Fox Television Stations, Inc. v. FilmOn X LLC

• Decision Date: 12 November 2015
• Docket Number: Civil Action No. 13-758 (RMC)
• Citation: 150 F.Supp.3d 1
• Parties: Fox Television Stations, Inc., et al., Plaintiffs, v. FilmOn X LLC, et al., Defendants.
• Court: U.S. District Court — District of Columbia

150 F.Supp.3d 1

Fox Television Stations, Inc., et al., Plaintiffs,

v.FilmOn X LLC, et al., Defendants.

Civil Action No. 13-758 (RMC)

United States District Court, District of Columbia.

Signed November 12, 2015

Filed December 2, 2015

Paul March Smith, Jenner & Block LLP, Robert Alan Garrett, Murad Hussain, Arnold & Porter LLP, Washington, DC, Amy M. Gallegos, Julie Ann Shepard, Richard L. Stone, Jenner & Block LLP, John Charles Ulin, James Spencer Blackburn, Arnold & Porter, LLP, Los Angeles, CA, for Plaintiffs.

Jaime W. Marquart, Ryan G. Baker, Scott M. Malzahn, Baker Marquet LLP, Los Angeles, CA, Kerry J. Davidson, Law Offices of Kerry J. Davidson, Silver Spring, MD, for Defendants.

OPINION

ROSEMARY M. COLLYER

, United States District Judge

This case involves a clash between two important national policies and interests. On the one hand, there is the need to protect and reward copyright owners for creating valuable intellectual property—here, original television programming. On the other hand, it is important to promote competition and ensure broad public access to diverse television programming. When enacting the Copyright Act of 1976, specifically the compulsory license regime prescribed in 17 U.S.C. § 111

, Congress struck a delicate balance between these two important interests. It is up to this Court to interpret and apply that balance to determine whether a service that engages in Internet retransmission of over-the-air television programming violates the Copyright Act.

Defendant FilmOn X, LLC (formerly known as Aereokiller LLC) operates a service that captures the signals of multiple television channels that are broadcast over-the-air and streams them over the Internet to the public.¹ FilmOn X assigns an individual user the content stream from one of thousands of minute, dime-sized antennas that it operates in major metropolitan areas, including Washington, D.C. As a result, this service allows viewers to watch over-the-air television programming on any computer or digital device. Plaintiffs,² a group of television broadcasters and programmers that own much of the streamed content, sued FilmOn X, its affiliates,³ and CEO Alkiviades David (collectively Defendants) for retransmitting their copyrighted works without a license. See Second Am. Compl. [Dkt. 66]. Plaintiffs claim that Defendants have violated their intellectual property rights, particularly the exclusive right to public performance of their copyrighted programming. See id. ¶¶ 39–47.

On September 5, 2013, this Court held that FilmOn X's conduct likely violated Plaintiffs' exclusive rights and preliminarily enjoined FilmOn X and its affiliates from streaming Plaintiffs' broadcast programming without authorization. See Fox Television Stations, Inc. v. FilmOn X LLC , 966 F.Supp.2d 30 (D.D.C.2013)

(2013 D.C. Prelim. Inj.), [Dkt. 34]. In a separate case, the Supreme Court ultimately validated this Court's conclusion that the Copyright Act forbids the unauthorized retransmissions of copyrighted programs over the Internet even when such retransmissions rely on the use of separate antennas and data streams. Am. Broad. Cos. v. Aereo, Inc. , ––– U.S. ––––, 134 S.Ct. 2498, 2511, 189 L.Ed.2d 476 (2014) (Aereo III ). In doing so, the Supreme Court drew an analogy between Internet-based retransmitters and the community antenna television (CATV) systems that Congress brought within the scope of the Transmit Clause, 17 U.S.C. § 101, in the 1976 amendments to the Copyright Act. Id. at 2507. Aereo III described the practices of Internet-based retransmission services as highly similar to those of CATV systems (precursors of modern cable systems). Id. at 2511. As a result, it held that retransmitting copyrighted programming over the Internet constitutes a public performance within the meaning of the Transmit Clause. Id.

Although Defendants had expressly disclaimed the argument that they are “cable systems” within the meaning of § 111

, they now rely on the Supreme Court's analogy in Aereo III to amend their answers. Compare David Decl. in Supp. of Opp'n to Mot. for Prelim. Inj. [Dkt. 31-1] (Prelim. Inj. David Decl.), Ex. B at 13 (CEO David stating that FilmOn X “is not a Cable system”) with Answers to Am. Compl. [Dkts. 69 and 70] (raising affirmative defense that Defendants are entitled to compulsory license under § 111(c) ). Defendants now argue that they are entitled to a § 111 compulsory license to retransmit Plaintiffs' broadcast programming as a cable system. Id. at 8-9. Plaintiffs move for summary judgment, arguing that Defendants' nearly-simultaneous and time-delayed retransmission services violate the Copyright Act and that Defendants are not entitled to a § 111 license. Pls.' Mot. for Partial Summ. J. [Dkt. 81] (Pls.' Mot.). Defendants cross-move for summary judgment on their counterclaim that they are entitled to such statutory license and they also contend that it is premature to decide whether Plaintiffs' exclusive rights of public performance were actually infringed in the past. Defs.' Mot. for Summ. J. [Dkt. 97] (Defs.' Mot.).

Upon consideration of the parties' briefs and for the reasons stated in this Opinion, this Court holds that Defendants are not entitled to a § 111

license. Section 111(f)(3) defines cable systems as physical facilities that both receive and retransmit broadcast signals to paying subscribers through wires, cables, microwave, and other types of communication channels. FilmOn X is not such a facility because it relies on the Internet, which is neither a tangible nor physical entity, to retransmit the broadcast signals to its paying subscribers. The Court also holds that FilmOn X infringed Plaintiffs' exclusive right of public performance in violation of the Copyright Act.⁴ As such, this Court will grant Plaintiffs' motion for summary judgment in part and deny Defendants' motion.

I. FACTS

A. Prior Litigation

In October 2010, a group of broadcasters and television networks, including some of the Plaintiffs, sued Defendant FilmOn.com, Inc. for copyright infringement in the U.S. District Court for the Southern District of New York. See Pls.' Req. for Jud. Notice [Dkt. 90] (“Pls.' RJN”), Ex. A (Mot. for TRO). Defendant FilmOn.com, Inc., which essentially streamed over the Internet the signals of various broadcast television stations on a live basis, argued that it was a cable system entitled to a § 111

license. Id. , Ex. B (FilmOn Opp'n to Mot. for TRO) at 5. The district court (Buchwald, J.) disagreed and granted a temporary restraining order enjoining FilmOn.com, Inc. from streaming copyrighted programming. Id. , Ex. C. (TRO). In a companion case, Judge Buchwald also held that an Internet-based retransmission service was not a “cable system” and, thus, was not entitled to a § 111 license. WPIX, Inc. v. ivi, Inc. , 765 F.Supp.2d 594, 617 (S.D.N.Y.2011) (ivi I ), aff'd 691 F.3d 275 (2d Cir.2012) (ivi II ), cert. denied , ––– U.S. ––––, 133 S.Ct. 1585, 185 L.Ed.2d 607 (2013). Shortly before the Second Circuit's decision in ivi II, Judge Buchwald entered a Stipulated Consent Judgment and Permanent Injunction (“2012 Injunction”) binding FilmOn.com, Inc. and its affiliates from streaming Plaintiffs' copyrighted programming without authorization. Pls.' RJN, Ex. E (2012 Injunction).

In August 2012, Mr. David launched a new Internet-based retransmission service called FilmOn X. David Dep. [Dkt. 93-3], Ex. 1 at 58:3-21. Like FilmOn.com, Inc., this new service streamed broadcast television signals over the Internet without payment or authorization. Unlike the prior system, FilmOn X relied on a mini-antenna/data video recorder technology that provided viewers with both time-delayed and nearly simultaneous retransmissions of copyrighted content. David Decl. in Supp. of Defs.' Mot. for Summ. J. [Dkt. 111] (Summ. J. David Decl.) ¶¶ 12, 16. Unlike FilmOn.com, Inc., FilmOn X explicitly disclaimed that it was a cable system entitled to a compulsory license. Prelim. Inj. David Decl., Ex. B, at 13. In fact, FilmOn X's service was specifically designed to avoid copyright liability under then-applicable Second Circuit precedent in Cartoon Network LP, LLLP v. CSC Holdings, Inc. , 536 F.3d 121, 137 (2d Cir.2008)

(Cablevision ) (holding that a “Remote Storage DVR” system that makes “transmissions to one subscriber using a copy made by that subscriber” does not violate the Transmit Clause of the Copyright Act). Summ. J. David Decl. ¶ 12.

On July 22, 2012, the Southern District of New York (Nathan, J.) applied Cablevision

to hold that the use of a separate small antenna and separate data stream for each subscriber did not violate the Copyright Act. Am. Broad. Cos. v. Aereo, Inc. , 874 F.Supp.2d 373 (S.D.N.Y.2012) (Aereo I ). Judge Nathan found that Aereo—an established competitor to FilmOn X that offered a virtually identical service—made only nonpublic performances and, thus, avoided Transmit Clause liability. Id. at 385. Since FilmOn X's new service replicated Aereo's technology and complied with Second Circuit precedent, Plaintiffs did not ask Judge Buchwald to find Defendants in contempt for violating the 2012 Injunction. Instead, they filed a copyright infringement action against FilmOn X in the U.S. District Court for the Central District of California. See

Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC , 915 F.Supp.2d 1138 (C.D.Cal.2012). The California district court (Wu, J.) disagreed with Aereo I and Cablevision and preliminarily enjoined FilmOn X's unauthorized streaming of copyrighted content, but only in the Ninth Circuit. Id. at 1151.

Shortly after Judge Wu enjoined Defendants, the Second Circuit affirmed Judge Nathan's decision in Aereo I.

WNET, Thirteen v. Aereo, Inc. , 712 F.3d 676 (2d Cir.2013) (Aereo II ). Facing a jurisdictional split and still hoping to obtain a nationwide injunction against FilmOn X's service, Plaintiffs filed the instant copyright action against Defendants. In 2013, this Court preliminarily enjoined FilmOn X, as...