“Aereo” smiths (part one)

aereo-logoUPDATE, June 25, 2014:  The Supreme Court has ruled.  [Still, read this.  Then read this. -- RDC]

If you are a real IP lawyer, or have a TV, or read this blog, you probably already know what Aereo is.  You probably also know that the Supreme Court heard oral argument about this Aereo business last week.

But let’s just say I don’t know what Aereo is.  If I didn’t know before extremely recently however — given that I don’t have a TV, in fact — I’d need a short, simple definition, because while I care about intellectual property law i don’t care all that much about TV.

So based on the back-filling I did today at the Copyright Society’s New York Chapter luncheon, which featured a panel of Aereo stunt men, I would say this captures it nicely and simply:

Here, briefly, is how Aereo works: You pay $8-ish a month, and get assigned a mini-antenna, roughly the size of a dime, that is located in a warehouse in Brooklyn. Aereo has thousands of these antennas, each of which is assigned to a single user and connected to a single DVR-like device. When you want to watch, let’s say, “The Voice,” Aereo’s app pulls the show from your antenna, streams it to your device, and makes a copy that is only viewable by you. If 40,000 other Aereo users are watching “The Voice” at the same time, there will be 40,000 dime-sized antennas streaming 40,000 identical copies of the show onto 40,000 devices and into 40,000 DVRs.

Get it?  In other words, Aereo is a variation on what Matthew David Brozik called the now-defunct Zediva service in a post from 2012:  “The world’s longest extension cord.”  It’s a system to watch TV that you pay for but not quite where it was supposed to be delivered — designed under the close auspices of a patent lawyer, of course.  Or a copyright lawyer maybe?  Or a both of them lawyer:

Aereo’s entire business model is based on a legal head-fake. Under copyright law, 40,000 people with their own antennas can watch TV at home for free, but if you want to have one giant antenna that picks up TV shows and distributes them to an audience of 40,000 people, the law calls that a “public performance,” and you have to pay a copyright fee to do it. Aereo didn’t want to pay those fees, so it figured out a way to make what is essentially a simultaneous mass broadcast look like lots of little broadcasts.

Trademark lawyer Ron ColemanYeah!  Copyright lawyer!

Can’t you just see the guy with all the latest jurisprudence on this kind of thing propped up in front of him while he tells the engineers and that sort of person where to plug in the sidebanger and how far he can string out the whoseamacallit?

Not that there’s anything wrong with that, though — right!  Or, maybe yes?

This seems to be an issue, actually:  “Legal head fake,” says that last excerpt.  Another take on last week’s Aereo show:  “Oral argument revealed a widespread disposition to view Aereo’s business model as too clever by half.”

Really? This idea — that the law’s job is to look past mere compliance and “see what’s really going on” — frequently results in justice.  Here, however, it bothers me. It should bother you, too, and the older and crankier I get the more I see this as part of the big problem I wrote about with respect to the presentation retired Federal Circuit Judge Paul Michel gave at the Cleveland IP Association earlier this year:  Judges making policy, i.e., deciding what the law should be instead of what the law is. Judge Michel’s point arose in the patent context.  I extended it, in the post I wrote about that talk, to the trademark context.  Now here it is in the copyright context.

And it inevitably manifests itself this way:  Client has a Thing — an invention, a brand, a method of distributing creative content.  He has capital.  And what he wants is to combine these things with a mixture of 99% perspiration because he believes he has come up with something people want to buy because it will benefit them. But then there’s the Law.

The law stands athwart the market, wisely establishing regimes by the operation of which innovators, the Law tells us, may protect such investments for some reasonable period of time (before, of course, throwing the advances in human existence they embody open to all God’s creatures.) In light of this, the Client, in fact, is eager to utilize the Law to protect the Thing.

He has no problem with the Law.  But he knows the Law may have a problem with his Thing, because, by definition, his Thing offers a benefit not already available.  And he knows well that those who presently dominate the market by which that benefit is distributed will probably use the Law to keep him out of it, somehow. He’s down with that.

That’s why he calls the lawyer.  And the lawyer pulls out all the latest cases and articles and analyses and spreads them out on four wide screens on his desk or on the garage floor or whatever and says, as he is paid to say,

“You can do this.  You can’t do that.  You can go this far.  You can’t go any further.

And this might work.  But that could be a problem.”

That’s “too clever by half”?  That’s “a legal head fake”?  Well, yeah.  Because Judges.  They know what you’re really trying to do!  You’re trying to just — just — follow the law!  Instead of, you know.  Spirit of the thing! In fact the lawyer knows this.  He’s hep.  That’s why he hedges, in fact:  “This might work.  That could be a problem.  We just don’t really know.”  So he gives advice, probabilities of outcomes — in the recognition that the Client is doing something novel, after all.

Because nothing has quite been done quite this way, the Client is made to understand that this advice is a well-educated guess. Those of us who operate in the common law tradition are used to this, of course.  Judges are charged with making policy, a little, no?  That’s what precedent is — a mini-policy!

But how is it that when a lawyer limns these mini-policies, analyzes, hypothesizes and, then, advises, we’ve got judges saying he’s being “too clever by half”? In fact, one of the words I kept hearing during the panel discussion today was about how, at oral argument, the Justices raised concerns about how Aereo is all about “circumventing” copyright law.  Here, look:

Your technological model is based solely on circumventing legal prohibitions that you don’t want to comply with,” Roberts told Aereo attorney David Frederick during the presentation before a packed chamber. “There’s no reason for you to have 10,000 dime-sized antennas except to get around the Copyright Act,” he said. Added Justice Ruth Bader Ginsburg: ”You are the only player so far that pays no royalties whatsoever.”

“Circumventing”?  Isn’t that actually something technological?  How is it circumventing copyright law by literally applying the parameters that previous courts have established in order to find a way to make and sell the new Thing — the Thing that people want — that doesn’t circumvent anything, but, rather, follows the law?  Isn’t that what we’re supposed to do?

I asked the NYIPLA panel that question.  There was some agreement, indeed, that “circumvention” was an unfortunate term.  I said, isn’t this what we as lawyers are supposed to do — tell people what is and isn’t allowed?  How can we continue to do that if it’s ultimately just a wild guess about whether or not the result comes across as manipulation or …. Wait.  Come on, now, counselor.  Look at this business — this Thing — Aereo made!  It’s preposterous!  Again:

Under copyright law, 40,000 people with their own antennas can watch TV at home for free, but if you want to have one giant antenna that picks up TV shows and distributes them to an audience of 40,000 people, the law calls that a “public performance,” and you have to pay a copyright fee to do it. Aereo didn’t want to pay those fees, so it figured out a way to make what is essentially a simultaneous mass broadcast look like lots of little broadcasts.

It didn’t just make it look like lots of little broadcasts, though, did it?  It really did make lots of little broadcasts! Whatever “broadcasts” mean. Whatever “public performances” mean. Whatever “copy” means. Whatever “distribute” means. See what I mean?  These aren’t mini-policies at all.  These are policy-policies!

At one point one of the panelists mentioned that “under Sony” — no, not that Sonny; Sony v. Universal, i.e., the “Betamax” case – by way of another case, mainly the Ninth Circuit’s ruling in A&M Records v. Napster – we all understand that “time shifting is fine, but not space shifting.”

We all do, we do, we do. But is that distinction, found nowhere in the Copyright Act, one for judges to make?   (Part two tomorrow.)

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Author:Ron Coleman

I write this blog.

2 Responses to ““Aereo” smiths (part one)”

  1. May 1, 2014 at 7:25 pm #

    Atta boy!

    I do have one quibble, though, because words mean things. Aero didn’t “make a lot of little broadcasts.” If broadcast is to have any meaning, it can’t mean sending information to a single customer. Radio and TV over the airwaves are broadcasts because they can be received by multiple people at once. Aero specifically prevented/avoided that. One antenna to one DVR to one customer.

    Not too clever by half. Just clever.

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