By: Robb Roby, Partner in the Orange County office
Yesterday the Supreme Court issued the Aereo opinion and decided that, given its activities, Aereo is substantially similar to a cable television provider and therefore “perform[s] petitioners’ copyrighted works ‘publicly,’ as those terms are defined by the Transmit Clause [of the Copyright Act].” The Court was quick to point out, however, that “given the limited nature of this holding, the Court does not believe its decision will discourage the emergence or use of different kinds of technologies.”
Justice Scalia, who penned a dissent, noted that “what we have before us must be considered a ‘loophole’ in the law. It is not the role of this Court to identify and plug loop-holes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes.” Good lawyers, indeed, likely will be scouring the opinion in search of new alternatives to accomplish what Aereo was doing, albeit in another clever manner that may better avoid the reach of the Copyright Act.
It is therefore possible that content providers, such as television broadcasters, will be faced with a large scale game of “Whack a Mole” in which the content providers will need to address disruptive technologies that are spawned by the express limitations put forth by the Supreme Court in the Aereo case. The explicit language from the Supreme Court opinion makes clear that there may be solutions to which the opinion would not extend. Those solutions could be of interest to enterprising individuals and may well be out of the reach of the opinion.
Instead of being passive, content providers can proactively anticipate new technological solutions and emerging content delivery platforms in an effort to get out in front of the wave instead of battling against each new alternative as it presents itself. In this regard, the content providers themselves could turn to the Supreme Court opinion and identify the types of challenges to their respective business models that are most likely to emerge.
As content providers innovate or anticipate innovation trends, the content providers could protect their innovations through the patent system. A protected innovation can provide a market advantage and the patent protection could be used to stop others from using the innovation. Moreover, by creating a patent minefield, the content providers can dissuade new companies from entering the content distribution market or make it difficult to market the new technological solutions that may appear on the horizon. Defensively, the content providers could begin creating prior art publications that would reduce the ability of new companies to protect their disruptive technologies. Without the ability to adequately protect their solutions, start-up companies likely would find funding more difficult to obtain.
Content providers, such as the broadcasting companies, could also address the demand for streaming content. The supply of new technological solutions will likely dwindle if broadcasters cater to this changing paradigm of accessing content on-the-go, at a price point significantly lower than the current alternatives. If broadcasting companies ignore this demand shift in the industry, they will face an on-going battle by companies attempting to derive a stream of revenue on the coat-tails of the efforts of the broadcasters.
By reducing the ability of new companies to adequately protect new technological developments that avoid the restrictions imposed by the Aereo holding, the content providers stand a better chance of protecting their revenue streams without resorting to claims based solely in copyright law.