Television broadcasters scored a big victory last week in their quest to power down online television streaming services. It's a dispute that likely seems headed to the U.S. Supreme Court, entertainment lawyers say, given divided rulings from courts across the country.
A Washington federal trial judge granted a nearly nationwide injunction on September 5 blocking the operations of FilmOn, one of the streaming services to face the networks' wrath in court. U.S. District Judge Rosemary Collyer found that FilmOn X LLC was retransmitting copyrighted material in violation of federal law.
Similar disputes over online streaming services have been playing out in other courts across the country. Collyer's injunction applies across the United States, with the exception of the boundaries of the U.S. Court of Appeals for the Second Circuit — which includes New York, Connecticut and Vermont — where the networks lost a motion for an injunction against a streaming service similar to FilmOn.
The varied court rulings present the "perfect storm" of litigation likely destined for the Supreme Court, said Fox Rothschild partner Darrell Miller, chairman of the firm's entertainment law practice and managing partner of the Los Angeles office. "You're going to continue to see a bunch of forum-shopping to get a complete record of confusion on the record, in which case that's a perfect scenario for someone" to seek review from the high court, he said.
The networks accused FilmOn of "exploiting…some of the most valuable intellectual property created in the United States" by allowing users to stream live television programs online. The plaintiffs included the major broadcast networks — ABC, NBC, CBS and Fox — along with Telemundo, Disney and local affiliates of the networks that air programming around the Washington region.
FilmOn founder Alki David said he planned to appeal.
"They granted it? Well then it was rigged as I said in the first I heard they were suing in DC," he said in an email. "Certain individuals connected with the supposed random [j]udge selection process always get their first round. We will appeal and win." David is represented by Baker Marquart in Los Angeles.
A spokesman for Fox said in an email that they were "pleased, but not surprised, that the court recognized that the commercial retransmission of our broadcast signal without permission or compensation is a clear violation of the law."
The Fox plaintiffs are being represented by Jenner & Block partner Paul Smith, co-chairman of the firm's media and First Amendment practice. In an email, Smith praised Collyer's ruling. "Congress made clear that an unlicensed service using any technology to retransmit broadcast programs to the public is engaging in public performance and thus infringing the copyrights in the show," Smith wrote.
Arnold & Porter intellectual property partner Robert Garrett is lead counsel for the rest of the plaintiffs. Garrett could not immediately be reached for comment.
STREAMING, FOR A FEE
According to filings, FilmOn uses tiny antennas to capture signals from television networks in local markets and makes the content available for streaming online, for a fee. The networks say they never gave FilmOn license to distribute copyrighted programs. Miller said that, like the launch of cable several decades ago, the online streaming services represent "another chip away at the armor of the broadcast networks' dominance of the broadcast audience."
FilmOn has argued that its service was similar to "rabbit ear" antennas that captured broadcasts on traditional television sets. Since the networks were required by federal law to make broadcasts available for free, FilmOn accused the networks of trying to block public access.
As it fended off claims from the networks, FilmOn was originally embroiled in a dispute with another streaming service, Aereo Inc.
Aereo and FilmOn previously butted heads in trademark disputes — FilmOn founder David initially adopted the name Aereokiller for his service — but recently reached a settlement, allowing them to focus on the larger challenges brought by the networks. David agreed to stop using the Aereokiller name and use FilmOn instead, according to sibling publication Am Law Litigation Daily.
SECOND CIRCUIT DENIES INJUNCTION
The case in Washington is the ­latest to test the legality of FilmOn and similar online streaming services. In the Second Circuit, the networks sued Aereo, but a federal district trial judge in New York denied the networks' motion for a preliminary injunction. A divided three-judge panel of the Second Circuit affirmed the judge's decision in April.
The majority, pointing to a 2008 decision from the Second Circuit in a case that raised similar issues related to a DVR system, agreed with Aereo that its service was similar to individual antennae used to capture broadcast signals on older television sets. The individual transmissions weren't "public performances" of the programs, meaning Aereo didn't run afoul of the federal Copyright Act.
"As much as Aereo's decision may resemble a cable system, it also generates transmissions that closely resemble the private transmissions from" devices similar to personal roof-top antennas, Second Circuit Judge Christopher Droney, writing for the majority, said. The appeals court also found that "the balance of hardships" tipped in favor of Aereo, since an injunction would effectively shutter the service.
Writing in dissent, Judge Denny Chin said Aereo's use of individual mini antennas, as opposed to one central antenna, was a "sham" designed to "take advantage of a perceived loophole in the law," and that the transmissions were "very much public performances."
A divided Second Circuit in July denied the networks' petition for a rehearing.
NETWORKS WIN IN CALIFORNIA
The networks won in another related case, though. In the U.S. District Court for the Central District of California the networks secured a limited injunction in December blocking FilmOn from operating within the Ninth Circuit's boundaries, which included California, Montana, Idaho, Washington, Oregon, Nevada, Arizona, Hawaii and Alaska.
U.S. District Judge George Wu found the networks were likely to succeed on their claims that FilmOn's internet transmissions were public, not private. However, Wu declined to enter a nationwide injunction, instead limiting it to the Ninth Circuit. Both sides appealed to the Ninth Circuit.
In last week's ruling, Collyer said that, under the federal Copyright Act, FilmOn's service violated the network's exclusive right to "perform the copyrighted work publicly." She rejected FilmOn's comparison to television antennae used in the past, since FilmOn's mini antennas were "networked together."
"By making available Plaintiffs' copyrighted performances to any member of the public who accesses the FilmOn X service, FilmOn X performs the copyrighted work publicly" as defined by the Copyright Act, she wrote.
Collyer said she weighed both decisions from the Second Circuit and the Central District of California. Although she noted that she wasn't bound by either ruling, she said she found the California court's ruling "to be more persuasive."
The judge found the networks proved they would suffer irreparable harm without an injunction. The networks argued that, without an immediate stop, their relationships with advertisers and authorized transmitters, along with their general control over copyrighted programs, would suffer.
A status conference is scheduled for September 20.
Contact Zoe Tillman at firstname.lastname@example.org.