March 13, 2012 6:00pm PT by Eriq Gardner
Barry Diller's Aereo Fights Legal Challenge Over TV Streaming
Aereo, the new TV streaming service that has been sued by all the major broadcasters, is prepared to battle. Just two weeks after the Barry Diller-backed company was hit with a pair of major copyright infringement lawsuits, Aereo has swiftly responded in court. Of course, there's no time to waste. The broadcasters are seeking an injunction, Aereo had planned to launch its service in the New York area on Wednesday.
Earlier this month, two federal lawsuits were filed against the company, each taking issue with Aereo's plans to transmit TV broadcasts over the Internet. The defendant stressed that its service would only be offered locally, one market at a time—but the broadcasters believed there was no way that Aereo could limit unlimited streams across the globe.
On Monday, Aereo filed its response, which includes a counterclaim that seeks a declaratory judgment that its service doesn't infringe broadcasters' copyrights.
The upstart company says it has been transparent about its technology, which constitutes tiny antennae the size of a dime assigned to each consumer. Aereo also provides access to a remote storage DVR for those who pay its $12-per-month service.
In making its arguments why the service is legit, Aereo lists three major legal developments.
The first is the Radio Act of 1927, which the company says established the principal that the airwaves are owned by the public and licensed to broadcasters for the benefit of the public interest, convenience and necessity. The second is the Supreme Court's 1984 Sony Betamax decision, which helped establish the idea that some technologies could have substantial non-infringing uses like the right to record programs for personal use. Finally, Aereo also cites the 2nd Circuit's 2008 Cablevision decision, which permitted the defendant's remote storage DVR service against broadcasters' objections that playback of copies infringed their public performance rights.
"The Aereo Technology rests squarely on these three bedrock legal principles," says the company in their filing. 'Aereo members use a remotely located antenna to receive local over-the-air programming content and a remotely located DVR to record unique copies of that content for their personal use."
Noticeably absent in the filing is any talk of the complicated retransmission consent rules. As the FCC notes, the Communications Act has provisions that prohibit multichannel video programming distributors from retransmitting commercial television without first obtaining the broadcaster's consent, and one of the big differences from the Cablevision case is that the cable company already had negotiated at least some distribution rights with broadcasters.
Such issues will be fussed over in the next few months.
In the meantime, Aereo and the broadcasters will go toe-to-toe over whether a preliminary injunction is warranted. The judge will weigh the likelihood of success and balance the potential harm to the broadcasters versus the harm to Aereo for stopping its service now.
In Aereo's filing on Monday, the company notes a few factors that might play into a judge's calculus, including that broadcasters were made aware of the service in April 2011 and that up until the lawsuit was filed, Aereo had never received a cease-and-desist.
Aereo got $20.5 million in venture funding for its start-up, including from some media big-shots like Diller. The company is represented in court by R. David Hosp at Goodwin Proctor.
Here's a copy of the broadcasters' original complaint followed by Aereo's response: