July 16 (Bloomberg) -- The broadcast television networks, which failed to persuade a panel of federal appeals judges to shut down the Barry Diller-backed online TV service Aereo Inc., lost a bid to have the case reheard by the full appellate court.
The U.S. Court of Appeals in New York found in a 2-1 ruling in April that Aereo doesn’t violate the networks’ copyrights for programs because its transmissions to subscribers aren’t public performances, which would require a license. In a filing today, the appeals court said it won’t review the case.
“An active judge of the court requested a poll on whether to rehear the case,” the appeals court said in its order, adding that a majority of justices didn’t favor a review by the full court, which is known as en banc.
Broadcasters including Walt Disney Co.’s ABC, Comcast Corp.’s NBC and CBS Corp. had asked the Second Circuit appeals court to overturn a July 2012 order by U.S. District Judge Alison Nathan denying a preliminary injunction that would have put New York-based Aereo out of business. U.S. Circuit Judge Denny Chin dissented from the majority opinion. Chin and U.S. Circuit Judge Richard Wesley dissented from today’s court order.
The networks sued Aereo in March 2012, claiming that it infringed copyrights by capturing their over-the-air signals and retransmitting the programming to subscribers on computers and smartphones. They said the service would devalue their programming and cut viewership, jeopardizing revenue from advertisers and pay-TV providers.
Aereo has filed a motion in district court to dismiss the broadcasters’ lawsuit and Nathan hasn’t ruled on it. If she denies the motion, the case could go to trial.
“We are not surprised by this decision, given that requests for a full en banc hearing are rarely granted,” Dennis Wharton, a spokesman for the trade group the National Association of Broadcasters, said in an e-mail. “We believe that the broadcasters will prevail when this case goes to trial, and that Aereo will be declared a copyright infringer.”
Scott Grogin, a spokesman for News Corp.’s Fox Television Stations, another plaintiff in the case, said in an e-mailed statement that Fox is reviewing its options, which include seeking a hearing by the U.S. Supreme Court.
Aereo said its service allows subscribers to record and play back broadcast network programming using remotely located individual antennas and digital video recorders. The company said its technology can be compared to the rooftop antennas and rabbit ears used to bring over-the-air TV signals into the home for free.
“We are pleased by the further ruling in favor of Aereo,” Virginia Lam, a spokeswoman for the company, said in an e-mail.
Bloomberg LP, which owns Bloomberg News, is an Aereo partner and offers its cable channel on the service.
The appeals are American Broadcasting Cos. v. Aereo, 12-02807, and WNET v. Aereo, 12-02786, U.S. Court of Appeals for the Second Circuit (Manhattan). The lower-court cases are American Broadcasting Cos. v. Aereo, 12-cv-01540, and WNET v. Aereo, 12-cv-01543, U.S. District Court, Southern District of New York (Manhattan).
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