Aereo Hits CBS with Preemptive Lawsuit Ahead of Big Expansion
The Litigation Daily
Between a big appellate victory last month and plans for a 22-city expansion, the online television company Aereo Inc. has been on quite a roll. Now it's up to Fish & Richardson, Winston & Strawn, and Constantine Cannon to make sure Aereo's enemies can't kill the momentum.
On Monday the trio of firms filed a declaratory judgment suit on Aereo's behalf against CBS Broadcasting Inc. and about two dozen CBS affiliates, asking a judge to rule that Aereo's service doesn't infringe the defendants' copyrights. The complaint, filed in U.S. district court in Manhattan, comes less than a week after CBS president Leslie Moonves vowed to keep suing Aereo everywhere it plans to expand. The company says it will launch its network TV streaming and recording service in Boston next week, followed by 21 additional cities beyond its current market in New York.
For those just catching up with the Aereo story, here's a quick primer: The start-up, with heavy backing from media mogul Barry Diller, lets subscribers watch local television programs live on their computers or mobile devices or record them for later. Rather than stream the networks' content directly from a central Aereo antenna, the company packed a warehouse in Brooklyn with thousands of itsy-bitsy antennas that it assigns to individual customers. Subscribers pay Aereo a monthly or annual fee for the service, but Aereo doesn't pay retransmission fees to the networks or their station affiliates.
One judge has derided the antenna setup as a "Rube Goldberg-like contrivance," but so far it's been an effective shield against copyright claims by the major networks. The model was engineered specifically to take advantage of 2008 ruling from the U.S. Court of Appeals for the Second Circuit in a copyright case against Cablevision over a remote digital video recording service.
Last July U.S. District Judge Alison Nathan in Manhattan refused to preliminarily enjoin Aereo's service, ruling that the networks' copyright claims were likely to fail. On April 1, the Second Circuit upheld that decision in a 2-1 ruling, concluding that Aereo's convoluted strategy for avoiding copyright liability is probably legal.
Monday's declaratory judgment suit claims that CBS is now threatening to sue Aereo in other jurisdictions, even before Judge Nathan has rendered a final judgment in the New York litigation. "Such threatened follow-on suits would be an attempt to avoid or evade the [district court and Second Circuit rulings] by seeking 'do-overs' in other courts," Aereo's lawyers wrote. "It is not proper for parties to re-litigate claims that are pending, let alone already decided."
Last summer we named Michael Elkin of Winston & Strawn and R. David Hosp of Fish & Richardson (then at Goodwin Procter) our Litigators of the Week for blocking the networks' preliminary injunction bid for Aereo. In addition to Elkin and Hosp, the company is represented by Seth Greenstein of Constantine Cannon in the latest suit.
This article originally appeared in The Am Law Litigation Daily.