Second Circuit rules that a TV-streaming company does not qualify as a “cable system” under the Copyright Act

Yesterday in WPIX v. ivi, the Second Circuit affirmed a preliminary injunction against ivi, Inc. and its CEO, prohibiting them from re-transmitting copyrighted cable TV programs.

ivi itself began the litigation. After receiving cease-and-desist letters, ivi filed suit in federal court in the Western District of Washington seeking declaratory relief. A week later, WPIX filed suit in New York; the Washington action was dismissed. ivi, Inc. v. Fisher Commc’ns, Inc., No. C10-1512JLR, 2011 WL 197419 (W.D. Wash. Jan. 19, 2011).

ivi’s defense relied almost entirely on § 111 of the Copyright Act. That section is an exception to the traditional rule that a copyright owner has exclusive broadcast rights. Section 111 permits a “cable system” to publicly transmit signals of copyrighted television programming to its subscribers, provided they pay royalties at government-regulated rates and abide by the statute’s procedures. ivi lost at the district court—which issued the injunction—and appealed.

The Second Circuit concluded that the plain language of § 111 did not conclusively establish whether an Internet broadcaster qualifies as a “cable system” that would be entitled to a compulsory license. (If ivi had qualified for a license, its transmission would not constitute infringement.) Legislative history suggested, however, that Congress did not intend § 111 to cover Internet transmissions. The Second Circuit decided the question by deferring to the Copyright Office’s interpretation of § 111—an Internet broadcaster does not qualify as a “cable system” entitled to a compulsory license:.

 In 2008, the Copyright Office stated:

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 a 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.

(quoting U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act Section 109 Report 1 (2008).)

Without a compulsory license, ivi had no defense to infringement, and the appellate court upheld the preliminary injunction.

Posted on August 28, 2012, in Copyright, Infringement and tagged , , . Bookmark the permalink. Comments Off on Second Circuit rules that a TV-streaming company does not qualify as a “cable system” under the Copyright Act.

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