Fox v. Aereokiller - Brief of the Fox Appellees - Cross-Appellants

2193255.2

Nos. 13-55156, 13-55157, 13-55226, and 13-55228

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT ______________________

FOX TELEVISION STATIONS, INC., et al.,

Plaintiffs-Appellees / Cross-Appellants,

v.

AEREOKILLER, LLC, et al.,

Defendants-Appellants / Cross-Appellees

______________________

On Appeal from the United States District Court

for the Central District of California Case Nos. CV-12-6921-GW and CV-12-6950-GW

District Judge George H. Wu ______________________

BRIEF OF THE FOX APPELLEES/CROSS-APPELLANTS

______________________

Richard L. Stone Julie A. Shepard Amy M. Gallegos JENNER & BLOCK LLP 633 West 5th Street, Suite 3600 Los Angeles, CA 90071

Paul M. Smith JENNER & BLOCK LLP 1099 New York Avenue, NW, Suite 900 Washington DC 20001

Attorneys for Plaintiff-Appellees and Cross-Appellants Fox Television Stations, Inc., Twentieth Century Fox Film Corp., and Fox

Broadcasting Company

Case: 13-55156 04/26/2013 ID: 8607331 DktEntry: 44 Page: 1 of 75

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CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,

and to enable the Court to evaluate possible disqualification or recusal, the

Fox Appellees and Cross-Appellants certify as follows: Fox Broadcasting

Company is an indirect, wholly-owned subsidiary of News Corporation, a

publicly traded company. No publicly held company owns 10% or more of

News Corporation stock. Twentieth Century Fox Film Corp. is also an

indirect, wholly-owned subsidiary of News Corporation, a publicly traded

company. No publicly held company owns 10% or more of News

Corporation stock. Fox Television Stations, Inc. is also an indirect, wholly-

owned subsidiary of News Corporation, a publicly traded company. No

publicly held company owns 10% or more of News Corporation stock.


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TABLE OF CONTENTS

Page

STATEMENT OF JURISDICTION.......................................................................... 1

STATEMENT OF THE ISSUES............................................................................... 1

PRELIMINARY STATEMENT ............................................................................... 2

STATEMENT OF THE CASE .................................................................................. 6

STATEMENT OF FACTS ........................................................................................ 6

A. Public Performance Rights Under The Copyright Act .................. 6

B. The Cablevision Case ..................................................................... 9

C. FilmOn, Aereo, And Aereokiller .................................................. 11

D. The District Court’s Ruling .......................................................... 13

E. The Aereo Appeal ......................................................................... 14

STANDARD OF REVIEW ..................................................................................... 16

SUMMARY OF ARGUMENT ............................................................................... 16

ARGUMENT ........................................................................................................... 20

I. The District Court Correctly Held That The Broadcasters Are Likely To Succeed On The Merits .................................................................. 20

A. Aereokiller Publicly Performs The Broadcasters’ Copyrighted Programs ................................................................................... 20

B. Systems Using Mini-Antennas And Individual Copies Are Not Exempt From The Transmit Clause .......................................... 22

C. The District Court Correctly Rejected Cablevision ..................... 25

1. The Cablevision Court Confused The Terms “Performance” And “Transmission.” ............................. 25


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2. The Reasoning That Led The Cablevision Court To Hold That Each Transmission Is A Separate Performance Was Flawed .................................................................... 29

3. Reading The Statute Correctly Would Not Make All Performances Public ....................................................... 33

4. A Public Performance Does Not Require A Master Copy .................................................................... 35

5. Cablevision Is Not Only Wrong, But Also Distinguishable ............................................................... 40

D. Aereokiller’s Subscribers Are Not Transmitting The Programming To Themselves Using “Remote Equipment.” .... 41

E. Aereokiller Does Not Have A Fair Use Defense .......................... 45

II. The District Court Correctly Concluded That Each Of The Relevant Factors Supported A Preliminary Injunction ...................................... 50

A. The District Court Correctly Found That Aereokiller’s Illegal Service Would Irreparably Harm The Broadcasters ................. 50

B. The District Court Correctly Found That The Balance Of Hardships Favored An Injunction ............................................. 56

C. The District Court Correctly Found That An Injunction Would Serve The Public Interest .......................................................... 58

JOINDER IN THE ABC PARTIES’ CROSS-APPEAL ARGUMENTS ............... 61

CONCLUSION ........................................................................................................ 61

STATEMENT REQUESTING ORAL ARGUMENT ............................................ 63

CERTIFICATE OF COMPLIANCE ....................................................................... 64

CERTIFICATE OF RELATED CASES ................................................................. 65


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TABLE OF AUTHORITIES

Page(s) CASES

Am. Broad. Cos., Inc. v. Aereo, 874 F. Supp. 2d 373 (S.D.N.Y. 2012) .........................................................passim

AMP Inc. v. Foxconn Int’l, Inc., No. 93-1162, 1994 WL 315889 (C.D. Cal. Mar. 7, 1994) ................................. 57

Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir. 1983) ............................................................................. 57

Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984) ........................................................................................ 7, 48

Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) ........................................................................passim

Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984) ............................................................................... 35

Columbia Pictures Industries, Inc. v. Professional Real Estate Investors, Inc., 866 F.2d 278 (9th Cir. 1989) ........................................................................ 44, 45

Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600 (1st Cir. 1988) ............................................................................... 56

Cont’l Airlines, Inc. v. Intra Brokers, Inc., 24 F.3d 1099 (9th Cir. 1994) .............................................................................. 55

Corley v. United States, 556 U.S. 303 (2009) ............................................................................................ 28

Credit Bureau Connection, Inc. v. Pardini, 726 F. Supp. 2d 1107 (E.D. Cal. 2010) ............................................................. 55

Cuviello v. City of Oakland, No. 06-5517, 2007 WL 2349325 (N.D. Cal. Aug. 15, 2007) ............................. 57

Diamontiney v. Borg, 918 F.2d 793 (9th Cir. 1990) .............................................................................. 53


v 2193255.2

eBay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d 1058 (N.D. Cal. 2000) .............................................................. 54

Eldred v. Ashcroft, 537 U.S. 186 (2005) ............................................................................................ 58

Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989 (9th Cir. 2011) .............................................................................. 56

Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968) .....................................................................................passim

Fox Broadcasting Co. v. Dish Network, LLC, --- F. Supp. 2d ---, 2012 WL 5938563 (C.D. Cal. Nov. 7, 2012) ................. 49, 50

Gilder v. PGA Tour, Inc., 936 F.2d 417 (9th Cir. 1991) .............................................................................. 54

Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc., 549 F.3d 1079 (7th Cir. 2008) ............................................................................ 52

Helene Curtis Indus. v. Church & Dwight Co., Inc., 560 F.2d 1325 (7th Cir. 1977) ............................................................................ 57

Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998) ............................................................................... 46

L.A. News Serv. v. Reuters Television Int’l, Inc., 149 F.3d 987 (9th Cir. 1998) .............................................................................. 46

L.A. News Serv. v. Tullo, 973 F.2d 791 (9th Cir. 1992) .............................................................................. 46

Marlyn Nutraceuticals, Inc. v. Muco Pharma Gmbh & Co., 571 F.3d 873 (9th Cir. 2009) .............................................................................. 16

McCormack v. Hiedeman, 694 F.3d 1004 (9th Cir. 2012) ............................................................................ 16

Metro One Telecomms., Inc. v. C.I.R., 704 F.3d 1057 (9th Cir. 2012) ............................................................................ 20


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MGM Studios, Inc. v. Grokster, 545 U.S. 913 (2005) ...................................................................................... 59, 60

Mullins v. City of N.Y., 626 F.3d 47 (2d Cir. 2010) ................................................................................. 53

Nat’l Football League v. TVRadioNow Corp., Nos. 00-120, 00-121, 2000 WL 34200602 (W.D. Pa. Feb. 29, 2000) ................. 3

On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787 (N.D. Cal. 1991) ..............................................................passim

Princeton Univ. Press v. Mich. Document Servs. Inc., 99 F.3d 1381 (6th Cir. 1996) .............................................................................. 46

Rent-A-Center, Inc. v. Canyon Tel. & Appliance Rental, Inc., 944 F.2d 597 (9th Cir. 1991) .............................................................................. 54

Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th Cir. 2009) ........................................................................ 21, 31

SoftMan Prods. Co. LLC v. Adobe Sys., Inc., 171 F. Supp. 2d 1075 (C.D. Cal. 2001) .............................................................. 61

Sony Corp. v. Universal Studios, Inc., 464 U.S. 417 (1984) ...................................................................................... 48, 49

Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 832 (9th Cir. 2001) ........................................................................ 52, 54

Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330 (9th Cir. 1995) .............................................................................. 56

Twentieth Century Fox Film Corp. v. iCraveTV, Nos. 00-120, 00-121, 2000 WL 255989 (W.D. Pa. Feb. 8, 2000) ..... 3, 51, 52, 54

Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 192 F. Supp. 2d 321 (D.N.J. 2002) ..................................................................... 46

Warner Bros. Entm’t Inc. v. WTV Systems, Inc., 824 F. Supp. 2d 1003 (C.D. Cal. 2011) .......................................................passim


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Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) ................................................................................................ 16

WNET, Thirteen v. Aereo, Inc., --- F.3d ---, 2013 WL 1285591 (2d Cir. Apr. 1, 2013) ................................passim

WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir. 2012) ........................................................................passim

WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594 (S.D.N.Y. 2011) .......................................................... 51, 55

Zomba Enters., Inc. v. Panorama Records, Inc., 491 F.3d 574 (6th Cir. 2007) .............................................................................. 46

STATUTES

17 U.S.C. § 101 .................................................................................................passim

17 U.S.C. § 106 .................................................................................................... 7, 21

17 U.S.C. § 111 .......................................................................................................... 8

OTHER AUTHORITIES

CBS Broad. Inc. v. FilmOn.com, Inc., No. 10-7532, ECF No. 49 (S.D.N.Y. Aug. 9, 2012) .............................. 51, 52, 54

H. Comm. on the Judiciary, 89th Cong., 1st Sess., Supplemental Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law, 13-14 (Comm. Print 1965) ......................................................................... 23

H.R. Rep. No. 94-1476 (1976), 1976 U.S.C.C.A.N. 5659 ........................................ 8

Jane C. Ginsburg, Recent Developments in US Copyright Law – Part II, Caselaw: Exclusive Rights on the Ebb?, Columbia Law Sch. Pub. Law & Legal Theory Working Paper Grp., Paper No. 08158, (2008) ........................... 27

Jane C. Ginsburg, WNET v. Aereo: The Second Circuit Persists In Poor (Cable)Vision, The Media Institute (Apr. 23, 2013) .......................................... 28

Jeffrey Malkan, The Public Performance Problem in Cartoon Network LP v. CSC Holdings, Inc., 89 Or. L. Rev. 505, 536 (2011) ......................................... 29


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Melville B. Nimmer & David Nimmer, Nimmer on Copyright (2012) ............. 37, 38

Paul Goldstein, Goldstein on Copyright § 7.7.2 (3d ed. 2008) ......................... 24, 28

Wright, Miller & Kane, Federal Practice & Procedure § 2948.1 (2d ed. 1995) ................................................................................................................... 53


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STATEMENT OF JURISDICTION

The Fox Parties agree with Aereokiller’s jurisdictional statement, and

join and incorporate by reference the ABC Parties’ jurisdictional statement

relating to the cross-appeal.

STATEMENT OF THE ISSUES

1. Under the Copyright Act, to publicly perform a copyrighted

television program means to transmit it to the public using “any device or

process” that is “now known or later developed.” Thus, cable, satellite, and

internet services must be licensed to retransmit broadcast television; if they

are not, they are infringing the copyright owners’ exclusive right to publicly

perform the programs. Aereokiller claims that due to a loophole in the law

created by the Second Circuit in Cablevision,1 the system of mini-antennas

and digital recording devices that it uses to retransmit live television

programs over the internet to thousands or millions of people does not result

in a public performance. Thus, Aereokiller contends, it is free to operate its

for-profit retransmission business without paying for a license. Was the

district court correct to enjoin Aereokiller’s service and reject this argument?

2. Every court to consider the issue has held that the unlicensed

retransmission of copyrighted broadcast programming over the internet

1 Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) .


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irreparably harms broadcasters by, among other things, damaging their

goodwill, damaging their ability to negotiate favorable license agreements

with cable and satellite companies, unfairly competing with their own

internet distribution channels, and harming negotiations with advertisers by

diverting viewers to a platform where viewership is not measured for the

purposes of advertising revenue calculation. The Broadcasters presented

uncontroverted evidence that the same harms would occur here. Was the

district court correct to find that the Broadcasters would suffer irreparable

harm if Aereokiller was not enjoined?

PRELIMINARY STATEMENT

Aereokiller is in the business of capturing live broadcast television

signals and retransmitting the programming over the internet. Anyone can

watch live television on Aereokiller simply by going to Aereokiller’s

website, or using its mobile application to watch television on a cell phone

or tablet. Aereokiller makes money by charging subscription fees to watch

television in high definition, and by displaying banner ads and running

commercials that play when the viewer selects a channel to watch (the

advertisers pay Aereokiller, not the broadcast networks, for these ads). ER

1070, 1076. Unlike the cable, satellite, and other authorized retransmission


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services with which it competes, Aereokiller is paying nothing for the

broadcast programming that it profits from.

This is illegal. Under a provision of the 1976 Copyright Act known as

the Transmit Clause, transmitting copyrighted television programs to the

public using “any device or process” is a public performance that infringes

the copyright owners’ exclusive rights if it is not licensed. 17 U.S.C. § 101;

id. § 106(4).

Companies that retransmit broadcast programming over the internet

without a license are commonly enjoined. E.g., WPIX, Inc. v. ivi, Inc., 691

F.3d 275, 288 (2d Cir. 2012), cert. denied, --- S. Ct. ---, 81 U.S.L.W. 3511

(Mar. 18, 2013); Twentieth Century Fox Film Corp. v. iCraveTV, Nos. 00-

120, 00-121, 2000 WL 255989, at *1 (W.D. Pa. Feb. 8, 2000); Nat’l

Football League v. TVRadioNow Corp., Nos. 00-120, 00-121, 2000 WL

34200602, at *1 (W.D. Pa. Feb. 29, 2000). In fact, Aereokiller’s sister

company, FilmOn, was enjoined from retransmitting live television over the

internet several years ago by a district court in New York. ER 1072, 1111-

12.

Aereokiller believes it has found a legal loophole that allows it to do

exactly what cable, satellite, and other authorized retransmission services do

– retransmit broadcast television to the public for a profit – yet without


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paying for the same licenses these other services pay for. In 2008, the

Second Circuit held in Cablevision that a cable provider licensed to

retransmit broadcast programming could offer a remote DVR service

without having to take a second license to cover the transmissions from the

cable company’s remote server that occurred when the subscribers played

back the recorded programs. See 536 F.3d at 140-41. The Cablevision

Court’s analysis was that these playback transmissions were private, because

they emanated from unique copies made by subscribers, and each

transmission could only be received by the subscriber who had copied the

program. Id. at 134-35.

Aereokiller designed its system to use thousands of miniature

antennas and digital copies to retransmit the programming, so it can claim

that its transmissions are “private” under Cablevision.2 In other words,

Aereokiller would contend that when one million people go on its website

Thursday night at 8:00 pm and watch Glee, there is no public performance

by Aereokiller – just one million private performances of Glee that

Aereokiller is making money from without paying a dime to the company

2 The Broadcasters do not know whether this is really how Aereokiller’s system works, since they were denied expedited discovery regarding the details of Aereokiller’s technology, ER 1948-50, but will assume for the purpose of this appeal that Aereokiller’s description of its system is accurate.


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that invested millions of dollars in creating and producing that copyrighted

work.

That is plainly not right. Cablevision and the doctrine of stare decisis

might have required the Second Circuit to bless Aereo (a similar service that

Aereokiller knocked off, hence the name “Aereokiller”). See WNET,

Thirteen v. Aereo, Inc., --- F.3d ---, 2013 WL 1285591 (2d Cir. Apr. 1,

2013); but see id. at *15-22 (Judge Chin dissenting on the ground that a

retransmission system consisting of miniature antennas and individual

copies is clearly a “device or process” that transmits copyrighted

programming to the public, and arguing that Cablevision should not have

been controlling because it involved a DVR, not an unlicensed

retransmission service). But Cablevision is not the law in this Circuit. And,

as leading scholars have noted, Cablevision’s interpretation of the Transmit

Clause was incorrect. Under the Transmit Clause, transmitting a

performance of a work to the public is a public performance. Whether the

performance is transmitted to the public simultaneously in a single

transmission, or seriatim in many transmissions, or whether the transmitter

uses one copy or many, is not relevant under the statute’s plain language.

Judge Wu’s careful analysis of the statutory language, legislative

history, and Cablevision’s reasoning led him to reject the Cablevision


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Court’s reading of the Transmit Clause and hold that Aereokiller was

infringing under the statute’s plain language. This analysis was correct, and

this Court should therefore affirm the preliminary injunction against

Aereokiller.

STATEMENT OF THE CASE

The Broadcasters sued Aereokiller for copyright infringement on

August 10 and 13, 2012, and jointly moved for a preliminary injunction on

November 8, 2012. The district court (Wu, J.) conducted three separate

hearings on that motion and, on December 27, 2012, preliminarily enjoined

Aereokiller from retransmitting the Broadcasters’ copyrighted television

programming over the internet, but limited the scope of the injunction to the

geographic boundaries of the Ninth Circuit. These consolidated appeals

followed.

STATEMENT OF FACTS

A. Public Performance Rights Under The Copyright Act.

The Broadcasters own the copyrights to a large number of the

programs broadcast by television stations over-the-air to viewers. For

example, Fox owns the copyrights in popular shows such as Glee, Family

Guy, Touch, and Bones. Broadcasters invest significant resources in the


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development, acquisition and production of their programming. E.g., ER

1456.

Although those programs are available to viewers for free over the

airwaves, this does not mean that a business can free-ride on the

Broadcasters’ investment by capturing broadcast signals and retransmitting

them to customers for a profit. Copyright law gives owners of “motion

pictures and other audiovisual works” the exclusive right “to perform the

copyrighted work[s] publicly.” 17 U.S.C. § 106(4). Under the Transmit

Clause, the exclusive right of public performance includes the right “to

transmit or otherwise communicate a performance or display of the work . . .

to the public, by means of any device or process, whether the members of

the public capable of receiving the performance or display receive it in the

same place or in separate places and at the same time or at different times.”

Id. § 101.

By this language, it is copyright infringement for a service provider to

retransmit copyrighted television broadcasts without a license. In fact,

requiring cable companies and other retransmission services to pay royalties

under statutory or negotiated licenses was one of Congress’s express

purposes when it revised the Copyright Act in 1976. See Capital Cities

Cable, Inc. v. Crisp, 467 U.S. 691, 709-10 (1984) (“In revising the


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Copyright Act . . . Congress concluded that cable operators should be

required to pay royalties to the owners of copyrighted programs

retransmitted by their systems on pain of liability for copyright

infringement.”); see also H.R. Rep. No. 94-1476, at 88-89 (1976), 1976

U.S.C.C.A.N. 5659, 5702-5704 (“cable systems are commercial enterprises

whose basic retransmission operations are based on the carriage of

copyrighted program material and . . . copyright royalties should be paid by

cable operators to the creators of such programs”) (the “1976 Report”).3

The Transmit Clause was enacted specifically to bring retransmission

of broadcast programming within the performance right, in response to prior

Supreme Court cases holding that cable systems did not “perform”

copyrighted television programs when they captured broadcast signals and

delivered them over cable wire to their subscribers. E.g. Fortnightly Corp.

v. United Artists Television, Inc., 392 U.S. 390, 399-400 (1968). The

rationale of these cases – which Congress rejected – was that cable systems

3 Section 111 of the Copyright Act creates a statutory license that permits cable services to retransmit broadcast signals to their subscribers, provided they pay royalties at government-regulated rates and abide by the statute’s procedures. ivi, 691 F.3d at 278. Services that retransmit broadcast programming over the internet are not entitled to take advantage of the statutory license; internet services must negotiate a license or incur liability for copyright infringement. Id. at 278-85.


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were merely enabling consumers to do what they could do anyway, i.e.,

receive over-the-air television broadcasts with an antenna. Id.

Congress also recognized that technology would evolve and therefore

wrote the Transmit Clause to be technology-neutral, so that the ability of

copyright owners to prevent infringing transmissions would not depend on

what technology the infringer used and would not be subject to technological

erosion. The Transmit Clause encompasses transmissions made via “any

device or process,” 17 U.S.C. § 101 (emphasis added), and the statute

defines “device or process” to include those “now known or later

developed.” See id.

B. The Cablevision Case.

Cablevision was decided by the Second Circuit in 2008. It involved a

cable company’s remote-storage DVR (“RS-DVR”) which, from the user’s

perspective, operated in all practical respects like a regular DVR, except that

the recorded programs were stored on a remote server instead of a set-top

box. 536 F.3d at 124-25. When a subscriber used her remote control to play

back a program, the program would be transmitted from the remote server to

her television. Id. The question in Cablevision was whether these playback

transmissions were a public performance. Id. at 134. Because the cable

company had a license to retransmit live broadcast programming to its


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subscribers, there was no issue involving unauthorized retransmission; the

only issue was whether an additional license was needed for the viewer to

play back the programming she had recorded. Id. at 123, 134.

The Cablevision Court held that the playback transmissions were not a

public performance. 536 F.3d at 136-38. Whatever one thinks of that

outcome, the important thing here is not the result but how it was reached.

The Cablevision Court held that when the Transmit Clause refers to

“members of the public capable of receiving the performance,” Congress

really meant “capable of receiving the transmission.” Thus, the Court

decided that a public performance occurs only if the transmitter makes a

single transmission that is capable of being received by multiple people. Id.

at 134-35. Under this reasoning, a transmitter could transmit a copyrighted

program to thousands or millions of subscribers by sending an individual

transmission to each subscriber – yet that would not count as a public

performance. See id.

The Cablevision Court also held that under the Transmit Clause it is

“relevant” whether each transmission of the same program emanates from

the same copy of the program or from unique, subscriber-associated copies,

as was the case with the RS-DVR. 536 F.3d at 138. Based on this

interpretation of the Transmit Clause, the Court held that “[b]ecause each


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RS-DVR playback transmission is made to a single subscriber using a single

unique copy produced by that subscriber,” there was no public performance.

Id. at 139.

C. FilmOn, Aereo, And Aereokiller.

FilmOn (Aereokiller’s sister company), Aereo, and Aereokiller are

services that retransmit live broadcast television programming over the

internet without a license. FilmOn launched in September 2010. ER 1071.

The Broadcasters immediately sued FilmOn for copyright infringement and

obtained a temporary restraining order. ER 1072.

Aereo took a different approach than FilmOn. It designed its system

to exploit the potential loopholes that the Cablevision decision created in the

Transmit Clause. Instead of using a single antenna to capture broadcast

signals, Aereo uses thousands of miniature antennas which it rotates among

its subscribers as they log in to watch broadcast programming. Aereo, 2013

WL 1285591 at *2. When a subscriber watches live television on Aereo, the

signal from the antenna temporarily assigned to her is routed to Aereo’s

server, which starts copying the program. Id. Once six or seven seconds of

programming have been saved on the server, Aereo streams the program

over the internet to the subscriber from this copy. Id.


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From the subscriber’s perspective, Aereo’s miniature antenna and

copying set-up is invisible: the subscriber simply logs on to Aereo, selects a

program that is currently being broadcast on network television from a

program guide, and then watches the program essentially live, albeit with a

six or seven second delay. 2013 WL 1285591 at *1-2. Aereo limited its

operations to the Second Circuit so that if it were sued, Cablevision would

be controlling. Id. at *21 (Chin, J., dissenting).

In March 2012, the Broadcasters sued Aereo in the Southern District

of New York. Because Aereo’s system was designed to map onto

Cablevision’s interpretation of the Transmit Clause, the court refused to

enjoin Aereo, holding that “[b]ut for Cablevision’s express holding

regarding the meaning of the provision of the Copyright Act in issue here –

the transmit clause – Plaintiffs would likely prevail on their request for a

preliminary injunction.” Am. Broad. Cos., Inc. v. Aereo, 874 F. Supp. 2d

373, 375 (S.D.N.Y. 2012).

On July 31, 2012, FilmOn settled with the Broadcasters and the court

entered a consent judgment permanently enjoining FilmOn from

retransmitting copyrighted broadcast programs without a license. See ER

1073, 1079-102. Days later, FilmOn resurfaced as “Aereokiller,” claiming

that it was now using an Aereo-like miniature antenna and copying system


13 2193255.2

and therefore could “legally” retransmit broadcast programming over the

internet with no license. The Broadcasters immediately sued Aereokiller in

the Central District of California, and the case was assigned to the Hon.

George H. Wu.

D. The District Court’s Ruling.

Judge Wu granted the Broadcasters’ motion for a preliminary

injunction. ER 4-10. Assuming for the purpose of the motion that

Aereokiller was using the same system as Aereo, Judge Wu carefully parsed

the language of the Transmit Clause, analyzed Cablevision’s reasoning, and

concluded that Cablevision’s interpretation of the Transmit Clause was

incorrect. ER 5-7. Based on the statute’s plain language, legislative history,

and this Circuit’s law, Judge Wu held that Aereokiller was publicly

performing broadcast programming because it was transmitting a

performance of the work – i.e., the program – to the public. Id.

Judge Wu also rejected Aereokiller’s argument that its service was

non-infringing because it merely enabled its customers to do what they could

lawfully do for themselves with an antenna, DVR, and Slingbox. See ER

684-85. As Judge Wu explained, this was the very reasoning Congress

rejected when it revised the Copyright Act in 1976 and overruled

Fortnightly. ER 5-6.


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Judge Wu also found that the Broadcasters had demonstrated

irreparable harm because the evidence showed that Aereokiller’s service

threatens the Broadcasters’ ability to (i) preserve their goodwill with

licensees and negotiate retransmission agreements with cable, satellite, and

other telecommunications providers; (ii) develop their own internet

distribution channels; and (iii) negotiate with advertisers. ER 7-8. Judge

Wu also noted that Aereokiller would be unlikely to satisfy a statutory

damages award. ER 8. Judge Wu also found that the harm to the

Broadcasters outweighed any harm to Aereokiller, which has “no equitable

interest in continuing an infringing activity.” Id. And he concluded that the

public interest would be served by an injunction that “‘uphold[s] copyright

protections and correspondingly, prevent[s] the misappropriation of skills,

creative energies, and resources which are invested in the protected

work[s].’” Id. (citation omitted).

E. The Aereo Appeal.

When Judge Wu ruled in this case, the appeal of the order denying a

preliminary injunction against Aereo was pending in the Second Circuit. On

April 1, 2013, the Second Circuit issued a split opinion affirming the district

court. Aereo, 2013 WL 1285591 at *14. Because it was bound by its prior

decision in Cablevision, the Aereo majority did not apply the Transmit


15 2193255.2

Clause based on its plain language but instead followed Cablevision’s

interpretation. Id. at *6, 13. Thus, the majority held that Aereo does not

publicly perform the Broadcasters’ copyrighted programming by streaming

it live over the internet to subscribers because every subscriber watching live

television on Aereo receives an individual transmission from a “unique

copy” of the program. Id. at *5-9.

Judge Chin filed a sharp dissent, characterizing Aereo’s system as a

“sham” and a “Rube Goldberg-like contrivance, over-engineered in an

attempt to avoid the reach of the Copyright Act and to take advantage of a

perceived loophole in the law.” 2013 WL 1285591 at *15. The dissent

explains why the plain language of the Transmit Clause compels the

conclusion that Aereo publicly performs broadcast programming:

It is apparent that Aereo’s system falls squarely within the plain meaning of the statute . . . . The statute is broadly worded, as it refers to “any device or process.” Aereo’s system of thousands of antennas and other equipment is clearly a “device or process.” Using that “device or process,” Aereo receives copyrighted images and sounds and “transmit[s] or otherwise communicate[s] them to its subscribers “beyond the place from which they are sent[.]” . . . The “performance or display of the work” is then received by paying subscribers “in separate places” and “at different times.”

Id. at *17 (internal citations omitted).


16 2193255.2

STANDARD OF REVIEW

“‘A plaintiff seeking a preliminary injunction must establish that [s]he

is likely to succeed on the merits, that [s]he is likely to suffer irreparable

harm in the absence of preliminary relief, that the balance of equities tips in

[her] favor, and that an injunction is in the public interest.’” McCormack v.

Hiedeman, 694 F.3d 1004, 1010 (9th Cir. 2012) (quoting Winter v. Natural

Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)) (brackets in original).

This Court reviews “a district court’s grant of a preliminary injunction

for an abuse of discretion. ‘[O]ur inquiry is at an end once we determine

that the district court employed the appropriate legal standards which govern

the issuance of a preliminary injunction, and . . . correctly apprehended the

law with respect to the underlying issues in [the] litigation.’” Marlyn

Nutraceuticals, Inc. v. Muco Pharma Gmbh & Co., 571 F.3d 873, 876 (9th

Cir. 2009) (citation omitted, alterations in original). “The district court’s

interpretation of underlying legal principles is subject to de novo review.”

McCormack, 694 F.3d at 1010.

SUMMARY OF ARGUMENT

Judge Wu was correct to conclude that Aereokiller publicly performs

copyrighted broadcast programming when it streams it over the internet

where it can be received by anyone on a computer, cell phone, or tablet.


17 2193255.2

Aereokiller’s miniature antenna and copying system is a “device or process”

that Aereokiller uses to transmit programming to members of the public.

Therefore, Aereokiller falls squarely within the Transmit Clause. There is

no reasonable reading of the Transmit Clause that would make Aereokiller’s

system exempt.

To the extent Cablevision’s interpretation of the Transmit Clause

would justify allowing Aereokiller to continue operating unlicensed, that

interpretation cannot be squared with the statute’s text or legislative history,

and Judge Wu was correct to reject it. Moreover, Cablevision is

distinguishable because it involved only a remote DVR service offered as an

adjunct to a legal, licensed cable television service. Cablevision did not hold

that an unlicensed service provider could avoid the need for a license

altogether by using unique copies and separate streams to retransmit the

programming.

Aereokiller characterizes its system as advanced “technology” that

allows consumers to remotely access antennas and related equipment they

can use to supposedly transmit broadcast programming to themselves. This

is not accurate. Aereokiller is a retransmission service. Viewers watching

television programming on Aereokiller do not use remote antenna equipment

to transmit programming to themselves any more than satellite television


18 2193255.2

subscribers use remote satellite equipment to transmit programming to

themselves. Viewers use Aereokiller’s ad-sponsored website and mobile

applications to watch television over the internet, not to own and operate

remote antennas or any other technology platform. The experience is the

same as watching programs on a television. The viewer simply selects a

channel, and watches it:

25

ER 219


19 2193255.2

ER 220.

Courts within this Circuit have squarely rejected attempts by service

providers to avoid copyright liability by claiming they are not transmitting

copyrighted works but instead simply providing remote equipment viewers

use to transmit the works to themselves. See, e.g., Warner Bros. Entm’t Inc.

v. WTV Systems, Inc., 824 F. Supp. 2d 1003, 1010-11 (C.D. Cal. 2011)

(enjoining internet movie streaming service, and rejecting argument that the

service was really just allowing viewers to rent and watch movies remotely);

On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787,

789-90 (N.D. Cal. 1991) (granting summary judgment against service that

transmitted movies to hotel room televisions, and rejecting argument that the


20 2193255.2

service was really offering “‘electronic rentals’ similar to patrons’ physical

borrowing of videotapes.”).

The Court should also reject Aereokiller’s claim that its infringing

activities are somehow protected by “fair use” principles. Just because

individuals can receive broadcast television using rooftop antennas does not

mean Aereokiller is entitled to act as a middleman and profit from capturing

and retransmitting programming for which it pays nothing. As Judge Wu

recognized, this is the same justification that Congress rejected when it

enacted the Transmit Clause and overruled Fortnightly. Moreover, no court

has ever held that a fair use defense could even theoretically apply in a

performance right claim against a commercial retransmission service.

ARGUMENT

I. The District Court Correctly Held That The Broadcasters Are Likely To Succeed On The Merits.

A. Aereokiller Publicly Performs The Broadcasters’ Copyrighted Programs.

The starting point for the Court’s analysis is the plain language of the

Transmit Clause. Metro One Telecomms., Inc. v. C.I.R., 704 F.3d 1057,

1061 (9th Cir. 2012). “The preeminent canon of statutory interpretation

requires us to presume that the legislature says in a statute what it means and


21 2193255.2

means in a statute what it says there.” Satterfield v. Simon & Schuster, Inc.,

569 F.3d 946, 951 (9th Cir. 2009) (internal brackets omitted).

The Copyright Act grants copyright owners the exclusive right to

perform their copyrighted works publicly. 17 U.S.C. § 106(4). Section 101

of the Act defines what it means to perform a work “publicly.” Under the

Transmit Clause, “to perform a work publicly” is:

to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

Id. § 101.

A television program is performed when its images and sounds are

played. 17 U.S.C. § 101 (definition of “perform” an “audiovisual work”).

To “transmit a performance” is to “communicate it by any device or process

whereby images or sounds are received beyond the place from which they

are sent.” Id. And a “device or process” includes “one now known or later

developed.” Id.

Aereokiller publicly performs the Broadcasters’ programs within the

plain language of the statute. For example, Aereokiller performs the Fox

program Glee when it retransmits Glee by capturing Fox’s signal on its


22 2193255.2

antennas, transcoding the signal for delivery over the internet, and streaming

Glee over the internet. Aereokiller’s “technology” – its system of miniature

antennas, copies, and the internet – is a “device or process.” The Aereokiller

“technology” transmits the program: Aereokiller viewers can receive and

watch Glee at any location on a computer or mobile device, which is a place

beyond the place from which the images and sounds of the program were

sent. And Aereokiller transmits the program to the public: viewers

watching Glee on Aereokiller are members of the public who receive the

performance of Glee in separate places. Thus, Aereokiller is publicly

performing the Broadcasters’ copyrighted programs under the plain

language of the Transmit Clause.

B. Systems Using Mini-Antennas And Individual Copies Are Not Exempt From The Transmit Clause.

Judge Wu was right to reject Aereokiller’s claim that its “technology”

is somehow exempt from the Transmit Clause. The Transmit Clause is

expressly technology-neutral. It clearly states that a work is performed

publicly if it is transmitted to the public “by means of any device or

process.” 17 U.S.C. § 101 (emphasis added). This broad language is

repeated in the definition of “transmit,” which can be done using “any

device or process.” Id. The fact that Congress intended to capture all

possible technologies within the definition of public performance is


23 2193255.2

underscored by the statute’s definition of “device or process,” which

includes those “now known or later developed.” Id.

The legislative history further confirms Congress’s intent to include

all possible technologies within the Transmit Clause:

The definition of “transmit” . . . is broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them. Each and every method by which the images or sounds comprising a performance or display are picked up and conveyed is a ‘transmission,’ and if the transmission reaches the public in any form, the case comes within the scope of clauses (4) or (5) of section 106.

1976 Report at 64 (emphasis added); see also id. at 63 (a “performance may

be accomplished ‘either directly or by means of any device or process,’

including all kinds of equipment for reproducing or amplifying sounds or

visual images, any sort of transmitting apparatus, any type of electronic

retrieval system, and any other techniques and systems not yet in use or even

invented”) (emphasis added); H. Comm. on the Judiciary, 89th Cong., 1st

Sess., Supplemental Report of the Register of Copyrights on the General

Revision of the U.S. Copyright Law, 13-14 (Comm. Print 1965) (“[T]he bill

should, we believe, adopt a general approach aimed at providing

compensation to the author for future as well as present uses of his work that


24 2193255.2

materially affect the value of his copyright . . . . A real danger to be guarded

against is that of confining the scope of an author’s rights on the basis of the

present technology so that, as the years go by, his copyright loses much of

its value because of unforeseen technical advances.”).

Ignoring the statute’s plain language and legislative history,

Aereokiller and its amici argue that when Congress enacted the 1976

Copyright Act, it wrote the Transmit Clause narrowly to balance copyright

owners’ rights with the public’s right to access the copyrighted works

through “private performances.” E.g., Appellants’ Opening Brief (“AOB”)

at 13; Aereo Amicus Brief at 8-10. The only support they cite for this is

general language stating that only public performances are actionable, which

is of course not disputed.

This is revisionist history. The types of private performances

Congress had in mind were things like singing in the shower, listening to the

radio, or watching television in the home. E.g., 1976 Report at 63-64; see

also Paul Goldstein, Goldstein on Copyright § 7.7.2 (3d ed. 2008) (Congress

determined that the copyright owner’s “rights should not be extended to

situations, such as singing in the shower, where interests in privacy or the

small scale of the use will typically make it inappropriate or impracticable

for the copyright owner to detect the use and for the copyright owner and


25 2193255.2

user to negotiate a license.”). There is nothing in the statute or legislative

history indicating Congress would have intended a commercial service

retransmitting live broadcast programming to thousands or millions of

people to be engaging in “private performances.”

C. The District Court Correctly Rejected Cablevision.

Aereokiller’s only argument that its service is non-infringing relies on

the Cablevision Court’s interpretation of the Transmit Clause, which it

asserts Judge Wu should have followed. As detailed below, Cablevision’s

reading of the Transmit Clause does violence to the plain language of the

statute and the intent of Congress, produces absurd results, has been roundly

criticized by leading scholars, and should not be adopted by this Court.

1. The Cablevision Court Confused The Terms “Performance” And “Transmission.”

As Judge Wu recognized, the basic, underlying mistake in

Cablevision was the Second Circuit’s conclusion that a “transmission of a

performance is itself a performance.” 536 F.3d at 134 (citation omitted); ER

5. This led the court to replace the term “performance” in the Transmit

Clause with the term “transmission,” thereby effectively – and improperly –

rewriting the clause to read:

to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether


26 2193255.2

the members of the public capable of receiving the performance transmission or display receive it the transmission in the same place or in separate places and at the same time or at different times.

Applying its revised version of the Transmit Clause, the Second

Circuit reasoned that unless a single transmission is capable of being

received by multiple people, the transmitter has not infringed the public

performance right. 536 F.3d at 134-40.

This was wrong. As defined by the statute, a “transmission” and a

“performance” are not the same thing. To transmit a performance is to

“communicate it by any device or process whereby images or sounds are

received beyond the place from which they are sent.” 17 U.S.C. § 101. This

tells us that the “performance” is the thing that is communicated and the

transmission is the means of communicating the performance. As Judge Wu

correctly explained, the Transmit Clause, properly read, says that

“transmitting a performance to the public is a public performance.” ER 5. It

“does not by its express terms require that two members of the public

receive the performance from the same transmission.” ER 6.

Moreover, the fact that the Transmit Clause states that transmitting a

performance to the public is a public performance even if the members of

the public capable of receiving the performance receive it “at different

times” confirms that Congress envisioned multiple transmissions of the


27 2193255.2

same work as being a public performance. This is because there is no such

thing as two people receiving the same transmission at different times.

People receiving transmissions at different times are necessarily receiving

separate transmissions. See Jane C. Ginsburg, Recent Developments in US

Copyright Law – Part II, Caselaw: Exclusive Rights on the Ebb?, Columbia

Law Sch. Pub. Law & Legal Theory Working Paper Grp., Paper No. 08158,

(2008), pub’d in 218 Revue Internationale du Droit d’Auteur (2008) (Fr.), 26

(“The [Cablevision] court’s construction clashes with the text of the Act in

another important way as well: it is not possible to transmit a performance

‘created by the act of transmission’ to members of the public ‘at different

times.’ While such a ‘performance’ could be transmitted to differently

located recipients, recipients differently situated in time cannot receive the

same transmission.”).4

By interpreting the Transmit Clause as requiring each separate

transmission to be treated as a distinct performance, the Cablevision Court

read the “different times” language out of the statute. Under Cablevision’s

interpretation, whenever a service transmits a performance of a work to

members of the public who receive it “at different times,” the performance

would necessarily be private, and never public, because each recipient

4 Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1305270.=columbia_pllt


28 2193255.2

would be receiving a separate transmission. See Jane C. Ginsburg, WNET v.

Aereo: The Second Circuit Persists In Poor (Cable)Vision, The Media

Institute (Apr. 23, 2013) (explaining that “at different places and different

times” is “the key language that should make clear that Congress was

covering both simultaneous, and ‘asynchronous’ transmissions,” and that

“the Second Circuit’s reading effectively deletes ‘different times’ from the

statute, thus defeating Congress’s clear intent to bring pay-per-view and

other individualized forms of transmission within the scope of the Copyright

Act”).5 By reading language out of the statute, the Cablevision Court

violated one of the most basic rules of statutory construction. See Corley v.

United States, 556 U.S. 303, 314 (2009) (“[O]ne of the most basic

interpretive canons [is] that a statute should be construed so that effect is

given to all its provisions, so that no part will be inoperative or superfluous,

void or insignificant.”) (internal quotation marks and alterations omitted)).

Leading scholars agree with Judge Wu that the Cablevision Court

misread the statute. See Paul Goldstein, Goldstein on Copyright § 7.7.2 (3d

ed. 2008) (“The error in the Second Circuit’s construction of the transmit

clause was to treat ‘transmissions’ and ‘performance’ as synonymous, where

the Act clearly treats them as distinct – and different – operative terms.”);

5 Available at http://www.mediainstitute.org/IPI/2013/042313.php.


29 2193255.2

Ginsburg, supra, at 26 (“the court confused ‘performance’ and

‘transmission’”); Jeffrey Malkan, The Public Performance Problem in

Cartoon Network LP v. CSC Holdings, Inc., 89 Or. L. Rev. 505, 536 (2011)

(the court “thought that the words ‘performance’ and ‘transmission’ were

interchangeable . . . [but] a transmission and a performance remain,

technically and legally, two distinct things”); id. at 553 (“The principal error

in the court’s application of the transmit clause was that it substituted the

word ‘transmission’ for the word ‘performance’ in the phrase ‘capable of

receiving the performance[.]’”).

2. The Reasoning That Led The Cablevision Court To Hold That Each Transmission Is A Separate Performance Was Flawed.

Cablevision’s reading of the Transmit Clause is illogical and not

grounded in the statute’s text. This is how the Cablevision Court reached its

interpretation of the statute:

The statute itself does not expressly define the term “performance” or the phrase “to the public.” It does explain that a transmission may be “to the public . . . whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times. This plain language instructs us that in determining whether a transmission is to the public it is of no moment that the potential recipients of the transmission are in different places, or that they may receive the transmission at different times. The implication


30 2193255.2

from this same language, however, is that it is relevant, in determining whether a transmission is made to the public, to discern who is “capable of receiving” the performance being transmitted. The fact that the statute says “capable of receiving the performance” instead of “capable of receiving the transmission” underscores the fact that a transmission of a performance is itself a performance.

536 F.3d at 134 (emphasis added, internal citation omitted).

Each underlined word or phrase is a problem. First, the Transmit

Clause does not “explain that a transmission may be to the public . . . .” Nor

does the Transmit clause require us to “determin[e] whether a transmission

is to the public.” The Transmit Clause says it is a public performance to

“transmit” a “performance” of the work to the public. See 17 U.S.C. § 101.

This does not necessarily require a single transmission to the public, as the

Cablevision Court seemed to believe. Rather, one can transmit a television

program to the public either by transmitting it once to many people (like a

television broadcast) or by transmitting it numerous times to many different

people (like video-on-demand). Judge Wu recognized this. ER 6 (“The

statute provides an exclusive right to transmit a performance publicly, but

does not by its express terms require that two members of the public receive

the performance from the same transmission.”).


31 2193255.2

Moreover, “[t]he fact that the statute says ‘capable of receiving the

performance’ instead of ‘capable of receiving the transmission’” does not

“underscore . . . that a transmission of a performance is itself a

performance.” 536 F.3d at 134. This statement by the Cablevision Court is

a non-sequitur. In actuality, the fact that the statute says “‘capable of

receiving the performance’ instead of ‘capable of receiving the

transmission’” tells us that a performance made available by transmission is

a public performance if members of the public are capable of receiving the

performance. After all, we are supposed to assume that Congress meant

what it said. Satterfield, 569 F.3d at 951.

The Cablevision Court attempted to support its reading of the statute

with language from the House Report on the 1976 Copyright Act, which

said:

Under the bill, as under the present law, a performance made available by transmission to the public at large is “public” even though the recipients are not gathered in a single place, and even if there is no proof that any of the potential recipients was operating his receiving apparatus at the time of the transmission. The same principles apply whenever the potential recipients of the transmission represent a limited segment of the public, such as the occupants of hotel rooms or the subscribers of a cable television service.

536 F.3d at 135 (emphases and brackets omitted).


32 2193255.2

The Cablevision Court assumed that because the House Report used

the language “potential recipients of the transmission,” Congress must have

meant that courts should look at the potential recipients of each separate

transmission to determine whether a performance is public. But this is not

what Congress wrote in the statute. Moreover, this language from the House

Report is simply confirming that a transmission made available to a limited

segment of the public such as hotel room occupants or cable subscribers is

still public. It is not defining what it means to transmit a performance to the

public, and it does not state that a public performance can only occur if a

single transmission can be received by multiple people. Additionally, the

very next sentence of the House Report says that “Clause (2) of the

definition of ‘publicly’ is applicable ‘whether the members of the public

capable of receiving the performance or display receive it . . . at the same

time or at different times.’” 1976 Report at 65 (emphasis added). Because,

as explained above, a single transmission cannot be received at different

times, this language tells us that Congress understood a public performance

would occur if a performance was transmitted individually to members of

the public at different times.


33 2193255.2

3. Reading The Statute Correctly Would Not Make All Performances Public.

The Cablevision Court attempted to support its interpretation of the

Transmit Clause by stating that any other interpretation would “obviate[]

any possibility of a purely private transmission.” 536 F.3d at 136. It used

two examples to illustrate this point:

Assume that HBO transmits a copyrighted work to both Cablevision and Comcast. Cablevision merely retransmits the work from one Cablevision facility to another, while Comcast retransmits the program to its subscribers. Under plaintiffs' interpretation, Cablevision would still be transmitting the performance to the public, solely because Comcast has transmitted the same underlying performance to the public. Similarly, a hapless customer who records a program in his den and later transmits the recording to a television in his bedroom would be liable for publicly performing the work simply because some other party had once transmitted the same underlying performance to the public.

Id.

In other words, the Cablevision Court presumed that if each

transmission was not viewed in isolation, then all transmissions of the same

program by everyone in the universe would be viewed collectively as a

public performance, making everyone who had ever transmitted that

program an infringer. This is bizarre. In the Cablevision-Comcast

hypothetical, Cablevision has not publicly performed the program because


34 2193255.2

Cablevision only transmitted the program between its own facilities and

never transmitted it to the public. Likewise, in the “hapless customer”

hypothetical, the customer has not publicly performed the program because

he did not transmit it to the public, he transmitted it to himself in his

bedroom. Judge Wu addressed the “hapless customer” hypothetical in his

opinion, and correctly recognized “[t]here is nothing public about such a

performance.” ER 6 n.12.

Aereokiller echoes this fallacy in its brief, contending that if the

preliminary injunction is affirmed, it will mean that a homeowner engages in

a public performance if she receives a broadcast signal on a rooftop antenna

and delivers that signal throughout her house, or if she plays a song she has

stored on Apple’s iCloud service on multiple devices. AOB at 20. No. The

homeowner is not transmitting the broadcast signal to the public; she is

transmitting it to other rooms in her own house. And a person listening to a


35 2193255.2

music file she owns is not publicly performing either; she is listening to her

own music in private.6

4. A Public Performance Does Not Require A Master Copy.

The Cablevision Court’s second critical error was its holding that if a

system transmits copyrighted programs from unique, subscriber-associated

copies, then each transmission is private. 536 F.3d at 138. This allowed the

Court to square its interpretation of the Transmit Clause with other cases

where courts found individualized transmissions to members of the public

from a master copy to be public performances. E.g., Columbia Pictures

6 Aereokiller and its amici insist that if the Transmit Clause is read properly, then companies which purportedly relied on Cablevision to design “cloud storage” or “cloud computing” services will be harmed. Aereokiller is not a cloud storage service (nor is Aereo, despite what it claims in its amicus brief). Aereo and Aereokiller are services that retransmit broadcast television over the internet. As far as the Broadcasters are aware, it is not possible for a consumer to upload a file she owns and store it on Aereo or Aereokiller. Moreover, as the briefs of Aereokiller’s amici demonstrate, “cloud computing,” “cloud service,” “cloud storage” and the like are amorphous terms that companies use to describe a wide variety of different types of internet services. Some companies that refer to themselves as “cloud services” publicly perform copyrighted works under the Transmit Clause (e.g., Aereo). Others do not. Some of these services are licensed; others are not. Holding that Aereokiller is committing copyright infringement under the plain language of the statute would not mean that all “cloud computing” would become illegal. Indeed, it would not even mean that the Cablevision RS-DVR would become illegal. A reasonable court might conclude that transmissions to individual cable subscribers of shows they had chosen to have recorded on the RS-DVR do not constitute public performances.


36 2193255.2

Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154, 159 (3d Cir. 1984) (separate

transmissions of movies to private viewing booths were a public

performance); On Command, 777 F. Supp. at 789-90 (separate transmissions

of movies to separate hotel rooms was a public performance).

A rule that a performance is public if separate transmissions emanate

from a master copy but private if the transmissions emanate from individual

copies cannot be squared with the language of the Transmit Clause. The

Transmit Clause does not say anything about unique copies or master copies

– it says “any device or process.” The legislative history says nothing about

unique copies or master copies. And this makes sense. Copyright law

protects the copyrighted work, not any particular copy that work. A copy is

just a material object, like a DVD or computer file, in which the copyrighted

program is fixed. All copies of last week’s episode of Glee embody the

same copyrighted work. There is no logical reason why Congress would

have granted Fox, as the copyright owner, the exclusive right to stream Glee

to the public from a master copy only, leaving retransmitters free to stream

Glee without a license so long as they devise a device or process that first

makes individual, subscriber-associated copies before streaming the

programs. Judge Wu was plainly correct when he rejected this aspect of

Cablevision, holding that “the concern [under the Copyright Act] is with the


37 2193255.2

performance of the copyrighted work, irrespective of which copy of the work

the transmission is made from.” ER 6 (emphasis added).

The idea that transmissions from a master copy are public and

transmissions from individual copies are private originated with the Nimmer

Copyright treatise. See Cablevision, 536 F.3d at 138. In that treatise, the

author editorialized that the “different times” language in the statute was

probably meant to cover situations where the same work was performed over

and over for members of the public – for example, an “old-fashioned penny

arcade, where a short motion picture sequence might be seen in a coin-

operated ‘peep show’ device.” 2 Melville B. Nimmer & David Nimmer,

Nimmer on Copyright § 8.14[C][3] (2012). The treatise cites no statutory

language or legislative history supporting the author’s view and cannot

override the plain language of the statute and Congress’s express intent that

it should be a public performance to transmit a performance to members of

the public using any device or process.

Moreover, Professor Nimmer himself acknowledged that deciding

whether a performance is public or private based on whether it involves

individual copies or a master copy produces absurd results. For example,

the treatise states that under this rule, a person who rents a movie from a


38 2193255.2

video store is publicly performing the movie because other people rented

and watched that same copy:

In the abstract, it may be argued that the practice of renting a given videocassette of a motion picture to various members of the public gives rise to “public” performances of the work, although each such performance of the work on a home television set is received only by an individual or family group. Nevertheless, the same copy gives rise to numerous performances, which are received by the public “at different times.” Therefore, under the wording of the Act, and by reason of the underlying rationale of what constitutes a “public” performance, it may follow that each individual rental performance is a “public” performance.

Nimmer on Copyright § 8.14[C][3].

A person sitting in his living room watching a DVD of Braveheart

that he rented from Blockbuster is not publicly performing Braveheart. This

is because he is neither playing the DVD at a place open to the public nor

transmitting Braveheart to members of the public, as the statute requires.

See 17 U.S.C. § 101.

Under Professor Nimmer’s analysis, four people who happened to rent

the same DVD copy of Braveheart from Blockbuster would each be liable

for publicly performing Braveheart by virtue of the fact that they all

watched the same copy. Yet Aereokiller could retransmit the Super Bowl to

thousands of subscribers without a license, and these would be deemed


39 2193255.2

“private” performances simply because it has built a “Rube Goldberg”

contraption that makes thousands of copies of the broadcast signal and

transmits from those copies. The fact that Professor Nimmer’s analysis

produces a result that conflicts with the statute and defies common sense

confirms that his reasoning was flawed.

Aereokiller contends that district courts in this Circuit have adopted

Cablevision’s “master copy” requirement, citing On Command and WTV

Systems. This is not accurate. On Command involved a system for

transmitting movies to hotel rooms from a central bank of VCRs. 777 F.

Supp. at 788-89. The court found that On Command was publicly

performing the movies – but the fact that the hotel guests were watching the

same copy was not part of the analysis. See id. at 789-90. Rather, the court

reasoned that On Command was publicly performing the movies because the

hotel guests were “members of the public” and the relationship between On

Command and the hotel guests “is a ‘public’ one regardless of where the

viewing takes place.” Id. This is a more logical way to analyze whether a

performance is to the public than by looking to whether the transmissions

emanate from one copy or many.

WTV Systems involved an internet service called Zediva that allowed

customers to watch movies streamed over the internet. 824 F. Supp. at


40 2193255.2

1006-08. As with On Command, the court’s conclusion that Zediva was

publicly performing the movies when it transmitted them over the internet to

its customers was not based on the fact that Zediva had a master copy of

each movie that it used to make the transmissions. Instead, it was based on

the fact that Zediva’s customers were members of the public. Id. at 1010

(“Customers watching one of Plaintiffs’ Copyrighted Works on their

computer through Zediva’s system are not necessarily watching it in a

‘public place,’ but those customers are nonetheless members of ‘the

public.’”). The district court noted that Cablevision was inapplicable

because Cablevision’s RS-DVR used unique copies instead of the master

copies used by Zediva, but it did not analyze or approve of Cablevision’s

reasoning. See id. at 1011 n.7.

5. Cablevision Is Not Only Wrong, But Also Distinguishable.

Even if Judge Wu had followed Cablevision, the correct result still

would have been to enjoin Aereokiller’s unlicensed retransmission service.

Because Cablevision was licensed to retransmit broadcast programming in

the first instance, see 536 F.3d at 123, the court in that case did not consider

whether a service without a license could avoid the need to obtain one by

designing a system that used individual transmissions and unique copies to

retransmit the programming.


41 2193255.2

The RS-DVR at issue in Cablevision was completely different than

Aereokiller’s unlicensed service. The RS-DVR was functionally the same as

a set-top DVR, and it existed only to allow subscribers to copy and watch

programming that Cablevision was licensed to provide to them. 536 F. 3d at

139; see also Aereo, 2013 WL 1285591 at *20 (Chin, J., dissenting). By

contrast, Aereokiller’s system – just like Aereo’s – makes copies solely to

argue that it can retransmit live programming without paying for the licenses

that cable and satellite companies pay for. See Aereo, 2013 WL 1285591, at

*20 (Chin, J., dissenting) (describing Aereo’s analogous system). As Judge

Chin explained in his Aereo dissent: “Aereo’s use of copies is essential to its

ability to retransmit broadcast television signals, while Cablevision’s copies

were merely an optional alternative to a set-top DVR. The core of Aereo’s

business is streaming broadcasts over the Internet in real-time; the addition

of the record function, however, cannot legitimize the unauthorized

retransmission of copyrighted content.” Id.

D. Aereokiller’s Subscribers Are Not Transmitting The Programming To Themselves Using “Remote Equipment.”

Aereokiller repeatedly mischaracterizes its service as merely allowing

subscribers to use remote technology – i.e., antennas and computer

equipment – to transmit programming to themselves. This characterization

is a sham. Aereokiller is a retransmission service, whereby consumers can


42 2193255.2

log onto Aereokiller’s web site or mobile application and watch live

broadcast programming streamed over the internet. ER 1345-49, 1375-80,

1403-14; see also ER 933-34 (Aereokiller admitting its system receives,

encodes, and distributes programming over the internet). The only thing the

viewer does is choose a program to watch, just as she would on a television.

No court would seriously entertain an argument by a cable or satellite

provider that it does not need a license because it merely allows its

subscribers to use remote technology – i.e., antennas and cable wires, or a

satellite dish – to transmit television programming to themselves.

Aereokiller is no different.

Aereokiller is not the first service provider to try to skirt liability for

transmitting copyrighted works by pretending its customers are merely

controlling technology remotely. For example, the defendant in On

Command tried to argue that its system for transmitting movies from a

central bank of VCRs to hotel room televisions was not actually transmitting

movies to hotel rooms; instead, it characterized its service as merely

allowing guests to rent movies electronically. On Command, 777 F. Supp. at

789. The court found this argument to be “without merit,” holding that:

On Command transmits movie performances directly under the language of the definition. The system “communicates” the motion picture “images and sounds” by a “device or process” –


43 2193255.2

the equipment and wiring network – from a central console in the hotel to individual guest rooms, where the images and sounds are received “beyond the place from which they are sent.” The fact that the hotel guests initiate this transmission by turning on the television and choosing a video is immaterial.

Id. at 789-90 (emphasis added, internal citations omitted).

Likewise, in WTV Systems, Zediva tried to argue that its system for

streaming movies over the internet from a central bank of DVD players was

not transmitting movies over the internet to its customers. 824 F. Supp. 2d

at 1009. Instead, according to Zediva, its customers were merely renting

DVDs remotely. Id. The court rejected this argument, holding that the

“Zediva service transmits performances of Plaintiffs’ Copyrighted Works

directly under the language of the statute . . . . As in On Command, the fact

that Zediva’s customers initiate the transmission by turning on their

computers and choosing which of Plaintiffs’ Copyrighted Works they wish

to view is immaterial.’” Id. at 1009-10.

As in On Command and WTV, Aereokiller is transmitting

performances of the copyrighted programs under the plain language of the

statute. Aereokiller communicates the images and sounds of the

copyrighted programs through the use of a “device or process” –

Aereokiller’s antenna farm, routers, transcoders, etc. The images and


44 2193255.2

sounds are received beyond the place from which they were sent – they are

sent from Aereokiller and received on subscribers’ computers or mobile

devices. Under the plain language of the statute, Aereokiller is transmitting

television programming, not renting remote antennas, and the fact that

individual viewers choose which program to watch does not mean they are

transmitting the programs to themselves. On Command, 777 F. Supp. at

798-90; WTV, 824 F. Supp. 2d at 1009-1010.

Aereokiller cites Columbia Pictures Industries, Inc. v. Professional

Real Estate Investors, Inc., 866 F.2d 278 (9th Cir. 1989), for the proposition

that a “hotel was not a ‘retransmitter’ because the hotel was merely

providing the consumers equipment that allowed them to watch the videos in

private.” See AOB at 27 n.12. Professional Real Estate Investors was

completely different because the hotel in that case was renting guests

videodiscs that they could pick up, bring back to their rooms, and play on

videodisc players located in the hotel rooms. 866 F.2d at 279. The Court

held that the hotel was not transmitting the movies because there was no

performance being received from beyond the place it was sent; the guests

were just watching videodiscs that were physically located in their hotel

room disc players and played on their hotel room televisions. Id. at 282.

Here, by contrast, there is obviously a performance being received beyond


45 2193255.2

the place it was sent: the Broadcasters’ programming is being sent over the

internet and being received by viewers watching Aereokiller on their

computers and mobile devices. ER 1345-49.

Moreover, the Court in Professional Real Estate Investors recognized

that a closed-circuit system for transmitting movies to individual hotel guest

rooms on-demand does publicly perform the movies. 866 F.2d at 282 n.7

(“Spectradyne’s closed circuit system falls squarely within the transmit

clause of the Act. It uses wires to transmit a signal, employs a central

transmission device, and the signal is received at places beyond the place

from which it is sent.”).

E. Aereokiller Does Not Have A Fair Use Defense.

Aereokiller argues that its service is legal under the “fair use”

doctrine, because it simply allows viewers to receive and record broadcast

programming that they would have the right to receive with a rooftop

antenna and record with a DVR. AOB at 21-25; see id. at 9 (“Through

Aereokiller’s technology, a user may remotely record and privately view

television programming the user indisputably has the right to record and to

view.”). This is wrong.

It is irrelevant that some of Aereokiller’s viewers could receive

broadcast programming using rooftop antennas. As Judge Wu correctly


46 2193255.2

noted, copyright law recognizes a difference between what people can

legally do on their own, and what a commercial service provider can legally

do for a number of people. ER 6-7.

First, a commercial retransmitter cannot avoid the need to obtain a

license by claiming to stand in the shoes of its customers. See, e.g., L.A.

News Serv. v. Tullo, 973 F.2d 791, 797 (9th Cir. 1992); Zomba Enters., Inc.

v. Panorama Records, Inc., 491 F.3d 574, 582-83 (6th Cir. 2007)

(commercial karaoke CD maker could not stand in the shoes of its customers

or benefit from fair use arguments they might have); Infinity Broad. Corp. v.

Kirkwood, 150 F.3d 104, 112 (2d Cir. 1998) (en banc) (“[C]ourts have

rejected attempts by for-profit users to stand in the shoes of their

customers.”); Princeton Univ. Press v. Mich. Document Servs. Inc., 99 F.3d

1381, 1389 (6th Cir. 1996) (en banc) (same); accord L.A. News Serv. v.

Reuters Television Int’l, Inc., 149 F.3d 987, 994 (9th Cir. 1998) (“[T]he

question of whether defendants’ copying and transmission of the works

constitutes fair use is distinct from whether their subscribers’ broadcasts of

the works are fair use.”); Video Pipeline, Inc. v. Buena Vista Home Entm’t,

Inc., 192 F. Supp. 2d 321, 333 (D.N.J. 2002) (defendant “should not be able

to hide behind the lawful actions and privileges extended to its retailer

customers who have abided by the Copyright Act”).


47 2193255.2

Second, as Judge Wu explained, Aereokiller’s position is exactly the

argument that Congress rejected in the 1976 Copyright Act, which

overturned the Fortnightly case. See 392 U.S. at 398-99; ER 7. Before the

1976 Act, the Supreme Court had ruled that a cable company did not need a

license to capture over-the-air broadcasts and retransmit them to subscribers

because it was simply doing what viewers could have done for themselves.

392 U.S. at 399-400. In Fortnightly, the Supreme Court had reasoned that

the community access television antenna in that case accomplished nothing

more than individuals were entitled to accomplish on their own: “If an

individual erected an antenna on a hill, strung a cable to his house, and

installed the necessary amplifying equipment, he would not be ‘performing’

the programs he received on his television set . . . . The only difference in

the case of CATV is that the antenna system is erected and owned not by its

users but by an entrepreneur.” 392 U.S. at 400.

Congress rejected that equivalency, reasoning that unlike individual

viewers, “cable systems are commercial enterprises whose basic

retransmission operations are based on the carriage of copyrighted program

material and . . . copyright royalties should be paid by cable operators to the

creators of such programs.” See 1976 Report at 89. Thus, in the 1976 Act,

Congress enacted the Transmit Clause and mandated that a retransmission


48 2193255.2

service engages in a public performance, requiring a copyright license, when

it retransmits broadcast programming to subscribers. See Capital Cities

Cable, 467 U.S. at 709-10.

Amici argue that Congress could not have enacted the Transmit

Clause in response to Fortnightly because it drafted that provision in 1965

prior to the Supreme Court issuing the Fortnightly decision in 1968.

Congress, however, had been dealing with the “difficult problem” of

determining copyright liability of broadcast retransmission services such as

cable systems “since 1965.” 1976 Report at 89. The Fortnightly litigation

itself began in 1960. See 392 U.S. at 392. Early drafts of the copyright

revision legislation contained the same Transmit Clause language ultimately

enacted, reflecting that Congress determined early on that broadcast

retransmission services should incur copyright liability. Congress, however,

left no doubt that the basis for the Fortnightly decision was “completely

overturned” in the 1976 Act. See 1976 Report at 87.

Third, Aereokiller’s contention that its service is legal under Sony

Corp. v. Universal Studios, Inc., 464 U.S. 417 (1984) because it allows

viewers to record the programs Aereokiller illegally retransmits is truly off-

base. Contrary to Aereokiller’s contention, its “technology” does not

“perform[] exactly the same function as the Betamax in Sony.” AOB at 22.


49 2193255.2

A Betamax VCR performs the function of allowing people to record

programming they receive on their televisions from authorized providers.

Aereokiller’s “technology” performs the function of allowing Aereokiller to

offer an internet retransmission service while claiming it somehow does not

need to pay for a license. This case has nothing to do with the time-shifting

found to be fair use in Sony – namely, recording a single program, watching

it one time, then erasing it. See 464 U.S. at 423 (defining time-shifting as

“the practice of recording a program to view it once at a later time, and

thereafter erasing it”); see also id. at 458 (Blackmun, J., dissenting) (time-

shifting is the process “whereby the user records a program in order to watch

it at a later time, and then records over it, and thereby erases the program,

after a single viewing”). No court has ever recognized a fair use defense for

a commercial retransmitter that retransmits entire live broadcasts to the

public, and Sony certainly does not support a fair use defense in this case.

Fourth, although Aereokiller seems to rely on Fox Broadcasting Co.

v. Dish Network, LLC, --- F. Supp. 2d ---, 2012 WL 5938563 (C.D. Cal.

Nov. 7, 2012) to support a fair use defense, that case is not on point and

Aereokiller has completely misrepresented its facts and holdings. By way of

example, (i) the motion resolved in that opinion sought only to enjoin Dish’s

unauthorized commercial-free video-on-demand service, not the Sling


50 2193255.2

Adapter (id. at *5 n.10); (ii) the copyright claims at issue on that motion

involved reproduction and distribution rights only, not the performance right

(id. at *7-15); (iii) the opinion does not discuss whether any transmissions

are private or public, because transmissions were not at issue since it was a

reproduction right claim (see generally id.); and (iv) Cablevision’s

interpretation of the Transmit Clause was never even mentioned (see

generally id.).

II. The District Court Correctly Concluded That Each Of The Relevant Factors Supported A Preliminary Injunction.

A. The District Court Correctly Found That Aereokiller’s

Illegal Service Would Irreparably Harm The Broadcasters. Judge Wu found that in the absence of an injunction, Aereokiller’s

unlicensed internet retransmission service would irreparably harm the

Broadcasters in four ways: (i) it would damage the Broadcasters’ ability to

negotiate favorable retransmission consent agreements with cable, satellite,

and telecommunications providers; (ii) it would damage the Broadcasters’

goodwill with their licensees; (iii) it would unfairly compete with the

Broadcasters’ own internet distribution channels; and (iv) it would siphon

viewers from platforms where advertising is measured for the purposes of

advertising revenue calculation (e.g., Nielsen ratings), thereby harming the

Broadcasters’ negotiating positions with advertisers. ER 7-8.


51 2193255.2

These findings were squarely in line with numerous other cases

holding unequivocally that the unauthorized retransmission of copyrighted

television broadcasts over the internet irreparably harms the copyright

owners. See, e.g., ivi, 691 F.3d at 285-87 (unauthorized streaming service

would irreparably harm broadcasters by undermining retransmission fees,

negotiations, and agreements, and reducing the value of advertisements);

Aereo, 874 F. Supp. 2d at 397-400 (same); WPIX, Inc. v. ivi, Inc., 765 F.

Supp. 2d 594, 617-620 (S.D.N.Y. 2011) (same), aff’d, 691 F.3d 275 (2d Cir.

2012); see also iCraveTV, 2000 WL 255989, at *8 (unauthorized streaming

service would irreparably harm broadcasters); CBS Broad. Inc. v.

FilmOn.com, Inc., No. 10-7532, ECF No. 49 (S.D.N.Y. Aug. 9, 2012)

(enjoining unauthorized streaming service); accord WTV Sys., 824 F. Supp.

2d at 1012-15 (unauthorized movie-streaming service would irreparably

harm content owners’ goodwill, relationships with licensees, and their

“overall ability to control the use and transmission of their Copyrighted

Works”).

Judge Wu correctly concluded that these harms were irreparable

because “they are ‘neither easily calculable, nor easily compensable.’” ER 8

(quoting WTV Sys., 824 F. Supp. 2d at 1013). Again, this holding was

squarely in line with numerous other cases. See ivi, 691 F.3d at 285-87;


52 2193255.2

Aereo, 874 F. Supp. 2d at 397-400; FilmOn.com, No. 10-7532, ECF No. 49

(S.D.N.Y. Aug. 9, 2012); iCraveTV, 2000 WL 255989, at *8; accord WTV

Sys., 824 F. Supp. 2d at 1012-15.

Aereokiller has failed to demonstrate that these findings were clear

error. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am.,

Inc., 549 F.3d 1079, 1087 (7th Cir. 2008) (courts review irreparable harm

“as [they] do any finding of fact, for clear error.”); see also Stuhlbarg Int’l

Sales Co. v. John D. Brush & Co., 240 F.3d 832, 841 (9th Cir. 2001)

(district court’s finding that plaintiff would suffer irreparable harm was “not

clearly erroneous”). Aereokiller’s primary argument is that the district court

should have found no infringement and therefore no irreparable harm. This

argument is a non-starter because, as explained above, the district court’s

conclusion that Aereokiller was infringing the Broadcasters’ copyrights was

correct.

As to the court’s actual findings on irreparable harm, Aereokiller

challenges only the district court’s conclusion that its illegal service would

harm the Broadcasters’ retransmission consent negotiations, and not the

other three types of irreparable harm found by the district court. Thus,

because the other three types of irreparable harm are sufficient to uphold the


53 2193255.2

injunction, the Court can affirm without even considering Aereokiller’s

argument as to retransmission consent negotiations.

Either way, Aereokiller’s argument that the district court should not

have found irreparable harm to the Broadcasters’ retransmission consent

negotiations is without merit. Aereokiller contends that the Broadcasters’

evidence on this point was “speculative” because the Broadcasters did not

say exactly how much revenue they would lose if Aereokiller’s unlicensed

internet retransmission service became a factor in retransmission consent

negotiations. AOB at 32.

Aereokiller’s argument misses the point of the irreparable harm

inquiry. First, “[t]he standard for injunctive relief requires a threat of

irreparable harm, not that irreparable harm already have occurred.” Mullins

v. City of N.Y., 626 F.3d 47, 55 (2d Cir. 2010); 11A Wright, Miller & Kane,

Federal Practice & Procedure § 2948.1 (2d ed. 1995) (“injury need not have

been inflicted when application is made or be certain to occur; a strong

threat of irreparable injury before trial is an adequate basis”). Indeed,

“[r]equiring a showing of actual injury would defeat the purpose of the

preliminary injunction, which is to prevent an injury from occurring.”

Diamontiney v. Borg, 918 F.2d 793, 795 (9th Cir. 1990). For essentially this

reason, in each of the cases cited above that considered preliminary


54 2193255.2

injunction challenges to services that retransmitted broadcast programming

over the internet, the courts based their findings of irreparable harm on the

threat of injury to the Broadcasters’ intellectual property and their

businesses without requiring them to wait for the challenged service to cause

(further) actual injury. See ivi, 691 F.3d at 285-87; Aereo, 874 F. Supp. 2d

at 397-400; FilmOn.com, No. 10-7532, ECF No. 49 (S.D.N.Y. Aug. 9,

2012); iCraveTV, 2000 WL 255989, at *8; accord WTV Sys., 824 F. Supp.

2d at 1012-15.

Second, irreparable harm is an injury that cannot be “remedied by a

damage award” alone. Rent-A-Center, Inc. v. Canyon Tel. & Appliance

Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991). This includes “damages

[that] would be difficult to valuate.” Id. The fact that damages are difficult

to quantify makes them irreparable, not unduly speculative. Gilder v. PGA

Tour, Inc., 936 F.2d 417, 423 (9th Cir. 1991). Accordingly, the Ninth

Circuit has long held that intangible injuries, such as “lost contracts and

customers, and harm to [a company’s] business reputation and goodwill”

qualify as irreparable harm. Stuhlbarg, 240 F.3d at 838; see also Rent-A-

Center, 944 F.2d at 603; eBay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d

1058, 1066 (N.D. Cal. 2000) (“Harm resulting from lost profits and lost

customer goodwill is irreparable because it is neither easily calculable nor


55 2193255.2

easily compensable and is therefore an appropriate basis for injunctive

relief.”); accord Cont’l Airlines, Inc. v. Intra Brokers, Inc., 24 F.3d 1099,

1105 (9th Cir. 1994) (“The certain harm to Continental was to its power, not

its purse . . . . There is certain harm to Continental’s control of its own

business, even though the harm to its profitability is unproven or perhaps

immeasurable.”); Credit Bureau Connection, Inc. v. Pardini, 726 F. Supp.

2d 1107, 1123 (E.D. Cal. 2010) (irreparable injury shown by evidence of

“blocking CBC’s ability to form contracts with new customers” and

“divert[ing] CBC’s existing customers to Data Consultants for servicing”).

Indeed, when the district court in ivi found the exact same harms to be

irreparable, the court noted that it was “obvious” that the absence of

quantifiable injuries is precisely what makes them irreparable. 765 F. Supp.

2d at 620, aff’d 691 F.3d 275; see also id. at 618 (“These losses are

‘notoriously difficult’ to prove and nearly impossible to quantify, and

accordingly are considered irreparable.”); accord Aereo, 874 F. Supp. 2d at

398 (“Harm of this sort has been accepted as irreparable based, at least in

part, on the difficulty of proving or quantifying such damages[.]”). Further,

even if the injury inflicted on the Broadcasters were quantifiable, which it is

not, Judge Wu also expressly found that “given the extent of Defendants’

retransmissions, and the large statutory damages that may be available, it is


56 2193255.2

unlikely that Defendants’ start-up companies would be likely to be able to

satisfy the damage award.” ER 8.7

B. The District Court Correctly Found That The Balance Of Hardships Favored An Injunction.

Judge Wu found that the balance of hardships favored an injunction

because Aereokiller was an infringer and therefore “cannot complain of the

harm that will befall it when properly forced to desist from its infringing

activities.” ER 8 (quoting Triad Sys. Corp. v. Se. Express Co., 64 F.3d

1330, 1338 (9th Cir. 1995)).

This was the correct analysis. If Aereokiller’s service is infringing,

then it cannot avoid an injunction on the ground that ceasing its infringing

activities would hurt its business. Triad, 64 F.3d at 1338; see also Concrete

Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 612 (1st Cir.

1988) (“Where the only hardship that the defendant will suffer is lost profits

from an activity which has been shown likely to be infringing, such an

7 The Broadcasters do not rely on any presumption of irreparable harm that may flow from their demonstrating a likelihood of success on the merits of their copyright claims. See Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 998 (9th Cir. 2011). To the contrary, the Broadcasters proved with uncontroverted evidence all of the harms identified in their preliminary injunction motion – including the impact on advertising and retransmission consent negotiations, damage to the Broadcasters’ efforts to develop a lawful internet distribution system through licensing, undermining the Broadcasters’ own web offerings – and each has been found irreparable in one or more of the cases that has addressed the issues being litigated here. ER 1457-69.


57 2193255.2

argument in defense ‘merits little equitable consideration.’”) (quoting

Helene Curtis Indus. v. Church & Dwight Co., Inc., 560 F.2d 1325, 1333

(7th Cir. 1977); Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d

1240, 1255 (3d Cir. 1983) (in motion for preliminary injunction, district

court should not consider the effect of the injunction on the infringer’s

business).

Aereokiller’s only argument on this issue is that it does not infringe,

so the court should have found that the losses to its business from an

injunction outweighed the irreparable harms to the Broadcasters that would

occur if no injunction issued. Although Aereokiller argued below that an

injunction would “cripple its business,” it submitted no evidence to the

district court to support that claim. Aereokiller’s failure to submit evidence

alone is fatal to Aereokiller’s “balance of hardships” arguments. See WTV

Sys., 824 F. Supp. 2d at 1014-15 (rejecting defendant’s balance of hardships

argument, in part, because it was made “without any evidence”); Cuviello v.

City of Oakland, No. 06-5517, 2007 WL 2349325, at *8 (N.D. Cal. Aug. 15,

2007) (“[T]he balance of hardship tips sharply in Plaintiffs’ favor given . . .

Defendants’ failure to provide evidence showing any real harm likely to

occur were the injunction granted.”); AMP Inc. v. Foxconn Int’l, Inc., No.

93-1162, 1994 WL 315889, at *4 (C.D. Cal. Mar. 7, 1994) (because


58 2193255.2

defendant failed to provide evidence in support of its balance of hardships

argument, it was “impossible for the Court to discern the effect of the

preliminary injunction on its overall business operations.”).

Moreover, as the ivi court noted, the harm to the Broadcasters from

unauthorized retransmission of their copyrighted programming exceeds any

harm that Aereokiller would suffer from being forced to stop its infringing

activities. ivi, 691 F.3d at 287.

C. The District Court Correctly Found That An Injunction Would Serve The Public Interest.

The Supreme Court has made clear that upholding copyright

protection is in the public interest. Eldred v. Ashcroft, 537 U.S. 186, 212

n.18 (2005). Here, Judge Wu found that because Aereokiller likely

infringed the Broadcasters’ copyrights, an injunction would serve the public

interest. He explained, “‘it is virtually axiomatic that the public interest can

only be served by upholding copyright protections and correspondingly,

preventing the misappropriation of skills, creative energies, and resources

which are invested in the protected work.’” ER 8 (quoting WTV Sys., 824 F.

Supp. 2d at 1015)).

This conclusion is consistent with the Second Circuit’s careful

analysis of the policy concerns relating to unauthorized internet

retransmissions in ivi. As the ivi Court explained:


59 2193255.2

Plaintiffs are copyright owners of some of the world’s most recognized and valuable television programming. Plaintiffs’ television programming provides a valuable service to the public, including, inter alia, educational, historic, and cultural programming, entertainment, an important source of local news critical for an informed electorate, and exposure to the arts. . . . Plaintiffs’ desire to create original television programming surely would be dampened if their creative works could be copied and streamed over the Internet in derogation of their exclusive property rights.

691 F.3d at 288 (internal citation omitted).

Aereokiller contends that enjoining its illegal service undermines the

public interest in technological innovation. AOB at 36. This argument

misstates the facts. Aereokiller is not a technology innovator and the

injunction issued by Judge Wu does not ban any innovative technology.

Aereokiller did not invent miniature antennas, routers, servers, transcoders

and the like. This is not a case where the defendant is making a technology

available that others can use to infringe, and where the Court has to evaluate

whether holding the defendant secondarily liable for infringing acts by

others would chill innovation. See, e.g., MGM Studios, Inc. v. Grokster, 545

U.S. 913, 928-29 (2005). This is a case where Aereokiller is using (or

purports to be using) technology in a way it wrongly believes allows it to

circumvent copyright law and retransmit copyrighted programming to the

public without a license.


60 2193255.2

Aereokiller posits a false choice when it argues that the public interest

will not be served if its service is enjoined – threatening (according to

Aereokiller) the consumer’s interest in viewing “broadcast programming in

an important new and convenient way.” AOB at 36. Copyright law

inherently balances “two competing public interests” – assuring the “broad

accessibility of public works” and “rewarding and incentivizing creative

efforts.” See ivi, 691 F.3d at 287. An injunction in this case would serve

both interests by protecting the “copyright owners’ marketable rights . . . and

the economic incentive to continue creating television programming[,]” (id.),

while also “encouraging the production of creative work [and] ultimately

serv[ing] the public’s interest in promoting the accessibility of such works.”

MGM Studios, 545 U.S. at 961; ivi, 691 F.3d at 287. Indeed, even in Aereo,

the court rejected the notion that the public interest is served by unfettered

access. 874 F. Supp. 2d at 404.

Moreover, enjoining Aereokiller’s unauthorized retransmissions

would not deprive the public of access to internet streaming of copyrighted

broadcasts. To the contrary, the evidence presented to Judge Wu

demonstrated that an injunction against Aereokiller’s unlawful service

would facilitate the development of a lawful market for licensed distribution

of the Broadcasters’ programming by cable and satellite providers and


61 2193255.2

internet licensees, and over the Broadcasters’ own websites and internet

services. ER 1461-64. For all of these reasons, an injunction would serve

all of the public interests implicated by copyright law.8 See id.; WTV Sys.,

824 F. Supp. 2d at 1015.

JOINDER IN THE ABC PARTIES’ CROSS-APPEAL ARGUMENTS

The Fox Parties hereby join and incorporate by reference the

arguments presented by the ABC Parties in support of the cross-appeal

relating to the geographic scope of Judge Wu’s injunction.

CONCLUSION

For the reasons stated above, this Court should affirm the district

court’s decision to enjoin Aereokiller’s unauthorized broadcast

retransmission service pending a final judgment, and extend the preliminary

injunction nationwide.

8 Aereokiller’s purported reliance on SoftMan Prods. Co. LLC v. Adobe Sys., Inc., 171 F. Supp. 2d 1075 (C.D. Cal. 2001) is misplaced. In that case, Adobe attempted to characterize transactions involving its software products as licenses, rather than sales subject to the first use doctrine. See id. at 1088-89. The court was concerned about Adobe’s apparent attempt to expand its ability to control software prices through licensing. Id. at 1090-91. This case is vastly different. The Broadcasters make their broadcast television programming available over the internet and on-demand from a variety of licensed sources, and are working to expand consumer access to their content in these nascent markets.


62 2193255.2

April 26, 2013 Respectfully Submitted,

By: ___/s Paul M. Smith___________ Paul M. Smith Paul M. Smith JENNER & BLOCK LLP 1099 New York Avenue, NW, Suite 900 Washington, DC 20001

Richard L. Stone Julie A. Shepard Amy M. Gallegos JENNER & BLOCK LLP 633 West 5th Street, Suite 3600 Los Angeles, CA 90071

Attorneys for the Fox Appellees and Cross-Appellants


63 2193255.2

STATEMENT REQUESTING ORAL ARGUMENT

Pursuant to Federal Rule of Appellate Procedure 34(a), the Fox

Appellees and Cross-Appellants request that oral argument of this appeal be

permitted. Oral argument will assist this Court in deciding the appeal.


By: ___/s Paul M. Smith________ Paul M. Smith Paul M. Smith JENNER & BLOCK LLP 1099 New York Avenue, NW, Suite 900 Washington, DC 20001

Richard L. Stone Julie A. Shepard Amy M. Gallegos JENNER & BLOCK LLP 633 West 5th Street, Suite 3600 Los Angeles, CA 90071 Attorneys for the Fox Appellees And Cross-Appellants


64 2193255.2

CERTIFICATE OF COMPLIANCE

I certify that, pursuant to Federal Rule of Appellate Procedure

32(a)(7)(C) and Ninth Circuit Rule 32-1, the foregoing Brief is

proportionately spaced, has a typeface of 14 points or more, and contains

12,792 words.


By: ___/s Paul M. Smith________ Paul M. Smith Paul M. Smith JENNER & BLOCK LLP 1099 New York Avenue, NW, Suite 900 Washington, DC 20001



65 2193255.2

CERTIFICATE OF RELATED CASES

Pursuant to Ninth Circuit Rule 28-2.6, counsel for the Fox Appellees

and Cross-Appellants states that other than the four consolidated appeals and

cross-appeals – Case Nos. 13-55156, 13-55157, 13-55226, and 13-55228 –

there are no related cases pending in this Court.


By: ___/s Paul M. Smith________

Paul M. Smith Paul M. Smith JENNER & BLOCK LLP 1099 New York Avenue, NW, Suite 900 Washington, DC 20001



I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on (date) . I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system.

CERTIFICATE OF SERVICE When All Case Participants are Registered for the Appellate CM/ECF System

I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system on (date) . Participants in the case who are registered CM/ECF users will be served by the appellate CM/ECF system. I further certify that some of the participants in the case are not registered CM/ECF users. I have mailed the foregoing document by First-Class Mail, postage prepaid, or have dispatched it to a third party commercial carrier for delivery within 3 calendar days to the following non-CM/ECF participants:

Signature (use "s/" format)

CERTIFICATE OF SERVICE When Not All Case Participants are Registered for the Appellate CM/ECF System

9th Circuit Case Number(s)

*********************************************************************************

Signature (use "s/" format)

NOTE: To secure your input, you should print the filled-in form to PDF (File > Print > PDF Printer/Creator).

*********************************************************************************

s/ Richard L. Stone

13-55156, 13-55157, 13-55226 and 13-55228

04/26/2013


Fox v. Aereokiller - Brief of the Fox Appellees - Cross-Appellants

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Transcript of Fox v. Aereokiller - Brief of the Fox Appellees - Cross-Appellants