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Fox Television Stations, Inc. v FilmOn X, LLC, et al.

By Barry Werbin

On September 5th, the District of D.C. issued a preliminary injunction against FilmOn X, LLC (FilmOn X), in favor of Fox Television Stations, Inc. (Fox) and other over-air broadcasters in the D.C. area, including Disney and Telemundo. FilmOn X isn't a stranger to these claims, as it was previously known as AereoKiller, under which name it was enjoined by a California district court earlier this year in a case currently on appeal to the Ninth Circuit. (After trademark complaints by Brooklyn-based Aereo, AereoKiller changed its name.)

Like Aereo, FilmOn X uses tiny individual antennas to capture broadcast signals over the airways and retransmit them to subscribers. A specific antenna is assigned to one specific individual subscriber only when that subscriber is watching broadcast TV through the system; once a user is done watching TV, the same antenna is then assigned to a different user. No single antenna is used by more than one user at a time. Broadcast data are routed from the antenna to a FilmOn X server, where it is stored in a "unique" directory for each user. After a user stops viewing a program, the data in the user's unique directory is deleted. FilmOn X also employs a DVR that allows its subscribers to pause live programming or record shows for later viewing. User access for standard definition broadcasts is free; hi-definition and selecting shows for later viewing incur fees.

The plaintiffs relied on the AereoKiller decision in California, Fox Television Systems, Inc. v. Barry Driller Content Systems, PLC, 915 F. Supp.2d 1138 (C.D. Cal. 2013), while FilmOn X relied on WNET, Thirteen v. Aereo, Inc., 712F.3d 676 (2d Cir. 2013), reh'g denied 2013 WL 3657978 (2d Cir. July 16, 2013), and the "Cablevision" case - Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). The D.C. court here made it clear that it was not making a simple "blind choice" between the two.

[Note - Oral argument in the AereoKiller case took place before the Ninth Circuit during the last week of August, so a decision there is imminent. Interestingly, a visiting judge on the Ninth Circuit panel was Hon. Brian Cogan (formerly of Stroock) from the SDNY, where the Second Circuit had upheld Aereo's defenses, finding no infringement.]

The court held that "the Copyright Act forbids FilmOn X from retransmitting Plaintiffs' copyrighted programs over the Internet. Plaintiffs are thus likely to succeed on their claim that FilmOn X violates Plaintiffs' exclusive public performance rights in their copyrighted works." The court first undertook a detailed analysis of the respective decisions in the Barry Driller, Cablevision and Aereo decisions, also emphasizing Judge Denny Chin's strong dissent in Aereo. The court then took a close look at the core issue in all the cases - the proper interpretation and application of the Copyright Act's "Transmit Clause" in 17 U.S.C. ยง 101.

After analyzing the legislative history, the D.C. court found that such history and the plain language of the Transmit Clause respecting the meaning of the phrase to "perform or display a work 'publicly'" by any "device or process," compelled the conclusion that by "making available Plaintiffs' copyrighted performances to any member of the public who accesses the FilmOn X service, FilmOn X performs the copyrighted work publicly...." The court found the definitions within the Transmit clause are broadly encompassing of new technology, especially in light of the terms "device," "'machine," or "process" being defined as "now known [i.e., in 1976] or later developed." The court thus found that FilmOn X "transmits (i.e., communicates from mini-antenna through servers over the Internet to a user) the performance (i.e., an original over-the-air broadcast of a work copyrighted by one of the Plaintiffs) to members of the public (i.e., any person who accesses the FilmOn X service through its website or application) who receive the performance in separate places and at different times (i.e. at home at their computers or on their mobile devices)."

FilmOn X's one-to-one customer relationship was characterized as a "charitable description" of its technological arrangement. The court emphasized that the "the mini-antennas are networked together so that a single tuner server and router, video encoder, and distribution end point can communicate with them all....This system, through which any member of the public who clicks on the link for the video feed, is hardly akin to an individual user stringing up a television antenna on the roof." The aggregation of new technologies cannot avoid liability, said the court, because Congress defined "device or process" broadly to encompass "any other techniques and systems not yet in use or even invented." The court expressly agreed with Judge Chin's dissent in Aereo, stating in a footnote that the Second Circuit in "Cablevision and Aereo mistakenly substituted 'transmission' for 'performance' in its analysis."

Last, the court had no difficulty in finding, as has every court that has visited the issue (including the District Court in Aereo), that "unauthorized Internet streaming of television and other video programming causes irreparable harm to the copyright owners...." In particular, the court highlighted several findings of non-economic injury that plaintiffs likely would suffer in the absence of injunctive relief: "harm to their ability to negotiate with advertisers; damage to their contractual relationships and ability to negotiate with authorized retransmitters; interference with their proprietary and licensed online distribution avenues...and the loss of control over the distribution and quality of their copyrighted programs." The court concluded that a nationwide injunction was proper but excluded the Second Circuit, "where Aereo is the binding precedent."

The decision is attached and can also be accessed here: http://www.scribd.com/doc/165845374/filmonx

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