In a unusual legal twist, broadcasters may now have two shots at killing Aereo, the controversial TV streaming service recently launched by media mogul Barry Diller.
Alki David, the provocative media entrepreneur who recently launched an Aereo-like streaming TV service called BarryDriller.com, may have unintentionally just done broadcasters a huge favor in their fight to stop both online video services. That's because instead of solely banking on a favorable legal outcome against Aereo in New York, broadcasters now have a second suit in a different jurisdiction.
This week ABC, CBS and NBC joined Fox filing against BarryDriller.com in the U.S. District Court for the central district of California. If the California court delivers a different decision than the New York court, that could push the matter to the Supreme Court, theoretically giving the TV world a second chance and burying Aereo.
Both Aereo and BarryDriller.com use small antennas to capture local broadcast signals in order to stream them on the Internet. The TV network station owners claim the services violate their copyrights and trademarks by streaming their signals without permission.
But broadcasters were dealt a blow last month when a New York judge refused to grant their request for a preliminary injunction against Aereo, forcing them to file an appeal.
In the New York case, broadcasters' complaints were trapped by a 2008 appellate court ruling over Cablevision's DVR cloud-based service—a decision which ended up defining Cablevision's service as a private performance, not a public one. That definition was used by a judge in Aereo's favor. As a private performance, Aereo would not be subject to copyright fees.
Enter David, who was issued an injunction in 2010 for a streaming TV service called FilmOn. Even as he agreed to pay the networks $1.6 million to settle charges, he saw a legal opening in the Aereo case. In a nod to Barry Diller, a major investor in Aereo, David copied Aereo's approach of using individual antennas to launch his new streaming service.
"A lot of business has taken this contortion of the law on public performance as a loophole to get around the copyright law," said Mary Rasenberger, a partner with Cowan, DeBaets, Abrahams & Sheppard.
But David's no-holds-barred move could come back to bite both his service and Aereo's. Until David, broadcasters had to wait for Aereo to launch in another market before filing in another jurisdiction. With only 3,500 subscribers, the wait could have been a long one. And broadcasters would still be swatting back other would-be streaming TV services looking to capitalize on the incumbent TV business.
"The problem the networks had in New York, they were trying to swim upstream to get away from the Cablevision decision," said David Wittenstein, a partner and head of the communications practice for Dow Lohnes. "If you're the networks, you go to another court in another part of the country. You start with a clean slate."
Though getting the cases to the Supreme Court could be a long slog, the high court may be broadcasters' best bet. "I wouldn't be surprised if the Supreme Court overturned the underpinnings of Cablevision," Rasenberger said. "The Supreme Court has a more holistic view of copyright than the lower courts do."