The Stream Runs Downhill: Part 3

Today we will conclude our overview of the court's four-part decision in the Hearst v. Aereo copyright infringement case. If you recall, last week we concluded with the court's denial of Hearst's final two claims.

The court then turned to the question of whether Hearst had adequately shown that irreparable harm would be caused absent an injunction, and found that it had not. Hearst first claimed that allowing Aereo to continue its streaming service would leave Hearst unable to maintain its negotiating position in regards to the sale of rebroadcasting rights and the pursuit of other streams of revenue. While the court conceded that Aereo’s service might, in time, weaken Hearst’s ability to negotiate with rebroadcasters, it also noted that because these contracts were only re-negotiated every few years, rather than constantly, that the irreparable harm would likely not occur before the litigation ran its course, making a preliminary injunction unnecessary for preventing this damage.

Hearst next claimed that there would be irreparable harm to its advertising revenue, as advertising rates were based on viewership ratings, and those ratings did not measure those viewers who used streaming services such as Aereo. The court noted that Nielsen, the foremost ratings agency, had recently begun to count online viewers as part of its ratings, and thus ruled that Hearst had not shown irreparable harm from that source either. Finally, the court ruled that Hearst’s claim that Aereo’s service would harm Hearst’s efforts to create its own online streaming service was defective as well, as Hearst’s plans for such a service were too inchoate to be irreparably harmed at this time.

Having failed the first two prongs of the preliminary injunction test, the final two factors were more perfunctory than dispositive. The court, in two paragraphs, noted that the balance of harm does not appear to clearly favor either party, and the public interest similarly “cuts both ways.” In the end, it found that neither factor did much to change its earlier conclusions, and so ruled that because Hearst had failed to show a likelihood of success on the merits, and failed to show irreparable harm, its request for a preliminary injunction was denied.

What does this case mean in a larger context? For one, it is clear that attempts to use decades-old law to regulate cutting edge technology are bound to create serious problems of interpretation. The Copyright Law regarding these issues as cited by the court comes from 1976, when cable television was still in its infancy, and has not truly evolved to keep up with the times. The court’s ruling can be interpreted in different ways. Some will argue that it allows emergent forms of technology to effectively flout copyright laws and profit off the protected material of others due to unforeseen loopholes in the law. Others will take the opposing view, that the courts are unwilling to force new forms of technology into an antiquated regime of law, and will instead allow them to innovate new forms of content distribution until some elected body makes the conscious decision to regulate these new technologies.

 

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