Will Second Circuit Decide Legality of Aereo, Inc?

November 19, 2012

Later this month, the Second Circuit Court of Appeals will consider the copyright infringement litigation pitting startup Aereo, Inc. against several major broadcasters.

Aereo’s new service is controversial because it will take broadcast television signals for the New York-area television stations and retransmit them over the Internet to Aereo subscribers, who can then view programming on their computers and mobile devices. The plaintiffs, including Fox Television, PBS, and ABC, argue that because Aereo has not licensed this television programming, the service constitutes copyright infringement.

Earlier this year, the U.S. District Court for the Southern District of New York denied the plaintiffs’ request for a preliminary injunction. It ruled that Aereo’s service did not violate the broadcasters’ pubic performance rights under the Copyright Act. The networks subsequently appealed.

The primary question before the Second Circuit is how to apply the precedent established in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”). The lawsuit involved a “remote DVR” system created by Cablevision, which was ultimately held not to violate copyright law.

On appeal, the networks argue that the District Court’s reliance on Cablevision was erroneous. They maintain that Aereo’s retransmission of live broadcasts constitutes “a quintessential public performance” in violation of the Copyright Act. They further contend that the Cablevision decision should be limited to the facts of that case and should not be expanded to include Internet transmissions.

Conversely, Aereo argues that the precedent established in Cablevision clearly applies. Similar to the Cablevision case in which because users selected the programs that were recorded and replayed, Aereo sends unique copies of programs to individual subscribers. It argues that the involvement of different technology, such as the Internet, should have no bearing on the court’s decision.

“Indeed, contrary to what may be the view of certain Appellants [the broadcast networks], copyright laws were never intended to be used to confine consumers to outdated technology. The reality is that the networks fought VCRs, and they fought remote DVRs, and they lost in both cases. This is simply another attempt to preserve the status quo as a business matter without regard to fundamental copyright principles,” the brief argues.

Oral arguments are scheduled for November 30, 2012. Given that the Second Circuit’s decision could shake up both the media and technology industries, we are closely watching the case and will provide updates as they become available.

If you have any questions about this case or other copyright concerns, please contact me, Michael Cifelli, or the Scarinci Hollenbeck attorney with whom you work.

Mr. Michael Cifelli focuses his practice in the area of civil defense litigation in such areas as insurance coverage matters in regards to employment and labor claims, asbestos claims, and environmental contamination claims. Mr. Cifelli has provided coverage analysis and litigation services for insurers. He has had litigation cases in front of administrative agencies at State and Federal courts, and has successfully defended employers in the public and private sector.

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