Alki David's FilmOn Sues Barry Diller's Aereo

Barry Diller

Chet Kanojia raised $20.5 million in seed investment, including millions from Barry Diller, who said that when he first heard Kanojia pitch Aereo, his team "spent a lot of time and a good amount of money trying to find, legally and technically, what was wrong with it."

The Shakespearean legal war over digital television has taken another step toward the preternatural.

Alki David's FilmOn has filed a new lawsuit in California federal court against Aereo, the upstart company funded in large part by Barry Diller.

Both companies capture the signals of TV broadcasters including CBS, NBC, ABC and Fox and deliver them to subscribers online. Both enterprises have been defending lawsuits against those same broadcasters. Naturally, there's a rivalry between the would-be digital TV titans, which has born some odd triangular litigation.

On Thursday, FilmOn claimed rights to "Aero" and said Aereo has taken a moniker that's confusingly similar. The new lawsuit comes six months after David was sued after attempting to redub his own service as and AereoKiller.

The basis for the lawsuit filed Thursday comes from the allegation that months before Bamboon Labs changed its name to Aereo, FilmOn already had a hold on "Aero."

STORY: Aereo Expands Digital TV Service Nationally

Specifically, David's company says it had been distributing a portable mini-television antenna product for Windows-equipped computers called "WinTV-Aero-m." The product was manufactured by Hauppauge Computer Works, which consented to FilmOn's use of "Aero." The complaint adds that on Wednesday -- a day before the lawsuit was filed -- Hauppauge assigned in writing to FilmOn the rights to the trademark "Aero."

"Seeking to unfairly capitalize on the success of WinTV-Aero-m and the name 'Aero,' Defendant Aereo devised a scheme to start a competing business," says the lawsuit alleging false designation of origin under the Lanham Act.

Read the full complaint here.

The lawsuit represents a specialty of the eccentric David: revenge litigation. After he was sued by the broadcasters, for instance, he turned around and filed a lawsuit against CBS for facilitating piracy.

David's latest legal jab follows the same pattern. In August, Diller sued over and AereoKiller, alleging that his own name was being exploited and that FilmOn was unfairly attempting to associate its services with Diller's.

Aereo also sees a connection. "This lawsuit was filed in direct response to a letter that we sent in January 2013 to the attorneys for AereoKiller and Alki David requesting that they stop trading on Aereo's trademark 'Aereo,' " says Virginia Lam, a spokesperson for Aereo." We believe that this lawsuit is not only baseless but frivolous and will respond to it as appropriate."

The irony is that while both of these companies sue each other, they have things in common beyond any name-calling.

The major networks believe that both Aereo and FilmOn commit massive infringement by violating the transmit clause of the U.S. Copyright Act.

Aereo has been more lucky on this front, defeating a requested injunction as the dispute is now under appeal.

As for FilmOn, a California judge recently agreed to grant broadcasters' motion for a preliminary injunction, though it was with the caveat that it applied only "within the geographical boundaries of the United States Court of Appeals for the Ninth Circuit" -- meaning much of the Northwest. Also on Thursday, the ruling was appealed.

As FilmOn fights for its survival in the Ninth Circuit and Aereo fights in the Second Circuit -- and battle each other in the midst -- the possibility exists for split rulings, which could set up a Supreme Court showdown over the future of TV streaming.

For now, David says that despite the recent injunction ruling, his service is doing well, offering the major TV networks in seven major cities in the U.S. And if all that hasn't sufficiently reached the heights of 21st century legal oddities, David also has announced that his own TV stations recently reached a distribution deal with Dish Network, the satellite TV company that is in the midst of a copyright war with broadcasters.

"Personally, I blame the lawyers," he says. "If it were not for their insatiable desire to create billable controversy, we would not be in the situation where I have to spend my time and resources to punish them."

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