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7/30/2019 Fox v. Aereokiller - Brief of Amici Curiae the Copyright Alliance et al in Support of Affirmance
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NOS.13-55156-cv(L),13-55157-cv(CON), 13-55226-cv(XAP)
and 13-55228-cv(XAP)
United States Court of Appeals
for the Ninth Circuit
FOX TELEVISION STATIONS, INC.; TWENTIETH CENTURY FOX FILMCORPORATION; FOX BROADCASTING COMPANY, INC.,
Plaintiffs-Appellees,
v.
AEREOKILLER, LLC; ALKIVIADES DAVID; FILMON.TV NETWORKS,
INC.; FILMON.TV, INC.; FILMON.COM, INC.,
Defendants-Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
CENTRAL DISTRICT OF CALIFORNIA CASE NO. 2:12-CV-06921-GW-JCGEORGE H. WU, UNITED STATES DISTRICT JUDGE
BRIEF OFAMICI CURIAE THE COPYRIGHT ALLIANCE,
THE ASSOCIATION FOR COMPETITIVE TECHNOLOGY,
THE CENTER FOR INDIVIDUAL FREEDOM, AND VARIOUSPROFESSORS IN SUPPORT OF AFFIRMANCE
SANDRA AISTARSExecutive Director
COPYRIGHT ALLIANCE
1224 M Street, NW, Suite 101Washington, DC 20005
(202) 540-2247
ELEANORM.LACKMANCounsel of Record
MARY E.RASENBERGER
NANCY E.WOLFFCOWAN,DEBAETS,ABRAHAMS
&SHEPPARD LLP
41 Madison Avenue, 34th FloorNew York, New York 10010
(212) 974-7474
Attorneys for Amici Curiae
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C-1
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,
amicus curiae The Copyright Alliance states that it does not have a parent
corporation, and that no publicly held corporation owns 10% or more of
amicus stock.
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,
amicus curiae The Association for Competitive Technology states that it
does not have a parent corporation, and that no publicly held corporation
owns 10% or more ofamicus stock.
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,
amicus curiae The Center for Individual Freedom states that it does not have
a parent corporation, and that no publicly held corporation owns 10% or
more ofamicus stock.
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TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT .......................................... C-1
TABLE OF CONTENTS.............................................................................. i-ii
TABLE OF AUTHORITIES ...................................................................... iii-v
INTEREST OFAMICI................................................................................... 1
SUMMARY OF ARGUMENT ...................................................................... 6
ARGUMENT .................................................................................................. 9
I. THIS COURT SHOULD AFFIRM THE DISTRICTCOURTS PROPER RULING BELOW RATHERTHAN FOLLOW THE SECOND CIRCUITSREASONING IN CABLEVISION............................................. 9
A.The Cablevision Decision Is a Poor Blueprint forCopyright and Law Technology ......................................... 11
1. The Legal and Practical Impacts ofCablevision Have Been LoomingConcerns for Creators of ExpressiveWorks ..................................................................... 11
2. Leading Copyright Scholars Agree ThatThe Cablevision Decision is Problematic .............. 14
a. The Ruling is Premised on LegalError ................................................................ 15
b. The Reasoning Leaves The DoorOpen to The Whittling Away of ThePerformance Right as NewTechnology Develops ..................................... 18
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B.The Reach ofCablevision Was Intended to BeLimited to Cable Retransmissions ...................................... 20
II. REVERSAL WOULD BENEFIT ONLYCOMMERCIALLY MOTIVATED FREE-RIDERS,TO THE DETRIMENT OF INNOVATION ANDCONSUMER OPTIONS .......................................................... 24
A.Aereokiller Is Not Innovation, It isTechnological Regression ................................................... 24
B.Affirmance Promotes the Progress of Science andUseful Arts, and Benefits the Public ................................. 27
CONCLUSION ............................................................................................. 33
CERTIFICATE OF COMPLIANCE ............................................................ 34
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iii
TABLE OF AUTHORITIES
Page(s)
CASES
A&M Records Inc. v. Napster, Inc.,239 F.3d 1004 (9th Cir. 2001) ........................................................... 28, 30
American Broadcasting Cos., Inc. v. Aereo, Inc.,874 F. Supp. 2d 373 (S.D.N.Y. 2012) ......................................... 22, 23, 29
American Geophysical Union v. Texaco,802 F. Supp. 1 (S.D.N.Y. 1992), affd, 60 F.3d 913 (2d Cir. 1994) ....... 26
Cartoon Network LP, LLLP v. CSC Holdings, Inc.,
536 F.3d 121 (2d Cir. 2008) ............................................................passim
Columbia Pictures Industries, Inc. v. Redd Horne, Inc.,749 F.2d 154 (3d Cir. 1984) .................................................................... 11
Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,--- F. Supp. 2d ---, 2002 WL 6784498 (C.D. Cal. Dec. 27, 2012) ........... 9
Golan v. Holder,132 S. Ct. 873 (2012) .............................................................................. 26
Harper & Row, Publishers, Inc. v. Nation Enters.,471 U.S. 539 (1985)................................................................................. 26
Herbert v. Shanley Co.,242 U.S. 591 (1917) ................................................................................ 26
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,545 U.S. 913 (2005)................................................................................. 28
United States v. ASCAP,1992 WL 142749 (S.D.N.Y. June 12, 1992) ........................................... 12
United States v. Broadcast Music, Inc.,316 F.3d 189 (2d Cir. 2003) .................................................................... 25
WNET, Thirteen v. Aereo, Inc.,12-2786-cv, 2013 WL 1285591 (2d Cir. Apr. 1, 2013) .............. 23, 24, 25
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STATUTES &RULES
17 U.S.C. 101 ............................................................................................. 17
17 U.S.C. 110(5)(A) .................................................................................. 12
Fed. R. App. P. 29(b) ...................................................................................... 1
Fed. R. App. P. 29(c)(5).................................................................................. 1
U.S. Const. art. I, 8, cl. 8.............................................................................. 6
OTHERAUTHORITIES
Adam Mosoff,How Copyright Drives Innovation in ScholarlyPublishing
13-25 George Mason University Law and Economics ResearchPaper Series ............................................................................................. 26
Brief of Amicus Curiae Copyright Alliance, Cable News Network,Inc. v. CSC Holdings, Inc.,No. 08-448, 2008 WL 4887717 (U.S. Nov. 5, 2008) .............................. 13
Brief of the United States as Amicus Curiae, Cable News Network,Inc. v. CSC Holdings, Inc., No. 08-448, 2009 WL 1511740(U.S. May 29, 2009) ................................................................... 20, 21, 22
Brief of Various Professors as Amicus Curiae, Cable News Network,Inc. v. CSC Holdings, Inc.,No. 08-448, 2008 WL 4819896 (U.S. Nov. 5, 2008) .............................. 18
Eric Schmidt, Conversation with Eric Schmidt hosted by DannySullivan, Search Engine Strategies Conference (Aug 9, 2006) ............... 32
James Grimmelmann,Why Johnny cant Stream: How video copyrightwent insane,ARS TECHNICA (Aug. 30, 2012) .......................................... 25
H.R. Rep. No. 94-1476, reprinted in 1976 U.S.C.C.A.N 5659 .............. 10, 12
Jane C. Ginsburg,Recent Developments in U.S. Copyright Law PartII, Caselaw: Exclusive Rights on the Ebb? Colum. Pub. L. & LegalTheory Working Papers, No. 08158 (2008) .....................................passim
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Jeffrey Malkan, The Public Performance Problem In CartoonNetwork LP v. CSC Holdings, Inc., 89 OR.L.REV. 505 (2010) ...... 16, 17
Paul Goldstein, Goldstein on Copyright, (2011 Supp.) .................... 14, 16, 19
Raymond T. Nimmer, Law of Computer Technology, (2013) ..................... 11
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Pursuant to Federal Rule of Appellate Procedure 29(b), amici curiae
the Copyright Alliance, the Association for Competitive Technology, the
Center for Individual Freedom, and various professors listed herein
(collectively, Amici) respectfully submit this brief in support of appellees
Fox Television Stations, Inc., Twentieth Century Fox Film Corporation and
Fox Broadcasting Company, Inc. (the Fox Parties), and NBCUniversal
Media, LLC, Universal Network Television, LLC, NBC Subsidiary KNBC-
TV, LLC, American Broadcasting Companies, Inc., Disney Enterprises, Inc.,
CBS Broadcasting, Inc., CBS Studios, Inc., Open 4 Business Productions,
LLC, Big Ticket Television, Inc., Telemundo Network Group, LLC and
WNJU-TV Broadcasting, LLC (the NBC Parties) (the Fox Parties and
NBC Parties, collectively, Appellees). This brief is submitted on motion.1
INTEREST OF AMICI
The Copyright Alliance is a nonprofit, nonpartisan 501(c)(4)
membership organization dedicated to promoting and protecting the ability
of creative professionals to earn a living from their creativity. It represents
1 Pursuant to Federal Rule of Appellate Procedure 29(c)(5), no counsel forany party authored this brief in whole or in part, and no party or counsel forany party made a monetary contribution intended to fund the preparation orsubmission of this brief. Only amici curiae made such a monetarycontribution. Some Copyright Alliance members are, or are affiliates of,Appellees in this matter. Some may join otheramicus briefs in support ofAppellees.
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the interests of individual authors from a diverse range of creative industries
including, for example, writers, musical composers and recording artists,
journalists, documentarians and filmmakers, graphic and visual artists,
photographers and software developers and the small businesses that are
affected by the unauthorized use of their works. The Copyright Alliances
membership encompasses these individual artists and creators, creative
union workers, and small businesses in the creative industry, as well as the
organizations and corporations that support and invest in them.
Those affected by the reach of copyright law, including the law that
applies to television retransmission, extend far beyond the names of the
parties involved in the present appeal. For example, even the lengthy credits
displayed during a broadcast television program may not come close to fully
capturing all of the names of those who provided writing, directing, design,
recording, engineering, photography and editing contributions to make that
program available for customers to enjoy. Similarly, those who invest in
others creation of copyrighted works, and the means of distributing them,
must be protected from free-riding.
The concept of innovation is of fundamental importance to the
Copyright Alliance. Just like the patent laws encourage the development of
technology, the copyright laws spur the development of the creative works
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for the benefit of public consumption through ensuring that those who
contribute to creative works are fairly compensated for their efforts.
The Copyright Alliance encourages the development of new
technologies that may be used to bring licensed works to the public in new
ways, even if those new ways disrupt traditional business models.
However, regardless of the ways in which technology and business evolve,
the Copyright Alliances primary dedication is to ensuring that the policies
in the Constitution and Congress directions in the Copyright Act continue
to provide meaningful protections to authors whose works may be publicly
performed or displayed, and to the investments made to commercialize those
works. The Copyright Alliance submits this brief to help the Court
appreciate how Judge Wus principled decision is consistent with those
policies and directions. The Copyright Alliance also submits this brief to
help the Court understand the negative impacts of reversal to all of those
who rely on the public performance and public display rights including if
reversal is premised on errors made in a decision of another circuit.
The Association for Competitive Technology (ACT) is an
international grassroots advocacy and education organization with more than
5,000 small and medium sized software and mobile-app companies,
including more than 4,000 based in the United States. ACT was founded in
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1998 by independent software developers concerned about how the
interactions between major companies and policymakers affected small and
medium sized developers. ACT is a registered 501(c)(6) non-profit
organization in the United States. Specifically, the institutional purpose of
ACT, as detailed in its U.S. charter documents, is directly related to the
benefit of the application developer community by enhanc[ing] public
understanding of the high quality of its members products and services and
its members commitment to innovation and technological advancement.
The mobile-app industry has grown from non-existent just five years
ago to a $20 billion-dollar industry today. The industry continues to grow
rapidly and is projected to reach $100 billion by 2015. And those software
developers who contribute to the growth of the industry increasingly rely on
their public performance right. A strong, and globally consistent,
application of the public performance right is fundamental to the industrys
ability to ensure that it (like other copyright-reliant U.S. export industries)
can compete in the global, networked world. Thus, for reasons similar to
those of the Copyright Alliance, ACT submits this brief to encourage the
Court to follow the policies and objectives of this countrys copyright law
and affirm the decision below accordingly.
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The Center for Individual Freedom (the Center) is a 501(c)(4)
nonprofit organization with the mission to protect and defend individual
freedoms and rights guaranteed by the U.S. Constitution, including, but not
limited to, property rights, free speech rights, privacy rights, and freedom of
association. Toward those ends the Center undertakes a wide variety of
publications and programs, and since its founding in 1998, the Center has
filed numerous briefs before state and federal courts, including the United
States Supreme Court, on behalf of fundamental Constitutional rights. The
instant case squarely raises issues of particular importance to the Center,
namely the constitutional protection of intellectual property rights as
specifically set forth in Article I, Section 8 of the Constitution and the
fundamental importance of protecting property rights, the rule of law and
free markets.
The various professors who join this brief are professors who teach,
research, and have an interest in the theory, law and practice of copyrights,
property rights, and contracts.2 The professors have no other stake in the
outcome of this case, but are interested in ensuring that copyright law
2The professors are Adam Mossoff, Raymond Nimmer, Mark Schultz,
Christal Sheppard, Jon Simson and Lionel Sobel. Their biographies areappended to the accompanying Motion for Leave to FileAmicus Brief.
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develops in a way that best promotes creativity, innovation and competition
in the digital world.
SUMMARY OF THE ARGUMENT
The district courts decision advances the underlying goal of this
countrys copyright law: [t]o promote the Progress of Science and useful
Arts . . . . U.S. Const. art. I, 8, cl. 8. Reversal here would promote
neither. Instead, blessing the system crafted and offered by appellants
Aereokiller, LLC, Alkiviades David, FilmOn.TV Networks, Inc.,
FilmOn.TV, Inc. and FilmOn.com, Inc. (Appellants) would promote
lawyer-created and judicially blessed technological inefficiencies designed
to help only those seeking to maximize their profits, to the detriment of
innovation in technology and innovation in creative expression. When
technologies designed to exploit judicially-created loopholes in the
Copyright Act cut creators from established licensing structures, those
providers of expressive works are harmed and no longer incentivized to
come together to make the same types of works that the public enjoys. If
those who invest in the production and distribution of creative works cannot
be assured that their interests will be protected regardless of whether those
works are distributed through old, traditional models or new, disruptive
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ones the array of works that will be offered to the public will suffer. Put
simply, if Appellants win, everyone else loses.
This Court should reject the invitations of Appellants and theiramici
to extend a legally flawed and factually limited case, Cartoon Network LP,
LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (Cablevision),
involving a cable operators remote storage DVR, to a contrived
retransmission system that purports to be based on the holding in that case.
Plenty of reasons exist that should encourage this Court not to follow
Cablevision here.
As a fundamental matter, Cablevisions interpretation of the public
performance right has been criticized by members of academia as inherently
flawed and potentially far-reaching in ways that conflict with Congress
intent. Even then-Solicitor General Elena Kagan questioned the court of
appeals interpretation of the public performance right. It would be error for
this Court to similarly misinterpret the law.
As a practical matter, the consequences to the Copyright Alliances
members of applying Cablevisions interpretation of the public performance
right have threatened and do threaten to have broad impact on those who
rely on strong rights of public performance and public display. The
concluding statements of the Cablevision decision and the Solicitor
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Generals brief to the Supreme Court of the United States quieted the fears
of the copyright community five years ago: both expressly recognized that
Cablevisions holding was limited to Cablevisions remote-storage DVR.
Nonetheless, the Second Circuits application of Cablevision under
principles ofstare decisis to the Aereo system, and the arguments in the case
at bar, have reignited the fears that the Cablevision decision threatens to not
be as limited as the Second Circuit and Solicitor General had opined.
In the wake of the troubling rulings from the Second Circuit, the
district courts decision below marked a welcomed shift away from the
cloud that Cablevision left behind. Judge Wus ruling was not only correct,
it was a win for sound statutory interpretation, Congressional intent and
well-established copyright policy. The ruling properly accounts for the
fundamental principle that those who profit from public redistribution of
copyrighted works must not cut out the works creators from due
compensation. In the same vein, affirmance would be a victory for all
involved: for the incentivization of creation and copyright
commercialization, insulated against for-profit free-riding; for the
encouragement of technological developments that focus on delivering the
best product possible, not on designing systems engineered by lawyers; for
the expansion of consumer choice through the robust growth and
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diversification of efficient and licensed distribution systems; and, finally,
for sound and reasoned statutory interpretation which correctly construes the
scope of the transmit clause consistent with the foregoing and the overall
statutory framework of the Copyright Act.
ARGUMENT
I. THIS COURT SHOULD AFFIRM THE DISTRICT COURTSPROPER RULING BELOW RATHER THAN FOLLOW THE
SECOND CIRCUITS REASONING IN CABLEVISION
As detailed more fully in Appellees briefs, Judge Wus decision is
consistent with the law of this Circuit and with the statutory framework of
the 1976 Copyright Act. See Fox Parties Br. at 20-25; NBC Parties Br. at
23-28. The district court properly followed and reconciled the facts of this
case with a ruling from this Circuit. SeeFox Television Stations, Inc. v.
BarryDriller Content Sys., PLC, --- F. Supp. 2d ---, 2002 WL 6784498, at *4
(C.D. Cal. Dec. 27, 2012) (hereinafter, Op.) (citing On Command Video
Corp. v. Columbia Pictures Industries, 777 F. Supp. 787 (N.D. Cal. 1991)).
Moreover, it correctly understood the distinction between performances of
works that are wholly private, and those that relate to a public, commercial
enterprise. See id. at *5 (recognizing that cable systems are commercial
enterprises whose basic retransmission operations are based on the carriage
of copyrighted program material and . . . copyright royalties should be paid
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by cable operators to the creators of such programs, and analogizing to
Aereokiller) (quoting H.R. Rep. No. 94-1476, at 89 (1976), reprinted in
1976 U.S.C.C.A.N. 5659, 5704). Aereokiller is clearly a commercial
enterprise engaged in unlicensed retransmissions of copyrighted material,
and those facts easily resolve to the holding that Judge Wu reached.
Appellants only justification for their makeshift system is that it
purportedly rests on the Second Circuits Cablevision decision a decision
that is not even binding on this Court, was wrongly decided in the first place,
and should be strictly limited to its facts. Judge Wu correctly rejected
attempts to use Cablevision to condone Aereokiller. See Op. at *2 ([T]he
Ninth Circuits precedents do not support adopting the Second Circuits
position on the issue. Instead, the Court would find that Defendants
transmissions are public performances, and therefore infringe Plaintiffs
exclusive right of public performance.). On appeal, the Court may also
review the underlying authority and come to its own conclusions, just as
Judge Wu did. And just as Judge Wu did, it can reach those conclusions
without regard to the Second Circuits ruling. If the Court does so, it will
affirm.
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A. The Cablevision Decision Is a Poor Blueprint for CopyrightLaw and Technology
1. The Legal and Practical Impacts ofCablevision Have BeenLooming Concerns for Creators of Expressive Works
Appellants and their amici have urged this Court to follow
Cablevision a decision that raised significant concerns across a large part
of the copyright community.3 Copyright owners were understandably
worried about letting specific technology drive a ruling that conflicted with
the technology-neutral performance right. See Raymond T. Nimmer, Law of
Computer Technology 15:6 (2013), available at Westlaw LCOMTECH
(court took a restrictive view of the case that combined an emphasis on the
technology Cablevision used with an apparent desire to enable cable entities
to control this type of delayed viewing . . . .). In reaching its result, the
Cablevision decision overlooked the fact that a work can be publicly
performed in ways other than from a single copy like the system in
Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d
Cir. 1984). In conclusory fashion, the court of appeals rejected the lower
courts careful reliance on On Command, even though that ruling had not
been disturbed in nearly 20 years. Cablevision, 536 F.3d at 139. And, rather
than taking into account the types of policies and directions that Judge Wu
3 The relevant facts ofCablevision are more fully detailed in Fox Parties Br.at 9-11.
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did in the ruling below, the Cablevision court concerned itself with the
possibility that a hapless customer that sends a recorded program to
another room of his house might be sued for copyright infringement even
though copyright law and policy already reflect a much more nuanced
approach than the court of appeals strained hypothetical scenario suggests.4
The rulings unjustified deviation from certain well-settled principles
of copyright law provoked concern from a broad group of representatives
from the creative community. Thirty-six amici including software
creators, photographers, book publishers, sports leagues, distributors, guilds,
music publishers, academic presses, record companies, performing rights
organizations and professors, including some ofAmici in eight amicus
briefs, urged the Supreme Court to grant certiorari and reverse the court of
appeals holding. The expansive reaction was a clear symptom of a
potentially serious problem.
4See, e.g., H.R. Rep. No. 94-1476, at 63 (Certain other performances and
displays, in addition to those that are private, are exempted or given
qualified copyright control under sections 107 through 118.);17 U.S.C. 110(5)(A) (public performance and display exemptions pertaining toreception of performances on a single receiving apparatus of a kindcommonly used in private homes); cf. United States v. ASCAP (In re
Muzak), 1992 WL 142749, at *7 (S.D.N.Y. June 12, 1992) (commercialestablishments that further communicate licensed broadcasts to the publicrequire separate license).
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Among other concerns, the petitioners and theiramici pointed out that
the court of appeals decision could undercut the goals of copyright law and
financially disadvantage and disincentivize the countless individuals and
industries that rely on the performance right. At the same time, the ruling
could lead to another policy shift: one that incentivizes the development of
delivery services in a way that is designed to game the copyright licensing
system, rather than develop better means of delivery. See, e.g., Brief of
Amicus Curiae Copyright Alliance, Cable News Network, Inc. v. CSC
Holdings, Inc., No. 08-448, 2008 WL 4887717, at *11, *13 (U.S. Nov. 5,
2008). In other words, the petitioners and their amici were worried that
Cablevision would open the door to the same genre of gimmickry that
Appellants ask the Court to bless today.
In a case premised on a synthetic technological architecture that is
purportedly sanctioned by the Cablevision ruling, it is no surprise that the
Copyright Alliance again, joined by the otherAmici, is voicing similar
concerns about the broader effects of excluding certain technological
structures from the framework of copyright law. Yet, five years of
hindsight, reflection and judicial rulings confirm that the Cablevision
petitioners and their amici were not crying wolf. Those thousands of
creators and investors in creative works, for whom the Copyright Alliance
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spoke, had legitimate cause for concern then, just like they will if the
decision below is not affirmed now.
2. Leading Copyright Scholars Agree That The CablevisionDecision Is Problematic
Analysis from the academic community has echoed the Copyright
Alliances arguments that Cablevision could have a devastating impact on
copyright owners. See 2 Paul Goldstein, Goldstein on Copyright, 7.7.2, at
7:168.1 (2011 Supp.) (Goldstein) (Cablevision effectively closed off a
critical aspect of the transmit clauses intended embrace . . . .); Jane C.
Ginsburg,Recent Developments in U.S. Copyright Law Part II, Caselaw:
Exclusive Rights on the Ebb? Colum. Pub. L. & Legal Theory Working
Papers, No. 08158, (2008), available at
http://lsr.nellco.org/columbia_pllt/08158 (Ginsburg) ([T]he Second
Circuits recent decision in Cartoon Networks v. CSC Holdings, if followed,
could substantially eviscerate the reproduction and public performance
rights.). Academia has identified two categories of problems: error in the
court of appeals interpretation of the law, and the potential impacts on other
cases, parties and distribution methods as a result of Cablevisions
precedential effect.
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a. The Ruling is Premised on Legal ErrorWhile the consequences of the holding have gathered attention, the
misreading of the law itself has become a lightning rod for academic
criticism. The courts main error which Judge Wu properly avoided is
both simple and glaring. The court started out properly enough, with the
meaning of publicly as defined in the statute. Cablevision, 536 F.3d at
134. Based on its reading, the court asked whether, under the Transmit
Clause of the definition, Cablevision transmit[s] . . . . a performance . . . of
the work . . . to the public. Id. From there, the court opined that it is
relevant to discern who is capable of receiving the performance being
transmitted. Id.
Yet, instead of answering the question, the court took a detour through
a variety of legislative history and never came back to where it had started.
By the time it had finished reciting that history, the court had reframed the
question completely, concluding that the law directed the court to examine
who precisely is capable of receiving a particular transmission of a
performance, id. at 135 rather than the performance being transmitted
under its prior formulation, id. at 134 (emphases added).
As leading commentators have directly pointed out, the court of
appeals confusion in assessing the plain language of the statute led to a
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result that Congress did not intend. The principal error in the courts
application of the transmit clause was that it substituted the word
transmission for the word performance in the phrase capable of
receiving the performance . . . . Jeffrey Malkan, The Public Performance
Problem In Cartoon Network LP v. CSC Holdings, Inc., 89 OR.L.REV. 505,
553 (2010) (Malkan). The statute does not say capable of receiving the
transmission, id., and [t]here can be little doubt that the [ ] word itin the
definition refers to performance or display, not transmission, which in fact
appears only as a verb, and not a noun, in the definition. Goldstein, at
7:168. [T]he transmit clause specifies that members of the public must be
capable of receiving the performance, not capable of receiving the
transmission. Malkan, at 536 (emphases added).
Having rewritten the definition, the Cablevision court proceeded to
reinforce its original error by treating performance and transmission as
synonymous and interchangeable. The problem is, they are neither. See
Goldstein, at 7:168 (The error in the Second Circuits construction of the
transmit clause was to treat transmissions and performance as
synonymous, where the Act clearly treats them as distinct and different
operative terms.); see also Ginsburg, at 26 (making same observation).
The law makes the receipt of the performance outcome-determinative, not
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the receipt of the transmission that conveys or otherwise communicates
the performance. Moreover, even though the transmit clause refers, as
Judge Walker put it, to the performance created by the act of transmission,
a transmission and a performance remain, technically and legally, two
distinct things. Malkan, at 536. Accordingly, although a transmission of a
performance is a type of performance, the two words are not interchangeable
or reversible. Id. at 531 (emphasis added).5
The nature and extent of the courts error manifests itself in other
material ways, including that its statutory construction cannot be reconciled
with the intended meaning of the public, i.e., a group of persons not
otherwise connected via familial or socially familiar relationship.
Cablevision said that, under the transmit clause, we must examine the
potential audience of a given transmission by an alleged infringer to
determine whether that transmission is to the public. Cablevision, 536
5The definition of perform to which the Cablevision court did not give
any meaningful consideration helps to explain the difference. Toperform a work can include reciting it, playing it or rendering it; in thecase of a performance of a work preserved in a motion picture or otheraudiovisual format, to perform can mean showing that audiovisual works
series of related images in any sequence or making the soundsaccompanying it audible. See 17 U.S.C. 101. In other words, it isrepresentational. In contrast, the term transmit is spatial: it hews to thenature of the performances travel from one place to a distant location. Seeid. (to transmit a performance . . . is to communicate [that performance]
by any device or process whereby images or sounds are received beyond theplace from which they are sent.).
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F.3d at 137. But rather than narrowing the universe of the public, the
phrase members of the public capable of receiving the performance is
designed to be broad: its role is to clarify that a transmission is still to the
public even if its receipt is individualized. Ginsburg, at 26 (emphasis
added). See also Op. at *4 (The statute provides an exclusive right to
transmit a performance publicly, but does not by its express terms require
that two members of the public receive the same transmission.). Or, as
eight professors argued in their brief in support ofcertiorari,
[I]t is quite clear that Cablevision offered delayed performancesto the public (its entire customer base) and transmitted the
performance via its RS-DVR system. According to the Courtof Appeals, each of these were [sic] private performances. Butthat wrongly ignores the system as a whole.
Brief of Various Professors as Amicus Curiae, Cable News Network, Inc. v.
CSC Holdings, Inc., No. 08-448, 2008 WL 4819896, at *13 (U.S. Nov. 5,
2008).
b. The Reasoning Leaves The Door Open to TheWhittling Away of The Performance Right as New
Technology Develops
Commentators have also expressed their concern about the practical
effects of interpreting the transmit clause as the Cablevision court did. In
particular, the court of appeals interpretation excises from the law entire
categories of transmissions clearly intended to fall within the broad scope of
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the performing right including those where the delivery requires two
transmissions in order to communicate that performance to the recipients
(for example, because those two individuals are located in different places
or prefer to stream the program at different times). See Ginsburg, at 26
(While such a performance could be transmitted simultaneously to
differently located recipients, recipients differently situated in time cannot
receive the same transmissions.). The courts interpretation thus reads non
simultaneous receipt out of the statute. Id. IfCablevisions misreading
viewing the transmission of a performance as if it were itself the
performance were followed, it would entirely undermine Congresss
intention in formulating the public performance right as it had drafted, lest
this technology displace traditional, compensated instances of public and
broadcast performance with uncompensated private ones. Goldstein, at
7:168 (emphasis added). Professor Goldsteins observation is directly on
point here: Congress intention was not to have uncompensated
technologies such as Aereokiller replace traditional, compensated instances
of public performance such as cable and satellite retransmission. Just like in
antitrust law, copyright law does not choose between competitors.
That these commentators observations mirror Amicis concerns
underscores the potential jurisprudential and practical problems of adopting
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Cablevisions abridgement of the public performance right. Perhaps the
Second Circuit may have found a device or process worth excluding from
the performance right, but particularly in the age of rapid technological
growth where new models compete to outpace traditional models, the
bleeding cannot be allowed to continue. Therefore, before making the same
errors the Second Circuit did, this Court should pause to consider whether
Appellants contrived system merits the same type of judicial carve-out to
the performance right, notwithstanding Congress express intention to avoid
them.
B. The Reach ofCablevision Was Intended to Be Limited toCable Retransmissions
The plaintiffs in the Cablevision petitioned for certiorari. For a
variety of traditional reasons, the Solicitor General recommended that
certiorari be denied. But that did not mean that she thought that the
Cablevision holding on the performance right was correct. Rather, her view
was that creators and other copyright owners need not be worried because
the Second Circuit expressly limited its decision to the facts of the case.
The Solicitor Generals brief expressly recognized that the court of
appeals reasoning contained errors. It noted that some aspects of the
Second Circuits reasoning on the public-performance issue are problematic
. . . . Brief of the United States as Amicus Curiae, Cable News Network,
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Inc. v. CSC Holdings, Inc., No. 08-448, 2009 WL 1511740, at *22 (U.S.
May 29, 2009) (U.S. Cablevision Br.). This included the fact that [s]ome
language in the court of appeals opinion could be read to suggest that a
performance is not made available to the public unless more than one
person is capable of receiving a particular transmission. Id. at 20
(emphasis in original); see also id. at *6 (observing that language in the
decision could be read to endorse overly broad, and incorrect, propositions
about the Copyright Act). The Solicitor General also expressly recognized
the specific concerns of the Copyright Alliance and others, observing that
[s]uch a construction could threaten to undermine copyright protection in
circumstances far beyond those presented here, including with respect to
VOD services or situations in which a party streams copyrighted material on
an individualized basis over the Internet. Id. at *20-21.
But in her view, those predictions would never come to pass. The
Second Circuit simply resolved a narrow question about a discrete
technology in the terms that it had been framed by the parties and was
careful to tie its actual holdings to the facts of this case. Id. at *19, *6. The
Second Circuits words were indeed limiting:
This holding, we must emphasize, does not generally permitcontent delivery networks to avoid all copyright liability bymaking copies of each item of content and associating oneunique copy with each subscriber to the network, or by giving
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their subscribers the capacity to make their own individualcopies.
Cablevision, 536 F.3d at 139. And the Solicitor General reiterated what the
Cablevision court had said: the court of appeals analysis of the public-
performance issue should not be understood to reach VOD services or other
circumstances beyond those presented in this case. U.S. Cablevision Br. at
*20-21.6
Like the petitioners and theiramici, commentators remained skeptical.
See, e.g., Ginsburg, at 27 (Cablevisions potential for eviscerating the
public performance right may be even greater than the Second Circuits
pious wish portends.). With respect to Appellants inspiration, Aereo, they
would appear to have been right. Despite argument from Cablevision itself
that Cablevision should not be expanded to Aereo, the Aereo district court
did it anyway. Finding that while the plaintiffs ordinarily would have
received an injunction but for Cablevision, Cablevisions express holding
regarding the meaning of . . . the transmit clause required it to follow the
Second Circuits interpretation and deny the injunction. American
Broadcasting Cos., Inc. v. Aereo, Inc., 874 F. Supp. 2d 373, 375 (S.D.N.Y.
6 Neither the Second Circuits nor the Solicitor Generals observations givedue consideration to the fact that VOD and other television licenses,including the statutory cable licenses in Section 111 of the Copyright Act,are based wholly or primarily on the public performance right.
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2012). On appeal, the Second Circuit was bound by the lower courts
factual record and stare decisis. See WNET, Thirteen v. Aereo, Inc., 12-
2786-cv, 2013 WL 1285591, at *4, *13 (2d Cir. Apr. 1, 2013). The Second
Circuit was hoist on its own petard and, as the dissent observed, the
majoritys decision provide[d] a blueprint for others to avoid the Copyright
Acts licensing regime altogether. Id. at *22.
This Court has an antidote in hand. Like the district court below, this
Court is not bound to follow statutory interpretations from other circuits. It
may go back to the language and come to its own conclusions. And as the
Aereo dissent practically exhorts, it is particularly important that it do so
here. Having seen the potential onslaught of new copyright-avoiding
business models that [the Cablevision decision] might inspire, Ginsburg, at
27, including the factitious system at issue before the Court, the Court has
plenty of reasons to come to its own conclusions (including those Appellees
have described) rather than make the same mistakes the Cablevision court
did.
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II. REVERSAL WOULD BENEFIT ONLY COMMERCIALLYMOTIVATED FREE-RIDERS, TO THE DETRIMENT OF
INNOVATION AND CONSUMER OPTIONS
A. Aereokiller Is Not Innovation, It Is TechnologicalRegression
Systems such as Aereokiller, FilmOn and ivi engage in public
performances by taking broadcast signals and transmitting them over the
Internet. See, e.g.,WNET, Thirteen, 2013 WL 1285591, at *16 (Aereo is
doing precisely what cable companies, satellite television companies, and
authorized Internet streaming companies do they capture over-the-air
broadcasts and retransmit them to customers except that those entities are
doing it pursuant to statutory or negotiated licenses, for a fee.). The only
difference with Aereokiller is that it makes hundreds of intermediate copies
in the process of retransmission. These copies do not make the system
operate better, faster, more cheaply or more efficiently. Rather, they are
technological inefficiencies shamelessly designed to exploit what Appellants
believed was a loophole in the law or, more accurately, a legal ruling that
extends only to the Second Circuit.
This pretext was obvious to the panel in the Aereo case, which at oral
argument never heard any technological justification for its inefficient model
only that Aereo had followed the assembly instructions that the
Cablevision panel purportedly engineered. See Oral Argument in WNET v.
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AEREO Incorporated, 12-cv-2786 (2d Cir.), Dkt. #243. The dissent
described Aereos platform of thousands of individual dime-sized antennas
as a sham and called out the system for what it is: a Rube Goldberg-like
contrivance, over-engineered in an attempt to avoid the reach of the
Copyright Act and to take advantage of a perceived loophole in the law.
WNET, Thirteen, 2013 WL 1285591, at *15.7
By and large, it is the repertoire of copyrighted works available that
motivates a consumer to pay for a service. See United States v. Broadcast
Music, Inc. (Application of Music Choice),316 F.3d 189, 195 (2d Cir. 2003)
(The customer pays the retail price because the customer wants the music,
not because the customer wants to finance the laying of cable or the
launching of satellites.). Systems like Appellants charge their customers
for their service, but they cut authors and other creators out of the equation.
This is fundamentally wrong. The legions of authors and other contributors
7Even those who have suggested that Cablevision reached the right result
have drilled down on the technological waste involved in systems likeAppellants. By way of example, in a piece on Aereo for the pro-technology
blog Ars Technica, Professor James Grimmelmann described the design aswillfully perverse, one that makes no technical sense, wast[es]
resources, and drive[s] up costs. James Grimmelmann, Why Johnnycant stream: How video copyright went insane, ARS TECHNICA (Aug. 30,2012), http://arstechnica.com/tech-policy/2012/08/why-johnny-cant-stream-how-video-copyright-went-insane/. Thousands of tiny antennas are aridiculous way of capturing over-the-air TV. Storing a permanent copyrather than a buffer just large enough for streaming is a pessimization, not anoptimization. Id.
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and investors in the works that give the service its value are owed
compensation. See, e.g., Herbert v. Shanley Co., 242 U.S. 591, 595 (1917)
(Holmes, J.) (If music did not pay it would be given up. If it pays it pays
out of the publics pocket. Whether it pays or not the purpose of employing
it is profit and that is enough.).
Those who invest in the works commercialization and dissemination
are also owed protection from free-riding on their investments. See
generally, e.g., Adam Mosoff, How Copyright Drives Innovation in
Scholarly Publishing, 13-25 George Mason University Law and Economics
Research Paper Series, available at http://ssrn.com/abstract=2243264. As
the Supreme Court recently recognized, the promotion of Progress
encompasses giving incentives toward making works available. Golan v.
Holder, 132 S. Ct. 873, 888 (2012) ([I]nducing dissemination as opposed
to creation was viewed as an appropriate means to promote science.);see
alsoHarper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 557
(1985) (By establishing a marketable right to the use of ones expression,
copyright supplies the economic incentive to create and disseminate ideas.)
(emphasis added);American Geophysical Union v. Texaco, 802 F. Supp. 1,
16 (S.D.N.Y. 1992) (Copyright protection is vitally necessary to the
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dissemination of scientific articles . . . [It] is essential to finance the
publications that distribute them.), affd, 60 F.3d 913 (2d Cir. 1994).
Notwithstanding all of these principles, Appellants believe they
should be entitled to keep all the profit for themselves. The message that
this sends to subscribers is that Appellants would rather spend that money on
glue and boards than develop better services that acknowledge and
encourage the creation of copyrighted works for Appellants customers to
enjoy. This short-sighted business plan has nothing in common with what
the public interest compels or what the public itself as consumers of
technology and cultural expression wants, namely, innovation and sound
investments in both the sciences and the useful arts.
B. Affirmance Promotes the Progress of Science and UsefulArts, and Benefits The Public
In contrast to incentivizing the development of creative ways to avoid
paying compensation for the distribution and enjoyment of copyrighted
works, incentivizing innovation and investment in creative works is pro-
consumer, pro-public, and pro-Progress. It will encourage the
development of new works andlegal methods for distributing them.
This outcome is not merely what the Framers had in mind, it makes
logical sense. It is in the interest of those who use copyrighted works to
have them available. A clever new way to distribute works of authorship
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will have little chance of survival if the incentives to creators of those works,
and to those who invest in commercialization of such works, are whittled
away to the point that no new expressive works are created. See Metro-
Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 929 n.8 (2005)
(warning against overstating the mutual exclusivity of the respective
values of supporting creative pursuits through copyright protection and
promoting innovation in new communication technologies). In other
words, creative and technological innovation thrive when the relationship
between the two is symbiotic. When it becomes parasitic, they die.
These principles are nothing new to this Court, which 12 years ago
shut down a novel, Internet-based system for distributing copyrighted works
without authorization. See A&M Records Inc. v. Napster, Inc., 239 F.3d
1004 (9th Cir. 2001). Since then, consumers have spent billions of dollars
on legal sales of music over the Internet via the iTunes stores and other sites
that were allowed to develop without competition from those who do not
follow the rules or policies of copyright law.
The situation is no different in the context of new, cord-cutting
television distribution systems, both paid and unpaid. Licensed Internet and
mobile services such as Netflix, Hulu, MobiTV and even Appellees own
online channels have flourished and thrived. See American Broadcasting
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Cos., 874 F. Supp. 2d at 404 (noting the numerous other methods through
which the public can lawfully receive access to Plaintiffs content and
rejecting argument that public has the right to access broadcast television
from Aereos particularservice). The income earned from these licensed
distribution systems translates into financial support for those to whom those
distributed works owe their existence: from the producers who invest in the
works, to the writers, actors, photographers, set designers, editors and others
who provide their creative authorship, to the songwriters and recording
artists that lend their talents to soundtracks. Particularly in an age where the
present and future business of copyright dissemination, especially via the
Internet, is increasingly focused on dissemination via performance
(including through services such as Spotify and Rdio), the ability to reap
benefits from the performing right needs to be cautiously protected so that
Progress can furthered.
If unlicensed services such as Aereokiller are permitted to circumvent
the need for payments to rights holders, it will cut into the cable business
and other licensed legitimate businesses, which pay significant royalties to
contributors whose works are used in the broadcasts those businesses
retransmit. Cable, satellite and other licensed services have worked in
partnership with creators to build businesses that benefit the public interest,
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and that return compensation to creative workers in a variety of ways.
Songwriters are paid for the performance of their works in cable broadcasts,
union workers are paid residuals, and productions are greenlit on the basis
of understanding how various elements of the work will be paid for through
licensed distribution. More broadly, because copyright protection
incentivizes the commercialization of copyrighted works, it spurs investment
in giving the public a variety of new ways to enjoy those works: copyright
law gives these investors the ability to reap a return on their investments in
creation and distribution of expressive works.
All of these arrangements and their underlying goals are subverted if
services like Aereokiller are allowed to pursue their license-avoiding
schemes. Even where new services may disrupt or entirely supplant
traditional models, the change in delivery method does not justify subverting
the framework of copyright law. To ensure that the prolific growth of these
licensed distribution methods are not undercut by shams like Aereokiller, the
Court need only take a page from its decision in Napster, and reaffirm its
precedent of rejecting invitations to recast piracy as innovation.
For the foregoing reasons, a healthy relationship between copyright
and technology is central to Amicis interests. It therefore comes as a
surprise that some of Appellants amici have proffered the argument that
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affirmance will damage the development of cloud locker technologies.
Although cloud hosting and storage existed and grew even before
Cablevision cut back a significant part of the performance right, these amici
say that investment in cloud technologies has grown more robustly since
Cablevision was handed down. In essence, Appellants amici are asking the
Court to believe that a singular decision from the Second Circuit involving
an add-on cable service is the primary reason for a surge in investment in a
wide variety of technologies that include cloud computing, and that this is a
reason to give amnesty to Appellants unlicensed system. See Brief of
Amicus Curiae of Aereo, Inc., Dkt. #20-2, at 23-24 (Mar. 22, 2013); Brief of
Amicus Curiae of the Computer & Communications Industry Assn, Dkt.
#22, at 6-8 (Mar. 22, 2013). Those arguments miss the mark. First of all,
several of the cloud locker services Appellants amici mention operate
successfully under license notwithstanding Cablevision. No reason exists to
prevent Aereokiller from similarly seeking to obtain licenses. Moreover,
among other foundational problems, amicis theory also suffers a logical
flaw: correlation does not equal causation.8
8 Putting aside the general principle that the Internet itself has operated as acloud service for over 50 years, some of the most well-known services thatrely on cloud computing (including Google, Yahoo!, eBay and Amazon)were established long before 2008. See, e.g., Eric Schmidt, Conversationwith Eric Schmidt hosted by Danny Sullivan, Search
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Fundamentally, using buzzwords to invoke a type of technology that
many members of the public (including the Copyright Alliances members)
use does not demonstrate how Aereo, Aereokiller or other retransmission
services are in fact the same thing as cloud lockers legally or factually. To
any reasonable observer, cloud lockers used to remotely store and retrieve
lawfully owned copies of documents and other works are a far cry from a
concocted system designed to retransmit a networks copy of a program to
various members of the public at large. And it is quite telling that just like
the litigants have been unable to explain the technological basis for the
Aereokiller design their amici have no explanation for how or why the
future of cloud computing hangs on the existence of Appellants sub-optimal
redistribution system, apart from serving as stalking horse for dialing back
copyright protection to its weakest level in over 35 years. Those amicis
silence says enough.
Engine Strategies Conference (Aug. 9, 2006),http://www.google.com/press/podium/ses2006.html (describing companiesthat have benefited from cloud computing).
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CONCLUSION
For the reasons set forth above, and for those set forth in Appellees
brief, amici curiae respectfully requests that the decision below be affirmed.
Dated: New York, New YorkMay 3, 2013
s/ Eleanor M. LackmanEleanor M. Lackman
Counsel of Record
Mary E. RasenbergerNancy E. WolffCOWAN DEBAETS ABRAHAMS &
SHEPPARD LLP41 Madison Avenue, 34th Floor
New York, New York 10010Tel: (212) 974-7474
Sandra AistarsExecutive DirectorCOPYRIGHT ALLIANCE1224 M Street, NW, Suite 101Washington, DC 20005Tel: (202) 540-2247
Attorneys for Amici Curiae
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CERTIFICATE OF COMPLIANCE
I hereby certify that this brief complies with the type-volume
limitations of Fed. R. App. P. 32(a)(7)(B) because this brief contains 6909
words, excluding the parts of the brief exempted by Fed. R. App. P.
32(a)(7)(B)(iii), as counted by Microsoft Word 2007, the word processing
software used to prepare this brief.
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because
this brief has been prepared in a proportionally spaced typeface using
Microsoft Word 2007, Times New Roman, 14 point.
s/ Eleanor M. LackmanEleanor M. Lackman
Attorneys for Amici CuriaeDated: May 3, 2013
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CERTICATE OF SERVICE
I hereby certify that on May 3, 2013, I electronically filed the foregoing
Brief ofAmici Curiae The Copyright Alliance, The Association for Competitive
Technology, the Center for Individual Freedom, and Various Professors in Support
of Affirmance with the Clerk of the Court of the United States Court of Appeals
for the Ninth Circuit by using the appellate CM/ECF system.
I certify that all participants in the case are registered CM/ECF users and
that service will be accomplished by the appellate CM/ECF system.
s/ Kersuze Morancy
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