Technological Designs Create Legal Significance – Part I

This is part of a multi-blog series to demonstrate that product design may have—and in many areas of Internet law and regulation, will have—a determining factor for how a product or service is regulated. This first part relates the treatment of cloud services.

Breathing a Little Easier in the Cloud

Recently, the Second Circuit handed down its much-anticipated decision in WNET v. Aereo, Inc., No. 12-2786, 2013 WL 1285591 (2d Cir. Apr. 2, 2013). To the considerable relief of public-facing cloud providers, the Second Circuit reaffirmed its core holding in Cartoon Network LP, LLLP v. CSC Holdings, Inc. ("Cablevision"), 536 F.3d 121 (2d. Cir. 2008), that enabling a user to copy a work and transmit that copy to herself does not result in an infringing public performance simply because the means of storage and transmission are located outside of the user's home. More than anything, Aereo makes clear that how you design your technology matters.

At first blush, Cablevision and Aereo appear to have little to do with the cloud. Cablevision involved a challenge to the cable provider's remote DVR (RDVR) system that allowed a subscriber to record and play movies and television programs stored on hard drives located at the cable head-end rather than in the subscriber's home. In rejecting that challenge, the Second Circuit observed that each copy of a work made by a Cablevision subscriber on a RDVR was accessible only to that individual subscriber, just as if the copy were made on a DVR in that subscriber's home. Because that copy was accessible to no one else, there was no public performance within the meaning of the Copyright Act's Transmit Clause and, hence, no copyright infringement. Put another way, a public performance of a copyrighted work did not occur simply due to the length of cord connecting the DVR to the subscriber's television. The result ensured regulatory symmetry between the treatment of a DVR in a subscriber's home and a DVR located on Cablevision's premises.

Aereo extended the logic of Cablevision to over-the-air broadcasts captured and transmitted via the Internet. The Aereo system involves a series of individual, dynamically assigned antennae that capture over-the-air broadcasts and, at the user's direction, record and transmit broadcasted programs to (and only to) that user's Internet-enabled device. Thus, where Cablevision concerned a RDVR, Aereo can be thought of as concerning remote antennae, remote DVR and remote Slingbox in one...