Ninth Circuit Reverses FilmOn X Decision

Defers to Copyright Office that internet retransmissions aren't analogous to cable

In a victory for broadcasters, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has reversed a lower court decision that FilmOn X was eligible for the same compulsory license to TV programming as cable operators have.

In the decision, released Tuesday, the appeals court held that "a service that captures copyrighted works broadcast over the air, and then retransmits them to paying subscribers over the Internet without the consent of the copyright holders, is not a 'cable system' eligible for a compulsory license under the Copyright Act."

Broadcasters led by Fox had challenged the lower court ruling.

That came only days after FilmOn X argued in the U.S. Court of Appeals for the D.C. Circuit that another lower court decision denying them the license should be overturned.

The Ninth Circuit essentially deferred to the Copyright Office's conclusion that internet-based retransmission services are not eligible for the blanket license, indicating the status of FilmOn X's eligibility was hardly cut-and-dried.

"FilmOn and other Internet-based retransmission services are neither clearly eligible nor clearly ineligible for the compulsory license," the court said. "The Copyright Office says they are not eligible. Because the Office's viewers are persuasive, and because they are reasonable, we defer to them."

The United States District Court for the Central District of California, rendered by judge George Wu, had awarded partial summary judgment to FilmOn X, saying it was entitled to the license. Wu had also cited the Supreme Court, which analogized—in the Aereo case—that internet retransmissions were like cable retransmissions.

"FilmOn X is disappointed with the Ninth Circuit’s opinion, which allows the Copyright Office to further its narrow agenda rather than give meaning to the plain language of the relevant statute," said Ryan Baker of Baker Marquart, who represents FilmOn X. "FilmOn X continues to believe Congress intended that cable companies could utilize modern communications channels to deliver broadcast television to the American public."

“A legal result where online video services have the same copyright liabilities as traditional cable services (following the Supreme Court's Aereo decision), but not the same copyright benefits (the compulsory license), is not a good result for consumers or competition," said Public Knowledge senior counsel John Bergmayer.

“NAB is very pleased with the Ninth Circuit’s decision in the FilmOn case," said National Association of Broadcasters EVP communications, Dennis Wharton. "The court reached the correct conclusion as supported by NAB’s amicus brief.”

(Photo via Tori Rector's FlickrImage taken on July 21, 2016 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)