Aereo’s decision to ask the Supreme Court to take the case is a bold gesture: the startup could instead have argued that it was too soon for the country’s highest court to hear the broadcasters’ petition, especially as there is ongoing, unresolved litigation over streaming TV in the lower courts.

But as set out in its brief (embedded below), Aereo argues that the court should rule on the case now in part because the big broadcasters, including Fox, NBC, ABC and CBS, are drowning the startup in litigation costs:

“[The broadcasters] have signaled their intention to wage a war of attrition by re-litigating this issue in every market to which Aereo expands its business,” writes Aereo, which is now streaming local TV in about 20 different cities for $8 to $12 a month through personal antennas.

There is a lot at stake in the case, which pits powerful players of the traditional TV industry against Aereo and others who want to break the so-called bundle model, in which viewers are force fed large  and expensive packages of channels, many of which they don’t watch.

The central legal issue turns on copyright law, and whether Aereo is akin to watching a personal recording via a remote DVR unit (which is legal) or if it is instead an illegal re-transmission of the broadcasters’ signal. The case has also attracted the attention of sports leagues, with the NFL and Major League Baseball filing in support of the broadcasters.

Aereo argues that its technology, which provides a tiny personal antenna to every subscriber, is akin a remote DVR case called Cablevision in which the US Second Circuit Court of Appeals ruled in 2008 that the Copyright Act does not apply if a person is watching a personal, discrete transmission. In April, the same court in New York ruled that the same reasoning applied to Aereo — giving the company the green light to expand operations.

In its new filing, Aereo repeats the individual transmission argument, and compares itself to someone renting antennas on a hill:

If a landowner offered space on a hilltop where individuals could place a conventional antenna, no one would argue that the land- owner was engaged in a public performance, even if hundreds of individuals placed individual antennas there and watched the same World Series game.

The broadcasters, by contrast, have argued that the New York court got it wrong, and that the Copyright Act should apply to the underlying show — not the individual streaming transmission.

It’s hard to say if the Supreme Court will accept the case. The court is well into its term, which lasts until about May, and its docket is mostly full already; but, for now, it’s still adding new cases to the schedule.

Aereo is also urging the court to consider the facts of the case as they relate to Aereo specifically — and not to consider legal issues related Film On, a would-be streaming clone launched by eccentric billionaire Alki David, that a California court shut down in late 2012.

Finally, Aereo is framing the outcome of the case as important to the success of still-emerging cloud-based entertainment technologies, and consumers’ ability to access them at low cost:

“Instead of purchasing a home DVR, an antenna for over-the-air broadcasts, and a media- shifting device (such as a Slingbox) to transmit those signals to Internet-connected devices, a consumer can purchase access to functionally equivalent Aereo equipment for a fraction of that cost,” its filing states.

The filing is below with key parts underlined.

Aereo Cert Petition Response Brief Final (Filed 12-12-13)

The sports leagues argue that Aereo is undercutting the value of the deals they sign with TV companies, and that they will have to respond by moving all of their games to cable stations like ESPN and NFL Network. Currently, the NFL distributes 90% of its games via the broadcasters — CBS, NBC, ABC and FOX — while MLB shows 400 games a year and the World Series this way.

In a friend-of-the-court brief, reported by Variety and embedded below, the leagues warn that Aereo: “adversely impacts the more than eleven million households in the United States that do not subscribe to cable or satellite and thus do not receive non-broadcast cable networks.”

The leagues and the broadcasters are asking the Supreme Court to step in and overrule a finding by an influential New York appeals courts’ repeated findings that Aereo, which relies on tiny antennas to deliver a personal TV stream, does not violate copyright law.

It’s uncertain, however, if the Supreme Court will hear the case in the current term which ends in June, or if the Justices will wait until the 2014-15 term. Court watchers note that there is a current split in the law between the east and west coasts, but that an appeals court in California (where Aereo-like services are now illegal) has yet to rule — meaning the case may be premature.

The NFL and MLB brief is also significant because it provides a window into the evolving economics of TV in the digital era. It notes, for instance, that cable and satellite systems like Time Warner or Dish now pay $300 million a year for “retransmission rights” from the broadcasters, and that the sports leagues get $100 million of that.

The leagues also regard Aereo as a threat to their strategy of slicing up online sports rights into smaller and smaller pies — through products like NFL Sunday Ticket (which allows Direc-TV subscribers to watch out-of-market Sunday games) and NFL Mobile, which saw Verizon pay $1 billion for the rights to stream some games to cellphones but not tablets.

This so-called “cy-pres” model, described in a New York Times piece this summer, has also been copied by other companies, including Google and Adobe.

Now, the Supreme Court is hinting that it’s had enough of companies using charity payouts to end lawsuits. On Monday, Chief Justice John Roberts expressed skepticism about the Beacon settlement, which paid $3 million to class action lawyers and $6.5 million to a new privacy group called the “Digital Trust Foundation.” In a written opinion, he noted the potential for abuse and conflict-of-interest:

“[The] challenge focused on a number of disconcerting features of the new Foundation: the facts that a senior Facebook employee would serve on its board, that the board would enjoy nearly unfettered discretion in selecting fund recipients, and that the Foundation—as a new entity—necessarily lacked a proven track record of promoting the objectives behind the lawsuit.”

The opinion, however, concluded that the Supreme Court would not review the Beacon case, but that it might instead watch for a “suitable case” in order to “clarify the limits” on the charity payouts. In response to a request for comment, a Facebook spokesperson provided the following statement:

“We are pleased that the case is resolved and look forward to establishing the Digital Trust Foundation, which will fund worthy projects that will help protect and improve Internet users’ privacy, safety and security.”

While Monday’s decision is technically a victory for Facebook, since the Beacon settlement will be allowed to stand, Roberts’ words amount to a warning to companies that attempt to settle lawsuits in a way that cuts out consumers.

If the Supreme Court comes back to the issue, one candidate could be Facebook’s “Sponsored Stories” settlement, which is currently before a California appeals court. In that case, a judge initially balked at a $20 million deal, in part because lawyers had chosen payouts “out of thin air.” Since then, one of the charity recipients, the John D. and Catherine T. MacArthur Foundation, has refused its share of the money because it doesn’t work on privacy issues. Here’s Chief Justice Roberts (see also the Volokh Conspiracy for another unusual feature of the opinion):

Marek v Lane (Facebook Beacon, SCOTUS).pdf

New York Times’ legal reporter Adam Liptak called attention to the problem in September, citing research that showed half of the links on the Supreme Court site don’t work. This pervasive “link rot,” he noted, means the sources and authorities that form the basis of the Court’s decisions are simply missing.

Link rot is a growing issue for both courts and academic journals, but one that is downplayed on the grounds that books and paper are the “real” authorities while internet sources are ephemeral or, at best, unofficial. As the era of print recedes, however, this anti-digital bias looks more and more untenable.

The good news is that libraries have a plan to fix the problem. This weekend, the Times Higher Education website published a feature that looks at Perma CC, a site that is creating etched-in-stone digital references for scholars and lawyers.

It works like this: a scholar (or anyone else) can submit a link to Perma CC, which is managed by a coalition that includes universities, libraries and the Internet Archive. According to Perma CC, the group will create a permanent URL and store the page on its servers and on mirror sites around the world.

Readers who encounter Perma.cc links can click on them like ordinary URLs. This takes them to the Perma.cc site where they are presented with a page that has links both to the original web source (along with some information, including the date of the Perma.cc link’s creation) and to the archived version stored by Perma.cc.

There is also a process for scholars and librarians to “vest” certain URLs so that they become an official, permanent citation for law and science journals.

This process appears to be a long overdue solution. Here are some more stats cited by the Times Higher Education feature:

• Link rot at influential science journals rises from 4 percent at three months to 10 percent at 15 months to 13 percent after 27 months.

• 98.3 percent of web pages change in some way within six months, while 99.1 percent do within a year

• At three Harvard legal journals, over a 12-year period, 70 percent of the links no longer worked

Image by Aleksey Stemmer via Shutterstock

According to Variety, the broadcasters are moving to put a petition before the Court by October 15 in the hopes that the Justices will hear the case this term, which runs from October till June. (Update: the broadcaster filed the petition as expected).

The petition may be a long shot, however, given that the Court already has a chock-a-block docket with cases ranging from abortion to campaign finance. Also, a California appeals court has yet to issue an anticipated ruling on streaming technology.

The California case turns on many of the same questions that led the influential Second Circuit Court of Appeals in New York to rule that Aereo is legal. A lower court in California came to the opposite conclusion — but the appeals court of that state is still considering the issue.

“Unless there is an actual split [..] it would be unlikely that a review-worthy case would reach the Court in the coming term — October through June.  That would mean the fall of 2014 at the earliest,” wrote Lyle Dennison, a veteran SCOTUS Blog reporter, in a recent email.

In other words, the Supreme Court will likely wait to hear the petition until next time around.

In the meantime, Aereo and the broadcasters will continue to skirmish on a region by region level. Aereo recently won a ruling in Boston, which opens up the service to New England, while the broadcasters had a victory in a related case in Washington, DC. This week, the TV companies sued in Utah — the outcome will determine whether they can shut down Aereo in seven more western states, in addition to the ones they’ve blacked out already (see the Disco Project’s helpful map).

The legal issue turns on whether Aereo’s technology, which rents a personal tiny antenna to every subscriber, is a private recording or instead an illegal public performance.

Update: Aereo declined to comment on the broadcasters’ petition.

The California hearing was just the latest twist in a complex series of cases that many lawyers predict could land before the Supreme Court and redefine the rules for TV. By the time that happens, however, rapidly expanding Aereo or some other streaming service may have already disrupted the current business model for television.

Here’s a quick primer of where the case stands, and why time is on Aereo’s side.

Legal on the east coast, not the west coast

If you’re unfamiliar with Aereo, the Barry Diller-backed start-up provides tiny antennas that allow subscribers to watch and record over-the-air TV via iPhones, laptops and other mobile devices. Aereo says the service does not violate copyright law because the individual antennas result in a private, not a public, transmission.

In 2011, all the major broadcasters sued to shut down Aereo, as they have done to earlier TV streaming services, but a federal judge in New York court ruled that the service was legal. An appeals court upheld the ruling earlier this year, meaning that Aereo is clearly legal for now in three northeastern states.

Meanwhile, in California, an eccentric billionaire launched a would-be rival to Aereo called FilmOn, but this time the broadcast networks were able to shut down the service in short order. It was an appeal of this order that took place in California last week. The appeals court will rule in weeks or months, but in the meantime nine western states are off-limits to Aereo.

The split between the two appeals courts — regarded as the most sophisticated in the country on tech and copyright matters — means a test case could be teed up for the Supreme Court.

Supreme Court would decide in 2015 or 2016 (if ever)

According to Lyle Denniston, a veteran reporter with SCOTUS blog, an authority on Supreme Court news, the case is unlikely to be heard anytime soon.

“Unless there is an actual split … it would be unlikely that a review-worthy case would reach the Court in the coming term — October through June. That would mean the fall of 2014 at the earliest,” wrote Denniston by email.

The Supreme Court’s docket is largely set, in other words, and any Aereo-related case would only appear on the calendar in late 2014 or 2015 — meaning a decision would be unlikely before mid-2015. And, since the California appeals court has yet to rule, it’s not even clear that there will be a split in the first place.

People familiar with the Aereo litigation also note that the California court could remand the case to the lower court for further evidence, meaning a potential trip to the Supreme Court could take as long as 2016.

Aereo marches on

As the legal jousting takes place on both sides of the country, Aereo is putting its foot to the floor and going forward with plans to launch in city after city: it’s already live in Boston and Atlanta, and this month will be available in Florida and Texas. The company has said it is aiming for 22 cities in the near future.

If the service gets traction, it could have a permanent effect on the way Americans perceive and pay for television service. Right now, sports fees are driving cable and satellite packages to ever higher levels, and viewers, familiar with digital on-demand services, are increasingly frustrated with “bundles” that force them to buy channels they don’t want to watch.

Pay television rates have begun to decline for the first time in history and, in this context, Aereo could be the vanguard for blowing up the current bundle model once and for all. Indeed, CEO Chet Kanojia has vowed to transform the TV industry into a la carte model or at least a “rational bundle.” In the meantime, the impending approach of companies like Google and Apple into the TV market is likely to make viewers more receptive than ever to an Aereo-style model.

So is Aereo’s ascendence inevitable? On the legal front, the answer appears to be yes. The long lead time until any Supreme Court decision (which may never happen at all) means the company has a green light outside the west. While there are other, flickering court challenges in Boston and Washington, these have been moving slowly, and judges in those places will be reluctant to further complicate the legal landscape.

Given the slow pace of the courts, broadcasters have also made appeals to Congress. But, at a time when the current legislative slough involves subjects like the debt ceiling, the tax code and Syria, a brand new retransmission law seems a long shot at best.

Ultimately, then, the best broadcasters may hope for in the near term is that Aereo proves a business failure. The CEO of CBS, Les Moonves, has panned the service, saying “We don’t think it’s catching on at all.”

Aereo itself has refused to release revenue or subscriber numbers but, given its on-going expansion, the company appears confident in its prospects. Consumers outside of the west, meanwhile, have ample time to decide for themselves.

Judges across the country can’t agree on the answer and now the Obama Administration is weighing in. In a brief filed last week, the White House urged the Supreme Court to hear an appeal of a drug case in Massachusetts where cops obtained a call log from a flip phone without a warrant.

Meanwhile, an alleged gang member from California is also asking the Court to overturn his shooting conviction because evidence in the case came via a warrantless search of his Samsung Instinct smartphone.

The two appeals, conflicting case law and the Obama Administration’s involvement mean the Supreme Court is “highly likely” to address the question this fall, according to Scotusblog, a top legal blog. This means that the Court will probably provide definite rules in 2014 about the Fourth Amendment and what cops can do with smartphones.

At a larger level, a Supreme Court hearing would also provide a new occasion to define the scope of civil liberties and privacy in the age of the smartphone. The issue matters because, as some judges have noted, our phones now contain not just call logs but intimate details of our lives; we are carrying powerful computers in our pockets and, for now, the rules are unclear about who can go through them.

We’ll be watching this issue in the future but, in the meantime, Forbes has a nifty map via the Electronic Frontier Foundation that gives a state-by-state view of where cops can and can’t search your phone.

In a 6-3 ruling, the court rejected publisher John Wiley’s interpretation of a rule known as the “first sale doctrine” which prevents copyright owners from exerting rights over a product once it has been purchased legally. This rule is what allows used book and music stores to sell used items without the copyright owners’ permission.

In recent years, copyright owners facing a wave of imported good have argued that “first sale” only applies to goods manufactured in the United States. Lower courts have till now sided with the copyright owners, producing considerable uncertainty about whether or not retailers can import and sell goods they legally purchase abroad.

Writing for the majority, Justice Stephen Breyer rejected John Wiley’s argument that the phrase “lawfully made under this act” implied a geographic limitation. He also cited the concerns of library associations, used-book dealers, technology companies, consumer-goods retailers, and museums — all of which had urged the court to reject the restricted notion of “first sale.”

Wiley CEO Stephen Smith expressed disappointment with the ruling, saying in a statement: “It is a loss for the U.S. economy, and students and authors in the U.S. and around the world.”

The John Wiley ruling comes three years after the Supreme Court failed to resolve the same issue in a dispute between watch maker Omega and the retailer Costco. In that case, Omega had put little pictures on its watches and then argued that Coscto infringed on its copyright when it imported them; that case produced a 4-4 tie which meant the lower ruling against Costco was upheld. The result was different this time with different judges on the bench.

The ruling is likely to be a relief for used booksellers and others who feared that geographical limits on first sale would harm their business. In the case before the Supreme Court, the defendant was a college student who had arranged for his family in Asia to buy textbooks and mail them to him in America where he sold them at a profit.

Justices Ginsburg, Kennedy and Scalia dissented from the ruling. To learn more about the first sale doctrine, read our background on the Wiley case here.

This story was updated at 3:30pm with a statement from Wiley’s CEO.

In a unanimous ruling, the court declined to take up larger First Amendment questions about the degree to which swearing and nudity are protected speech. Instead, the justices found that the federal regulator had used overly vague guidelines to sanction Fox and ABC news and failed to give the broadcasters adequate notice about the rules.

In the case of Fox, the decision turned on so-called “fleeting expletives” such as when celebrity Nicole Richie make the unscripted remark  “Have you ever tried to get cow s*** out of a Prada purse? It’s not so f***ing simple” during an award show. The FCC warned Fox but did not fine the station but it did levy a fine on ABC News for showing an actress’ bare bottom for seven seconds.

The Court concluded that, since it could throw out FCC’s swearing and nudity decisions on vagueness grounds, it did not have to take up the First Amendment questions.

The question of swearing, free speech and broadcasting remains informed by a 1978 Supreme Court decision involving comedian George Carlin’s “Filthy Words” monologue.

In an odd pairing, liberal Justice Ruth Ginsburg and conservative Justice Clarence Thomas added a one paragraph concurring opinion arguing that the Carlin case was out of date due to “time” and “technological advances” and should be reconsidered.

To learn more about the fleeting executives case, see our earlier Q & A.

On Monday morning, the court broke a logjam when it agreed to hear the appeal of entrepreneur, Supap Kirtsaeng, a California man whose family in Thailand had sent him textbooks to resell. He reportedly sold $37,000 worth of John Wiley textbooks in the US.

The publisher sued Kirtsaeng for copyright infringement in eight textbooks and won to the tune of $75,000 in damages for each book.

Kirtsaeng argues that he is protected by the first sale doctrine — a rule that lets copyright owners exercise their right only the first time an individual book or record is sold. The first sale rule is what allows used book and record stores to do business.

While the first sale doctrine has long been an accepted in the case of goods made in the US, it gets more complicated when it comes to overseas goods — should the rule apply when the first sale in question took place in another country?

The Supreme Court had a chance to resolve the question in 2010 but failed to do so after it deadlocked in a rare 4-4- tie. The tie came after Justice Kagan had recused herself, leaving only eight judges to decide.

The 2010 case involved Costco reselling Omega watches in the US that it had legally purchased overseas.

The new John Wiley case, in which Justice Kagan will take part, will shape brand owners’ ability to maintain pricing power in the face of so-called “grey market” goods from overseas.

Public interest groups had urged the Supreme Court to take the appeal. Public Knowledge, for instance, has warned:

“[The appeal's court] ruling could cripple markets for used books, movies, CDs, toys, and any other goods that contain copyrighted works.”

The Supreme Court will likely hear the case in the fall.