PACIFIC & SOUTHERN COMPANY v. Satellite Broadcast Networks

• Decision Date: 16 August 1988
• Docket Number: No. 1:87-CV-357-RHH,1:87-CV-629-RHH and 1:87-CV-421-RHH.,1:87-CV-357-RHH
• Citation: 694 F. Supp. 1565
• Parties: PACIFIC & SOUTHERN CO., INC. and KPNX Broadcasting Co., Plaintiffs, v. SATELLITE BROADCAST NETWORKS, INC., Defendant. NBC TELEVISION AFFILIATES, Plaintiff, v. SATELLITE BROADCAST NETWORKS, INC., Defendant. NATIONAL BROADCASTING CO., Plaintiff, v. SATELLITE BROADCAST NETWORKS, INC., Defendant.
• Court: U.S. District Court — Northern District of Georgia

694 F. Supp. 1565

PACIFIC & SOUTHERN CO., INC. and KPNX Broadcasting Co., Plaintiffs, v. SATELLITE BROADCAST NETWORKS, INC., Defendant.

NBC TELEVISION AFFILIATES, Plaintiff, v. SATELLITE BROADCAST NETWORKS, INC., Defendant.

NATIONAL BROADCASTING CO., Plaintiff, v. SATELLITE BROADCAST NETWORKS, INC., Defendant.

Nos. 1:87-CV-357-RHH, 1:87-CV-629-RHH and 1:87-CV-421-RHH.

United States District Court, N.D. Georgia, Atlanta Division.

August 16, 1988.

Terrence B. Adamson, Dow Lohnes & Albertson, Atlanta, Ga., for plaintiffs.

David H. Flint, Alexander Jackson Simmons, Jr., Schreeder Wheeler & Flint, Atlanta, Ga., for defendant.

ORDER

ROBERT H. HALL, District Judge.

Plaintiffs bring this consolidated action alleging defendant, by retransmitting the broadcast signals of television stations, is infringing plaintiffs' copyright in violation of the Copyright Act of 1976, 17 U.S.C. §§ 101 et seq. and tortiously interfering with plaintiffs' contractual relations in violation of state law. Plaintiff Pacific & Southern Co., Inc. ("P & S") also alleges that defendant's actions constitute an infringement of P & S's service marks and unfair competition in violation of the Lanham Act, 15 U.S.C. §§ 1051 et seq. Plaintiffs seek declaratory and injunctive relief as well as damages. This court's jurisdiction is predicated upon 28 U.S.C. §§ 1331 and 1338(a).

Currently before the court are plaintiffs' and defendant's cross-motions for partial summary judgment on the issue of liability. Also before the court is the motion of Satellite Broadcasting and Communications Association of America for leave to file an amicus curiae brief. At the outset, the court GRANTS the latter motion. The court read the amicus brief and considered the arguments in arriving at its conclusions enumerated below. For the reasons stated below, the court partially grants and partially denies both plaintiffs' and defendant's motions.¹

FACTUAL BACKGROUND²

Plaintiff National Broadcasting Company, Inc. ("NBC") owns and operates the NBC Television Network, a national commercial television network with approximately 200 affiliated and 5 owned stations throughout the United States. Plaintiffs' Joint Statement of Material Facts as to Which There is no Genuine Issue, ¶ 1 ("Plaintiffs' Joint Facts"). Plaintiff P & S owns and operates WXIA-TV, a television station located in Atlanta, Georgia which is licensed by the Federal Communications Commission ("FCC") and affiliated with the NBC Television Network. Id., ¶¶ 2-3. Plaintiff KPNX Broadcasting Company ("KPNX") owns and operates KPNX-TV which is broadcast in Mesa (Phoenix), Arizona and is affiliated with the NBC Television Network. Id., ¶¶ 4-5. Plaintiff NBC Television Affiliates ("NBC Affiliates") is a corporation and trade association which represents the affiliated NBC network stations in legislative, administrative and judicial proceedings, and acts as a liaison between those stations and the NBC Television Network. Id., ¶ 6. Defendant Satellite Broadcast Networks, Inc. ("SBN") is a Delaware corporation which receives the signals of three television stations owned by or affiliated with the three major television networks and retransmits (or makes secondary transmissions) of those signals via satellite. Id., ¶ 7.

Some of the programs distributed by NBC for broadcast by the NBC network stations are created and produced by NBC itself. NBC is the copyright owner in these programs and, as such, owns the exclusive right to perform (i.e., broadcast) them. Other programs distributed by NBC to the NBC network stations include works that are produced by third parties and licensed on an exclusive basis to NBC for Network telecast. P & S, through its parent company, Gannett, is the beneficial owner of copyrights in programming it produces for broadcast by WXIA-TV. P & S also is the exclusive licensee of works produced by third-party producers and suppliers which have licensed P & S to broadcast such works in WXIA-TV's community of license. Both KPNX-TV and WXIA-TV have obtained the exclusive rights to broadcast some of the same programming in their respective communities of service. Id., ¶¶ 8-12. The plaintiffs' exclusive rights as licensees and/or copyright owners are granted under and subject to the provisions of the Copyright Act of 1976, 17 U.S.C. § 101 et seq.

In 1986 defendant SBN introduced a service called "PrimeTime 24" which it described as a "special three-channel package of ABC, NBC and CBS broadcast superstations for the home satellite dish market." Id., ¶ 26. From its facilities in Carteret, New Jersey, Atlanta, Georgia and Chicago, Illinois, SBN receives the over-the-air broadcast signals of WABC, WXIA and WBBM respectively. Defendant's Statement of Material Facts as to Which There is no Genuine Issue to be Tried, ¶ 2 ("Defendant's Facts"). SBN then scrambles and uplinks those signals for satellite retransmission. The three signals are combined as a single three-channel package and retransmitted via satellite and small amounts of cable to home satellite dish ("HSD") owners throughout the United States who pay SBN an annual fee for the package. Plaintiffs' Joint Facts, ¶ 26.³

On December 11, 1986 SBN's retransmissions of the WXIA-TV broadcast signal became continuous and, except for several interruptions ranging in duration from one minute to four hours, the retransmissions have remained continuous to this date. Id., ¶ 32. In April 1987, SBN began scrambling the retransmissions of WXIA-TV so that only HSD owners who have descramblers and who have been specifically authorized by SBN (and pay an annual fee to SBN) are able to receive the signal. Id., ¶¶ 33-34; Defendant's Facts, ¶ 6. There are currently approximately 13,000 HSD owners who are paid subscribers to SBN's PrimeTime 24 service. At one time SBN predicted it would have 700,000 to one million subscribers by the year 1992. Plaintiffs' Joint Facts, ¶ 74.

SBN markets its PrimeTime 24 service to and serves HSD owners in the 48 contiguous states of the United States and Alaska, and the U.S. Trust Territories and possessions in the Caribbean. Id., ¶¶ 63, 76. SBN is willing to sell and does sell its retransmissions to HSD owners residing in these areas regardless of whether they receive adequate over-the-air reception of an NBC network station or have access to a local cable system that carries the signals of a local NBC network station. SBN does not target its marketing efforts to HSD owners who reside in "white" areas (i.e., rural areas which cannot receive signals except via satellite) and indeed, some SBN subscribers reside in KPNX-TV's area of service (Phoenix) as well as in Atlanta, New York City, Los Angeles, Chicago, Philadelphia and Miami. Id., ¶¶ 63-64.⁴

SBN's satellite retransmissions of the WXIA-TV broadcast signal are delivered simultaneously throughout the entire geographic area reached by the satellite transmissions. Therefore, the SBN retransmissions frequently make Network programming available to viewers in the western parts of the nation at times different from the times such programming is broadcast to those viewers by the local NBC network stations. In addition, SBN's retransmissions of WXIA-TV's signal into the KPNX-TV area makes certain syndicated programming available in that area despite the fact that KPNX-TV has the exclusive right, subject to the Copyright Act of 1976, to display the syndicated programming. Id., ¶¶ 57-58.⁵

In February 1987, plaintiffs P & S, KPNX and NBC notified SBN in writing of their objections to SBN's retransmissions of the WXIA-TV signal and requested that SBN cease its retransmissions. At that time the three plaintiffs served upon SBN Advance Notices of Potential Infringement pursuant to section 411(b) of the Copyright Act of 1976. The Notices identified certain programs scheduled for broadcast and copyrighted by the plaintiffs and advised SBN that its unauthorized retransmission of the programs would constitute intentional copyright infringement. SBN subsequently retransmitted, without the consent of NBC or P & S, all of the works listed in the Notices of Potential Infringement. Id., ¶¶ 35-38. In retransmitting the signals of WXIA-TV, SBN retransmits P & S's federally registered service marks "WXIA-TV" and "11-ALIVE" in interstate commerce. Id., ¶¶ 19-21.

In early 1987, HSD viewers from approximately seven or eight states across the country as well as from parts of Georgia outside WXIA-TV's service area telephoned or wrote personnel at WXIA-TV blaming the latter (rather than SBN) for scrambling the WXIA-TV signal which they had previously received from satellite transmissions. In the first part of 1988, approximately ten to twelve HSD owners from different parts of the country telephoned WXIA-TV (rather than SBN) inquiring how to receive WXIA-TV's signal on satellite in unscrambled form. Id., ¶ 23. SBN has paid a total of $407.57 to the Copyright Office as royalty fees in connection with its retransmissions of the broadcast signals of WXIA-TV, WBBM-TV and WABC-TV. Aside from these payments to the Copyright Office, SBN intends to make no other payments to NBC, WXIA-TV or to any other copyright owners or licensees for the programming that it retransmits. Id., ¶ 75.

SBN has neither requested nor received the consent of NBC, P & S or any NBC network station to retransmit or to market scrambled retransmissions of programming which is broadcast by WXIA-TV or any other NBC network station. SBN contends it is authorized to retransmit the WXIA-TV signal under the compulsory license provision of the Copyright Act of 1976, 17 U.S.C. § 111(c), and that it need not seek the consent of P & S or NBC. SBN does not deny that it retransmits the WXIA-TV signal without the plaintiffs' consent but it argues that it is not infringing the plaintiffs' copyright because the Copyright Act of 1976 entitles it to make such retransmissions. Further facts will be disclosed as necessary for discussion of the motion.

DISCUSSI...