Court Rules TV-Streaming Service Provider May Seek Compulsory Copyright Licenses; Fox to Appeal

Posted by on Jul 27, 2015

In what may be considered a surprise decision, a federal judge ruled that online television streaming service, FilmOn X, may be treated as a cable company by allowing it the same compulsory copyright licenses that broadcast companies receive.

FilmOn offers content from cable companies like Fox, NBC, and the like. FilmOn captures broadcast television signals and transmits them to its users through the internet, enabling them to watch on their web-enabled devises.

Multiple cable companies sued FilmOn based on the premise that because it does not function like a traditional cable company, it should not be permitted to utilize Section 111 of the Copyright Act. This particular section of the Act gives cable companies permission access to broadcast content from broadcast television signals for a fee.

If this case sounds familiar, it should. The decision, which was made on a motion for summary, comes a year after the Supreme Court ruled on a case involving the now-defunct online streaming service, Aereo. In that case, the Supreme Court found Aereo was effectively operating as a cable company, and was therefore infringing on the copyrights of broadcast companies by not paying licensing fees. 

District Court Judge George Wu acknowledged the Copyright Office’s desire to keep internet streaming companies from utilizing Section 111; however, he reasoned the Office’s argument was based on policy and not the law. Wu explained that it was the Court’s role to say what the law currently is, and not to detract from it. In the end, Judge Wu reasoned that strong policy arguments for treating FilmOn X differently than traditional cable services is not set forth in the plain language of Section 111.

The court noted its split from the 2nd Circuit, which refused to classify an online streaming service as a “cable company,” and certified the ruling for immediate appeal to the 9th Circuit.

Despite this win, an injunction is still in place barring FilmOn X from retransmitting broadcast programming to its users, and a stay has been placed on proceedings pending the plaintiffs’ appeal.