The Supreme Court ruling 6-3 is considered as a big win for America's powerful television broadcasters, which threatened by Aereo's innovative and technologies approached the apex court against Chet Kanojia's product.
Aereo has developed cloud-based antenna and DVR technology that allows consumers to watch live or recorded HD broadcast television on virtually any type of Internet- connected device, including smart TVs, smartphones, tablets and computers.
Kanojia, who holds a bachelor's degree in Mechanical Engineering from the National Institute of Technology in Bhopal, launched the product in New York last year and then extended it to 10 other cities.
Soon the top American cable broadcasters including ABC, CBS and Fox approached the Supreme Court, alleging that Aereo was an infringement on the current copyright laws.
The Supreme Court gave a verdict today in the favour of the cable companies.
However, Justice Stephen Breyer, writing for the majority, said it was a limited decision that will not "discourage the emergence or use of different kinds of technologies."
According to Breyer, Aereo is no different from other video providers because the content it sends to viewers constitutes a "public performance".
That is despite the fact that Aereo gives each of its subscribers their own TV antennas in a deliberate attempt to circumvent that legal issue.
"These behind-the-scenes technological differences do not distinguish Aereo's system from cable systems, which do perform publicly," the Court said.
"Given Aereo's overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here," it said.
Fox news welcomed the court's decision.
"21st Century Fox welcomes the US supreme court's ruling, a decision that ultimately is a win for consumers that affirms important copyright protections and ensures that real innovation in over-the-top video will continue to support what is already a vibrant and growing television landscape," it said in a statement.
Reporting on the court's decision, The Washington Post said the ruling killed Aereo.
"The Supreme Court just killed Aereo," the headline read.
"The ruling is a major victory for broadcasters, who have demanded that Aereo pay them a fee for carrying TV content," the paper said.