fox v. aereokiller - brief of amici curiae the copyright alliance et al in support of affirmance

7/30/2019 Fox v. Aereokiller - Brief of Amici Curiae the Copyright Alliance et al in Support of Affirmance

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NOS.13-55156-cv(L),13-55157-cv(CON), 13-55226-cv(XAP)

and 13-55228-cv(XAP)

United States Court of Appeals

for the Ninth Circuit

FOX TELEVISION STATIONS, INC.; TWENTIETH CENTURY FOX FILMCORPORATION; FOX BROADCASTING COMPANY, INC.,

Plaintiffs-Appellees,

v.

AEREOKILLER, LLC; ALKIVIADES DAVID; FILMON.TV NETWORKS,

INC.; FILMON.TV, INC.; FILMON.COM, INC.,

Defendants-Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

CENTRAL DISTRICT OF CALIFORNIA CASE NO. 2:12-CV-06921-GW-JCGEORGE H. WU, UNITED STATES DISTRICT JUDGE

BRIEF OFAMICI CURIAE THE COPYRIGHT ALLIANCE,

THE ASSOCIATION FOR COMPETITIVE TECHNOLOGY,

THE CENTER FOR INDIVIDUAL FREEDOM, AND VARIOUSPROFESSORS IN SUPPORT OF AFFIRMANCE

SANDRA AISTARSExecutive Director

COPYRIGHT ALLIANCE

1224 M Street, NW, Suite 101Washington, DC 20005

(202) 540-2247

ELEANORM.LACKMANCounsel of Record

MARY E.RASENBERGER

NANCY E.WOLFFCOWAN,DEBAETS,ABRAHAMS

&SHEPPARD LLP

41 Madison Avenue, 34th FloorNew York, New York 10010

(212) 974-7474

Attorneys for Amici Curiae

Case: 13-55156 05/03/2013 ID: 8616043 DktEntry: 65-2 Page: 1 of 42


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C-1

CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,

amicus curiae The Copyright Alliance states that it does not have a parent

corporation, and that no publicly held corporation owns 10% or more of

amicus stock.


amicus curiae The Association for Competitive Technology states that it

does not have a parent corporation, and that no publicly held corporation

owns 10% or more ofamicus stock.


amicus curiae The Center for Individual Freedom states that it does not have

a parent corporation, and that no publicly held corporation owns 10% or

more ofamicus stock.



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TABLE OF CONTENTS

Page

CORPORATE DISCLOSURE STATEMENT .......................................... C-1

TABLE OF CONTENTS.............................................................................. i-ii

TABLE OF AUTHORITIES ...................................................................... iii-v

INTEREST OFAMICI................................................................................... 1

SUMMARY OF ARGUMENT ...................................................................... 6

ARGUMENT .................................................................................................. 9

I. THIS COURT SHOULD AFFIRM THE DISTRICTCOURTS PROPER RULING BELOW RATHERTHAN FOLLOW THE SECOND CIRCUITSREASONING IN CABLEVISION............................................. 9

A.The Cablevision Decision Is a Poor Blueprint forCopyright and Law Technology ......................................... 11

1. The Legal and Practical Impacts ofCablevision Have Been LoomingConcerns for Creators of ExpressiveWorks ..................................................................... 11

2. Leading Copyright Scholars Agree ThatThe Cablevision Decision is Problematic .............. 14

a. The Ruling is Premised on LegalError ................................................................ 15

b. The Reasoning Leaves The DoorOpen to The Whittling Away of ThePerformance Right as NewTechnology Develops ..................................... 18



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B.The Reach ofCablevision Was Intended to BeLimited to Cable Retransmissions ...................................... 20

II. REVERSAL WOULD BENEFIT ONLYCOMMERCIALLY MOTIVATED FREE-RIDERS,TO THE DETRIMENT OF INNOVATION ANDCONSUMER OPTIONS .......................................................... 24

A.Aereokiller Is Not Innovation, It isTechnological Regression ................................................... 24

B.Affirmance Promotes the Progress of Science andUseful Arts, and Benefits the Public ................................. 27

CONCLUSION ............................................................................................. 33

CERTIFICATE OF COMPLIANCE ............................................................ 34



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iii

TABLE OF AUTHORITIES

Page(s)

CASES

A&M Records Inc. v. Napster, Inc.,239 F.3d 1004 (9th Cir. 2001) ........................................................... 28, 30

American Broadcasting Cos., Inc. v. Aereo, Inc.,874 F. Supp. 2d 373 (S.D.N.Y. 2012) ......................................... 22, 23, 29

American Geophysical Union v. Texaco,802 F. Supp. 1 (S.D.N.Y. 1992), affd, 60 F.3d 913 (2d Cir. 1994) ....... 26

Cartoon Network LP, LLLP v. CSC Holdings, Inc.,

536 F.3d 121 (2d Cir. 2008) ............................................................passim

Columbia Pictures Industries, Inc. v. Redd Horne, Inc.,749 F.2d 154 (3d Cir. 1984) .................................................................... 11

Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,--- F. Supp. 2d ---, 2002 WL 6784498 (C.D. Cal. Dec. 27, 2012) ........... 9

Golan v. Holder,132 S. Ct. 873 (2012) .............................................................................. 26

Harper & Row, Publishers, Inc. v. Nation Enters.,471 U.S. 539 (1985)................................................................................. 26

Herbert v. Shanley Co.,242 U.S. 591 (1917) ................................................................................ 26

Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,545 U.S. 913 (2005)................................................................................. 28

United States v. ASCAP,1992 WL 142749 (S.D.N.Y. June 12, 1992) ........................................... 12

United States v. Broadcast Music, Inc.,316 F.3d 189 (2d Cir. 2003) .................................................................... 25

WNET, Thirteen v. Aereo, Inc.,12-2786-cv, 2013 WL 1285591 (2d Cir. Apr. 1, 2013) .............. 23, 24, 25



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STATUTES &RULES

17 U.S.C. 101 ............................................................................................. 17

17 U.S.C. 110(5)(A) .................................................................................. 12

Fed. R. App. P. 29(b) ...................................................................................... 1

Fed. R. App. P. 29(c)(5).................................................................................. 1

U.S. Const. art. I, 8, cl. 8.............................................................................. 6

OTHERAUTHORITIES

Adam Mosoff,How Copyright Drives Innovation in ScholarlyPublishing

13-25 George Mason University Law and Economics ResearchPaper Series ............................................................................................. 26

Brief of Amicus Curiae Copyright Alliance, Cable News Network,Inc. v. CSC Holdings, Inc.,No. 08-448, 2008 WL 4887717 (U.S. Nov. 5, 2008) .............................. 13

Brief of the United States as Amicus Curiae, Cable News Network,Inc. v. CSC Holdings, Inc., No. 08-448, 2009 WL 1511740(U.S. May 29, 2009) ................................................................... 20, 21, 22

Brief of Various Professors as Amicus Curiae, Cable News Network,Inc. v. CSC Holdings, Inc.,No. 08-448, 2008 WL 4819896 (U.S. Nov. 5, 2008) .............................. 18

Eric Schmidt, Conversation with Eric Schmidt hosted by DannySullivan, Search Engine Strategies Conference (Aug 9, 2006) ............... 32

James Grimmelmann,Why Johnny cant Stream: How video copyrightwent insane,ARS TECHNICA (Aug. 30, 2012) .......................................... 25

H.R. Rep. No. 94-1476, reprinted in 1976 U.S.C.C.A.N 5659 .............. 10, 12

Jane C. Ginsburg,Recent Developments in U.S. Copyright Law PartII, Caselaw: Exclusive Rights on the Ebb? Colum. Pub. L. & LegalTheory Working Papers, No. 08158 (2008) .....................................passim



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Jeffrey Malkan, The Public Performance Problem In CartoonNetwork LP v. CSC Holdings, Inc., 89 OR.L.REV. 505 (2010) ...... 16, 17

Paul Goldstein, Goldstein on Copyright, (2011 Supp.) .................... 14, 16, 19

Raymond T. Nimmer, Law of Computer Technology, (2013) ..................... 11



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Pursuant to Federal Rule of Appellate Procedure 29(b), amici curiae

the Copyright Alliance, the Association for Competitive Technology, the

Center for Individual Freedom, and various professors listed herein

(collectively, Amici) respectfully submit this brief in support of appellees

Fox Television Stations, Inc., Twentieth Century Fox Film Corporation and

Fox Broadcasting Company, Inc. (the Fox Parties), and NBCUniversal

Media, LLC, Universal Network Television, LLC, NBC Subsidiary KNBC-

TV, LLC, American Broadcasting Companies, Inc., Disney Enterprises, Inc.,

CBS Broadcasting, Inc., CBS Studios, Inc., Open 4 Business Productions,

LLC, Big Ticket Television, Inc., Telemundo Network Group, LLC and

WNJU-TV Broadcasting, LLC (the NBC Parties) (the Fox Parties and

NBC Parties, collectively, Appellees). This brief is submitted on motion.1

INTEREST OF AMICI

The Copyright Alliance is a nonprofit, nonpartisan 501(c)(4)

membership organization dedicated to promoting and protecting the ability

of creative professionals to earn a living from their creativity. It represents

1 Pursuant to Federal Rule of Appellate Procedure 29(c)(5), no counsel forany party authored this brief in whole or in part, and no party or counsel forany party made a monetary contribution intended to fund the preparation orsubmission of this brief. Only amici curiae made such a monetarycontribution. Some Copyright Alliance members are, or are affiliates of,Appellees in this matter. Some may join otheramicus briefs in support ofAppellees.



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the interests of individual authors from a diverse range of creative industries

including, for example, writers, musical composers and recording artists,

journalists, documentarians and filmmakers, graphic and visual artists,

photographers and software developers and the small businesses that are

affected by the unauthorized use of their works. The Copyright Alliances

membership encompasses these individual artists and creators, creative

union workers, and small businesses in the creative industry, as well as the

organizations and corporations that support and invest in them.

Those affected by the reach of copyright law, including the law that

applies to television retransmission, extend far beyond the names of the

parties involved in the present appeal. For example, even the lengthy credits

displayed during a broadcast television program may not come close to fully

capturing all of the names of those who provided writing, directing, design,

recording, engineering, photography and editing contributions to make that

program available for customers to enjoy. Similarly, those who invest in

others creation of copyrighted works, and the means of distributing them,

must be protected from free-riding.

The concept of innovation is of fundamental importance to the

Copyright Alliance. Just like the patent laws encourage the development of

technology, the copyright laws spur the development of the creative works



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for the benefit of public consumption through ensuring that those who

contribute to creative works are fairly compensated for their efforts.

The Copyright Alliance encourages the development of new

technologies that may be used to bring licensed works to the public in new

ways, even if those new ways disrupt traditional business models.

However, regardless of the ways in which technology and business evolve,

the Copyright Alliances primary dedication is to ensuring that the policies

in the Constitution and Congress directions in the Copyright Act continue

to provide meaningful protections to authors whose works may be publicly

performed or displayed, and to the investments made to commercialize those

works. The Copyright Alliance submits this brief to help the Court

appreciate how Judge Wus principled decision is consistent with those

policies and directions. The Copyright Alliance also submits this brief to

help the Court understand the negative impacts of reversal to all of those

who rely on the public performance and public display rights including if

reversal is premised on errors made in a decision of another circuit.

The Association for Competitive Technology (ACT) is an

international grassroots advocacy and education organization with more than

5,000 small and medium sized software and mobile-app companies,

including more than 4,000 based in the United States. ACT was founded in



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1998 by independent software developers concerned about how the

interactions between major companies and policymakers affected small and

medium sized developers. ACT is a registered 501(c)(6) non-profit

organization in the United States. Specifically, the institutional purpose of

ACT, as detailed in its U.S. charter documents, is directly related to the

benefit of the application developer community by enhanc[ing] public

understanding of the high quality of its members products and services and

its members commitment to innovation and technological advancement.

The mobile-app industry has grown from non-existent just five years

ago to a $20 billion-dollar industry today. The industry continues to grow

rapidly and is projected to reach $100 billion by 2015. And those software

developers who contribute to the growth of the industry increasingly rely on

their public performance right. A strong, and globally consistent,

application of the public performance right is fundamental to the industrys

ability to ensure that it (like other copyright-reliant U.S. export industries)

can compete in the global, networked world. Thus, for reasons similar to

those of the Copyright Alliance, ACT submits this brief to encourage the

Court to follow the policies and objectives of this countrys copyright law

and affirm the decision below accordingly.



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The Center for Individual Freedom (the Center) is a 501(c)(4)

nonprofit organization with the mission to protect and defend individual

freedoms and rights guaranteed by the U.S. Constitution, including, but not

limited to, property rights, free speech rights, privacy rights, and freedom of

association. Toward those ends the Center undertakes a wide variety of

publications and programs, and since its founding in 1998, the Center has

filed numerous briefs before state and federal courts, including the United

States Supreme Court, on behalf of fundamental Constitutional rights. The

instant case squarely raises issues of particular importance to the Center,

namely the constitutional protection of intellectual property rights as

specifically set forth in Article I, Section 8 of the Constitution and the

fundamental importance of protecting property rights, the rule of law and

free markets.

The various professors who join this brief are professors who teach,

research, and have an interest in the theory, law and practice of copyrights,

property rights, and contracts.2 The professors have no other stake in the

outcome of this case, but are interested in ensuring that copyright law

2The professors are Adam Mossoff, Raymond Nimmer, Mark Schultz,

Christal Sheppard, Jon Simson and Lionel Sobel. Their biographies areappended to the accompanying Motion for Leave to FileAmicus Brief.



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develops in a way that best promotes creativity, innovation and competition

in the digital world.

SUMMARY OF THE ARGUMENT

The district courts decision advances the underlying goal of this

countrys copyright law: [t]o promote the Progress of Science and useful

Arts . . . . U.S. Const. art. I, 8, cl. 8. Reversal here would promote

neither. Instead, blessing the system crafted and offered by appellants

Aereokiller, LLC, Alkiviades David, FilmOn.TV Networks, Inc.,

FilmOn.TV, Inc. and FilmOn.com, Inc. (Appellants) would promote

lawyer-created and judicially blessed technological inefficiencies designed

to help only those seeking to maximize their profits, to the detriment of

innovation in technology and innovation in creative expression. When

technologies designed to exploit judicially-created loopholes in the

Copyright Act cut creators from established licensing structures, those

providers of expressive works are harmed and no longer incentivized to

come together to make the same types of works that the public enjoys. If

those who invest in the production and distribution of creative works cannot

be assured that their interests will be protected regardless of whether those

works are distributed through old, traditional models or new, disruptive



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ones the array of works that will be offered to the public will suffer. Put

simply, if Appellants win, everyone else loses.

This Court should reject the invitations of Appellants and theiramici

to extend a legally flawed and factually limited case, Cartoon Network LP,

LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (Cablevision),

involving a cable operators remote storage DVR, to a contrived

retransmission system that purports to be based on the holding in that case.

Plenty of reasons exist that should encourage this Court not to follow

Cablevision here.

As a fundamental matter, Cablevisions interpretation of the public

performance right has been criticized by members of academia as inherently

flawed and potentially far-reaching in ways that conflict with Congress

intent. Even then-Solicitor General Elena Kagan questioned the court of

appeals interpretation of the public performance right. It would be error for

this Court to similarly misinterpret the law.

As a practical matter, the consequences to the Copyright Alliances

members of applying Cablevisions interpretation of the public performance

right have threatened and do threaten to have broad impact on those who

rely on strong rights of public performance and public display. The

concluding statements of the Cablevision decision and the Solicitor



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Generals brief to the Supreme Court of the United States quieted the fears

of the copyright community five years ago: both expressly recognized that

Cablevisions holding was limited to Cablevisions remote-storage DVR.

Nonetheless, the Second Circuits application of Cablevision under

principles ofstare decisis to the Aereo system, and the arguments in the case

at bar, have reignited the fears that the Cablevision decision threatens to not

be as limited as the Second Circuit and Solicitor General had opined.

In the wake of the troubling rulings from the Second Circuit, the

district courts decision below marked a welcomed shift away from the

cloud that Cablevision left behind. Judge Wus ruling was not only correct,

it was a win for sound statutory interpretation, Congressional intent and

well-established copyright policy. The ruling properly accounts for the

fundamental principle that those who profit from public redistribution of

copyrighted works must not cut out the works creators from due

compensation. In the same vein, affirmance would be a victory for all

involved: for the incentivization of creation and copyright

commercialization, insulated against for-profit free-riding; for the

encouragement of technological developments that focus on delivering the

best product possible, not on designing systems engineered by lawyers; for

the expansion of consumer choice through the robust growth and



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diversification of efficient and licensed distribution systems; and, finally,

for sound and reasoned statutory interpretation which correctly construes the

scope of the transmit clause consistent with the foregoing and the overall

statutory framework of the Copyright Act.

ARGUMENT

I. THIS COURT SHOULD AFFIRM THE DISTRICT COURTSPROPER RULING BELOW RATHER THAN FOLLOW THE

SECOND CIRCUITS REASONING IN CABLEVISION

As detailed more fully in Appellees briefs, Judge Wus decision is

consistent with the law of this Circuit and with the statutory framework of

the 1976 Copyright Act. See Fox Parties Br. at 20-25; NBC Parties Br. at

23-28. The district court properly followed and reconciled the facts of this

case with a ruling from this Circuit. SeeFox Television Stations, Inc. v.

BarryDriller Content Sys., PLC, --- F. Supp. 2d ---, 2002 WL 6784498, at *4

(C.D. Cal. Dec. 27, 2012) (hereinafter, Op.) (citing On Command Video

Corp. v. Columbia Pictures Industries, 777 F. Supp. 787 (N.D. Cal. 1991)).

Moreover, it correctly understood the distinction between performances of

works that are wholly private, and those that relate to a public, commercial

enterprise. See id. at *5 (recognizing that cable systems are commercial

enterprises whose basic retransmission operations are based on the carriage

of copyrighted program material and . . . copyright royalties should be paid



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by cable operators to the creators of such programs, and analogizing to

Aereokiller) (quoting H.R. Rep. No. 94-1476, at 89 (1976), reprinted in

1976 U.S.C.C.A.N. 5659, 5704). Aereokiller is clearly a commercial

enterprise engaged in unlicensed retransmissions of copyrighted material,

and those facts easily resolve to the holding that Judge Wu reached.

Appellants only justification for their makeshift system is that it

purportedly rests on the Second Circuits Cablevision decision a decision

that is not even binding on this Court, was wrongly decided in the first place,

and should be strictly limited to its facts. Judge Wu correctly rejected

attempts to use Cablevision to condone Aereokiller. See Op. at *2 ([T]he

Ninth Circuits precedents do not support adopting the Second Circuits

position on the issue. Instead, the Court would find that Defendants

transmissions are public performances, and therefore infringe Plaintiffs

exclusive right of public performance.). On appeal, the Court may also

review the underlying authority and come to its own conclusions, just as

Judge Wu did. And just as Judge Wu did, it can reach those conclusions

without regard to the Second Circuits ruling. If the Court does so, it will

affirm.



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A. The Cablevision Decision Is a Poor Blueprint for CopyrightLaw and Technology

1. The Legal and Practical Impacts ofCablevision Have BeenLooming Concerns for Creators of Expressive Works

Appellants and their amici have urged this Court to follow

Cablevision a decision that raised significant concerns across a large part

of the copyright community.3 Copyright owners were understandably

worried about letting specific technology drive a ruling that conflicted with

the technology-neutral performance right. See Raymond T. Nimmer, Law of

Computer Technology 15:6 (2013), available at Westlaw LCOMTECH

(court took a restrictive view of the case that combined an emphasis on the

technology Cablevision used with an apparent desire to enable cable entities

to control this type of delayed viewing . . . .). In reaching its result, the

Cablevision decision overlooked the fact that a work can be publicly

performed in ways other than from a single copy like the system in

Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d

Cir. 1984). In conclusory fashion, the court of appeals rejected the lower

courts careful reliance on On Command, even though that ruling had not

been disturbed in nearly 20 years. Cablevision, 536 F.3d at 139. And, rather

than taking into account the types of policies and directions that Judge Wu

3 The relevant facts ofCablevision are more fully detailed in Fox Parties Br.at 9-11.



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did in the ruling below, the Cablevision court concerned itself with the

possibility that a hapless customer that sends a recorded program to

another room of his house might be sued for copyright infringement even

though copyright law and policy already reflect a much more nuanced

approach than the court of appeals strained hypothetical scenario suggests.4

The rulings unjustified deviation from certain well-settled principles

of copyright law provoked concern from a broad group of representatives

from the creative community. Thirty-six amici including software

creators, photographers, book publishers, sports leagues, distributors, guilds,

music publishers, academic presses, record companies, performing rights

organizations and professors, including some ofAmici in eight amicus

briefs, urged the Supreme Court to grant certiorari and reverse the court of

appeals holding. The expansive reaction was a clear symptom of a

potentially serious problem.

4See, e.g., H.R. Rep. No. 94-1476, at 63 (Certain other performances and

displays, in addition to those that are private, are exempted or given

qualified copyright control under sections 107 through 118.);17 U.S.C. 110(5)(A) (public performance and display exemptions pertaining toreception of performances on a single receiving apparatus of a kindcommonly used in private homes); cf. United States v. ASCAP (In re

Muzak), 1992 WL 142749, at *7 (S.D.N.Y. June 12, 1992) (commercialestablishments that further communicate licensed broadcasts to the publicrequire separate license).



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Among other concerns, the petitioners and theiramici pointed out that

the court of appeals decision could undercut the goals of copyright law and

financially disadvantage and disincentivize the countless individuals and

industries that rely on the performance right. At the same time, the ruling

could lead to another policy shift: one that incentivizes the development of

delivery services in a way that is designed to game the copyright licensing

system, rather than develop better means of delivery. See, e.g., Brief of

Amicus Curiae Copyright Alliance, Cable News Network, Inc. v. CSC

Holdings, Inc., No. 08-448, 2008 WL 4887717, at *11, *13 (U.S. Nov. 5,

2008). In other words, the petitioners and their amici were worried that

Cablevision would open the door to the same genre of gimmickry that

Appellants ask the Court to bless today.

In a case premised on a synthetic technological architecture that is

purportedly sanctioned by the Cablevision ruling, it is no surprise that the

Copyright Alliance again, joined by the otherAmici, is voicing similar

concerns about the broader effects of excluding certain technological

structures from the framework of copyright law. Yet, five years of

hindsight, reflection and judicial rulings confirm that the Cablevision

petitioners and their amici were not crying wolf. Those thousands of

creators and investors in creative works, for whom the Copyright Alliance



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spoke, had legitimate cause for concern then, just like they will if the

decision below is not affirmed now.

2. Leading Copyright Scholars Agree That The CablevisionDecision Is Problematic

Analysis from the academic community has echoed the Copyright

Alliances arguments that Cablevision could have a devastating impact on

copyright owners. See 2 Paul Goldstein, Goldstein on Copyright, 7.7.2, at

7:168.1 (2011 Supp.) (Goldstein) (Cablevision effectively closed off a

critical aspect of the transmit clauses intended embrace . . . .); Jane C.

Ginsburg,Recent Developments in U.S. Copyright Law Part II, Caselaw:

Exclusive Rights on the Ebb? Colum. Pub. L. & Legal Theory Working

Papers, No. 08158, (2008), available at

http://lsr.nellco.org/columbia_pllt/08158 (Ginsburg) ([T]he Second

Circuits recent decision in Cartoon Networks v. CSC Holdings, if followed,

could substantially eviscerate the reproduction and public performance

rights.). Academia has identified two categories of problems: error in the

court of appeals interpretation of the law, and the potential impacts on other

cases, parties and distribution methods as a result of Cablevisions

precedential effect.



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a. The Ruling is Premised on Legal ErrorWhile the consequences of the holding have gathered attention, the

misreading of the law itself has become a lightning rod for academic

criticism. The courts main error which Judge Wu properly avoided is

both simple and glaring. The court started out properly enough, with the

meaning of publicly as defined in the statute. Cablevision, 536 F.3d at

134. Based on its reading, the court asked whether, under the Transmit

Clause of the definition, Cablevision transmit[s] . . . . a performance . . . of

the work . . . to the public. Id. From there, the court opined that it is

relevant to discern who is capable of receiving the performance being

transmitted. Id.

Yet, instead of answering the question, the court took a detour through

a variety of legislative history and never came back to where it had started.

By the time it had finished reciting that history, the court had reframed the

question completely, concluding that the law directed the court to examine

who precisely is capable of receiving a particular transmission of a

performance, id. at 135 rather than the performance being transmitted

under its prior formulation, id. at 134 (emphases added).

As leading commentators have directly pointed out, the court of

appeals confusion in assessing the plain language of the statute led to a



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result that Congress did not intend. The principal error in the courts

application of the transmit clause was that it substituted the word

transmission for the word performance in the phrase capable of

receiving the performance . . . . Jeffrey Malkan, The Public Performance

Problem In Cartoon Network LP v. CSC Holdings, Inc., 89 OR.L.REV. 505,

553 (2010) (Malkan). The statute does not say capable of receiving the

transmission, id., and [t]here can be little doubt that the [ ] word itin the

definition refers to performance or display, not transmission, which in fact

appears only as a verb, and not a noun, in the definition. Goldstein, at

7:168. [T]he transmit clause specifies that members of the public must be

capable of receiving the performance, not capable of receiving the

transmission. Malkan, at 536 (emphases added).

Having rewritten the definition, the Cablevision court proceeded to

reinforce its original error by treating performance and transmission as

synonymous and interchangeable. The problem is, they are neither. See

Goldstein, at 7:168 (The error in the Second Circuits construction of the

transmit clause was to treat transmissions and performance as

synonymous, where the Act clearly treats them as distinct and different

operative terms.); see also Ginsburg, at 26 (making same observation).

The law makes the receipt of the performance outcome-determinative, not



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the receipt of the transmission that conveys or otherwise communicates

the performance. Moreover, even though the transmit clause refers, as

Judge Walker put it, to the performance created by the act of transmission,

a transmission and a performance remain, technically and legally, two

distinct things. Malkan, at 536. Accordingly, although a transmission of a

performance is a type of performance, the two words are not interchangeable

or reversible. Id. at 531 (emphasis added).5

The nature and extent of the courts error manifests itself in other

material ways, including that its statutory construction cannot be reconciled

with the intended meaning of the public, i.e., a group of persons not

otherwise connected via familial or socially familiar relationship.

Cablevision said that, under the transmit clause, we must examine the

potential audience of a given transmission by an alleged infringer to

determine whether that transmission is to the public. Cablevision, 536

5The definition of perform to which the Cablevision court did not give

any meaningful consideration helps to explain the difference. Toperform a work can include reciting it, playing it or rendering it; in thecase of a performance of a work preserved in a motion picture or otheraudiovisual format, to perform can mean showing that audiovisual works

series of related images in any sequence or making the soundsaccompanying it audible. See 17 U.S.C. 101. In other words, it isrepresentational. In contrast, the term transmit is spatial: it hews to thenature of the performances travel from one place to a distant location. Seeid. (to transmit a performance . . . is to communicate [that performance]

by any device or process whereby images or sounds are received beyond theplace from which they are sent.).



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F.3d at 137. But rather than narrowing the universe of the public, the

phrase members of the public capable of receiving the performance is

designed to be broad: its role is to clarify that a transmission is still to the

public even if its receipt is individualized. Ginsburg, at 26 (emphasis

added). See also Op. at *4 (The statute provides an exclusive right to

transmit a performance publicly, but does not by its express terms require

that two members of the public receive the same transmission.). Or, as

eight professors argued in their brief in support ofcertiorari,

[I]t is quite clear that Cablevision offered delayed performancesto the public (its entire customer base) and transmitted the

performance via its RS-DVR system. According to the Courtof Appeals, each of these were [sic] private performances. Butthat wrongly ignores the system as a whole.

Brief of Various Professors as Amicus Curiae, Cable News Network, Inc. v.

CSC Holdings, Inc., No. 08-448, 2008 WL 4819896, at *13 (U.S. Nov. 5,

2008).

b. The Reasoning Leaves The Door Open to TheWhittling Away of The Performance Right as New

Technology Develops

Commentators have also expressed their concern about the practical

effects of interpreting the transmit clause as the Cablevision court did. In

particular, the court of appeals interpretation excises from the law entire

categories of transmissions clearly intended to fall within the broad scope of



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the performing right including those where the delivery requires two

transmissions in order to communicate that performance to the recipients

(for example, because those two individuals are located in different places

or prefer to stream the program at different times). See Ginsburg, at 26

(While such a performance could be transmitted simultaneously to

differently located recipients, recipients differently situated in time cannot

receive the same transmissions.). The courts interpretation thus reads non

simultaneous receipt out of the statute. Id. IfCablevisions misreading

viewing the transmission of a performance as if it were itself the

performance were followed, it would entirely undermine Congresss

intention in formulating the public performance right as it had drafted, lest

this technology displace traditional, compensated instances of public and

broadcast performance with uncompensated private ones. Goldstein, at

7:168 (emphasis added). Professor Goldsteins observation is directly on

point here: Congress intention was not to have uncompensated

technologies such as Aereokiller replace traditional, compensated instances

of public performance such as cable and satellite retransmission. Just like in

antitrust law, copyright law does not choose between competitors.

That these commentators observations mirror Amicis concerns

underscores the potential jurisprudential and practical problems of adopting



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Cablevisions abridgement of the public performance right. Perhaps the

Second Circuit may have found a device or process worth excluding from

the performance right, but particularly in the age of rapid technological

growth where new models compete to outpace traditional models, the

bleeding cannot be allowed to continue. Therefore, before making the same

errors the Second Circuit did, this Court should pause to consider whether

Appellants contrived system merits the same type of judicial carve-out to

the performance right, notwithstanding Congress express intention to avoid

them.

B. The Reach ofCablevision Was Intended to Be Limited toCable Retransmissions

The plaintiffs in the Cablevision petitioned for certiorari. For a

variety of traditional reasons, the Solicitor General recommended that

certiorari be denied. But that did not mean that she thought that the

Cablevision holding on the performance right was correct. Rather, her view

was that creators and other copyright owners need not be worried because

the Second Circuit expressly limited its decision to the facts of the case.

The Solicitor Generals brief expressly recognized that the court of

appeals reasoning contained errors. It noted that some aspects of the

Second Circuits reasoning on the public-performance issue are problematic

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



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Inc. v. CSC Holdings, Inc., No. 08-448, 2009 WL 1511740, at *22 (U.S.

May 29, 2009) (U.S. Cablevision Br.). This included the fact that [s]ome

language in the court of appeals opinion could be read to suggest that a

performance is not made available to the public unless more than one

person is capable of receiving a particular transmission. Id. at 20

(emphasis in original); see also id. at *6 (observing that language in the

decision could be read to endorse overly broad, and incorrect, propositions

about the Copyright Act). The Solicitor General also expressly recognized

the specific concerns of the Copyright Alliance and others, observing that

[s]uch a construction could threaten to undermine copyright protection in

circumstances far beyond those presented here, including with respect to

VOD services or situations in which a party streams copyrighted material on

an individualized basis over the Internet. Id. at *20-21.

But in her view, those predictions would never come to pass. The

Second Circuit simply resolved a narrow question about a discrete

technology in the terms that it had been framed by the parties and was

careful to tie its actual holdings to the facts of this case. Id. at *19, *6. The

Second Circuits words were indeed limiting:

This holding, we must emphasize, does not generally permitcontent delivery networks to avoid all copyright liability bymaking copies of each item of content and associating oneunique copy with each subscriber to the network, or by giving



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their subscribers the capacity to make their own individualcopies.

Cablevision, 536 F.3d at 139. And the Solicitor General reiterated what the

Cablevision court had said: the court of appeals analysis of the public-

performance issue should not be understood to reach VOD services or other

circumstances beyond those presented in this case. U.S. Cablevision Br. at

*20-21.6

Like the petitioners and theiramici, commentators remained skeptical.

See, e.g., Ginsburg, at 27 (Cablevisions potential for eviscerating the

public performance right may be even greater than the Second Circuits

pious wish portends.). With respect to Appellants inspiration, Aereo, they

would appear to have been right. Despite argument from Cablevision itself

that Cablevision should not be expanded to Aereo, the Aereo district court

did it anyway. Finding that while the plaintiffs ordinarily would have

received an injunction but for Cablevision, Cablevisions express holding

regarding the meaning of . . . the transmit clause required it to follow the

Second Circuits interpretation and deny the injunction. American

Broadcasting Cos., Inc. v. Aereo, Inc., 874 F. Supp. 2d 373, 375 (S.D.N.Y.

6 Neither the Second Circuits nor the Solicitor Generals observations givedue consideration to the fact that VOD and other television licenses,including the statutory cable licenses in Section 111 of the Copyright Act,are based wholly or primarily on the public performance right.



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2012). On appeal, the Second Circuit was bound by the lower courts

factual record and stare decisis. See WNET, Thirteen v. Aereo, Inc., 12-

2786-cv, 2013 WL 1285591, at *4, *13 (2d Cir. Apr. 1, 2013). The Second

Circuit was hoist on its own petard and, as the dissent observed, the

majoritys decision provide[d] a blueprint for others to avoid the Copyright

Acts licensing regime altogether. Id. at *22.

This Court has an antidote in hand. Like the district court below, this

Court is not bound to follow statutory interpretations from other circuits. It

may go back to the language and come to its own conclusions. And as the

Aereo dissent practically exhorts, it is particularly important that it do so

here. Having seen the potential onslaught of new copyright-avoiding

business models that [the Cablevision decision] might inspire, Ginsburg, at

27, including the factitious system at issue before the Court, the Court has

plenty of reasons to come to its own conclusions (including those Appellees

have described) rather than make the same mistakes the Cablevision court

did.



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II. REVERSAL WOULD BENEFIT ONLY COMMERCIALLYMOTIVATED FREE-RIDERS, TO THE DETRIMENT OF

INNOVATION AND CONSUMER OPTIONS

A. Aereokiller Is Not Innovation, It Is TechnologicalRegression

Systems such as Aereokiller, FilmOn and ivi engage in public

performances by taking broadcast signals and transmitting them over the

Internet. See, e.g.,WNET, Thirteen, 2013 WL 1285591, at *16 (Aereo is

doing precisely what cable companies, satellite television companies, and

authorized Internet streaming companies do they capture over-the-air

broadcasts and retransmit them to customers except that those entities are

doing it pursuant to statutory or negotiated licenses, for a fee.). The only

difference with Aereokiller is that it makes hundreds of intermediate copies

in the process of retransmission. These copies do not make the system

operate better, faster, more cheaply or more efficiently. Rather, they are

technological inefficiencies shamelessly designed to exploit what Appellants

believed was a loophole in the law or, more accurately, a legal ruling that

extends only to the Second Circuit.

This pretext was obvious to the panel in the Aereo case, which at oral

argument never heard any technological justification for its inefficient model

only that Aereo had followed the assembly instructions that the

Cablevision panel purportedly engineered. See Oral Argument in WNET v.



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AEREO Incorporated, 12-cv-2786 (2d Cir.), Dkt. #243. The dissent

described Aereos platform of thousands of individual dime-sized antennas

as a sham and called out the system for what it is: a Rube Goldberg-like

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

Copyright Act and to take advantage of a perceived loophole in the law.

WNET, Thirteen, 2013 WL 1285591, at *15.7

By and large, it is the repertoire of copyrighted works available that

motivates a consumer to pay for a service. See United States v. Broadcast

Music, Inc. (Application of Music Choice),316 F.3d 189, 195 (2d Cir. 2003)

(The customer pays the retail price because the customer wants the music,

not because the customer wants to finance the laying of cable or the

launching of satellites.). Systems like Appellants charge their customers

for their service, but they cut authors and other creators out of the equation.

This is fundamentally wrong. The legions of authors and other contributors

7Even those who have suggested that Cablevision reached the right result

have drilled down on the technological waste involved in systems likeAppellants. By way of example, in a piece on Aereo for the pro-technology

blog Ars Technica, Professor James Grimmelmann described the design aswillfully perverse, one that makes no technical sense, wast[es]

resources, and drive[s] up costs. James Grimmelmann, Why Johnnycant stream: How video copyright went insane, ARS TECHNICA (Aug. 30,2012), http://arstechnica.com/tech-policy/2012/08/why-johnny-cant-stream-how-video-copyright-went-insane/. Thousands of tiny antennas are aridiculous way of capturing over-the-air TV. Storing a permanent copyrather than a buffer just large enough for streaming is a pessimization, not anoptimization. Id.



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and investors in the works that give the service its value are owed

compensation. See, e.g., Herbert v. Shanley Co., 242 U.S. 591, 595 (1917)

(Holmes, J.) (If music did not pay it would be given up. If it pays it pays

out of the publics pocket. Whether it pays or not the purpose of employing

it is profit and that is enough.).

Those who invest in the works commercialization and dissemination

are also owed protection from free-riding on their investments. See

generally, e.g., Adam Mosoff, How Copyright Drives Innovation in

Scholarly Publishing, 13-25 George Mason University Law and Economics

Research Paper Series, available at http://ssrn.com/abstract=2243264. As

the Supreme Court recently recognized, the promotion of Progress

encompasses giving incentives toward making works available. Golan v.

Holder, 132 S. Ct. 873, 888 (2012) ([I]nducing dissemination as opposed

to creation was viewed as an appropriate means to promote science.);see

alsoHarper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 557

(1985) (By establishing a marketable right to the use of ones expression,

copyright supplies the economic incentive to create and disseminate ideas.)

(emphasis added);American Geophysical Union v. Texaco, 802 F. Supp. 1,

16 (S.D.N.Y. 1992) (Copyright protection is vitally necessary to the



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dissemination of scientific articles . . . [It] is essential to finance the

publications that distribute them.), affd, 60 F.3d 913 (2d Cir. 1994).

Notwithstanding all of these principles, Appellants believe they

should be entitled to keep all the profit for themselves. The message that

this sends to subscribers is that Appellants would rather spend that money on

glue and boards than develop better services that acknowledge and

encourage the creation of copyrighted works for Appellants customers to

enjoy. This short-sighted business plan has nothing in common with what

the public interest compels or what the public itself as consumers of

technology and cultural expression wants, namely, innovation and sound

investments in both the sciences and the useful arts.

B. Affirmance Promotes the Progress of Science and UsefulArts, and Benefits The Public

In contrast to incentivizing the development of creative ways to avoid

paying compensation for the distribution and enjoyment of copyrighted

works, incentivizing innovation and investment in creative works is pro-

consumer, pro-public, and pro-Progress. It will encourage the

development of new works andlegal methods for distributing them.

This outcome is not merely what the Framers had in mind, it makes

logical sense. It is in the interest of those who use copyrighted works to

have them available. A clever new way to distribute works of authorship



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will have little chance of survival if the incentives to creators of those works,

and to those who invest in commercialization of such works, are whittled

away to the point that no new expressive works are created. See Metro-

Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 929 n.8 (2005)

(warning against overstating the mutual exclusivity of the respective

values of supporting creative pursuits through copyright protection and

promoting innovation in new communication technologies). In other

words, creative and technological innovation thrive when the relationship

between the two is symbiotic. When it becomes parasitic, they die.

These principles are nothing new to this Court, which 12 years ago

shut down a novel, Internet-based system for distributing copyrighted works

without authorization. See A&M Records Inc. v. Napster, Inc., 239 F.3d

1004 (9th Cir. 2001). Since then, consumers have spent billions of dollars

on legal sales of music over the Internet via the iTunes stores and other sites

that were allowed to develop without competition from those who do not

follow the rules or policies of copyright law.

The situation is no different in the context of new, cord-cutting

television distribution systems, both paid and unpaid. Licensed Internet and

mobile services such as Netflix, Hulu, MobiTV and even Appellees own

online channels have flourished and thrived. See American Broadcasting



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Cos., 874 F. Supp. 2d at 404 (noting the numerous other methods through

which the public can lawfully receive access to Plaintiffs content and

rejecting argument that public has the right to access broadcast television

from Aereos particularservice). The income earned from these licensed

distribution systems translates into financial support for those to whom those

distributed works owe their existence: from the producers who invest in the

works, to the writers, actors, photographers, set designers, editors and others

who provide their creative authorship, to the songwriters and recording

artists that lend their talents to soundtracks. Particularly in an age where the

present and future business of copyright dissemination, especially via the

Internet, is increasingly focused on dissemination via performance

(including through services such as Spotify and Rdio), the ability to reap

benefits from the performing right needs to be cautiously protected so that

Progress can furthered.

If unlicensed services such as Aereokiller are permitted to circumvent

the need for payments to rights holders, it will cut into the cable business

and other licensed legitimate businesses, which pay significant royalties to

contributors whose works are used in the broadcasts those businesses

retransmit. Cable, satellite and other licensed services have worked in

partnership with creators to build businesses that benefit the public interest,



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and that return compensation to creative workers in a variety of ways.

Songwriters are paid for the performance of their works in cable broadcasts,

union workers are paid residuals, and productions are greenlit on the basis

of understanding how various elements of the work will be paid for through

licensed distribution. More broadly, because copyright protection

incentivizes the commercialization of copyrighted works, it spurs investment

in giving the public a variety of new ways to enjoy those works: copyright

law gives these investors the ability to reap a return on their investments in

creation and distribution of expressive works.

All of these arrangements and their underlying goals are subverted if

services like Aereokiller are allowed to pursue their license-avoiding

schemes. Even where new services may disrupt or entirely supplant

traditional models, the change in delivery method does not justify subverting

the framework of copyright law. To ensure that the prolific growth of these

licensed distribution methods are not undercut by shams like Aereokiller, the

Court need only take a page from its decision in Napster, and reaffirm its

precedent of rejecting invitations to recast piracy as innovation.

For the foregoing reasons, a healthy relationship between copyright

and technology is central to Amicis interests. It therefore comes as a

surprise that some of Appellants amici have proffered the argument that



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affirmance will damage the development of cloud locker technologies.

Although cloud hosting and storage existed and grew even before

Cablevision cut back a significant part of the performance right, these amici

say that investment in cloud technologies has grown more robustly since

Cablevision was handed down. In essence, Appellants amici are asking the

Court to believe that a singular decision from the Second Circuit involving

an add-on cable service is the primary reason for a surge in investment in a

wide variety of technologies that include cloud computing, and that this is a

reason to give amnesty to Appellants unlicensed system. See Brief of

Amicus Curiae of Aereo, Inc., Dkt. #20-2, at 23-24 (Mar. 22, 2013); Brief of

Amicus Curiae of the Computer & Communications Industry Assn, Dkt.

#22, at 6-8 (Mar. 22, 2013). Those arguments miss the mark. First of all,

several of the cloud locker services Appellants amici mention operate

successfully under license notwithstanding Cablevision. No reason exists to

prevent Aereokiller from similarly seeking to obtain licenses. Moreover,

among other foundational problems, amicis theory also suffers a logical

flaw: correlation does not equal causation.8

8 Putting aside the general principle that the Internet itself has operated as acloud service for over 50 years, some of the most well-known services thatrely on cloud computing (including Google, Yahoo!, eBay and Amazon)were established long before 2008. See, e.g., Eric Schmidt, Conversationwith Eric Schmidt hosted by Danny Sullivan, Search



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Fundamentally, using buzzwords to invoke a type of technology that

many members of the public (including the Copyright Alliances members)

use does not demonstrate how Aereo, Aereokiller or other retransmission

services are in fact the same thing as cloud lockers legally or factually. To

any reasonable observer, cloud lockers used to remotely store and retrieve

lawfully owned copies of documents and other works are a far cry from a

concocted system designed to retransmit a networks copy of a program to

various members of the public at large. And it is quite telling that just like

the litigants have been unable to explain the technological basis for the

Aereokiller design their amici have no explanation for how or why the

future of cloud computing hangs on the existence of Appellants sub-optimal

redistribution system, apart from serving as stalking horse for dialing back

copyright protection to its weakest level in over 35 years. Those amicis

silence says enough.

Engine Strategies Conference (Aug. 9, 2006),http://www.google.com/press/podium/ses2006.html (describing companiesthat have benefited from cloud computing).



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CONCLUSION

For the reasons set forth above, and for those set forth in Appellees

brief, amici curiae respectfully requests that the decision below be affirmed.

Dated: New York, New YorkMay 3, 2013

s/ Eleanor M. LackmanEleanor M. Lackman

Counsel of Record

Mary E. RasenbergerNancy E. WolffCOWAN DEBAETS ABRAHAMS &

SHEPPARD LLP41 Madison Avenue, 34th Floor

New York, New York 10010Tel: (212) 974-7474

Sandra AistarsExecutive DirectorCOPYRIGHT ALLIANCE1224 M Street, NW, Suite 101Washington, DC 20005Tel: (202) 540-2247

Attorneys for Amici Curiae



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CERTIFICATE OF COMPLIANCE

I hereby certify that this brief complies with the type-volume

limitations of Fed. R. App. P. 32(a)(7)(B) because this brief contains 6909

words, excluding the parts of the brief exempted by Fed. R. App. P.

32(a)(7)(B)(iii), as counted by Microsoft Word 2007, the word processing

software used to prepare this brief.

This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because

this brief has been prepared in a proportionally spaced typeface using

Microsoft Word 2007, Times New Roman, 14 point.

s/ Eleanor M. LackmanEleanor M. Lackman

Attorneys for Amici CuriaeDated: May 3, 2013



42/42

CERTICATE OF SERVICE

I hereby certify that on May 3, 2013, I electronically filed the foregoing

Brief ofAmici Curiae The Copyright Alliance, The Association for Competitive

Technology, the Center for Individual Freedom, and Various Professors in Support

of Affirmance with the Clerk of the Court of the United States Court of Appeals

for the Ninth Circuit by using the appellate CM/ECF system.

I certify that all participants in the case are registered CM/ECF users and

that service will be accomplished by the appellate CM/ECF system.

s/ Kersuze Morancy


fox v. aereokiller - brief of amici curiae the copyright alliance et al in support of affirmance

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