Entertainment & Sports Programming Network v. Edinburg Community Hotel

• Decision Date: 15 February 1985
• Docket Number: Civ. A. No. B-84-448.
• Citation: 623 F. Supp. 647
• Parties: ENTERTAINMENT AND SPORTS PROGRAMMING NETWORK, INC., Heritage Cablevision of Texas, Inc., Home Box Office, Inc., and Southern Satellite Systems, Inc., Plaintiffs, v. EDINBURG COMMUNITY HOTEL, INC., d/b/a Echo Motor Hotel, Defendant.
• Court: U.S. District Court — Southern District of Texas

623 F. Supp. 647

ENTERTAINMENT AND SPORTS PROGRAMMING NETWORK, INC., Heritage Cablevision of Texas, Inc., Home Box Office, Inc., and Southern Satellite Systems, Inc., Plaintiffs, v. EDINBURG COMMUNITY HOTEL, INC., d/b/a Echo Motor Hotel, Defendant.

Civ. A. No. B-84-448.

United States District Court, S.D. Texas, Brownsville Division.

February 15, 1985.^*

Koppell Ezell Jackson, James S. Bates, P.C. & Powers by Michael R. Ezell, Harlingen, Tex., Frates Bienstock & Sheehe by Terry S. Bienstock, H. Mark Vieth, Miami, Fla., for plaintiffs.

Glaser Griggs & Schwartz by Richard L. Schwartz, Dallas, Tex., and James S. Bates, P.C., by James S. Bates, Edinburg, Tex., for defendant.

FINAL JUDGMENT FOR PERMANENT INJUNCTION AND DAMAGES

VELA, District Judge.

This matter came before this Court on January 25, 1985 on Plaintiffs' Motion for Preliminary Injunction. The Court has consolidated this hearing with the trial of the action on the merits pursuant to Rule 65(a)(2), Federal Rules of Civil Procedure.

Plaintiffs seek to enjoin the Defendant from unauthorized and willful interception, reception, exhibition and public performance of copyrighted and otherwise protected satellite-delivered audiovisual programming through the use of a satellite reception dish antenna at Defendant's motor hotel, and a judgment for damages, attorneys' fees and costs. The bases for relief are the Federal Communications Act of 1934, 47 U.S.C. § 605 as amended 705(a); the Copyright Act of 1976, 17 U.S.C. §§ 101 et seq.; the Lanham Act, 15 U.S.C. §§ 1051-1125; federal common law, and Texas statutory and common law.

This Court has jurisdiction under 28 U.S.C. §§ 1331 and 1338 over the federal claims, and pendent jurisdiction of the state law claims.

The issues raised have been briefed and this Court has reviewed evidence and heard argument of counsel. The parties have stipulated to the operative facts in this action and have agreed to entry of this order and judgment. Upon this, the Court concludes that plaintiffs are entitled to permanent injunctive relief, damages and attorneys' fees and costs, and hereby makes and enters the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. Plaintiff, HERITAGE CABLEVISION OF TEXAS, INC., ("HERITAGE"), owns and operates cable television systems and is engaged in the business of acquiring exhibition and performance rights to programming, some of which is copyrighted, for distribution to its cable television systems, subscribers and authorized satellite antenna users. HERITAGE pays the originators of the programming for such exhibition and performance rights. HERITAGE is an authorized distributor of such television programming to customers through its local cable television systems in its franchised service areas, including Cameron, Willacy and Hidalgo Counties, Texas, and incorporated municipalities therein.

2. Plaintiff, ENTERTAINMENT AND SPORTS PROGRAMMING NETWORK, INC., ("ESPN"), produces a private, pay television entertainment service consisting primarily of sports programming, featuring amateur and professional events. Plaintiff, HOME BOX OFFICE, INC., ("HBO"), produces private, commercial-free pay television entertainment services called "Home Box Office" and "Cinemax", consisting of movies, special events and sports programming, some of which, as with ESPN, it copyrights under the Copyright Law of the United States, 17 U.S.C. § 101 et seq.

3. ESPN and HBO acquire distribution and public display rights for motion pictures, sports events, and other audiovisual works from authors, producers, event organizers, or distributors, and distribute such assembled works in entertainment programming services. Each programming service distributes its programming to operators by transmitting its signals to a satellite. HBO and ESPN contract with subscription television operators to distribute their programming by means of either cable television, direct satellite reception, or microwave distribution service. Subscription television operators, including HERITAGE, pay a per customer subscription fee for the right to include the services in their cable transmissions. The operators receive the signal by means of satellite antennas or "earth stations".

4. HBO has registered its trademarks and trade names in order to identify and distinguish its products from those of its competitors. ESPN is in the process of registering its trademark and trade name.

5. Plaintiff, SOUTHERN SATELLITE SYSTEMS, INC., ("SSS"), is an FCC-licensed resale common carrier which sells the signal of WTBS, a television broadcast station in Atlanta, Georgia, consisting of full-time sports, movies, variety and news. SSS contracts with local cable operators, including HERITAGE, which pay a fee for the right to receive the signal of WTBS via a satellite channel of communication.

6. Defendant, EDINBURG COMMUNITY HOTEL, INC., d/b/a ECHO MOTOR HOTEL, owns and operates the Echo Motor Hotel in Edinburg, Texas, which is within the franchised service area of HERITAGE. Defendant, in fact, had been a subscriber of HERITAGE, but discontinued the cable service and replaced it with reception by use of a satellite earth station.

7. HERITAGE transmits programming services acquired through coaxial cable to subscribers. HERITAGE is also an authorized distributor of services received directly by satellite antennas. As a cable system operator, HERITAGE provides a basic cable service to subscribers for a monthly fee. This basic cable service includes local broadcast channels, imported signals (distantly broadcasted television channels), and other satellite-delivered programming services, including ESPN and WTBS. Additionally, HERITAGE provides certain premium programming, including HBO and Cinemax, for which subscribers pay a fee in addition to their basic cable fee. HERITAGE pays copyright fees to the Copyright Royalty Tribunal and licensing fees to the program suppliers.

8. Through various contractual agreements, HERITAGE has acquired the right to exhibit, perform and retransmit programming services to its customers. HERITAGE has master contracts with program suppliers authorizing the distribution of programming throughout HERITAGE's cable systems, although not all are currently being distributed by HERITAGE in south Texas. HERITAGE's master contracts authorize it to distribute HBO, Cinemax, Galavision, ESPN, WTBS, Showtime, The Movie Channel, WGN, Playboy Channel, Cable News Network-Headline News, Reuters Ltd., Disney Channel, The Music Channel, CNN, Arts and Entertainment, Nickelodeon, U.S.A. Network, Nashville Network, The Weather Channel, MTV, Lifetime, CBN, and SIN.

9. The monthly charge paid by HERITAGE's customers for the basic and premium programming is the primary source of revenue for HERITAGE's cable systems. The fees paid by subscription television service operators, including HERITAGE, are the primary source of revenue for the entertainment programming service companies.

10. The programming service companies and HERITAGE, through its cable systems, provide their customers with services different from those provided by "free" standard broadcast television. The signals transmitted via satellite to HERITAGE, other cable system operators, and other fee-paying distributors are intended for use only by such companies' paying customers, and are not transmitted for the benefit of or use by the general public.

11. Defendant has been and is engaged in the distribution of Plaintiffs' programming, and has intercepted, received, exhibited, publicly performed and retransmitted for profit the audiovisual works of Plaintiffs through the use of a satellite dish antenna and related equipment installed on its premises.

12. Defendant's interception, reception, exhibition, public performance and retransmission of the audiovisual works are made without the consent or license of the programming service companies, copyright owners, common carriers, or HERITAGE, an authorized distributor of such programming in the franchise area. No part of the proceeds received from Defendant's patrons for viewing of the audiovisual works has been paid to any of the Plaintiffs.

13. Defendant's acts are willful because its purpose and intent in receiving and exhibiting such audiovisual works is to profit by misappropriating the Plaintiffs' rights to the programming and transmissions, while avoiding payment therefor. Furthermore, Defendant had been advised by the programming service companies that its activities are unauthorized and that it should immediately cease and desist. Defendant did not do so until after suit was filed, and then it received other satellite-delivered programming services for which HERITAGE has master contracts.

CONCLUSIONS OF LAW

SECTIONS 605 AND 705(a) OF THE FEDERAL COMMUNICATIONS ACT

1. Section 605 of the Federal Communications Act of 1934, 47 U.S.C. § 605, which has been amended and redesignated as 47 U.S.C. § 605(a) (effective December 29, 1984), prohibits any person from receiving or assisting another in receiving any non-public radio communication for his own benefit or for the benefit of another not entitled thereto.

2. The satellite transmissions embodying the audiovisual works of the Plaintiffs are protected communications under 47 U.S.C. §§ 605 and 705(a), because they are intended to be used only by those who use special reception equipment, and who are authorized and pay a subscription fee.

3. By virtue of their respective positions as purchasers and distributors of the audiovisual works, or as senders of private interstate communications, Plaintiffs have important economic interests in the integrity of the communications system by which they distribute the audiovisual works, i.e., the reception of such communications only by those persons who obtain appropriate authorization and pay the requisite fees.

4. First, it must be determined whether the Plaintiffs have standing to assert claims under 47 U.S.C. §§ 605 and 705(...