Judge Puts the Cuffs on AereoKiller

Disagreeing with the Second Circuit, a district judge in the Ninth Circuit has enjoined Aereokiller from transmitting its opponents’ over-the-air programming.

Remember Aereo, the Barry Diller-backed startup seeking to revolutionize the way we watch television? (Hint: It’s the video delivery service that uses rooms full of dime-sized antennas, each assigned to a different subscriber, enabling said subscriber to watch broadcast television via any mobile, Internet-based device.) As we reported last summer, Aereo won a key legal battle in New York in July, when a federal judge OK’d the continued provision of Aereo’s service at least temporarily. (Technically, the judge refused to issue a preliminary injunction requiring Aereo to shutter its service while it’s being sued by a number of broadcasters claiming that the Aereo service infringes their copyrights.) 

You may also recall Alki David, the owner of several services providing online distribution of over-the-air television (and other) programming. The most relevant for our purposes are FilmOn.com and Aereokiller

David’s Aereokiller service seems to have drawn inspiration (not to mention its name) from Aereo’s service. While not absolutely identical to Aereo, Aereokiller rests on the same general technology and the same basic legal principles as Aereo. (In its court filings, Aereokiller argues that it is not only technologically analogous to Aereo but, in fact, “better and more legally defensible”). And further highlighting the influence of Diller’s Aereo service on David’s Aereokiller service, the latter was originally launched via a website found at www.barrydriller.com (though it has now migrated to David’s FilmOn.com site and is available via an Aereokiller app); it appears to be operated by the David-owned “Barry Driller Content Systems, PLC”. At least I think I’ve got that corporate structure right (there’s clearly a lot going on here). 

In any event, it’s easy to suppose that David may have Aereo and Barry Diller in his sights, at least competitively. But a recent decision by a federal judge in Los Angeles could deep-six both Aereokiller and Aereo: Judge George Wu from the United States District Court for the Central District of California has issued a preliminary injunction against at least some aspects of Aereokiller’s operation.

We could be on a direct path to the Supreme Court.  (Quick, someone get the Swami! Oh, wait, that’s me!).

Like Aereo, Aereokiller was sued by virtually every major broadcast network soon after it began streaming signals of the network affiliate stations in Los Angeles. Using the same approach they had tried, unsuccessfully, in the NYC litigation against Aereo, the networks sought a preliminary injunction, asking Judge Wu to stop Aereokiller from retransmitting the networks’ over-the-air broadcasts until the litigation had been concluded. 

As we learned in the Aereo preliminary injunction post, the networks could win their motion for preliminary injunction only if they could show:

  • A likelihood of succeeding on the merits of the case itself;
  • That they would suffer irreparable harm in the absence of preliminary relief;
  • That the balance of equities tips in their favor;
  • That an injunction is in the public interest.

In both the Aereo and Aereokiller cases, the broadcasters were able to satisfy three of those four criteria. But you need all four, and in the Aereo case in New York, the judge was not convinced that the broadcasters were likely to prevail on their central infringement claim – because the Second Circuit’s Cablevision decision posed an insurmountable obstacle to that claim. So Aereo was allowed to continue to operate.

Aereokiller was not so lucky. Judge Wu in Los Angeles concluded that the broadcasters are likely to prevail. 

First, and foremost, he reminded everyone of basic geography: California is in the Ninth Circuit, not the Second Circuit. Therefore, he is not bound by either the Aereo decision or the Second Circuit’s Cablevision decision. 

More importantly, Judge Wu surmised that the Ninth Circuit – whose decisions are binding on Wu – would have come out differently in the Cablevision case. His disagreement with the Second Circuit is based on an alternate interpretation of the Copyright Act. In his densely reasoned opinion, Judge Wu parsed the meaning of terms such as “transmission”, “copy”, “work”, “performance” and “performance of a performance”. He concluded that, in Cablevision, the Second Circuit placed too much importance on whether the end user (i.e., the Aereo subscriber/viewer) was ultimately receiving a public performance of a transmission; the key issue should have been whether the end user is receiving a public performance of a copyrighted work “irrespective of which copy of the work the transmission is made from”. 

As the Judge explained:

Very few people gather around their oscilloscopes to admire the sinusoidal waves of a television broadcast transmission. People are interested in watching the performance of the work. And it is the public performance of the copyrighted work with which the Copyright Act, by its express language, is concerned. Thus, Cablevision’s focus on the uniqueness of the individual copy from which a transmission is made is not commanded by the statute.

Judge Wu also cited a law review article by the esteemed (by some) Judge Richard Posner (from the U.S. Court of Appeals for the Seventh Circuit), who proposed this analysis of the considerations relevant to the assessment of copyright infringement claims:

A rational resolution of the issue requires discerning the purpose of giving the owner of a copyrighted work the exclusive right to perform it. The purpose is to prevent the form of free riding that consists of waiting for someone to spend money creating a valuable expressive work and then preventing him from recouping his investment by copying the work and selling copies at a price below the price the creator of the work would have to charge to break even.

As Wu sees it, in Judge Posner’s terminology, Alki David and (presumably) Barry Diller are in effect free riders. 

All of which puts the Aereo decision (from a District Judge in the Second Circuit) and the Aereokiller decision (from a District Judge in the Ninth Circuit) on course for a collision in the Supreme Court.

If both the Second Circuit and the Ninth Circuit affirm their respective lower courts’ views as to what constitutes a public performance, the result will be a classic “circuit split” that could be resolved only by the Supreme Court (unless Congress were to intercede with legislation addressing the problem). In my mind, it’s dead-on certain that the Supreme Court would agree to resolve the split in Circuit law, should such a split develop. The Supremes would have to resolve that split because avoiding it would result in a nationwide service being treated differently according to region, with similar parties treated in vastly distinct manners under the law.

In that case the Supremes would likely consider not only how the statutory language itself must be read, but also what Congress intended and how much weight that perceived intention should be accorded. That, in turn could, lead to Congressional revision of the definition of “public performance”, should Congress disagree with the Court’s decision. In which case, there is still the possibility that David, Diller and innovators everywhere win in the end (and for that, from a strictly legal-nerd perspective, I love them . . . because this will be fascinating to watch). 

But that’s all a bit speculative – we probably won’t get to that point for a year or two, if ever.

In the meantime, the situation will have to remain geographically muddled. In the Second Circuit, Aereo may still operate its service (although the legal momentum Aereo had been enjoying may be diminished some thanks to Judge Wu’s contrary analysis). But in the Ninth Circuit, Aereokiller – although offering a service extremely similar to Aereo’s – may not

retransmit[ ], stream[ ], or otherwise public perform[ ] or display[ ] within the geographic boundaries of the [Ninth Circuit], directly or indirectly, over the Internet (through websites such as filmonx.com or filmon.com), via web applications (available through platforms such as the Windows App Store, Apple’s App Store, the Amazon Appstore, Facebook or Google Play), via portable devices (through applications on devices such as iPhones, iPads, Android devices, smart phones, or tablets), or by any means of any device or process, the Copyrighted Programming.

For purposes of the injunction, “Copyrighted Programming” refers to all broadcast TV programming in which any of the plaintiff broadcasters holds an exclusive right under the Copyright Act. The plaintiffs include NBCUniversal, Telemundo, ABC/Disney, CBS, Open 4 Business Productions and Big Ticket Television, Inc.

The Second Circuit encompasses New York, Connecticut and Vermont. The Ninth Circuit covers Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, the Northern Mariana Islands, Oregon and Washington – and Guam and the Northern Mariana Islands, too! 

That leaves a huge chunk of America’s heartland in which Aereo and/or Aereokiller may or may not be deemed legal. For now, the Swami will remain silent on where he sees this going. . . .

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Comments (2) Read through and enter the discussion with the form at the end
Sheogorath - January 17, 2013 3:14 AM

" In both the Aereo and Aereokiller cases, the broadcasters were able to satisfy three of those four criteria. But you need all four."
Er, no you don't. 2 Live Crew's parody of 'Pretty Woman' was commercial and was still found to be Fair Use. Source: http://en.wikipedia.org/wiki/Campbell_v._Acuff-Rose_Music,_Inc.

Kevin Goldberg - January 17, 2013 10:11 AM

Well, I think you've confused the "Fair Use" test that was used in the 2 Live Crew case with the "Preliminary Injunction" test that is being applied in the Aereo and Aereokiller cases. Easy mistake to make since both are four-part tests, but the Fair Use test (which you correctly note -- and we always remind people -- does NOT require that all four factors be met in order to apply) is a defense applicable only to copyright matters. A preliminary injunction is not restricted to copyright cases; it is an early motion by the plaintiff in a lawsuit asking for the defendant's allegedly illegal acts to be stopped pending resolution of the actual lawsuit. Courts, in almost all cases, require all four factors of this test to be met before a preliminary injunction is issued, although the relative weight to be accorded to any of the factors may vary from case to case, depending on the facts.

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