TV Streaming Ruling Could Set Up Supreme Court Showdown for Hollywood

A judge tentatively grants broadcasters' motion to shut down Alki David's digital service, but there's a huge catch.
Gareth Cattermole/Getty Images
Alki David.

In November, broadcasters appeared before the 2nd Circuit Court of Appeals and argued why a federal judge was wrong to deny an injunction against Aereo, an upstart digital TV company backed by Barry Diller.

Now, across the other side of the nation, a California federal judge has tentatively agreed to grant broadcasters' motion for a preliminary injunction against another digital TV service -- Alki David's Aereokiller, alternatively known as FilmOn.

But there's more than meets the eye here, and the ruling could begin to shape a battle over the legality of digitally distributing television content that could eventually land on the doorstep of the U.S. Supreme Court.

In his tentative ruling this week (read here), U.S. District Judge George H. Wu agrees with the position of Fox, NBCU, ABC, CBS and others that David's company is likely to infringe broadcasters' copyrights and irreparably harm their businesses.

However, the tentative decision is just as notable for criticizing legal precedent in another jurisdiction -- the 2nd Circuit, where the Aereo case is being decided -- and the judge indicates some hesitancy on adopting a broad injunction ruling that extends beyond the 9th Circuit (much of the Northwest). Before granting such a request from the broadcasters, the judge has ordered more briefing from the parties' lawyers on how other appellate circuits in the United States view some of the pertinent copyright issues at question.

It's almost impossible to understand what's happening to FilmOn without perspective to the legal issues confronting Aereo.

In July, a New York federal court turned down broadcasters' attempts to shut down Aereo, relying heavily on a 2nd Circuit decision from 2008 that concerned Cablevision's plan to introduce a remote-storage DVR. In that case, the appellate court ruled that because "each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber ... such transmissions are not performances 'to the public.'"

The private nature of Aereo's system of capturing TV signals and then relaying unique copies of content to individual consumers was essentially the reason why broadcasters couldn't get an injunction against Aereo -- and why they are at the 2nd Circuit asking for reconsideration.

Now, onto the lawsuit against FilmOn channels, which David has affectionately has dubbed the Aereokiller (and just might be, just not how he intended.)

David has maintained that his own company is technologically analogous to Aereo, and so if that company survived judicial review, so should his.

The problem is that David's case is being heard in California -- not New York -- and so the judge hearing his case is not bound by the 2nd Circuit precedent from the Cablevision case.

And Judge Wu has strong words against what was decided there. For instance in his tentative ruling, he writes:

"Very few people gather around their oscilloscopes to admire the sinusoidal waves of a television broadcast transmission. People are interested in watching the performance of the work. And it is the public performance of the copyrighted work with which the Copyright Act, by its express language, is concerned. Thus, Cablevision's focus on the uniqueness of the individual copy from which a transmission is made is misplaced."

Judge Wu goes on to do some circuit score-settling. The judge notes that the Cablevision decision decided to reject the conclusions in a 1991 case in a California district court concerning the public performance nature of movies being transmitted from a hotel equipment room to individual hotel rooms, but the judge thinks this home turf ruling should be given more respect. "Precedent in the Ninth Circuit instead properly looks at public performance of the copyrighted work," he writes.

Then, in the tentative ruling, Judge Wu takes the extremely rare step of directly challenging a decision currently under appellate review. He blasts New York federal judge Alison Nathan's decision not to order an injunction against Aereo. The decision came, says Judge Wu, because his New York contemporary decided that it wasn't right to immediately halt a service equivalent to what individuals could lawfully do for themselves -- that is, if they had the technological know-how to set up an antennae on their rooftop to capture over-the-air TV signals and figure out a way to send a private transmission to their own iPad.

Judge Wu says:

"But Congress has rejected that mode of reasoning in this context. The equivalency between (1) what individuals could lawfully do for themselves and (2) what a commercial provider doing the same thing for a number of individuals could lawfully do, was the basis for the Supreme Court's cable television jurisprudence before the 1976 Copyright Act.." (Here is the judge's citation.)

Thus, Judge Wu agrees that the broadcasters have shown a likelihood of success on the merits on their public performance theory of liability. He also agrees that they have demonstrated irreparable harm from Alki David's company.

BUT (!), Judge Wu has an extraordinary sense that there's a circuit split on these issues and says he requires further briefing on the geographical scope of his ruling. "Other Circuits may also have law that conflicts with this decision," he writes. "The Court would therefore only issue an injunction covering the Ninth Circuit until receiving further briefing from the parties on whether other Circuits are aligned with the Ninth, Second, or neither."

The briefs will be filed in January.

Meanwhile, the 2nd Circuit is set to rule in the Aereo case. Assuming the broadcasters lose there -- and that's hardly a certainty as the broadcasters' lawyers did a pretty good job in November -- this all sets the stage for an appeal up to the U.S. Supreme Court. One of the biggest criteria for review at the high court is an appellate circuit split -- and Judge Wu has just articulated just how wide a gulf there is on the issue of TV streaming in courtrooms in this nation. In fact, thanks to the briefing he has ordered, it's possible that differences in copyright adjudication in the various circuits will be fleshed out even further.

Another way to look at this is that injunction that covers some geographical regions, but not others, in a world where geographical boundaries are supposedly diminished thanks to the advent of electronic networks practically begs for a higher judicial review.

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