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What Happened To My Open Source Coffee?

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color-correct-coffee

Like many people, I enjoy a good cup of coffee. However, most mornings, in the rush to get myself ready and help prepare my kids for school, I am perfectly content with a quick, reliable, and perfectly portioned cup of coffee, delivered via my Keurig coffee maker. I enjoy coffee, but I am not a coffee snob. The mere mention of Keurig may send many high-end baristas into a frenzy, but I appreciate my Keurig’s simple operation and its variety of coffee offerings. And oh the variety! That is what sets Keurig apart from my other grind-and-brew coffee maker and even my french press, each of which arguably deliver a better product. It is the large selection of K-Cup coffee pods (over 200 varieties with 50 different brands) that are available not only from Green Mountain Coffee Roasters, the company that owns Keurig, but from Starbucks, Dunkin’ Donuts, and others, that make the Keurig shine. Variety has made Keurig brewers ubiquitous in offices and homes across the country. Undoubtedly, your local specialty coffee shop may brew a better cup of coffee, but for the price, convenience, ease-of-use, and selection, the Keurig does its job well and it shows – Green Mountain has sold more than 20 billion coffee pods, and 35 million Keurig brewers to date.

Despite its brisk business, Green Mountain remains concerned that the K-Cups being produced by its competitors will cut into its market dominance. Green Mountain’s fear stems from the fact that certain of its key patents for the Keurig K-Cups expired in late 2012, enabling unlicensed, generic, Keurig-compatible coffee pods to enter the market. These unlicensed third-party coffee pod refills are generally cheaper than Green Mountain’s products, often by as much as 25%. Because Green Mountain operates on a Pez dispenser/candy model (the printer/printer cartridge and razor/razor blade analogies were already taken), whereby it earns most of its money from the sale of K-Cups rather than Keurig coffee machines, the rise of unlicensed generics is a direct threat to its bottom line.

It is no wonder then that Green Mountain’s announcement that its future Keurig machines will only accept Green Mountain proprietary K­-Cups has caused such a hyper-caffeinated uproar. Some have argued that Green Mountain is implementing a form of digital rights management (DRM) by preventing competitors from accessing its Keurig machines, much like the means record companies and movie studios have employed to dissuade consumers from sharing music and movies online. Others have even suggested that this approach is a step backwards and away from the “Internet-of-Things” ideal whereby your home appliances and digital devices can freely communicate with each other across a network to anticipate and respond to your needs and desires before you even know you have them. In the Internet-of­-Things world, your washing machine knows when you are running low on detergent, your refrigerator can tell when you need to buy more orange juice, your coffee machine can anticipate when you are running low on coffee pods, and all of these devices can communicate through a shared network to automatically place a refill order with a grocery store or retailer without you having to lift a finger. Green Mountain, by going “closed source”such that future Keurig machines will only accept proprietary Green Mountain K-­Cups, has arguably erected a barrier to interoperability ­- the ability of your home appliances and electronic devices to freely communicate with each other.

Another, albeit related, question is whether Green Mountain’s action will ramp up a format-war with its competitors. Green Mountain’s Keurig continues to face challenges from Tassimo, Nespresso, Flavia, and others. A savy competitor may, in time, develop a platform which can effectively rival Keurig (much like Google achieved when it created its Android mobile operating system as an alternative to Apple’s iOS). A format-war may not necessarily be bad for consumers, who could benefit from increased choice for coffee products and better technology to aid in their consumption. What is interesting in Green Mountain’s case is that it was already winning (perhaps even won) the format-war, yet it has nevertheless decided to implement a proprietary model to fend off the unlicensed masses. Although Green Mountain’s market dominance is not likely to diminish anytime soon, format-wars are unpredictable. One need look no further than to Sony to see the varying degrees of success it has experienced in pushing propriety models on consumers (MiniDiscs, UMDs, and ATRAC anyone?)

Proprietary models and DRM-­like approaches need not doom or cripple the Internet­-of­-Things, provided that manufactures like Green Mountain display a willingness to adopt common standards for communicating information between networked devices. Interoperability does not need to suffer if there is an agreement on a common protocol for sending and receiving signals to/from appliances and electronic devices. It is possible (in fact, probable) that a Nest-like device (maybe even the Nest itself, in future iterations) will be able to not only control your thermostat, but also your lights, appliances, and electronic devices seamlessly over a network; an intelligent operating system for the home. Perhaps, if we are lucky, it will even know how to brew a good cup of coffee.

Aereo Amicus Scorecard (Spoiler Alert: Aereo Is Losing)

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Credit: Aereo

Credit: Aereo

This week, several groups filed amicus curiae (“friend of the court”) briefs in the ABC v. Aereo case currently pending before the United States Supreme Court.  Although the case is not scheduled to be argued until April 22, and Aereo has yet to file its opposition brief (due March 26), already the National Association of Broadcasters, a group of International Associations and Copyright Scholars, the Copyright Alliance, The Media Institute, Professors Peter S. Menell and David Nimmer, ASCAP, the American Intellectual Property Law Association, BSA | The Software Alliance, Cablevision, and the U.S. Department of Justice have all weighed in on the appeal brought by the major network broadcasters in their ongoing fight against Aereo’s streaming television service.  Almost all of the amici (with the exception of BSA and the Software Alliance, who principally argue against any decision by the Court that may stifle cloud computing) have uniformly rejected Aereo’s position that its service does not infringe the broadcasters’ copyrights. There is little doubt that the snowball of amicus briefs will continue to grow; maybe one or two may even support Aereo (stranger things have happened).  The question is, do these submissions effectively aid the Court in reaching its decision?

The Rules of the Supreme Court of the United States state that “an amicus curiae brief that brings to the attention of the Court relevant matter not already brought to its attention by the parties may be of considerable help to the Court.”  However, “an amicus curiae brief that does not serve this purpose burdens the Court, and its filing is not favored.”  There is no doubt that the amicus briefs filed in Aereo raise valid arguments.  Yet the issue before the Court, “whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet,” is, on its face, a narrow one.  Concerns over what effect the Court’s decision may have on, for example, cloud computing and streaming music services, are certainly important and worth debating.  But must the Court address these issues in this case?  Is it necessary to answer the question presented?  The central – and only – issue before the Court in Aereo, as framed by the broadcasters, concerns Aereo’s streaming technology and whether its retransmission of the broadcasters’ signals to its subscribers constitutes a public performance.  

The Second Circuit’s majority opinion in the underlying case accepted Aereo’s argument (which relied heavily on Cablevision’s victory in another key Second Circuit case) that its technology creates a unique copy of the broadcasters’ content for each subscriber which is then only available to that specific subscriber via a dedicated antenna; to wit, at issue is a private, not a public performance.  As the Second Circuit explained:

It is beyond dispute that the transmission of a broadcast TV program received by an individual’s rooftop antenna to the TV in his living room is private, because only that individual can receive the transmission from that antenna, ensuring that the potential audience of that transmission is only one person. Plaintiffs have presented no reason why the result should be any different when that rooftop antenna is rented from Aereo and its signals transmitted over the internet: it remains the case that only one person can receive that antenna’s transmissions. Thus even without the creation of user-associated copies, which under Cablevision means that Aereo’s transmissions are not public, there is significant reason to believe that Aereo’s system would not be creating public performances, since the entire chain of transmission from the time a signal is first received by Aereo to the time it generates an image the Aereo user sees has a potential audience of only one Aereo customer.

Judge Denny Chin, in his dissenting opinion, strongly disagreed with the majority’s decision, finding that Aereo’s service is a “sham” and “a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act.”  According to Judge Chin, Aereo did not have a “technologically sound reason” for using thousands of individually assigned, dime-sized antennas instead of a central one, other than to skirt Copyright law.  So far, the broadcasters and their legion of amici agree with Judge Chin.

What remains to be seen is how broadly the Court will address the central issue in Aereo and what significance, if any, it will give to the amici’s concerns.  It will also be interesting to see how the Court deals with the Second Circuit’s decision in Cablevision; a possibility which troubles Cablevision and is likely a prime motivator for its amicus filing this week.  It is worth noting that the Second Circuit in issuing its decision in Cablevision reversed the district court judge (at the time, Judge Denny Chin).  Judge Chin has made it clear that, in his view, Cablevision was wrongly decided.  It is thus conceivable that the Supreme Court may decide against Aereo, and, in so doing, send Cablevision to the same watery grave (an unlikely result, I think, but the possibility exists).  In the end, Judge Chin may be vindicated two times over.

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