Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 1 of 26
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`IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
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`CENTRAL DIVISION
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`COMMUNITY TELEVISION OF
`UTAH, LLC dba KSTU FOX 13, KUTV
`LICENSEE, LLC dba KMYU and
`KUTV, and FOX BROADCASTING
`COMPANY,
`
`MEMORANDUM DECISION AND
`ORDER GRANTING PRELIMINARY
`INJUNCTION AND STAY
`
`Plaintiffs,
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`Consolidated Case No. 2:13CV910DAK
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`Judge Dale A. Kimball
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`vs.
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`AEREO, INC.,
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`Defendant.
`____________________________________
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`NEXSTAR BROADCASTING
`COMPANY,
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`Plaintiff,
`
`vs.
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`AEREO, INC.,
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`Defendant.
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`This matter is before the court on Plaintiffs Community Television of Utah, LLC, KUTV
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`Licensee, and Fox Broadcasting Company’s Motion for Preliminary Injunction, Plaintiff Nexstar
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`Broadcasting, Inc.’s Motion for Preliminary Injunction, Defendant Aereo, Inc.’s Motion to Stay
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`Proceedings Pending the Supreme Court’s decision in ABC v. Aereo, and Defendant Aereo’s
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`Motion to Transfer. The court held a hearing on Aereo’s Motion to Stay on February 7, 2014,
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 2 of 26
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`and a hearing on Plaintiffs Motions for Preliminary Injunction on February 11, 2014. At the
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`hearings, Plaintiffs Community Television of Utah, LLC, KUTV Licensee, and Fox Broadcasting
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`Company were represented by Brent O. Hatch, Shaundra L. McNeil, and Richard L. Stone,
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`Plaintiff Nexstar Broadcasting, Inc. was represented by Rodney R. Parker and John C. Ulin, and
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`Defendant Aereo was represented by Daralyn J. Durie, Joseph C. Gratz, Jess M. Krannich, and
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`Timothy Considine. After carefully considering the parties’ arguments, as well as the law and
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`facts relevant to the motions, the court enters the following Memorandum Decision and Order
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`FACTUAL BACKGROUND 2
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`Plaintiffs are a collection of local and national broadcast television companies who have
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`brought the present lawsuit against Aereo for copyright infringement. Aereo enables its paying
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`customers to watch or record broadcast television programs on their computer, laptop, tablets or
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`other mobile devices. Plaintiffs own or are the exclusive licensees in the copyrights to many
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`programs which Aereo is making available to its customers.
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`Cable systems and satellite carriers retransmit the content aired by Plaintiffs throughout
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`Utah and surrounding areas after obtaining retransmission consent and the necessary copyright
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`licenses from Plaintiffs. Aereo, however, does not obtain retransmission consent or copyright
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` Although Aereo’s Motion to Transfer was scheduled to be heard in connection with
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`Plaintiffs’ Motions for Preliminary Injunction, the parties did not focus on the motion during oral
`argument. The motion was more than adequately briefed in the memoranda submitted by the
`parties and the court considers the motion submitted on the briefs.
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` The court notes that the findings of fact and conclusions of law made by a court in
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`deciding a preliminary injunction motion are not binding at the trial on the merits. University of
`Texas v. Camenisch, 451 U.S. 390, 395 (1981); City of Chanute v. Williams Natural Gas Co.,
`955 F.2d 641, 649 (10 Cir. 1992), overruled on other grounds, Systemcare, Inc. v. Wang Labs
`th
`Corp., 117 F.3d 1137 (10 Cir. 1997) (recognizing that “the district court is not bound by its
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`prior factual findings determined in a preliminary injunction hearing.”).
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 3 of 26
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`licenses from Plaintiffs because it does not believe that its technology is subject to the same laws.
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`For a subscription fee, Aereo provides its customers with access to small remote antennas
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`that enable the customer to watch and record over-the-air broadcasts over the Internet. Aereo’s
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`system captures over-the-air broadcasts from local television stations and creates digital copies of
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`the broadcasts that Aereo can then stream over the Internet. Aereo maintains thousands of dime-
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`sized antenna loops on circuit boards connected to computer equipment in an area that receives
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`good broadcast reception. Each antenna is connected to its own tuner and feed lines and
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`responds to an individual customer’s commands. Once the customer sends a signal to watch or
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`record a program, one of the many small antennas maintained by Aereo is then activated and
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`tuned specifically for that customer. The customer can watch the broadcast with a brief delay or
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`record the broadcast for later viewing.
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`Aereo’s subscribing customers can log onto Aereo’s website and view a television
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`programming guide to select available programs to watch or record. Aereo likens its technology
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`to what its customers could do on their own with an antenna, digital video recorder, and
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`Slingbox. If Aereo’s customers want to watch the program on their home televisions, rather
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`than on their computers or mobile devices, they could do so with an internet-connected television
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`or a device such as Apple TV or Roku.
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`In March 2012, Aereo initially launched its business only in the New York City market.
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`It has been expanding the markets in which it does business and began doing business in Utah
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`last July or August. Within approximately six weeks of Aereo’s launch in Utah, Plaintiffs filed
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`the present lawsuits, which the court later consolidated into this single action. The case was
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`reassigned to several different judges for various reasons and the pending motions for
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`preliminary injunction took several months to be heard. The case was reassigned to the
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 4 of 26
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`undersigned judge on February 7, 2014, and the motions were heard within a week of the
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`reassignment.
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`In the meantime, an identical lawsuit brought by copyright owners of broadcast television
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`programs against Aereo in the Southern District of New York and appealed to the Second Circuit
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`Court of Appeals was granted a writ of certiorari by the United States Supreme Court in January
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`2014. The parties agree that the case should be stayed pending the Supreme Court’s ruling.
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`However, the parties disagree as to whether the case should be stayed with a preliminary
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`injunction in place or not. Therefore, although the court heard arguments on Aereo’s Motion to
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`Stay first, the court proceeded to hear arguments on Plaintiffs Motions for Preliminary
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`Injunction.
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`LEGAL ANALYSIS
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`Plaintiffs’ Motions for Preliminary Injunction
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`Preliminary injunctive relief is appropriate if the moving party establishes: “(1) a
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`likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm
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`in the absence of preliminary relief; (3) that the balance of equities tips in the movant’s favor;
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`and (4) that the injunction is in the public interest.” Roda Drilling Co. v. Siegal, 552 F.3d 1203,
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`1208 (10th Cir. 2009). Because a preliminary injunction is an extraordinary remedy, the “right to
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`relief must be clear and unequivocal.” SCFC LLC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098
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`(10th Cir. 1991).
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`A.
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`Likelihood of Success on the Merits
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`Plaintiffs argue that Aereo’s retransmission service infringes their copyrights. To prevail
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`on a claim of copyright infringement, Plaintiffs must establish (1) ownership of a valid copyright,
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`and (2) defendant’s violation of any one of the five exclusive rights granted to copyright owners
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 5 of 26
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`under 17 U.S.C. § 106. Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 831-32 (10th
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`Cir. 1993). It is undisputed that Plaintiffs own or are the exclusive licensee in programs that
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`Aereo streams to its customers over the internet. The issue, therefore, is whether Aereo’s
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`conduct violates any of Plaintiffs’ exclusive rights under the Copyright Act.
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`Plaintiffs contend that Aereo is violating their exclusive rights to perform their works
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`publicly. The Copyright Act of 1976 grants copyright owners “of literary, musical, dramatic, and
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`choreographic works, pantomines, and motion pictures and other audiovisual works” the
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`exclusive right “to perform the copyrighted work publicly.” 17 U.S.C. § 106(4). The term
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`“perform” is defined in the Copyright Act as “to recite, render, play, dance, or act it, either
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`directly or by means of any device or process or, in the case of a motion picture or other
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`audiovisual work, to show its images in any sequence or to make the sounds accompanying it
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`audible.” Id. § 101.
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`The Copyright Act further defines what it means to perform or display a work “publicly”
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`as follows:
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`(1) to perform or display it at a place open to the public or at any
`place where a substantial number of persons outside of a normal
`circle of a family and its social acquaintances is gathered; or
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`(2) to transmit or otherwise communicate a performance or display
`of the work to a place specified by clause (1) or 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.
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`Id. Subsection (2), which is at issue in this case, is commonly referred to as the “Transmit
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`Clause.” Section 101 also defines “[a] ‘device,’ ‘machine,’ or ‘process’ [as] one now known or
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`later developed.” Id. And the term “transmit” is defined as follows: “To ‘transmit’ a
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 6 of 26
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`performance or display is to communicate it by any device or process whereby images or sounds
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`are received beyond the place from which they are sent.” Id.
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`The parties have competing views of how these statutory definitions apply to Aereo’s
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`business and technology. Plaintiffs assert that the plain language of the statute applies to any
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`device or process that is used to transmit their copyrighted works to people outside Aereo’s circle
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`of family and social acquaintances. This position finds support in two other district court cases
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`and a dissent in Aereo’s case in the Second Circuit Court of Appeals. See Fox Television
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`Stations, Inc. v. BarryDriller Content Systems, 915 F. Supp. 2d 1138 (C.D. Cal. 2012); Fox
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`Television Stations, Inc. v. FilmOn X LLC, 2013 WL 4763414 (D.D.C. Sept. 5, 2013); WNET v.
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`Aereo, Inc., 712 F.3d 676 (2d Cir. 2013) (Chin, J., dissenting). Aereo, however, relying on its
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`case in the Second Circuit Court of Appeals, argues that the Transmit Clause does not apply to its
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`technology because its technology merely enables its customers to view the copyrighted work
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`privately. See WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013); see also Hearst Stations Inc. v.
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`Aereo, Inc., 2013 WL 5604284 (D. Mass. Oct. 8, 2013) (denying preliminary injunction to
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`copyright holders).
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`This court is not bound by the holdings in the cases cited by the parties and there is no
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`controlling law from the Tenth Circuit on this issue. Therefore, this court must make its own
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`analysis of the whether the Transmit Clause applies to Aereo’s activities. The court, however,
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`has carefully reviewed each of the prior decisions and has concluded that the California and D.C.
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`district court cases as well as Judge Chin’s dissent in the Second Circuit case are the better
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`reasoned and more persuasive decisions with respect to the proper construction of the Transmit
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`Clause and its application to Aereo’s operations.
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`“As to principles of statutory construction involving federal statutes, it is [the court’s]
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 7 of 26
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`primary task in interpreting statutes to determine congressional intent, using traditional tools of
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`statutory construction. We begin by examining the statute’s plain language. If the statutory
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`language is clear, our analysis ordinarily ends . . . If the statute’s plain language is ambiguous as
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`to Congressional intent, we look to the legislative history and the underlying public policy of the
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`statute.” United States v. Handley, 678 F.3d 1185, 1189 (10 Cir. 2012).
`th
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`The plain language of the 1976 Copyright Act support Plaintiffs’ position. The
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`definitions in the Act contain sweepingly broad language and the Transmit Clause easily
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`encompasses Aereo’s process of transmitting copyright-protected material to its paying
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`customers. Aereo uses “any device or process” to transmit a performance or display of Plaintiff’s
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`copyrighted programs to Aereo’s paid subscribers, all of whom are members of the public, who
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`receive it in the same place or separate places and at the same time or separate times. See
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`BarryDriller, 915 F. Supp. 2d at 1144 (Copyright Act’s definition section sets forth that
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`“transmitting a performance to the public is a public performance.”); FilmOn X, 2013 WL
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`4763414, at *13 (holding provisions of the 1976 Copyright Act are clear and apply to technology
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`similar to Aereo’s).
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`Because of the parties’ dispute as to the meaning of the Transmit Clause and the split
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`decisions in the prior cases on this subject, the court believes it is also helpful to review the
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`history of the Transmit Clause. “The relevant history of the Transmit Clause begins with two
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`decisions of the Supreme Court, Fortnightly Corp. v. United Artists Television, Inc., 392 U.S.
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`390, 88 S. Ct. 2084, 20 L. Ed. 2d 1176 (1968), and Teleprompter Corp. v. Columbia
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`Broadcasting System, Inc., 415 U.S. 394, 94 S. Ct. 1129, 39 L. Ed. 2d 415 (1974).” WNET, 712
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`F.3d at 685. These decision were decided under the 1909 Copyright Act, “which lacked any
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`analog to the Transmit Clause.” Id. The cases arose in an era of changing technology and
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 8 of 26
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`involved the first community cable companies. Id. In Fortnightly, the cable company had
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`erected community antennas and connected homes to the antenna via coaxial cable. Id. Under
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`the prior Copyright Act, the Court found that the cable company, as an entrepreneur, could do
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`whatever a private citizen could do for itself without infringing the copyright. Id.
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`Congress then passed the Copyright Act of 1976 in response to the Supreme Court’s
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`Fortnightly decision. “The 1976 Act was enacted as a complete overhaul of its predecessor, the
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`Copyright Act of 1909, to respond to ‘significant changes in technology [that] affected the
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`operation of the copyright law.” FilmOn X, 2013 WL 4763414 at *11 (quoting H.R. Rep. 94-
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`1476 (House Report) at 1 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5660). The House
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`Report further stated, “‘Pursuant to two Supreme Court decisions [Fortnightly and
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`Teleprompter], . . . under the 1909 copyright law, the cable television industry has not been
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`paying copyright royalties for its retransmission of over-the-air broadcast signals.’” Id. (quoting
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`House Report, 1976 U.S.C.C.A.N. at 5703). “Congress found that ‘cable systems are
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`commercial enterprises whose basic retransmission operations are based on the carriage of
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`copyrighted program material and . . . copyright royalties should be paid by cable operators to the
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`creators of such programs.’” BarryDriller, 915 F. Supp. 2d at 1146 (quoting House Report No.
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`94-1476, at 88-89 (1976)). Thus, the addition of the Transmit Clause in the 1976 Copyright Act
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`“was intended in part to abrogate Fortnightly and Teleprompter and bring a cable television
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`system’s transmission of broadcast television programming within the scope of the public
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`performance right.” WNET, 712 F.3d at 685 (citing House Report 94-1476, 1976 U.S.C.C.A.N.
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`5659, at 63 (1976)).
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`Aereo’s retransmission of Plaintiffs’ copyrighted programs is indistinguishable from a
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`cable company and falls squarely within the language of the Transmit Clause. It is undisputed
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 9 of 26
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`that Plaintiffs license its programming to cable and satellite television companies and through
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`services such as Hulu and iTunes. These companies and services are providing paying customers
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`with retransmissions of copyrighted works. Similarly, Aereo uses “any device or process” to
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`transmit a performance or display of Plaintiff’s copyrighted programs to Aereo’s paid
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`subscribers, all of whom are members of the public. However, Aereo’s retransmissions are done
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`without a license to do so.
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`Aereo’s response to Plaintiffs’ claims of copyright infringement is that it designed its
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`system specifically to avoid the application of the Transmit Clause and in accordance with the
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`Second Circuit’s decision in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir.
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`2008) (“Cablevision”). In Cablevision, the Second Circuit concluded that the cable company’s
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`remote-storage DVR system did not result in an additional public performance under the terms of
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`the Transmit Clause because each subscriber made a single unique copy. 536 F.3d at 139. Given
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`that the cable company already had a license to transmit the performance, the only issue was
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`essentially whether the customer’s ability to record the performance required an additional
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`license. Id. at 124. The cable company was splitting its licensed data stream, sending one stream
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`to customers who were watching the program immediately and sending the other to a remote
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`computer system maintained by the cable company that designated a portion of a hard drive for
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`each customer who had requested the program to be recorded for later viewing. Id. at 124-25.
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`To reach its conclusion that the recorded copies for later playback did not require an
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`additional license as a separate public performance, the Second Circuit proceeded to spin the
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`language of the Transmit Clause, the legislative history, and prior case law into a complicated
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`web. The court focused on discerning who is “capable of receiving” the performance to
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`determine whether a performance is transmitted to the public. Id. at 134. However, such a focus
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 10 of 26
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`is not supported by the language of the statute. The clause states clearly that it applies to any
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`performance made available to the public. Paying subscribers would certainly fall within the
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`ambit of “a substantial number of persons outside of a normal circle of a family and its social
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`acquaintances” and within a general understanding of the term “public.”
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`However, the Cablevision court appears to discount the simple use of the phrase “to the
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`public” because it concludes that the final clause within the Transmit Clause – “whether the
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`members of the public capable of receiving the performance or display receive it in the same
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`place or in separate places and at the same time or at different times”– was intended by Congress
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`to distinguish between public and private transmissions. This court disagrees. The entire clause
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`“whether the members of the public capable of receiving the performance or display receive it in
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`the same place or in separate places and at the same time or at different times” appears to actually
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`be Congress’ attempt to broaden scope of the clause, not an effort to distinguish public and
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`private transmissions or otherwise limit the clause’s reach. The term “whether” does not imply
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`that the ensuing clause encompasses a limitation. Rather, the introduction of the clause with the
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`word “whether” implies an intent to explain the broad sweep of the clause and the many different
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`ways it could apply to members of the public. Reading this final clause expansively is consistent
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`with Congress’ intent to have the entire Transmit Clause apply to all technologies developed in
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`the future.
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`Congress expressly used language throughout the definition section of the 1976
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`Copyright Act that would encompass all known or yet to be developed technologies. In
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`FilmOnX, the court recognized that “the aggregation of several new kinds of technology does not
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`avoid the Copyright Act because Congress intended ‘device or process’ in the Transmit Clause to
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`include ‘all kinds of equipment for reproducing or amplifying sounds or visual images, any sort
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 11 of 26
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`of transmitting apparatus, any type of electronic retrieval system, and any other techniques and
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`systems not yet in use or even invented.’” 2013 WL 4763414 at *14 (quoting House Report at
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`5677). The definition of “transmit” was also “broad enough to include all conceivable forms
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`and combinations of wires and wireless communications media, including but by no means
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`limited to radio and television broadcasting as we know them.’” Id.
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`The Cablevision court’s analysis also appears to have changed the wording of the
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`Transmit Clause from reading “members of the public capable of receiving the performance” to
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`“members of the public capable of receiving the transmission.” See Cablevision, 536 F.3d at
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`134. Therefore, instead of examining whether the transmitter is transmitting a performance of
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`the work to the public, the Cablevision court examined who is capable of receiving a particular
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`transmission. See id. at 135. This court agrees with Plaintiffs that the language of the Transmit
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`Clause does not support such a focus.
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`Aereo asserts that there is legislative history to support the Cablevision court’s
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`interpretation of the Transmit Clause. The House Report states, “Although any act by which the
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`initial performance or display is transmitted, repeated, or made to recur would itself be a
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`‘performance’ or ‘display’ under the bill, it would not be actionable as an infringement unless it
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`were done ‘publicly,’ as defined in section 101.” H.R. Rep. No. 94-1476, at 63 (1976). This
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`language, however, merely points the court back to the standards expressed in the definitions of
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`Section 101 to determine whether a performance is public or private. This language explains that
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`the statute defines both “performance” and the more limited “to perform publicly.” That a
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`“public performance” is more limited than a “performance” speaks only to the unremarkable and
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`indisputable fact that private performances exist. It is uncontroverted that an individual’s
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`retransmission of a broadcast to himself, his family, or circle of friends is not a public
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 12 of 26
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`performance. The court is still required, and directed by this legislative history, to apply the
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`standards defining a public performance in the Transmit Clause.
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`This court is also not persuaded by the Second Circuit’s subsequent application of its
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`Cablevision decision to Aereo’s system. See WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013).
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`The court finds Judge Chin’s dissenting opinion more persuasive than the majority opinion. As
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`Judge Chin explained, there are “critical differences” between Aereo’s situation and the cable
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`company in Cablevision: “Cablevision involved a cable company that paid statutory licensing
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`and retransmission consent fees for the content it retransmitted, while Aereo pays no such fees.
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`Moreover, the subscribers in Cablevision already had the ability to view television programs in
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`real-time through their authorized cable subscriptions, and the remote digital video recording
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`service at issue there was a supplemental service that allowed subscribers to store that authorized
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`content for later viewing. In contrast, no part of Aereo’s system is authorized. Instead, its
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`storage and time-shifting functions are an integral part of an unlicensed retransmission service
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`that captures broadcast television programs and streams them over the Internet.” Id. at 697
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`(Chin, J., dissenting).
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`The cable company in Cablevision was licensed to transmit the performance to its paying
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`customers, who in turn decided to record the performance for later viewing. The Cablevision
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`court’s decision that the customer’s subsequent viewing of the recording was a private viewing is
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`not akin to Aereo’s interception and retransmission of copyrighted programs to paying
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`subscribers. “What Aereo is doing is not in any sense ‘private.’” Id. at 699 (Chin, J., dissenting).
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`This court agrees with Judge Chin that “[b]y any reasonable construction of the statute, Aereo is
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`engaging in public performances” when it intercepts and retransmits copyrighted programs to
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`paying strangers. Id.
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`Moreover, “[e]ven if the language of the transmit clause were ambiguous as applied to
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`Aereo’s system, the legislative history reinforces the conclusion that Aereo is engaging in public
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`performances.” Id. Aereo argues that it provides a service that its subscribers could do for
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`themselves without infringing Plaintiffs’ copyrights through the use of the subscriber’s own
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`antenna, television, digital video recorder, Slingbox, and computer or other mobile device. But,
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`this is the same arguments from Fortnightly and Teleprompter which Congress specifically
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`rejected when it passed the 1976 Copyright Act. See BarryDriller, 915 F. Supp. 2d at 1146.
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`Throughout the debates on the 1976 Copyright Act, the proponents of no copyright
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`liability argued that broadcast stations offer their programming free over-the-air to the viewing
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`public and cable systems do nothing more than provide technology that allows consumers to do
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`what they can do on their own. Congress resolved the issue by concluding that commercial
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`broadcast retransmission services must obtain copyright licenses and compensate copyright
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`owners. “In the 1976 Copyright Act, Congress altered the definitions of ‘perform’ and ‘publicly’
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`specifically to render the CATV systems’ unlicensed retransmissions illegal.” WNET, 712 F.3d at
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`700 (Chin, J., dissenting) (citing Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 469
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`n.17, 104 S. Ct. 774, 78 L. Ed. 2d 574 (1984); H.R. Rep. No. 94-1476, at 63, reprinted in 1976
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`U.S.C.C.A.N. 5659, 5676-77 (“[A] cable television system is performing when it retransmits the
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`broadcast to its subscribers . . . .”)). Congress reached that conclusion because it determined that
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`a commercial enterprise should not be allowed to build a business off the exploitation of
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`copyrighted programming without compensating the owners of that programming. See H.R. Rep.
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`No. 94-1476, at 89.
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`Furthermore, as stated above, the legislative history makes clear that Congress intended
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`the sweeping language of the Copyright Act to apply not only to cable television but any device
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 14 of 26
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`or process that could be developed in the future to transmit copyrighted works in any form to the
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`public. WNET, 712 F.3d at 701 (Chin, J., dissenting) (citing H.R. Rep. No. 94-1476, at 64,
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`reprinted in 1976 U.S.C.C.A.N. at 5678). The legislative history underscores Congress’ desire to
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`use definitions of terms such as “transmit” and “any device or process” to embrace future
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`technologies. Congress made clear that it did not want copyright liability to turn on the technical
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`details of a transmission service and did not want the statute rendered obsolete by changes in the
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`technology used to communicate performances to the public. Even the majority decision in
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`WNET recognized that “[p]erhaps the application of the Transmit Clause should focus less on the
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`technical details of a particular system and more on its functionality.” 712 F.3d at 694. This
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`court finds no basis in the language of the Transmit Clause or the relevant legislative history
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`suggesting that technical details take precedence over functionality. In fact, such a focus runs
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`contrary to the clear legislative history.
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`Based on the plain language of the 1976 Copyright Act and the clear intent of Congress,
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`this court concludes that Aereo is engaging in copyright infringement of Plaintiffs’ programs.
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`Despite its attempt to design a device or process outside the scope of the 1976 Copyright Act,
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`Aereo’s device or process transmits Plaintiffs’ copyrighted programs to the public. Accordingly,
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`the court concludes that Plaintiffs have met their burden of establishing a likelihood of success
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`on the merits.
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`B.
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`Irreparable Harm
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`Under Tenth Circuit law, “[t]he party seeking injunctive relief must show that the injury
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`complained of is of such imminence that there is a clear and present need for equitable relief to
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`prevent irreparable harm.” Heideman v. S. Salt Lake City, 348 F.3d 1182, 1189 (10 Cir. 2003).
`th
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`“It is also well settled that simple economic loss usually does not, in and of itself, constitute
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 15 of 26
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`irreparable harm, such losses are compensable by monetary damages.” Id. “Rather, the
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`irreparable harm findings are based on such factors as the difficulty in calculating damages, the
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`loss of a unique product, and existence of intangible harms such as loss of goodwill or
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`competitive market position.” Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356
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`F.3d 1256, 1264 (10 Cir. 2004).
`th
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`The parties dispute whether the financial harm to Plaintiffs during the pendency of this
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`litigation is real or imminent. Aereo points to statements from Plaintiffs’ executives to argue,
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`essentially, that Aereo’s infringement is a drop in the bucket for Plaintiffs. However, the court
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`does not focus on financial harm in determining irreparable harm to the extent that it can be
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`compensated with monetary damages. Rather, if Aereo were permitted to continue to infringe
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`Plaintiffs’ copyrights during the pendency of this litigation, Aereo’s infringement will interfere
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`with Plaintiffs’ relationships and negotiations with legitimate licensees, impede and effect
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`Plaintiff’s negotiations with advertisers, unfairly siphon viewers from Plaintiffs’ own websites,
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`threaten Plaintiffs’ goodwill and contractual relationships with Plaintiffs’ licensed internet
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`distributors, lose their position in the competitive marketplace for Internet content, and cause
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`Plaintiffs to lose control of quality and potential piracy of its programming. All of these potential
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`harms are intangible factors that support a finding of irreparable harm.
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`Every court that has considered the question of whether unauthorized Internet streaming
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`of television and other video programming causes irreparable harm to the copyright owners has
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`concluded that it does. See, e.g., FilmOn X, 2013 WL 4763414, at 15-17; BarryDriller, 915 F.
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`Supp. 2d at 1147; WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 617-20 (S.D.N.Y. 2011).
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`Plaintiffs have amply demonstrated that Aereo’s infringing activities threaten to impair Plaintiffs’
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`control over its copyrighted programs, threaten Plaintiffs’ goodwill and business reputation and
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`Case 2:13-cv-00910-DAK Document 87 Filed 02/19/14 Page 16 of 26
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`relationships, cause Plaintiffs to lose business and standing in the marketplace, and subject
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`Plaintiffs’ copyrighted work to viral infringement and piracy. Accordingly, the court concludes
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`that Plaintiffs have met the high burden required to demonstrate irreparable harm and this factor
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`supports the issuance of a preliminary injunction.
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`C.
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` Balance of Harms
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`While the court has already addressed Plaintiffs’ irreparable harm should a preliminary
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`injunction not issue, Aereo argues that a preliminary injunction will cause its business
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`devastating harm. The court, however, has already determined that Plaintiffs are likely to
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`succeed on the merits of their copyright infringement claims against Aereo. And, the Tenth
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`Circuit has held that “the potential injury to an allegedly infringing party . . . ‘merits little
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`equitable consideration and is insufficient to outweigh the continued wrongful infringement.’”
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`Autoskill Inc. v. Nat’l Educ. Support Sys., Inc., 994 F.2d 1476, 1498-99 (10th Cir. 1993).
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`“[W]hen the case for infringement is clear, a defendant cannot avoid a preliminary injunction by
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`claiming harm to a business built upon that infringement.” General Motors Corp. v. Urban
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`Gorilla, LLC, 500 F.3d 1222, 1229 (10th Cir. 2007).
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`In FilmOn X, the court reasoned that “[w]hile FilmOn X points out that its business could
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`be crippled and that a decision in Plaintiffs’ favor will chill technological innovation, these
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`concerns are overstated” because a copyright infringer “has no cognizable interest in continuing
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`to infringe Plaintiffs’ copyrights and thus cannot complain of the harm it will suffer if ordered to
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`cease doing so.” 2013 WL 4763414, at *17. In this case, the harm to Aereo’