Broadcasters were handed a key legal victory Tuesday as a three-judge panel of the Ninth Circuit Court of Appeals reversed a lower court opinion holding that online video distributor (OVD) FilmOn X qualifies for the same compulsory license rights to broadcast programming as cable operators. The case involving FilmOn—an OVD which captures live, over-the-air broadcast television programming for distribution to paying customers via the Internet—recalls a similar case involving Aereo, Inc., the subject of a 2014 Supreme Court ruling which held that Aereo’s method of streaming live television broadcasts through a network of dime-size antennas assigned to individual customers violated broadcaster copyrights. Although Aereo was consequently forced to terminate its operations and seek bankruptcy protection, FilmOn seized upon language in the high court opinion that compared Aereo’s unlicensed OVD service to that of a traditional cable system that qualifies for compulsory copyright licensing. In a 2015 ruling, the U.S. District Court for the Central District of California agreed with that argument, explaining that “courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and retransmitters in the wake of technological innovation.” FilmOn also backed its claim for compulsory licensing with the contention that cable systems are defined by Section 111 of the Copyright Act in a “technology agnostic” and “sweeping” manner.
Ruling in favor of broadcasters, the Ninth Circuit panel countered that the Act defines cable systems in a “detailed, if arguably ambiguous way.” Though admitting that FilmOn and other OVDs “are neither clearly eligible nor clearly ineligible for the compulsory license” of Section 111, the Ninth Circuit deferred to the interpretation of the U.S. Copyright Office, which “says [OVDs] are not eligible” for compulsory licensing. As it stressed that the Aereo case involved “an altogether different provision of the Copyright Act, the Transmit Clause,” which “refers in sweeping terms to transmissions or communications made ‘by means of any device or process,’” the court held: “if Congress had intended Section 111 to service the entire secondary transmission community, doling out statutory licenses without regard to the technological makeup of its member, it would have been easy enough for Congress to say so.”