Reprinted with Permission from Law360
Did Aereo Open The Door To Compulsory Licenses?
Law360, New York (June 17, 2016, 12:51 PM ET) --
After the U.S. Supreme Court’s ruling in ABC v. Aereo Inc., 134 S.Ct. 2498 (2014), that Aereo’s internet retransmission
service was “substantially similar” to cable, and therefore violated the Transmit Clause of the
Copyright Act, another similar internet retransmission service has succeeded in using the analogy to
cable to obtain a ruling that it is eligible for a compulsory license for cable systems adopted as part of
the 1976 Copyright Act amendments under 17 U.S.C. § 111.
On July 16, 2015, U.S. District Judge George Wu of the Central District of California held that
FilmOn’s internet retransmission service is entitled to a compulsory license under a plain reading of
the language of Section 111,[1] notwithstanding the rejection of this legal theory by numerous district
courts and the U.S. Court of Appeals for the Second Circuit.[2] His decision in Fox Television Stations
Inc. et al. v. AereoKiller et al., is now on appeal before the U.S. Court of Appeals for the Ninth Circuit.
Whoever wins in the Ninth Circuit, an appeal seems likely, and thus the issue of online streaming
services may again wind up before the Supreme Court.
At issue in AereoKiller is a service provided by FilmOn[3] that collects over-the-air television
broadcast signals, converts the signals into digital packets, and streams those packets through the
internet to paying subscribers. FilmOn’s service operates similarly to the one offered by its competitor,
Aereo, which used dime-sized antennae to capture television broadcasts that it would record and retransmit to viewers over
the internet. One of FilmOn’s systems, called a “trailer system,” operates using an “array of small anten nas on the roof of a
trailer.”[4] The other involves a “Lanner system” which uses “a single master antenna on the roof of a commercial data
center [that routes] signals to an antenna box where the signals [are] amplified and captured b y small antennas.”[5]
Subscribers of FilmOn’s service access and stream television programming through FilmOn’s website. Acco rding to
FilmOn, it restricts the availability of television programming based on the subscriber’s geographical location.
In 2012, the plaintiffs in AereoKiller, several broadcasting companies that include Fox, NBC and CBS, obtained a
preliminary injunction based on the legal theory upheld by the Supreme Court in Aereo two years later, i.e., that FilmOn
publicly performed copyrighted works without authorization in violation of the Transmit Clause of the Copyright Act. In
finding Aereo liable for infringing the Copyright Act under this theory, the Supreme Court drew a close comparison
between Aereo’s services and those of “the CATV companies that Congress amended the Act to reach.”[ 6] The court
characterized the two types of services as “substantially similar,” and described Aereo’s s ystem as having an
“overwhelming likeness to the cable companies targeted by the 1976 amendments,” and “for all practical p urposes a
traditional cable system.”[7]
Elaine Zhong
Andrea Weiss Jeffries
