ON/TV of Chicago v. Julien, 84-1908

• Citation: 763 F.2d 839
• Decision Date: 31 May 1985
• Docket Number: No. 84-1908,84-1908
• Parties: ON/TV OF CHICAGO, Plaintiff-Appellee, v. Archie Ward JULIEN, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 839

763 F.2d 839

ON/TV OF CHICAGO, Plaintiff-Appellee, v. Archie Ward JULIEN, Defendant-Appellant.

No. 84-1908.

United States Court of Appeals Seventh Circuit.

Argued Jan. 23, 1985.

Decided May 31, 1985.

Archie Ward Julien, pro se.

Marureen P. McIntyre, Henehan & McIntyre, Cary, Ill., for plaintiff-appellee.

Before COFFEY, FLAUM, Circuit Judges, and JAMESON, Senior District Judge. ^*

COFFEY, Circuit Judge.

The defendant appeals the grant of a preliminary injunction preventing him from selling "decoder kits" capable of unscrambling the plaintiff's subscription television signal. We affirm.

I.

The plaintiff ON/TV of Chicago ("ON/TV"), an Illinois joint venture, produces, promotes and transmits subscription television services over UHF channels in Chicago. To ensure that ON/TV programming will be received only by subscribers, ON/TV transmits an encoded or scrambled signal that is incapable of reception by an ordinary television set. Reception adequate for viewing is obtained only by television sets equipped with special decoding devices leased by ON/TV to its subscribers on a monthly basis. The defendant, Archie Ward Julien, doing business as LSR Engineering and as Julien and Reed Electronics, sold kits containing electronic parts and detailed instructions for assembling the parts into unauthorized or "pirate" ON/TV decoders. The defendant included in the kit a "Disclaimer of all Liability, Description and Limited Warranty." The Disclaimer of all Liability and Description provided:

"These plans are intended for use conforming to current laws and regulations only. Since these plans may be used to construct a device for receiving subscription television, the F.C.C. recommends disclosure that Section 605 of the 1934 Communications Act (as well as certain law in the State of Illinois: see part of S.B. 1387, Amended, enclosed), may require the hobbyist to obtain the prior permission from the broadcaster. Furthermore, the broadcaster may have filed a waiver to Section 605 in applying for a broadcast license. Also, video taping from such a device may be legally restricted. The hobbyist is subject to, and agrees to compliance with applicable government regulations. ANY VIOLATION THEREOF IS IN DIRECT CONTRAVENTION OF THE INTENDED USE OF THESE PLANS, AND IS STRICTLY PROHIBITED BY LSR ENGINEERING.

"Any plans are relevant to only one system, and may be completely incompatible with any other system. Since the listing of different systems on the last page is second-hand information, it is the HOBBYIST'S RESPONSIBILITY to determine the type of system actually being used in any particular case. A device built from Sine Wave System plans will not operate in the desired manner if receiving a channel using the Gated Pulse System. (Sine Wave System plans will not work for channel 66 in Chicago.) Obviously, LSR cannot control the broadcaster. Any listing given of a station using any particular system, e.g., the Sine Wave System for channels 44 and 60 in Chicago, is merely meant to be a helpful hint to facilitate the hobbyist in illustrating the transmission principles involved. Therefore, although LSR stronglyest [sic] encourages hobbyists to take out a regular subscription from the broadcaster (to avoid any semblance of impropriety on anybody's part), the list should not be construed as an implication that the broadcaster will grant permission or continue using the system indefinitely. Again, it is the responsibility of the hobbyist to confirm the actual system being used, and to be able to evaluate the usefulness of these plans as it pertains to its individual circumstances."

In January of 1983, an investigator working for ON/TV responded to an advertisement in Tradin' Times for a "DLX, Sign Wave, UHF Converter by LSR Engineering" by telephoning a number listed in the advertisement. The unidentified male who answered the call stated that he had ON/TV decoder kits for sale but that the purchase price, $175.00, must be paid in cash. The investigator arranged to meet the man at his home to purchase an ON/TV decoder. Upon arriving at the apartment, 3801 W. Addison, Chicago, Illinois, the investigator was greeted by a man identifying himself as Archie, who sold the investigator an ON/TV decoder kit.

On September 23, 1983, a second investigator hired by ON/TV responded to a newspaper advertisement for a TV decoder that "picks up all movies and sports and is easy to build and connect," by telephoning a number listed in the advertisement. The telephone number was registered to Archie Ward Julien. The investigator requested information pertaining to ON/TV decoders and the unidentified male who answered directed the investigator to a store, Julien and Reed Electronics, located at 3806 W. Lawrence, Chicago, Illinois. At the store, the investigator observed signs in the store windows listing television channels, including ON/TV, and prices of decoder kits. Upon entering the store, the investigator informed the sales clerk that he had talked to someone on the phone earlier in the day regarding ON/TV decoders and asked the clerk whether he had any for sale. The clerk responded affirmatively and described various kits to the investigator including a model that would allow the purchaser to view Spectrum, Sports Vision and ON/TV. While in the store, the investigator noted several signs stating that payments were on a cash basis and that there were no exchanges or refunds. The investigator purchased a kit described by the sales clerk as an "ON/TV kit."

On March 26, 1984, a plain clothes police officer and a third investigator working for ON/TV visited Julien and Reed Electronics. Upon entering the store, the two men spoke with the sales clerk who told them that he had a decoder kit for sale capable of decoding the ON/TV signal. The clerk further informed the men that "ON/TV was going to jam the signal but if the kit was jammed, he had an add-on kit that would overcome the jamming." The men purchased an ON/TV decoder kit and left the store.

The plaintiff filed suit in the district court for the Northern District of Illinois alleging violations of the Federal Communications Act, the Racketeer Influenced and Corrupt Organizations Act, the Lanham Act, and the Omnibus Crime Control and Safe Streets Act; copyright infringement; and pendent states claims of unfair competition, conversion and violation of the Illinois Consumer and Deceptive Businesses Practices Act. After a hearing on the plaintiff's motion, the court granted a preliminary injunction barring Archie Ward Julien from selling ON/TV decoder kits.

II.

The defendant in this case contends that the district court erred in granting a preliminary injunction. To obtain a preliminary injunction, a plaintiff must show: (1) that he has no adequate remedy at law or will suffer irreparable harm if the injunction is denied; (2) that the harm he will suffer is greater than the harm the defendant will suffer if the injunction is granted; (3) that the plaintiff has a reasonable likelihood of success on the merits; and (4) that the injunction will not harm the public interest. Palmer v. City of Chicago, 755 F.2d 560, 576 (7th Cir.1985). Grants of preliminary injunctions are reviewed under the abuse of discretion standard. Doran v. Salem, Inc., 422 U.S. 922, 932, 95 S.Ct. 2561, 2568, 45 L.Ed.2d 648 (1975). Julien questions only the likelihood of the plaintiff's success on the merits arguing that because he included the "Disclaimer of All Liability" with the decoder kit instructions, Sec. 605 of the Federal Communications Act (47 U.S.C. Sec. 605) and the Copyright Act do not provide the plaintiff with causes of action supporting injunctive relief.

Section 605 of the Federal Communication Act, 47 U.S.C. Sec. 605 (West Supp.1984) provides in pertinent part: "No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto ..." The statute further provides, however, that its prohibitions "shall not apply to the receiving, divulging, publishing, or utilizing the contents of any radio communication which is transmitted by any station for the use of the general public..." Id. "Radio communication" as defined in Sec. 153(b) of the Act has been construed to include television transmissions. Allen B. DuMont Laboratories v. Carroll, 184 F.2d 153 (3d Cir.1950), cert. denied, 340 U.S. 929, 71 S.Ct. 490, 95 L.Ed. 670 (1951). Although Congress' purpose in passing the Communications Act was to regulate the communications industry, courts have long recognized a private right of action under Sec. 605. E.g., Movie Systems, Inc. v. Heller, 710 F.2d 492 (8th Cir.1983); National Subscription Television v. S & H TV, 644 F.2d 820 (9th Cir.1981); Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir.1980); Reitmeister v. Reitmeister, 162 F.2d 691 (2nd Cir.1947).

Addressing the argument that Sec. 605 does not apply to subscription television because of the broadcasting "for the use of the general public" exemption, courts have held that the crucial factor in determining whether programming is broadcast for the use of the general public "is not whether the content of the programming has mass appeal or mass availability but rather, whether it was intended for the use of the general public." Movie Systems, 710 F.2d at 494 (emphasis in original); Chartwell Communications, 637 F.2d at 465; National Subscription Television, 644 F.2d at 823-25.

"We think there is an important distinction between making a service available to the general public and intending a program for the use of the general public. The whole point of STV [subscription television] is to provide the service to as many members of the public as are interested. If the services could not be widely distributed there would be no business. However, the...