(Reuters) - An appeals court on Monday declined to temporarily shut down Aereo Inc, an online television venture backed by billionaire Barry Diller that broadcasters say is infringing their copyrights.
The 2nd U.S. Circuit Court of Appeals disagreed with the broadcasters, including Walt Disney Co's ABC and Comcast Corp's NBCUniversal, that Aereo should discontinue its service until litigation between the companies is resolved.
Subscribers to Aereo can stream live broadcasts of TV channels on mobile devices using miniature antennas each assigned to one subscriber. The service was launched in March 2012 in the New York-area at a cost to subscribers of $12 a month, and the company announced plans in January to expand to 22 cities.
The appeals court, upholding a lower court ruling, concluded that the broadcasters had not shown they were likely to prove their claims of copyright infringement because Aereo's transmissions are "unique copies" and are not "public performances" of the broadcaster's copyrighted works.
To secure an injunction, a party needs to show it is likely to win on the merits of the case.
In a joint statement, News Corp's Fox, the Public Broadcasting Service and New York Station WNET, also plaintiffs in the litigation, called the decision "a loss for the entire creative community." They also said the "court has ruled that it is OK to steal copyrighted material and retransmit it without compensation."
An attorney for ABC and NBCUniversal could not immediately be reached for comment.
Attorneys for Aereo told the appeals court at oral arguments in November 2012 that the company's technology did not violate the broadcasters' rights. The judges listening to the arguments appeared skeptical, with Judge John Gleeson calling Aereo's method a "belt and suspenders approach" to avoiding copyright law.
Aereo argued that its technology was designed to conform to court precedent, specifically a 2008 2nd Circuit decision in favor of Cablevision Systems Corp for its remote-storage digital video recorder (RS-DVR) system.
Two of the three judges on the appeals court panel that heard the case agreed with Aereo that its system conforms to the Cablevision ruling.
Appeals court Judge Denny Chin dissented, writing that he believes Aereo's transmissions constitute copyright infringement.
The cases are CBS Broadcasting Inc., et al v. AEREO, Inc. and WNET, et al v. AEREO, Inc, 2nd U.S. Circuit Court of Appeals, Nos. 12-2807 and 12-2786.
(Reporting By Erin Geiger Smith; Editing by Steve Orlofsky)