FOX TELEVISION STATIONS, INC., et al v. AEREOKILLER LLC, et al

Filing 37

Emergency MOTION for Reconsideration re 33 Memorandum & Opinion, 34 Preliminary Injunction, by AEREOKILLER LLC,, FILMON X, LLC, FILMON.COM, INC,, FILMON.TV NETWORKS, INC.,, FILMON.TV, INC. (Attachments: # 1 Declaration, # 2 Declaration, # 3 Declaration, # 4 Text of Proposed Order)(Baker, Ryan)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA
_______________________________________
Civil No. 1:13-cv-00758 (RMC)

FOX TELEVISION STATIONS, INC., et al.
Plaintiffs/Counter-Defendants,
v.

Hon. Rosemary M. Collyer
Civil No. 1:13-cv-00758 (RMC)

FILMON X LLC, et al.
Defendants/Counter-Plaintiffs.
_______________________________________
DEFENDANTS’ EMERGENCY NOTICE OF MOTION AND MOTION FOR
RECONSIDERATION OF THE GEOGRAPHIC SCOPE OF THE PRELIMINARY
INJUNCTION AND BOND AMOUNT
Defendants1 respectfully seek reconsideration of this Court’s September 5, 2013
Memorandum Opinion (Dkt. 33) and Order (Dkt. 34) granting Plaintiffs’ Motion for Preliminary
Injunction (Dkt. 27). Specifically, Defendants request, on reconsideration, that this Court limit
the geographic scope of any injunction to the D.C. Circuit. In the alternative, the Court should
increase the amount of the bond by $250,000 for each federal circuit covered by the injunction.
Additionally, Defendants request that this Court continue their deadline to demonstrate
compliance with the preliminary injunction until this Court has ruled on this emergency motion.
The basis for Defendants’ motion is set forth in the attached Memorandum, the
accompanying Declarations of Mykola Kutovyy, Alkiviades David, Ryan Baker, and the court
records filed by the parties in connection with plaintiffs’ motion for a preliminary injunction. A
proposed order is also included. Because Defendants are required to file a report demonstrating
“Defendants” refers collectively to FilmOn X LLC, FilmOn.TV Networks, Inc., FilmOn.TV,
Inc. and FilmOn.com, Inc.
1

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compliance with the Preliminary Injunction by Thursday, September 12, 2013, Defendants
respectfully request expedited consideration of this motion.
Pursuant to Local Rule 7(m), defendants provided notice of their intent to seek the relief
requested in this motion to plaintiffs’ counsel on September 9, 2013. (Declaration of Ryan G.
Baker (“Baker Decl.”), ¶ 3.) Plaintiffs’ counsel indicated that plaintiffs would oppose this
motion. (Id., ¶ 4 & Ex. 1.) Defendants’ counsel further proposed an expedited briefing schedule,
but the parties were unable to agree on terms. (Id., ¶ 5.) This motion has been brought by
defendants at the first available opportunity. (Id., ¶ 6.)

Dated: September 10, 2013

BAKER MARQUART LLP

By:_/s/ _Ryan G. Baker_____________________
Ryan G. Baker
BAKER MARQUART LLP
10990 Wilshire Blvd., Fourth Floor
Los Angeles, California 90024
[phone] (telephone)
[phone] (facsimile)
Bar No.: 200344
Attorneys for Defendants and Counterclaim
Plaintiffs FilmOn X, LLC, FilmOn.TV, Inc.,
FilmOn.TV Networks, Inc., and FilmOn.com, Inc

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TABLE OF CONTENTS
INTRODUCTION .......................................................................................................................... 1
ARGUMENT .................................................................................................................................. 2
I.

This Court Has Jurisdiction To Reconsider Its September 5, 2013 Memorandum
Opinion And Order ............................................................................................................. 2

II.

On Reconsideration, This Court Should Limit The Geographic Scope Of The
Preliminary Injunction To The D.C. Circuit ....................................................................... 3
A.

This Court Did Not Previously Consider That The Injunction Does Not
Apply To Aereo ..................................................................................................... 3

B.

It Is Especially Appropriate For This Court To Limit The Scope Of The
Injunction In Light Of Certain Factual Errors Contained In This Court’s
Opinion ................................................................................................................... 5

III.

If This Court Leaves The Current Injunction Intact, The Amount Of The Bond
Should Be Increased To Take Into Account The Broad Geographic Scope Of The
Injunction ............................................................................................................................ 8

CONCLUSION ............................................................................................................................... 9

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TABLE OF AUTHORITIES
Page(s)
FEDERAL CASES
Cobell v. Norton,
355 F. Supp. 2d 531 (D.D.C. 2005) ...........................................................................................2
Fox Broadcasting Co, Inc., et al. v. Dish Network L.L.C., et al.,
2013 WL 3814917 (9th Cir. July 24, 2013), slip op. .................................................................6
Isse v. Am. Univ.,
544 F. Supp. 2d 25 (D.D.C. 2008) .............................................................................................3
Singh v. George Washington University,
383 F. Supp. 2d 99 (D.D.C. 2005) .............................................................................................2
Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417 (1984) ...................................................................................................................6
Williams v. Johanns,
555 F. Supp. 2d 162 (D.D.C.2008) ............................................................................................5
RULES
Rule 54(b) ........................................................................................................................................2

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
EMERGENCY MOTION FOR RECONSIDERATION OF THE GEOGRAPHIC SCOPE
OF THE PRELIMINARY INJUNCTION AND BOND AMOUNT

INTRODUCTION
The preliminary injunction issued by this Court on September 5, 2013 is extremely broad
and should be reconsidered. With the exception of the Second Circuit where the technology at
issue been found to be legal, the injunction applies “throughout the United States . . . .” (Dkt.
No. 34). This nearly nationwide injunction was issued even though there is ongoing litigation in
the First and Ninth Circuits concerning the same subject matter as this lawsuit.
(Defendants/Counter-Plaintiffs’ Request for Judicial Notice (“RJN”), Exs. 10-11.) The Ninth
Circuit heard oral argument related to Defendants’ technology on August 27, 2013. In the First
Circuit, the District Court for Massachusetts will hear a motion for preliminary injunction –
similar to the motion brought by plaintiffs in this case – on September 18, 2013. (RJN, Exs. 1011.)
In light of this ongoing litigation and the disagreement that already exists between the
Second Circuit and district courts in the Ninth Circuit and the D.C. Circuit, the Supreme Court
ultimately may have to resolve a circuit split over the proper interpretation of the Transmit
clause. This Court’s injunction is too broad. Based on principles of comity, this Court should
limit the injunction to the D.C. Circuit so that the injunction does not interfere with the litigation
in the First and Ninth Circuits or otherwise arrest the development of case law in other circuits
where similar lawsuits may be filed in the future. (RJN, Exs. 10-11.) Other jurisdictions should
have an opportunity to decide for themselves whether the technology at issue in this case violates
the Transmit clause or merely facilitates lawful private performances protected by the Copyright
Act.
Moreover, it is especially important for this Court to reconsider the geographic scope of
the injunction because Aereo is not bound by the injunction. While FilmOn X is prohibited by
the injunction from providing certain services to consumers in eleven different judicial circuits,
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Aereo may continue to provide or expand those same services to consumers across the country
(with the arguable exception of the D.C. Circuit). By limiting the injunction to the D.C. Circuit,
this Court would reduce the irreparable harm that FilmOn X would suffer if its nationwide
operations were undercut by Aereo.
Alternatively, this Court should increase the amount of the bond to take into account the
extremely broad geographic scope of the injunction. When this Court ordered a bond of
$250,000, it adopted the bond amount set by the district court judge in the Barrydriller case even
though the preliminary injunction in that case only applies within the territorial limits of the
Ninth Circuit. Because the preliminary injunction in this case applies across eleven judicial
circuits, the harm suffered by Defendants from the preliminary injunction in this case is
exponentially greater than the harm from the limited injunction in BarryDriller. Accordingly, if
this Court does not modify the geographic scope of the injunction, this Court should increase the
amount of the bond in the interests of justice.
ARGUMENT
I.

This Court Has Jurisdiction To Reconsider Its September 5, 2013 Memorandum
Opinion And Order
The Court has broad discretion to hear a motion for reconsideration brought under Rule
54(b). The standard for determining whether or not to grant a motion to reconsider brought
under Rule 54(b) is the “as justice requires” standard espoused in Cobell v. Norton, 355 F. Supp.
2d 531, 539 (D.D.C. 2005), which requires “determining, within the Court’s discretion, whether
reconsideration is necessary under the relevant circumstances.” See also Singh v. George
Washington University, 383 F. Supp. 2d 99, 101 (D.D.C. 2005). Considerations a court may take
into account under the “as justice requires” standard include whether the court “patently”
misunderstood the parties, made a decision beyond the adversarial issues presented, made an
error in failing to consider controlling decisions or data, or whether a controlling or significant
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change in the law has occurred. See Id. The party seeking reconsideration bears the burden of
proving that some harm would accompany a denial of the motion to reconsider; “[i]n order for
justice to require reconsideration, logically, it must be the case that, some sort of ‘injustice’ will
result if reconsideration is refused. That is, the movant must demonstrate that some harm, legal
or at least tangible, would flow from a denial of reconsideration.” Cobell, 355 F. Supp. 2d at 540.
Cobell also suggests that even if justice does not “require” reconsideration of an
interlocutory ruling, a decision to reconsider is nonetheless within the court's discretion, so long
as reasonable: “[E]ven if the appropriate legal standard does not indicate that reconsideration is
warranted, the Court may nevertheless elect to grant a motion for reconsideration if there are
other good reasons for doing so.” Cobell, 355 F. Supp. 2d at 540.
For the reasons discussed below, reconsideration is appropriate in this case.
II.

On Reconsideration, This Court Should Limit The Geographic Scope Of The
Preliminary Injunction To The D.C. Circuit
A.

This Court Did Not Previously Consider That The Injunction Does Not
Apply To Aereo

It is in the interests of justice for this Court to limit the geographic scope of its injunction.
Section 502(a) of the Copyright Act states a court may grant an injunction “on such terms as it
may deem reasonable.” It is the moving party’s burden to show that some harm would
accompany the Court’s denial of the motion to reconsider. Isse v. Am. Univ., 544 F. Supp. 2d 25
(D.D.C. 2008). That harm can be legal or tangible. Id.
Here, it is completely reasonable for the Court to reconsider the scope of its injunction.
Defendants will suffer both legal and tangible harm should the Court refuse and thus maintain its
virtual nationwide injunction. This harm Defendants will suffer is a manifest injustice. This
Court has issued a nationwide injunction preventing Defendants from operating a predominant

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portion of their services to customers everywhere, except for within the geographic boundaries of
the Second Circuit, where this Court recognized its decision is in direct contravention to the law
there. (Memorandum of Opinion (Dkt. 33) (“Opinion”) at p. 25 fn 11.)
This Court recognized in its Memorandum of Opinion that “in some cases comity may
require courts to limit the scope of injunctions.” (Id. at 34.) This is such a case. One circuit has
already ruled this technology to be legal within the Copyright Act. In addition to that circuit,
there are two other cases on this technology pending in two additional circuits, Ninth Circuit and
the First Circuit. (RJN, Exs. 10-11.) Defendants, and the other circuits, should not be denied the
ability to consider merits and decide themselves which law is more in line with that circuit.
Further, Defendants will suffer real, tangible harm should the Court refuse to reconsider
the scope of its injunction. The injunction enjoins Defendants from enabling users to access
Plaintiffs’ copyright works through Defendants’ service anywhere except for the Second Circuit.
However, Defendants’ direct competitor, Aereo, Inc. (“Aereo”), is not so enjoined. As the
concurrently filed Request for Judicial Notice shows, Aereo is already in large markets
throughout the United States and has clear plans to expand in many others. (RJN, Exs. 1-9.) In
markets outside the Second Circuit, Aereo operates in Atlanta, Boston, Miami and Salt Lake
City. (RJN, Exs. 1-5.) Further, Aereo has announced plans to expand to the following markets:
Minneapolis, Madison, Chicago, Detroit, Cleveland, Providence, Philadelphia, Pittsburgh,
Baltimore, Raleigh-Durham, Kansas City, Birmingham, Houston, Tampa, Dallas-Ft. Worth,
Austin, Kansas City and Denver. (RJN, Exs. 6-9.)
Preventing Defendants from competing with Aereo on an equal footing in this
competitive, growing market is clearly a manifest injustice to Defendants. Should the virtual
nationwide injunction remain, it will cause Defendants extreme revenue losses, market share

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losses, loss of brand recognition, loss of customer loyalty, lost opportunities with vendors and
sponsors and lost goodwill. (Declaration of Alkiviades David in support of Defendants/CrossPlaintiffs’ Motion for Reconsideration (“David Decl.”) ¶¶ 5-10.) These harms are in addition to
the millions of dollars Defendants have invested into their technology and services and
establishing themselves as a market competitor. (David Decl. at ¶¶ 5.)
Given the legal and tangible harms the Court’s broad injunction will cause Defendants, it
is proper for the Court to reconsider the geographic scope of its injunction and limit it to the D.C.
Circuit.
B.

It Is Especially Appropriate For This Court To Limit The Scope Of The Injunction
In Light Of Certain Factual Errors Contained In This Court’s Opinion

Reconsideration in the interests of justice is appropriate where the Court “patently
misunderstood the parties.” Williams v. Johanns, 555 F. Supp. 2d 162, 164 (D.D.C.2008). In the
Court’s Memorandum of Opinion there are several material misunderstandings regarding
Defendants technology, which greatly impacted the Court’s Opinion.
In its September 5, 2013 Order, this Court ruled that “FilmOn X’s service violates
Plaintiffs’ ‘exclusive right . . . to perform the copyrighted work publicly’” because it “mak[es]
available Plaintiffs’ copyrighted performances to any member of the public who accesses the
FilmOn X service . . . .” (Order at 25.) It reasoned that that “any member of the public who
clicks on the link for the video feed” can access broadcasts of a television programs that are
“‘generated from the same copy’—the original source.” (Id. at 27.)
However, this Court’s description of the underlying technology is factually inaccurate.
Further, this Court mischaracterizes FilmOn X’s legal position when it states that FilmOn X’s
argument is that “there is no copyright violation” “so long as each FilmOn X user has his or her
own assigned antenna.” (Opinion at 2.) FilmOn X does not—as the Court implies—simply
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build an antenna farm and then stream content over the internet, using antennas. Rather,
consumers use FilmOn X’s services to record individual copies of television programs for their
own future use and enjoyment. Like the remote storage RS-DVR systems in Cablevision and
Aereo, FilmOn X’s system merely enables consumers to personally make and privately view
performances from individual copies, at the consumer’s convenience. This is no different in kind
from consumer use of a traditional home video recorder, which Sony deemed a non-infringing
fair use. See Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 131-32 (1984)
(Sony); see also Fox Broadcasting Co, Inc., et al. v. Dish Network L.L.C., et al., 2013 WL
3814917, at *1 (9th Cir. July 24, 2013), slip op. at 12 (based on its conclusion that
“[i]nfringement of the reproduction right requires ‘copying by the defendant,’” as opposed to the
end user, the district court properly denied Fox’s motion for preliminary injunction.)
To clarify the Court’s understanding, Defendants’ service is based entirely on a “one-toone relationship” between a unique copy of a copyrighted work and an individual FilmOn X
user. (Declaration of Mykola Kutovyy filed in support of Defendants’ Motion for
Reconsideration (“Kutovyy Decl.”) at ¶ 3.) While it is true Defendants’ technology relies on
such devices as servers and encoders to facilitate the process when a user requests an antenna
and content, those additional devices do not change the fact that individual copies of content are
generated for future viewing by the user and the user alone. (Id.) Those devices merely
facilitate the user’s private transmission. (Id.)
When a user chooses to record a particular program through FilmOn X, the FilmOn X
antenna, tuner and other equipment generate a unique copy of that program for the user. (Id.)
That unique copy is stored in a hard-drive directory unique to the specific user, which cannot be
accessed by any other user. (Id.) Thus, although FilmOn X uses servers and other equipment,

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the copies that it generates are not broadcast to the public at large but instead are made available
for viewing by a specific individual upon that individual’s request. (Id.)
While the technology of FilmOn X involves certain steps and processes in order to
respond to a user’s request for free over-the-air broadcast television, those steps merely facilitate
the one-to-one relationship that exists every step of the way between a FilmOn X user and the
technological system. Each step in the process is both individualized and something each user
has the right to do for themselves. These technological clarifications show that FilmOn X is not
an internet streamer of copyrighted works, but a provider of remote equipment enabling users to
view free over-the-air broadcast television.
Moreover, as explained in the Declaration of Mykola Kutovyy, the Court misunderstood
FilmOn X’s technology in other relevant ways. For example, this Court found that “all dynamic
antennas are shared” and, in a footnote, that “[a]ccording to Aereo I, even static users sometimes
share antennas.” (Opinion at 5.) However, a FilmOn X user will never simultaneously “share”
an antenna with another user. (Kutovyy Decl. at ¶ 4.) A “static” FilmOn X user will never
“share” his or her antenna, unless there is a system malfunction. (Id.) Each time a “dynamic”
FilmOn X user logs onto the FilmOn X system, he or she is assigned an antenna that only he or
she may control until that user logs off of the system. (Id.)
Also on page five of the Opinion, the Court states, “The video encoder is connected to a
‘distribution endpoint,’ which is a ‘server or group of servers’ that delivers the video and audio
to FilmOn X users.” When a FilmOn X user requests content from the FilmOn X website, the
data obtained by a particular antenna while allocated to a particular user is not “shared” with or
accessible by any other FilmOn X user. (Kutovyy Decl. at ¶ 5.) That data is completely
individualized. (Id.) At the time the allocated antenna picks up the individualized data, a unique

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directory assigned specifically to an individual user is created in order to individually store the
data received by the allocated antenna. (Id. at ¶ 6.) The data has to be processed by the
transcoder so it will be in a format that allows it to be transmitted to the user. (Id.) The
transcoding process does not alter or affect the individualized nature of the data. (Id.)
Finally, to clarify any confusion surrounding the distribution endpoint, it is just simply
the point at which the television show is then, still individualized of course, transmitted to the
consumer. The distribution endpoint technologically is made up a server or groups of servers
and is the distribution point for the data that makes up the television program. (Id. at ¶ 8.) At all
times the system still maintains the completely individualized nature of the transcoded data. (Id.)
There are server partitions within the servers, as well as unique codes that isolate and maintain
individualized nature of each set of data that is sent in response to a user’s request for content
through FilmOn X’s system. (Id.) Indeed, FilmOn X’s technological system ensures that there
is “one-to-one relationship” between a copy of the copyrighted work and the individual FilmOn
X’s users at every stage of the technological process.
In light of this “one-to-one relationship,” Defendants respectfully request that this Court
reconsider its earlier factual findings. Further, in light of these factual errors, justice requires that
this Court limit the geographic scope of the injunction so that courts in other circuits may reach
their own factual and legal determinations with respect to the technology at issue.
III.

If This Court Leaves The Current Injunction Intact, The Amount Of The Bond
Should Be Increased To Take Into Account The Broad Geographic Scope Of The
Injunction
The bond should be increased drastically if the Court refuses to stay or amend the

injunction. The Court seemingly based the amount of the bond it granted on the Central District
of California’s determination of the bond amount in the BarryDriller case. (Opinion at 35.) The
Court stated it “finds no meaningful distinction between this case and BarryDriller. It will
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require Plaintiffs to post $250,000 bond.” (Id.) However, there is a very meaningful distinction
between the injunction here and the one in BarryDriller,
The court in BarryDriller only enjoined Defendants from offering their full services in
the Ninth Circuit. Here, the Court is enjoining Defendants from offering their full services in
every circuit, other than the Second Circuit. If the court in BarryDriller (this Court’s apparent
guide for determining the bond amount) found $250,000 to be sufficient for an injunction
covering one circuit, the proper bond amount based on this Court’s Order would be at a
minimum, substantially larger, if not eleven times larger, given this injunction covers eleven
circuits.
The Court does recognize some of the harm Defendants will suffer as a result of the
injunction. (Id.) The Opinion, however, fails to recognize the drastically increased harm to
Defendants given the exponentially larger injunction it entered. Therefore, should the Court not
stay the injunction or at least modify it to only cover the D.C. Circuit, Defendants should be
granted a substantially larger bond amount.
CONCLUSION
For the foregoing reasons, Defendants respectfully request the Court reconsider the
geographic scope of its preliminary injunction and limit the injunction to the D.C. Circuit.
Alternatively, this Court should substantially increase the amount of the bond so that a bond of
$250,000 must be posted for each federal circuit covered by the injunction.

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September 10, 2013

Respectfully submitted,

By: /s/ Ryan G. Baker
Ryan G. Baker
BAKER MARQUART LLP
10990 Wilshire Blvd., Fourth Floor
Los Angeles, California 90024
[phone] (telephone)
[phone] (facsimile)
Bar No.: 200344
/s/ Kerry J. Davidson
LAW OFFICE OF KERRY J. DAVIDSON
1738 Elton Road, Suite 113
Silver Spring, Maryland 20903
[phone] (telephone)
[phone](facsimile)
Bar No.: 456431
Attorneys for Defendants and Counterclaim
Plaintiffs FilmOn X, LLC, FilmOn.TV, Inc.,
FilmOn.TV Networks, Inc., and FilmOn.com, Inc.

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