IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- October 17, 2013

Table of Contents

Evans v. Hewlett-Packard Co., USDC, N.D. Cal., October 10, 2013
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  • District court rejects state-law claims brought by performer “Chubby Checker” relating to lewd mobile app using the same name, finding claims pre-empted by Section 230 of the Communications and Decency Act.

Plaintiff Ernest Evans, who performs under the stage name “Chubby Checker” and is best known for the 1960 hit song The Twist, and several companies that own Chubby Checker trademarks, brought suit against defendants Hewlett-Packard and Palm, Inc., asserting federal trademark and state-law claims related to an adult-oriented mobile app called The Chubby Checker, which defendants made available for sale and download through their HP App Catalogue.

The district court had previously found that plaintiffs’ state-law claims were pre-empted by Section 230 of the Communications and Decency Act (CDA), which immunizes providers of interactive computer services from claims based on the content of material published using their services. Plaintiffs moved to file a Second Amended Complaint with additional allegations, re-asserting state-law causes of action that the court had previously dismissed. The court denied plaintiffs’ request, finding that the CDA pre-empted plaintiff’s state-law claims, even as revised.

Plaintiffs’ proposed pleading would have alleged, in pertinent part, that defendants (1) “created, designed, developed and transformed” at least parts of advertisements for the allegedly infringing content; (2) “assisted in the development, distribution, naming endorsement and sale” of the app; and (3) had a partnership or joint venture with the application’s developer by which they profited from the application’s sale.

Rejecting the proposed Second Amended Complaint, the court first disagreed with the plaintiffs’ argument that the defendants’ assertion of CDA immunity was an affirmative defense that could not be decided at the motion to dismiss stage. The court noted that, where an affirmative defense is apparent from the face of the complaint, the court may consider the defense on a motion to dismiss.

Here, the court concluded, plaintiffs’ Second Amended Complaint established that the defendants acted as service providers, as opposed to content providers, and were entitled to CDA immunity. The court disregarded as merely conclusory many of the proposed additional allegations – such as that defendants “created, designed developed and transformed” at least parts of advertisements for The Chubby Checker. The court also found that the mere fact that defendants were entitled to a percentage of the sales revenues generated by the app did not transform defendants’ into joint venturers or partners with the app’s creators, or show that they had any role in creation of the app’s content.

As the court had previously declined to dismiss plaintiffs’ federal trademark and unfair competition claims, it left open the possibility that plaintiffs would learn additional facts in discovery that would allow them to plead around the CDA’s harbor provisions for service providers.

Hearst Stations, Inc. v. Aereo, Inc., USDC, D. Mass., October 8, 2013
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  • District court denies preliminary injunction against Aereo’s internet television services, finding local television station unlikely to prevail on its copyright infringement claim, and denies Aereo’s motion to transfer suit to Southern District of New York.

Hearst Stations Inc. (Hearst), which owns the Boston-area television station WCVB-TV, brought this copyright infringement suit against defendant Aereo, Inc., alleging that Aereo is intercepting its television signals and converting its programs for retransmission over the internet without authorization. Three motions were before the court: Hearst’s motion for a preliminary injunction, and Aereo’s motions to transfer the case to the Southern District of New York (where a court refused to enjoin Aereo in a parallel proceeding) and to stay proceedings pending transfer. The court denied all three motions.

Hearst’s copyright allegations—and the technology at the core of the dispute—have been discussed in similar cases, including in the Second Circuit’s decision in WNET, Thirteen v. Aereo, Inc. affirming denial of an injunction (read our summary of the court’s decision here) and decisions by the Central District of California and the D.C. District Court granting injunctions (read our summary of those decisions here and here). Using banks of small antennas installed around the Boston area, Aereo intercepts television broadcast signals and converts the signals into a digital format that is saved to Aereo’s servers and then streamed over the internet to Aereo’s paying subscribers. Users cannot download the content to their own devices, though the electronic copies are stored indefinitely on Aereo’s hard drives.

The district court first rejected Aereo’s argument that the lawsuit should be moved to the Southern District of New York, because a case pending in that court was already “quite advanced,” and transfer would cause further delay or unfairly burden Hearst, whose choice of its home forum was entitled to deference.

Turning to Hearst’s motion for preliminary injunction, the court addressed whether Aereo’s technology infringes WCVB’s exclusive rights under Section 106 of the Copyright Act to publicly perform, reproduce, distribute, and prepare derivative works of its copyrighted programming. The court noted that the First Circuit has not yet decided whether technology that allows the transmission of copyrighted material over the internet constitutes a “public performance.” Looking to the statutory text, its legislative history, and case law from other jurisdictions, the court concluded that Aereo’s position was more persuasive, particularly because the legislative history indicated that the process of communicating a copyrighted work from its original creator to the ultimate consumer may involve several “performances.” Although the court did not explain the significance of this piece of legislative history, the court may have understood Congress to have equated a performance with a transmission, and therefore reasoned that a private transmission cannot constitute a public performance.

Hearst also argued that Aereo’s practice of recording three versions of a program every time a subscriber chooses to watch or record a program violates WCVB’s exclusive right to reproduce its copyrighted work. In the absence of First Circuit precedent on this point, the district court again noted that other circuits required that the defendant engage in “volitional” copying in order to be held liable for direct infringement. Here, the court found, it was likely that the subscriber, rather than Aereo, supplied the relevant volitional conduct, although the court noted that further discovery on the issue was warranted. The court summarily rejected Hearst’s arguments that Aereo unlawfully “distributes” or prepares “derivative works” of WCVB’s copyrighted works.

While the court considered it possible that WCVB’s ability to negotiate retransmission fees with cable providers would be irreparably harmed by Aereo’s service, any harm would take years to manifest, according to the court, and the potential harm did not overcome the relative weakness of Hearst’s position on the merits. The balance of hardships was neutral and the public interest factor, the court found, cut both ways. Accordingly, the court denied Hearst’s motion for a preliminary injunction.


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