Primetime 24 Joint Venture V. Nat'l Broad, Co., Inc
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Page 1 219 F.3d 92, 2000-2 Trade Cases P 72,968, 55 U.S.P.Q.2d 1385, 28 Media L. Rep. 1993, 21 Communications Reg. (P&F) 647 (Cite as: 219 F.3d 92) 29Tk604 k. Television and radio. Most Cited Cases United States Court of Appeals, (Formerly 265k12(6)) Second Circuit. Submission by television stations of concerted PRIMETIME 24 JOINT VENTURE, challenges pursuant to Satellite Home Viewer Act Plaintiff–Appellant, (SHVA) to eligibility of satellite operator's sub- v. scribers would not violate Sherman Act, whether NATIONAL BROADCASTING COMPANY, such efforts were orchestrated by networks, broad- INC., ABC, Inc., CBS, Inc., FOX Broadcasting casters' association or trade association, so long as Company, National Association of Broadcasters, challenges were made in good faith; Congress con- NBC Television Affiliates, ABC Television Affili- templated cooperation among stations in achieving ates Association, CBS Television Network Affili- compliance with SHVA. Sherman Act, § 1, as ates Association, KPAX Communications, Inc., and amended, 15 U.S.C.A. § 1; 17 U.S.C.A. § 119(a)(8) Benedek Broadcasting Corporation, Defend- . ants–Appellees. [2] Antitrust and Trade Regulation 29T 604 Docket No. 98–9392 Argued: May 3, 1999 29T Antitrust and Trade Regulation Decided: July 7, 2000 29TVI Antitrust Regulation in General 29TVI(E) Particular Industries or Businesses Satellite operator sued broadcast television net- 29Tk602 Telecommunications works, their affiliates, and television trade organiz- 29Tk604 k. Television and radio. Most ations for engaging in concerted action to restrict Cited Cases availability of network programming to direct- (Formerly 265k12(6)) to-home satellite subscribers. The United States Coordinated challenges by television stations District Court for the Southern District of New under Satellite Home Viewer Act (SHVA) to eli- York, Lawrence M. McKenna, J., 21 F.Supp.2d gibility of satellite operator's subscribers, without 350, dismissed suit on ground of Noerr–Pennington regard to merits and for purpose of imposing unne- immunity, and operator appealed. The Court of Ap- cessary costs upon operator as means of limiting its peals, Winter, Chief Judge, held that: (1) complaint ability to operate and compete, would violate Sher- stated claim under “sham” exception to No- man Act, and such bad faith conduct would also fall err–Pennington; (2) complaint stated concerted re- within “sham” exception to Noerr–Pennington. fusal to deal claim; (3) complaint sufficiently al- Sherman Act, § 1, as amended, 15 U.S.C.A. § 1; 17 leged injury; and (4) operator had standing. U.S.C.A. § 119(a)(8). Reversed. [3] Antitrust and Trade Regulation 29T 905(3) West Headnotes 29T Antitrust and Trade Regulation [1] Antitrust and Trade Regulation 29T 604 29TXI Antitrust Exemptions and Defenses 29T Antitrust and Trade Regulation 29Tk905 Efforts to Influence Government 29TVI Antitrust Regulation in General Action 29TVI(E) Particular Industries or Businesses 29Tk905(3) k. Litigation; sham litigation. 29Tk602 Telecommunications Most Cited Cases © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 2 219 F.3d 92, 2000-2 Trade Cases P 72,968, 55 U.S.P.Q.2d 1385, 28 Media L. Rep. 1993, 21 Communications Reg. (P&F) 647 (Cite as: 219 F.3d 92) (Formerly 265k12(16.5)) series of legal proceedings, test of whether “sham” Litigation, including good faith litigation to exception to Noerr–Pennington applies is whether protect valid copyright, falls within protection of legal filings were made, not out of genuine interest Noerr–Pennington doctrine. in redressing grievances, but as part of pattern or practice of successive filings undertaken essentially [4] Antitrust and Trade Regulation 29T for purposes of harassment; it is immaterial that 905(2) some claims might, as a matter of chance, have merit, rather, relevant issue is whether legal chal- 29T Antitrust and Trade Regulation lenges are brought pursuant to policy of starting 29TXI Antitrust Exemptions and Defenses legal proceedings without regard to merits and for 29Tk905 Efforts to Influence Government purpose of injuring market rival. Sherman Act, § 1, Action as amended, 15 U.S.C.A. § 1. 29Tk905(2) k. Petitioning government. Most Cited Cases [6] Antitrust and Trade Regulation 29T (Formerly 265k12(16.5)) 972(3) Antitrust and Trade Regulation 29T 905(3) 29T Antitrust and Trade Regulation 29TXVII Antitrust Actions, Proceedings, and 29T Antitrust and Trade Regulation Enforcement 29TXI Antitrust Exemptions and Defenses 29TXVII(B) Actions 29Tk905 Efforts to Influence Government 29Tk972 Pleading Action 29Tk972(2) Complaint 29Tk905(3) k. Litigation; sham litigation. 29Tk972(3) k. In general. Most Most Cited Cases Cited Cases (Formerly 265k12(16.5)) (Formerly 265k28(6.2)) To establish “sham” administrative or judicial Satellite television operator's allegation that proceedings, under exception to Noerr–Pennington television stations submitted simultaneous and vo- doctrine, plaintiff must show that litigation in ques- luminous challenges under Satellite Home Viewer tion is objectively baseless and an attempt to inter- Act (SHVA) to eligibility of satellite operator's sub- fere directly with business relationships of compet- scribers, without regard to merits, and for purpose itor through use of governmental process, as op- of making it difficult and expensive for operator to posed to outcome of that process, as anticompetit- comply with SHVA, stated claim under “sham” ex- ive weapon. Sherman Act, § 1, as amended, 15 ception to Noerr–Pennington. Sherman Act, § 1, as U.S.C.A. § 1. amended, 15 U.S.C.A. § 1; 17 U.S.C.A. § 119(a)(8) [5] Antitrust and Trade Regulation 29T . 905(2) [7] Antitrust and Trade Regulation 29T 586 29T Antitrust and Trade Regulation 29T Antitrust and Trade Regulation 29TXI Antitrust Exemptions and Defenses 29TVI Antitrust Regulation in General 29Tk905 Efforts to Influence Government 29TVI(E) Particular Industries or Businesses Action 29Tk584 Intellectual Property 29Tk905(2) k. Petitioning government. 29Tk586 k. Copyrights. Most Cited Most Cited Cases Cases (Formerly 265k12(16.5)) (Formerly 265k12(6)) Where defendant is accused of bringing whole Concerted refusal of television stations to li- © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 3 219 F.3d 92, 2000-2 Trade Cases P 72,968, 55 U.S.P.Q.2d 1385, 28 Media L. Rep. 1993, 21 Communications Reg. (P&F) 647 (Cite as: 219 F.3d 92) cense copyrighted programming to satellite operat- [10] Antitrust and Trade Regulation 29T or in order to prevent competition from it would be 972(5) boycott in violation of Sherman Act. Sherman Act, § 1, as amended, 15 U.S.C.A. § 1. 29T Antitrust and Trade Regulation 29TXVII Antitrust Actions, Proceedings, and [8] Antitrust and Trade Regulation 29T 586 Enforcement 29TXVII(B) Actions 29T Antitrust and Trade Regulation 29Tk972 Pleading 29TVI Antitrust Regulation in General 29Tk972(2) Complaint 29TVI(E) Particular Industries or Businesses 29Tk972(5) k. Injury to business or 29Tk584 Intellectual Property property. Most Cited Cases 29Tk586 k. Copyrights. Most Cited (Formerly 265k28(6.7)) Cases Satellite television operator's antitrust com- (Formerly 265k12(5)) plaint pled injury to itself and to competition gener- Although coordinated efforts to enforce copy- ally by alleging that operator had been injured in its rights against common infringer may be permiss- business and property, including by having lost ible, copyright holders may not agree to limit their profits and goodwill, by having to incur substantial individual freedom of action in licensing future and unnecessary expenses, and by being seriously rights to such infringer before, during, or after the weakened, and threatened with elimination and that lawsuit; such an agreement would, absent litigation, conspiracies both reduced networks' national com- violate Sherman Act. Sherman Act, § 1, as petition with alternative programming and reduced amended, 15 U.S.C.A. § 1. local stations' competition with alternative distribu- tion systems. Sherman Act, § 1, as amended, 15 [9] Antitrust and Trade Regulation 29T U.S.C.A. § 1. 972(3) [11] Antitrust and Trade Regulation 29T 29T Antitrust and Trade Regulation 964 29TXVII Antitrust Actions, Proceedings, and Enforcement 29T Antitrust and Trade Regulation 29TXVII(B) Actions 29TXVII Antitrust Actions, Proceedings, and 29Tk972 Pleading Enforcement 29Tk972(2) Complaint 29TXVII(B) Actions 29Tk972(3) k. In general. Most 29Tk959 Right of Action; Persons En- Cited Cases titled to Sue; Standing; Parties (Formerly 265k28(6.3)) 29Tk964 k. Competitors. Most Cited To make out restraint of trade violation of Cases Sherman Act, plaintiff must allege combination or (Formerly 265k28(1.6)) some form of concerted action between at least two Satellite television operator had antitrust stand- legally distinct economic entities that constituted ing to assert claim that broadcast television net- unreasonable restraint of trade either per se or un- works, their affiliates, and television trade organiz- der rule of reason; in addition, plaintiff must inde- ations engaged in concerted action to restrict avail- pendently show “antitrust injury,” in order to en- ability of network programming to direct-to-home sure that plaintiff can recover only if loss stems satellite subscribers; operator competed directly from competition-reducing aspect or effect of de- with networks' owned and affiliated stations in dis- fendant's behavior. Sherman Act, § 1, as amended, tributing network programming and was also cus- 15 U.S.C.A. § 1. tomer of network defendants. Sherman Act, § 1, as © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 4 219 F.3d 92, 2000-2 Trade Cases P 72,968, 55 U.S.P.Q.2d 1385, 28 Media L. Rep. 1993, 21 Communications Reg. (P&F) 647 (Cite as: 219 F.3d 92) amended, 15 U.S.C.A. § 1. broadcasts in packages of hundreds of channels sold to consumers. When the complaint was filed, *94 Harry Frischer, Solomon, Zauderer, Ellenhorn, PrimeTime was the leading American provider of Frischer & Sharp (Louis M. Solomon, Jonathan D. network television broadcasts to satellite dish own- Lupkin, of counsel), New York, New York, for ers.