FilmOn Turned Off – Another Court Rejects Aereo’s “Unique Copies” Interpretation

Yesterday, the District Court for the District of Columbia handed a win to broadcasters in their ongoing litigation against FilmOn X (formerly Aereokiller). The Court, which has overseen the case between broadcasters and Film On X since the former filed in late May, issued a preliminary injunction to stop the defendants from “retransmitting Plaintiff’s copyrighted programs over the Internet.”  FilmOn X’s business model has been well-documented; they operate a subscription-based television service which retransmits broadcast television captured by tiny dime-sized individual antennas over the Internet.  They, in turn, sell the programming to individual subscribers, in the same vein as Aereo, without any licensing fees or arrangement with the broadcasters.

The D.C. District Court decision is a decisive victory involving what has been a fairly contested legal issue. In fact, the court was originally scheduled to hold a hearing to evaluate the preliminary injunction on September 20th, but since the facts overwhelmingly supported a finding for the plaintiffs, it issued the injunction ahead of schedule.

The Court found that broadcasters were likely to succeed on the merits of their claim, as the “Copyright Act forbids FilmOn X from retransmitting Plaintiff’s copyrighted programs over the Internet.” The Court’s decision relied upon their interpretation of the Transmit Clause of the Copyright Act, which “confers on copyright holders” the right to “perform the copyrighted work publicly.” According to the Court, the plain language of the Transmit Clause is unambiguous, and FilmOn X’s service clearly falls within its scope:

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).

The Court rejected FilmOn X’s argument that, because it created a one-to-one relationship between transmissions and viewers, its transmissions constituted private performances. “First,” noted the Court, “this is a charitable description of
FilmOn X’s arrangement; while each user may have an assigned antenna and hard-drive directory temporarily, the mini-antennas are networked together so that a single tuner server and router, video encoder, and distribution endpoint can communicate with them all.” Ultimately, the Court held that FilmOn X’s system is “hardly akin to an individual user stringing up a television antenna on the roof” and saw no meaningful difference between the service and traditional cable television services.

The remaining preliminary injunction factors also favored an injunction. Broadcasters demonstrated a number of ways in which the continued operation of FilmOn X was causing irreparable harm, including (1) harm to the value in network and local advertising, (2) damage to the broadcasters’ ability to negotiate retransmission consent agreements, (3) interference with lawful Internet television distribution, and (4) loss of control over content and the threat of further piracy. The Court also determined that the public interest would be served by upholding the protection of the broadcasters’ copyrights.

The decision chips away at the Second Circuit’s ruling for Aereo in WNET v. Aereo, Inc. The Second Circuit, bound by their decision in Cablevision, erroneously concluded that the defendant’s retransmission was not a violation of the plaintiff’s public performance rights because each transmission originated from a “unique copy” of the work. The DC Court altogether dismissed the Second Circuit’s reasoning as flawed, pointing out at several times the errors the Circuit made in reaching its conclusion. The District Court of DC is the second court outside the Second Circuit to address the same issue as Aereo, and the second court to reject Aereo’s holding.

While technically there is no circuit split yet, this decision increases the likelihood that a split will eventually occur. This in turn increases the probability that FilmOn X, Aereo, and broadcasters will ultimately appear before the Supreme Court. Add to that the continuing harm that the Second Circuit’s Aereo holding is causing to broadcast television and it is becoming more vital that the Supreme Court steps in to correct that court’s flawed interpretation.