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12-2786-cv 12-2807-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT WNET, THIRTEEN, FOX TELEVISION STATIONS, INC., TWENTIETH CENTURY FOX FILM CORPORATION, WPIX, INC., UNIVISION TELEVISION GROUP, INC., THE UNIVISION NETWORK LIMITED PARTNERSHIP, AND PUBLIC BROADCASTING SERVICE Plaintiffs-Counter-Defendants - Appellants,
v.

AEREO, INC., F/K/A BAMBOOM LABS, INC., Defendant-Counter-Claimant - Appellee. (For Continuation of Caption See Inside Cover) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK CONSOLIDATED BRIEF OF DEFENDANTCOUNTER-CLAIMANT - APPELLEE AEREO, INC. R. DAVID HOSP JOHN C. ENGLANDER MARK S. PUZELLA YVONNE W. CHAN ERIN M. MICHAEL GOODWIN PROCTER LLP Exchange Place Boston, MA 02109 617.570.1000 MICHAEL S. ELKIN THOMAS P. LANE WINSTON & STRAWN LLP 200 Park Avenue New York, NY 10166 212.294.6700 (For Additional Counsel See Inside Cover)

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AMERICAN BROADCASTING COMPANIES, INC., DISNEY ENTERPRISES, INC., CBS BROADCASTING INC., CBS STUDIOS INC., NBCUNIVERSAL MEDIA, LLC, NBC STUDIOS, LLC, UNIVERSAL NETWORK TELEVISION, LLC, TELEMUNDO NETWORK GROUP, LLC AND WNJU-TV BROADCASTING, LLC Plaintiffs-Counter-Defendants - Appellants,
v.

AEREO, INC. Defendant-Counter-Claimant - Appellee.

SETH D. GREENSTEIN CONSTANTINE CANNON LLP One Franklin Square 1301 K Street, NW Suite 1050 East Washington, DC 20005 202.204.3500

JENNIFER A. GOLINVEAUX WINSTON & STRAWN LLP 101 California Street San Francisco, CA 94111 415.591.1000

Attorneys for Defendant-Counter-Claimant-Appellee Aereo, Inc. October 19, 2012

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CORPORATE DISCLOSURE STATEMENT Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure, the undersigned certifies that Aereo, Inc. has no parent corporation and that USANi LLC, a subsidiary of IAC/InterActiveCorp, a publicly-traded company, owns 10% or more of its stock. /s/ R. David Hosp

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES .....................................................................................v STATEMENT OF ISSUES PRESENTED ...............................................................1 INTRODUCTION .....................................................................................................1 SUMMARY OF ARGUMENT .................................................................................4 STATEMENT OF THE CASE................................................................................15 STATEMENT OF FACTS ......................................................................................17 I. What is Aereo? ..............................................................................................17

II. The Aereo System Is Materially Identical To The System In Cablevision In Every Relevant Respect. ......................................................19 III. The Aereo System From the Consumer’s Perspective. ................................20 IV. The Aereo System “Under The Hood.” ........................................................21 a. The System Automatically Activates An Individual Antenna, Allowing It To Receive An Over-The-Air Television Program. ............ 22 b. Next, The System Automatically Makes A Unique, Fixed Copy, Which Is Transmitted Only To The Consumer Who Made It. ............... 24 i. The Copies Are Unique Fixed Copies Associated Only With The Consumer Who Made Them. ..............................................................25 ii. Each Transmission To The Consumer Is From That Consumer’s Unique Copy........................................................................................28 iii. The Transmission Of The Unique Copy Is Made Solely To The Member Who Requested It. ..............................................................28 c. Transmissions To The Aereo Consumer Are Secure And Protected. .................................................................................................29
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STANDARD OF REVIEW .....................................................................................31 ARGUMENT ...........................................................................................................31 I. Cablevison Held That Under The Transmit Clause, A Transmission Made From A Single Unique Copy Accessible Only To A Single Recipient Is Not A Public Performance. ......................................................32 a. The Relevant “Performance” Is The Transmission Of The Copy. .......... 34 b. Only The Aereo Member Associated With The Copy Can Receive The Transmission Of That Copy. ............................................................37 c. Congress Expressly Intended to Exempt “Private” Performances From Copyright Liability. .......................................................................38 II. Appellants’ Arguments That Cablevision’s Analysis of The Transmit Clause Should Not Apply In This Case Fail. ...............................................42 a. Appellants’ Argument That Cablevision Is Limited In Application Only To Its Literal Precise Facts Contradicts Fundamental Principles Of Stare Decisis And Is An Attempt To Overturn Cablevision. .............................................................................................43 b. Appellants’ Argument That The Consumer’s Transmission Of An Aereo Performance Should Be Aggregated With Other Performances Is Counter To The Language Of The Act, And Has Been Rejected By This Court..................................................................48 c. The Phrases “In Separate Places” And “At Different Times” In The Transmit Clause Do Not Expand The Exclusive Performance Right Beyond Performances That Are “To The Public.” .......................52 III. There Are No Material Factual Distinctions Between This Case And Cablevision. ..................................................................................................53 a. The District Court Found That The Facts In This Case Are Materially Identical To Cablevision. ......................................................54

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b. Appellants’ Argument That This Case Is “Different” From Cablevision Because The Cablevision Transmissions Were Licensed Is Plainly Wrong….. ................................................................55 IV. Appellants’ Argument That Cablevision Applies Only To “Completed Time-Shifting” Is Illogical And Finds No Basis In Cablevision Or Otherwise In The Law. .......................................................60 V. The Aereo System Is Innovative Consumer Technology and Copies Made By Consumers In the Aereo System Are Not “Artifices” or “Gimmicks.” .................................................................................................64 VI. The Fact That Transmissions In The Aereo System Are Made Over The Internet Does Not Change The Applicable Legal Principles................68 VII. The Balance Of Harms And The Public Interest Defeat Appellants’ Claim For Injunctive Relief..........................................................................75 a. The District Court Correctly Found That Aereo Would Be Substantially Harmed By The Entry Of A Preliminary Injunction. ....... 75 b. The District Court Found Any Irreparable Harm To Appellants Was Not Overwhelming. .........................................................................77 c. An Injunction Would Not Serve The Public Interest. .............................79 CONCLUSION ........................................................................................................81

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TABLE OF AUTHORITIES CASES PAGE(S)

Allied-Signal, Inc. v. Dir., Div. of Taxation, 504 U.S. 768 (1992) ............................................................................................46 Am. Express Fin. Advisors Inc. v. Thorley, 147 F.3d 229 (2d Cir. 1998) ...............................................................................31 Arista Records, LLC v. Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009) ...............................................................................73 Bogle-Assegaie v. Conn., 470 F.3d 498 (2d Cir. 2006) ...............................................................................56 Cartoon Network LP v. CSC Holdings, Inc. 536 F.3d 121 (2d Cir. 2008) ........................................................................passim CBS Broad., Inc. v. FilmOn, Inc., No. 10-cv-07532, (S.D.N.Y. Nov. 22, 2010) .....................................................73 Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984) .............................................................13, 72, 73, 74 Concrete Machinery Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600 (1st Cir. 1988) ..............................................................................76 Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968) ......................................................................................13, 39 In re Application of Cellco P’ship, 663 F. Supp. 2d 363 (S.D.N.Y. 2009) .....................................................4, 45, 62 In re Sokolowski, 205 F.3d 532 (2d Cir. 2000) ...............................................................................32 Infinity Broad. Corp. v. Kirkwood, 63 F. Supp. 2d 420 (S.D.N.Y. 1999) ..................................................................71 Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998) ...............................................................................71
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CASES

PAGE(S)

Jayaraj v. Seappini, 66 F.3d 36 (2d Cir. 1995) ..................................................................................78 Kickham Hanley P.C. v. Kodak Ret. Income Plan, 558 F.3d 204 (2d Cir. 2009) ...............................................................................31 Live Nation Motor Sports, Inc. v. Davis, No. 3:06-CV-276-L, 2007 WL 79311 (N.D. Tex. Jan 9, 2007) .........................73 M&G Elecs. Sales Corp. v. Sony Kabushiki Kaisha, 250 F. Supp. 2d 91 (E.D.N.Y. 2003) .................................................................75 McDonald v. City of Chi., 130 S. Ct. 3020 (2010) .................................................................................. 46-47 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) ............................................................................................80 Nat’l Football League v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir. 2000) .................................................................................49 On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787 (N.D. Cal. 1991) ............................................................... 13, 72 Ottoman’s v. Sunshine State Laboratories, No. 92-cv-05386, 1992 U.S. Dist. LEXIS 12710 (S.D.N.Y. Aug. 24, 1992) .................................76 Republic of Aus. v. Altmann, 541 U.S. 677 (2004) ............................................................................................46 Shred-It USA, Inc. v. Mobile Data Shred, Inc., 202 F. Supp. 2d 228 (S.D.N.Y. 2002) ...............................................................76 Sony Corp. of Am. v. Universal Studios Inc., 464 U.S. 417 (1984) .....................................................................................passim Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394 (1974) ................................................................................13, 39, 40 Twentieth Century Fox Film Corp. v. iCraveTV, No. Civ. A. 00-121, 2000 WL 255989 (W.D. Pa. Feb. 8, 2000)........................73
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CASES

PAGE(S)

United States v. Am. Soc’y of Composers, Authors & Publishers, 627 F.3d 64 (2d Cir. 2010) ..........................................................................passim United States v. Wilkerson, 361 F.3d 717 (2d Cir. 2004) ...............................................................................31 Warner Bros. Entm’t, Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003 (C.D. Cal. 2011) ............................................13, 71, 72, 74 WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594 (S.D.N.Y. 2011) .........................................................13, 77 WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir. 2012) ........................................................................70, 78 STATUTES 17 U.S.C. § 101 ..................................................................................................50, 52 17 U.S.C. § 106 ....................................................................................................1, 32 17 U.S.C. § 111 ..................................................................................................70, 77 47 U.S.C. § 151 ........................................................................................................59 47 U.S.C. § 303 ........................................................................................................58 OTHER AUTHORITIES H.R. REP. 94-1476 (1976), reprinted in 1976 U.S.C.C.A.N. 5659 ..................passim Pub. L. No. 69-169, 44 Stat. 1162 (1927)................................................................58 Brief of Plaintiffs-Counter-Defendants-Appellees Twentieth Century Fox Film Corp., et al., Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (No. 07-1480), 2007 WL 6101619 ................57, 68 Turner’s Memorandum of Law in Opposition To Cablevision’s Motion for Summary Judgment, Cartoon Network LP v. CSC Holdings, Inc., 478 F. Supp. 2d 607 (S.D.N.Y. 2007) (No. 06 Civ. 4092), 2006 WL 3607694 .............................................................................................57
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OTHER AUTHORITIES

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THE MEDIA BUREAU, FCC, THE PUBLIC AND BROADCASTING: HOW TO GET THE MOST SERVICE FROM YOUR LOCAL STATION 6 (2008), available at http://transition.fcc.gov/mb/audio/decdoc/public_and_broadcasting.html ........ 59 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 8.14[C][3].........................................................................................................73 Transcript of CBS Corporation, Q2 2012 Earnings Call (Aug. 2, 2012) available at http://seekingalpha.com/article/776631-cbs-managementdiscusses-q2-2012-results-earnings-call-transcript. ..................................... 78-79

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STATEMENT OF ISSUES PRESENTED Did the District Court correctly apply the express language of the transmit clause of the Copyright Act of 1976, 17 U.S.C. § 101 et seq. (“Copyright Act”), as interpreted by this Court in Cartoon Network LP v. CSC Holdings, Inc. 536 F.3d 121 (2d Cir. 2008) (“Cablevision”), to find that, in determining whether each subject consumer performance using Aereo technology was to the public, the Court must look to: (a) the transmission being made as the performance at issue (versus the underlying work); and (b) the recipients capable of receiving that particular transmission? Did the District Court correctly apply the above analysis to find that there is no public performance because the transmission at issue using Aereo, whether or not the underlying program or “work” may still be “airing,” is made to a single consumer using a unique individual copy that is available only to that consumer? INTRODUCTION A private performance is not copyright infringement. In the Copyright Act, Congress specified that a copyright owner has the exclusive right to make a performance of a work to the public, but recognized that to avoid making individuals liable for the kind of private use Congress had always protected, private performances are not actionable. See 17 U.S.C. § 106(4). In Cablevision, this Court construed the statutory phrase “to the public” and explained that there is
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no public performance when the transmission at issue is made to a single consumer using a unique individual copy that was available only to that consumer. That was what the defendant’s technology enabled in Cablevision, and that is what Aereo’s technology enables—as the District Court found, there are no material factual distinctions between these technologies. The District Court therefore correctly followed Cablevision and declined to preliminarily enjoin Aereo. Aereo provides a technology platform that enables consumers to use remotely-located equipment, including an individual antenna and digital video recorder (“DVR”), to create, access and view their own unique recorded copies of free over-the air broadcast television programming. Essentially, for a small monthly fee, consumers are able to take advantage of current technology to use remotely-located “in the cloud” equipment functionally identical to that which they would otherwise have and use in their home for those same purposes. In their complaints filed below, Appellants assert that Aereo infringes Appellants’ copyrights under several theories. 1 However, their motion for a preliminary injunction was based solely on the limited issue of public performance
1

Appellants in 12-2807-cv (the “ABC Appellants”) assert claims for direct copyright infringement. Appellants in 12-2786-cv (the “Fox Appellants”) assert claims for direct and indirect copyright infringement. The Fox Appellants also asserted a state law claim for unfair competition (essentially arguing that even if the performance was private under copyright law, it was illegal under state law). The District Court dismissed that claim, finding that it was preempted by the Copyright Act. See JA at 54 (12-cv-1543 Dkt #86).
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and the relief requested with respect to that claim was further limited. Appellants’ sole argument to the District Court was that the transmission and viewing of an individual copy by a consumer using Aereo technology, while the underlying television programming was still airing, constituted a “public performance” under the Copyright Act. The District Court rejected that argument and request for relief, and whether that rejection was correct is the only matter on appeal before this Court. Appellants’ arguments find no basis in the Copyright Act and previously have been expressly rejected by this Court. Indeed, Appellants admitted to the District Court that their claim for relief was “not completely principle[d].” JA at 1665-66 (Hrg. Tr. at 416:24-420:6) (Keller Summation).2 Appellants’ arguments depend in large part on their view that, in determining whether a transmission is “to the public,” every subsequent transmission of a television program should be aggregated with Appellants’ original broadcast of that program. This position is contrary to the language of the Copyright Act and has been expressly rejected by this Court. Moreover, acceptance of Appellants’ positions in this appeal would destroy the careful balance that Congress has struck between a copyright owner’s right to control “public” performances, and the right of the public to engage in
2

“JA” refers to the Joint Appendix. Two versions of the Joint Appendix have been made available to the Court, a public version and a confidential version, using the same numbering but with different prefixes: A-### and CA-###.
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“private” performances. It would upend clear and long-standing precedent of this Court upon which industries and consumers have relied. And, it would mean that every consumer who watches live programming through her DVR to enable pause and rewind functionality will be at risk of liability for an infringing public performance. For all of these reasons and as further set forth herein, the District Court’s decision should and must be upheld. SUMMARY OF ARGUMENT This Court has addressed the issue that Appellants raise in this appeal squarely and repeatedly, and stated without equivocation that, in accordance with the Copyright Act’s transmit clause, where a transmission is made to a single consumer using a unique copy available only to that consumer, it is not a performance “to the public,” and therefore does not infringe any exclusive right of public performance. Cablevision, 536 F.3d at 139. This core legal principle from Cablevision has been sustained and applied both by this Court, see, e.g., United States v. Am. Soc’y of Composers, Authors & Publishers, 627 F.3d 64, 75 (2d Cir. 2010) (“ASCAP”) (“[B]ecause the performance is made by a unique reproduction of the song that was sold to the user, the ultimate performance of the song is not ‘to the public.’”) (citing Cablevision, 536 F.3d at 137, 138), and by other courts within this Circuit, see, e.g., In re Application of Cellco P’ship, 663 F. Supp. 2d 363, 37174 (S.D.N.Y. 2009) (“Cellco”) (downloading of ringtones to cell phones is not a
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public performance “[b]ecause only one subscriber is capable of receiving this transmission or performance”) (citing Cablevision, 536 F.3d at 138). The District Court, after careful analysis of both the Aereo system and the facts underlying the Cablevision decision, found that the Aereo transmissions at issue with respect to Appellants’ public performance claim are “materially identical to those in Cablevision.” --- F. Supp. 2d ---, 2012 WL 2848158 (July 11, 2012) (“Aereo Op.”) (Special Appendix (“SPA”)) at 13. Based on its factual findings, the District Court applied the transmit clause analysis set forth by this Court in Cablevision and properly rejected Appellants’ request for a preliminary injunction. The District Court expressly founded its decision in this case on “two crucial premises” of this Court’s decision in Cablevision. Aereo Op. SPA at 15. The first is that, in determining whether a performance is “to the public” under the Copyright Act, courts “look to the transmission being made as the performance at issue, rather than simply to whether the public receives the underlying work.” Aereo Op. SPA at 15 (citing Cablevision, 536 F.3d at 134-36). The District Court thus followed this Court’s ruling that “when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission.” Cablevision, 536 F.3d at 134-136; see also ASCAP, 627 F.3d at 74 (“‘[T]ransmittal of a work’ is distinct from transmittal of ‘a performance’—the
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former being a transmittal of the underlying work and the latter being a transmittal that is itself a performance of the underlying work.”). The second critical premise relied on by the District Court is that in determining whether a performance is “public” (and thus expressly within the terms of the Copyright Act) or “private” (and thus expressly outside of the Act), the “transmit clause directs courts to ‘examine who precisely is capable of receiving a particular transmission of a performance.’” Aereo Op. SPA at 16 (citing Cablevision, 536 F.3d at 135). The District Court found that “on the key points on which Cablevision actually relied . . . Aereo’s system is materially identical to that in Cablevision . . . .” Aereo Op. SPA at 19. The District Court went on to state that “[t]he facts on which the Second Circuit relied in holding that the potential audience of the transmissions in Cablevision was limited are the same as those present here, namely the use of unique copies, accessible only to the users who requested them and transmitted only to those users.” Aereo Op. SPA at 23 (citing Cablevision, 536 F.3d at 139). 3 As a result, the District Court concluded that use of the Aereo system results only in private performances. In attempting to persuade the Court to depart from the clear and thorough legal reasoning of Cablevision and ASCAP, Appellants offer only the same
3

Appellants do not argue on appeal that the District Court erred in its factfinding. Appellants argue only that this Court should come to a different conclusion about those facts than that dictated by Cablevision.
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arguments that have already been considered and rejected by this Court in those cases. In fact, after a thorough analysis of this Court’s Cablevision opinion, the District Court found Appellants’ arguments to be “implausible,” “a non-starter,” “wholly misplaced,” “unsustainable,” “unmoored from its foundation,” and “simply not consistent with” and “expressly rejected” by Cablevision: The Court cannot accept [Appellants’] reading of Cablevision, which applies controlling significance to facts on which the Second Circuit did not rely, requests that this Court read volumes into Cablevision’s silence, and has no foundation in the articulated reasoning on which the Second Circuit’s decision was actually grounded. Aereo Op. SPA at 22-23, 25, 30, 31, 33.4 Appellants’ briefs are replete with efforts to conflate the individual performances at issue with the performance of the underlying work by the network. Appellants argue that “discrete transmissions to particular members of the public must be aggregated and viewed collectively as constituting a public performance” if they are of the same underlying work. Brief for Plaintiffs-Counter-Defendants4

Despite these very clear views of the District Court, Appellants imply to this Court that the District Court somehow wanted to grant Appellants’ motion for preliminary injunction, but felt handcuffed by Cablevision. They also imply that the District Court saw Cablevision as inconsistent with the Copyright Act. See, e.g., Brief for Plaintiffs-Counter-Defendants-Appellants at 4, No. 12-2807 (2d Cir. Sept. 14, 2012), ECF No. 77 (“ABC Br.”) (claiming that the District Court concluded “that Cablevision prevented it from granting the relief the Copyright Act otherwise would provide”). Both implications are false. The District Court’s dismissal of both Appellants’ legal analysis and their logic make clear that this is not the case. Rather, the District Court merely recognized the obvious point that, were the law different from what it is, Appellants might have succeeded.
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Appellants at 34, No. 12-2786-cv (2d Cir. Sept. 14, 2012), ECF No. 86 (“Fox Br.”). This argument is directly contrary to the Copyright Act and to Cablevision, which addresses the issue at great length and concludes that, “it would be inconsistent with our own transmit clause jurisprudence to consider the potential audience of an upstream transmission by a third party when determining whether a defendant’s own subsequent transmission of a performance is ‘to the public.’” Cablevision, 536 F.3d at 136. Moreover, such an interpretation of the Act’s transmit clause would yield absurd results that would “obviate[] any possibility of a purely private transmission.” Id. According to this argument, any consumer who sends her DVR recording to her television in the living room will be engaging in an unlicensed public performance for which she is liable, because that transmission will be aggregated with the original transmission of the work by the broadcasters. Appellants’ position thus cannot be squared with Congress’s stated intention to exempt private performances from copyright liability. Appellants further urge the Court to confine Cablevision’s principles, reasoning and holdings to its exact specific facts, as if it should have no application whatsoever outside of a Cablevision-branded RS-DVR. Erecting the fence around Cablevision that Appellants advocate is a thinly veiled attempt to persuade this Court to overrule not only the Cablevision precedent but also the ASCAP and Cellco cases that have followed the same reasoning.
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There is no legal principle articulated by Appellants or amici that justifies treating Cablevision as some special breed of precedent, one without ordinary precedential value or effect. The District Court correctly acknowledged the importance of applying binding precedent and respecting the fundamental principle of stare decisis, and applied the law as intended by Congress and as explained by this Court. While the District Court correctly perceived Appellants’ “creative attempt to escape from the express holding of Cablevision,” she rightly rejected those attempts, as should this Court. Aereo Op. SPA at 19. In challenging Cablevision and the District Court’s opinion, another one of the primary themes sounded by Appellants, as well as certain of the amici, is that Cablevision does not apply because (they assert) in Cablevision the content transmitted was licensed and in this case it is not. This argument fails for a number of reasons. As a threshold matter, this argument addresses the issue of whether the copy is authorized—not the manner in which the copy is transmitted—and is thus an issue related to the reproduction right, not the public performance right. Appellants specifically chose not to raise an unauthorized copying or reproduction claim before the District Court in connection with their motion for a preliminary

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injunction. 5 That claim was not before the District Court below and is not properly before this Court. Without waiving its objection to this argument being raised on appeal, Aereo notes: First, in Cablevision, the challenged transmission was not licensed— Cablevision had no license to receive and retransmit content into its RS-DVR, and plaintiffs in that case (which include some Appellants in this case) expressly argued that the challenged content was unlicensed. Indeed, that was the catalyst of the dispute in that case. Second, the public has a right to access local over-the-air broadcast television via an antenna. As a result, receipt of the programming in this case is licensed. There is, of course, no authority that prevents consumers from using remotely-located antennas in order to capture Appellants’ free broadcasts. Moreover, consumers have a long-standing fair use right to record television programming for private viewing and, as the District Court noted, the consumer cannot do more with the Aereo technology that she can do with available home equipment such as an antenna, DVR and Slingbox-like device or service. Aereo The question of who “did” the copying was separately addressed in Cablevision in the section analyzing the plaintiffs’ reproduction right claims. Cablevision, 536 F.3d at 130-33. While Appellants made the decision not to pursue any copyright claim regarding reproduction before the District Court, the evidence adduced below still makes clear that, as in Cablevision, the customer is the one who “makes” the copy using the Aereo system. See, e.g., JA at 2522-24 (Lipowski Decl. ¶¶ 12, 14). However, because Appellants never raised this issue below, Aereo did not make a full presentation on this issue, and would be extremely prejudiced if the issue were taken up on appeal when not fully briefed or presented below.
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Op. SPA at 4-5; cf. Sony Corp. of Am. v. Universal Studios Inc., 464 U.S. 417 (1984). Appellants’ argument that Cablevision’s analysis applies only to “complete time shifting” is equally unavailing.6 ABC Br. at 33. Indeed, this is simply another iteration of the aggregation argument. As the District Court explained in detail, Appellants’ reliance on “time shifting,” whether complete or partial, as a limiting principle finds no basis in this Court’s jurisprudence and makes no logical sense. While Appellants purport to rely on Cablevision for this position, nowhere in that case does time-shifting play a role in the public performance analysis. The District Court also notes numerous reasons why Plaintiffs’ position regarding “complete time-shifting” is without any basis in law or logic. Aereo Op. SPA at 33. For example, if Appellants’ “complete time-shifting” argument were adopted, a consumer who tapes the first segment of a 60 Minutes episode on her DVR, and then stops the recording and watches it in another room while the later two segments are still airing live, would be guilty of engaging in a performance “to the

Appellants never filed an actual motion for an injunction nor did they provide a proposed order. It was not until the end of the first day of the hearing, when pressed by the Court, that Appellants stated that the relief they were seeking was an injunction preventing consumers from watching their recordings on Aereo before the underlying program had finished airing. JA at 1587-89 (Hrg. Tr. at 253:11-262:5).
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public” simply because other members of the public continue to watch the original broadcast “live.” Appellants next suggest that this case is distinguishable from Cablevision because the consumer is using the Internet to stream the copies, including to mobile devices. However, Appellants utterly fail to explain why the viewing medium—for example, an iPad, rather than a television monitor—has any impact on the question of whether a performance is “to the public.” There is no dispute that here, as in Cablevision, only the member who made the copy of the programming in question can access that copy. Aereo Op. SPA at 19-20. Appellants provide no explanation why a private Internet transmission should be treated differently under the Copyright Act than a private cable transmission. Appellants’ attempt to evade Cablevision by limiting it using concepts not addressed in that case (e.g., complete time-shifting, or some other concept that Cablevision’s analysis does not apply to the Internet but only to a set-top box located in the home) are without any foundation in the Copyright Act, Cablevision, or any other case and should be rejected. Appellants urge the Court to ignore the holding in Cablevision, and instead apply cases which are, on their face, inapplicable to the facts of this case. For example, in ivi, the defendant did not claim that the transmissions were from individual unique copies (let alone individual antennas), and therefore did not
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contest that the technology resulted in a public performance. See WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 601 (S.D.N.Y. 2011). In that case, it was not disputed that the ivi transmission that was received by consumers was sent from a single, common source to multiple recipients nationwide. Likewise, Appellants cite On Command, Warner Bros. and Redd Horne, but in those cases the transmissions at issue also all emanated from a common source. On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787, 788 (N.D. Cal. 1991); Warner Bros. Entm’t, Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003, 1007, 1011 n. 7 (C.D. Cal. 2011); Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154, 159 (3d Cir. 1984). With respect to Fortnightly and Teleprompter, those cases involved a community or master antenna—again, a common source—and Congress chose to enact a specific statutory scheme that addressed cable retransmissions from a master antenna. Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 391-92 (1968); Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394, 399-400 (1974). This case, on the other hand, does not involve a community antenna or transmissions of the same performance and there is certainly no specific statutory scheme overruling the express holding of Cablevision. Moreover, when Congress adopted the 1976 Copyright Act in response (in part) to Fortnightly and Teleprompter, it was careful to exempt private performances from copyright protection. Finally, both Appellants and amici argue that the Aereo technology is
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an “artifice” or some clever attempt to get around copyright law. Essentially, Appellants are arguing that Aereo carefully designed its system to comply with Cablevision. There is considerable irony in Appellants’ suggestion that Aereo is somehow culpable because it carefully designed its system to comply with copyright law. In order for this Court to overturn the District Court’s decision, it would necessarily be forced to ignore core legal principles previously articulated by the Court, and to overturn its prior precedents from Cablevision and ASCAP. But this Court’s prior analysis of the public performance right is correct, and it dictates affirmance of the District Court. Appellants also argue that they have established irreparable harm sufficient to warrant a preliminary injunction. But while the District Court acknowledged the potential for irreparable harm to Appellants, it noted that the alleged harm was “not overwhelming.” Aereo Op. SPA at 44. By contrast, the District Court found very substantial and irreparable harm to Aereo if the injunction were allowed and, as a result, concluded that the balance of harms did not tip decidedly in favor of Appellants. Id. at 47-50. As the District Court found below, an injunction would likely entirely destroy Aereo’s business. Id. The District Court’s opinion is also consistent with the public interest for multiple reasons. First, while Appellants imply that the sole purpose of the
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Copyright Act is to protect content owners, the Act was instead intended to strike the proper balance between copyright owners, on the one hand, and public access to information on the other. H.R. REP. 94-1476 at 64 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5678. Congress expressly and deliberately exempted “private” performances from copyright protection. Further, consumers have a right of access to local over-the-air broadcast television. There is no basis in law to confine that use to a home-based antenna or equipment, to fully time-shifted copies (whether on VCR, DVR, or RS-DVR), or to only non-Internet related deployment. Indeed, contrary to what may be the view of certain Appellants and amici, copyright laws were never intended to be used to confine consumers to outdated technology. The reality is that the networks fought VCRs, and they fought remote DVRs, and they lost in both cases. This is simply another attempt to preserve the status quo as a business matter without regard to fundamental copyright principles. STATEMENT OF THE CASE On March 1, 2012, Appellants filed copyright infringement lawsuits against Aereo, alleging that Aereo was infringing upon their rights of public performance and reproduction by providing consumers with access to a remote antenna and remote DVR in order to record and watch over-the-air television broadcasts. In addition, the Fox Appellants alleged that Aereo was secondarily liable for infringement of the reproduction right, on the theory that consumers who use the
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Aereo technology infringe Appellants’ copyrights. 7 The Fox Appellants also asserted a claim for unfair competition, which was dismissed by the District Court on May 21, 2012. See JA at 54 (12-cv-1543 Dkt #86). After filing their complaints, Appellants moved for a preliminary injunction against Aereo, but chose to limit their motion solely to their claim that Aereo was infringing Appellants’ right of public performance. Aereo Op. SPA at 2. In other words, Appellants did not argue that a preliminary injunction was warranted because Aereo allegedly engaged in unauthorized copying; nor did they argue any consumer infringement of Appellants’ copyrights. Then, upon questioning by the District Court during the evidentiary hearing on their motion, Appellants explained that they were challenging only those transmissions that occur while the underlying broadcast is airing, and not any transmissions that take place after a broadcast has finished. JA at 1587 (Hrg. Tr. at 255:6-18); JA at 1628 (Hrg. Tr. at 267:14-23); Aereo Op. SPA at 2. The District Court (Nathan, J.) held a two-day evidentiary hearing on May 30-31, 2012, in which six live witnesses testified and over 145 exhibits (including

The ABC Appellants did not allege a claim for indirect infringement and instead only specifically pled direct infringement claims. JA at 74-75, 77 (ABC Complaint ¶¶ 24, 32-36).
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sworn declarations from six other witnesses) were offered into evidence.8 JA at 1522-1726. On July 11, 2012, the District Court issued an opinion and order denying Appellants’ motion, finding that Appellants were unlikely to succeed on their public performance claim. Aereo Op. SPA at 1-52. STATEMENT OF FACTS 9 I. What is Aereo? Aereo is a technology company that has created innovative technology that enables consumers to accomplish remotely what they could otherwise do at home. Specifically, at home, a consumer can capture over-the-air broadcast television via an antenna, make copies of that programming on a video cassette recorder (“VCR”) or a digital video recorder (“DVR”) and, using a device like a Slingbox, 10 view their recorded content via the Internet on an Internet-connected device such
8

The hearing followed extensive expedited discovery over a three-month period during which Aereo produced over 40,000 pages of documents, fifteen witnesses were deposed, and four expert witnesses submitted expert reports and declarations. As the District Court noted in its decision, the facts surrounding Aereo’s system are largely undisputed. Aereo Op. SPA at 3. And Appellants have not challenged the District Court’s findings of fact in this appeal. A Slingbox is an example of a consumer device that allows the user to “sling” his or her DVR recordings over the Internet to the user’s mobile devices, such as an iPad or mobile phone. See JA at 2190 (Horowitz Decl. ¶ 77). Aereo’s expert, Professor Horowitz, testified that a consumer can use an antenna, DVR, and Slingbox to do at home themselves exactly what the Aereo system does. Id.; see also JA at 1638 (Hrg. Tr. at 308:17-25). Appellants did not challenge the legality of Slingbox-like services below. Aereo Op. SPA at 5.
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as a television, phone or tablet. See, e.g., JA at 2190 (Horowitz Rep. ¶ 77).
Consumers today commonly use DVRs at home to watch recorded television programming at their convenience. They can begin watching these recordings either while the program is still airing or at a later time after the program has ended. When watching a recording of a program while it is still being broadcast, they can pause the program and resume watching later, or rewind the recording to replay an earlier scene or sports play, and fast-forward to where they left off.

Aereo simply provides technology that allows the consumer to use that same equipment located remotely to accomplish the very same thing they could otherwise do at home. The consumer can use Aereo: to access an individual remote antenna to tune to an over-the-air broadcast television station that they choose; to make an individual, unique copy of that programing using their remote DVR; and then to transmit that unique copy, only to themselves, on their Internetconnected device. See Aereo Op. SPA at 19-20. Aereo’s technology does nothing but allow consumers to exercise their long-standing and existing rights under the Copyright Act using convenient and easy-to-use modern technology.

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II.

The Aereo System Is Materially Identical To The System In Cablevision In Every Relevant Respect. The District Court’s application of Cablevision to the Aereo system was

based on its findings on three critical facts, which are not challenged on appeal: 11 “First, Aereo’s system creates a unique copy of each television program for each subscriber who requests to watch that program, saved to a unique directory on Aereo’s hard disks assigned to that user.” Aereo Op. SPA at 19-20. “Second, each transmission that Aereo’s system ultimately makes to a subscriber is from that unique copy.” Id. at 20. “Third, the transmission of the unique copy is made solely to the subscriber who requested it; no other subscriber is capable of accessing that copy and no transmissions are made from that copy except to the subscriber who requested it.” Id. (footnote omitted) (emphasis in original). Based on these findings, the District Court concluded that “[t]he overall factual similarity of Aereo’s service to Cablevision on these points suggests that Aereo’s service falls within the core of what Cablevision held lawful.” Id.

Appellants have also not disputed on appeal the factual findings of the District Court that the Aereo antennas function independently. The District Court made these findings after reviewing all of the evidence in the record, including expert declarations and testimony submitted by both Appellants and Aereo, and concluding that Aereo’s experts and witnesses were more credible. Aereo Op. SPA at 7-11. In particular, the District Court credited the testimony of Aereo’s experts, Professors Horowitz and Pozar, as well as the testimony of Aereo’s Chief Technology Officer, Joseph Lipowski, and found that the opinions of Appellants’ expert, Dr. John Volakis, who did not testify, were unreliable. Aereo Op. SPA at 9-10; JA at 1583, 1641, 1642 (Hrg. Tr. at 239:9-12, 318:13-319:3, 322:13-323:14); JA at 2392, 2396, 2397-98 (Pozar Decl. ¶¶ 22, 27-28, 30-32); JA at 2283-84, 2286-88 (Horowitz Decl. ¶¶ 29-31, 33-34, 40, 42-45, 47-49).
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III.

The Aereo System From the Consumer’s Perspective. Like a traditional DVR, the Aereo system enables a consumer to watch her

recordings “live” or to save her recordings for later viewing. In both cases, the consumer is making and watching a recording. For the “live” function, the recording serves the purpose of enabling pause and rewind functionality. 12 To access the Aereo system, the consumer logs onto the Aereo website from an Internet-enabled device and selects a broadcast program from the “Guide” section of the website. Aereo Op. SPA at 3; JA at 1557 (Hrg. Tr. at 133:2-134:24). The consumer can press “Watch” to record a program that is currently airing, or she can press “Record” to schedule a recording of a program that is slated to air in the future. Aereo Op. SPA at 3-4; JA at 1542, 1557 (Hrg. Tr. at 73:2-74:6, 134:1124, 136:8-15); JA at 2185-86 (Horowitz Rep. ¶ 64); JA at 1816 (Kelly Decl. ¶ 39).13

Just as with an in-home DVR, a consumer watching a “live” sports event can pause the action and rewind it to review a play and then fast-forward to where they left off. See Aereo Op. SPA at 3-4; JA at 1551 (Hrg. Tr. at 111:12-112:12). The “Record” feature can also be used, like the “Watch” feature, to view programs “live”: users can direct Aereo’s system to begin a recording and then can begin playback of the recording as it is being made. Aereo Op. SPA at 4; JA at 1554, 1558-59 (Hrg. Tr. at 121:15-25, 138:3-139:3, 140:18-141:6). Whether the consumer is using “Watch” or “Record” to view live programming, she is always viewing a recording that is time-shifted from the underlying broadcast, again to permit the pause and rewind functionality. Id.; see also Aereo Op. SPA at 25.
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Once the recording of a program has started—whether the recording was requested via “Watch” or “Record,” and whether the request was made days in advance or while the program was airing—the consumer can start watching her own unique recording, even if the underlying broadcast is still airing. Aereo Op. SPA at 3-4; JA at 1554, 1558-59 (Hrg. Tr. at 121:15-25, 138:3-139:3, 140:18141:6). Playback to the consumer of her own unique recording does not begin unless the consumer requests it, whether by pressing “Watch” or a “Play” icon. Aereo Op. SPA at 3-4; JA at 2523-24 (Lipowski Decl. ¶ 14). In both the “Watch” mode and the “Record” mode the consumer is always watching her own unique recording, which enables the consumer to pause or rewind while viewing her recording. Aereo Op. SPA at 7, 25-26; JA at 1545-46 (Hrg. Tr. at 88:15-90:9). Even if a consumer uses the “Watch” mode to watch a recording that is only moderately time-shifted from the over-the-air broadcast, the recording allows the consumer to pause or rewind (which then “increase[es] the disparity between the time at which the program is initially broadcast and the time at which the user watches it”). Aereo Op. SPA at 3-4; JA at 1550-51 (Hrg. Tr. at 107:9-18, 111:12112:12). IV. The Aereo System “Under The Hood.” The Aereo system is designed to work automatically and only in response to consumer direction. JA at 2523-24 (Lipowski Decl. ¶ 14). No Aereo antenna is
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tuned to a broadcast frequency unless and until a consumer tunes her individual antenna to receive a particular channel by choosing “Watch” or “Record” with respect to a specific program at a specific time. JA at 2523-2524, 2533 (Lipowski Decl. ¶¶ 14, 36). Likewise, no recordings are made until a consumer so requests by choosing “Watch” or “Record.” Id. Similarly, nothing is performed or transmitted to a consumer unless and until the consumer chooses to watch her recording. Id. The following describes what happens within the Aereo system after a consumer makes her selections: a. The System Automatically Activates An Individual Antenna, Allowing It To Receive An Over-The-Air Television Program. The Aereo antennas, which are each about the size of a dime, are housed on antenna boards at Aereo’s Brooklyn, New York facility. JA at 2524, 2526 (Lipowski Decl. ¶¶ 15, 22-23). When a consumer presses “Watch” or “Record,” the web browser sends a request to Aereo’s Application Server which, in turn, automatically sends a request to the Antenna Server. Aereo Op. SPA at 5, 7; JA at 1542 (Hrg. Tr. at 74:10-21); JA at 1820-21 (Kelly Decl. ¶¶ 44-45); JA at 2533 (Lipowski Decl. ¶ 35). The Antenna Server allocates resources to the user depending on whether she is a “static” or “dynamic” user, a distinction based on the user’s plan with Aereo. Aereo Op. SPA at 5, 7; JA at 1542 (Hrg. Tr. at 74:2275:20); JA at 1821 (Kelly Decl. ¶¶ 45-46); see also JA at 2533 (Lipowski Decl.
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¶ 35).14 Under no circumstance, however, is an antenna ever used by more than one consumer at any given time. Aereo Op. SPA at 5; JA at 1549-50 (Hrg. Tr. at 104:20-105:1); JA at 1582 (Hrg. Tr. at 234:3-15). By pressing “Watch” or “Record,” the consumer causes the Aereo system to assign an antenna and tune that antenna to the requested channel, at which time the antenna begins to receive a broadcast signal. Aereo Op. SPA at 6; JA at 1549 (Hrg. Tr. at 103:4-22); JA at 1822-23 (Kelly Decl. ¶ 50); JA at 1870 (Volakis Decl. ¶ 58); JA at 2532-33 (Lipowski Decl. ¶¶ 33, 35-37); JA at 2185-86 (Horowitz Rep. ¶ 64). The Aereo antennas are independently tuned to receive only the channel requested by the consumer, and only receive broadcast signals when they are tuned by a consumer. JA at 2523-2524, 2533, 2543-44 (Lipowski Decl. ¶¶ 14, 35-36, 65); JA at 814 (Volakis Dep. at 201:21-202:8). When an individual antenna is not being used by a consumer, that antenna receives no broadcast signal. Id. From the moment a signal enters the Aereo system via an individual antenna, it is associated solely with the consumer who tuned the antenna, and cannot be used or accessed by any other consumer. Aereo Op. SPA at 6; JA at 1549-50 (Hrg. Tr. at 104:20-106:24); JA at 1558 (Hrg. Tr. at 137:1-7, 139:12-16); JA at 2386-88, 2391 (Pozar Decl. ¶¶ 10-14, 19); JA at 2191 (Horowitz Rep. ¶ 81); Certain Aereo users (“static users”) are assigned to the same antenna each time they use the Aereo system. Aereo Op. SPA at 5; JA at 1542 (Hrg. Tr. at 74:2276:11); JA at 1822 (Kelly Decl. ¶¶ 47-48). Other Aereo users (“dynamic users”) can be assigned to a different antenna each time they log in. Id.
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JA at 1550 (Hrg. Tr. at 105:17-106:24). Although the Aereo system has certain shared resources (as did Cablevision’s system), the unique, individual signal from an antenna through to recording and playback to the consumer is never shared. Aereo Op. SPA at 6; JA at 1549-50 (Hrg. Tr. at 104:20-106:24); JA at 1558 (Hrg. Tr. at 137:1-7, 139:12-16); JA at 2386-88, 2391 (Pozar Decl. ¶¶ 10-14, 19); JA at 2191 (Horowitz Rep. ¶ 81). b. Next, The System Automatically Makes A Unique, Fixed Copy, Which Is Transmitted Only To The Consumer Who Made It. The consumer’s request to “Watch” or “Record” also instructs the Aereo system to automatically make a unique recording using the signal received by the consumer’s individually-tuned antenna. Aereo Op. SPA at 6; JA at 1822-1824 (Kelly Decl. ¶¶ 50-52). As found by the District Court, there are several key attributes of these copies: (1) the copies are unique fixed copies and associated only with the consumer who made them; (2) each transmission to the consumer is from the consumer’s unique copy; and (3) the transmission of the unique copy is made solely to the subscriber who requested it. See, e.g., Aereo Op. SPA at 19-20, 25-26 (finding that in all cases Aereo transmissions are “made from a unique copy, previously created by that user, accessible and transmitted only to that user”).

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i. The Copies Are Unique Fixed Copies Associated Only With The Consumer Who Made Them. The signal from each individual antenna can be used to make a copy only for the consumer who tuned the antenna. Aereo Op. SPA at 6; JA at 1549-50 (Hrg. Tr. at 104:20-106:24); JA at 1558 (Hrg. Tr. at 137:1-7, 139:12-16); JA at 2386-88, 2391 (Pozar Decl. ¶¶ 10-14, 19); JA at 2184 (Horowitz Rep. ¶ 59). Each unique recording (whether initiated from the “Record” or “Watch” mode) is written to hard drive disk storage, is associated solely with the individual consumer who tuned the antenna and made the recording, and can be accessed and played back only by that consumer. Id.; see also Aereo Op. SPA at 29-30; JA at 1639 (Hrg. Tr. at 310:8-311:6); JA at 1550-52 (Hrg. Tr. at 106:25-107:24, 111:12-114:17). Also, each recording made by an Aereo member—whether by pressing “Watch” or “Record”—is a unique copy with its own individual attributes, glitches, and artifacts. JA at 2183 (Horowitz Rep. ¶ 55 n. 42); JA at 1636-37 (Hrg. Tr. at 300:16-304:14); JA at 2540 (Lipowski Decl. ¶ 56). From the moment an individual antenna is tuned by a consumer, the signal from that antenna is available only to that consumer. Aereo Op. SPA at 6; JA at 1549-50 (Hrg. Tr. at 104:20-106:24); JA at 1558 (Hrg. Tr. at 137:1-7, 139:12-16); JA at 2386-88, 2391 (Pozar Decl. ¶¶ 10-14, 19); JA at 2191 (Horowitz Rep. ¶ 81); JA at 1550 (Hrg. Tr. at 105:17-106:24). The recording made from that signal can be accessed and played back only by the consumer who made the recording. Aereo
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Op. SPA at 19-20; JA at 1550 (Hrg. Tr. at 105:17-106:10); JA at 2535 (Lipowski Decl. ¶ 43); JA at 2183 (Horowitz Decl. ¶ 55, n. 42). In other words, even if two Aereo users make a recording of the same underlying television program and play back those recordings at the exact same time, each user is still watching a different, unique recording, with its own unique qualities. If one user’s recording fails or if she deletes her recording, she will not be able to access the other user’s copy of that program. JA at 2535 (Lipowski Decl. ¶ 43). In addition to being unique, the copies in the Aereo system also are “fixed” copies. Aereo Op. SPA at 29-30; JA at 1639 (Hrg. Tr. at 310:8-311:6); JA at 155052 (Hrg. Tr. at 106:25-107:24, 111:12-114:17); JA at 2538-39 (Lipowski Decl. ¶¶ 51-55); JA at 1546, 1552 (Hrg. Tr. at 90:7-9, 113:6-19). Whether in “Watch” mode or “Record” mode, the unique recording made by the consumer is fixed to disk, is retained for an extended period of time, is controlled and managed by the Aereo user, and can be used to store a copy of the entire work. Aereo Op. SPA at 6-7, 30; JA at 1545-56 (Hrg. Tr. at 87:11-88:3, 88:15-90:9); JA at 1550-51 (Hrg. Tr. at 107:9-108:1, 108:23-110:15, 111:20-112:21); JA at 1636, 1639 (Hrg. Tr. at 297:12-300:5, 310:22-311:6).15

A recording is necessary to enable the consumer to pause, rewind and fastforward the transmission of that underlying program. JA at 1636 (Hrg. Tr. at 298:14-23); JA at 2479-80 (Kanojia Decl. ¶¶ 33-34).
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Recordings in both modes are written to a hard drive and stored for at least the duration of the user’s viewing experience. Aereo Op. SPA at 6-7, 30; JA at 1550-51 (Hrg. Tr. at 108:23-110:15, 111:20-112:21); JA at 1545-46 (Hrg. Tr. at 88:15-90:9); JA at 1551-52 (Hrg. Tr. at 112:22-114:17); JA at 1554 (Hrg. Tr. at 121:15-25); JA at 1559 (Hrg. Tr. at 141:7-13); JA at 1636 (Hrg. Tr. at 297:12300:5).16 As the District Court found, the fixed copies in the Aereo system are both physically and functionally different from the temporary “buffers” used in Internet web-streaming. Aereo Op. SPA at 29-30; JA at 1639 (Hrg. Tr. at 310:8311:6); JA at 1550-52, 1636 (Hrg. Tr. at 106:25-107:24, 111:12-114:17); JA at 2538-39 (Lipowski Decl. ¶¶ 51-55); JA at 1546, 1552 (Hrg. Tr. at 90:7-9, 113:619).17

If a recording was made by the consumer selecting “Record,” the recording is automatically retained until the consumer deletes it. Aereo Op. SPA at 7; JA at 1546 (Hrg. Tr. at 90:7-9). If the recording was made by the consumer selecting “Watch,” the recording is automatically retained until the consumer has finished watching it, at which point it is deleted unless the consumer saves the recording by pressing “Record.” Aereo Op. SPA at 7; JA at 1545-46 (Hrg. Tr. at 88:15-89:24). Unlike buffer copies used for Internet streaming, which are temporary copies that “act purely to pass through data,” the Aereo copies—whether made in “Watch” or in “Record”—are fixed copies, saved to hard disk, “which are ‘nonvolatile storage’ as typically used to make a recorded copy on a standard DVR.” Aereo Op. SPA at 30; JA at 1639 (Hrg. Tr. at 310:8-311:6).
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ii. Each Transmission To The Consumer Is From That Consumer’s Unique Copy. All transmissions in the Aereo system are made from a consumer’s unique copy, and never directly from an incoming broadcast signal. Aereo Op. SPA at 1920, 25-26; JA at 2530-40 (Lipowski Decl. ¶¶ 29-56). If the consumer is watching a program while the underlying broadcast is still airing, the transmission to the consumer originates from the consumer’s own unique recording, which she automatically made when she selected “Watch” or “Record.” Aereo Op. SPA at 25-26; JA at 2540 (Lipowski Decl. ¶ 56). iii. The Transmission Of The Unique Copy Is Made Solely To The Member Who Requested It. If the consumer is watching a program while the underlying broadcast is still airing, the transmission is only available to the member who made it and is not available to any other Aereo member. Aereo Op. SPA at 25-26; JA at 2540 (Lipowski Decl. ¶ 56); JA at 1550 (Hrg. Tr. at 105:17-106:10). In all cases, “[w]hether a user watches a program through Aereo’s service as it is being broadcast or after the initial broadcast ends does not change that the transmission is . . . accessible and transmitted only to that user . . . .” Aereo Op. SPA at 25. 18

18

Notably, the signal generated from an individual antenna is also unique in that it will have variations in signal attributes different from the signals recorded from another antenna. JA at 1550 (Hrg. Tr. at 106:11-24); JA at 2535 (Lipowski Decl. ¶ 43); JA at 2183 (Horowitz Rep. ¶ 55 n. 42). In other words, the signal generated by each individual antenna is unique in two respects: it is available only to a single
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c. Transmissions To The Aereo Consumer Are Secure And Protected. Aereo takes several affirmative steps to protect the consumers’ transmissions against further access, recording, or retransmission. Each transmission in the Aereo system is made over the Internet using the Secure HTTP protocol (“HTTPS”), which is an industry-standard transmission protocol commonly used by online retailers, financial institutions, and others to encrypt and securely transmit content. JA at 1634 (Hrg. Tr. at 292:21-25); JA at 2536 (Lipowski Decl. ¶ 45). When an individual consumer transmits her own recording to her own mobile device using HTTPS, that transmission is not accessible to anyone other than that individual consumer. Id. Aereo also takes several steps to limit the use of its system to users physically present in its New York City market. First, the Aereo Terms of Use limit use only to New York. JA at 2548 (Aereo’s Terms of Use ¶ 2). Second, the

consumer and cannot be shared, and the signal is in fact different from the signals generated by other antennas, even antennas tuned to the same channel at the same time. The District Court also found that the antennas each acted individually. Aereo Op. SPA at 11. For these reasons, while the District Court did not consider the antennas to be necessary to its analysis and findings, the District Court found that Aereo’s system presented an even stronger case for non-infringement than the system in Cablevision. Id. at 22 (“Indeed, in light of this Court’s factual determination that each antenna functions independently, in at least one respect the Aereo system is a stronger case than Cablevision for attaching significance to such copies because, unlike Cablevision in which multiple copies were all created from a single stream of data, each copy made by Aereo’s system is created from a separate stream of data.”) (internal citation omitted) (emphasis in original).
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consumer’s credit card information is cross-checked with a New York physical billing address associated with the card holder. JA at 2520-21 (Lipowski Decl. ¶ 9). Third, when the consumer accesses the Aereo website, the consumer’s Internet Protocol (IP) address is checked using a third-party location database to determine the location of the user. Id. If the consumer fails the first geo-location check by IP address, the consumer is offered a further check using the device browser’s geo-location features which may include GPS function, cell tower triangulation, crowd-sourced WiFi hotspot and a proprietary browser IP look-up. Id. 19 If the second geo-location check fails or if the consumer disallows the check, the consumer is then presented with a series of screens on the Aereo website that
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Appellants attempt to mislead the Court by asserting that Aereo can be accessed from “anywhere in the world” (ABC Br. at 6) or from the Virgin Islands (Fox Br. at 29 n. 9). By Order of the District Court, Aereo was directed to make an exception to its geo-location security to allow Appellants’ experts to access the Aereo system without restriction as to location of access. See Order, 12-cv-1540AJN, Dkt# 28, at 3 (Mar. 30, 2012); Order, 12-cv-1543-AJN, Dkt# 34, at 3 (Mar. 30, 2012). Moreover, Appellants deliberately mischaracterize the testimony of Aereo’s CEO, Chet Kanojia, in claiming that Mr. Kanojia “admit[ed] that countless subscribers can watch the Super Bowl ‘on a plane . . . on a train . . . [and] on vacation in the Caribbean’ ‘all at the same time via Aereo.’” ABC Br. at 42. Mr. Kanojia did not testify that consumers could use Aereo while on vacation in the Caribbean. Rather, in response to a question in which Appellants’ counsel characterized consumers’ use of the Aereo system by stating “they can do it on a plane; they can do it on a train; they actually, if they lied, say they’re in the home market, could do it on vacation in the Caribbean,” Mr. Kanojia stated, “I’m describing what the technology – how it functions.” JA at 1580 (Hrg. Tr. at 227:15). Similarly, the quoted statement, “all at the same time via Aereo,” was part of a question posed by Appellants’ counsel, to which Mr. Kanojia responded, “ I don’t understand the question.” JA at 1580 (Hrg. Tr. at 226:16-18).
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inform her of the geographic restrictions of the system and allow her to verify, pursuant to the Aereo Terms of Use, that she is physically located within the New York City market. JA at 2521-22 (Lipowski Decl. ¶¶ 10-11). STANDARD OF REVIEW The denial of a preliminary injunction is reviewed for abuse of discretion. See Kickham Hanley P.C. v. Kodak Ret. Income Plan, 558 F.3d 204, 209 (2d Cir. 2009). Under this standard, factual findings are reviewed for clear error, but Appellants have not assigned error to any factual findings in this case. The District Court’s conclusions of law with respect to the claims on appeal are reviewed de novo. See, e.g., Am. Express Fin. Advisors Inc. v. Thorley, 147 F.3d 229, 231 (2d Cir. 1998). In conducting this de novo review, “this court is bound by a decision of a prior panel unless and until its rationale is overruled, implicitly or expressly, by the Supreme Court or this court en banc.” See, e.g., In re Sokolowski, 205 F.3d 532, 534-35 (2d Cir. 2000) (overruled on other grounds) (citations omitted); United States v. Wilkerson, 361 F.3d 717, 732 (2d Cir. 2004). ARGUMENT The District Court, after detailed, careful and thorough consideration of the facts and law pertaining to Appellants’ public performance copyright claim, correctly found that a consumer’s use of the Aereo system to watch her own individual copy of programming broadcast over the air does not violate the public
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performance clause of the Copyright Act. The District Court properly denied Appellants’ request for preliminary injunction. Appellants’ arguments are directly foreclosed by the language of the Copyright Act, the intent of Congress, and established case law. I. Cablevison Held That Under The Transmit Clause, A Transmission Made From A Single Unique Copy Accessible Only To A Single Recipient Is Not A Public Performance. Under the Copyright Act, content owners have the exclusive right to “perform the copyrighted work publicly.” 17 U.S.C. § 106(4). The relevant definitional section of the Act states that: [t]o perform or display a work ‘publicly’ means . . . to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times. Id. § 101 (emphasis added).20 By singling out performances “to the public,” Congress made clear that private performances do not fall within the copyright owner’s exclusive rights. In marking the line between a private performance and a public performance in the context of the transmit clause, this Court in Cablevision specifically relied on the language of the Act, and noted that each separate transmission made by a

20

The ellipses omit clause one, which the parties agree is not at issue here. See Fox Br. at 23-24; ABC Br. at 18.
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party is, itself, an individual “performance.” Cablevision, 536 F.3d at 134 (“[A] transmission of a performance is itself a performance.”). Further, the “performance” relevant to a court’s inquiry under the transmit clause is limited to the specific transmission of a performance. Id. at 135. As a result, the panel concluded: [T]he transmit clause directs us to identify the potential audience of a given transmission, i.e., the persons “capable of receiving” it, to determine whether that transmission is made “to the public.” Id. at 139 (emphasis added). 21 Applying this principle to the facts of that case, this Court found that, because each RS-DVR transmission is “made to a single subscriber using a single unique copy,” the transmission was private, not public. Id. This Court was clear in its reasoning in Cablevision: In determining whether a performance is “to the public” under the transmit clause, the only questions that a court asks are: (1) what is the specific transmission that constitutes the relevant performance; and (2) who is capable of receiving that performance. In this case, following the holding and reasoning expressly laid out in Cablevision, the District Court correctly concluded that the answers to these two questions in

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The public/private distinction reflects the fact that Congress chose to protect public performances, but chose not to protect private performances. Cablevision, 536 F.3d at 136 (“[T]he transmit clause obviously contemplates the existence of non-public transmissions; if it did not, Congress would have stopped drafting that clause after ‘performance.’”).
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this case preclude a finding of copyright infringement based on public performance because the performance in question is the transmission of the individual consumer’s copy, and the consumer is the only individual capable of receiving that transmission.22 a. The Relevant “Performance” Is The Transmission Of The Copy. As noted, under Cablevison, the specific “performance” that is relevant in determining whether a transmission is “to the public” is the “performance created by the act of transmission.” Cablevision, 536 F.3d at 134-36. The only transmission that is legally relevant in this case is the transmission that originates from the copy made on the Aereo system. There is no dispute that
22

While the District Court based its decision on the fact that the performance at issue was the transmission of the individual unique copies, the District Court also noted that: Aereo’s use of single antennas does, however, reinforce the conclusion that the copies created by Aereo’s system are unique and accessible only to a particular user, as they indicate that the copies are created using wholly distinct signal paths. Moreover, Aereo’s antennas also reinforce the dividing line between the over-the-air signal the Aereo antennas receive and the transmissions Aereo’s system makes to its users. Because the copies are created from a signal received independently by each antenna, in order to find a ‘master’ copy that is arguably being transmitted, the Court would be required to look back to the incoming over-the-air signal rather than simply an earlier step in Aereo’s process. Aereo’s antennas thus reinforce the significance of the copies its system creates and aid the Court in finding that Aereo does not create mere facilitating copies. Aereo Op. SPA at 37.
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this transmission is made using an individual and unique fixed copy of the program in question associated only with a particular member. Aereo Op. SPA at 19-20; JA at 2530-40 (Lipowski Decl. ¶¶ 29-56); JA at 1550-51 (Hrg. Tr. at 107:5-8, 108:23109:8). In the Aereo system, the transmission to the member is always made from the member’s copy, and never directly from the over-the-air signals themselves. Id. There is no dispute that each Aereo member who watches a program using the Aereo system is watching her own individual, unique copy from which the transmission is made. Id.; JA at 1550 (Hrg. Tr. at 106:1-10). Both the Copyright Act and Cablevision make clear that the performance that results from the transmission of an individual copy is separate and legally distinct from the original broadcast of the underlying work that was copied. See Cablevision, 536 F.3d at 134-36 (“[W]e believe that when Congress speaks of transmitting a performance to the public, it refers to the performance created by the act of transmission.”); see also ASCAP, 627 F.3d at 73-74 (“‘[T]ransmittal of a work’ is distinct from a transmittal of ‘a performance’ – the former being a transmittal of the underlying work and the latter being a transmittal that is itself a performance of the underlying work.”) (citing Cablevision, 536 F.3d at 134). Thus, in Cablevision, the Court found that the relevant transmission was the

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transmission made from the Cablevision computer server to the consumer. 536 F.3d at 135-136. 23 This Court has recognized the importance of Congress’s choice of language in finding that the specific transmission of a copy of a program is legally separate from the original transmission of the work from which that copy was made. It noted that to hold otherwise would ignore the language of the statute: [The transmit clause] speaks of people capable of receiving a particular “transmission” or “performance,” and not of the potential audience of a particular “work.” Indeed, such an approach would render the “to the public” language surplusage. Doubtless the potential audience for every copyrighted audiovisual work is the general public. As a result, any transmission of the content of a copyrighted work would constitute a public performance under the district court’s interpretation. But the transmit clause obviously contemplates the existence of non-public transmissions; if it did not, Congress would have stopped drafting that clause after “performance.” Cablevision, 536 F.3d at 135-136 (second emphasis added). In this case, it is undisputed that the transmissions from the Aereo system are made to the consumer from the individual copy associated with that consumer that is created on the Aereo server. See Aereo Op. SPA at 20 (“[E]ach transmission that Aereo’s system ultimately makes to a subscriber is from that

And the Court made this finding notwithstanding the fact that, in that case, unlike this one where the copies originate from individual antennas, each consumer’s copy was made from a common source—the programming stream directed into the RS-DVR server by Cablevision (without a license). Cablevision, 536 F.3d at 124-25, 138.
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unique copy”); Statement of Facts, supra, § IV.b.ii. This is the only transmission at issue in this case. b. Only The Aereo Member Associated With The Copy Can Receive The Transmission Of That Copy. Once the transmission in question is identified, Cablevision holds that the transmit clause requires us to “examine who precisely is ‘capable of receiving’ a particular transmission of a performance” to determine if a performance is public. Cablevision, 536 F.3d at 135. In that case, this Court correctly noted that the only individual capable of receiving the relevant transmission—the one from the individual copy to the consumer—was the consumer specifically associated with that copy. Id. at 138. In this case, again, there is no dispute that the transmission from the unique copy made on the Aereo server can only be received by the individual consumer associated with that copy. Aereo Op. SPA at 20. No other individual has the ability to receive that transmission. Indeed, notwithstanding Appellants’ repeated incantations of “Internet transmissions” of programming, as if the Internet was somehow an illicit backchannel or futuristic media experiment, they did not and could not find any basis for suggesting that the transmissions at issue can be received by anyone other than the specific individual customer. 24
24

As Professor Horowitz testified, each transmission in the Aereo system is made over the Internet using HTTPS, which is an industry-standard transmission
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As the District Court correctly stated, “[b]ecause the Second Circuit considered the relevant performance to be the discrete transmission of each user’s unique playback copy of the television program to that user, the potential audience ‘capable of receiving’ that performance was limited to that user, and each such performance was private, not public.” Aereo Op. SPA at 16 (citing Cablevision, 536 F.3d at 125, 135, 139). In light of Cablevision and its progeny, there is simply no question that the District Court correctly concluded that transmissions using the Aereo system do not constitute public performances. c. Congress Expressly Intended to Exempt “Private” Performances From Copyright Liability. This Court’s interpretation of the “public performance” clause in Cablevision is entirely consistent with Congress’s stated intent. Notwithstanding Appellants’ repeated suggestion that the only interests addressed and protected by the Copyright Act are those of Appellants, in adopting the 1976 Copyright Act, Congress established a balance between protecting the rights of copyright owners, and protecting the rights of the public. H.R. REP. 94-1476, at 64 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5678. Part of that balance included granting to the

protocol commonly used by online retailers, financial institutions, and others to encrypt and securely transmit content. JA at 1634 (Hrg. Tr. at 292:21-25).
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copyright owner the exclusive right to make “public” performances, but reserving to the public the ability to make “private” performances. As Appellants point out repeatedly, the transmit clause was crafted in part to address the Supreme Court’s decisions in Fortnightly and Teleprompter. See generally Fortnightly, 392 U.S. 390; Teleprompter, 415 U.S. 394. Appellants repeatedly try to compare Aereo to those cases, but those cases, unlike this one, dealt with retransmission systems that used common or master antennas to access over-the-air broadcasts, and then relay those signals from the common antennas to multiple cable customers both inside and outside the range of the original broadcasts. Fortnightly, 392 U.S. at 391-92; Teleprompter, 415 U.S. at 399-400. In those cases, the Supreme Court addressed only the issue of whether those retransmissions constituted “a performance” under the 1909 Act, and likened the actions being taken by the cable companies in retransmitting the television signal from a master antenna to receipt rather than to performance. Fortnightly, 392 U.S. at 400-401; Teleprompter, 415 U.S. at 403. As a result, the Court found that the subject retransmissions were not performances and fell outside of the 1909 Act’s purview. The Court did not address, however, the question of what constituted performances to the public. 25

Neither Fortnightly nor Teleprompter needed to consider whether the transmissions in question were “to the public,” because it was not disputed that the
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In the wake of Fortnightly and Teleprompter, Congress revised the Copyright Act in 1976 to clarify that any transmission itself would be considered a performance, and that the definition of a transmission should be “broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them.” H.R. REP. 94-1476, at 64 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5678.26 Although Congress in the 1976 Act defined what constitutes a “performance” (i.e., that a transmission is itself a performance), it also made clear that merely defining something as a “performance” is not sufficient to bring it under the Act’s purview. Specifically, Congress stated that “private” transmissions were not implicated under the Act. Indeed, in summarizing its intent, Congress stated: Although any act by which the initial performance or display is transmitted, repeated, or made to recur would itself be a ‘performance’ or ‘display’ under the bill, it would not be actionable as an infringement unless it were done ‘publicly,’ as defined in section 101. Certain other performances and displays, in addition to those that

transmissions in question were to the public. They came from a common source— the community antenna—rather than from individual copies, as in this case. Appellants repeatedly reference this passage for their argument that a consumer’s use of Aereo’s system constitutes a “public” performance but generally neglect to combine their analysis of this language with the adjoining language “to the public.” ABC Br. at 22; Fox Br. at 24-25.
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are ‘private,’ are exempted or given qualified copyright control under sections 107 through 118. H.R. REP. No. 94-1476, at 63 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5677 (emphasis added). Thus, Congress deliberately drafted the Act to make clear that copyright owners had no right to prohibit “private” transmissions. This distinction was necessary to prevent the definition of “performance” from swallowing a range of transmission activities that clearly qualify as “performances,” but are nonetheless universally recognized as not “to the public” and within the rights of consumers. For example, the transmission of a television signal from a private antenna on the rooftop of a house to a television in that house’s family room is unquestionably a “performance” under the 1976 Act. If Congress had not exempted private performances, every consumer who erected such an antenna would have been required to take a public performance license from the broadcasters.27

In the 1976 Act, Congress also defined “public performance” copyright liability as unrelated to the question of whether a performance was made for commercial or non-commercial purposes. The 1909 Act rested the definition of a public performance in part on whether the performance was “for profit.” H.R. REP. No. 94-1476, at 62-63 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5676. Congress rejected this approach in the 1976 Act and rested the applicability of the Act solely on the question of whether a performance is private or public, placing no weight on considerations of whether it is commercial or non-commercial. In other words, whether or not Aereo charges for use of its technology or TiVo charges for its DVR has no bearing on any public performance analysis.
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In this case, as in Cablevision, there is no dispute that the transmission of an individual, unique copy to an individual associated with that copy is a performance. The only question that is relevant here is whether that individual transmission is “to the public” as defined under the Copyright Act, and as that Act has been interpreted by this Court in cases like Cablevision and ASCAP. The answer is that it is not. It is a quintessential private performance under the Copyright Act. II. Appellants’ Arguments That Cablevision’s Analysis of The Transmit Clause Should Not Apply In This Case Fail. This Court’s decision in Cablevision makes clear that the transmission of a member’s individual copy on the Aereo system to that member does not implicate Appellants’ public performance rights. However, Appellants use a variety of tactics to try to persuade this Court to jettison its prior precedent and adopt an entirely new interpretation of the transmit clause. As the District Court correctly found, none of these arguments are supported by, or warrant a departure from settled law.

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a. Appellants’ Argument That Cablevision Is Limited In Application Only To Its Literal Precise Facts Contradicts Fundamental Principles Of Stare Decisis And Is An Attempt To Overturn Cablevision. Appellants seek to have this panel strip Cablevision of all precedential impact, functionally overturning the case. 28 Essentially, they urge that the Cablevision holding should only apply to the precise and exact facts considered in that case—literally, it appears, only to a Cablevision-branded RS-DVR. Needless to say, this would fly in the face of the basic principle of stare decisis, would ignore this Court’s interpretation of the Copyright Act (and transmit clause in particular), and would cast into jeopardy and doubt industries and consumers that have relied upon the fact that this Court meant what it said in Cablevision and ASCAP. Undoubtedly, every case is presented based on a factual record, but it is absurd to argue, as Appellants do, that legal rulings have no application outside of those precise facts. Indeed, Cablevision was based on a careful evaluation of statutory text and purpose that plainly applies—and was intended to apply—

Appellants make no secret of their disdain for Cablevision’s reading of the plain language of the Copyright Act. At oral argument before the District Court, counsel for the ABC Appellants stated, “Cablevision is a troublesome case. It’s kind of messy. It’s not so clear.” JA at 1686 (Hrg. Tr. at 497:7-8) (Keller Rebuttal). Counsel for the Fox Appellants echoed these sentiments, suggesting that the decision should have no precedential value outside of that particular case: “[W]hat the Second Circuit said is you’re required only to follow the holding, and the holding is only with respect to the facts and circumstances presented there.” JA at 1662 (Hrg. Tr. at 401:17-20) (Fabrizio Summation) (emphasis added).
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beyond the precise facts considered. For example, Cablevision notes that, based on the language of the Act and its legislative history, “it is evident that the transmit clause directs us to examine who precisely is ‘capable of receiving’ a particular transmission of a performance,” 536 F.3d at 135, and that, “[b]ecause each RSDVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber,” it was not “to the public.” Cablevision, 536 F.3d at 139. These pronouncements are clear statements of legal principles that are, by their terms, applicable beyond the facts of the Cablevision decision. And, of course, Cablevision’s “public performance” principles have been applied by this Court to other factual circumstances in other cases. For example, in ASCAP, this Court considered whether Internet service providers engaged in a public performance by allowing members of the public to download songs (i.e., copying them) so that they could be played. 627 F.3d at 71-75. In conducting the analysis, the Court examined whether such downloads constituted a “performance,” and whether subsequent playback of the downloads consitituted performances “to the public.” Id. First, the Court concluded that a download was not a “performance,” because it was not perceived by the consumer. Id. at 73. But the Court went on to say that, even if the download did constitute a performance, it was not “to the public”:
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Just as in [Cablevision], the [defendants] transmit a copy of the work to the user, who then plays his unique copy of the song whenever he wants to hear it; because the performance is made by a unique reproduction of the song that was sold to the user, the ultimate performance of the song is not ‘to the public.’ [citing Cablevision, 536 F.3d at 137, 138]. ASCAP, 627 F.3d at 75. Thus, this Court has already followed the holding in Cablevision in other factual circumstances, and upheld the decision as binding precedent. Other courts within this Circuit have similarly applied the principles of the Copyright Act as enunciated in Cablevision. For example, in Cellco—a decision which this Court cited favorably in ASCAP—the District Court for the Southern District of New York analyzed whether the transmission of ringtones by Verizon, to its cellphone customers, constituted a public performance. Cellco, 663 F. Supp. 2d at 371-74. There, again, the court applied the language adopted by Congress as interpreted by this Court in Cablevision and found that no public performance resulted: As the Second Circuit has explained, since the Transmission Clause speaks of those “capable of receiving the performance,” instead of those “capable of receiving the transmission,” it is the “transmission of a performance that is itself a performance” for purposes of § 101. Id. at 134. Because only one subscriber is capable of receiving this transmission or performance, the transmission is not made to the public and is not covered by the Transmission Clause, at least when considered by itself. This transmission of a “unique copy … limit[s] the potential audience of a transmission and is therefore relevant to whether that transmission is made ‘to the public.’” Id. at 138.
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Id. at 371. Importantly, the court in Cellco noted that even if the ringtones were played at the same time they were downloaded, there would still be no public performance because the transmission was from a single copy to the individual who owned the copy: In any event, the [Cablevision] decision presents an insurmountable impediment to this argument. Even if the customer could listen to the download as it was being received, and contemporaneously perceive it as the musical work, that would not constitute a public performance. Id. at 374. Appellants’ attempts to characterize the Cablevision decision as some sort of an eccentric outlier that must be corralled and rendered meaningless beyond the specific dispute it decided is specious. It is a barely concealed attempt to ask this panel to overrule the case. Adherence to prior decisional law is a critical element of judicial authority. As courts have repeatedly noted, the principle of stare decisis is particularly important to preserve parties’ expectations, stability in the law, and respect for judicial authority. See Republic of Aus. v. Altmann, 541 U.S. 677, 693 (2004) (noting that predictability and stability are of prime importance in considering property rights); Allied-Signal, Inc. v. Dir., Div. of Taxation, 504 U.S. 768, 783 (1992) (stare decisis “promotes stability, predictability, and respect for judicial authority”); cf. McDonald v. City of Chi., 130 S. Ct. 3020, 3102 (2010) (Stevens,

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J., dissenting) (stare decisis is a rule “prizing stability and order in the law” and “respecting reliance interests”). In this instance, the principles of stability and predictability promoted by stare decisis are not mere abstract concepts. The holding of Cablevision has been relied upon by entire industries in creating new business models as well as by companies like Aereo. As made clear in the amicus brief submitted in the District Court proceedings by NetCoalition and the Computer & Communications Industry Association, for example, the entire cloud computing industry has relied for years, in part, on Cablevision’s public performance analysis in creating and using their technology. This industry accounts for an estimated $28 billion in annual revenue, and is expected to create over 200,000 new jobs in the United States in the next five years. See Brief for Netcoalition, et al. as Amici Curiae in Support of Neither Party, at 8, Am. Broad. Cos., Inc. v. Aereo, Inc., No. 12-cv-1540-AJN (S.D.N.Y. May 22, 2012), ECF No. 67. It is an industry that could be at risk if the principles announced in Cablevision, and subsequently followed by this and other courts, are reversed or permitted to be ignored. Appellants have offered no reasonable justification for departing from the law of this Circuit, or for the cavalier disregard of precedent in the manner that they propose.

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b. Appellants’ Argument That The Consumer’s Transmission Of An Aereo Performance Should Be Aggregated With Other Performances Is Counter To The Language Of The Act, And Has Been Rejected By This Court. Having argued that the Cablevision holding should not apply in this case, Appellants advance a series of arguments that this Court has expressly rejected in that case. For example, as noted above, Appellants’ submissions are replete with efforts to aggregate the individual Aereo performances at issue with Appellants’ performances of the underlying work—all in contravention of Cablevision and the Copyright Act. Indeed, notwithstanding the clear language in Cablevision to the contrary, Appellants expressly argue that the District Court should have aggregated the original broadcaster’s transmission with the Aereo consumer’s transmission because the “chain from the original broadcast to an Aereo subscriber [i]s one continuous retransmission originating directly from Appellants’ broadcasts.” ABC Br. at 36. Remarkably, Appellants expressly argue that Cablevision “did not establish any general rule proscribing a look ‘upstream.’” Id. at 35. It is hard to imagine how Appellants can honestly read the Cablevision decision in this manner. In Cablevision, this Court specifically stated: “we believe it would be inconsistent with our own transmit clause jurisprudence to consider the potential audience of an upstream transmission by a third party when determining whether a defendant’s own subsequent transmission of a performance is ‘to the public.’” Cablevision, 536 F.3d at 136.
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The NFL case, which Cablevision distinguished, reinforces this analysis. See Nat’l Football League v. PrimeTime 24 Joint Venture, 211 F.3d 10 (2d Cir. 2000). It counsels not to look “upstream” as Appellants urge but rather to consider whether a public performance occurs in the subject downstream transmissions. Id. at 13. In NFL, the defendant transmitted copyrighted programming via an “uplink” from the United States to a satellite, in order to enable the final “downlink” transmissions from that single content source to multiple members of the public in Canada, where U.S. copyright law did not apply. Id. at 11-12. In other words, the transmission at issue was intended to and did result in the downstream public performances. Id. at 13. In contrast, in the Aereo system, the final transmissions are made from unique individual consumer copies and are not public performances. As the District Court observed, this Court twice has held this distinction to be determinative: “Both Cablevision and [ASCAP] expressly distinguished NFL based on the creation, in those cases, of unique copies from which the transmissions were made, explaining that such copies meant that the ultimate performance was not ‘to the public.’ See [ASCAP, 627 F.3d] at 75 (‘Just as in [Cablevision], the Internet Companies transmit a copy of the work to the user, who then plays his unique copy of the song whenever he wants to hear it; because the performance is made by a unique reproduction of the song that was sold to the

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user, the ultimate performance of the song is not ‘to the public.’’); Cablevision, 536 F.3d at 137.” Aereo Op. SPA at 28. There is simply no serious question that this Court has already foreclosed Appellants’ attempt to tie their upstream broadcasts to each consumer’s private performance downstream because each transmission at issue is made to a single consumer using a unique individual copy that was available only to that consumer. Indeed, the Court felt strongly enough that it stated this position more than once: Because NFL directs us to look downstream, rather than upstream or laterally, to determine whether any link in a chain of transmissions made by a party constitutes a public performance, we reject plaintiffs’ contention that we examine the potential recipients of the content provider’s initial transmission to determine who is capable of receiving the RS-DVR playback transmission. Cablevision, 536 F.3d at 137. Appellants fail to even address this Court’s prior holding, and instead proceed as if this is the first time the Court has considered these issues. As this Court stated in Cablevision, Congress was deliberate in defining what it means to perform “publicly.” Cablevision, 536 F.3d at 139. Congress did not define the public performance of a work as the transmission “of a work” to the public; rather, Congress defined the public performance as the transmission of a “performance . . . of the work.” 17 U.S.C. § 101. This choice of words comports with Congress’s express intent that each separate transmission should be treated as

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its own “performance,” and should not be aggregated with other previous “upstream” performances: [A] singer is performing when he or she sings a song; a broadcasting network is performing when it transmits his or her performance (whether simultaneously or from records); a local broadcaster is performing when it transmits the network broadcast; a cable television system is performing when it retransmits the broadcast to its subscribers; and any individual is performing whenever he or she plays a phonorecord embodying the performance or communicates the performance by turning on a receiving set. Although any act by which the initial performance or display is transmitted, repeated, or made to recur would itself be a ‘performance’ or ‘display’ under the bill, it would not be actionable as an infringement unless it were done ‘publicly,’ as defined in section 101. H.R. REP. NO. 94-1476, at 63 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5676-77 (emphasis added). As a result, this Court was explicit in its rejection of the very same arguments offered by Appellants in this case: [A]ccording to plaintiffs, when Congress says that to perform a work publicly means to transmit . . . a performance . . . to the public, they really meant “transmit . . . the ‘original performance’ . . . to the public.” The implication of this theory is that to determine whether a given transmission of a performance is “to the public,” we would consider not only the potential audience of that transmission, but also the potential audience of any transmission of the same underlying “original” performance. . . . [T]his view obviates any possibility of a purely private transmission. Cablevision, 536 F.3d at 136. This Court’s rejection of the aggregation argument advanced by Appellants was not only consistent with the language of the Act, but it was consistent with logic and common sense. The Court explained that to credit the aggregation
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argument would make a defendant’s “liability depend, in part, on the actions of legal strangers”: Assume that HBO transmits a copyrighted work to both Cablevision and Comcast. Cablevision merely retransmits the work from one Cablevision facility to another, while Comcast retransmits the program to its subscribers. Under plaintiffs’ interpretation, Cablevision would still be transmitting the performance to the public, solely because Comcast has transmitted the same underlying performance to the public. Similarly, a hapless customer who records a program in his den and later transmits the recording to a television in his bedroom would be liable for publicly performing the work simply because some other party had once transmitted the same underlying performance to the public. Id. at 136. As this Court noted in Cablevision, such a conclusion runs directly counter to the intent of Congress, and this Court simply could not accept the notion that “Congress intended such odd results.” Id. at 136. c. The Phrases “In Separate Places” And “At Different Times” In The Transmit Clause Do Not Expand The Exclusive Performance Right Beyond Performances That Are “To The Public.” In another attempt to aggregate the performance with the underlying work, Appellants cite the statement in 17 U.S.C. § 101 that a performance may be “to the public” even if received at “separate places” or “different times” apparently for the proposition that there is a public performance because Aereo members may see the underlying program “in separate places” or at “different times.” See, e.g., ABC Br. at 3, 5, 18; Fox Br. at 9. But this is simply another example of Appellants conflating the underlying work with the performance at issue under the Copyright
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Act. There are no two Aereo members who see the same “performance”—i.e., the transmission of the same copy—at all. Each views a separate transmission of her own copy. This Court has specifically noted that these phrases were not intended to expand the exclusive right to private transmissions that are received by a single individual, finding that while: [t]his plain language instructs us that, in determining whether a transmission is ‘to the public,’ it is of no moment that the potential recipients of the transmission are in different places, or that they may receive the transmission at different times. The implication from this same language, however, is that it is relevant, in determining whether a transmission is made to the public, to discern who is ‘capable of receiving’ the performance being transmitted. Cablevision, 536 F.3d at 134 (emphasis added). Thus, the transmission in question must be “to the public”—i.e., capable of being received by more multiple recipients as an initial matter. In this case, because the individual transmission at issue is the one made from the individual copy to the individual member, the performance is private. III. There Are No Material Factual Distinctions Between This Case And Cablevision. Because Cablevision is written with such clarity, and Appellants know that it is binding precedent, Appellants argue that there are factual differences between this case and Cablevision that should somehow alter the outcome. These arguments, however, are not supported by the record or the law.
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a. The District Court Found That The Facts In This Case Are Materially Identical To Cablevision. After considering all of the evidence in the record and examining this Court’s analysis of the facts and its reasoning in Cablevision, the District Court rejected Appellants’ attempts to distinguish Cablevision and found that “on the key points on which Cablevision actually relied . . . Aereo’s system is materially identical to that in Cablevision.” Aereo Op. SPA at 19. In particular, the District Court found that: First, Aereo’s system creates a unique copy of each television program for each subscriber who requests to watch that program, saved to a unique directory on Aereo’s hard disks assigned to that user. See id. at 124 (“If a customer has requested a particular program, the data for that program move from the primary buffer into a secondary buffer, and then onto a portion of one of the hard disks allocated to that customer.”). Second, each transmission that Aereo’s system ultimately makes to a subscriber is from that unique copy. See id. at 137 (“[T]he RS-DVR system, as designed, only makes transmissions to one subscriber using a copy made by that subscriber”). Third, the transmission of the unique copy is made solely to the subscriber who requested it; no other subscriber is capable of accessing that copy and no transmissions are made from that copy except to the subscriber who requested it. See id. (“[T]he universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.”).

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Id. at 20 (citing Cablevision) (footnote omitted). Based on these findings—which Appellants have not disputed—the Court concluded that “Aereo’s service falls within the core of what Cablevision held lawful.” Id. 29 b. Appellants’ Argument That This Case Is “Different” From Cablevision Because The Cablevision Transmissions Were Licensed Is Plainly Wrong. One of the major themes articulated by both Appellants and amici is that the Aereo facts are different from those in Cablevision because in that case, the underlying transmissions were licensed. This argument fails for three reasons: (1) the separate claim of copying or unauthorized reproduction was not presented to the District Court or decided below and is not properly before this Court on appeal; (2) the subject copies in Cablevision were unlicensed; and (3) the underlying content here is “licensed” to the consumer. First, it is important to recognize that, in moving for a preliminary injunction, Appellants specifically chose not to bring the claim before the District Court that the copying of the broadcasts in question constituted an infringement of the reproduction right or unauthorized reproduction. For whatever strategic reasons, they limited their claims on preliminary injunction to the claim that the transmission of those copies constitute public performances. Aereo Op. SPA at 2. Notwithstanding their decision not to bring any claim with respect to their As discussed supra footnote 18, if anything, the individual antennas make this case stronger than Cablevision.
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reproduction rights in the preliminary injunction proceedings, Appellants now seem to try to argue this claim on appeal. This is improper and would cause severe prejudice to Aereo as Aereo did not fully present its evidence or briefing on that separate claim below. See Bogle-Assegaie v. Conn., 470 F.3d 498, 504 (2d Cir. 2006) (“It is a well-established general rule that an appellate court will not consider an issue raised for the first time on appeal.”) (citation omitted). 30 Aereo does not waive this jurisdictional objection to this claim being asserted for the first time on appeal but further comments below. The fact that Appellants make the argument is remarkable given the actual positions taken before this Court in Cablevision by parties that are both Appellants and amici in this case—positions which directly contradict the views now espoused. They argue here that the subject Cablevision transmissions were unlicensed. However, in briefing the issues as appellees in Cablevision, Twentieth Century Fox, Paramount Pictures, and Disney Enterprises made clear that the fact that Cablevision had a license to the underlying content (versus the transmission at issue) was entirely irrelevant to the question whether the transmission of the RSDVR copy violated copyright:
30

Cablevision Systems Corp. argues the reproduction right issue explicitly in its amicus brief. Brief for Cablevision Sys. Corp. as Amicus Curiae In Support of Reversal at 26-29, WNET, et al. v. Aereo, Inc., No. 12-2786 (2d Cir. Sept. 21, 2012), ECF No. 130 (“CSC Br.”). Whether done directly (as there) or by implication (in Appellants’ briefs), arguing an entire claim on appeal that was not raised in the District Court below is improper and highly prejudicial to Aereo.
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None of Cablevision’s negotiated licenses, nor any statutory licenses, authorizes Cablevision to transmit or to reproduce copyrighted programming through RS-DVR. SPA.4; pages 16-17 infra. Cablevision informed copyright owners it had no intention of obtaining their consent to make any reproductions or transmissions of copyrighted programming through the RS-DVR Service. Indeed, Cablevision expressly rejected proposals by some content providers to negotiate licenses for that Service. No Plaintiff or any other copyright owner has agreed that Cablevision may provide its RS-DVR Service without a license. SPA.4. Brief of Plaintiffs-Counter-Defendants-Appellees Twentieth Century Fox Film Corp., et al. at 5, Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (No. 07-1480), 2007 WL 6101619, at *7; see also Turner’s Memorandum of Law in Opposition To Cablevision’s Motion for Summary Judgment at 1, Cartoon Network LP v. CSC Holdings, Inc., 478 F. Supp. 2d 607 (S.D.N.Y. 2007) (No. 06 Civ. 4092), 2006 WL 3607694 (Cablevision acted “without obtaining any licenses for its copying and transmission”) (emphasis in original). The complete reversal in position by both Appellants and amici is instructive here. The appellees in Cablevision argued explicitly that Cablevision’s splitting of the programming stream in its system—necessary to direct the programming into the RS-DVR—was unlicensed, and therefore constituted an unlicensed public performance. In concluding that the ultimate transmission of the copy to the individual did not constitute a performance “to the public,” this Court rejected the

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argument that it mattered whether the stream accessed by Cablevision was licensed or unlicensed. See Cablevision, 536 F.3d at 137. Finally, even if this reproduction claim were properly before the Court (and Aereo does not waive its objection to it), Appellants’ argument that this case is materially different than Cablevision in terms of the consumer’s right to access the underlying programming is simply factually incorrect, because it is undisputed that the consumers in question have the right to access the over-the-air broadcasts that are the programming source to the antennas tuned by each individual consumer. 31 The airwaves are owned by the public and licensed to broadcasters for the convenience of the public. 32 Congress enacted the Communications Act, which created the Federal Communications Commission, for the purpose of “regulating To the extent that Appellants are trying to argue that it is Aereo and not the consumer who makes the reproduction, they merely reiterate the same reproduction claim not raised below and improperly presented here. It is notable, however, that there was a great deal of evidence adduced on the public performance claims that makes clear that consumers are the actors in making copies using the Aereo System. See, e.g., JA at 2522-24 (Lipowski Decl. ¶¶ 12, 14). Nonetheless, again, this reproduction claim was not advanced below and, accordingly, Aereo objects on jurisdictional grounds to it being advanced on appeal. Aereo was not afforded the opportunity to conduct discovery or marshal and introduce full evidence and briefing on these claims and would be severely prejudiced as a result. Section 1 of the Radio Act of 1927 created the Federal Radio Commission to allocate the “use of such [broadcast] channels, but not the ownership thereof, by individuals, firms, or corporations . . . under licenses granted by Federal authority”). Pub. L. No. 69-169, 44 Stat. 1162 (1927) (emphasis added). Section 4 of that Act directed the Commission to grant licenses to the public airwaves in the “public convenience, interest, or necessity”—a requirement carried forward today in the Communications Act of 1934, 47 U.S.C. § 303.
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interstate and foreign commerce in communication by wire and radio so as to make [it] available, so far as possible, to all the people of the United States.” 47 U.S.C. § 151. The Supreme Court has acknowledged a “public interest in increasing access to television programming, an interest that ‘is consistent with the First Amendment policy of providing the fullest possible access to information through the public airwaves.’” Sony, 464 U.S. at 425 (quoting Universal City Studios, Inc. v. Sony Corp. of Am., 480 F. Supp. 429, 454 (C.D. Cal. 1979) (citing Columbia Broad. Sys., Inc. v. Democratic Nat’l Comm., 412 U.S. 94, 102 (1973))). Television stations broadcast over these public airwaves not as a matter of right, but under licenses granted by the public. Those licenses come with responsibility: “In exchange for obtaining a valuable license to operate a broadcast station using the public airwaves, each [] television licensee is required by law to operate its station in the ‘public interest, convenience and necessity.’” THE MEDIA BUREAU, FCC, THE PUBLIC AND BROADCASTING: HOW TO GET THE MOST SERVICE FROM YOUR LOCAL STATION 6 (2008), available at http://transition.fcc.gov/mb/ audio/decdoc/public_and_broadcasting.html. Moreover, consumers have a well-established right to record this programming, which they are legally entitled to receive, for their own personal use. In Sony, the Supreme Court held that Sony was not liable for indirect copyright infringement for selling a video recorder (the Betamax) because personal consumer
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recording of television programming is not copyright infringement. 464 U.S. at 455-56. The Court concluded that when consumers record and play back television programming available to them for their own personal use, they are engaged in a “fair use” and do not violate the Copyright Act. Id. This fundamental principle applies regardless of the technology or media used to make the recording, e.g., Betamax, a VCR, a DVR, or a computer. Indeed, to hold otherwise would be to effectively limit consumers’ fair use rights to outdated technologies. IV. Appellants’ Argument That Cablevision Applies Only To “Completed Time-Shifting” Is Illogical And Finds No Basis In Cablevision Or Otherwise In The Law. Appellants also argue that transmissions of copies using the Aereo system are “to the public” as long as they are transmitted while the original over-the-air broadcast is still airing—i.e., as long as it is not “completely” time shifted. This argument, however, as the District Court found, has no basis whatsoever in the law. 33

It must be recognized, though, that the very purpose of the copies made in the Aereo system is for time-shifting. The copies make it possible for a member to pause, to rewind, and to store a program for later viewing. Aereo Op. SPA at 7, 25-26; JA at 1545-46 (Hrg. Tr. at 88:15-90:9); JA at 1635-36 (Hrg. Tr. at 294:1300:5). These are quintessential attributes of time-shifting, and are no different in nature from what is made possible by the RS-DVR examined in Cablevision.
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As the District Court recognized, this Court did not base its decision in Cablevision on the fact that copies transmitted using the RS-DVR system were time-shifted, whether “completely” or otherwise. In fact, such a temporal distinction was found nowhere in the Court’s decision: Plaintiffs’ position that the Second Circuit’s decision in Cablevision turned on its unstated reliance on the importance of time shifting as “breaking the chain of transmission” is unpersuasive. The Second Circuit’s analysis of the public performance claim was entirely directed toward explaining why the copies created by the system in Cablevision were significant and resulted in performances to a limited, non-public audience. Plaintiffs’ view of Cablevision requires the dubious conclusion that despite the Second Circuit’s extensive discussion of the importance of these unique copies, the Second Circuit relied on the time-shifted nature of these copies as casedispositive but left this crucial consideration in the background for subsequent courts to puzzle out on their own. Aereo Op. SPA at 24-25. The issue of time-shifting was simply never mentioned or identified as a relevant consideration in Cablevision. Nor was “time-shifting” considered a factor in this Court’s discussion of whether a performance is “to the public” in its ASCAP decision, where, again, the Court looked solely to the nature of the copies and the recipients in order to determine whether a performance was “to the public”: [The Defendants] transmit a copy of the work to the user, who then plays his unique copy of the song whenever he wants to hear it; because the performance is made by a unique reproduction of the song that was sold to the user, the ultimate performance of the song is not “to the public.”

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ASCAP, 627 F.3d at 75 (citing Cablevision, 536 F.3d at 137, 138). And, based on this Court’s precedent, the District Court in Cellco explicitly rejected the notion that time-shifting was relevant to the public performance analysis. See Cellco, 663 F.Supp.2d at 374. Under Cablevision, “[e]ven if the customer could listen to the download as it was being received, and contemporaneously perceive it as the musical work, that would not constitute a ‘public performance.’” Id. (emphasis in original). Taking this unfounded argument even further, Appellants also suggest that as long as a transmission of an individual copy is made while the original broadcast is still under way—i.e. unless there is a “completed” time shift—the use of a copy to make the transmission fails to limit the potential recipients of the transmission as required by Cablevision. This argument makes no sense at all for many reasons, all articulated by the District Court. First, the copies transmitted are individual and unique at all times. As the District Court noted, Appellants’ complete time-shift arguments in this regard are “opaque”: Whether a user watches a program through Aereo’s service as it is being broadcast or after the initial broadcast ends does not change that the transmission is made from a unique copy, previously created by that user, accessible and transmitted only to that user, the factors Cablevision identified as limiting the potential audience. [Cablevision, 36 F.3d] at 134-39. To the extent Plaintiffs mean to suggest that time-shifting limits the potential audience because it “breaks the chain of transmission,” this is merely a restatement of the conclusion that Plaintiffs hope the Court will draw, not an independent argument that explains why only a time-shifted copy
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limits the potential audience of a transmission to render the resulting performance non-public. Aereo Op. SPA at 25-26 (emphasis in original). In reality, Appellants’ “complete time-shifting” argument is really just a different articulation of the “aggregation” argument that has already been rejected by this Court. See supra at 11-12. Appellants assert that, as long as the playback transmission occurs “while the broadcast is in progress,” it “remain[s] completely tethered to, not divorced from, the original broadcast.” ABC Br. at 9. This ignores the individual independent copies that the Court found as a matter of fact. Aereo Op. SPA at 6. No matter what words are used to advance the argument, it does not change the fact that this Court has previously considered and rejected it. As the District Court recognized, Appellants’ “complete” time-shifting position would also have absurd practical implications. Aereo Op. SPA at 33 (“[A]s Plaintiffs would have it, an Aereo user who begins watching a recording of the Academy Awards, initially broadcast at 6:00 pm, one minute before the program ends at 11:00 pm has not allowed the chain of transmission to be broken, despite the nearly five hours of time-shifting that has occurred. In contrast, a user who begins watching a standard half-hour sitcom just a minute after its initial broadcast ends would ‘break the chain of transmission’ for that program after just 31 minutes of time shifting.”).

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V.

The Aereo System Is Innovative Consumer Technology and Copies Made By Consumers In the Aereo System Are Not “Artifices” or “Gimmicks.” It is striking to note that the Appellants actually argue that the District Court

focused too heavily on the specifics of the way in which the Aereo system truly works, and should have, instead, taken a more results-oriented view of its practical effects—i.e., allowing consumers to view over-the-air television broadcasts (which they are entitled to watch) without paying Appellants a fee. ABC Appellants argue that “the District Court focused unduly on the technical elements of the Aereo system and minimized its overall function.” ABC Br. at 6. Along similar lines, Fox Appellants argue that, “If Aereo were able to circumvent the Broadcasters’ exclusive right of public performance merely by multiplying the number of antennas it uses or by interposing copies into its transmission stream, technological developments would make that right a dead letter.” Fox Br. at 27. The fact that Appellants urge this Court to ignore the specifics of how Aereo works demonstrates the vacuity of Appellants’ legal arguments. They are, ironically, criticizing Aereo for complying with the law. As a threshold matter, the Aereo technology is no artifice. It is the result of years of work and, as found by the Court, the system works as represented. Aereo Op. SPA at 3-11. The individual antennas and copies utilized in the system each have a specific purpose. The antennas are to enable the consumer to conveniently access broadcast television in the same manner that they could with a home
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antenna but taking advantage of modern technology. The copies, whether in “Watch” or “Record” mode, enable DVR functionality, such as pause and rewind, that consumers expect on a home DVR system. In Cablevision, this Court was clear that its focus on individual copies in determining that a transmission is not “to the public” would not eviscerate the public performance right, or leave copyright owners without protection. For example, this Court noted that where a copy is made without legal basis in order to facilitate a private performance, the copyright owner likely has recourse based on its exclusive reproduction right: This holding, we must emphasize, does not generally permit content delivery networks to avoid all copyright liability by making copies of each item of content and associating one unique copy with each subscriber to the network, or by giving their subscribers the capacity to make their own individual copies. We do not address whether such a network operator would be able to escape any other form of copyright liability, such as liability for unauthorized reproductions or liability for contributory infringement. Cablevision, 536 F.3d at 139-40. And, of course, the Court’s reasoning in Cablevision is sound. If a delivery system were to make unauthorized copies that fail to fall within a copyright exemption available for individual delivery, it would be liable for violating Appellants’ reproduction rights.34 In the particular circumstances of the Aereo

34

Fox Appellants argue that that if interposing a unique copy of programming could avoid liability for making a “public” performance, it would “obliterate
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system, however, there is no violation of the reproduction right because the overthe-air signals are lawfully accessible by consumers, and consumers have the right to make copies of those broadcasts under Sony. Importantly though, Appellants did not assert a claim for violation of the reproduction right in their motion for preliminary injunction; that claim is thus not on appeal in this matter (and, as noted, Aereo objects to any consideration of that claim on appeal). Cablevision Systems Corporation (“CSC”) makes a related argument in its amicus brief, asserting that the facts in this case are different from the facts in Cablevision because, in that case, the copies in question were “independent” and “operationally meaningful.” CSC Br. at 16-17. This argument fails, as well. First, the copies in the Aereo system are both operationally meaningful and independent as set forth above. See supra Statement of Facts § VI.b. The copies in the Aereo system as operated in the “Watch” mode allow the member to pause,

copyright owners’ right of public performance” because digital copies are now “cheap and easy” to make. Fox Br. at 7. Thus, they lament, it must be a violation—otherwise cable companies “could begin doing the same thing.” Id. This argument overlooks two critical facts, though: First, as described herein, if a cable company improperly makes the copies itself, it could be liable for a violation of the reproduction right under Cablevision. 536 F.3d at 139-40. And second, cable companies are already “doing the same thing” by allowing consumers to make copies of programming on a remote system and to transmit those copies to themselves. Those were the facts in Cablevision, and this Court held that providing that technology did not violate Appellants’ exclusive right of public performance. Cablevision, 536 F.3d at 139.
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rewind, and save the program in question for later viewing. 35 The District Court understood this and specifically found that the copies were meaningful. Aereo Op. at 37 (“There may be cases in which copies are purely facilitory, such as true buffer copies or copies that serve no function whatsoever other than to pass along a clearly identifiable ‘master’ copy from which the transmission is made. These facts, however, are not before the Court today.”). In other words, the District Court expressly found, as a factual matter, that the copies are independent and separate from the original over-the-air broadcast. In essence, CSC argues that the Aereo system could have been designed in a different manner—one that might have violated the public performance right. See CSC Br. at 24. While that may be true, it is difficult to see how that is legally relevant or a viable logical point. CSC’s argument also fails because there is no legal support for it in the statute or the case law. The notion that the copies from which private transmissions are made must be “operationally meaningful” in order for them not to be “to the public” is never mentioned in Cablevision or any other decision; nor does CSC provide any relevant legal support for its assertion. Following CSC’s reasoning would require the dubious conclusion that this Court relied on these Indeed, CSC admits that the copies have an operational function “when customers actually use them to pause or rewind a program.” CSC Br. at 24 (emphasis in original).
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concepts in Cablevision, but left these “crucial consideration[s] in the background for subsequent courts to puzzle out on their own.” Aereo Op. SPA at 25. Finally, the argument made by CSC has already been rejected by this Court. Indeed, it is ironic that CSC advances this position, because it is literally the identical view urged by appellees—many of which are Appellants here—against CSC in the Cablevision case. Appellees in Cablevision specifically pointed out that CSC could have architected its system far more efficiently as a video-ondemand system, which admittedly would have resulted in public performances, and urged this Court that to ignore that fact would elevate form over substance: It is wholly irrelevant, for purposes of Section 101, that Cablevision would make and use a separate copy of a program to support each ondemand transmission of that program – a highly inefficient system that has no purpose other than to facilitate Cablevision’s effort to create a loophole in copyright protection. . . . The only relevant fact, for purposes of determining the existence of a public performance, is that Cablevision would transmit the same performance to multiple paying subscribers. Brief of Plaintiffs-Counter-Defendants-Appellees Twentieth Century Fox Film Corp. at 11, Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (No. 07-1480), 2007 WL 6101619, at *9. VI. The Fact That Transmissions In The Aereo System Are Made Over The Internet Does Not Change The Applicable Legal Principles. In an attempt to invent yet another reason why Cablevision should not apply to the facts of this case, Appellants repeatedly characterize Aereo as an “Internet retransmission service,” as if the mode of transmission somehow transforms what
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is otherwise a private performance into a public one. Rather than explaining how the use of the Internet affects the public performance analysis, however, Appellants merely assert the tautology that courts have found other (unrelated) Internet streaming services to have engaged in a public performance, and so Aereo, too, must be engaged in a public performance if its transmissions are made over the Internet. Appellants again attempt to create confusion by ignoring Cablevision, misstating the facts and holdings in other Internet related cases, and misrepresenting the nature of the Aereo system. As an initial matter, as the District Court noted, an individual consumer could lawfully stream programming over the Internet to herself simply by, for example, purchasing home equipment such as a Slingbox. Aereo Op. SPA at 4, 20-21. Appellants have not explained, and cannot explain, how a consumer’s use of home equipment to accomplish this personal Internet streaming is different from the Aereo system in any way that would render the Aereo transmissions public, while a consumer’s own Slingbox (or similar service) transmission remains private. Moreover, there is nothing in Cablevision, or in the language of the Transmit Clause, that provides any basis for drawing a distinction, for purposes of analyzing whether a performance is “public” or “private,” between performances made over the Internet and performances made through another medium such as the cable
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wires in Cablevision, through the air, or across the wire from a rooftop antenna to a television. As the District Court found, the transmissions in the Aereo system are private under Cablevision because a unique copy is created for each member who requests a recording, each transmission in the system is made from that copy, and each unique copy can only be transmitted to the member who made the copy. Aereo Op. SPA at 19-20. Whether the transmission is made over the Internet is immaterial under Cablevision, as the mode of transmission does not affect any of the factors that Cablevision held relevant to the public performance analysis. That other Internet streaming services have engaged in public performances does not change this analysis. As the District Court found, the cases that Appellants rely on in making this argument did not involve or consider facts similar to this case, where the transmissions in question are made from a unique copy to a single individual. Aereo Op. SPA at 29. For example, Appellants repeatedly cite to the ivi case and suggest that, because the defendant there was subject to a preliminary injunction, Aereo should be as well. But, of course, the facts of the ivi case are completely different in numerous material ways. First, ivi is not a “public performance” case. WPIX, Inc. v. ivi, Inc., 691 F.3d 275, 277 (2d Cir. 2012) (“ivi”). The defendant in that case never challenged the notion that it was engaged in a public performance, and instead argued that it was a “cable company” and, pursuant to 17 U.S.C. § 111, it
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was entitled to retransmit content and pay a statutorily established minimum royalty. Id. at 277-78. As a result, neither the district court nor this Court in ivi considered whether the performance was “to the public” because the defendant’s legal argument (that it acted as an Internet “cable company”) required the concession that its performances were to the public.36 Nor was there any dispute in ivi that the transmissions in question came from a common (rather than a unique) source. Id. at 277. This is a fundamental distinction that this Court highlighted in Cablevision. Cablevision, 536 F.3d at 138-39 (use of a unique copy as the source of a transmission limits the potential audience). Similarly, in Warner Bros., where the defendant used a bank of DVR players that it used to play the same copies of movies seriatim to its subscribers over the Internet, the dispositive fact was not that the transmissions were made over the Internet, but that transmissions were made from the same copies to

36

Appellants rely on Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998), for support that a consumer’s use of the Aereo system constitutes a public performance, but that case also is not a public performance case. As is shown in the District Court opinion, the defendant Kirkwood did not raise the issue of whether its performance was to the public. Rather, it conceded that the performances were to the public and argued that its conduct was a fair use. See Infinity Broad. Corp. v. Kirkwood, 63 F. Supp. 2d 420, 421 (S.D.N.Y. 1999). Neither the District Court nor the Appeals Court decision has any discussion of what constitutes a public performance. See id.; Infinity Broad. Corp., 150 F.3d 104. As a result, the case is not instructive here.
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numerous consumers, rendering those transmissions “to the public.” Warner Bros., 824 F.2d at 1010-11. In this sense, ivi and Warner Bros. are factually similar to the Redd Horne and On Command cases—and factually dissimilar to Aereo’s system and to Cablevision. In Redd Horne, the defendant operated a video rental store where patrons could select a VCR tape of a movie, and watch it in one of the store’s small rooms. 749 F.2d at 156-57. The patron would enter the room and close the door, and then a store employee would load the copy of the movie into a bank of VCR players at the front of the store and press play, thereby transmitting the movie to the back room. Id. Once that customer was done watching the movie, another customer could select the same copy of the movie, repeat the process, and that same copy would be used to transmit the movie to that new customer. Id. Similarly, in On Command, the defendant provided a similar system to hotels, where a guest could select a movie via remote control in her room. 777 F. Supp. at 788. By doing that, one of the VCRs in a centralized bank of VCRs that contained copies of the offered films would begin transmitting the film to that guest’s room. Id. While the guest was watching the film, no other guest could access that particular copy. Id. However, once the guest was done, other guests could then select the same movie, and the same copy would be retransmitted again to a new recipient. Id.
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In Cablevision, the Court distinguished On Command and Redd Horne because, in those cases, a single source was played to multiple members of the public, albeit at different times. Indeed, the Court specifically highlighted this distinction as dispositive. It noted that in the Redd Horne case, “[i]n concluding that [defendant] violated the transmit clause, [the Third Circuit] explicitly relied on the fact that defendants showed the same copy of a work seriatim to its clientele.” Cablevision, 536 F.3d at 138. In highlighting the importance of the individual nature of the copies from which “private” transmissions are made, both this Court and the Court of Appeals for the Third Circuit rely on Professor Nimmer’s treatise, which points out that “if the same copy . . . of a given work is repeatedly played (i.e., ‘performed’) by different members of the public, albeit at different times, this constitutes a ‘public’ performance.” 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright, § 8.14[C][3], at 8-142 (emphasis in original) (cited in Cablevision, 536 F.3d at 138; Redd Horne, 749 F.2d at 159).37 Here, as in Cablevision, there is no common copy; each member is entitled to and may view only the copy associated uniquely with her. As a result, this case Similarly, the other cases Appellants cite are a common transmission to multiple recipients. See Arista Records, LLC v. Launch Media, Inc., 578 F.3d 148, 149 (2d Cir. 2009); CBS Broad., Inc. v. FilmOn, Inc., No. 10-cv-07532, Order to Show Cause for Prelim. Inj. With TRO (S.D.N.Y. Nov. 22, 2010), ECF No. 8; Live Nation Motor Sports, Inc. v. Davis, No. 3:06-CV-276-L, 2007 WL 79311, at *4 (N.D. Tex. Jan 9, 2007); Twentieth Century Fox Film Corp. v. iCraveTV, No. Civ. A. 00-121, 2000 WL 255989, at *6 (W.D. Pa. Feb. 8, 2000).
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is factually analogous to Cablevision, whereas ivi and Warner Bros. are factually analogous to On Command and Redd Horne. 38 Appellants’ arguments to this Court attempt to create the false and misleading impression that any transmission made, in their words, “over the open Internet” somehow becomes available to anyone with Internet access, and not just the member who requested the transmission. ABC Br. at 42. This is factually incorrect. The District Court found—and Appellants do not dispute the finding— that each transmission in the Aereo system is made only to a single individual and cannot be accessed by anyone else. Aereo Op. at 20. In arguing that transmission over the Internet renders the “potential Aereo audience” to be “virtually unlimited” (ABC Br. at 42), Appellants deliberately confuse the inquiry by focusing on all

38

Appellants also cite On Command to support their argument that because Aereo is a commercial enterprise, performances effected through its system must be “to the public” because the system is commercially available to members of the public. This Court, in Cablevision, expressly rejected that argument. With respect to On Command, it found “this interpretation untenable, as it completely rewrites the language of the statutory definition. If Congress had wished to make all commercial transmissions public performances, the transmit clause would read: ‘to perform a work publicly means . . . to transmit a performance for commercial purposes.’” Cablevision, 536 F.3d at 139. As noted above, when Congress enacted the 1976 Act, it explicitly abandoned the distinction between commercial and non-commercial activities as determinative for infringement. H.R. REP. No. 94-1476, at 63 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5676.
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consumers in the entire Aereo system—not the potential audience for each individual transmission.39 VII. The Balance Of Harms And The Public Interest Defeat Appellants’ Claim For Injunctive Relief. a. The District Court Correctly Found That Aereo Would Be Substantially Harmed By The Entry Of A Preliminary Injunction. The District Court correctly found that Aereo, a small business, would suffer very substantial irreparable harm if an injunction was issued. It found that Aereo had made significant investments in both labor and capital that Aereo has already expended to develop and launch its system, and at least some of which “would come to naught if Aereo were to go out of business.” Aereo Op. SPA at 48. The testimony on these points was undisputed. Mr. Kanojia testified that the development of Aereo’s antennas and selecting a site for Aereo’s facilities required substantial investment. Id. The District Court also found that an injunction “will diminish or destroy a variety of its intangible resources,” including the loss of employees and the ability to attract further investment. Id. (citing M&G Elecs. Sales Corp. v. Sony Kabushiki Kaisha, 250 F. Supp. 2d 91, 105 (E.D.N.Y. 2003)). The District Court also found that an injunction would damage the company’s
39

As Professor Horowitz testified, each transmission in the Aereo system is made over the Internet using HTTPS, which is an industry-standard transmission protocol commonly used by online retailers, financial institutions, and others to encrypt and securely transmit content. JA at 1634 (Hrg. Tr. at 292:21-25).
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“goodwill with its customers, defeat its substantial investments in launching its service, and diminish its competitive advantage in launching a unique and innovative product.” Id. In response to these points Appellants argue, relying on ivi, that an “infringer” is not entitled to complain of the consequences of being prohibited from infringing. See Fox Br. at 49; ABC Br. at 45-46. The District Court properly disregarded these arguments by finding that ivi was premised on a finding of liability and that the court must consider the effect on a party to be enjoined as if they were improperly enjoined, i.e., if they were not an infringer. See Aereo Op. SPA at 49 (citing Shred-It USA, Inc. v. Mobile Data Shred, Inc., 202 F. Supp. 2d 228, 234 (S.D.N.Y. 2002) (“The harm to Cruz, who operates a new and relatively small business, if she is improperly enjoined from operating her business for the few months required to hold a trial in this case will be much greater than the harm to Shred-It . . . .”) (emphasis added); Ottoman’s v. Sunshine State Laboratories, No. 92-cv-05386, 1992 U.S. Dist. LEXIS 12710, at *3-4 (S.D.N.Y. Aug. 24, 1992); Concrete Machinery Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 612 (1st Cir. 1988)). Appellants’ position, if accepted, would eliminate the balance of the harms as its own factor because in all cases the accused would have no harms to balance with plaintiff. As the District Court correctly concluded, that is not the rule.
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b. The District Court Found Any Irreparable Harm To Appellants Was Not Overwhelming. The District Court correctly found that Appellants’ irreparable harm was not overwhelming. Importantly, the irreparable harms of which Appellants complain are not the result of any infringement, but rather are the consequences of the balance Congress struck in prohibiting only “public,” not “private” performances. As described above, this Court, in Cablevision, recognized that Congress chose not to prohibit private performances when drafting the transmit clause. Cablevision, 536 F.3d at 136 (“the transmit clause obviously contemplates the existence of nonpublic transmissions”). If private performances are lawful, each of Appellants’ claimed harms are not harms, but effects of Congress’s balancing of rights between copyright owners and the public. In any case, where Congress chooses not to grant a copyright holder an exclusive right the copyright holder necessarily is denied the ability to exploit such a right. That is not an irreparable harm; it is a policy choice. In their briefs Appellants rely on ivi to suggest that this Court has already considered the effect of Aereo’s business on the television industry and affirmed a finding of irreparable harm. See Fox Br. at 46-48; ABC Br. at 43-45. This assertion is wrong for four reasons: First, ivi used different technology and was not a “public performance” case—the defendant in that case conceded liability, but argued that it was a “cable system” under 17 U.S.C. § 111 and entitled to pay a statutory royalty. See ivi, 765 F. Supp. 2d at 599.

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Second, the ivi Court’s affirmance of irreparable harm turned in large part on the fact that ivi allowed users outside of the local market to receive the broadcasts. See, e.g., ivi, 691 F.3d at 285 (“ivi could make plaintiffs’ programming available earlier in certain time zones than scheduled by the programs’ copyright holders or paying retransmission rights holders…”); id. at 286 (out of market transmission “fragments” and “diverts the number of ‘local viewers’” affecting advertising and marketability). In contrast, Aereo does not permit users outside the local market to use the technology. See supra Statement of Facts § IV.c. Third, the ivi Court did not consider the question of immediacy and it was not raised by ivi. The ivi Court recognized general types of potential irreparable harms, but found no facts concerning whether those harms would occur before the conclusion of the case below. 691 F.3d at 285-86. Fourth, this Court’s finding of irreparable harm in ivi was premised on the assumption of liability. The District Court in this case correctly discounted the import of the ivi decision on the balance of the harms factor for the same reason. See Aereo Op. SPA at 49. Finally, the District Court correctly rejected some of the declarants’ irreparable harm contentions, finding that they were unlikely to occur during the pendency of the case. See Aereo Op. SPA at 43-44, (citing Jayaraj v. Seappini, 66 F.3d 36,40 (2d Cir. 1995) (“[I]rreparable harm is measured in terms of the harm arising during the interim between the request for an injunction and final disposition of the case on the merits . . . .”)).40

40

Indeed, at least one of Appellants’ own executives has suggested that the claimed risks are not immediate and, instead, are baseless. Les Moonves, CEO of CBS, stated during an earnings call “The people who have cried, ‘Oh my god, this could hurt retransmission’ are really exaggerating greatly…. [It is] not something I
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c. An Injunction Would Not Serve The Public Interest. The public has a very substantial interest in access to television broadcasts sent over-the-air using the public’s airwaves. Likewise, the public has an interest in access to and use of modern and innovative technology to effectuate their right to over-the-air broadcasts. Copyright law was never meant to block or prevent innovation that is consistent, as here, with fundamental copyright principles. It is also important to protect the balance struck by Congress between the copyright owner’s right to control public performances and the public’s right to engage in private performances. The fact that Congress preserved the public’s right to engage in private performances reflects a public policy decision. This policy would be rendered meaningless if the public could be prevented from purchasing the technology, particularly modern and innovative technology, that would allow its members to engage in the private performance. It is not Aereo’s right that is at stake, but the public’s right to access and use technology to effectuate its rights. Appellants seek to overturn the balance struck by Congress when it reserved to copyright owners the right to make “public” performances, and to the public the right to make “private” performances. Appellants’ demand that this Court extend

lose sleep over even for five minutes.” Transcript of CBS Corporation, Q2 2012 Earnings Call (Aug. 2, 2012), available at http://seekingalpha.com/article/776631cbs-management-discusses-q2-2012-results-earnings-call-transcript.
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to copyright owners the exclusive right to make private performances would represent a remarkable extension of the rights granted by Congress. The Supreme Court recognizes that consumer use of technology to personalize their access to copyrighted works implicates public interests. The holding of Sony confirmed the symbiotic policies linking copyright law and the technologies that grant the public access to copyrighted works. See Sony, 464 U.S. at 430-431 & nn. 11-12. “The more artistic protection is favored, the more technological innovation may be discouraged; the administration of copyright law is an exercise in managing the tradeoff.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 928 (2005).41 As the Supreme Court has instructed: Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology. In a case like this, in which Congress has not plainly marked our course, we must be circumspect in construing the scope of rights created by a legislative enactment which never contemplated such a calculus of interests.
41

“[C]opyright laws are not intended to discourage or to control the emergence of new technologies, including (perhaps especially) those that help disseminate information and ideas more broadly or more efficiently. Thus Sony's rule shelters VCRs, typewriters, tape recorders, photocopiers, computers, cassette players, compact disc burners, digital video recorders, MP3 players, Internet search engines, and peer-to-peer software.” Grokster, 545 U.S. at 857 (Breyer, J. concurring).
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Sony, 464 U.S. at 431. The District Court’s decision in this matter followed the language of the Copyright Act, the intent of Congress, and the clear instructions of prior decisions of this Court. For these reasons, the decision should be upheld. CONCLUSION This Court’s decision in Cablevision was clear, and the District Court appropriately applied the legal holdings of that case to this matter. For that reason and the reasons detailed above, the District Court’s judgment should be upheld.

Dated: October 19, 2012

Respectfully submitted, By: /s/ R. David Hosp R. David Hosp John C. Englander Mark S. Puzella Yvonne W. Chan Erin M. Michael GOODWIN PROCTER LLP Exchange Place Boston, MA 02109 617.570.1000 Michael S. Elkin Thomas Patrick Lane WINSTON & STRAWN LLP 200 Park Avenue New York, New York 10166 212.294.6700

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Jennifer A. Golinveaux WINSTON & STRAWN LLP 101 California Street San Francisco, California 94111 415.591.1000 Seth Greenstein CONSTANTINE | CANNON, LLP One Franklin Square 1301 K Street, NW, Suite 1050 East Washington, DC 20005 202.204.3514 Attorneys for Defendant-CounterClaimant - Appellee

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CERTIFICATE OF COMPLIANCE PURSUANT TO FED. R. APP. P. 32(a)(7)(C) I certify that the foregoing Brief complies with the type-volume limitations of this Court’s October 11, 2012 Order (12-2786-cv, Dkt. No. 165; 12-2807-cv, Dkt. No. 144) granting permission to file a consolidated brief not to exceed 21,000 words, because it contains 20,804 words, excluding the parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii). I certify that the foregoing Brief complies with the typeface and type style requirements of Federal Rule of Appellate Procedure 32(a)(5) and (6) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2003 in 14-point font of Times New Roman type style.

Dated:

October 19, 2012

By: /s/ R. David Hosp

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on October 19, 2012, a true and correct copy of the foregoing was served on all counsel of record in this appeal via CM/ECF pursuant to Local Rule 25.1(h). Dated: October 19, 2012 By: /s/ R. David Hosp

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