FilmOn And The Copyright Act §111 Compulsory Licensing

Web-based television streaming services have been dealt another blow in their campaign to transmit large broadcasters' copyrighted programs. In the latest decision on the issue, a federal judge rejected FilmOn X LLC's claims that the company could stream protected broadcasts without committing copyright infringement. Fox Television Stations, Inc. v. FilmOn X LLC, No. 13-758-RMC (D.D.C. Nov. 12, 2015) (opinion under seal). This ruling follows the Supreme Court's 2014 decision in American Broadcasting Cos. v. Aereo, Inc., which held that Aereo (a provider of over-the-air television service to Internet-connected devices) was unlawfully publicly performing copyrighted works by providing its subscribers access to television programs over the Internet at about the same time as the programs were broadcast over the air.

More recently, FilmOn, an Internet-based television provider and one-time competitor of Aereo, argued that if the umbrella of traditional cable services covers Web-based services offering similar products, then these companies should also have the right to the benefits of the "cable system" classification and be treated like other cable service providers. On November 12, Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia granted partial summary judgment against FilmOn. Judge Collyer not only found FilmOn liable for copyright infringement, but also dismissed FilmOn's counterclaim seeking declaratory relief affirming that they are entitled to a statutory license as a "cable system," under Section 111 of the Copyright Act.

Section 111 establishes a compulsory licensing system that allows cable companies to make secondary transmissions of copyrighted works. The FilmOn case addressed the question of whether Web-based providers could utilize this compulsory licensing system. FilmOn argued that if Web-based services could be held to violate copyright laws as if they were cable companies, per Aereo, then they should also have access to the perks offered to traditional cable services, specifically section 111's compulsory license. Judge Collyer, however, interpreted section 111 to not encompass Internet streaming companies within the meaning of "cable systems." This interpretation is consistent with the Second Circuit's...