On April 22, 2014, the United States Supreme Court heard oral arguments in the case of American Broadcast Corporation et. al. v. Aereo, a case that has put cloud computing in the spotlight at the highest court in the county.
The Aereo case originated as a lawsuit by broadcast television networks against Aereo for claimed copyright violations. Aereo is a service that enables a subscriber, through the use of a specialized antenna assigned to that subscriber, to view and record broadcast televisions programming on a tablet, computer, smartphone, or Internet-enabled television. The television networks have asserted that Aereo is violating the networks’ copyright rights by re-broadcasting copyrighted network programming without paying the networks any licensing fees.
On its face, the Aereo case is a dispute over the future of broadcast television. To many, however, the Aereo case could have unintended implications that extend far beyond television into the “cloud.” Specifically, the issue of enabling subscribers to store and retrieve copyrighted materials from a remote location is at the heart of an exploding cloud computing industry. Given published reports regarding the growth of the cloud computing industry, the stakes are high, and the industry is making every effort to make sure that this is not jeopardized or impeded in any way by the Aereo case, unintentionally or otherwise. Reports state that the cloud industry is expected to have an economic impact up to 6.2 trillion dollars by 2025 (Forbes 11/16/2013, citing McKinsey & Company). Additionally, the growth of cloud deployment technologies has been rapid, and within the next five years enterprises will spend over 921 billion dollars, achieving a compound annual growth rate of 17% (Forbes 11/16/2013, citing Gartner). The global cloud market is expected to achieve a CAGR rate of 24.8% by 2018, reaching 9.6 billion dollars (Forbes 11/16/2013, citing IDC).
The cloud computing industry efforts have included the filing of briefs with the Supreme Court, effectively urging the Court to be aware that the implications of the questions raised in the Aereo case may be much larger than just ruling on whether or not a niche television recording and viewing service is legal. The focus of these filings has been on a service provider’s right, under federal copyright law, to enable individual users to store and retrieve copyrighted materials in and from a remote location – i.e., a service that lies at the very heart of cloud computing. In these filings, industry trade associations and public interest groups have implored the Supreme Court to be very careful and express in preserving this capability, regardless of whether the Court determines Aereo’s particular business model to be lawful or not.
At the recent oral argument before the Supreme Court, it was apparent that the cloud computing industry’s concerns did not fall on deaf ears. In discussions driven largely by Justices Breyer, Sotomayor, and Kagan, the justices asked questions about the unintentional bleed of the Aereo case into other industries, including, most notably, cloud computing. This discussion included requests for the parties’ counsel to comment on the legality of various hypotheticals, including whether a record store violated copyright law by selling copyrighted music or whether a seller of coaxial cable, antennas, or video recording devices violated copyright law by enabling the transmission of copyrighted television programming. To many observers, these questions created more confusion than clarity. However, to most, this line of questioning was a strong signal that the Supreme Court was acutely aware of the potential ramifications of its review of Aereo’s business model to the cloud computing industry and, by most accounts, determined to resolve the Aereo case without creating any legal uncertainty or impediment to the continued use and growth of cloud computing services.
The Supreme Court’s resolution of the Aereo case is set to be issued and released in June of this year. Undoubtedly, many in the cloud computing industry will be waiting anxiously for this resolution and hoping for a decisions that solidifies the legal standing of cloud computing under federal copyright law and inviting even further investment and innovation in cloud computing technologies.
