A Preview of Possible Outcomes in Aereo Supreme Court Case

by Matt Schruers on June 18, 2014

As the IP nerd vigil over Aereo continues, let us take a minute to survey what potential outcomes might look like.  So, if World Cup prognostication isn’t for you, this post should get you started on the next best thing: Supreme Court tea-leaf reading.

The Court’s Aereo decision will issue on a Thursday or Monday between now and June 30.  The case could be resolved as early as tomorrow morning, but the fact that it was argued so late in the term may produce a correspondingly late decision date.  I’ll assume you know how Aereo got to the Supreme Court; if not, try this post and infographic surveying the Aereo litigation. Below I describe how the most probable outcomes would look, plus a few unlikely results.

(1) Affirmance.  An affirmance would be an Aereo victory, upholding the decision from the appellate court, the Second Circuit Court of Appeals, that the broadcasters were not entitled to enjoin Aereo.  There would still be district court proceedings after an affirmance, but broadcasters could not expect any relief, since an affirmance would establish that Aereo is not publicly performing works when its subscribers utilize one of Aereo’s antennas to send themselves their local, free over-the-air broadcast signals via the Internet.  Affirmance would also allay the concerns voiced by the tech and Internet sector that a decision adopting the broadcasters’ theory would endanger cloud-based digital services.

(2) Reversal.  A reversal would be a victory for the broadcaster plaintiffs, ABC et al.  The extent of that victory will depend greatly on the details of the opinion.  A narrow reversal might leave a path forward for Aereo, or for competitor companies, and could also take into account the concerns raised about the cloud.  Thus, the consequences of a broad reversal would be different from a narrower opinion.

    (2a) Broad reversal.  If a majority of the Supreme Court concludes the Second Circuit got it completely wrong, a sweeping reversal might resemble the trial court decisions against Aereo’s aspiring contender, FilmOn X.  In this case, don’t expect diplomacy; the Supreme Court has no qualms telling a Circuit Court it is out of line.  Consider the Court’s recent admonition to the Federal Circuit that it “fundamentally misunderstands” part of patent law (although that came after 5 straight unanimous reversals).

    (2b) Narrow reversal.  Although some justices seemed doubtful of Aereo’s theory at oral argument, several others also expressed concerns about the negative consequences of broadening the public performance right.  The Court sought in vain for a way to separate Aereo from other cloud-based services; the broadcasters’ lawyer said the court did not have to resolve that question; “it can just be confident they are different.”  Justice Alito, not surprisingly, responded that this wasn’t very satisfying, and other Justices piled on (transcript here). As I’ve previously argued, such a theory is difficult to articulate; it is hard to honor broadcasters’ view of the public performance right while also leaving untouched the Cablevision decision so critical to the cloud.  This suggests that any reversal might be circumscribed to avoid creating the problems that several amicus briefs (including the one that I authored) warned about.  It is conceivable that the Court could attempt to thread the needle by cabining its ruling to specific details of this case. But a narrow loss is still a loss for Aereo.  Regardless of the breadth of the opinion, a reversal would relaunch the suit against Aereo, which Judge Nathan effectively stymied when she refused the broadcasters’ request for a preliminary injunction in July 2012.  The company has made clear it has no “plan B,” and a reversal of the injunction order could shutter the service.

(3) Vacatur/Remand.  The Court might discard the Second Circuit’s decision without necessarily overturning it, and send the case back for consideration of some unresolved question. This is as close as the Supreme Court could get to a draw.  A number of questions could result in a remand: the mostly unexplored question of volitional conduct — i.e., who exactly does the copying (Aereo or the user) — or the relevance of retransmission consent to the public performance right.  (Justice Breyer at one point suggested remanding the case on whether Aereo qualified as a cable company under the Copyright Act.)

(4) Fractured, plurality opinion.  While multiple dissents and concurrences are common in the Supreme Court, it is possible that the Court could be so divided that no opinion gets a majority.  In this case, we would still see a result — affirmance, reversal, etc. –but with only a plurality (i.e., less than 5 votes) behind it.  Such an opinion would have far less precedential weight than a majority opinion. The highly anticipated Bilski v. Kappos decision in 2010, which also came at the end of the term, was expected to offer some guidance about the boundaries of what can be patented.  The fractured opinion ultimately offered relatively little insight.  Although portions of the majority opinion actually garnered 5 votes, Justice Scalia opted out of a substantial part of it, rendering those parts a plurality only.   Two other concurrences issued, with 4 and 2 votes behind them.  A similar result here may still direct the Second Circuit to resolve the Aereo case in a specific way, but offer little more in the way of precedent.  A heavily fractured opinion would offer no meaningful guidance to other businesses who are potentially regulated by the public performance right.

Improbable Outcomes:

(5) DIG’d.  “Dismissed as Improvidently Granted.”  The DIG acronym is Supreme Court lawyer-speak for “undo,” meaning that the Court concluded it shouldn’t have asked to hear the case in the first place.  DIGs are relatively rare.  The last IP case that I can recall being DIG’d was the patent case Labcorp v. Metabolite, presumably because it became apparent over briefing that patent eligibility — the elephant in the room — hadn’t been fully addressed by the lower court.

(6) Order for reargument:  Although uncommon, the Supreme Court has on occasion directed the parties to brief and argue additional questions.  Several landmark cases have been reargued in Supreme Court history, including Brown v. Board of Education, Roe v. Wade, and Citizens United.  Two prominent copyright cases — Sony v. Universal (1984), the “Betamax” case, and Feltner v. Columbia Pictures (1997) — were also both reargued to address additional questions that became apparent after the initial grant of certiorari.  Re-arguments are rare as of late, however, occurring only in a handful of cases in recent years. This should cover the waterfront.  One of these outcomes, or some combination thereof, should happen within the next two weeks.

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