristic means that it does so publicly, and Part III of the Court’s opinion discusses an issue that is no longer relevant—though discussing it certainly gives the opinion the “feel” of real textual analysis.

Making matters worse, the Court provides no criteria for determining when its cable-TV-lookalike rule applies. Must a defendant offer access to live television to qualify? If similarity to cable-television service is the measure, then the answer must be yes. But consider the implications of that answer: Aereo would be free to do exactly what it is doing right now so long as it built mandatory time shifting into its “watch” function. Aereo would not be providing live television if it made subscribers wait to tune in until after a show’s live broadcast ended. A subscriber could watch the 7 p.m. airing of a 1-hour program any time after 8 p.m. Assuming the Court does not intend to adopt such a do-nothing rule (though it very well may), there must be some other means of identifying who is and is not subject to its guilt-by-resemblance regime.

Take this a step further, and as Scalia notes, suddenly you implicate a lot of other services:

Two other criteria come to mind. One would cover any automated service that captures and stores live television broadcasts at a user’s direction. That can’t be right, since it is exactly what remote storage digital video recorders (RS–DVRs) do, ... and the Court insists that its “limited holding” does not decide the fate of those devices.... The other potential benchmark is the one offered by the Government: The cable-TV-lookalike rule embraces any entity that “operates an integrated system, substantially dependent on physical equipment that is used in common by [its] subscribers.” ... The Court sensibly avoids that approach because it would sweep in Internet service providers and a host of other entities that quite obviously do not perform.

That leaves as the criterion of cable-TV-resemblance nothing but th’ol’ totality-of-the-circumstances test (which is not a test at all but merely assertion of an intent to perform test-free, ad hoc, case-by-case evaluation). It will take years, perhaps decades, to determine which automated systems now in existence are governed by the traditional volitional-conduct test and which get the Aereo treatment. (And automated systems now in contemplation will have to take their chances.) The Court vows that its ruling will not affect cloud-storage providers and cable television systems..., but it cannot deliver on that promise given the imprecision of its result-driven rule. Indeed, the difficulties inherent in the Court’s makeshift approach will become apparent in this very case. Today’s decision addresses the legality of Aereo’s “watch” function, which provides nearly contemporaneous access to live broadcasts. On remand, one of the first questions the lower courts will face is whether Aereo’s “record” function, which allows subscribers to save a program while it is airing and watch it later, infringes the Networks’ public-performance right.

Scalia further notes that it's quite troubling to see the Supreme Court effectively picking winners and losers in the technology space, noting as a warning how close the Court came to outlawing the VCR based on bogus claims of "we'll die!" by Hollywood.

We came within one vote of declaring the VCR contraband 30 years ago in Sony.... The dissent in that case was driven in part by the plaintiffs’ prediction that VCR technology would wreak all manner of havoc in the television and movie industries. ... (arguing that VCRs “directly threatened” the bottom line of “[e]very broadcaster”).

The Networks make similarly dire predictions about Aereo. We are told that nothing less than “the very existence of broadcast television as we know it” is at stake. .... Aereo and its amici dispute those forecasts and make a few of their own, suggesting that a decision in the Networks’ favor will stifle technological innovation and imperil billions of dollars of investments in cloud-storage services. We are in no position to judge the validity of those self-interested claims or to foresee the path of future technological development.... Hence, the proper course is not to bend and twist the Act’s terms in an effort to produce a just outcome, but to apply the law as it stands and leave to Congress the task of deciding whether the Copyright Act needs an upgrade.

Unfortunately, the majority decided to go in the other direction. And it has just created a huge mess for cloud computing that may result in tremendous stifling of important innovation online.

Filed Under: antonin scalia, cable services, cloud computing, direct infringement, looks like a duck, retransmission, stephen breyer, supreme court
Companies: aereo

Why Do So Many People Describe Aereo 'Complying' With Copyright Law As The Company 'Circumventing' Copyright Law?

from the the-law-is-the-problem dept

We mentioned this briefly in our writeup of the oral arguments at the Supreme Court in the Aereo case, but I wanted to focus in on one particularly annoying issue that has come up repeatedly throughout this company's history: the idea that its compliance with the law is actually the company circumventing the law. A perfect example of this is an incredibly ill-informed opinion piece for New York Magazine's Kevin Roose that declares, based on a near total misunderstanding of the case, that the Supreme Court should shut down Aereo because its 10,000 antennas are a cheap "copyright-avoidance gimmick."

But that's simply incorrect. It's actually 100% the opposite. We'll fully admit, as that article does, that the setup of Aereo is simply insane from a technology standpoint. There is no good reason at all to design the technology this way. But the reason they're doing this is not to avoid copyright but to comply with it. If you think that this is insane (and you're right) the answer is not to whine about what Aereo is doing, but to note that it's copyright law that leads to this bizarre result. Don't blame Aereo for following exactly what the law says, and then say it's a "gimmick." Blame the law for forcing Aereo down this path.

Of course, it's one thing for an uninformed magazine columnist to make this argument... but quite another for Supreme Court justices to do so themselves. And tragically, in the oral arguments, a few of them appeared to be coming close to making that kind of argument (though not so ridiculously as the column above). The worst offender was Chief Justice Roberts, who asked:

All I'm trying to get at, and I'm not saying it's outcome determinative or necessarily bad, I'm just saying your technological model is based solely on circumventing legal prohibitions that you don't want to comply with, which is fine. I mean, that's -- you know, lawyers do that.

Note the twisting here. Complying with the law is now "circumventing legal prohibitions." Justices Ginsburg and Scalia both also asked about whether or not the technology decisions had any technological purpose, or if they were solely about the law (though, at least both questioned if the choices were about "complying" with the law). But the implication that is being raised (and has been explicitly raised by others) is that in setting up this "a Rube Goldberg–like contrivance" (as 2nd Circuit judge Denny Chin called Aereo in his dissent to the company's victory in that court) it means that they're somehow violating the law by meticulously complying with it.

And that's a very dangerous assumption, even by implication.

If that argument is allowed to fly, then it's not a stretch to see how copyright holders might twist lots of versions of complying with the law, into infringing on the law simply by arguing that the form of compliance is somehow "too clever." That would lead to all sorts of dangerous implications -- in which those who are being careful to comply with the law may suddenly be deemed infringing because of their careful compliance. Under such a standard, the more carefully you aim to comply with the law, the greater chance you can be accused of "contorting" yourself in a manner that allows copyright holders to argue that your compliance is somehow "less than sincere" as appears to be the main suggestion here.

It's troubling that at least a few of the Supreme Court Justices appear to even be considering such a possibility.

Yes, Aereo's setup is technologically bizarre. But that's because it's doing everything to comply with copyright law. If you have a problem with it, it's not because the company is breaking the law, it's because the law itself is broken. It would be a cruel twist of fate for Aereo to lose its case because Supreme Court Justices believed that it had broken the law, because the inevitable results of the broken law itself create a situation where complying with the law looks so bizarre that it appears to be infringement!

Filed Under: antonin scalia, compliance, copyright, gimmicks, john roberts, kevin roose, ruth bader ginsburg
Companies: aereo

Judge Scalia Suggests The Supreme Court May Be Asked To Determine Constitutionality Of Metadata Program

from the might-allow-terrorism-to-trump-the-Constitution dept

The US Supreme Court has yet to take a case that directly challenges the NSA's domestic surveillance programs, having turned down EPIC's turnstile-jumping attempt to bring the bulk collection to the court's attention back in November. More recently, it also declined to grant standing to a case pursued by the Center for Constitutional Rights challenging the legality of Bush-era surveillance programs.

But in a talk given at Brooklyn Law School last Friday, visiting Supreme Court Justice Antonin Scalia dropped hints that the telephone metadata program's constitutionality may be put in the hands of the Supreme Court.

Mr. Napolitano then asked if mass surveillance of cellphones and emails would be prohibited by the Fourth Amendment, which states: “The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated.” Many of the National Security Agency’s controversial surveillance programs were prominently exposed last year by Edward Snowden, a former security contracted who leaked sensitive documents revealing the U.S. government’s wide collection of digital data.

“You’re getting into the NSA stuff, right?” Mr. Scalia remarked–one of many snarky, laughter-drawing lines he issued throughout the evening. “This may come before the court. And I don’t want to get myself recused.” But Mr. Scalia nevertheless directly said he didn’t feel “conversations” were part of the “persons, houses, papers and effects” covered by the Fourth Amendment.

If this program does end up in front of the Court, it appears Scalia will be casting his lot with the government and its expansive reading of the Third Party Doctrine. He also suggested the Supreme Court wasn't up to the task, albeit based on severely backwards logic.

"The Supreme Court doesn't know diddly about the nature and extent of the threat," Scalia said. Later on, he added, "It's truly stupid that my court is going to be the last word on it."

Why Scalia feels the "nature and extent of the threat" has any bearing on the program's adherence to the Constitution is beyond me, and his apparent willingness to defer to the government's justifications for domestic spying is troubling. This argument is on par with the City of New York arguing for the stop-and-frisk program because it was useful in fighting crime, an argument the presiding judge dismissed as irrelevant to the issue at hand: the constitutionality of the program itself.

No doubt the Supreme Court will get plenty of chances to hear the government discuss the nature and extent of the terrorist threat. But it needs to keep in mind that it's ruling on the constitutionality, not whether the ends justify the means.

This peculiar statement is also troubling in light of Scalia's earlier comments that same night, where he pointed out the dangers of originalism, and reinterpreting the Constitution in light of technological advances.

“It’s the freedom of speech. It doesn’t matter whether you’re speaking in semaphore or a cellphone or any type of modern technology. You apply the same First Amendment principals to the new technology that you applied to the old. And the same for reasonable searches and seizures.”

If Scalia's going to argue that the times may change but the Constitution doesn't, then he needs to be consistent. Just because a threat that was minimal before September 2001 is now viewed as all-encompassing by the government should have no bearing on whether the Supreme Court is capable of issuing an opinion on the constitutionality of the NSA's domestic surveillance.

On the plus side, a person in the audience raised a question that may cause Scalia to reconsider his strict definition of what the Fourth Amendment covers.

When Mr. Scalia later took questions from audience members, a law student surprised the self-confident justice by pressing him on whether personal computer data–not conversations–should be protected. “Do you believe that data within a computer would be too broad of a construction of the word ‘effects’ under the Fourth Amendment?” the student inquired.

“Mmm! Mmm!” Mr. Scalia exclaimed to himself, clearly impressed with the line of argument but cautious about weighing in on a topic he expects to come up before the U.S. Supreme Court.

“I better not answer that,” he added whimsically. “That’s something that may well come up. It’s a really good question.”

So, that's a bit more promising. And Scalia is just one of nine justices. With two judges having issued contrary opinions on the Section 215 program, it may be the Court's responsibility to sort this out. Of course, this is just one of the NSA's programs with constitutional implications, and it's one that looks to be severely scaled back if not sacrificed completely to keep other, more intrusive programs free from additional scrutiny.

Filed Under: 4th amendment, antonin scalia, bulk metadata collection, nsa, section 215, supreme court

Could The Supreme Court Invalidate Software Patents?

from the in-truth,-it-already-has... dept

Back when the Supreme Court ruled on the Bilski case, many people were upset that it so narrowly tailored the result, so that it didn't include any real statement on the patentability of business methods or software. Reading the tea leaves, it wasn't difficult to realize that Justice Scalia actually appeared to be the most skeptical of software patents. Tim Lee is now wondering if Scalia is the last best hope for invalidating software patents (and hopes that perhaps the recent This American Life episode on patent trolling will get people to realize how big a problem this is).

Some folks claimed in response that Lee was advocating "judicial activism," and Scalia's hands were tied by the law itself. However, as Lee correctly retorts, the law does not explicitly say software patents are okay. In fact, the Supreme Court has ruled against such patents in the past. It's just that those rulings were a long time ago, and the lower courts (mainly CAFC) have chipped away at that over the past couple decades. Lee points out that in 1972, when the Supreme Court first rejected software patents in Gottschalk v. Benson, it invited Congress to change patent law if Congress intended for software to be patentable. Congress did nothing.

Thus, it seems entirely reasonable that the Supreme Court could point to its earlier rulings (and there are others beyond Benson), and say that software is not patentable -- but that would likely entail greater awareness of why software patents are a massive problem. So... how do we get everyone on the Supreme Court to hear that TAL episode?

Filed Under: antonin scalia, software patents, supreme court

Supreme Court Justice Scalia Given Lesson In Internet Privacy

from the not-an-issue? dept

BoingBoing points us to an interesting story involving Supreme Court Justice Antonin Scalia, who apparently gave a recent talk questioning the need to protect privacy online. That caught the attention of Joel Reidenberg, a law professor at Fordham, who teaches an Information Privacy Law class. As part of that class he includes an assignment for the class to try to dig up information on someone online, in order to prove how much information is out there. Last year, he chose himself. This year, given Scalia's comments, he had the class put together a dossier on Scalia, which was not released publicly, but did include a bunch of private info about Scalia that was dug up online. Apparently Scalia was not amused, saying:

I stand by my remark at the Institute of American and Talmudic Law conference that it is silly to think that every single datum about my life is private. I was referring, of course, to whether every single datum about my life deserves privacy protection in law.

It is not a rare phenomenon that what is legal may also be quite irresponsible. That appears in the First Amendment context all the time. What can be said often should not be said. Prof. Reidenberg's exercise is an example of perfectly legal, abominably poor judgment. Since he was not teaching a course in judgment, I presume he felt no responsibility to display any.

Now, to be fair, Scalia does have a point that not every single datum about anyone's life should be considered private. But it's equally silly to lash out and call the decision to give the assignment "abominably poor judgment." That seems like Scalia is suggesting security through obscurity is reasonable, and exposing why it's not is poor judgment. It's hard to see how that makes sense.

Filed Under: antonin scalia, internet, privacy, supreme court