May 22, 2013 6:06pm PT by Eriq Gardner
Power Lawyers: How Aereo's Attorneys Beat Hollywood (For Now)
This story first appeared in the May 31 issue of The Hollywood Reporter magazine.
When Barry Diller unveiled Aereo in February 2012, he said the startup allowing consumers to watch network television on digital devices would break the chains of a “closed cable-broadcast-satellite circle.” Not surprisingly, all of the major TV networks immediately sued. So Aereo turned to R. David Hosp and Michael Elkin to defend the company in court.
Hosp was picked because five years earlier, he persuaded an appeals court to overturn an injunction issued by Judge Denny Chin that had stopped Cablevision’s remote-storage DVR. Diller and Aereo’s leaders knew that the Cablevision ruling raised issues similar to those represented by Aereo and thus would be their best hope of beating the broadcasters. But Aereo’s success was less than assured. Even though the company prevailed at an initial stage by getting a judge to deny the broadcasters’ injunction request, when the case was appealed to the Second Circuit Court of appeals in New York, Aereo’s lawyers received unwelcome news.
“I just had this feeling that Judge Denny Chin was going to be put on the panel,” says Hosp. “Sure enough, it happened.” Few people outside of the legal community realized the significance of this at the time, but when the Second Circuit sided with Hosp in 2008, it also embarrassed Judge Chin, then a lower court judge.
With Aereo, it was Hosp’s job to play “defense” by arguing that broadcasters were unlikely to prevail on their theory that harnessing broadcast TV signals and putting them online was tantamount to stealing copyrights. For the “offense,” Aereo turned to Elkin to poke holes in the claim that the networks would lose billions of dollars if Aereo is allowed to exist. “I added valued by getting into the kitchen of broadcasters,” says Elkin.
In November, Hosp and Elkin argued the case knowing that Chin was likely to rule against them and that they’d need to go 2-for-2 with the remaining judges on the panel. “I’m sure the other side had a greater sense of confidence walking into court that day,” says Elkin. Aereo’s lawyers did have something in their back pocket, however: an early 52-page ruling denying an injunction that discussed Aereo’s complex technology and articulated why the Cablevision precedent hurt the broadcasters’ case.
On April 1, THR Power Lawyers Elkin and Hosp got word they had won the important second stage of the battle. Judge Chin wrote a dissenting opinion, of course. And the broadcasters are asking for a rehearing as the case continues at the trial court. Aereo’s future isn’t sealed, but a key round has been won by Aereo and its lawyers.