By Scott Flaherty, From The Litigation Daily From

The broadcast networks have already convinced the U.S. Supreme Court that Aereo Inc.’s business model violates copyright law, sending the fledgling television streaming company into bankruptcy. Now they’re fighting to lift a litigation hold stemming from Aereo’s Chapter 11 filing and get their case back in district court, where they can press their infringement claims and secure their pound of flesh.

In a string of recent filings in bankruptcy court in Manhattan, lawyers for the networks at Debevoise & Plimpton, Jenner & Block and other firms have asked for relief from an automatic litigation stay set off by Aereo’s late-November bankruptcy filing. The broadcasters have spent two years embroiled in copyright litigation with Aereo, the Barry Diller-backed startup that allowed users to stream and store broadcast television using tiny, remote antennas.

The Supreme Court sided with the broadcasters in June, ruling that Aereo’s service relied on wholesale copyright infringement. But the broadcasters still haven’t closed the book on key aspects of the copyright suit—including the amount of damages they’re entitled to if Aereo is found liable for infringement.

With that in mind, the broadcasters asked the bankruptcy court on Dec. 11 to allow U.S. District Judge Alison Nathan to determine “the appropriate scope of permanent injunctive relief and damages.” The broadcasters filed another bankruptcy motion on Monday, seeking to block Aereo’s attempts to sell off assets before Nathan has decided the copyright suit.

“Aereo’s bankruptcy case and broadcasters’ copyright litigation are substantially intertwined,” the broadcasters wrote in Monday’s brief. “Substantial copyright issues still need to be resolved before any court can decide whether Aereo should be allowed to sell assets that have only one apparent use—to infringe the broadcasters’ copyrighted work.”

Brown Rudnick’s William Baldiga, who serves as debtor’s counsel for Aereo, argued in a brief filed Tuesday that the broadcasters’ arguments were unfounded, since there’s no threat that Aereo would infringe the networks’ copyrights. In an interview, he said the broadcasters have “pointed to no cases” that back up their position.

“Here, the debtor went out of business six months ago,” Baldiga said. “There are no continuing operations, so of course there is no continuing infringement.”

In October, Nathan issued a preliminary injunction blocking Aereo from streaming the broadcasters’ programs without authorization. But that order dealt only with simultaneous rebroadcasts, and didn’t cover time-delayed retransmissions, according to the broadcasters.

Nathan had indicated that she would soon decide the merits of the case, and potentially enter a broader permanent injunction covering delayed rebroadcasts. The automatic bankruptcy stay shelved that process, however, and the broadcasters claim Aereo is hiding behind the Chapter 11 proceedings to avoid the implications of the copyright case.

Aereo shut down its services less than a week after the Supreme Court issued its decision in June. Aereo’s bankruptcy filing reported $20.5 million in assets and $4.2 million in liabilities, though it didn’t account for potential copyright infringement damages.

1. Natasha Labovitz, one of the Debevoise & Plimpton lawyers representing ABC and CBS in connection with the bankruptcy, didn’t immediately respond to a request for comment Wednesday. Patrick Trostle of Jenner & Block, who represents Fox, also wasn’t available.

IMAGE: Aereo in action, before the bankruptcy. Courtesy of Aereo

For more on this story go to: http://www.litigationdaily.com/id=1202712682284/Broadcasters-Pursue-Aereo-in-Bankruptcy-TugofWar#ixzz3MH2tMkLb

See iNews Cayman related story published July 20 3014 “Copyright Office deems Aereo not a cable company” with links to other related stories go to: http://www.ieyenews.com/wordpress/copyright-office-deems-aereo-not-a-cable-company/