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1 INTHESUPREMECOURTOFTHEUNITEDSTATES
2 x
3 AMERICANBROADCASTING :
4 COMPANIES,INC.,ETAL., :
5 Petitioners : No.13461
6 v. :
7 AEREO,INC.,FKABAMBOOM :
8 LABS,INC. :
9 x
10 Washington,D.C.
11 Tuesday,April22,2014
12
13 Theaboveentitledmattercameonfororal
14 argumentbeforetheSupremeCourtoftheUnitedStates
15 at11:26a.m.
16 APPEARANCES:
17 PAULD.CLEMENT,ESQ.,Washington,D.C.;onbehalf
18 ofPetitioners.
19 MALCOLML.STEWART,ESQ.,DeputySolicitorGeneral,
20 DepartmentofJustice,Washington,D.C.;onbehalfof
21 theUnitedStates,asamicuscuriae,supporting
22 Petitioners.
23 DAVIDC.FREDERICK,ESQ.,Washington,D.C.;onbehalfof
24 Respondent.
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1 CONTENTS
2 ORALARGUMENTOF PAGE
3 PAULD.CLEMENT,ESQ.
4 3OnbehalfofthePetitioners
5 ORALARGUMENTOF
6 MALCOLML.STEWART,ESQ.
7 OnbehalfoftheUnitedStates,as
8 amicuscuriae,supportingPetitioners 19
9 ORALARGUMENTOF
10 DAVIDC.FREDERICK,ESQ.
11 OnbehalfoftheRespondent 27
12 REBUTTALARGUMENTOF
13 PAULD.CLEMENT,ESQ.
14 OnbehalfofthePetitioners 51
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1 PROCEEDINGS
2 (11:26a.m.)
3 CHIEFJUSTICEROBERTS: We'llhearargument
4 nextinCase13461,AmericanBroadcastingCompaniesv.
5 Aereo.
6 Mr.Clement.
7 ORALARGUMENTOFPAULD.CLEMENT
8 ONBEHALFOFTHEPETITIONERS
9 MR.CLEMENT: Mr.ChiefJustice,andmayit
10 pleasetheCourt:
11 Aereo'sbusinessmodelistoenable
12 thousandsofpayingstrangerstowatchliveTVonline.
13 Aereo'slegalargumentisthatitcanmakeallofthat
14 happenwithoutpubliclyperforming. ButCongresspassed
15 astatutethatsquarelyforeclosesthatrather
16 counterintuitivesubmission. Becausealthoughthe
17 Internetandthethousandsofminiantennasarenew,the
18 basicservicethatAereoisprovidingisnotmaterially
19 differentfromtheserviceprovidedbythecablecompany
20 beforethisCourtin1969.
21 JUSTICESOTOMAYOR: Whyaren'ttheycable
22 companies?
23 MR.CLEMENT: They'renot
24 JUSTICESOTOMAYOR: I'mlookingatthe
25 everybody'sbeenarguingthiscaseasifforsure
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1 they'renot. ButIlookatthedefinitionofacable
2 company,anditseemstofit. Afacilitylocatedinany
3 State. They'vegotawhatevertheyhavea
4 warehouseorabuildinginBrooklyn,thethat
5 receivessignaltransmissionsorprogramsbroadcastby
6 televisionbroadcaststations. They'retakingthe
7 signalsoffofthe
8 MR.CLEMENT: They'retakingthesignals,
9 right.
10 JUSTICESOTOMAYOR: I'msorry,theyare.
11 Makessecondarytransmissionsbywires,cables,orother
12 communicationchannels. Itseemstomethatalittle
13 antennawithadimefitsthatdefinition. To
14 subscribingmembersofthepublicwhopayforsuch
15 service. Imean,IreaditandIsay,whyaren'ttheya
16 cablecompany?
17 MR.CLEMENT: Well,JusticeSotomayor,a
18 coupleofthings. Firstofall,Imean,Ithinkif
19 you'reifyou'realreadyatthatpoint,you've
20 probablyunderstoodthatjustlikeacablecompany,
21 they'republicthey'republiclyperformingandmaybe
22 theyqualifyasacablecompanyandmaybetheycould
23 qualifyforthecompulsorylicensethat'savailable
24 tocablecompaniesunderSection111ofthestatute.
25 JUSTICESOTOMAYOR: Butitjustgetsit
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1 mixedup. Dowehavetogotoallofthoseother
2 questionsifwefindthatthey'reacablecompany? We
3 saythey'reacapablecompany,theygetthecompulsory
4 license.
5 MR.CLEMENT: Well,no. There'slotsof
6 conditionsonthecompulsorylicense. AndIthinkthe
7 firstplacethereasonthatwehaven'tbeendebating
8 aboutwhetherthey'reacablecompanyisbecausethey
9 don'twanttobeacablecompany. Theyhaveafootnote
10 intheredbriefthatmakesitclear. Theyarenota
11 cablecompanyintheirview. Theydon'twanttobea
12 cablecompany. AndIthinkthat'sbecausecomingwitha
13 cablecompany,itmightpotentiallygetyouintothe
14 compulsorylicense,butitbringswithitalotof
15 obligationstocomewithbeingacablecompany
16 JUSTICEBREYER: Yes. Butthat'swhythey
17 don'twantit.
18 MR.CLEMENT: Exactly.
19 JUSTICEBREYER: Thatisn'tthequestion.
20 MR.CLEMENT: Well,here'stheotherthing
21 isIthink
22 JUSTICESOTOMAYOR: Thequestionisare
23 they?
24 MR.CLEMENT: Idon'tthinktheyare.
25 That'sreallyultimatelyaquestionundertheFederal
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1 CommunicationsAct. Buthere'swhy,ifIcouldI
2 thinkMr.Frederickwillcertainlyspeaktothisif
3 ifyouwanthimto. ButIthinkthereasontheydon't
4 wanttobeacablecompanyisbecauseIthinktheir
5 basicbusinessmodelwouldnotallowthemtoqualify
6 withcompulsorylicenseanyways.
7 JUSTICEBREYER: ButI'dstillliketoknow
8 theanswertothequestion,inyouropinion. And,of
9 course,ifyouwantareason,I'llgiveyoumyreason.
10 Ifwetakepublicperformance,maybewerun
11 intowhatProfessorNimmersawasaproblem. Whyisn't
12 whatusedtobecalledaphonographrecordstorethat
13 sellsphonographrecordsto10,000customersapublic
14 performance? Itseemstofallwithinthatdefinition.
15 Butifitis,there'snonofirstsaledoctrineand
16 it'sabigproblem. Sowecouldavoidthatproblem.
17 Now,that'swhyI'mveryinterestedinthe
18 answer,notjustwhattheywant.
19 MR.CLEMENT: Well,Idon'tthinktheyare
20 ultimatelyacablecompany,andwecoulddebatethat
21 question,butit'snotthequestionbeforeyou. So
22 maybeIcouldgiveyousomecomfortaboutwhyyoudon't
23 needtodecidethatquestion.
24 JUSTICEBREYER: Well,perhapsweshould
25 remandit,becausemyreasonforwantingtodecideitis
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1 whatIsaid. Andwhatyou'vereadintheirbriefsis
2 they,intheirsupportingamici,havethrownupaseries
3 ofseriousproblemsnotinvolvingthem,likethecloud,
4 whichthegovernmenttellsustoignore,andmany
5 others,whichmakemenervousabouttakingyour
6 preferredgroup. Sothat'swhyIwasinterestedinthis
7 question.
8 MR.CLEMENT: But,JusticeBreyer,Ithink
9 it'sveryimportanttotounderstandthatevenif
10 they'reacablecompany,itdoesn'tmakeallthese
11 problemsgoaway. Becausetheywouldbeacablecompany
12 thatbyveryvirtueofwhattheywanttopointto,which
13 istheiruserspecificcopies,Idon'tthinktheywould
14 qualifyforthecompulsorylicense.
15 Ialsothinkthebetterwaytoavoidyour
16 concernsistomaybetakethemondirectly. Thereason
17 thattherecordcompanyisnotinvolvedinapublic
18 performanceisit'snotinvolvedinanyperformanceat
19 all,butthat'sdifferent,ofcourse,fromanonline
20 musicstore,whichnotonlyprovidesadownloadof
21 something,butactuallyperformsitandstreamsitand
22 allowsitlive. Andthatisabasicdistinctionthat's
23 notonlyrecognizedbytheSecondCircuitintheASCAP
24 case,butit'salsorecognizedintherealworldbythe
25 waythesethesedifferentservicesarestructured.
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1 Ifyouprovidedownloadsofmusic,yougeta
2 distributionlicenseorareproductionlicense. Ifyou
3 providestreamingofmusicwhereyoualsohavea
4 contemporaneousliveperformance,thenyoualsogeta
5 publicperformancelicense.
6 JUSTICESOTOMAYOR: IsyourdefinitionI
7 mean,JusticeBreyerhasalreadyaskedyousaidhe's
8 troubledaboutthephonographstore,andandthe
9 DropboxandtheiCloud. I'malsoworriedabouthowto
10 defineorpublicperformanceortheperformanceofa
11 workpublicly,whichIguessisthebetterwaytodoit,
12 accordingtoyou. HowdoIdefinethatsothatsomeone
13 whosellscoaxialcabletoaresidentofabuildingis
14 notsweptupasaparticipantinthis? Orsomeone
15 whothesortofpassivestorageadvisorsthatthis
16 isreallyhardforme.
17 MR.CLEMENT: Okay. Butletme
18 JUSTICESOTOMAYOR: HowdoIwhatdoIdo
19 toavoidwhatdowedo,notme,butwhatdoesthe
20 Courtdotoavoidadefinitionoranacceptanceofa
21 definitionthatmightmakethosepeopleliable?
22 MR.CLEMENT: Okay. Well,letmetryto
23 takethoseareactuallytwodifferentexamples,andI
24 thinktheanswertobothofthemissomewhatdifferent.
25 Ithinktheproviderofcoaxialcableisifit'sjust
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1 asimplesaleofthecableisnotperformingatall.
2 AndsoIthinkifyou'resomebodyandallyoudoistake
3 apieceofhardwareandyousellitonceandforallto
4 auser,thentheusermaybeperformingwiththe
5 equipment,butyou'reoutofthepicture. Andthat's
6 differentfromanongoingservice,likeacablecompany
7 orlikeAereo,whostillownsallthesefacilitiesand
8 they'reproviding,throughwiretransmissions,these
9 performancesonanongoingbasis.
10 JUSTICESOTOMAYOR: Whatifyougetit
11 throughDropbox?
12 JUSTICEKAGAN: Well,that'ssomethingelse
13 beforeyougettoJusticeSotomayor'ssecondhalfofthe
14 question,butsomethingmorealongthelinesof
15 providinghardware. Supposeacompanyjustgavethe
16 antennaandaharddrive,that'swhattheysoldtothe
17 user,andtheuserwasabletousetheantennaandthe
18 harddriveinherownhouseorapartmentinordertoget
19 allthesebroadcastprograms. Whatwouldthewould
20 thatbeaperformance?
21 MR.CLEMENT: Ithinktheenduserwouldbe
22 doingaperformance,butitwouldbeapurelyprivate
23 performance,andIdon'tthinkthepersonthatsoldthem
24 thehardwareorreallyanybodyelse,ifIunderstand
25 yourhypo,wouldbeinvolvedinaperformance. Andthe
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1 answertothesehyposImean,thisisn'tsomething
2 thatI'mmakinguponthefly. Imean,it'srightthere
3 inthetextofthestatute.
4 JUSTICEKAGAN: Butthenitreallydoes
5 dependon,like,wherethewherethehardwareis. In
6 otherwords,ififAereohasthehardwareinits
7 warehouseasopposedtoAereosellingthehardwareto
8 theparticularenduser,thatisgoingtomakeallthe
9 differenceintheworldastowhetherwehaveapublic
10 performanceornotapublicperformance.
11 MR.CLEMENT: Welland,again,Ithink
12 thatgoestowhatIwasabouttosay,whichislet's
13 justnotbecause,youknow,welikeonebetterthanthe
14 other. It'sbecauseofthetextofthestatuteCongress
15 wrote. Oneofthewaysthatyoucanpublicperform. I
16 mean,theystartwiththeclassicpublicperformance.
17 Right? Asingerinaconcerthall. Theysoldtickets.
18 Butthentheysay,wait,it'salsoapublicperformance
19 ifyoutakethesinger'sperformanceandyoutransmit
20 it,andthey'rethinkingovertheairwaysandallsorts
21 ofotherways,ifyoutransmitittothepublic. And
22 thedefinitionoftransmission,then,istocommunicate
23 itfromoneplacetoanother.
24 Sothereisageographicalaspect,ifyou
25 will,builtrightintothestatutesothatifyousell
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1 somebodyhardwareandallthey'redoingistransmitting
2 ittothemselvesattheirhome,there'snotgoingtobe
3 atransmissionthat'schargeabletothepersonwhosold
4 youthehardware. Butifyouprovideanongoingservice
5 fromaremote
6 JUSTICEKAGAN: Soyouthinkthatinmy
7 hypo,there'saperformance,butit'saprivate
8 performanceandthenyoumovethehardwareandit
9 becomesapublicperformance. Isthatit?
10 MR.CLEMENT: Ititbecomesapublic
11 performanceonbehalfofthesender,butitstillwould
12 beaprivateperformanceonbehalfofthereceiver. And
13 that'sonethingthat'sreallyimportanttogetinmind,
14 isthatinthisstatuteastothepublicperformance
15 right,there'snothingparticularlyanomalousabouta
16 singletransmissionthatfromthesender'sperspective
17 isapublicperformance,butfromtherecipient's
18 perspectiveonlyallowsforaprivateperformance.
19 Ifyouthinkabouttheclassiccable
20 context,whichiswhatCongresswastryingtoaddressin
21 1976withtheTransmitClause,youhavethecable
22 companyandthey'retakingaperformanceoffofthe
23 airwaysandthey'retransmittingittoallthe
24 endusers.
25 Now,thecablecompanyisclearlyperforming
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1 tothepublic,butthatsametransmissionisallowing
2 eachendusertoturnontheirtelevisionsetandto
3 makeaperformanceproper,whichisaprivate
4 performance.
5 JUSTICESOTOMAYOR: SoRokuisRokuis
6 payingalicensefornoreason.
7 MR.CLEMENT: I'msorry?
8 JUSTICESOTOMAYOR: Rokuispayingalicense
9 fornoreason? Theysoldmeapieceofequipment.
10 MR.CLEMENT: Idon'tknowallthedetails
11 ofthatparticularpieceofequipment. I'mnotsure
12 whetherthey'rethey'repayingalicenseornot. But
13 iftherewasreallyatransferandthere'snobodyelse
14 providingatransmission,Idon'tthinkthatjust
15 operatingthehardwareintheprivacyofyourownhome
16 isgoingtoresultinanythingbutaprivate
17 performance.
18 JUSTICESOTOMAYOR: GototheiDropinthe
19 cloud.
20 MR.CLEMENT: Sure. Now,there's,Ithink,
21 it'saslightlydifferentsituation. Here,Ithinkthe
22 ultimatestatutorytextthatallowsyoutodifferentiate
23 acloudlockerstoragefromsomethinglikewhatAereo
24 doesisalanguagetothepublic. AndIdothinkthat
25 inallsortsofplaces,includingtherealworld,
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1 there'safundamentaldifferencebetweenaservicethat
2 allowsthatprovidesnewcontenttoallsortsof
3 endusers,essentiallyanypayingstranger,anda
4 servicethatprovidesalocker,astorageservice. And
5 Ithinkifyouwantarealworldanalogyoffofthe
6 Internet,Ithinkit'sthebasicdecisionthe
7 differencebetweenacardealerandavaletparking
8 service. Imean,ifyoulookatitfrom30,000feet,
9 youmightthink,hey,bothofthesethingsprovidecars
10 tothepublic. Butifyoulookedatitmoreclosely,
11 you'dunderstand,well,ifIshowupatthecar
12 dealershipwithoutacar,I'mgoingtobeabletogeta
13 car. IfIshowupatthevaletparkingserviceandI
14 don'townacar,it'snotgoingtoendwellforme. And
15 so
16 JUSTICEALITO: Whatisthedifference
17 (Laughter.)
18 JUSTICEALITO: Ididn'tmeantointerrupt
19 your
20 MR.CLEMENT: Well,iwasjustgoingto
21 soIthinkthereisaveryrealwayinwhichyouwould
22 say,youknow,attheendoftheday,thecardealer's
23 providingcarstothepublic,thevaletparkingservice
24 isnot. It'sprovidingaparkingservice.
25 CHIEFJUSTICEROBERTS: Whyisn'tandI
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1 don'twanttostretchittoobutwhyisn'titlikea
2 publicgarageinyourowngarage? Imean,youknow,if
3 youyoucanparkyourcarinyourowngarageoryou
4 canparkitinapublicgarage. YoucangotoRadio
5 ShackandbuyanantennaandaDVRoryoucanrentthose
6 facilitiessomewhereelsefromAereo. They've
7 they'vegotanantenna. They'llletyouuseitwhenyou
8 needitandtheycan,youknow,recordthestuffaswell
9 andletyoupickitupwhenyouneedit.
10 MR.CLEMENT: Mr.ChiefJustice,that'snot
11 animplausiblewaytolookatthis. That'sexactlythe
12 waythatthisCourtlookedatitinFortnightly
13 decision. ButCongressin1976decideditwasgoingto
14 lookatitdifferently,anditsaidthatifyouare
15 providingaservice,evenifyouareprovidingaservice
16 thatonecouldreconceptualizeasjustrentingout
17 antennasthatsomebodycouldputontheirownhouse,the
18 personthatprovidesthatserviceonanongoingbasis
19 andintheprocessexploitsthecopyrightedworksof
20 othersisengagedinapublicperformance. Thatis
21 clearlywhattheyweretryingtodointhe1976Actby
22 addingthetransmitclause.
23 JUSTICEALITO: Well,theSecondCircuit
24 analogizedthistoitsCableVisiondecision. Somaybe
25 youcouldexplaintomewhatisthedifference,inyour
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1 view,betweenwhatAereodoesandaremotestorageDVR
2 system. Isthedifferencedoesthedifferencehave
3 todowiththewayinwhichthecablecompanythathas
4 theremotestorageDVRsystemversusAereoacquiresthe
5 programinthefirstplace? Doesithavetodowiththe
6 numberofpeoplewhoviewthisprogramthat'sbeen
7 recorded? Whatisthedifference?
8 MR.CLEMENT: Ithinkthepotential
9 difference,andit'sboththeCloudLockerstorageand
10 thisexample,Idon'tthinkthisCourthastodecideit
11 today. Ithinkitcanjustbeconfidenttheyare
12 different. Hereisthe
13 JUSTICEALITO: Well,Idon'tfindthatvery
14 satisfyingbecauseIreallyIneedtoknowhowfar
15 therationalethatyouwantustoacceptwillgo,andI
16 needtounderstand,Ithink,whateffectitwillhaveon
17 theseothertechnologies.
18 JUSTICEKENNEDY: Ihadthesamequestion.
19 JustassumethatCableVisionisourprecedent. Iknow
20 thatitisn't,butlet'sjustassumethatitis. How
21 wouldyoudistinguishtheCableVisionfromyourcaseand
22 howisitapplicablehere? Assumethatit'sbinding
23 precedent. Justthat'sahypothetical.
24 MR.CLEMENT: Okay. But,JusticeKennedy,I
25 wouldliketoanswerbothyourquestionsbyassuming
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1 thattheresultinCableVisionisright,butIdon't
2 havetonecessarilybuythereasoning,becauseIthink
3 thereasoningofCableVisionisprofoundlywrong,solet
4 mecirclebacktothat.
5 Butthereasonthere'safundamental
6 differencebetweentheRSDVRatissueinCableVision
7 andwhatAereoprovidesis,asJusticeAlitoalludedto,
8 thefactthatthere'salicenseintheCableVision
9 contexttogettheinitialperformancetothepublic.
10 AndsothenIthinkappropriatelythefocusinthe
11 CableVisioncontextbecomesjusttheplaybackfeature
12 andjustthetimeshiftingthat'senabledbythat. And
13 inthatcontext,ifyoufocusonlyonthat,thentheRS
14 DVRlooksalotlikealockerservicewhereyouhaveto
15 comeinwiththecontentbeforeyoucangetcontentout
16 andyouonlygetbackthesamecontent.
17 AndhereiswhatreallyIthinkAereois
18 like. AereoislikeifCableVision,havingwoninthe
19 SecondCircuit,decides: Whew,wewon,soguesswhat?
20 Goingforward,we'regoingtodispensewithallthese
21 licenses,andwearejustgoingtotrytotellpeoplewe
22 arejustanRSDVR,that'sallweare,andnevermind
23 thatwedon'thaveanylicensedabilitytogetthe
24 broadcastinthefirstinstance,andwe'regoingto
25 provideittoindividualusers,andit'sallgoingtobe
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1 becausetheypushbuttonsandnotbecausewepush
2 buttons. Ifthatwerethehypothetical,Idon'tknow
3 howthatwouldn'tbetheclearestviolationofthe1976
4 Act.
5 JUSTICEBREYER: That'sexactlyourproblem.
6 I'mhearingeverybodyhavingthesameproblem,andI
7 willbeabsolutelyprepared,atleastforargument's
8 sake,toassumewithyouthatiftherewereever
9 anythingthatshouldbeheldtofallwithinthepublic
10 performance,thisshouldbe. Allright? Iwillassume
11 that. I'mnotsayingit.
12 Butthentheproblemisinthewordsthatdo
13 that,becausewehavetowritewords,arewesomehow
14 catchingotherthingsthatreallywillchangelifeand
15 shouldn't,suchasthecloud? Andyousaid,well,as
16 thegovernmentsays,don'tworry,becausethatisn'ta
17 publicperformance. AndthenIreadthedefinitionand
18 Idon'tseehowtogetoutofit.
19 MR.CLEMENT: Hereisthewaytogetoutof
20 it,JusticeBreyer. Ultimatelythewordsyou'regoing
21 tohavetointerpretare"tothepublic."
22 JUSTICEBREYER: Tothepublic? Yousee,
23 separate,atthesametime,oratdifferenttimes?
24 Separateortogether? Soathousandpeoplestoreinthe
25 cloudthesamething,ascaneasilyhappen,andpullit
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1 backatvaryingtimesoftheday.
2 MR.CLEMENT: Ifalltheycandois,just
3 likethevaletcarparkingservice,isgetbackwhat
4 theyputupthere,Ithinkyoucouldeasilysaythat
5 thatisnottothepublic. Andthatisnotjustme
6 comingupwithacleverdistinction. That'sthe
7 distinctionthat'sreallybeendrawnintherealworld,
8 becausenotallcloudcomputingiscreatedequal,and
9 therearesomecloudcomputingservicesthatusecloud
10 computingtechnologytogetnewcontenttopeoplethat
11 don'thaveit,andtheygetlicenses. Andthereis
12 othercloudcomputingthatjusthaslockerservicesand
13 theydon'tthinktheyneedalicense,andsoI'mnot
14 sayingthatyouhavetoblesswhatthemarkethasdone,
15 butIthinkit'saprofoundindication
16 JUSTICEKAGAN: Butwhatif,Mr.Clement,
17 it'snotsosimpleasacompanythatjustallowsyou
18 yourselftoputsomethingupthere? Whatifhow
19 abouttherearelotsofcompanieswheremany,many
20 thousandsormillionsofpeopleputthingsupthere,and
21 thentheysharethem,andthecompanyinsomeways
22 aggregatesandsortsallthatcontent. Doesthatcount?
23 MR.CLEMENT: That,JusticeKagan,is
24 preciselywhyI'maskingyounottodecidethecloud
25 computingquestiononceandforalltoday,becausenot
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1 allcloudcomputingiscreatedequal. Thedetailsofit
2 mightmatter. IfIcantakemyvaletparkingservice
3 onemoretime. Ifavaletparkingservicestarts
4 rentingthemoutandsortofhasalittleZipcarservice
5 onthesideandsays,hey,whilewehaveyourcar,if
6 somebodyelseneedsacar,we'regoingtorentitoutto
7 them,Ithinkthat'sdifferentfromthepurevalet
8 parkingservice.
9 IfIcouldreservetherestofmytimefor
10 rebuttal. Thankyou.
11 CHIEFJUSTICEROBERTS: Thankyou,counsel.
12 Mr.Stewart.
13 ORALARGUMENTOFMALCOLML.STEWART
14 ONBEHALFOFTHEUNITEDSTATES,AS
15 AMICUSCURIAE,SUPPORTINGPETITIONERS
16 MR.STEWART: Mr.ChiefJustice,andmayit
17 pleasetheCourt:
18 Iwouldliketobeginbyreinforcingtwoof
19 thepointsthatMr.Clementmade. Thefirstisthat
20 whatAereoisdoingisreallythefunctionalequivalent
21 ofwhatCongressinthe1976Actwantedtodefineasa
22 publicperformance. AstheChiefJusticesaid,one
23 potentialwayoflookingatthisisthatAereoand
24 companieslikeitarenotprovidingservices,theyare
25 simplyprovidingequipmentthatdoes,inamore
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1 sophisticatedway,whattheviewerhimselfcando. It's
2 aplausiblewayoflookingattheworld. That'swhat
3 theCourtinFortnightlyandTelepromptersaid,but
4 Congressactedtooverridethatandtomakeclearthat
5 cableservices,servicesthatusedonebigantennato
6 pullbroadcastsignalsoutoftheskyandrerouteitto
7 theirsubscribers,thosepeoplewereengagedinpublic
8 performancesandtheyoughttobepayingroyalties.
9 ThesecondthingthatIwouldliketo
10 reinforceinMr.Clement'spresentationisthatthereis
11 noreasonthatadecisioninthiscaseshouldimperil
12 cloudlockerservicesgenerally,but,asMr.Clementwas
13 pointingout,thattheterm"cloudcomputing"
14 JUSTICESOTOMAYOR: HowaboutSimple.TVor
15 NimbleTV,whichisnotquiteahybrid?
16 MR.STEWART: IguessI'mnotfamiliar
17 enoughwiththeprecisedetailsoftheoperation,but
18 justletmesayingeneraltermsthereareobviously
19 servicesthatprovidetelevisionprogrammingoverthe
20 Internet. Someofthemarelicensedbecausethey
21 recognizethattheyarepubliclyperforming. Ifa
22 particularcompany,forinstance,recordedtelevision
23 programsandofferedtostreamthemtoanyonewhopaid
24 thefeeorofferedtostreamthemforfreeandmakeits
25 moneyoffadvertising,thatwouldbeapublic
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1 performancebecausethosecompanieswouldbeproviding
2 contenttopeoplewhodidn'thaveit.
3 Ithinkthebasicdistinction,theonethat
4 atleastdefinestheextremes,isthedistinction
5 betweenthecompany,whetheritbeInternetbasedora
6 cabletransmitter,thatprovidescontentinthefirst
7 instanceandthecompanythatprovidesconsumerswith
8 accesstocontentthattheyalreadyhave. Ifyouhavea
9 cloudlockerservice,somebodyhasboughtadigitalcopy
10 ofasongoramoviefromsomeothersource,storesit
11 inalockerandasksthatitbestreamedback,thecloud
12 lockerandstorageserviceisnotprovidingthecontent.
13 It'sprovidingamechanismforwatchingit.
14 JUSTICEKAGAN: CanIaskmysamequestion
15 toyouthatIaskedtoMr.Clement? Howaboutif
16 there'sacompanythatallowssharingandthat
17 aggregatesallthecontentthatdifferentindividual
18 usersputupandthatinsomesensesortofsortsand
19 classifiesthecontentindifferentways? Howabout
20 that?
21 MR.STEWART: Ithinkyouwouldhaveto
22 youwouldhavetoknowboththedetailsoftheservice
23 andyouwouldhavetobemakingahardercallthere
24 abouthowtodrawtheline,becauseIdon'tpretendthat
25 thereisabrightlinebetweenprovidingaserviceand
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1 providingaccesstoequipment. Ifyoulook,for
2 instance,attheextremesofapersonputtingarooftop
3 antennaathisownhome,everybodyagreesthatthe
4 rooftopantennamanufacturerisnotperformingatall
5 andtheindividualisengagedinasolelyprivate
6 performance.
7 Theotherextremeisthecablecompany,one
8 bigantenna,makestransmissionstoalotofpeople;
9 Congressclearlyintendedtodefinethatasaprivate
10 performance. Somewhereintheyoucouldcomeupwith
11 lotsofhypotheticalsthatlookmoreorlesslikeoneof
12 theotherextremes,theyaresomewhereinthemiddle.
13 It'sanauthenticallyhardcallastowheretodrawthe
14 line. SoIdon'thaveagoodanswerforyou.
15 JUSTICEBREYER: Howdowegetoutof
16 theexample? Imean,howdowegetoutwhatwordsdo
17 Iwritetogetoutofthis,throwingintothisclausea
18 musicstorethatdistributesviaFederalExpress,a
19 device,ortheU.S.PostalServiceorevensomeoneover
20 thecounter,distributesto10,000peopleacopyofa
21 recordwhichtheythenwilltakeandplayit? They
22 have,tothesamedegree,transmittedsomethingthat
23 willelectronicallymakeaperformanceofthemusic. So
24 aretheywhentheyselltherecordviolatingthedisplay
25 clause?
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1 MR.STEWART: No,they'renot
2 JUSTICEBREYER: Because? Because?
3 MR.STEWART: Becausethedefinitionof"to
4 transmit"goeson: "Totransmitaperformanceor
5 displayistocommunicateitbyanydeviceorprocess
6 wherebyimagesorsoundsarereceivedbeyondtheplace
7 fromwhichtheyaresent."
8 JUSTICEBREYER: Ofcoursetheyare. The
9 soundsarereceivedbeyondtheplace. Itrequiresthe
10 persontotaketherecord,putitonamachine,andthen
11 playit.
12 MR.STEWART: Well,thereisaseparate
13 exclusiveright.
14 JUSTICEBREYER: Ofcoursethereis. And
15 thatseparateexclusiverighthassuchthingsasfirst
16 saledoctrineisattached. Butiftheyalsoflowhere,
17 iftheyifthiscoversthem,whichiswhyNMPAwrote
18 theparagraphthatwasquoted,ifthiscoversit,there
19 isnofirstsaledoctrine,andthathasalotof
20 consequences. Ithinkso. Anyway,ifyoudon'tknow
21 andyouhaven'tgotsomethingrightthereandyou
22 haven'tthoughtaboutit,you'renotgoingtothink
23 aboutitintwominutes,norwillI.
24 MR.STEWART: No. No. Ihavethoughtabout
25 it. AndIthinktheansweristhattheword"transmit"
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1 isbeingusedinaparticularsense. Youarecorrect
2 thattherearesomecontextsinwhichwewouldsaythat
3 apersonwhosendsCDsorvitalalbumsoverthemailsis
4 transmittingthose. That'snotthesenseinwhichthe
5 term"transmit"isusedhere. It'stalkingabout
6 transmittinginawaythatcausesthesightsandsounds
7 tobereceived,transmissionthroughradiowaves,
8 throughcable,etcetera. Andiftherewereanydoubt
9 abouttheword"transmit,"rememberthatit'spartof
10 thedefinitionoftheword"perform." Andambiguities
11 inthedefinitionshouldbeconstruedinlightofthe
12 definedterm. Andnobodywouldsay,inordinary
13 parlance,thatapersonwhotransferredacopyofa
14 recordwasperformingit.
15 JUSTICEGINSBURG: Mr.Stewart,beforeyou
16 finish,Mr.Clementinhisbriefmadethepointthatwe
17 wouldifwetookthepositionthatPetitionerurges,
18 therewouldbeanincompatibilitywithourinternational
19 obligations;thatis,Aereo'sviewofthepublic
20 performancerightisincompatiblewithourobligations
21 undertheBerneConventionandunderwhatisit,
22 WYCO? Onpages44to45ofhisbrief,hesaysthat
23 "Aereo'sviewofwhatthepublicperformancerightis
24 runsstraightupagainstourinternationalobligations,"
25 andhecitesacasefromtheEuropeanCourtofJustice
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1 andIthinkanothercase.
2 MR.STEWART: Wehaven'tmadethatargument.
3 WewebelievethatexistingU.S.copyrightlaw
4 properlyconstruedisfullysufficienttocomplywith
5 ourinternationalobligations. Butthatthatdoesn't
6 meanthatwethinkthatwheneveracourtmisconstrues
7 thestatute,wewillautomaticallybethrowninto
8 breach. It'scertainlypossible. Butifthiscasewere
9 decidedinAereo'sfavorthatsomeofourinternational
10 tradingpartnersmightobject,butbutI'mnotgoing
11 totakethepositionthatwewouldconcedethose
12 objectionshadmerit,sowe'renotmakingthatargument.
13 TheotherthingIwouldmakesaytoto
14 reinforcethepointthatMr.Clementwasmakingabout
15 thephrase"tothepublic,"usinghisexampleofthe
16 valetparking,usingacomparableexampleofacoat
17 checkroom,therearesituationsallthetimeinwhich
18 peopleplacepropertymomentarilyatthedisposal
19 disposalofanotherandthenretrieveitlater. And
20 it'sdistributedtothematthatlaterdate,notin
21 theircapacitiesasmembersofthepublic,butasthe
22 trueownersoftheproperty. AndIthinksomekindof
23 distinctionalongthoselinesisessentialinmuchmore
24 mundaneapplicationsoftheCopyrightAct. Forexample,
25 ifIinvite10friendsovertowatchtheSuperBowl,
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1 that'saprivateperformance. It'snotapublic
2 performance. That'sthat'snotbecausemyfriends
3 arenotmembersofthepublic. Theyare. Andinsome
4 othercapacities,itwouldbeimportanttoregardthem
5 assuch.
6 Ifthetheaterdownthestreethada
7 screeningofCasablancaandithappenedthatthose10
8 peopleweretheonly10peoplewhoattended,itwouldbe
9 apublicperformance,becausetheywouldbeintherein
10 theircapacitiesasmembersofthepublic. SoIthink
11 forinawiderangeofsituationsdealingwithpublic
12 performance,distributiontothepublic,it'sessential
13 toasknotonlyaretheseindividualsmembersofthe
14 publicinsomesense,butaretheyactingintheir
15 capacitiesassuch. Andifyouhavethepurecloud
16 lockerservice,theservicethatdoesn'tprovide
17 content,itsimplystorescontentandthenplaysitback
18 attheuser'srequest,thatthatservicewouldbe
19 providingcontenttoitstrueowner.
20 JUSTICEKENNEDY: Howdoyouwantustodeal
21 withCableVisiontheCableVisioncaseintheSecond
22 Circuit? Againassumeit'sabindingprecedent. Just
23 assumethat.
24 MR.STEWART: Myanswerwouldbethesameas
25 Mr.Clement's,thatthereasoningofCableVision,ifyou
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1 reallyadheretotheideathattheonlytransthe
2 onlyperformancethatcountsistheindividual
3 transmission,andaskdoesthatgotomorethanone
4 person,thenit'shardtoseehowyoucouldrulein
5 favorofourpositionhere. Butasfarasthebottom
6 lineoutcomeofCableVisionisconcerned,youcould
7 acceptthegovernment'spositionandstillsay
8 CableVisionwasdecidedthecorrectwaybecause
9 preciselybecauseCableVisionhadalicensetoperform
10 inrealtime,tobroadcasttheprogramtoits
11 subscribers. Theonlythingthatwasatissuewasthe
12 supplementalRSDVRservice. Andthecourtin
13 CableVisionappropriately,wethink,heldthatthe
14 recordingofthoseprogramsbythesubscriberswhowere
15 alreadyentitledtoviewtheminrealtimewasfairuse
16 underSonyandtheplaybackcanreasonablybe
17 characterizedasaprivateperformanceoftheirown
18 content. Thankyou.
19 CHIEFJUSTICEROBERTS: Thankyou,
20 Mr.Stewart.
21 Mr.Frederick.
22 ORALARGUMENTBYMR.DAVIDC.FREDERICK
23 ONBEHALFOFTHERESPONDENT
24 MR.FREDERICK: Thankyou,Mr.Chief
25 Justice,andmayitpleasetheCourt:
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1 Iwanttoaddressthecablequestion,but
2 beforeIdothat,canIjustsaythethreepointsI
3 wantedtomakearethetextisveryclearforAereo,the
4 interpretationsofthetextthattheyofferabsolutely
5 threatencloudcomputing,andthird,thiscaseisreally
6 areproductionrightcasemasqueradingasapublic
7 performancecase.
8 Now,wearenotacableservice. Thereason
9 we'renotacableserviceisbecausecabletakesall
10 signalsandpushesthemdown. There'saheadin. It's
11 definedbystatute. There'saveryparticularized
12 regulatorystructurethatdealswithtakingalotof
13 contentandpushingitdowntoconsumers. Aereoisan
14 equipmentprovider. NothinghappensonAereo's
15 equipmentuntilauserinitiatesthesystem. Theuser
16 initiatesthesystembyloggingonandpressingthisis
17 theprogramthatIwanttowatch. Thatthentunesthe
18 antenna,activatestherecordingthatwillbemade,and
19 thentheuseristhenabletoplaybackthatrecording.
20 JUSTICESOTOMAYOR: Ialwaysthought,and
21 I'lltrytobecarefulaboutit,butnotoftenenough,
22 probablybreachitlikeeveryothermemberofthe
23 public,thatifItakeaphonographofarecordand
24 duplicateitamilliontimesthewayyou'redoingit,
25 andIthengooutandselleachofthosecopiestothe
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1 public,thenIamviolatingtheAct. Sowhyisitthat
2 youarenot?
3 MR.FREDERICK: Well
4 JUSTICESOTOMAYOR: It'snotlogicalto
5 me
6 MR.FREDERICK: Sure.
7 JUSTICESOTOMAYOR: thatyoucanmake
8 thesemillionsofcopiesandgivesellessentially
9 sellthemtothepublic,becauseyou'retellingthe
10 publicwhentheywanttobuyit,theycancallitupand
11 hearit. Sowhyaren'tyoutrans
12 MR.FREDERICK: Well,yourhypothetical,
13 JusticeSotomayor,implicatesthereproductionright.
14 Thatistheexclusiverightofthecopyrightholderto
15 restrictthenumberofcopiesthatismade. Thatisnot
16 apublicperformancerightquestion.
17 Theyabandonedtheirchallengeinthe
18 preliminaryinjunctionproceedingtothereproduction
19 rightissuebecauseitrunsrightintotheSony
20 decision. InSony,thisCourtheldthatconsumershave
21 afairuserighttotakelocalovertheairbroadcasts
22 andmakeacopyofit. AllAereoisdoingisproviding
23 antennasandDVRsthatenableconsumerstodoexactly
24 whatthisCourtinSonyrecognizedtheycandowhen
25 they'reinhomeandthey'removingtheequipment,the
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1 antennasandtheDVRs
2 JUSTICEGINSBURG: Mr.Frederick
3 MR.FREDERICK: totheInternet.
4 JUSTICEGINSBURG: wasJudgeChinright
5 whenhesaidtherewasnotechnicallysoundreasonto
6 usethesemultipleantennas? Thattheonlyreasonfor
7 thatwastoavoidthebreachoftheCopyrightAct. Was
8 thereatechnicalreason,insteadofhavingaoneway
9 antenna,tohaveallofthesewhat,dimesizeantennas?
10 MR.FREDERICK: Letmethisisavery
11 complexquestion,JusticeGinsburg,andletmeanswerit
12 multiplelevels. Therearetechnicalreasonswhythe
13 individualantennasprovidethesameutilityatlower
14 costsandfunctionalitythanonebigantenna. Butthere
15 areverypracticalconcerns,too.
16 Asastartupbusiness,Aereoisattempting
17 toenticeconsumerstoreplicateonthecloudwhatthey
18 candoathomeatlowercapcostsandmoreefficiency.
19 Asapracticalmatter,andJudgeChinhadnobasisin
20 whichtomakethisstatementatallinhisdissent
21 becausethesearefactsnotontherecordandefficiency
22 isnotaconsiderationundertheCopyrightAct,you
23 can'tdomultiplechannelsovertheInternetanyway.
24 Youcanonlydoasinglevideostreamatatime. So
25 whetheryouhaveonebigantennaorwhetheryouhave
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1 lotsoflittleantennas,youstillhavetocompressthe
2 signalandonlyonecangoovertheInternetatatime.
3 However,JusticeGinsburg,asastartup
4 business,thereisaveryrealconsiderationforwhy
5 multipleantennasmakesense. Ifyou'reinNewYork
6 City,youwanttoputanantennaontopofthebuilding,
7 you'vegottogetabuildingpermit. Ifyouwantto
8 constructit,you'vegottogetaconstructionpermit.
9 Ifyouwanttoputituptherewithacrane,youhaveto
10 getasubwaypermitbeforeyoucandoallofthethings
11 toputabigantennaonabuildinginNewYorkCityto
12 getbroadcastsignals.
13 CHIEFJUSTICEROBERTS: Butisthereany
14 reasonyouneed10,000ofthem? Can'tyouputjust
15 ifyourmodeliscorrect,can'tyoujustputyour
16 antennaupandthendoit? Imean,there'sno
17 technologicalreasonforyoutohave10,000dimesized
18 antenna,otherthantogetaroundthecopyrightlaws.
19 MR.FREDERICK: Well,thepointofthe
20 copyrightlaws,though,YourHonor,shouldn'tturnon
21 thenumberofantennas. Itturnsonwhethertheperson
22 whoisreceivingthesignalthatcomesthroughthe
23 Internetisprivatelyperformingbyinitiatingthe
24 actionofthatantennagettingadatastream,having
25 thatsignalcompressedsothatitcanbestreamedover
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1 theInternetthroughauserspecific,userinitiated
2 copy.
3 JUSTICESCALIA: Thatmaywellbe,butit
4 doesn'tcontradicttheChiefJustice'squestion. I
5 mean,you'rejustsayingthatbydoingitthiswayyou
6 don'tviolatethecopyrightlaws. Buthisquestionis,
7 isthereanyreasonyoudiditotherthannottoviolate
8 thecopyrightlaws?
9 MR.FREDERICK: Weunderstoodyes,there
10 isareason,JusticeScalia. Wewantedtotell
11 consumers,youcanreplicatetheexperienceatvery
12 smallcost. Youknowyouhavearighttoputanantenna
13 onyourroofandputaDVRinyourlivingroom. Wecan
14 provideexactlythesameantennaandDVRforafraction
15 ofcostbyputtingitoverthecloud.
16 CHIEFJUSTICEROBERTS: Yeah,butit's
17 notit'snot. Yougivethemspacethat'savailable
18 whentheycallin. Theydon'thavethisismylittle
19 dimething,andthisismycopythat'sgoingtobehere.
20 They'rethere,andwhentheywantsomething,youprovide
21 theserviceofgivingthemthat. Theydon'thavea
22 dedicatedantennainBrooklyn.
23 MR.FREDERICK: Well,someoftheconsumers
24 do. Therecordisclearthatsomearestatically
25 assignedtoparticularusers. ButMr.ChiefJustice,
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1 thatdoesn'tanswerthequestion,thestatutory
2 interpretationquestion,whichis,asinCableVision,as
3 JusticeKennedynoted,thereisauserspecific,
4 userinitiatedcopythatwhenviewedbytheuserisa
5 privateperformance.
6 Thatoperationofthesystemworksexactly
7 thesameway. AndthefactthatCableVisionisableto
8 compressitssignalstomakethemInternetaccessible
9 throughasingleantennaandAereochoosestodoit
10 throughmultipleantennastoavoidallthehasslesthat
11 gowithhavingabigantennashouldnotmatterforthe
12 copyrightlaws.
13 We'restilltalkingaboutrentingequipment,
14 thatconsumershavearighttogetovertheairsignals
15 thatarefreetothepublic,usingpublicspectrumthat
16 thethatthegovernmenthasallocatedsothat
17 broadcasters
18 JUSTICEKENNEDY: SupposesupposeAereo
19 offeredaservicesothattheviewerathomecouldpress
20 threedifferentbuttons,butittakesonly45seconds,
21 andhecouldgetthebroadcastwithoutadvertising? And
22 Aereowouldhavesomewaytoscreenouttheadvertising
23 soyoucouldwatchtheentirebaseballgameorfootball
24 gamewithouttheadwithouttheads.
25 MR.FREDERICK: Thatwouldprobablyviolate
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1 thereproductionright,JusticeKennedy. Itwouldnot
2 violatethepublicperformancerights.
3 JUSTICEKENNEDY: WouldAereobeaperformer
4 then?
5 MR.FREDERICK: Aereowouldnotbea
6 performer. Thequestionwouldbeandthisdoesgo
7 intothetechnicaldetails. Andhere,theposition
8 betweenthepartiesisquitestark. Theysaythefacts
9 don'tmatter. Wehaveawelldevelopedfactualrecord.
10 There,JusticeKennedy,thefactthatwouldmatterin
11 yourhypotheticalwouldbewhetherornottheinitiation
12 oftheadvertiserfreehadbeensomehowdonebythe
13 consumerorwhetherithadbeendonebythecloud
14 provider.
15 JUSTICEKENNEDY: No,theconsumermakesthe
16 choice. Youcanhaveitwiththeadsorwithoutthe
17 ads. Pushbuttononeorbuttontwo.
18 MR.FREDERICK: Right. Iunderstand
19 JUSTICEKENNEDY: Idon'tunderstandwhyhe
20 istheperformerinonecaseandnotintheothercase.
21 MR.FREDERICK: Becausethetheactionof
22 whoisaperformerturnsunderthestatuteonwhois
23 makingwhoisactingtomakethesequenceofsounds
24 andimagesperceivable. Whereyou'retalkingabout
25 takingoutadvertising,whatyou'redoingisyou're
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1 alteringthecopy,andyouareabridging,infringing,
2 thereproductionright. Thatisnotsomethingthatyou
3 candointheAereotechnology. Ihavenobriefto
4 defendthat. Thatwouldbeaverydifficult
5 reproductionrightquestion. Butitdoesn'tmatterin
6 termsofwhoisexercisingaprivateperformance,
7 becausethatisbeingdoneinthehomewiththe
8 userinitiated,userspecificcopy.
9 JUSTICESCALIA: Mr.Frederick,youryour
10 clientisisjustusingthisforlocalsignals
11 MR.FREDERICK: Yes.
12 JUSTICESCALIA: rightnow. Butifwe
13 approvethat,isthereanyreasonitcouldn'tbeused
14 fordistantsignalsaswell?
15 MR.FREDERICK: Possibly.
16 JUSTICESCALIA: Possiblywhat? Thereis
17 possiblyareason,oritcouldpossiblybeused?
18 MR.FREDERICK: Itcan'tbeusedfor
19 distance,butitimplicates
20 JUSTICESCALIA: Whatwouldthedifference
21 be. Imean,youcouldtakeHBO,right? Youcould
22 youcouldcarrythatwithoutwithoutperforming.
23 MR.FREDERICK: No,becauseHBOisnotdone
24 overtheairwaves. It'sdonethroughaprivateservice.
25 ButJusticeScalia,letmeansweryour
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1 distantsignalhypotheticalthisway. Thatwould
2 implicateagainthereproductionright. Itdoesnot
3 implicatetheprivateperformanceandpublicperformance
4 distinction,because,evenifyouweretotakedistant
5 signalsandmakethemavailableinthehome,it'sstill
6 throughauserinitiated,userspecificcopyofdistant
7 programming.
8 Thequestionthenbecomes,isthereafair
9 userighttobeabletodothat. WhatSonysaid,
10 becauseSonywasdealingwithlocalovertheair
11 broadcastsandmakingacopyoflocalovertheair
12 broadcasts,itsaidthatconsumershaveafairuseright
13 tomakeacopyofthat.
14 Sonydidnotaddressthedistantsignal,and
15 thequestionthenwouldbecomeinbalancingthefairuse
16 factorswhetheritwasappropriateforaconsumertobe
17 abletogetaccesstothatprogrammingwithoutbeing
18 abletootherwiseimplicatethefreepublicspectrum.
19 Now,thewayCongresshasaddressedthat,
20 Congresshasaddressedthatbysayingthatwhenthere
21 aredistancesignalsthatthengetpushedthrougha
22 cablesystem,thereisacopyrightroyaltythatgets
23 paid.
24 ButIwanttomakeabsolutelyclear.
25 Satellite,cable,donotpaycopyrightroyaltiesfor
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1 localovertheairbroadcasts. Why? Becausethelocal
2 overtheairbroadcastchannelswanteditthatway.
3 Theydidn'twanttobeinasituationofhavingto
4 figureouthowtodivvyupallthecopyrightroyalties
5 tothevariousholders. Sowhentheytalkabouthow
6 CongresssupposedlyoverruledFortnightly,whatthey
7 ignoreisthatinSection11(d)andinSection122(c)of
8 theCopyrightAct,Congresssaidtheretransmissionof
9 localovertheairbroadcaststhroughsatelliteand
10 cableshallbeexemptfromthecopyrightregime.
11 Andsowhentheytalkaboutthe
12 retransmissionissue,they'rereallytryingtoconflate
13 atotallydifferentregulatorysystem
14 JUSTICEGINSBURG: Mr.Frederick,wouldyou
15 clarify? Ifeveryothertransmitterdoespayaroyalty
16 maybeit'sundercompulsorylicenseandyouare
17 theonlyplayersofarthatdoesn'tpayanyroyaltiesat
18 anystage
19 MR.FREDERICK: Well,JusticeGinsburg,the
20 personwhosellsanantennatomeatthelocalRadio
21 Shackdoesn'tpaycopyrightroyaltieseither. Anda
22 andacompanythatprovidesarentalserviceformeto
23 putanantennainmyhomeandinstallit,theydon'tpay
24 copyrightroyaltieseither.
25 Andthequestionthatitreallyboilsdown
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1 inthiscaseishowsignificantshoulditbehowlong
2 thecordisbetweentheantennaandtheDVRbeing
3 JUSTICEBREYER: Theanswerisvery
4 significant. Andthereasonit'sverysignificantis
5 becausewhatthelocalantennapersondoesn'tdobutyou
6 apparentlycoulddo,evenifyoudon't,iswiththesame
7 kindofdevicepickupeverytelevisionsignalinthe
8 worldandsendit,almost,andsenditintoaperson's
9 computer. AndthatsoundssomuchlikewhataCATV
10 systemdoesorwhatasatellitesystemdoesthatit
11 looksasifsomehowyouareescapingaconstraintthat's
12 imposeduponthem. That'swhatdisturbseveryone.
13 Andthenwhatdisturbsmeontheotherside
14 isIdon'tunderstandwhatthedecisionforyouor
15 againstyouwhenIwriteitisgoingtodotoallkinds
16 ofothertechnologies. I'vereadthebriefsfairly
17 carefully,andI'mstilluncertainthatIunderstandit
18 wellenough. Thatisn'tyourproblem,butitmightturn
19 outtobe.
20 (Laughter.)
21 MR.FREDERICK: Well,letmeaddressI
22 thinkIletmetrytomakeittheirproblem.
23 (Laughter.)
24 MR.FREDERICK: IthinkI'veaddressedthe
25 distantsignal,andIthinkyoucanreservethatcaseto
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1 saythatmightraiseadifferentissue,butonthefacts
2 herewouldnotentitlethecompanytoaninjunction
3 enjoiningAereofromprovidingtheservice.
4 Now,withrespecttothesecondaspectof
5 this,thereasonwhytheirinterpretationofthe
6 transmitclausecausessomuchproblem,somanyproblems
7 forthecloudcomputingindustry,isthatistwofold.
8 Numberone,theyareconflatingperformancewithworkin
9 thetransmitclause. Whattheyaresayingisthat,so
10 longastheworkisalwaysperceivedinsomefashion
11 throughaperformancethatisprivatelydonethroughthe
12 playbackofarecording,thatthatbecausethe
13 initialworkwasdisseminatedtothepublic,that
14 implicatesthepublicperformanceright.
15 Whatthatdoesisitmeansthateverytime
16 somebodystoressomethinginthecloud,whetherit'sa
17 song,avideoimageororthelike,ifithappensto
18 besomethingthatsomebodyelsehasstoredinthecloud,
19 theactofonepersoninitiatingitandperceivingitis
20 goingtoimplicatethepublicperformanceright. And
21 that'swhythecloudcomputingindustryisfreakedout
22 aboutthiscasebecausethey'veinvestedtensof
23 billionsofdollarsonthenotionthatinuserspecific,
24 userinitiatedcopywhenperceivedbythatpersonisa
25 privateperformanceandnotapublicperformance.
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1 Thesecondthingthattheydothat'swrong
2 withthestatuteistheyaggregateperformances.
3 Insteadofwherethestatutesays"transmita
4 performance,"theysay"transmitperformances." Because
5 theyacknowledgethatthewaythetechnologyworksfor
6 Aereoisthatitisanindividual,userspecific,
7 userinitiatedcopy. Buttheysaynomatterifyouadd
8 enoughofthemtogether,youcanaggregatethatto
9 becomeapublicperformance.
10 CHIEFJUSTICEROBERTS: Justtomakesure
11 I'vegotthere'snoreasonit'sauserspecificcopy,
12 isit? They'remaking10,000copies. It'dbemuch
13 easierforyouifyou'djusthavetomakeonecopyand
14 everybodycouldgetacopy.
15 MR.FREDERICK: Well,that'swheretheissue
16 aboutreplicatingwhathappensinthehomematters,
17 Mr.ChiefJustice,becauseifI'minmyhomeandIstart
18 theprogramtwominutesin,usingAereo'stechnology,I
19 missedthefirsttwominutes,Inevergettowatchit.
20 IthappenstobewhenIpushthebuttontoinitiatethe
21 copy,justlikeifI'mathomewatchingonaDVR,the
22 sameprinciple. Andsothatcopywillalwaysbe
23 differentbecauseIhavecontroloveritversus
24 CHIEFJUSTICEROBERTS: Surely,youcanmake
25 aprogramwhereyouhavejustonecopyandstartingit
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1 atdifferenttimes. Youdon'tneedeveryviewertohave
2 hisowncopy.
3 MR.FREDERICK: Butthatisthatisthe
4 keydistinctionbetweenvideoondemandandtheservice
5 thatAereoprovides,thekindsofequipmentand
6 technologythatAereoprovides. Wedon'thaveabrief
7 todefendthemastercopybecauseinthemastercopy
8 situation,thatisindisputablypublicbecausethereis
9 norighttoexcludeanyoneelse. WithAereo's
10 technology,ifI'mmakingacopyusingAereo'ssystem,
11 nooneelsecanlookatit. Evenifyouhappentohave
12 watchedthesameprogram,youcan'twatchmycopy,I
13 can'tdownloadit
14 CHIEFJUSTICEROBERTS: That'sjustsaying
15 yourcopyisdifferentfrommycopy.
16 MR.FREDERICK: Correct.
17 CHIEFJUSTICEROBERTS: Butthat'sthe
18 reasonwecallthemcopies,becausethey'rethesame.
19 (Laughter.)
20 CHIEFJUSTICEROBERTS: AllI'mtryingto
21 getat,andI'mnotsayingit'soutcomedeterminativeor
22 necessarilybad,I'mjustsayingyourtechnological
23 modelisbasedsolelyoncircumventinglegal
24 prohibitionsthatyoudon'twanttocomplywith,which
25 isfine. Imean,that'syouknow,lawyersdothat.
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1 ButI'mjustwonderingwhy
2 (Laughter.)
3 CHIEFJUSTICEROBERTS: whetheryoucan
4 givemeanytechnologicalreason,apartfromcompliance
5 withaparticularlegalissue,foryourtechnological
6 mind.
7 MR.FREDERICK: Itismuchsimplerifyou're
8 astartuptoaddcomponents,toaddmoduleswhenyou're
9 startingup,rampingup. Andwhatwe'retalkingabout
10 inanycloudcomputingindustryisyou'restartingwith
11 onegroupofserversandthenyouaddthem,almostlike
12 Legopieces,asyouareaddingthenumberofpeoplethat
13 you'reusing. Thatisatechnologicalreasonwhythe
14 cloudworksthewayitdoes,Mr.ChiefJustice.
15 SowithAereo'santennasanditsDVRs,we
16 can,withaboutthelengthofthesizeofthiscounsel
17 tablehere,servicetensofthousandsofpeopleinthe
18 NewYorkarea. Wecanprovidetheantennasandwecan
19 providetheDVRsandit'saverycompact,smallspace.
20 Andthenifweexpandandwe'reabletocontinuetobe
21 inbusinessandwegetmoresubscribersinBrooklyn,we
22 mightaddanotherrowthatwouldbethesizeofof
23 thecounseltablesbehindme.
24 Thataspectofthetechnologygoestothe
25 modulesthatareusedforcloudcomputingwhereyou
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1 basicallycanaddadditionalservers,addadditional
2 harddiskspaceandthenwhennewconsumersactivate
3 andletmejustbeclearaboutthis,whentheysignup,
4 theirsystemiscompletelyempty. There'snocontent
5 beingprovided. There'sequipmentthat'sbeing
6 provided. Sowhentheyactivatethesystemandthey
7 say,Iwanttowatchthenewsat6o'clock,theythen
8 starttheprocessthatthenfillstheirindividually
9 assignedstoragewiththe6o'clocknews. Butuntil
10 thathappens,there'snocontentbeingprovided. Sothe
11 notionthattheyhaveintheirreplybriefoverandover
12 thatwe'resomehowacontentproviderwouldmeanthat
13 everybodywhoprovidesanantennaoraDVRissomehowa
14 contentprovider. Andifthat'strue,thenthe
15 implicationsfortheequipmentindustryareobviously
16 quitemassiveandyoucanunderstandwhythatwould
17 frightenthecloudcomputingindustrybecausethatturns
18 themintopublicperformerswhenevertheyarehandling
19 content. Now,thegovernmentsays
20 JUSTICEGINSBURG: Theygivethesubscriber
21 amenu,anditsaysyoucangetanyofthesethings.
22 It'snotasthoughthethesubscriberinitiatesit.
23 Youhavethesechoicesandthey'reprovidingyouthese
24 choicesandthosechoicesarecontent.
25 MR.FREDERICK: It'snodifferent,
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1 JusticeGinsburg,thanifI'mathomeandIhavean
2 antennaorrabbitearsonmyTVandIknowwhatchannels
3 Icanget.
4 JUSTICEKAGAN: But,Mr.Frederick,it's
5 alsoit'salsonodifferentfromfromauser's
6 perspective,it'sexactlythesameasifI'mwatching
7 cable. Right? Youjusthaveadifferentcontent
8 selection,butitlooksthesametoyou. Somebodyelse
9 isprovidingyouwithamenu,andthenyoupickoffthat
10 menu.
11 MR.FREDERICK: Right. Butthemenu,
12 JusticeKaganandJusticeGinsburg,issimplywhatis
13 technologicallyavailable. Therearebroadcastsignals
14 thatareavailableinalocalarea,andtheyarelimited
15 becausethat'swhatthebroadcastersmakeavailable.
16 Andsimplyprovidingauserguidethatsaysyoucantune
17 tothischanneloryoucantunetothatchannel,ifyou
18 wanttopickuponeprogramoranother,can'tbethe
19 differencebetweenacontentproviderandmerely
20 merelyfacilitatingtheuseofyourequipment.
21 JUSTICEBREYER: Wouldyouwouldyou
22 explaininasentenceortwo,whichwillsoundasifI'm
23 bickeringwithyou,butIwantthemtohaveachanceto
24 reply,thethingthatfrightenedmesomewhatinyour
25 briefwas,Ithink,ofthecloudstoringeverybody's
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1 music. Vastamountsofmusic. Andnowtheythensend
2 itdown,perhapstoamillionpeopleatatime,whoall
3 wanttohearthesamesong.
4 Now,whatyousaidwas,ifIunderstoodit,
5 butexplainitifitis,thatthereisaprovisionof
6 thecopyrightlawthatsayswhenthathappens,it's
7 subjecttoacompulsorylicense. Andifit'ssubjectto
8 acompulsorylicense,then,ofcourse,peoplecangetit
9 andit'spaidforbysomebody. Butifwesidewith
10 them,there'dbeadifferentprovisionthatwouldcome
11 intoplay,namely,theperformance,anditwouldn'tbe
12 subjecttothecompulsorylicense. There'snopoint
13 tellingmeI'mrightifI'mwrong. WhatIwanttoknow
14 isamIhaveIgotyourargumentcorrectly? Andif
15 not,whatisit?
16 MR.FREDERICK: Ithinkthatyourargument,
17 JusticeBreyer
18 JUSTICEBREYER: It'snotmyargument. It's
19 aparody. Anindirectversionofyourargument.
20 MR.FREDERICK: Letmeokay. Letmetry
21 tocorrectthis. Thereisnocompulsorylicensewith
22 respecttomusicorvideo. Therearedifferent
23 compulsorylicenseswithrespecttosatelliteandcable
24 thatcaptureallsignalsandpushthemdowntoeveryone.
25 JUSTICEBREYER: Allright. Sothatwould
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1 bethesameanditisn'tgoingtobeaproblem.
2 MR.FREDERICK: No. Whereit'sgoingtobe
3 aproblemwiththecloudisifyousayifI'm
4 watchingaparticularprogramandyou'rewatchinga
5 particularprogramandJusticeSotomayoriswatchingthe
6 sameprogram,weareengagingandthecompanythat
7 hasallowedustomakeacopyofthatisengagingin
8 publicperformance. Whereyouhavetodealwith
9 infringementistheconceptofofvolitionandthe
10 ideaofwhoisdoingtheact. IfI'msimplymaking
11 equipmentavailable,then
12 JUSTICEBREYER: Butitshouldworkoutina
13 parallelway. Thatis,whenIlookattheprogram,Iam
14 makingacopyoftheprogramand,therefore,I'm
15 violatingthenonexclusiverighttheexclusiveright
16 tocopy. Now,ifthat'sfairuseandtherefore,Ican
17 doit,itshouldalsobefairuseifexactlythesame
18 thinghappensbutitcomesfromacloud.
19 MR.FREDERICK: Butletmeletmelet
20 mefurtheransweryourquestionaboutmusic,becauseI
21 omittedakeydistinction,whichisthatforlocalradio
22 broadcasts,thereisamusicdistributionlicense. It's
23 underSection115oftheCopyrightAct.
24 JUSTICEBREYER: 115(c)(3).
25 MR.FREDERICK: Right. Butthat'sthe
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1 wholethatisexactlythesamewaysatelliteand
2 cablework,aswell. Sothatifyou'rebroadcastingin
3 thelocalarea,itisforfree. Itislikea
4 copyrightfreezone. Andthereasonforthatinthe
5 musicworldisbecausetheywantlocalradio
6 broadcasterstoplaysongsbecausethatdrivessalesof
7 therecords. That'satotallydifferentbusinessmodel,
8 ofcourse,thaninthetelevisionworld.
9 Butthereasonwhythismattersforyour
10 perspectiveisthatwhatthecourttheSecondCircuit
11 inCableVisiondidwasitsaiduserspecific,
12 userinitiatedcopiesareprivateperformances. They
13 arenotpublicperformances. Andtheonlyway
14 JUSTICESOTOMAYOR: Butnowyou'resaying
15 thatAT&Tsystem,Netflix,Hulu,allofthosesystems
16 gettheircontentandtheydon'tpushitdowntoyou.
17 Theydoexactlywhatyoudo. Theyletyouchoosewhat
18 youwanttosee.
19 MR.FREDERICK: Yeah. Thedifferenceis
20 thattheydonotexcludeanyone. Andthedifference
21 thepublicprivatedistinctionfromprivatepropertylaw
22 iswhetherornotthere'sarighttoexclude. IfIhave
23 privateproperty,Iexcludeothers. IfIhavepublic
24 property,I'mnotexcludingothers. Netflix,Hulu,
25 thoseotherservices,they'renotexcludinganyone. As
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1 auserofthoseservices,Ihavenorighttoexclude
2 anyoneelse. Andsotheyaremakingtheirproduct,
3 theircontentavailabletoallwithoutexclusionother
4 thanthesubscriptionthatyoupay. Whatwe'redoingis
5 providingtheequipmentthatenablespeopletoaccess
6 it.
7 JUSTICEGINSBURG: Butyouarefeeding
8 subscribers,legionsofsubscribers. SoIdon't
9 understandthat. Yousaytheyhavetoareyou
10 selective,inthatsomepeoplewhowanttouseyour
11 servicearegoingtobeturneddown? You'renot. You
12 willtakeanybodywhocanpay,right.
13 MR.FREDERICK: Sure. Andifwewentaround
14 toa1,000or10,000homesinBrooklynandweputup
15 antennas,installedtheirDVRsforthem,andwesent
16 themamonthlybilleverymonthtopayusbecausewehad
17 performedthatserviceandprovidedthatequipment,it
18 wouldbetheexactsameposition,JusticeGinsburg. And
19 thatcan'tbeacopyrightviolation.
20 Now,theonlydistinctionthegovernmenthas
21 offeredforwhyCableVisiondecisionintheSecond
22 Circuit,andthisgoestoyourquestion,
23 JusticeKennedy,somehowshouldbedifferenthere,isin
24 thesupposedlawfulnessofthefirstinstanceinwhich
25 thatcontentisreceived. Thatdistinctioncan'twork
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1 andwouldimperilthecloud. Hereiswhy. Whena
2 personisaccessinglocalovertheairbroadcast
3 television,itisdoingsobecausethatisprepublic
4 spectrum. AndSonysayswehaveafairuserightin
5 ordertomakeacopyofthatfreeuse. Thegovernment
6 intheFortnightlycasearguedthatthereisan
7 impliedinlawlicensewhenapersonaccesseslocal
8 overtheairtelecastsinthatway. Soitcan'tbethe
9 distinctionbetweenoursituationandCableVisionthat
10 thereissomehowsomedifference. BecauseifI'm
11 watchinglocalovertheairbroadcastTVinmyhome,I
12 don'thavetopayaroyaltyforit. Andthat'sexactly
13 theanalogythatwouldbeappropriatethere.
14 Now,howwouldthataffectthecloud? Well,
15 ifyouturneverytypeofperformancethatanindividual
16 makesfromsomecontentthatgetsdownloadedor
17 transferredfromthecloud,thecloudprovidercan't
18 tellwhatislegalorwhatisnotlegal. Somestuff
19 couldbeuptherepirated. Somestuffcouldbeupthere
20 perfectlylicensed. Andwhatthepositionoftheother
21 sideinthiscaseis,thosepeopleareliablefordirect
22 infringementofthepublicperformanceright. And
23 that'swhythecloudindustryisveryconcernedthatif
24 youhavetooexpansiveaninterpretationofwhatisthe
25 publicperformanceright,youareconsigningthemto
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1 potentiallyruinousliability.
2 JUSTICEKAGAN: Mr.Frederick,whyisn'tit
3 sufficienttocreatealinesuchastheoneMr.Clement
4 said,whichsaid,youknow,doyouontheonehand
5 supplyorprovidethecontent,thatputsyouinonebox;
6 ontheotherhand,ifyouarenotsupplyingorproviding
7 thecontent,iftheuserissupplyingandprovidingthe
8 content,andyouarejustprovidingthespace,akindof
9 platformforthemtodothatandforthempotentiallyto
10 sharethecontent,thatputsyouinanotherbox?
11 MR.FREDERICK: Well,JusticeKagan,Inote
12 thatmyfrienddidnotreferencethewordsofthe
13 TransmitClauseatallwhenheofferedthatdistinction.
14 Andthat'sactuallyquiteimportant,becauseinorderto
15 getthere,youhavetomakeupwordstoputtheminthe
16 TransmitClause. Butevenifyouweretothinkthat
17 thatwasgoodforapolicyreason,youwouldstillhave
18 toexplainwhythehundredsofthousandsofpeoplethat
19 aresubscriberstoAereo'sservicedon'thaveexactly
20 thesamefairuserighttogetovertheairbroadcast
21 contentthatallofthosepeoplewhoarenotAereo
22 subscribersbuttheyhappentohaveahomeantennaanda
23 DVR. Thosepeoplehaveeverybitasrighttogetthat
24 access. Andthefactthattheyaredoingitdoesn't
25 maketheirantennaortheirantennaprovideracontent
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1 provider. AsIsaid
2 JUSTICEGINSBURG: Whydopeoplepayforthe
3 Aereoserviceiftheycandothesamethingallby
4 themselves?
5 MR.FREDERICK: Becauseifyoudon'thaveto
6 buyaTV,aDVRandanantennaandaslingbox,which
7 mightcostyouthousandsofdollars,youmightpay$100
8 torentit,orifyouwanttojustlookatprogramming
9 selectively,youpay$8amonth,it'sarentalservice,
10 JusticeGinsburg. Thatcan'tchangethecopyright
11 analysis. Andjustbecauseyourentequipmentdoesnot
12 transformthepersonthatisprovidingthatequipment
13 intoapublicperformer,particularlywhenyouarethe
14 onewhoinitiateseverysetofsignalsthatactivates
15 theprogrammingandthecontent.
16 Iftherearenofurtherquestions,we'll
17 submit.
18 CHIEFJUSTICEROBERTS: Thankyou,Counsel.
19 Mr.Clement,youhavethreeminutes
20 remaining.
21 REBUTTALARGUMENTBYPAULD.CLEMENT
22 ONBEHALFOFPETITIONERS
23 MR.CLEMENT: Thankyou,Mr.ChiefJustice.
24 Justafewpointsinrebuttal:
25 First,Ijusthavetocorrectafundamental
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1 difference. Mr.Fredericksays,ashedidinhisred
2 brief,thatifyouonlyifyouareacablecompany
3 andyouonlyretransmitlocally,youdon'thavetopaya
4 royalty. Thatisjustwrong,aswepointoutinthe
5 replybrief. Thereisaminimumroyaltythatevery
6 cablecompanypayswhetherornottheytransmitdistance
7 signals. Sothatisjustwrong.
8 Second,thisisnotacase,asMr.Frederick
9 wouldliketosay,wheretheuserpushesabutton,and
10 thenafterthatpoint,Aereoisjustahapless
11 bystander. Andifyouwantinsightintowhatactually
12 happensbehindthescenes,tousethephrasethe
13 DistrictCourtused,lookatpages64Ato67Aofthe
14 petitionappendix. BecauseJudgeNathanexplainsallof
15 thethingsthatAereodoesaftertheconsumerpresses
16 thebuttonandbeforeitcomesbacktothemontheir
17 homescreen. Theyarenotjustapassivebystander.
18 Also,thiswholenotionofwhatis
19 volitional. Maybeinthereproductionconcept,in
20 context,justpushingabuttonandthereisonlyone
21 personwhoreproduces,buttheconceptofwhatisthe
22 requisitevolitionalconductisansweredbytheTransmit
23 Clause. Congressspecificallylookedatthisandsaid
24 therearegoingtobelotsofsituationswherethe
25 sender,usuallythecablecompanyorAereo,sendsa
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1 transmissiontotheuser,andthesenderofthat
2 transmission,ifitallowsacontemporaneous
3 performance,unliketherecordcompany,theyarea
4 transmitter.
5 JUSTICESOTOMAYOR: Mr.Waxman,tellmethe
6 consequencesofourdecisiontoday.
7 MR.CLEMENT: Yourconsequences
8 JUSTICESOTOMAYOR: Doyouputthemoutof
9 business,ordotheyhavetogoandnegotiatealicense
10 witheverycopyrightholder? Theyouare,infact,
11 tellingmetheyarenotacablecompany,theyarenota
12 satellitecompany,sotheycan'tgointothosesystems
13 ofpayment. Whathappensthen?
14 MR.CLEMENT: Theconsequencesreallygets
15 backtotheChiefJustice'squestion,whichis,ifthey
16 actuallyprovidesomethingthatisanetbenefit
17 technologically,there'snoreasonpeoplewon'tlicense
18 themcontent. Butontheotherhand,ifalltheyhave
19 isagimmick,thentheyprobablywillgooutofbusiness
20 andnobodyshouldcryatearoverthat.
21 JUSTICEBREYER: Onceyoutakethemoutof
22 thecompulsorylicensingsystem,they'regoingtohave
23 tofindcopyrightowners,whoownsJamesAgee's
24 pictures? Whoownssomethingthatwaswrittenby
25 likeaFrenchsilentfilmin1915? Imean,theproblem
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1 isthattheymightwanttohaveperfectlygoodthings
2 thatpeoplewanttowatchandtheycan'tfindouthowto
3 getpermission. Thatisaproblemthatworriesmeand
4 itworriesmeagainonceyoukickthemoutoftheother
5 systems.
6 MR.CLEMENT: It'snotaproblemthatshould
7 worryyoubecause,firstofall,iftheyneeda
8 compulsorylicense,maybeCongresscanrevisititasit
9 hasintechnologicallyspecificwaysforcableand
10 satellite,butthereisotherwaystogetcontent. They
11 canapproachHBO
12 JUSTICESOTOMAYOR: ButtheSecond
13 Circuit
14 JUSTICESCALIA: Doyouhavesomeother
15 rebuttalpoints?
16 MR.CLEMENT: Idid,YourHonor,andoneof
17 themreallygetstothisHBOpoint,whichistheywant
18 tosaythatthiswholecaseisaboutreproductionand
19 there'snopublicperformancegoingonatall. Andto
20 understandhowcrazythatis,withallduerespect,if
21 theyapproachHBOandsay,wewouldliketocarryyour
22 contentandprovideitasapremiumservice,theywould
23 betellingHBO,bytheway,wedon'tneedapublic
24 performancelicense. Allweneedisareproduction
25 licensebecausewedon'tinvolveourselvesinanypublic
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1 performanceatall,andthat'swhyattheendoftheday
2 theirargumentsimplyblinksreality. Theyprovide
3 thousandsofpayingstrangerswithpublicperformances
4 overtheTV,buttheydon'tpubliclyperformatall.
5 It'slikemagic.
6 Thankyou,YourHonors.
7 CHIEFJUSTICEROBERTS: Thankyou,counsel.
8 Counsel.
9 Thecaseissubmitted.
10 (Whereupon,at12:25p.m.,thecaseinthe
11 aboveentitledmatterwassubmitted.)
12
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big 6:16 20:5 32:22 42:21 41:18 13:25 14:10 15:8,24 17:19
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