The U.S. Supreme Court on Tuesday heard arguments in a case involving a start-up called Aereo on one side and virtually every major TV network and entertainment company producer on the other. At issue is whether or not Aereo’s retransmission of over-the-air broadcasts is an infringement of copyright holders rights.

At oral argument today, Chief Justice John Roberts said that Aereo’s service was specifically designed to dodge copyright law, although he could see the argument that Aereo’s service was similar to a retailer who provides both an antenna and a DVR with which a customer could make legal copies of copyrighted material. Other justices appeared to be concerned that a ruling against Aereo would also harm other cloud-based computing services.

The networks, which include broadcast network ownersThe Walt Disney Co. (NYSE: DIS), CBS Corp. (NYSE: CBS), and Comcast Corp. (NASDAQ: CMCSA), want the court to treat Aereo’s technology as another type of pay TV service like cable and satellite operators. The networks (and the U.S. Justice Department which filed an amicus brief on behalf of the networks) argue that Aereo is retransmitting broadcast content to the public, and therefore is violating copyright protection.

Aereo, which is backed by Barry Diller, CEO of IAC/InteractiveCorp (NASDAQ: IACI), argues that its service is customer-controlled and that it does not infringe on copyright protection and the company should not be forced to pay retransmission fees. Essentially Aereo’s service is no different from a homeowners TV antenna and a DVR, both of which are completely legal under existing law.

Will the Supreme Court side with the copyright claim or the technology claim? The justices didn’t give a clear impression one way or the other according to reports.

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