American Broadcasting Companies, Inc. et al v. AEREO, Inc.

MEMORANDUM OF LAW re: 321 Order Striking Document from Record,,,, WNET Plaintiffs' and ABC Plaintiffs' Memorandum on Remand in Support of a Preliminary Injunction. Document

S.D.N.Y.August 15, 2014

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------------------------------X : AMERICAN BROADCASTING COMPANIES, INC., : DISNEY ENTERPRISES, INC., CBS BROADCASTING : INC., CBS STUDIOS INC., NBCUNIVERSAL MEDIA, : LLC, NBC STUDIOS, LLC, UNIVERSAL NETWORK : TELEVISION, LLC, TELEMUNDO NETWORK GROUP : LLC, WNJU-TV BROADCASTING LLC, : : Plaintiffs, : : v. : 12 Civ. 1540 (AJN) : [consolidated] AEREO, INC., : : Defendant. : : ----------------------------------------------------------------------------X MEMORANDUM ON REMAND IN SUPPORT OF A PRELIMINARY INJUNCTION Richard L. Stone (pro hac vice) Kenneth D. Klein (pro hac vice) Julie A. Shepard (pro hac vice) JENNER & BLOCK LLP 633 West Fifth Street Los Angeles, CA 90071 Tel: (213) 239-5100 Fax: (213) 239-5199 Counsel for the WNET Plaintiffs Bruce P. Keller Jeffrey P. Cunard Matthew E. Fishbein DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, New York 10022 Tel: (212) 909-6000 Fax: (212) 909-6836 Counsel for the ABC Plaintiffs Dated: August 15, 2014 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 1 of 35 i TABLE OF CONTENTS PRELIMINARY STATEMENT ........................................................................................ 1 DISCUSSION..................................................................................................................... 5 I. Plaintiffs Have Satisfied All Of The Prerequisites For Entry Of A Preliminary Injunction. ........................................................................................... 5 II. Aereo Cannot Avoid A Preliminary Injunction By Belatedly Claiming That It Now Qualifies For The Section 111 Compulsory License. ........................ 7 A. The Court In Aereo III Did Not Rule That Aereo Qualifies For The Section 111 License Nor Did It Overrule ivi. ................................................. 8 B. The Copyright Office Has Not Granted Aereo A Section 111 Compulsory License By “Provisionally Accepting” Its Statements Of Account. ........................................................................................................ 11 III. The Injunction Cannot Properly Be Confined To What Aereo Terms “Near Simultaneous” Retransmissions............................................................................ 13 IV. The Injunction Should Be Nationwide. ................................................................ 15 CONCLUSION................................................................................................................. 17 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 2 of 35 ii TABLE OF AUTHORITIES Page(s) CASES American Broadcasting Companies, Inc., v. Aereo, Inc., 874 F. Supp. 2d 373 (S.D.N.Y. 2012)....................................................................1, 5, 6 American Broadcasting Companies, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014)......................................................................................... passim CBS Broadcasting, Inc. v. FilmOn.com, Inc., No. 10-7532, 2014 WL 3702568 (S.D.N.Y. July 24, 2014)....................................3, 11 Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).......................................................................................................9 Community Television of Utah, LLC v. Aereo, Inc., --- F. Supp. 2d ---, 2014 WL 642828 (D. Utah 2014)..........................................1, 6, 16 Fox Television Stations, Inc. v. BarryDriller Content Systems, PLC, 915 F. Supp. 2d 1138 (C.D. Cal. 2012) ...................................................................6, 16 Fox Television Stations, Inc. v. FilmOn X LLC, 966 F. Supp. 2d 30 (D.D.C. 2013) ...........................................................................6, 16 Glover v. United States, 531 U.S. 198 (2001).......................................................................................................9 In re Ivan F. Boesky Sec. Litig., 957 F.2d 65 (2d Cir. 1992)...........................................................................................15 Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443 (2007).......................................................................................................8 United States v. Mason, 412 U.S. 391 (1973).....................................................................................................10 WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d. Cir. 2013)..................................................................................1, 5, 6 WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir. 2012)................................................................................. passim Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 3 of 35 iii WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594 (S.D.N.Y. 2011)......................................................................3, 12 STATUTES 17 U.S.C. § 101..........................................................................................................2, 4, 14 17 U.S.C. § 111.......................................................................................................... passim 17 U.S.C. § 119..................................................................................................................10 17 U.S.C. § 122..................................................................................................................10 17 U.S.C. § 502..................................................................................................................15 OTHER AUTHORITIES 37 C.F.R. § 201.17 .............................................................................................................13 47 C.F.R. § 76.64 .................................................................................................................8 H.R. Rep. No. 94-1476 (1976)...........................................................................................16 S. Rep. No. 94-473 (1975) .................................................................................................16 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 4 of 35 1 PRELIMINARY STATEMENT In American Broadcasting Companies, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014) (“Aereo III”), the Supreme Court held that “Aereo ‘perform[s]’ copyrighted works ‘publicly,’ as those terms are defined by the Transmit Clause,” when Aereo streams broadcast television programming over the Internet to its subscribers. Id. at 2511. Consistent with the Supreme Court’s opinion and mandate in Aereo III, Aereo must be enjoined from streaming, transmitting, retransmitting, or otherwise publicly performing any of Plaintiffs’ programming over the Internet (through websites such as aereo.com), or by means of any device or process. This Court originally denied Plaintiffs’ motion for a preliminary injunction because it believed that Second Circuit law interpreting the Transmit Clause required a holding that Aereo did not publicly perform Plaintiffs’ copyrighted programs. The Second Circuit affirmed the order denying the preliminary injunction for the same reason. See WNET, Thirteen v. Aereo, Inc., 712 F.3d 676, 690-94 (2d. Cir. 2013) (“Aereo II”), aff’g American Broadcasting Companies, Inc., v. Aereo, Inc., 874 F. Supp. 2d 373 (S.D.N.Y. 2012) (“Aereo I”). Now that the Supreme Court has reversed the Second Circuit’s holding, Plaintiffs respectfully request that the Court enter a preliminary injunction against Aereo and that it do so in the form attached hereto as Exhibit A (“Proposed Order”). The Proposed Order is materially identical to the order that the United States District Court for the District of Utah, unconstrained by the Second Circuit’s prior interpretation of the Transmit Clause, entered against Aereo in Community Television of Utah, LLC v. Aereo, Inc., --- F. Supp. 2d ---, 2014 WL 642828 (D. Utah Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 5 of 35 2 2014) (“Community Television v. Aereo”). See Exhibit B (“Utah Order”). While Aereo has appealed the Utah court’s decision, it did not object to the form of the Utah Order at the time of its entry. Aereo attempts to avoid an injunction by desperately pitching Aereo III as an endorsement of its infringing business model; it claims the Supreme Court determined that Aereo is now entitled to a “compulsory” license under Section 111 of the Copyright Act, 17 U.S.C. § 111. But the Court held only that Aereo publicly performs Plaintiffs’ copyrighted works under the Transmit Clause, an intentionally “broad” provision that explicitly reaches anyone who transmits a performance “to the public” by means of “any device or process.” 134 S. Ct. at 2509; accord 17 U.S.C. § 101. Although the Court was clearly aware of Section 111, as the Justices raised it during oral argument, the Aereo III opinion notably does not say that Aereo is a cable system for purposes of Section 111 or that Aereo is entitled to the enormous benefits of the Section 111 compulsory license. The issue was simply not before the Court in Aereo III because Aereo had repeatedly denied being a cable system entitled to the Section 111 license. Aereo III also does not even mention, let alone overrule, the controlling Second Circuit law—WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir. 2012) (“ivi”), cert. denied, 133 S. Ct. 1585 (2013)—which held that Internet retransmission services (which would include Aereo) are not “cable systems” under the Copyright Act and do not qualify for the narrowly-defined Section 111 license. Id. at 284. Judge Buchwald reached that very conclusion three weeks ago, rejecting Aereo-clone FilmOn’s Section 111 license defense and holding it in contempt for streaming Plaintiffs’ programming over the Internet Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 6 of 35 3 following Aereo III. See CBS Broadcasting, Inc. v. FilmOn.com, Inc., No. 10-7532, 2014 WL 3702568, at *4 (S.D.N.Y. July 24, 2014) (“FilmOn.com”). The Copyright Office, which Congress entrusted with responsibility for administering the Section 111 license, likewise has advised Aereo (and FilmOn) that nothing in Aereo III alters the Office’s long-held view, affirmed by ivi, that retransmissions of broadcast signals over the Internet fall outside the scope of the Section 111 license. See Exhibits C & D. Aereo attempts to make much of the statement in Aereo III that “Aereo’s practices . . . [are] highly similar to those of [cable systems].” 134 S. Ct. at 2511. But simply retransmitting broadcast programming, while sufficient to bring Aereo within the broad Transmit Clause, is not sufficient to bring Aereo within the narrow Section 111 license. Otherwise any broadcast retransmission service whatsoever, including the proverbial Internet-savvy “kid in the dorm room,” would qualify for the Section 111 license. See WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 610 (S.D.N.Y. 2011) (“ivi I”). The thirty- five years of history following Section 111’s enactment, which has seen the emergence of other broadcast retransmission technologies that did not qualify for the Section 111 license, aptly demonstrates that that is not the case. Aereo also attempts to limit the injunction to what it terms “near-simultaneous” retransmissions. Aereo’s suggestion that it can avoid publicly performing Plaintiffs’ programs merely by retransmitting the programs to subscribers at some later time, Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 7 of 35 4 however, is irreconcilable with the Supreme Court’s opinion and the text of the Transmit Clause.1 The Supreme Court in Aereo III made clear that Aereo publicly performs Plaintiffs’ copyrighted works when it retransmits those works to subscribers over the Internet, regardless of any time delay that may occur. See 134 S. Ct. at 2510 (the fact that “Aereo’s subscribers may receive the same programs at different times . . . does not help Aereo. . . for the Transmit Clause expressly provides that an entity may perform publicly [when] ‘the members of the public capable of receiving the performance . . . receive it . . . at different times’”) (quoting 17 U.S.C. § 101). Even with a time delay, Aereo’s service still involves retransmitting contemporaneously-perceptible images and sounds of Plaintiffs’ programs to the public without authorization. 1 That suggestion also is inconsistent with the record. Aereo itself has emphasized that its live and time-delayed services are inextricably intertwined. They are the same service; the only distinction is whether the subscriber chooses to delete (Watch Now) or to save (Record) a copy of a program after its live transmission. See Kanojia Declaration filed 7/31/14 ¶ 7 [Dkt. 319 (stricken by Court order on August 1, 2014 [Dkt. 321])] (“[T]he Aereo technology was not set up to distinguish between operation of the ‘Watch Now’ function and ‘Record’ function – the only difference between the two was a setting on whether the user’s recording was automatically deleted after the conclusion of the program. As a result, Aereo could not just ‘turn off’ the simultaneous live viewing.”); see also 5/30/2012 Hr’g Tr. at 141:7-141:13 (Kanojia) (“Q: Technologically speaking, in terms of what is actually going on within the system and how the recording is being made, what is the difference between watching the program that is airing right now using record mode and watching the program that’s airing right now in watch mode? A. Technologically, and how the system functions, there is no distinction.”); id. at 140:18- 141:1 (Kanojia) (it is “possible to watch live television in the record mode” by setting up a “recording and join[ing] that recording and start[ing] a playback of that recording almost immediately”). Thus, as its system is currently structured, Aereo cannot turn off Watch Now without also turning off Record. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 8 of 35 5 Aereo is an adjudicated infringer. It has been trampling on Plaintiffs’ copyrights for over two years and has collected hundreds of thousands of dollars in subscriber fees while doing so. Plaintiffs are entitled to an injunction protecting their rights, and in order to protect those rights the injunction must bar Aereo from publicly performing Plaintiffs’ copyrighted works by streaming, retransmitting or any other means. DISCUSSION I. Plaintiffs Have Satisfied All Of The Prerequisites For Entry Of A Preliminary Injunction. Plaintiffs prevailed in the Supreme Court on the merits of their public performance claims. In addition to rejecting the Second Circuit’s interpretation of the Transmit Clause in the context of Aereo’s service, the Supreme Court also rejected Aereo’s characterization of itself as a mere provider of remote antennas and DVRs. The Court held that Aereo “performs” under the Copyright Act―notwithstanding the fact that its system captures, records, and retransmits programs only in response to subscriber requests. 134 S. Ct. at 2506-07. In light of the Supreme Court’s opinion in Aereo III, Plaintiffs have demonstrated the requisite likelihood of success on the merits of their claim that Aereo’s Internet retransmission service infringes their exclusive public performance rights. This Court already has concluded that Aereo’s unauthorized Internet retransmission service irreparably harms Plaintiffs and that the entry of a preliminary injunction would not disserve the public interest. See Aereo I, 874 F. Supp. 2d at 396- 404. Those conclusions are consistent with the Second Circuit’s decision in ivi, Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 9 of 35 6 upholding the district court’s finding that the unauthorized retransmission of broadcast programming over the Internet irreparably harms copyright owners and that enjoining such a service does not disserve the public interest. See 691 F.3d at 285-88 ; accord Community Television v. Aereo, 2014 WL 642828, at *9-10; Fox Television Stations, Inc. v. FilmOn X LLC, 966 F. Supp. 2d 30, 49-51 (D.D.C. 2013) (“FilmOn X”); Fox Television Stations, Inc. v. BarryDriller Content Systems, PLC, 915 F. Supp. 2d 1138, 1147-48 (C.D. Cal. 2012) (“BarryDriller”). This Court previously determined that the balance of hardships did not tip “decidedly” in Plaintiffs’ favor. See Aereo I, 874 F. Supp. 2d at 402-03. While the Second Circuit agreed with that determination, it did so because it mistakenly thought that Plaintiffs had not established a likelihood of success. See Aereo II, 712 F.3d at 684 (“[T]he balance of hardships is largely a function of whether the harm Aereo would suffer from the issuance of an injunction is legally cognizable, which in turn depends on whether Aereo is infringing the Plaintiffs’ copyrights.”); id. at 695-96 (same). Because Plaintiffs have now established the requisite likelihood of success, the balance of hardships tips decidedly in Plaintiffs’ favor. “It is axiomatic that an infringer of copyright cannot complain about the loss of ability to offer its infringing product.” ivi, 691 F.3d at 287; accord, Community Television v. Aereo., 2014 WL 642828 at *9-*10; FilmOn X, 966 F. Supp. 2d at 51; BarryDriller, 915 F. Supp. 2d at 1147-48. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 10 of 35 7 II. Aereo Cannot Avoid A Preliminary Injunction By Belatedly Claiming That It Now Qualifies For The Section 111 Compulsory License. Throughout the prior proceedings before this Court and the Supreme Court, Aereo repeatedly represented that it was not raising a Section 111 defense.2 See Defendant’s Initial Pre-Hearing Memorandum at 15-16 [Dkt. 30] (“Aereo . . . does not claim it is a ‘cable system,’ and these cases [ivi I and FilmOn.com] thus are irrelevant to the issues here.”) (emphasis added); Tr. of Oral Argument, Am. Broad. Cos., Inc. v. Aereo, Inc., No. 13-461 (U.S. Apr. 22, 2014) at 28:8-14 (D. Frederick, counsel for Aereo), available at http://www.supremecourt.gov/oral_arguments/argument_transcripts/13-461_o7jp.pdf. (“Now, we are not a cable service. The reason we’re not a cable service is because cable takes all signals and pushes them down. There’s a head [end]. It’s defined by statute. There’s a very particularized regulatory structure that deals with taking a lot of content and pushing it down to consumers.”); Br. for Respondent at 34 n. 17, Am. Broad. Cos., Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014) (No. 13-461) (“Petitioners do not argue that Aereo is a ‘cable system’ under § 111, and Aereo is not one.”). 2 Congress enacted Section 111, 17 U.S.C. § 111, as part of the 1976 Copyright Revision Act. Section 111(c) of the Act, 17 U.S.C. § 111(c), states that, under certain circumstances, “secondary transmissions” of “primary transmission[s] made by a broadcast station . . . shall be subject to statutory licensing” if made by a “cable system.” Among other things, the secondary transmissions must be “permissible” under the rules of the Federal Communications Commission (“FCC”) and the cable system must timely deposit statutorily-prescribed royalties with the Copyright Office. As the courts in ivi and the Copyright Office have concluded, Congress intended the Section 111 license to cover traditional cable services that bear no resemblance to Aereo’s Internet service, other than that each retransmits broadcast programming. Congress accorded the Section 111 license in 1976 to an industry that was (and remains) heavily regulated by the FCC and that incurs substantial costs developing and maintaining its own infrastructure and securing franchises on a community-by-community (or state-by-state) basis. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 11 of 35 8 Now that it has lost on appeal, Aereo’s position has changed. Aereo now claims, based on a misreading of the Supreme Court’s opinion, that it is a “cable system,” at least for purposes of securing the benefits of the Section 111 license―although, Aereo suggests, it is not a “cable system” for purposes of complying with FCC rules, which require, among other things, that cable systems obtain the consent of broadcast stations before retransmitting their signals. See 47 C.F.R. § 76.64. Aereo is wrong. The Supreme Court did not hold that Aereo is a “cable system” under Section 111 of the Copyright Act or that it is entitled to a Section 111 license. Aereo is not entitled to the Section 111 license, as the Second Circuit’s ivi decision and rulings of the Copyright Office make clear.3 A. The Court In Aereo III Did Not Rule That Aereo Qualifies For The Section 111 License Nor Did It Overrule ivi. Aereo predicates its change-of-theory on Aereo III, claiming the Supreme Court ruled that Aereo is a “cable system” for purposes of Section 111. Preliminarily, Aereo III cannot properly be construed as extending the Section 111 license to Aereo and other Internet retransmission services because Aereo never argued before the Supreme Court that it is entitled to the Section 111 compulsory license and, in fact, insisted that it is not a cable system and is not entitled to the Section 111 license. See Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 455 (2007) (“[W]e ordinarily do not 3 Aereo’s Section 111 “defense” is procedurally defective. Before that defense could be “properly raised,” see Mandate, WNET, Thirteen v. Aereo, Inc., 12-2807, Dkt. 349 (2d Cir. Aug. 6, 2014), Aereo would need to move for leave to amend its answer to assert that defense and leave to do so would need to be granted. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 12 of 35 9 consider claims that were neither raised nor addressed below[.]”); Glover v. United States, 531 U.S. 198, 205 (2001) (“As a general rule . . . we do not decide issues outside the questions presented by the petition for certiorari.”). More importantly, however, the Aereo III opinion does not hold that Aereo is a cable system entitled to a Section 111 license, even though the Court was clearly aware of Section 111, as Aereo points out. The opinion contains no discussion of Aereo’s entitlement to a Section 111 license at all. There is no analysis of the statutory framework governing the Section 111 license (including its history and purpose) nor of its relationship to the regulations of the FCC, no discussion of the statutory and administrative requirements for such a license, and no mention of the ivi decision, which speaks directly to this issue and which the Supreme Court declined to review just last year. The opinion also does not mention the Copyright Office’s longstanding (and continuing) view that Internet retransmitters are not entitled to the Section 111 license―a view to which the Second Circuit in ivi deferred under the doctrine of Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). See ivi, 691 F.3d at 279-85. Although Aereo is correct that the Supreme Court discussed Aereo’s similarity to early cable systems, the Court did so in the context of analyzing the legislative history to determine whether Aereo “performs” within the meaning of the Copyright Act. The Court concluded that Aereo does perform, and is not merely an equipment provider, because its broadcast retransmission service is functionally similar to the early community antenna television or cable systems that Congress intended to include within the scope of the Transmit Clause. 134 S. Ct. at 2506-07. That is not the same as holding Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 13 of 35 10 that Aereo qualifies for the statutory license. And it is certainly not the same as overruling ivi. See United States v. Mason, 412 U.S. 391, 395 (1973) (when the Supreme Court ‘did not so much as mention’ a decision, it cannot be said to have questioned or overruled that decision). In ivi, the Second Circuit thoroughly considered Section 111’s extensive “legislative history, development, and purpose” as well as its administrative history. 691 F.3d at 284. After doing so, and noting that Section 111 must be narrowly construed, id. at 281-82, the Second Circuit unequivocally concluded that Congress did not intend for Section 111 to extend to any Internet retransmission service. Id. at 284-85. Aereo III says no more than that Aereo is similar to cable systems because both retransmit broadcast signals to paying subscribers. That similarity does not make Aereo eligible for the Section 111 license. Satellite television services comparable to DirecTV and DISH once argued that they too were similar to cable systems and thus qualified for the Section 111 license. However, the Copyright Office and ultimately the United States Court of Appeals for the Eleventh Circuit ruled that satellite carriers were not eligible for the Section 111 license. And Congress established separate compulsory licenses for the satellite carriers tailored to their operations. See ivi, 691 F.3d at 281; 17 U.S.C. §§ 119 & 122. Likewise, microwave services once argued that because they are very similar to cable systems, they too are entitled to the 111 license. The Copyright Office rejected that argument and Congress responded by amending Section 111 to bring microwave services within the 111 license. See ivi, 691 F.3d at 282. Similarity to cable simply does not equate to eligibility for the narrow Section 111 license. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 14 of 35 11 Last month, FilmOn, which purports to be technologically identical to Aereo, made the same Section 111 argument to Judge Buchwald that Aereo makes here, i.e., that it is entitled to the Section 111 license because Aereo III said that Aereo is similar to cable. Judge Buchwald properly rejected the argument as a “mischaracterization of the holding in Aereo [III],” explaining that “[a] series of statements that Aereo . . . is very similar to a cable system is not the same as a judicial finding that Aereo and its technological peers are, in fact, cable companies entitled to retransmission licenses under § 111 of the Copyright Act.” FilmOn.com, 2014 WL 3702568, at *4 (emphasis added). Holding that FilmOn is not entitled to the Section 111 license, Judge Buchwald relied on the Second Circuit’s decision in ivi that “Congress did not intend for § 111 licenses to extend to Internet retransmissions.” Id. (citing ivi, 691 F.3d at 284). Judge Buchwald concluded that “the governing law in the Second Circuit is that services like [Aereo] that retransmit broadcast programming are not entitled to compulsory licenses under § 111 of the Copyright Act,” and there was nothing “in the Supreme Court’s recent decision in [Aereo III] that would alter this conclusion.” Id. at *4-*6 (emphasis in original). B. The Copyright Office Has Not Granted Aereo A Section 111 Compulsory License By “Provisionally Accepting” Its Statements Of Account. In its failed attempt to by-pass this Court and take its Section 111 defense straight to the Second Circuit, Aereo advised the Second Circuit that its Section 111 application “has been provisionally accepted” by the Copyright Office, suggesting that the Office has no issue with Aereo’s Section 111 claim. Letter from D. Hosp to C. Wolfe at 3, WNET, Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 15 of 35 12 Thirteen v. Aereo, Inc., No. 12-2807, Dkt. 333 (2d Cir. July 24, 2014). That is a serious misrepresentation by omission. The Copyright Office’s letter to Aereo unequivocally reaffirmed the Office’s longstanding view, in which Congress has acquiesced, that “internet retransmissions of broadcast television fall outside the scope of the Section 111 license.” See Exhibit C (Copyright Office July 16, 2014 letter to Aereo). Citing ivi, the Office also stated it does “not see anything in the Supreme Court’s recent decision in [Aereo III] that would alter [the] conclusion” that Aereo cannot “qualif[y] for the Section 111 statutory license.” Id. The Office provided a similar response to FilmOn. See Exhibit D. Rather than “accepting” Aereo’s application, the Office deferred rejecting it pending the outcome of Aereo’s ongoing litigation. See id. The Copyright Office’s response to Aereo and FilmOn is just the latest word on an issue about which that legislative agency has been consistent for decades. As noted in ivi I, the Copyright Office’s opinion that an Internet retransmitter “does not qualify for” a Section 111 license has been “unwavering” over the years and the Copyright Office essentially views that “matter as settled law.” ivi I, 765 F. Supp. 2d at 604-05. Aereo’s suggestion that the Copyright Office now has a different view, no longer thinks ivi is correct, or reads Aereo III to have changed the law, is misleading—at the least. It is equally misleading to suggest that Aereo somehow has a Section 111 license simply because the Copyright Office accepted (provisionally) Aereo’s statement of account. Copyright Office regulation establishes precisely the opposite: [C]ompletion by the Copyright Office of the final processing of a Statement of Account and royalty fee Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 16 of 35 13 deposit shall establish only the fact of such completion and the date or dates of receipt shown in the official record. It shall in no case be considered a determination that the Statement of Account was, in fact, properly prepared and accurate . . . or that any other requirements to qualify for a compulsory license have been satisfied. 37 C.F.R. § 201.17(c)(2) (emphasis added). III. The Injunction Cannot Properly Be Confined To What Aereo Terms “Near Simultaneous” Retransmissions. Aereo has argued that the injunction against it should be limited to the “near simultaneous transmission of over the air television broadcasts.” Letter from D. Hosp to C. Wolfe at 5, WNET, Thirteen v. Aereo, Inc., No. 12-2807, Dkt. 333 (2d Cir. July 24, 2014). In its now-stricken emergency motion, Aereo also argued (wrongly) that the Supreme Court found what Aereo refers to as its “time-shifted ‘Record’ function” to be non-infringing, and it suggested that it will offer some type of delayed-retransmission service in the future, whenever it can determine how to do so technologically. Memo. in Support of Aereo’s Emergency Motion, Dkt. 318 at 3 (stricken by Court order on August 1, 2014 [Dkt. 321]). Aereo’s suggestion that it can operate without infringing as long as it delays retransmissions so they are not made simultaneously with the original broadcast reflects a serious misunderstanding of Aereo III and the law. The Supreme Court’s interpretation of the Transmit Clause makes clear that Aereo’s retransmissions of the same programs to its subscribers are public performances, regardless of whether the retransmissions are made at the “same time” or at “different times.” 134 S. Ct. at 2509-10. Specifically, the Supreme Court held that Aereo publicly performs Plaintiffs’ copyrighted programs when it retransmits their contemporaneously Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 17 of 35 14 perceptible images and sounds to its subscribers over the Internet. Id. at 2509. And it made clear that Aereo’s retransmissions are a public performance even if they do not occur simultaneously with the broadcast or with each other: Finally, we note that Aereo’s subscribers may receive the same programs at different times and locations . . . . [That] does not help Aereo, . . . [because] the Transmit Clause expressly provides that an entity may perform publicly “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.” In other words, “the public” need not be situated together, spatially or temporally. Id. at 2510 (quoting 17 U.S.C. § 101) (emphasis added, internal citation omitted). Despite this unambiguous holding, Aereo claims it is devising another technological workaround which, according to its emergency motion, involves “uncoupling” its Watch Now function from its “time-shifted ‘Record’ function.” Memo. in Support of Aereo’s Emergency Motion, Dkt. 318 at 3. But the Supreme Court has held that Aereo cannot, in the first instance, lawfully retransmit the programming that would be recorded. Thus, while the Aereo III opinion expressly reserves the issue of remote storage DVRs and cloud-storage services in other circumstances, 134 S. Ct. at 2511, this does not assist Aereo. As the Supreme Court held, Aereo’s subscribers’ copies are not lawfully acquired; instead, they are received from Aereo’s unlicensed and infringing service: “Neither the record nor Aereo suggests that Aereo’s subscribers receive performances in their capacities as owners or possessors of the underlying works. . . . [A]n entity that transmits a performance to individuals in their capacities as owners or possessors does not perform to ‘the public,’ whereas an entity like Aereo that transmits to Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 18 of 35 15 large numbers of paying subscribers who lack any prior relationship to the works does so perform.” Id. at 2510. Finally, any technological workaround would still infringe under the reasoning of Aereo III, since it would still involve retransmitting the contemporaneously perceptible images and sounds of Plaintiffs’ programs to the public without authorization. Regardless of when Aereo’s subscribers view the programming (if at all), Aereo’s unauthorized retransmission service renders multiple subscribers “capable of receiving” the “contemporaneously perceptible images and sounds” of the programs, and thus, as the Supreme Court held in Aereo III, Aereo is publicly performing those programs. A time delay does not change that fact. Id. Plaintiffs are entitled to a preliminary injunction that affords them complete and meaningful relief consistent with Aereo III. See In re Ivan F. Boesky Sec. Litig., 957 F.2d 65, 69 (2d Cir. 1992) (district court’s actions on remand must carry out appellate mandate and give it full effect). IV. The Injunction Should Be Nationwide. Section 502(a) of the Copyright Act, 17 U.S.C. § 502(a), provides that a court “may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” Section 502(b) of the Act, 17 U.S.C. § 502(b), provides that any such injunction “shall be operative throughout the United States and shall be enforceable” by any United States court with personal jurisdiction. (Emphasis added). Congress intended copyright injunctions to apply nationwide: “a copyright owner who has obtained an injunction in one State will be able to enforce it Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 19 of 35 16 against a defendant located anywhere else in the United States.” H.R. Rep. No. 94-1476 at 160 (1976), reprinted in 1976 U.S.C.C.A.N. 5659; accord S. Rep. No. 94-473 at 142 (1975). Previously, concerns of comity persuaded other courts to limit the geographic scope of an injunction in cases involving services similar to Aereo. See FilmOn X, 966 F. Supp. 2d at 51-52; BarryDriller, 915 F. Supp. 2d at 1148; Community Television v. Aereo, 2014 WL 642828, at *10. However, the Supreme Court’s decision in Aereo III alleviates those concerns. As far as infringing public performances by Aereo are concerned, there are no conflicts between the law of the Second Circuit and any other circuit in the United States. The Second Circuit in ivi affirmed a preliminary injunction that prohibited the unauthorized Internet retransmission of broadcast programming to subscribers anywhere in the nation. The injunction against Aereo—which expanded into nine cities throughout the United States during the past two years4—likewise should be nationwide. 4 See http://blog.aereo.com/2014/01/aereo-announces-launch-date-cincinnati/ (announcing Aereo’s January 2014 launch in Greater Cincinnati region following its 2013 expansion into Boston, Atlanta, Miami, Salt Lake City, Houston, Dallas, Detroit, Denver and Baltimore metropolitan areas). Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 20 of 35 17 CONCLUSION For the foregoing reasons, Plaintiffs respectfully request that the Court enter the Proposed Order Granting Preliminary Injunction attached as Exhibit A. Dated: August 15, 2014 New York, New York /s/ Richard L. Stone /s/ Bruce P. Keller Richard L. Stone (pro hac vice) Kenneth D. Klein (pro hac vice) Julie A. Shepard (pro hac vice) JENNER & BLOCK LLP 633 West Fifth Street Los Angeles, CA 90071 Tel: (213) 239-5100 Fax: (212) 239-5199 Counsel for the WNET Plaintiffs Bruce P. Keller Jeffrey P. Cunard Matthew E. Fishbein DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, New York 10022 Tel: (212) 909-6000 Fax: (212) 909-6836 Counsel for the ABC Plaintiffs Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 21 of 35 Exhibit A Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 22 of 35 2299300.1 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ________________________________________ WNET, THIRTEEN, FOX TELEVISION STATIONS, INC., TWENTIETH CENTURY FOX FILM CORPORATION, WPIX, LLC, UNIVISION TELEVISION GROUP, INC., THE UNIVISION NETWORK LIMITED PARTNERSHIP, and PUBLIC BROADCASTING SERVICE, Plaintiffs, v. AEREO, INC. f/k/a BAMBOOM LABS, INC., Defendant. ________________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ECF Case Case No. 12-civ-1540-AJN (Consolidated) [PROPOSED] PRELIMINARY INJUNCTION This Court, having considered all the submissions in support of, and in opposition to, the Motion for Preliminary Injunction filed by Plaintiffs WNET, THIRTEEN, Fox Television Stations, Inc., Twentieth Century Fox Film Corporation, WPIX, LLC, Univision Television Group, Inc., The Univision Network Limited Partnership, Public Broadcasting Service, American Broadcasting Companies, Inc., Disney Enterprises, Inc., CBS Broadcasting Inc., CBS Studios Inc., NBCUniversal Media, LLC, NBC Studios, LLC, Universal Network Television, LLC, Telemundo Network Group LLC, and WNJU-TV Broadcasting LLC, all matters presented at the hearing on this Motion, and American Broadcasting Co. v. Aereo, Inc., 134 S. Ct. 2498 (2014), overturning WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), and remanding this case for further proceedings before this Court consistent with that opinion, and good cause appearing, hereby GRANTS the Motion and ORDERS THAT: Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 23 of 35 2299300.1 1. For purposes of this Preliminary Injunction, the following definitions shall apply: a. “Plaintiffs” shall mean Plaintiffs WNET, THIRTEEN, Fox Television Stations, Inc., Twentieth Century Fox Film Corporation, WPIX, LLC, Univision Television Group, Inc., The Univision Network Limited Partnership, Public Broadcasting Service, American Broadcasting Companies, Inc., Disney Enterprises, Inc., CBS Broadcasting Inc., CBS Studios Inc., NBCUniversal Media, LLC, NBC Studios, LLC, Universal Network Television, LLC, Telemundo Network Group LLC, and WNJU-TV Broadcasting LLC. b. “Defendant” shall mean Defendant Aereo, Inc. (formerly known as Bamboom Labs, Inc.). c. “Copyrighted Programming” shall mean each of those broadcast television programming works, or portions thereof, whether now in existence or later created, including but not limited to original programming, motion pictures and newscasts, in which the Plaintiffs, or any of them, (or any parent, subsidiary, or affiliate of any of the Plaintiffs) owns or controls an exclusive right under the United States Copyright Act, 17 U.S.C. §§ 101 et seq. 2. Pending a final resolution of this action, Defendant, and all of its parents, subsidiaries, affiliates, officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of this Order (the “Enjoined Parties”) are preliminarily enjoined from streaming, transmitting, retransmitting, or otherwise publicly performing any Copyrighted Programming over the Internet (through websites such as aereo.com), or by means of any device or process throughout the United States of America. Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 24 of 35 2299300.1 3. Violation of this Preliminary Injunction shall expose Defendant and all other persons bound by this Preliminary Injunction to all applicable penalties, including contempt of Court. 4. Within three court days of the effective date of this Preliminary Injunction, Defendant shall file and serve a report in writing and under oath setting forth in detail the manner and form with which Defendant has complied with the Preliminary Injunction. 5. Nothing herein shall restrict Plaintiffs’ ability to seek to amend this injunction or to seek permanent injunctive relief with terms that are broader in scope than those delineated herein. IT IS SO ORDERED. Dated: ________________________ __________________________________ ALISON J. NATHAN United States District Court Judge Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 25 of 35 Exhibit B Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 26 of 35 Brent O. Hatch (5715) Shaunda L. McNeill (14468) HATCH, JAMES & DODGE, P.C. 10 West Broadway, Suite 400 Salt Lake City, Utah 84101 Telephone: (801) 363-6363 bhatch@hjdlaw.com smcneill@hjdlaw.com Rodney R. Parker (4110) Adam M. Pace (14278) SNOW, CHRISTENSEN & MARTINEAU 10 Exchange Place, 11th Floor Salt Lake City, Utah 84111 Telephone: 801.521.9000 rrp@scmlaw.com amp@scmlaw.com Richard L. Stone (pro hac vice) Julie A. Shepard (pro hac vice) Amy M. Gallegos (pro hac vice) JENNER & BLOCK LLP 633 West 5th Street, Suite 3600 Los Angeles, California 90071 Telephone: (213) 239-5100 rstone@jenner.com jshepard@jenner.com agallegos@jenner.com Attorneys for Plaintiffs Community Television of Utah, LLC d/b/a KSTU FOX 13, KUTV Licensee, LLC d/b/a KMYU and KUTV, and Fox Broadcasting Company John C. Ulin (pro hac vice) ARNOLD & PORTER LLP 777 South Figueroa Street, Forty-Fourth Floor Los Angeles, California 90017-5844 Telephone: 213.243.4000 john.ulin@aporter.com Robert Alan Garrett (pro hac vice) Hadrian R. Katz (pro hac vice) ARNOLD & PORTER LLP 555 12th Street, N.W. Washington, D.C. 20004 Telephone: 202.942.5000 robert.garrett@aporter.com hadrian.katz@aporter.com Attorneys for Plaintiff Nexstar Broadcasting, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION COMMUNITY TELEVISION OF UTAH, LLC d/b/a KSTU FOX 13, KUTV LICENSEE, LLC d/b/a KUTV and KMYU, and FOX BROADCASTING COMPANY, Plaintiffs, vs. AEREO, INC., Defendant. ORDER GRANTING MOTIONS FOR PRELIMINARY INJUNCTION Civil No. 2:13-cv-00910 Judge Dale A. Kimball Case 2:13-cv-00910-DAK Document 101 Filed 02/25/14 Page 1 of 3Case 1:12-cv-0154 -AJN-HBP Document 323 Filed 08/15/14 Page 27 of 35 2 This Court, having considered all the submissions in support of, and in opposition to, the Motions for Preliminary Injunction filed by Plaintiffs Community Television of Utah, LLC, doing business as KSTU FOX 13; KUTV Licensee, LLC d/b/a KMYU and KUTV; Fox Broadcasting Company; and Nexstar Broadcasting, Inc. (collectively, “Plaintiffs”), and having considered all matters presented at the hearing on these Motions, and good cause appearing, for the reasons stated in the Memorandum Decision issued on February 19, 2014 (Dkt. 87), hereby GRANTS the Motions and ORDERS THAT: 1. For purposes of this Preliminary Injunction, the following definitions shall apply: a. “Plaintiffs” shall mean Plaintiffs Community Television of Utah, LLC, doing business as KSTU FOX 13; KUTV Licensee, LLC d/b/a KMYU and KUTV; Fox Broadcasting Company; and Nexstar Broadcasting, Inc. b. “Defendant” shall mean Defendant Aereo, Inc. c. “Copyrighted Programming” shall mean each of those broadcast television programming works, or portions thereof, whether now in existence or later created, including but not limited to original programming, motion pictures and newscasts, in which the Plaintiffs, or any of them, (or any parent, subsidiary, or affiliate of any of the Plaintiffs) owns or controls an exclusive right under the United States Copyright Act, 17 U.S.C. §§ 101 et seq. NEXSTAR BROADCASTING, INC. Plaintiff, vs. AEREO, INC. Defendant. Case 2:13-cv-00910-DAK Document 101 Filed 02/25/14 Page 2 of 3Case 1:12-cv-0154 -AJN-HBP Document 323 Filed 08/15/14 Page 28 of 35 3 2. Pending a final resolution of this action, Defendant, and all of its parents, subsidiaries, affiliates, officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice of this Order (the “Enjoined Parties”) are preliminarily enjoined from streaming, transmitting, retransmitting, or otherwise publicly performing, displaying, or distributing any Copyrighted Programming over the Internet (through websites such as aereo.com), or by means of any device or process within the geographic boundaries of the Court of Appeals for the Tenth Circuit. 3. Violation of this Preliminary Injunction shall expose Defendant and all other persons bound by this Preliminary Injunction to all applicable penalties, including contempt of Court. 4. Plaintiffs shall post a bond in the amount of $150,000.00, upon which this injunction will immediately take effect. 5. Within three court days of the effective date of this Preliminary Injunction, Defendant shall file and serve a report in writing and under oath setting forth in detail the manner and form with which Defendant has complied with the Preliminary Injunction. 6. Nothing herein shall restrict Plaintiffs’ ability to seek to amend this injunction or to seek permanent injunctive relief with terms that are broader in scope than those delineated herein. IT IS SO ORDERED. Dated: February 25, 2014. ____________________________ Dale A. Kimball, U.S. District Judge Case 2:13-cv-00910-DAK Document 101 Filed 02/25/14 Page 3 of 3Case 1:12-cv-0154 -AJN-HBP Document 323 Filed 08/15/14 Page 29 of 35 Exhibit C Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 30 of 35 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 31 of 35 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 32 of 35 Exhibit D Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 33 of 35 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 34 of 35 Case 1:12-cv-01540-AJN-HBP Document 323 Filed 08/15/14 Page 35 of 35