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Practising Law Institute's "Communications Law in the Digital Age 2012" program in New York opened my eyes to the disparate views over the Aereo case.

First, some background: Broadcasters ABC, NBC, CBS, and others sued New York startup company Aereo Inc., claiming that Aereo's service, which captures over-the-air signals and retransmits them without a license to subscriber smartphones and computers, infringes their copyrights. 

The service assigns a miniature antenna to each subscriber, enabling them to access broadcast content through the internet and mobile devices. The U.S. District Court for the Southern District of New York, in American Broadcasting Cos. v. Aereo Inc., 103 USPQ2d 1774 (S.D.N.Y. 2012), held that the Aereo service does not infringe content industry copyrights. The case is on appeal to the Second Circuit.

The district court relied on Cartoon Network LP v. CSC Holdings Inc, 536 F.3d 121, 87 USPQ2d 1641 (2d Cir. 2008), in which the Second Circuit found that Cablevision System's remote storage of programming on a network DVR did not constitute public performances of stored content. Various parties, including Cablevision itself, have argued to the Second Circuit that the services are not the same.

As Roger Parloff, senior editor at CNNMoney put it, the answers to the "riddles" posed in this litigation "could have enormous consequences for the future of television distribution."

The lawsuit is the latest iteration of a now familiar spectacle in which federal courts are tasked with cramming a digital technology into the Procrustean bed of analog-era legal concepts. In this instance, the service looks quite dubious when viewed from 30,000 feet, but becomes more plausible as you get closer and start wading into the weeds.

Public Knowledge in Washington, D.C., filed an amicus brief in favor of Aereo on Oct. 26. Senior staff attorney John Bergmayer stated that "[c]onsumers do not need permission to watch free TV. Just as viewers are allowed to use rabbit ears to receive over the air broadcasts, they're allowed to make use of Aereo's remote antenna service."

Broadcasters "are essentially government-sponsored entities," Bergmayer continued, "and because of this they have certain duties, among them an obligation to provide a free service to the public. It is improper for them to try to shut down Aereo, a service which simply allows the public to make use of the service it subsidizes."

Cablevision wrote in its brief that the "critical legal difference" between Aereo's and Cablevision's services "is that Cablevision pays statutory licensing and retransmission consent fees for the content it retransmits, while Aereo does not." Cablevision also opined that "[b]ecause the recordings are made available to any subscriber, the resulting performances are to the public, even though members of the public watch the recordings one at a time."

(For an interesting comparison of the two decisions, tune in to Episode 30 of the "Do You Copy" podcast here on this blog.)

Copyright lawyers do not share the view that Aereo should be able to keep on streamin'. Mary Snapp, corporate vice president and general counsel of the Products and Services Division of Microsoft Corp.'s Law and Corporate Affairs Department, spoke at a panel discussion on intellectual property as part of Practising Law Institute's "Communications Law in the Digital Age 2012" program. She observed that broadcasters are, in fact, adversely affected by Aereo's use of their signals, in the form of diminished ability to negotiate with advertisers and with other distributors.

Jeffrey P. Cunard and Bruce P. Keller,0 of Debevoise & Plimpton, Washington, D.C., represent ABC, NBC, and CBS against Aereo, which captures signals from those networks and a few others.

This case is "about the whole basis of the over-the-air broadcasting system in the United States which is predicated on copyright," Cunard said.

"If the Second Circuit were to affirm the denial of the motion for preliminary injunction, there are significant ramifications and the most significant of these is that retransmission of over-the-air broadcast programs can sidestep the effect of the public performance right if the retransmitter essentially whitewashes—launders—the signals by running them through a series of copies, each of which is uniquely associated with an end-user," he said. "That's a very profound and economically disastrous consequence, given the extent to which broadcasters rely on the relationships with licensed retransmitters such as cable companies, satellite companies and others for their economic viability."

Aereo essentially argues that  "'these are just antennas like you have at home … so what's the big deal here?'" Cunard's answer? "[J]ust because someone can do something at home that doesn't mean that a commercial operator who is providing a commercial service (which in every sense is really indistinguishable from a cable television or satellite service) … gets a bye."

The other central point in this is the effect of the Cablevision decision, Cunard said. Cablevision said "because there are individual copies that are made and only the subscriber can watch the copy at a time of his or her choosing, the transmission from that copy is a new transmission, a new public performance that's not tied to the original performance by the broadcaster, and therefore the public performance right is not implicated."

Thus, "Aereo has structured its service to come within this holding. There are individual copies that are associated with individual subscribers. The core of the defense is 'copies trump all.'" But, "in Cablevision the Second Circuit went out of its way to say that copies made a difference in that case, but would not necessarily make a difference in all cases," Cunard said.

Keller, who moderated the panel, asked Andrew Bridges of Fenwick & West, San Francisco, whether he thought there would be a "ripple effect" on technology companies if Aereo were to be reversed.

"The two sides of the argument that I hear (with the ears of a technology lawyer) are that something must be done to preserve the ecosystem of broadcast television and we must construe copyright law to make the preservation of the ecosystem the highest priority, and second is that there is something wrong about designing your business plans specifically to fit within the lines of the leading case in the Second Circuit," Bridges said.

"The debate is over … the effect on the incumbent marketplace, and over whether there's something sneaky about designing to conform to the law." Bridges observed that Aereo made an effort to comply, and queried whether it would be right to just shut the entire venture down. "The entire regime of copyright enforcement right now, with statutory damages of up to $150,000 per work infringed, means that any close case has the potential of being utterly catastrophic for innovators," he said. Thus, "it's going to have a huge ripple effect on the incentive to innovate with new business plans that people think are complying with the law."

"I think the current statutory damages regime fundamentally corrupts every discussion in copyright law, because the stakes are out of control," Bridges remarked.

At another PLI panel, Gigi Sohn, president of Public Knowledge, had observed that consumers want to experience television programming in new ways, such as by receiving it on their phones and other devices. In that vein, Snapp predicted that in light of consumers' expectations, it is inevitable that "there will be a way to conform." Furthermore, "if broadcast doesn't adapt I think there's going to be some pretty good content showing up for small screens."

Stay tuned for a decision from the court of appeals, which ought to result in more screaming, if not more streaming.