Hearst Denied Injunction Against Aereo In Boston Federal Court

The Boston decision follows a similar initial ruling made in the 2nd U.S. Circuit Court of Appeals in New York (CED April 2 p5). In another case, the U.S. District Court for the District of Columbia ordered a nearly nationwide preliminary injunction against FilmOn X, another streaming TV retransmission service (CED Sept 9 p8). The varying decisions will probably result in an ultimate decision made in the Supreme Court, said the attorneys.

The Massachusetts court found that a preliminary injunction is unwarranted, Judge Nathaniel Gorton wrote in a memorandum and order. Hearst hasn’t demonstrated “a sufficient likelihood of success on the merits nor the requisite irreparable harm,” it said. Aereo claimed that it provides technology letting customers do what they are legally entitled to do, which is “access free and legally accessible over-the-air television broadcasts using an antenna,” “create individual, unique recordings of those broadcasts for personal use” and play those recordings on devices, it said.

Aereo CEO Chet Kanojia called the decision a “victory” that belongs to the consumer. It makes clear “that there is no reason that consumers should be limited to 1950s technology to access over-the-air broadcast television,” he said in a statement. Hearst had no comment.

"The most hotly contested issue is whether Aereo infringes WCVB’s exclusive right to transmit its works to the public,” said the order. It pointed to the 2008 Cablevision case and the 2nd Circuit’s application of it in its decision earlier this year. Aereo claimed that it’s transmitting “private rather than public performances per Cablevision,” the order said. The order also rejected Hearst’s argument that WCVB’s right to prepare derivative works was violated. Gorton said he isn’t aware of any legal authority for the proposition that Aereo’s technology “creates a derivative work merely by converting programs from their original digital format to a different digital format compatible with Internet streaming.”

The split among the courts is a result of different perspectives on transmission and how to determine a public performance, said Kevin Goldberg, an intellectual property attorney at Fletcher Heald. It all comes down to whether this is a public performance, he said. That lies on one specific interpretation of what constitutes a public performance, specifically the transmit clause of that definition, he added. “The courts have different views based on what constitutes a transmission or not.” While conflicts between the courts aren’t unusual, “it’s very odd to see the degree of separation in decisions,” said Scott Flick, a Pillsbury Winthrop broadcast attorney. “It seems very obvious to one set of courts that this is an absolute violation of copyright law and seems much fuzzier for other courts."

The attorneys agreed that a Supreme Court decision would put the issue to rest. It’s clear that this is an issue that may not ultimately be resolved until it reaches that court, Flick said. Should the New York and Boston courts end up ruling in the broadcasters’ favor, “that would eliminate the conflict,” he said. “That is still possible.” Unless and until it goes to the Supreme Court, there will be no resolution, said Goldberg. However, the decision could ultimately belong to lawmakers, he added: “Congress could come back and say that it feels the interpretation is wrong and clarify it [public performance definition] in a new statute.”

Thursday’s decision doesn’t have a significant effect on the streaming TV service landscape, said the two lawyers. In some ways the biggest decision so far has been the D.C. court decision banning FilmOn X from streaming material, said Flick. “The restraining order that was granted was effectively nationwide other than in the 2nd Circuit,” he said. “That had the greatest geographic reach.” The pending appeals case from FilmOn X at the 9th Circuit U.S. Court of Appeals could have an impact if FilmOn X wins, Goldberg said. The 9th Circuit overruling the lower court decision could eliminate the possibility of a circuit split, he said. “Unless that happens, then it will continue to progress to an eventual Supreme Court decision."

The Massachusetts court also denied Aereo’s request to transfer the case to the U.S. District Court for the Southern District of New York. Even if the court were inclined to transfer the case, the actions pending before the judge there “are already quite advanced and therefore, transfer is virtually guaranteed to either delay litigation or unfairly burden Hearst,” the order said.