Update on Networks v. Aereo: Denial of En Banc Review, New Lawsuits Filed, and More

When we last updated you on the status of the Aereo case in the New York federal courts, we reported that on April 1, 2013, a split panel of the Second Circuit had affirmed the New York federal district court’s denial of an injunction against internet television re-broadcaster Aereo, despite a vigorous dissent from Judge Denny Chin. The television networks filed a request to the Second Circuit for rehearing of the case en banc, which will be granted if a majority of the active judges in the Circuit decides that rehearing is warranted. (In the Second Circuit, rehearing is granted in fewer than two percent of cases.) On July 16, 2013, the judges voted, ten-to-two, to deny the request. The denial puts the matter to rest, at least in New York, Connecticut, and Vermont, unless and until the Supreme Court of the United States takes the case. Judge Chin, once again, filed a spirited and lengthy dissent (joined by Judge Richard Wesley), espousing the need for the full court’s attention given the “question of exceptional importance” presented and the need to overturn (or at least limit) the controversial Cablevision decision (Cablevision insulated retransmitters of copyrighted content from liability where the transmissions were made from individualized copies requested by the user, and were thus deemed “private” performances).

Judge Chin reiterated most of the arguments from his April 1 dissent, including his analysis of the statutory text of the Copyright Act and of the law’s legislative history. This dissent, however, included a more in-depth analysis of Cablevision, and why its holding was wrongly decided or at least should be limited to its facts. Judge Chin insisted that “[b]y extending Cablevision, the panel decision eviscerates the Copyright Act” and “open[s] the door . . . for Aereo to design a Rube Goldberg-like contraption using miniature antennas and unique copies to flout Congress’s licensing regime.” He concluded by stating that “the majority’s decision elevates form over substance” and that Aereo’s system “is a sham . . . designed solely to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law purportedly created by Cablevision.”

While the Second Circuit remains divided, Aereo has continued ahead on remand in the District Court, where the parties in the consolidated actions have filed cross-motions for summary judgment, albeit on somewhat different issues. Aereo asserts that it does not infringe the public performance right or the right of reproduction (either directly or indirectly) and that consumers’ use of Aereo constitutes fair use and space-shifting. Plaintiffs Twentieth Century Fox and Fox Television argue that Aereo’s “watch now” copies infringe Fox’s reproduction right and do not constitute fair use. A decision by Judge Nathan in the Southern District of New York is pending.

The plot, however, continues to thicken: the Second Circuit is not the only jurisdiction wrestling with the difficult issues raised by Aereo. On December 27, 2012, Judge Wu in the Central District of California issued a preliminary injunction against Aereo doppelganger Aereokiller (formerly known as barrydriller.com), declining to adopt the Second Circuit’s reliance on Cablevision. Judge Wu instead held that plaintiffs would likely succeed on the merits of the argument that Aereokiller’s re-transmissions of broadcast programming constituted public performances under sections 101 and 106 of the Copyright Act. This decision is now fully briefed in the Ninth Circuit (including an amicus brief from the Copyright Alliance) and will be argued before the court on August 27, 2013. The Ninth Circuit’s ruling in Aereokiller will represent a possible turning point in this particular copyright “arms race”: if the Ninth Circuit affirms the district court, a clear circuit split arises, moving this hotly debated issue one step closer to consideration by the Supreme Court.

Even if the Ninth Circuit goes the way of its sister circuit in New York, the story is far from over, because Aereo and its competitors have recently announced plans to move into new geographic areas. This, in turn, has generated a spate of new lawsuits. On May 23, 2013, Fox Television Stations, Inc., along with 10 other broadcast plaintiffs, filed a copyright infringement suit in federal court in Washington, D.C., against Aereokiller and three other companies owned by Aereokiller founder Alki David. The Fox complaint, like ABC’s complaint against Aereo in New York and NBCUniversal’s complaint against Aereokiller in California, makes an omnibus allegation that Aereokiller violated not only the right of public performance, but also the networks’ rights of reproduction, distribution, display, and to create derivative works. An answer was filed in Fox on June 27, 2013, which alleged a counterclaim for a declaratory judgment that the defendants do not violate the Copyright Act.

Meanwhile, on July 9, 2013, Hearst Stations Inc. (d/b/a WCVB-TV) filed a copyright infringement action against Aereo in the United States District Court for the District of Massachusetts, within the First Circuit (see the Copyright Alliance’s prior coverage here). Hearst’s complaint, like Fox’s complaint in D.C., alleges violations of the public performance, reproduction, distribution, and derivative works rights, but sets forth each violation as a separate, detailed count. Hearst also moved for a preliminary injunction on July 9, 2013, and on July 16, 2013, Aereo moved for a stay and to transfer the case to the Southern District of New York.

A mere five years after Cablevision — a case whose holding was supposedly limited to its facts — four federal judicial circuits are now debating copyright issues that will be critical not only to the broadcast television industry, but to all creators of media that are capable of being digitized, copied, and sent out into the ether, and to purveyors of new technology. But like many of your favorite reality shows, the decision is now in the hands of the judges.