More developments in the realm of Internet retransmission of OTA signals.
Aereo – the gift that keeps on giving, at least when it comes to blogworthy content. As we reported, after it got its clock cleaned at the Supreme Court, Aereo bounced back with Plan B, which amounted to declaring itself (a) a cable system and, thus, (b) eligible for the compulsory copyright license granted to cable systems. But you can’t just say “I’m a cable system” and expect anybody to believe you. So Aereo went ahead with some of the paperwork required of f’real cable operators; among other things, it filed a bunch (14, to be exact) of Statements of Accounts with the U.S. Copyright Office, along with some royalty and fee payments amounting to the princely sum of $5,310.74.
A nice gesture, but wouldn’t you know it, the Copyright Office (CO) was not inclined to play along with the gambit. In a brief letter dated July 16, 2014, the CO let Aereo know that, as far as the CO is concerned, Aereo is not a cable system entitled to the compulsory license. As it turns out, more than a decade ago the CO had concluded that “internet retransmission of broadcast television fall outside the scope” of the compulsory license. That’s bad news for Aereo, whose system is firmly – indeed, exclusively – based on Internet retransmission.
The CO also noted that, in the ivi, Inc. case in 2012, the U.S. Court of Appeals for the Second Circuit had agreed with the CO’s interpretation. That’s even worse news for Aereo because, at least for the last couple of years, the Second Circuit has been Aereo’s BFF in its nationwide litigation wars. Of course, Aereo’s view is that the Supreme Court’s decision effectively overruled ivi so ivi really isn’t good law anymore. But that’s a tough argument to make (credibly, at least) when the Supremes didn’t even mention ivi in their opinion. Normally, when the Supreme Court wants to overrule something, they’ll say so.
Though obviously down, Aereo still may not be entirely out. Despite its view that Aereo is definitely not a cable system, the CO recognized that Aereo is still hip deep in litigation concerning its status. Since Aereo has advanced the “Look-at-me-I’m-a-cable-system” claim in court (i.e., before Judge Nathan in the remand phase of the District Court proceeding in New York) and the court hasn’t yet resolved the question, the CO decided not to reject Aereo’s submissions out of hand. Instead, the CO is going to hold Aereo’s Statements of Accounts and its $5,310.74 check for the time being, just in case Aereo gets lucky. (For Aereo’s sake, we hope that the CO is holding that cash in an interest-bearing account, since Aereo’s other revenue streams seem to be drying up.) But the CO warned Aereo that it’s entirely possible that the CO may change its mind and take “definitive action” on Aereo’s filings, action that could include formal rejection of those filings.
Meanwhile, in another proceeding quasi-related to Aereo’s travails, a panel of the U.S. Court of Appeals for the Ninth Circuit has declined to enjoin Dish Network from continuing to offer its “Dish Anywhere” and “Hopper Transfers” services. Fox has sued Dish in California, claiming that those two services infringe on Fox’s copyrights.
As we have seen in the various Aereo cases, standard operating procedure in such circumstances calls for the broadcast plaintiff to request an injunction to stop the alleged infringer in its tracks until the litigation is completed. Aereo successfully fended off such an injunction before both Judge Nathan and then, on appeal, the Second Circuit. But the Supreme Court reversed those lower decisions, strongly suggesting that an injunction should have issued.
But in the Dish case, in a decision issued after the Supreme Court had acted in Aereo, the Ninth Circuit did not enjoin Dish. Some observers seem mystified that, in the wake of the Supreme Court’s Aereo decision, the Ninth Circuit could seemingly flout the Supremes’ opinion by refusing to enjoin an alleged infringer.
But there’s a perfectly simple explanation here.
Recall that, in order to obtain an injunction, a party must make a four-prong showing. One of those prongs calls for the moving party to demonstrate that it will suffer irreparable harm if the injunction is not granted. Another prong requires a showing that the moving party is likely to prevail on the merits of the case at trial.
In Aereo, while Judge Nathan had agreed that Aereo’s operation could cause the plaintiff broadcasters irreparable harm, she was not convinced that they would ultimately prevail on the merits. That was because of the Second Circuit’s 2008 Cablevision decision, which Aereo persuasively argued was controlling in the Aereo case. So the focus of the Second Circuit’s Aereo decisions and the Supreme Court’s opinion was the question of likelihood of success on the merits.
By contrast, in the Dish case, the trial court had concluded that Fox was not going to suffer irreparable harm; accordingly, the court declined to enjoin Dish. Fox’s appeal to the Ninth Circuit thus had nothing to do with the likelihood of success on the merits criterion. Rather, it was all about irreparable harm. The Ninth Circuit reviewed the record and, invoking an appropriately deferential standard of review, concluded that the trial court’s decision was OK: Fox had not established that it would suffer irreparable harm absent an injunction, so its request for an injunction was correctly denied.
To be sure, we expect that Aereo’s cookies are seriously frosted at the thought that Dish avoided an injunction within a matter of a week or two after Aereo got whacked in the Supremes. But the two cases have little to do with one another, at least as each of them currently stands in its respective litigation process. There may come a point at which the issues in both will overlap, in which event it may be reasonable for Aereo and the rest of us to expect conformity between the two. But with respect to the two cases in their present postures, it’s apples and oranges.