Internet Streaming Provider Wins Decision Against Broadcasters

On July 16, 2015, in Fox Television Stations, Inc v FilmOn X, LLC, Justice Wu of the US District Court for the Central District of California ruled that the US federal copyright code does not distinguish between traditional cable television providers and online services such as FilmOn with respect to rights to a compulsory retransmission licence.  This means that online service providers could be eligible for the same statutory copyright licence, which gives cable companies such as Comcast automatic access to broadcast content for a set price.

FilmOn X LLC provides an Internet streaming service that receives and rebroadcasts programs to paying subscribers.  Plaintiffs Fox Television Stations, Inc, and other broadcasting companies moved for summary judgment and a finding that FilmOn X and other defendants were not eligible for compulsory licences.

The ruling, coming as consumers increasingly turn to the internet to access television content, is the first to view a streaming service like a cable provider, and could have major implications for broadcasters if it is upheld.  Broadcasters have been aggressively litigating against such services, contending they violate their copyrights and threaten their ability to generate advertising and control subscription fees.  Recent cases such as the US Supreme Court decision in American Broadcasting Cos v Aereo, Inc have supported broadcaster’s position that streaming broadcast TV channels violated copyright law (additional commentary on the Aereo decision is available here). 

In reaching its decision, the district court examined the plain text of the Copyright Act, which grants compulsory licences to “cable systems.” As defined by the act, a cable system is “a facility … that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations … and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.” Justice Wu ruled that Internet streaming services such as FilmOn X met the statutory requirements because “the undisputed facts in this case are that the signals . . . are received by antennas, located in particular buildings wholly within particular states. They are then retransmitted out of those facilities on ‘wires, cables, microwave, or other communications channels.’”

Recognizing the wide-ranging potential impact of the decision, Justice Wu authorized an immediate appeal of his opinion to the Ninth Circuit, maintaining an existing preliminary injunction, and staying the action pending the outcome of the appeal.