Web TV Company Not Entitled to License to Stream Content

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By Alexis Kramer

March 24 — Online television service provider FilmOn X, LLC isn't entitled to a compulsory license under the Copyright Act to stream copyrighted television programming over the Internet, the U.S. District Court for the Northern District of Illinois ruled March 23.

FilmOn X's Internet-based retransmission service doesn't meet the definition of a “cable system” under Section 111 of the statute, 17 U.S.C. § 111, because it doesn't retransmit the broadcast signals directly to subscribers, Judge Charles P. Kocoras said.

The case is one of several across the country that had been awaiting the U.S. Supreme Court's decision in Am. Broad. Cos. v. Aereo, Inc., 134 S.Ct. 2498 (U.S. 2014) , which held a similar service provider liable for copyright infringement.

Section 111 of the Copyright Act creates a compulsory license designed to allow cable systems to operate without the permission of broadcasters, so long as it pays royalties set by the Copyright Royalty Board and meets other conditions. A cable system is defined as a physical facility that receives broadcast signals and further transmits those signals by a communication channel to paying subscribers.

Not a ‘Cable System'

Plaintiff FilmOn X sought a ruling that the technology it used to retransmit Window to the World Communications Inc.'s (WTTW) broadcast programming to subscribers' mobile devices didn't infringe WTTW's copyrights.

The Supreme Court in Aereo interpreted the Copyright Act's transmit clause, 7 U.S.C. § 101, to prohibit Aereo Inc. from retransmitting copyrighted television programs to individual Internet users.

FilmOn X, subsequent to that decision, argued a different theory: that the retransmission of copyrighted works is authorized under the compulsory license scheme in Section 111.

The court agreed with the federal district court in the District of Columbia—in a Dec. 2, 2015 opinion in , 117 U.S.P.Q.2d 1100 (D.D.C. 2015) —that FilmOn X wasn't a “cable system” within the meaning of Section 111 because it relied on the Internet to deliver content to the subscriber.

The facility that FilmOn X controls and operates makes secondary transmissions to the Internet as opposed to sending them directly to the subscriber's device, the court said.

Congress enacted Section 111 to “cover the operation of cable television systems (not Internet-based systems), which both receive signals and retransmit them directly to their customers,” it said.

Jayaram Law Group represented FilmOn X. Jenner & Block LLP represented WTTW.

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bna.com

To contact the editor responsible for this story: Joseph Wright at jwright@bna.com

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