The Court Answers Last Two Questions in Online Television Streaming Copyright Infringement

Last week we presented an overview of the court’s process in making its decision in a recent copyright infringement lawsuit involving broadcasters and an online television streaming company. This week’s wrap-up will focus on the ancillary questions presented at the end of last week’s post—what the scope of the injunction should be and what amount of bond should be required of the plaintiffs.

As to the first question, the matter of scope was complicated by jurisdictional issues. As the defendants’ business had been running on a nationwide basis, different district courts had already weighed in and while Ninth Circuit had come to a similar conclusion to this court, the Second Circuit, having come to a different conclusion on whether the streaming service violated copyright law, had not granted an injunction. Further, the Copyright Act mandated that whenever an injunction was granted based on a claim of copyright infringement, that the injunction should be “operative throughout the United States.” Attempting to square this circle, the court referred to D.C. Circuit precedent that allowed it to limit the scope of injunctions in circumstances such as these and, accordingly, limited the scope of the injunction to cover the entirety of the United States except for the Second Circuit.

Finally, the court turned to the issue of bond. As it noted, the D.C. Circuit is not a mandatory-bond jurisdiction and, as a result, the court had the option of requiring no bond if the circumstances warranted it. The defendants, concerned that the injunction might destroy their business, asked the court to require a $10,000,000 bond. The court, however, noting the “considerable assets” held by the plaintiffs of this case, instead imposed a $250,000 bond.

               

 

Overview of the Court's Decision in Online Television Streaming Case

Last week we wrote about a recent decision in a copyright infringement case involving online television streaming. Today we are going to run through the court’s process in reaching the decision.

The court used the standard four-part test to determine whether or not a preliminary injunction should be granted in this case.

Likelihood of Success

The first question was whether the moving party was likely to succeed on the merits of the case. As a result, the court first had to look at the two elements that must be shown in a successful copyright claim, (1) that the plaintiff owns the allegedly infringed material and (2) that the infringement is a violation of the copyright holder’s rights set forth in the federal copyright law. In this case, the court noted that there was little dispute that the plaintiffs owned the material in question.

The second element, though, whether the infringement violated the plaintiffs’ rights, was more carefully scrutinized. The plaintiffs’ argument was that although online streaming was not entirely what Congress had in mind when they had last updated the relevant law, the streaming service provided by the defendant was an effective retransmission of the copyrighted material and, as a result, the defendants had violated the Copyright Act by failing to secure a license before retransmitting the copyrighted work.

The defendants, on the other hand, argued that the streaming service did not constitute a public retransmission of copyrighted material, instead casting its service as a private transmission to a single user, who could use the service in order to record broadcasts as a matter of convenience, which has, since the Betamax case, been considered a right of the consumer, and not a violation of copyright law.

Ultimately, the court chose to look at the legislative history regarding the 1976 amendments to the Copyright Act, which contained the clauses that were operative in this case, and came to the conclusion that, although Congress had not been able to foresee the exact cluster of facts in this case, it was clear from the record that they would have considered a streaming service like the defendant’s to be considered a transmission for the purposes of the Copyright Act and, as a result, there was a strong likelihood that defendant had violated the law by failing to gain the plaintiffs’ consent before retransmitting the material over its service.  The court then went on to explain that, even if the technological methods involved in the streaming service meant that, in a technical sense, the streaming was not done by conventional public transmission as was contemplated in the act, the overall effect of the streaming service was effectively the same as public transmission in either case. As a result, the court found that there was a likelihood that the plaintiffs would succeed on the merits of the case, passing the first part of the test.

Irreparable Harm

The second factor is whether there is a likelihood of irreparable harm should the injunction not be granted. The court ruled that there was, as the existence of the streaming service negatively impacted the copyright holder’s ability to sell advertising, negotiate retransmission agreements, or create its own internet television presence, as well as the danger of loss of control over its own content. Further, this harm could not be compensated with money damages as it would be difficult to calculate the total damages and, in all likelihood, the defendant would not be able to afford the judgment should the plaintiffs prevail on the case.

The defendant countered that such damages were speculative, and that plaintiffs had not shown that said damages were imminent or anything other than economic losses that could be recovered at law. The court rejected this argument, however, noting that the plaintiffs had produced some testimony from television executives that cable companies had already begun to take entities such as the defendant into account when negotiating retransmission fees, and therefore the harms were both imminent and non-speculative. The court ruled that there was a likelihood of irreparable harm as well.

Balance of Harms

The court looked at the balance of harms only briefly. The defendants had argued that, even if there were a likelihood of irreparable harm to the plaintiffs in the form of lower payments from content partners, the harm done to them by the granting of this injunction would be more severe, potentially collapsing their business model and thereby chilling technological innovation. The court, however, noted that the defendant had already begun to make agreements to legally transmit material through its streaming service, and therefore would not be too badly damaged by having its illegal streaming services shut down by an injunction.

Public Interest

The final question, that of the public interest, was dismissed with the court merely pointing to the long-held precedent that the public interest favors the upholding of copyright law and, as a result, that this final factor weighed in the plaintiffs’ favor as well.

Having decided that an injunction was warranted, the court next turned to two ancillary questions. First, what the scope of the injunction should be, and second, what amount of bond should be required of the plaintiffs. This will be covered in our next post.

 

 

Broadcasters Obtain Second Win in Court Case against FilmOn

Several lawsuits have resulted from the emergence of live streaming services broadcasting television via the internet.  Music streaming companies such as Napster involved similar issues, but the courts have only recently tackled the issue of television streaming.

A recent decision in Washington, D.C. granted a preliminary injunction against FilmOn, providing some insight into the future of these copyright issues.

The U.S. District Court for the District of Columbia handed out a preliminary injunction as the second win for the broadcasters in a series of three decisions in their copyright battle.

Both television streaming companies (FilmOn used to be associated with Aereo under a different name before striking out on its own) contend that they are not in violation of the law because they merely provide consumers with their own antennae, not access to the copyrighted content.

While it appears that the broadcasters involved in the lawsuit against FilmOn (Fox, NBC Universal, Telemundo, ABC, CBS, Allbritton Communications, Gannett Co.) will achieve a victory, having already been granted an injunction preventing FilmOn from continuing to stream television from their networks without permission, the U.S. District Court for the District of Columbia’s decision opposes a New York court’s decision in a similar case there against the streaming company Aereo.

What does this mean for the issue of copyright law associated with live streaming? It could mean that the issue will reach the Supreme Court. While the U.S. District Court of the District of Columbia’s decision extends to many territories beyond the D.C. area, the injunction is not nation-wide. It is yet to be determined whether or not the issue will reach the Supreme Court, but two major decisions reaching opposite conclusions opens a door to that possibility.  

Tune into our blog next week for a more comprehensive run through of the Court’s decision.

The Patterson Law Firm has handled many intellectual property cases and we stay abreast of the trends within this sphere in order to provide the best service to our clients. To learn more about the services we offer visit pattersonlawfirm.com or call 312.223.1699.