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Aereo, a startup that takes live TV broadcasts and sends them to mobile devices in New York for a monthly fee, has won a partial victory in court over the media companies that are suing it.
U.S. District Court Judge Alison Nathan in New York dismissed one of three claims made by a group of broadcast companies, including News Corp.'s Fox, PBS and others in a ruling released Monday.
Nathan dismissed the claim of unfair competition, saying it was pre-empted by the Copyright Act.
Two claims of copyright infringement remain in the Fox-led suit as does a separate copyright lawsuit that includes ABC, CBS and NBC as plaintiffs. A hearing on a preliminary injunction for both suits begins May 30.
The broadcasters have argued that Aereo is copying and retransmitting their programming over the Internet unlawfully. Aereo contends that by assigning miniature antennas to each of its users, it is providing legal access to free over-the-air broadcasts.
An Aereo spokeswoman declined to comment.
A spokesman for News Corp.'s Fox said the judge's dismissal of the unfair competition was on "technical grounds" and didn't affect the merit of the copyright claim.
"We look forward to our day in court to prove that Aereo's unauthorized streaming of our content constitutes copyright infringement," the spokesman said in a statement.
CBS Corp. said in a statement that the ruling "should have no bearing on the core claim that Aereo is clearly violating the plain language of the copyright law."
The case is being closely watched because of the precedent it could set. Broadcasters owned by The Walt Disney Co., CBS Corp. and Comcast Corp. have deals to collect hundreds of millions of dollars annually from cable and satellite TV providers for the right to retransmit their signals to subscribers.
Such signals are also available freely using an antenna, but most TV households pay for service through a provider. If Aereo's service is found not to infringe on broadcasters' copyrights, it could upend a system that has created a profitable new revenue stream for media companies.