In Countersuit, Aereo Claims It Doesn't Infringe Copyright

Barry Diller's Aereo has asked a federal judge in New York to declare that the company's new video service is legit.

Aereo says in its court papers that its business model -- which involves capturing free TV signals with antennas, and then streaming those signals to computers -- doesn't infringe copyright because consumers are allowed to install antennas themselves in order to watch TV.  "Aereo merely provides technology ... that consumers may use to do what they are legally entitled to do," the company says in papers seeking a declaratory judgment that its service is lawful.

Aereo filed its papers in response to a lawsuit brought earlier this month by TV broadcasters, who contend that the new service infringes copyright. Assuming Aereo doesn't get shut down first, the company plans to launch in New York on Wednesday with a $12 monthly service allowing people to watch TV shows on their computers or other Web devices.

In preparation for its launch, Aereo installed thousands of antennas -- each the size of a dime -- in New York. The company then creates individual recordings of broadcasts for customers' personal use and records and plays back those recordings using a remote digital video recorder.

Aereo says it doesn't have to pay licensing fees because people are allowed to install antennas and receive TV transmissions for free, as well as to record shows for personal use via remote DVRs.

"When a consumer is accessing broadcast television using the Aereo technology, he or she is using a specific individual antenna that is tuned and used only by that consumer for the duration of that access," the company writes. Aereo adds that it "simply provides to its members the convenience of locating at a remote facility the type of equipment that they could otherwise have and use at home.

Will Aereo succeed? To a large extent, the answer will depend on whether the judge views Aereo's antenna-to-PC transmission as a "public performance" that requires a licensing fee.

Aereo draws heavily on a case from 2009 involving Cablevision's remote-storage DVRs. In that case, the Second Circuit Court of Appeals ruled that Cablevision didn't engage in public performances by sending transmissions from major studios from remote servers to consumers' homes. "Companies that merely supply remote technological means that consumers can use to make personal recordings and play them back are not liable for copyright infringement," the company argues in its counterclaim, which references the Cablevision case.

Legal experts are divided about the company's prospects.

Tyler Ochoa, a copyright expert and law professor at Santa Clara University, is not optimistic about Aereo's chances of survival. He told MediaPost earlier this month that Aereo "has almost no chance of not being shut down." He says that Cablevision, unlike Aereo, had a license to broadcast shows -- though not the type of license that the studios said was required for the DVR service.

But Marvin Ammori, a legal fellow with the New America Foundation Open Technology Initiative,  wrote recently that Aereo's business model appears "completely legal."

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