Aereo Supreme Court Transcript

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1 Official - Subject to Final Review 1 IN THE SUPREME COURT OF THE UNITED STATES 2 -----------------x 3 AMERICAN BROADCASTING : 4 COMPANIES, INC., ET AL., : 5 Petitioners : No. 13-461 6 v. : 7 AEREO, INC., FKA BAMBOOM : 8 LABS, INC. : 9 -----------------x 10 Washington, D.C. 11 Tuesday, April 22, 2014 12 13 The above-entitled matter came on for oral 14 argument before the Supreme Court of the United States 15 at 11:26 a.m. 16 APPEARANCES: 17 PAUL D. CLEMENT, ESQ., Washington, D.C.; on behalf 18 of Petitioners. 19 MALCOLM L. STEWART, ESQ., Deputy Solicitor General, 20 Department of Justice, Washington, D.C.; on behalf of 21 the United States, as amicus curiae, supporting 22 Petitioners. 23 DAVID C. FREDERICK, ESQ., Washington, D.C.; on behalf of 24 Respondent. 25 Alderson Reporting Company

description

Oral arguments made before the Supreme Court on April 22, 2014 in the case of Aereo, Inc.

Transcript of Aereo Supreme Court Transcript

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    OfficialSubjecttoFinalReview

    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.

    25

    AldersonReportingCompany

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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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    13

    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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    19

    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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    20

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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?

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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"

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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,

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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:

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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,

    AldersonReportingCompany

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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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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    39

    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.

    AldersonReportingCompany

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    OfficialSubjecttoFinalReview

    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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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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

    AldersonReportingCompany

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    55

    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

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

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    56

    A additional 43:1 allocated 33:16 30:1,6,9,13 26:22,23

    $100 51:7 43:1 allow 6:5 31:1,5,21 assuming 15:25

    $8 51:9 address 11:20 allowed 46:7 33:10 42:15,18 AT&T 47:15

    a.m 1:15 3:2 28:1 36:14 allowing 12:1 48:15 attached 23:16

    abandoned 38:21 allows 7:22 anybody 9:24 attempting

    29:17 addressed 36:19 11:18 12:22 48:12 30:16

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    28:19 33:7 ads 33:24 34:16 alluded 16:7 anyways 6:6 22:13

    36:9,17,18 34:17 altering 35:1 apart 42:4 automatically

    42:20 advertiserfree ambiguities apartment 9:18 25:7

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    1:13 55:11 advertising American 1:3 APPEARAN... 32:17 36:5

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    absolutely 17:7 34:25 amici 7:2 appendix 52:14 46:11 48:3

    28:4 36:24 advisors 8:15 amicus 1:21 2:8 applicable 15:22 avoid 6:16 7:15

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    14:24

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    36:17 48:5 16:18 19:20,23 analogy 13:5 appropriate back 16:4,16

    50:24 28:3,13 29:22 49:13 36:16 49:13 18:1,3 21:11

    accesses 49:7 30:16 33:9,18 analysis 51:11 appropriately 26:17 28:19

    accessing 49:2 33:22 34:3,5 anomalous 16:10 27:13 52:16 53:15

    acknowledge 35:3 39:3 40:6 11:15 approve 35:13 bad 41:22

    40:5 41:5,6 50:21 answer 6:8,18 April 1:11 balancing 36:15

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    act 6:1 14:21 52:25 15:25 22:14 47:3 1:7

    17:4 19:21 Aereo's 3:11,13 23:25 26:24 argued 49:6 baseball 33:23

    25:24 29:1 24:19,23 25:9 30:11 33:1 arguing 3:25 based 41:23

    30:7,22 37:8 28:14 40:18 35:25 38:3 argument 1:14 basic 3:18 6:5

    39:19 46:10,23 41:9,10 42:15 46:20 2:2,5,9,12 3:3 7:22 13:6 21:3

    acted 20:4 50:19 answered 52:22 3:7,13 19:13 basically 43:1

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    action 31:24 aggregate 40:2,8 20:5 22:3,4,8 51:21 55:2 behalf 1:17,20

    34:21 aggregates 28:18 30:9,14 argument's 17:7 1:23 2:4,7,11

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    51:14 airwaves 35:24 32:12,14,22 asking 18:24 27:23 51:22

    ad 33:24 airways 10:20 33:9,11 37:20 asks 21:11 believe 25:3

    add 40:7 42:8,8 11:23 37:23 38:2,5 aspect 10:24 benefit 53:16

    42:11,22 43:1 AL 1:4 43:13 44:2 39:4 42:24 Berne 24:21

    43:1 albums 24:3 50:22,25,25 assigned 32:25 better 7:15 8:11

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    16:7 14:17 29:23 15:22 17:8,10 bickering 44:23

    AldersonReportingCompanyAldersonReportingCompany

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    57

    big 6:16 20:5 32:22 42:21 41:18 13:25 14:10 15:8,24 17:19

    22:8 30:14,25 48:14 called 6:12 19:11,16,22 18:2,16,23

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