Aereo Asks Justices to Settle Fight With Broadcasters
Tony Mauro is Supreme Court correspondent for The National Law Journal, an American Lawyer affiliate.
In an unusual move that raised the stakes in a major copyright battle between broadcast television networks and the upstart Aereo service, Aereo Inc. on Thursday urged the U.S. Supreme Court to resolve the dispute, even though it won in the court below.
Broadcasters have argued that Aereo's individualized transmission of shows to its customers threatens the industry by bypassing cable and satellite systems that pay for permission to broadcast their programming.
Aereo, represented by veteran Supreme Court advocate David Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel, filed a brief at the court Thursday afternoon – a brief that ordinarily would be labeled a "brief in opposition," opposing high court review because the U.S. Court of Appeals for the Second Circuit ruled in Aereo's favor.
Instead, Frederick's brief was simply called "brief for respondent," signaling that Aereo wanted the justices to go ahead and decide the case.
"Even though the Second Circuit decided that issue correctly, petitioners have signaled their intention to wage a war of attrition by re-litigating this issue in every market to which Aereo expands its business," Frederick wrote. "Accordingly, Aereo believes it is appropriate for this court to grant review to affirm the decision below." The case is American Broadcasting Companies Inc. v. Aereo Inc.
Separately, Aereo founder and chief executive officer Chet Kanojia said in a written statement, "Broadcasters appear determined to keep litigating the same issues against Aereo in every jurisdiction that we enter. We want this resolved on the merits rather than through a wasteful war of attrition."
The brief was the latest move in what is shaping up as one of the top business and intellectual property cases to land on the high court’s docket in years. Aereo's strategy can be read as a sign of confidence that the Supreme Court will agree with the Second Circuit.
Frederick’s brief is a reply to the petition filed in October by most major television networks, represented by former solicitor general Paul Clement of the Bancroft firm and Paul Smith of Jenner & Block. The networks assert that Aereo, launched in 2011, violates the Copyright Act by transmitting their programming without authorization.
The statute gives copyright holders the exclusive right to “perform the copyrighted work publicly.” Aereo claims it does not violate that right because it transmits the shows individually to its Internet customers through thousands of dime-sized antennas. The Second Circuit agreed with Aereo that its transmission method does not add up to a public performance, but instead to thousands of private performances.
That is “nonsensical reasoning,” according to the networks’ petition asking the Supreme Court to overturn the Second Circuit. “The Second Circuit’s decision is already transforming the industry and threatening the very fundamentals of broadcast television,” the networks assert. “This court’s intervention is urgently needed.”
The networks have long relied on the “settled law” that third parties including cable and satellite operators pay for authorization to transmit their programming, they write. “The broadcast television industry has invested billions of dollars producing and assembling high-quality and creative entertainment and news programming in reliance on this legal regime, which prevents retransmission services from free-riding on broadcasters’ investments.”
Major League Baseball and the National Football League have weighed in on the side of the networks. In a brief by Robert Garrett of Arnold & Porter, the sports organizations warn that they might have to move all their games to paid cable networks like ESPN to thwart the Aereo model. “The decision below judicially empowers Aereo and similar services to destroy marketplace-negotiated exclusivity,” the brief states.
In a separate brief, the National Association of Broadcasters urges the high court to put a quick end to Aereo’s “Rube Goldberg-like” system of transmitting shows to its customers.
Frederick's brief for Aereo asserts that its transmission model is in keeping with the "essential bargain" made by broadcasters for broadcast spectrum in return for allowing consumers to receive and record on-air programs. The transmission goes to each customer separately, Aereo claims, "not to the public."