Aereo Scrambles After First Copyright Loss to Broadcasters
Television's old guard finally opened a chink in Aereo Inc.'s armor this week, winning a ruling that left the Internet TV upstart and its lawyers fighting to limit the damage ahead of arguments at the U.S. Supreme Court in April.
U.S. District Judge Dale Kimball in Salt Lake City issued a sweeping 26-page decision on Wednesday granting a bid by a group of broadcasters for a preliminary injunction blocking Aereo's service in Utah, Colorado, Kansas, New Mexico, Wyoming and Oklahoma. Aereo's lawyers at Durie Tangri immediately sought to appeal the ruling to the U.S. Court of Appeals for the Tenth Circuit and asked the judge to stay his decision in the meantime.
"I think [Kimball's ruling] destroys the myth that Aereo is invulnerable and invincible," said Jenner & Block's Richard Stone, who represents Fox Broadcasting Company in the Utah case and before the Supreme Court. "It's useful for the Supreme Court to see yet another court step back and use a commonsense approach."
As we've chronicled, Aereo is engaged in a multifront copyright battle with television broadcasters, the fate of which is likely to be decided in a Supreme Court showdown to be argued April 22. Aereo streams third-party network programming to paying subscribers using a vast array of tiny, individually assigned antennas. The company says it doesn't need to pay the broadcasters retransmission fees for its service—as cable companies do—because it simply gives customers a way to capture over-the-air signals, combined with the equally legal functions of a DVR service.
The broadcasters, of course, vehemently disagree. Until now, however, they've never persuaded a judge to pull the plug on Aereo. Their biggest setback remains an April 2013 ruling by the U.S. Court of Appeals for the Second Circuit, which ruled that Aereo's service didn't constitute a "public performance" of the broadcasters' copyrights and therefore didn't run afoul of the law. (An Aereo rival, FilmOn X, has had a much spottier record making similar arguments.)
Judge Kimball on Wednesday strongly rejected the Second Circuit's rationale for siding with Aereo, instead aligning himself with a sharp dissent by Circuit Judge Denny Chin. Like Chin, Kimball didn't buy the notion that Aereo's use of mini antennas insulates the company from copyright liability. "Based on the plain language of the 1976 Copyright Act and the clear intent of Congress, this court concludes that Aereo is engaging in copyright infringement of plaintiffs' programs," Kimball wrote.
Fox and its local affiliates are represented in the case by Jenner & Block and Hatch, James & Dodge. Nexstar Broadcasting, Inc., owner of the ABC affiliate in Salt Lake City, is represented by Arnold & Porter and Snow, Christensen & Martineau.
Jenner's Stone told us Thursday that it's "important" that Kimball refused to hold off ruling on the injunction before the Supreme Court weighs in, and instead stayed the case with an injunction in place. Otherwise Aereo could have continued its expansion within the Tenth District, he said.
Aereo passed along a statement from founder Chet Kanojia apologizing to customers. "We are extremely disappointed that the district court in Utah has chosen to take a different path than every other court that has reviewed the Aereo technology," the statement said. "Consumers have a fundamental right to watch over the air broadcast television via an antenna and to record copies for their personal use. The Copyright Act provides no justification to curtail that right simply because the consumer is using modern, remotely located equipment."
Durie Tangri's Daralyn Durie, who represents Aereo, didn't immediately respond to our call.