Internet television streaming company FilmOn has won a surprise ruling that it is potentially entitled to a compulsory licence to retransmit broadcasters’ copyrighted programming. US District Judge George Wu ruled in Los Angeles that FilmOn should be treated like a traditional cable system in order to transmit broadcast network programmes over the Internet.
Broadcasters contend that such retransmission violates their copyrights and threaten their ability to generate advertising and control subscription fees. Wu’s ruling suggested that FilmOn X is entitled to a compulsory licence under the Copyright Act to retransmit the broadcasters’ programmes if it meets the law’s requirements.
Acknowledging the major commercial consequences of his decision, Wu said he would allow an immediate appeal to the 9th US Circuit Court of Appeals. He also left in place an existing injunction against FilmOn X’s operations that the broadcasters had won in 2012, so FilmOn will still not able to stream their content pending the appeal.
FilmOn X’s lawyer, Ryan Baker described the court’s decision as “a win for technology and for the American public”.
“This advisory opinion contravenes all legal precedent,” said a spokesperson for Fox. “The court only found that FilmOn could potentially qualify for a compulsory licence, and we do not believe that is a possibility. The injunction barring Film On from retransmitting broadcast programming over the Internet still remains in place and the full burden of proof still lies with FilmOn. We will of course appeal and fully expect to prevail.”
The dispute stems from two lawsuits that Fox, Walt Disney Co’s ABC network, CBS Corp, Comcast Corp’s NBCUniversal and several others filed against FilmOn X in 2012.
A similar action saw the closure of Aereo following a US Supreme Court in ruling in June 2014 that the company violated the broadcasters’ copyrights in retransmitting their programmes to subscribers’ devices via the Internet.Aereo then unsuccessfully argued in a Manhattan federal court it should be seen as analogous to cable, eligible for a compulsory licence.
The judge pointed out that FilmOn tendered statutory licence fees in 2014 and that the Copyright Office neither accepted nor rejected the payments.
If the decision holds after the appeal, FilmOn will still need meet certain requirements to gain a compulsory licence, which will also depend on what the FCC says in its forthcoming rulemaking on the MPVD issue. The judge said that the broadcasters “point to no ways in which Defendants are in violation of FCC regulations” noting that FilmOn had offered to comply with any applicable regulations that arise out of he rulemaking.