Over The Aereo

Win One for the Diller: Appeals Court Rules In Favor of IAC-Backed Aereo Over TV Networks

Court denies broadcasters request for a preliminary injunction against Aereo.
diller Win One for the Diller: Appeals Court Rules In Favor of IAC Backed Aereo Over TV Networks

IAC chairman Barry Diller. (David Shankbone)

Aereo, the New York City-based service that lets cordcutters live-stream network TV online, has been making broadcasters feel litigious ever since IAC led a $20.5 million Series A in the startup last February. The group of 17 broadcasters suing Aereo argue that the individual antennas Aereo assigns each user are an illegal loophole to avoid paying networks costly retransmission rights–and that Aereo is guilty of copyright violation of their content.

This January, Aereo raised $38 million more, which should help cover its considerable legal fees. But the TV incumbents haven’t found much support in the courts.

Today, the Second Circuit appeals court ruled in favor of Aereo, denying broadcasters their request for a preliminary injunction and upholding the decision made Federal District Court last summer. That vote of support is well-timed to Aereo’s recent major marketing push–expanding service 29 new counties across New York, New Jersey, Connecticut and Pennsylvania.

CEO and founder Chet Kanojia got the inspiration for Aereo by looking at the 2009 Supreme Court case, which ruled that Cablevision was within its rights to move its DVR systems to the cloud. The court of appeals referenced that decision in their ruling today:

 “We conclude that Aereo’s transmissions of unique copies of broadcast television programs created at its users’ requests and transmitted while the programs are still airing on broadcast television are not ‘public performances’ of the Plaintiffs’ copyrighted works under Cablevision. As such, Plaintiffs have not demonstrated that they are likely to prevail on the merits on this claim in their copyright infringement action. Nor have they demonstrated serious questions as to the merits and a balance of hardships that tips decidedly in their favor. We therefore affirm the order of the district court denying the Plaintiffs’ motion.”

But as AllThingsD notes, today’s decision just means that Aereo can continue operating while the trial is underway, it’s not a legal all-clear.

It is worth noting the dissenting opinion from District Court Judge Denny Chin, who doesn’t buy the Cablevision argument at all: “The system is a Rube Goldberg-like
contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.”

Sounds like someone in chambers has a Google Reader full of tech blogs!

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com