Copyright Infringement in Internet Broadcast of Local TV Programs

The compulsory licenses that permit cable operators to retransmit local television broadcasts to the ir subscribers are not available under 17 U.S.C. §111 to companies that rebroadcast television on the Internet, the Second Circuit Courtof Appeals holds.

Affirming the trial court’s issuance of an injunction, the Court held that statutory provisions that permit a cable operator to rebroadcast local TV were intended to improve access within local communities, while the Internet is simply not localized.  The decision, WPIX, Inc. v. IVI, Inc., 691 F.3d 275 (2d Cir. 2012), involved a company that retransmitted telephone programs over the Internet.

Rebroadcasts Exempt from Copyright Infringement Claim

The decision in interesting for a number of reasons.  It involved the statutory framework that was established to permit cable companies to rebroadcast local television and pay the original broadcaster under a mandatory license.  Initially adopted to permit cable to rebroadcast into areas not well-served by traditional broadcast, the statutory scheme was later expanded to include satellite communications, and provides that re-transmission is not copyright infringement under 17 U.S.C. § 501.

Streaming Television Programs Not Included

First, the Court held that Congress did not intend to given Internet broadcasters the right to make use of the mandatory licensing scheme because they rebroadcasts were not local – the web is worldwide, after all.  It relied on the both the legislative history and the positions taken by the U.S. Copyright Office.  The Court referred to a 2008 letter from the Register of Copyrights, that said:

The Office continues to oppose an Internet statutory license that would permit any website on the Internet to retransmit television programming without the consent of the copyright owner. Such measure, if enacted, would effectively wrest control away from program producers who make significant investments in content and who power the creative engine in the U.S. economy. In addition, a government-mandated Internet license would likely undercut private negotiations leaving content owners with relatively little bargaining power in the distribution of broadcast programming.

The Copyright Office also noted that Congress had not given consent to other technologies and that is was error to presume that the mandatory licensing scheme would apply. In short, the Court found that the Copyright Office has generally maintained that the compulsory license available for cable systems “is intended for localized retransmission services” and thus Internet retransmission services are not entitled to a license.

Mandatory License to Transmit Local Television Programs

The Court’s reliance on the scope of there distribution leaves some interesting gaps in reasoning.  The re-transmitter of content can fairly readily identify the location of the user that has connected to the site with the geo location databases that have become quite common today.  The Court’s reasoning on the technical differences between cable broadcasting and Internet broadcasting were not all that compelling.  By dividing transmissions into “localized” areas, companies like IVI could defeat the reasoning of the Court and the Copyright Office.

The fact is that the mandatory licenses required first that the retransmission not be to a “controlled group” but rather to the public at large and that the secondary transmission be permissible under the “rules, regulations, or authorizations” of the FCC and that re-transmitter is had deposited a statutory statement of account and royalty fee with the FCC.  The problem with Internet retransmission isn’t really the technology, but the fact that the re-transmitters don’t pay for the content that they use – sort of the definition of digital piracy, isn’t it.

Irreparable Harm in Copyright Infringement

The second aspect of the decision that I found interesting was the manner in which the uncertainty of damages can be readily computed in such a case supported a finding of likely irreparable harm.  The Court noted that lack of control over the broadcasts, over the time and manner, over the advertising market, all resulted in damages that were ultimately financial in nature but could never be accurately quantified.

That is the reason why copyright is a different species in which irreparable harm should be presumed.  There are innumerable ways in which the unauthorized copying and distribution harm copyright holders.  Sometimes it is easy to calculate damages, aswhen a known number of counterfeit copies were sold, but the fact is that most of the time, the damages calculations are akin to alchemy.  The court’s reasoning on the irreparable nature of the damages was solid and thorough.