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Weekly Issues in the News

By Geisa Balla

Aereo Inc.

Judge Alison Nathan of the Southern District denied a request for preliminary injunction by major U.S. broadcasters to stop Aereo Inc. from rebroadcasting some of its programming over the Internet.

Aereo is an online television venture, available only in New York City for $12 per month. Walt Disney Co's ABC, CBS Corp, Comcast Corp's NBC Universal and Telemundo, News Corp's Fox, Univision Communications Inc. and the Public Broadcasting Service had filed lawsuits accusing Aereo of copyright violations. The broadcasters sought to stop Aereo from streaming programs to phones, tablet computers and other devices, arguing that they would lose their right to retransmission fees from cable and other companies that rebroadcast their programming, and would lose significant advertising revenue. Judge Nathan held that while the broadcasters demonstrated that they faced irreparable financial damage if the venture were allowed to continue, Aereo also showed it would face severe harm if the requested preliminary injunction was granted. Judge Nathan agreed that Aereo would damage the broadcasters' ability to negotiate advertising and retransmission agreements, given that the service could artificially lower Nielsen viewership ratings. However Nathan also said Aereo, in addition to facing the risk of closure, could lose employees, the ability to attract new investors, customer goodwill, and its "substantial investments" in the service. The judge stated: "First and foremost, the evidence establishes that an injunction may quickly mean the end of Aereo as a business," and that "the balance of hardships certainly does not tip decidedly in favor of (the broadcasters)." The broadcasters said they would appeal, calling the decision "a loss for the entire creative community."


Kate Spade

The Vera Company, which controls the work of the late artist Vera Neumann, filed a copyright infringement lawsuit against Kate Spade in the Southern District. The lawsuit alleges that Kate Spade copied Neumann's 1979 work "Poppy Field" in the Kate Spade line of floral-print dresses and cell phone cases released in 2011. The complaint alleges that Spade publicly acknowledged "that among the items and products that have inspired her designs are the silk-screened scarves of [Neumann]." A Spade representative said the disputed design was "in fact created from a 'vintage' design," which was "obviously the plaintiff's."


Copyright Royalty Board

The U.S. Court of Appeals for the District of Columbia Circuit held on July 6th that the Copyright Royalty Board, which sets the rates broadcasters have to pay for copyright licenses, runs afoul of the Constitution. The U.S. Court of Appeals for the District of Columbia Circuit found that the three-judge board, appointed by the Librarian of Congress, violates the Appointments Clause of the Constitution, which requires officers with significant authority to be appointed by the President with Senate confirmation. The basis for the ruling was that "the Judges' exercise of significant ratemaking authority, without any effective means of control by a superior (such as unrestricted removability), qualifies them as "principal" officers who must be appointed by the President with Senate confirmation." The court found that it could fix the constitutional problem by giving the Librarian of Congress greater ability to fire the judges on board. "To remedy the violation, we follow the Supreme Court's approach in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 130 S. Ct. 3138 (2010), by invalidating and severing the restrictions on the Librarian of Congress's ability to remove the CRJs. With such removal power in the Librarian's hands, we are confident that the Judges are 'inferior' rather than 'principal' officers, and that no constitutional problem remains."



Lance Armstrong v. USADA

Lance Armstrong filed a 111-page complaint against the U.S. Anti-Doping Agency (USADA) on July 9th, after the USADA formally charged him with doping at the end of June. If found guilty, Armstrong could be stripped of all seven of his Tour de France titles, forced to turn over all the money he won from 1999-2005, and banned from Olympic sports for life. Armstrong's lawsuit alleged that USADA rules violated athletes' constitutional right to a fair trial, and that the agency does not have jurisdiction in his case. It also accused USADA's chief executive, Travis Tygart, of waging a personal vendetta against Armstrong. The lawsuit sought an injunction barring USADA from pursuing its case or issuing any sanctions against Armstrong. In the lawsuit, Armstrong called the USADA a "kangaroo court," stating that his Constitutional and common law due process rights were at risk. The complaint alleged that the USADA believed it "is above the United States Constitution, above the law, above court review, free from supervision from any person or organization, and even above its own rules."
Hours after the lawsuit was filed, it was dismissed by Judge Sam Sparks, who gave Armstrong leave to refile. Judge Sparks called the complaint a "lengthy and bitter polemic" against the defendants, and stated that the court "is not inclined to indulge Armstrong's desire for publicity, self-aggrandizement, or vilification of Defendants, by sifting through eighty most unnecessary pages in search of the few kernels of factual material relevant to his claims." In a footnote, Judge Sparks noted: "Contrary to Armstrong's apparent belief, pleadings filed in the United States District Courts are not press releases, internet blogs, or pieces of investigative journalism. All parties, and their lawyers, are expected to comply with the rules of this court, and face potential sanctions if they do not."

Armstrong's attorneys refiled a much shorter, 25-page complaint on July 10th.


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