involved a service provided by a hotel that rented videodiscs to its guests, who carried the discs
to their rooms to watch them on in-room videodisc players. The Ninth Circuit found that
because the performances at issue took place in a guest’s private hotel room, the performances
were not “in public,” and the performances were not transmissions under the transmit clause
because the guests carried the discs to their rooms, rather than the hotel transmitting a
performance to the room from a central bank of players. The Ninth Circuit stated, however, that
a closed circuit system similar to the one described in On Command would fall squarely within
the transmit clause. Accordingly, the district court found that the Professional Real Estate case
supported the court’s finding of infringement.^418
In concluding that the plaintiffs were entitled to a preliminary injunction, the court noted
the following forms of irreparable harm: because the defendants were exploiting the plaintiffs
copyrighted works without paying the normal licensing fees, they were depriving the plaintiffs of
revenue and jeopardizing the continued existence of the plaintiffs’ licensees’ businesses; the
Zediva service threatened the development of a successful and lawful video-on-demand market
and, in particular, the growing Internet-based video-on-demand market; the presence of the
Zediva service in the market threatened to confuse consumers about video-on-demand products,
and to create incorrect but lasting impressions with consumers about what constitutes lawful
video-on-demand exploitation of copyrighted works; and the Zediva service threatened the
development of a successful and lawful video-on-demand market by offering a sub-optimal
customer experience (the defendants admitted they had received complaints about the quality of
their service and that a lot of times customers would receive a notice that a particular copyrighted
work was temporarily “out of stock” because all DVD players containing that particular work
were in use).^419
The case settled in October 2011, with Zediva agreeing to pay $1.8 million to six major
movie studios and to cease showing their movies without permission.^420
- Capitol Records v. MP3tunes
For analysis of this case’s rulings with respect to infringement of public performance
rights against the operator of a music “locker” service, see Section III.C.6(b)(1)(iii).s below.
- American Broadcasting v. Aereo
The District Court Decision
The widely followed case of American Broadcasting Cos. v. Aereo, Inc.^421 applied the
logic of the Cablevision case, discussed in detail in Section II.B.5 above, to adjudicate important
(^418) WTV Systems, 824 F. Supp. 2d at 1011.
(^419) Id. at 1013-14. The court required the defendants to post a bond of $50,000 as a condition to issuance of the
preliminary injunction. Id. at 1015.
(^420) Melissa Lipman, “DVD Streaming Co. Settles Movie Studios’ IP Suit For $2M,” Law360 (Oct. 28, 2011),
available as of Aug. 3, 2012 at http://www.law360.com/articles/281603.