In September 2010, ivi, Inc. began live streaming WPIX's copyrighted programming over the internet to paying subscribers who downloaded ivi's TV player onto their computers. Specifically, ivi retransmitted television signals from New York, Seattle, Chicago and Los Angeles broadcast television stations. A group of producers and owners of copyrighted television programming, including WPIX, Inc., sued ivi for copyright infringement and moved for a preliminary injunction to stop the service. In response, ivi asserted an affirmative defense, arguing it was a "cable system" entitled to a compulsory license under Section 111 of the Copyright Act. The US District Court for the Southern District of New York held that ivi's service was not a cable system and granted the preliminary injunction.

The US Court of Appeals for the Second Circuit affirmed. It agreed with the SDNY that ivi's internet TV service was not a cable system under Section 111 of the Copyright Act, which defines cable system as a facility that receives signals transmitted or programs broadcast by one or more television broadcast stations. The court found that it was unclear from the statutory text whether a service that retransmits television programming live and over the internet is a cable system for purposes of Section 111. However, the court based its decision on legislative history and the Copyright Office's interpretation of Section 111 in consistently concluding that internet retransmissions are not cable systems.

The Second Circuit's decision is the latest in broadcasters' ongoing battles against various internet television streaming providers. Last month, in American Broadcasting Cos. v. AEREO, the SDNY denied the plaintiff television production and broadcasters' request for preliminary injunction against Aereo, finding that Aereo's transmission of single-user-only copies of television programs over the internet was not a public performance. For more on the SDNY's decision in Aereo, see Legal Update, SDNY Denies Copyright Infringement Preliminary Injunction Against AEREO