WNET v. Aereo - NBA NFL NHL MLB Amici Brief in Support of Rehearing en Banc

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Related Case No. 12-2786-cv

IN THE

mntteb Sta tes ourt of gppealsFOR THE SECOND CIRCUIT

AMERICAN BROADCASTING COMPANIES, INC., et al.

Plaintiffs-Appellants,

v.

AEREO, INC.,

Defendant-Appellee.

On Appeal from the United States District Court

for the Southern District of New York

BRIEF OF MICI CURI ENATIONAL BASK ETBALL ASSOCIATION

NBA MEDIA VENTUR ES LLC NBA PROPERTIES INC. NATIONALFOOTBALL LEAGUE NATIONAL HOCKEY LEAGUE OFFICE OF THE

COMM ISSIONER OF BASEBALL AND MLB ADVANCED MEDIA L.P.

IN SUPPORT OF REHEARING EN BAN C

Robert Alan GarrettStephen M. Marsh

R. Stanton Jones

ARNOLD PORTER LLP555 Twelfth Street, NW

Washington, DC 20004

202) [email protected]



RULE 26.1 CORPOR TE DISCLOSU RE ST TEMENT

In accordance with Federal Rule of Appellate Procedure 26.1, mici Curiae

state as follows:

The National Basketball Association ( NBA ) has no parent corporation and

no publicly held company owns 10% or more of its stock.

NBA Media Ventures, LLC ( NBAMV ) has no parent corporation and no

publicly held company owns 10% or more of its stock.

NBA Properties, Inc. ( NBAP ) is owned equally by the thirty NBA

members; NBAP has no parent corporation and no publicly held company owns

10% or more of its stock.

The National Football League ( NFL ) has no parent corporation and no


The National Hockey League ( NHL ) has no parent corporation and no


The Office of the Commissioner of Baseball, doing business as Major

League Baseball ( MLB ), has no parent corporation and no publicly held

company owns 10% or more of its stock.

MLB Advanced Media, L.P. ( MLBAM) is a limited partnership organized

under the laws of the State of Delaware. Its partners consist of MLB Advanced

Media, Inc., and MLB Media Holdings, L.P. ( MLBMH). There is no publicly



held company that owns 10 or more of the stock of MLBAM MLBMH or MLB

Advanced Media Inc.



T BLE OF CONTENTS

age

RULE 26.1 CORPORATE DISCLOSURE STATEMENT

TABLE OF AUTHORITIES v

IDENTITY AND INTERESTS OF AMICI CURIAE

ARGUMENT 2

I. THE MAJORITY S DECISION CONTRAVENES CONGRESS

DETERMINATION IN THE 976COPYRIGHT ACT THAT

BROADCAST RETRANSMISSION SERVICES MAKE PUBLIC

PERFORMANCES AND SHOULD PAY COPYRIGHT ROYALTIES

O THE OWNERS OF THE PROGRAMMING THEY EXPLOIT. 2

11. THE MAJORITY S DECISION IS INCONSISTENT WITH THIS

COURT S DECISIONS IN CABLEVISIONAND IVI

111. THIS CASE RAISES AN ISSUE OF EXCEPTIONAL IMPORTANCE 8

CONCLUSION 13

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE



T BLE OF UTHORITIES

Cartoon Network LP v. CSC Holdings Inc.536 F.3d 121 (2d Cir. 2008) pssim

Fortnightly Corp. v. U nited Artists Te levision Inc.

392 U.S. 390 (1968) 10

Fox Television Stations Inc. v. Barry Driller Content Sys. PLCF Supp. 2d ---, 012 WL 6784498 (C.D. Cal. Dec. 27, 2012)

Teleprompter Corp. v. Columbia Broad. Sys. Inc.415 U.S. 394 (1974) 0

Twentieth Century Music Corp. v. Aiken422 U.S. 15 1 (1975) 3

WPIX Inc. v. ivi Inc. 691 F.3d 275 (2d Cir. 2012),

cert. denied --- S. Ct. --- 1 U.S.L.W. 3511 (Mar. 18, 2013) 2, 7, 8

Fed. R. App. P 35(b)

Brief of the United States as Amicus Curiae, Cable News Network Inc. v.

CSC Holdings Inc. No. 08-448,2009 WL 1511740 (U.S. May 29,2009) 6 ,7

Case C-607/11, ITV Broadcasting Ltd. v TVCatchUp Ltd. (Mar. 7,2013),available at http://curia.europa.eu/juris/document/d0cument.jsf?text= docid= 134604 pageIndex=0 doclang=en mode=

req dir= occ=first part=l cid=143508 1

Christopher S. Stewart William Launder, Diller Wins A Broadcast-TVClash Wall St. J . July 12, 2012 10

.R. Rep. No 94-1476 8



Jane C. Ginsburg, WNET v. Aereo: The Second Circuit Persists in Poor

Cable) Vision Apr. 23,2013), available at

http://www.mediainstitute.org/IPI/2O1310423 13 php 5

Janko Roettgers, Does Dish Want To Buy Aereo? Broadcasters Would Love

To Know, Paid Content April 4,2013, 7:51 p.m.),http://paidcontent.org/2013/04/04/does dish want to buyaereobroadcasters-would-love-to-know. 0



IDENTITY AND INTERESTS OF AMICI CURIAE

Amici are the major U.S. .profess ional sports leagues-the National

Basketball Association ( NBA ), National Football Lea gue ( NFL ), National

Hockey League ( NHL ), and Office of the Commissioner of Baseball d/b/a Major

League Baseball ( MLBn)-NBA Media Ventures, LLC (owner of the right to

stream telecasts of NB A games ove r the Internet); NB A P roperties, Inc. (owner of

the intellectual property rights in certain NBA programming); and MLB Advanced

Media, L.P. (owner of the right to stream telecasts of MLB games over the

Internet).

Amici provide the public with, and own copyrights in, a substantial amount

of very valuable and popular live professional sports programm ing. A significant

portion of that programming appears on broadcast television stations that

Defendant-A ppellee Aereo, Inc. ( Aereo ) retransmits o ver the Internet to its

paying subscribers-without obtaining any authorization of, or paying any

compensation to, Am ici or anyone else. Aereo provides its unauthorized broadcast

retransmission service in direct and unfair competition with various Internet and

other services that Amici themselves offer or license to third parties. ee Brief of

No party's counsel authored this brief in whole or in part. N o party or party's

counsel made a monetary contribution intended to fund the preparation or

submission of this brief, and no person other than Amici or their counsel madesuch a m onetary contribution.



Amici Curia e National B asketball Association et al. at 3-4 (No. 12-2807 , Dkt. 1 23)

( Sports Amicus Br. ).

Amici believe that the panel majority's April 1, 2013 decision in this case

incorrectly interprets the Copyright Act and is inconsistent with the decisions of

this Cou rt in WPIX; Inc . v. ivi, Inc., 69 1 F.3d 275 (2d Cir. 20 12), cer t. denied , S.

Ct. --- 1 U.S.L.W. 35 11 (Mar. 18 ,20 13 ) ( ivy), and C artoon Network L P v. C SC

Holdings, Inc ., 536 F.3d 121 (2d Cir. 2008) ( C ablevision ). Th is case also raises

an issue of exceptional importance concerning the copyright liability of services

that retransmit broadcast television programming to paying subscribers without

licenses to do so. Accordingly, en bane review is warranted under Rule 35(b) of

the Federal Rules of A ppellate Procedure.

ARGUMENT

I. THE MAJORITY S DECISION CONTRA VENES CONGRESSDETERMINATION IN THE 1976 COPYRIGHT ACT THAT

BROADCAST RETRANSMISSION SERVICES MAKE PUBLIC

PERFORMANCES AND SHOULD PAY COPYRIGHT ROYALTIES

TO TH E OW NERS OF THE PROGRAMMING THEY EXPLOIT.

Like any cable or satellite service, Aereo allows thousands of paying

subscribers to view simultaneously the same over-the-air broadcast of a

copyrighted television program, e.g., the WNYW-TV or other network broadcast

of the Super Bowl or World Series. Nevertheless, the panel majority concluded

that Aereo makes, not public perform ances, but thousan ds of pr iv at e performances



of that program. A s the dissent correctly observed, that conclusion makes no

sense and elevates form over substance. Dissent at 3 4 (Chin, J.). An

individual who sings a copyrighted lyric in the shower engages in a private

performance. Twentieth C entury Music Covp v. Aiken 422 U.S. 151, 155 (1975).

A commercial service (like Aereo) that retransmits the broadcast of a copyrighted

television program to thousands of paying subscribers at the same time is not in

any way com parable to an individual singing in the shower.

The panel majority's decision is squarely at odds with Congress'

determination in the 1976 Copyright Act that broadcast retransmission services

engage in public performances. Congress concluded that it would be inequitable to

allow commercial enterprises to profit from retransmitting broadcast television

programming without compensating those who-at great expense, effort and

risk-are responsible for the creation of that program ming. See 1976 H.R. Rep.

No. 94-1476, at 89 (1976); Sports Am icus Br. 8-9. Aereo is such a comm ercial

enterprise; it too is a broadcast retransmission service built on the exploitation of

copyrighted programming, including Am ici's programm ing. Under the Transmit

Clause, all such services (whether cable, satellite or Internet) that retransmit to

multiple subscribers the same broadcast of a television program, i . e . the same

performance of a copyrighted work, publicly perform that w ork.



The panel majority improperly exempted Aereo's broadcast retransmission

service from th e public performance right, asserting that technical architecture

matters. Op . at 1. In other words, the majority concluded that such a service can

convert what is indisputably a public performance (the retransmission of a

broadcast of a program to thousands of households at the same time) into

thousands of individual private performances merely by adopting a Rube

Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the

Copyright Ac t and to take advantage of a perceived loophole in the law. Dissent

at 2. But there is no engineering exemption to the Transmit Clause; the Transmit

Clause is intentionally technology agnostic. And Congress in the 1976 Copyright

Act determined that all services that retransmit the broadcast of a program to

multiple mem bers of the public publicly perform that program-not just those who

employ a particular technical architecture to do so.

Indeed, a principal legislative objective in enacting the 1976 Copyright Act

was to ensure that unforeseen changes in technology would not erode the value of

the exclusive rights accorded copyright owners and require Congress constantly to

update the Copyright Act to ensure protection of those rights. See Sports Amicus

Br. 12. Accordingly, Con gress drafted the Transmit Clause broad[ly] to define

public perform ance as including the transmission of a performance or display of

the work to the public by means of any device or process now known or



lat er developed -irrespective of whether those capable of receiving the

transmission receive it separately, i.e., at the same place or in separate places or

at the same time or at different times. 17 U.S.C. 101 (emphasis added).

Aereo's broadcast retransmission service (like any of the cable systems and

satellite carriers with which it competes) falls squarely within that broad language.

The panel majority erred when it reached the contrary conclusion by mechanically

applying the C ablevision interpretation of the Tran smit Clause to a se rvice that the

Cablevision court never contemplated or addressed. See Dissent at 17-18; Jane C.

Ginsburg, WNET v. Aereo: The Second Circuit Persists in Poor (Cab1e)Vision

(Apr. 23, 2013) (explaining that the Aereo decision is inconsistent w ith statutory

text and policy ), available a t http://www.mediainstitute.org/IPI/2O13/0423 13.php.

11. TH E MA JORITY S DECISION IS INCON SISTENT WITH THIS

COURT S DECISIONS IN CABLEVISION AND IVI

Th e panel majority dismissed, as incompatible w ith the conclusions of the

Cablevision court, the view that Aereo's Internet broadcast retransmission service

engages in public performances under the language and legislative history of the

1976 Act. Op. at 31. But Cablevision did not consider, mu ch less disturb, the

well-settled principle that commercial broadcast retransmission services (like

Aereo) engage in public performances, regardless of the technology they employ.

Moreover, the C ourt in Cablevision determined only that a transmission made over

closed facilities owned and managed by a licensed cable operator is capable of



being received by more than one person without violating the Copyright Act. It

offered no view on the distinct issue of whether a retransmission made over the

Internet and to mobile devices is capable of being received by more than a single

individual without violating the Copyright Act. See Sports Amicu s Br. 26-29.

The Court in Cablevision emphasize[d] that it did not intend to exempt

content delivery networks from copyright liability simply because they (like

Aereo) associate unique copies of copyrighted works with each of their

subscribers. See 536 F.3d at 139. In recommending against Suprem e Court review

of Cablevision the Government (represented by then-Solicitor General Elena

Kagan) likewise explained that this Court in Cablevision was careful to tie its

actua l holdings to the facts of [that] case, and that Cablevision should not be

construed to underm ine copy right protection in circumstances far beyond those

presented here, including with respect to situations in which a party streams

copyrighted material on an individualized basis over the Internet. Brief of the

United States as Amicus Curiae, Cable News Network Inc. v. CSC Holdings Inc.

No. 08-448,2009 W 1511740, at 6,20 -21 (U.S. May 29,20 09).

The panel majority in this case acted inconsistently with Cablevision by

extending Cablevision well beyond its facts to encompass a wholly unlicensed

Internet broadcast retransmission service. See Dissent at 18-20. Th e majority did

so (a) without making any attempt to reconcile the Cablevision interpretation of the



Transmit C lause with the indisputable fact that Congress in the 1976 Act intended

to subject broadcast retransmission services to copyright liability; and (b) without

evaluating the significant factual differences between the Internet and mobile

services provided by Aereo, on the one hand, and the network DVR service at

issue in Cablevision on the other hand.

The panel majority's decision also cannot be reconciled with the recent ivi

decision, where this Court (like the Register of Copyrights) concluded that

Congress never intended to accord a compulsory or statutory license to

retransmit broadcast programming over the Internet. ivi 691 F.3d at 284-85. As

the Court in ivi also correctly determined, unauthorized retransmissions of

broadcast program ming over the Internet would substantially diminish the value

of the programming, drastically change the industry, to [copyright owners']

detriment, and threaten to destabilize the entire industry. Id at 285-86. These

concerns apply with equal force here, where Aereo is doing precisely w hat ivi was

enjoined from doing: streaming copyrighted works over the Internet without

permission of the copyrigh t holders. Dissent at 26.

The effect of the ivi decision is to require Internet broadcast retransmission

services to negotiate public performance licenses with copyrigh t owners. The

panel's decision in this case, however, is inconsistent with ivi. It provides Internet

services and others with a blueprint (id.) for avoiding the copyright licenses that



the Court in ivi (and Congress) determ ined are necessary--and thereby paves the

way for the very industry-wide harm that the Court in ivi sought to forestall. The

fact that an unlicensed Internet broadcast retransmission service (like Aereo)

inefficiently utilizes thousands of mini-antennas, unnecessarily makes a unique

copy of each television program for each subscriber, and employs other

technological gimmickry in the hope of avoiding copy right liability does nothing to

ame liorate that harm. The panel majority's decisio n in this case creates the

statutory exemption that Congress never intended to accord Internet broadcast

retransmission services and that the Court in ivi properly rejected. See Sports

Am icus Br. 15 23. In sho rt, it conflicts with ivi

I n THIS CA SE RAISES AN ISSUE OF EXCE PTIONAL IMPORTANCE

For several reasons, and as reflected by the broad array o f amici who have

participated in this appeal (on both sides) and the blitz of media attention that has

been focused on litigation involving Aereo and com parable Internet retransmission

services, this case raises an issue of exceptional importance that warrants the

attention of the full Court.

First he issue in this case concerns the copyright liability o f a com mercial

service that, without co nsent, reformats and retransmits to paying subscribers the

copyrighted program min g on broadcast television signals. Historically, that issue

has been one of exceptional importance. Indeed, it was the mo st controversial



issue in the legislative debates leading to the 1976 Copyright Act and was

primarily responsible for delaying passage of that legislation for more than a

decade. See H.R. Rep. No. 94-1476, at 89. Durin g that period, broadcasters,

copyright owners, cable operators and public interest organizations devoted

enormous resources to resolving the issue in legislative debates, federal court

litigation (culminating in two Supreme Court decisions reviewing decisions from

this Court), and numerous proceedings before the Federal Communications

Com mission and the Cop yright Office. Congress thought it had comprehensively

resolved in the 1976 Act the copyright issues surround ing broadcast retransm ission

services. Th e panel majority's decision, how ever, throws that resolution to the

wind by providing the blueprint for circumventing Congressional intent. Dissent

at 26.

Second with the advent of the digital age, there has been renewed focus on

the copyright issues surrounding unlicensed broadcast retransmission services.

Given the technological ease with which broadcast programm ing can be captured

and retransmitted over the Internet, several such commercial retransmission

services have emerge d. Th e courts have enjoined all these services, with the sole

exception of Aereo. See Sports Amicus Br. 7-8. Most recently, a California

federal court has preliminarily enjoined a service that claims to employ the same

technology as Aereo, concluding that the interpretation of the Transmit Clause



reflected in Cablevision and Aereo is simply incorrect. See Fox Television

Stations Inc. V Barry Driller Content Sys. PLC F Supp. 2d --- 012 WL

6784498 (C.D. Cal. Dec. 27, 2012). Tha t decision is pending before the Ninth

Circuit. If there is to be a circuit split on this issue, it is particularly important to

have the views of the full Court in this appeal, rather than that of a divided panel.

While the Supreme Court considered the scope of the public performance right

under the 1909 Copyright Act (including in the context of broadcast retransmission

services), see e.g. Fortnightly Coup. v. Un ited Artists Television Inc. 392 U.S.

390 (1968); Teleprompter Corp. v Columbia Broad. Sys. Inc. 415 U.S. 394

(1974), it has never considered the scope of that right under the 1976 Act.

Third there is nothing particularly complicated or proprietary about the

Rube Goldberg device that Aereo has employed to avoid copyright liability.

Othe rs (whether they a re start-up Internet services or traditional cable and satellite

services) can easily adopt the same technological fix. They too, with little

difficulty, can em ploy mini-antennas and insert uniqu e copies into

retransmission stream s in the hope of avo iding the copyright liability that Congress

imposed upon broadcast retransmission services in the 1976 Act. Th e copycat

service involved in the BarryDriller litigation, allegedly, already has done so.

It also is hardly surprising that various cable and satellite services have an

interest in the outcom e of this proceeding and in negotiating with Aereo a s a means



of circumventing copyrigh t liability. Christopher S. Stewart William Launder,

Diller Wins A B roadcast-TV Clash Wall St. J., July 12, 2012, at B1,

http:Nonline wsj com/article/SB0001424052702303644004577521 362073 162108

.html; Janko Roettgers, Does Dish Want To Buy Aereo? Broadcasters Would Love

To Know Paid Content (April 4, 2013, 7:51 p.m.),

http://paidcontent.org/20 13/04/04/does dish want to buy aereobroadcasters

would-love-to-know. Moreover, while Aereo currently retransmits only New York

signals to New Yo rk subscribers, its interpretation of the Transm it Clause does not

require this limitation; Aereo in effect claims that it can retransmit broadcast

signals anywhere in the country (or, indeed, in the world) without copyright

liability under U.S. law. Any decision to undo the 1976 Act s conclusions

concerning broadcast retransmission services should be made, if at all, by the

entire Court, and not a divided panel o f that Court.

Fourth th e pa ne l s decision places the United States in violation of its

obligations under various international treaties. See Sports Am icus Br. 30-32. It

also results in copyright owners receiving measurably less protection in the United

States than abroad. See Case C-607111, ITV Broadcasting Ltd. v. TVCatchUp Ltd.

(Mar. 7, 2013) (European Court of Justice decision holding that services that

retransmit live broadcast programming over the Internet make communications to

the public that require the consent of copyright owners), available at



http://curia.europa.edjuris/document/document.js~text= docid=l34604 pageInd

ex=0 doclang=en mode=req dir= occ=first part=l cid=143508. Such a

decision also should be made by the Court en bane and not by a divided panel,

which did not even consider the impact of its actions on this coun try s international

obligations.

Finally, this case involves application of a decision of this Court

(Cablevision) that itself was highly controversial. As noted, in response to a

petition for writ of certiorari, the Supreme Court called for the views of the then-

Solicitor General (Elena Kagan), who recommended against Supreme Court

review only because there was, at that time, no circuit split and the Court in

Cablevision explicitly confined its decision to the facts of that case. If there is to

be an extension of Cablevision to the unique circumstances presented by broadcast

retransmission services, that extension should be made (if at all) by the full Court.



ON LUSION

For the reasons set forth above, rehearing n b ne should be granted.

Dated: April 23,20 13 Respectfully submitted,

IS/ Robert Alan Garrett

Robert Alan Garrett

Stephen M. MarshR. Stanton Jones

ARNOLD PORTER P555 Twelfth Street, NW

Washington, DC 20004

202) 942-5000



CERTIFIC TE OF COMPLI NCE

This brief complies with the type-volume limitation of Fed. R. App. P.

32 a) 7) B) because the brief contains 2,621 words, excluding the parts of the brief

exempted by Fed. R. App. P. 32 a) 7) B) iii). This brief complies with the

typeface and type style requirements of Fed. R. App. P. 32 a) 5) and 32 a) 6),

respectively, because this brief has been prepared in a proportionately spaced

typeface using Microsoft Word 2007 in Times New R oman 14-point font.

IS/ Robert Alan Garre tt

Robert Alan Garrett

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