Owner of Aereo-like service seeks to underscore hypocrisy

A federal judge has rejected CBS Interactive’s efforts to dismiss all elements of a lawsuit claiming that the company-owned CNET induced copyright infringement by making file-sharing software accessible via Download.com.

U.S. District Judge Dale Fischer’s decision is one development in what could be lengthy litigation but it is perhaps more notable for its named plaintiff: colorful digital media entrepreneur Alki David.

In an effort to turn the tables on a media conglom, David filed thesuit in 2011 on behalf of a group of R&B and hip-hop artists, months after CBS and other broadcast networks won a court order that halted the unlicensed streaming of their stations by one of David’s companies, FilmOn. That company was a forerunner of sorts to Aereo, the Barry Diller-backed streaming service that was challenged by the nets last week with less success: A federal judge refused to stop Aereo’s streams of local stations in New York.

Fischer’s decision on David’s suit, issued Friday, dismissed two copyright-infringement claims against CNET but let move forward a claim of inducement. The judge wrote that when it came to that claim, it was “not a particularly close or challenging case for inducement based on the facts alleged.”

CBS Interactive is “alleged to have taken the unusual and ill-advised steps of distributing software programs that are capable of widespread copyright infringement while simultaneously demonstrating how to infringe copyrights using that software and evaluating the various programs as to their effectiveness in copying copyrighted material,” she wrote.

David, who once took to YouTube to single out CBS executives as “hypocritical” and “thieving liars,” told Variety that while his legal battle started “to really make a point,” he has grown even more determined to see it through “once I got into it and understood the ramifications of it, and how it affected friends and the entertainment industry as a whole.”

“It started as sending a message and it ended up being a cause,” David said.

In a statement, CBS Interactive said: “It is a very good sign that at the very earliest stage of this proceeding, the judge has fully and completely granted our motion to dismiss two of Mr. David’s three claims. We will continue vigorously defending the third claim and are fully confident we will prevail on that count as well.”

The two claims Fischer threw out had to do with “vicarious” and “contributory” copyright infringement, noting that CBS Interactive had not met the knowledge threshold to be held liable.

But the inducement claim was different, as Fischer noted that CNET posted videos to its sites demonstrating how to use specific peer-to-peer programs by searching for songs by copyrighted artists, and posted articles and guides with references to Napster and Limewire and downloading copyrighted material.

CBS claimed that liability for inducement requires allegations of specific files infringed, but Fischer rejected that assertion, saying it was not supported by case law. She also rejected a First Amendment defense that CNET was providing commentary on the software’s effectiveness, noting that combined with the availability of P2P software, “such behavior moves beyond opinion into the realm of conduct.”

David, meanwhile, praised last week’s Aereo decision, in which a federal judge refused to issue an order that would have effectively shut down the startup.

Although networks succeeded in halting streams on FilmOn, David’s startup has continued with dozens of non-major broadcast network HD channels such as Al Jazeera, UFC Next and the Ski Channel. FilmOn issued a press release last week praising Aereo’s “victory,” and it got in a few digs, with David calling Aereo’s local TV offerings “pitiful.”

On Thursday of last week, in fact, FilmOn even contained the streams of the local CBS and NBC affiliates in Los Angeles. But they were off the site by Friday.

Spokesmen for both networks said that they had no agreements in place with FilmOn. David said he would not comment on why the affiliates were offered but promised an announcement at the end of this week that he said would be a “big surprise.”

A key for Aereo’s initial legal victory was its streaming via a farm of dime-sized antennas, and FilmOn said that it is reinstating its live network streams in New York “with principally the same application of mini antennas as Aereo uses.” David described FilmOn’s version as eight inches in height and one that “will work on its own.”

FilmOn also has said that a “fundamental difference” between it and Aereo is that FilmOn now pays “retransmission fees on behalf of all its paying subscribers.”

David insisted that FilmOn has “always wanted to pay retransmission fees,” and that it is not acting as a “disruptor” but “enhancing an already existing business model.”

“In order for big glossy content to stay on the networks, they need to get retransmission fees,” David said. “Shame on Barry (Diller) for trying it that way.”

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