Internet Streaming Service Not Compulsory-License-Eligible Cable Provider: Ninth Circuit | Practical Law

Internet Streaming Service Not Compulsory-License-Eligible Cable Provider: Ninth Circuit | Practical Law

In Fox Television Stations, Inc. v. Aereokiller LLC, the US Court of Appeals for the Ninth Circuit held that internet-based retransmission services are not cable systems eligible for compulsory licenses under Section 111 of the Copyright Act.

Internet Streaming Service Not Compulsory-License-Eligible Cable Provider: Ninth Circuit

by Practical Law Intellectual Property & Technology
Published on 22 Mar 2017 • USA (National/Federal)
In Fox Television Stations, Inc. v. Aereokiller LLC, the US Court of Appeals for the Ninth Circuit held that internet-based retransmission services are not cable systems eligible for compulsory licenses under Section 111 of the Copyright Act.
On March 21, 2017, in Fox Television Stations, Inc. v. Aereokiller LLC, the US Court of Appeals for the Ninth Circuit reversed the US District Court for the Central District of California's grant of summary judgment, holding that internet-based retransmission services are not eligible for the compulsory license that Section 111 of the Copyright Act makes available to cable systems ( (9th Cir. Mar. 21, 2017)).
This case arose when a series of television broadcast stations and copyright holders (collectively Fox) sued an entity now known as FilmOn X for copyright infringement. FilmOn uses antennas to capture over-the-air broadcast programming and retransmits it over the internet to paying subscribers. Fox claimed that FilmOn was liable for copyright infringement because it retransmitted copyrighted programming without the consent or authorization of the copyright holders.
The district court granted FilmOn partial summary judgment, holding that:
  • Under Section 111 of the Copyright Act, cable systems are eligible for a compulsory license (17 U.S.C. § 111).
  • FilmOn qualified as a “cable system” under Section 111—and was therefore potentially entitled to a compulsory license—based on:
    • the plain meaning of Section 111; and
    • the US Supreme Court's Aereo decision, which had analogized internet-based retransmission services to cable companies in finding that streaming content online did “perform” the retransmitted works “publicly,” and therefore infringed copyright holders' exclusive performance rights (American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (2014)).
For more on the Supreme Court's Aereo decision, see Legal Update, Supreme Court Holds Aereo Transmissions Are Public Performances.
On appeal, the Ninth Circuit reversed the district court's grant of partial summary judgment, holding 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 Section 111.
The Ninth Circuit reasoned that:
  • Section 111 is drafted broadly and does not make clear on its face whether an internet-based retransmission service falls within the scope of a "cable system."
  • The US Copyright Office has held that internet-based retransmission services are not “cable systems” and therefore not eligible for compulsory licenses under Section 111.
  • The Copyright Office's interpretation of Section 111 is entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), because:
    • it is persuasive and reasonable;
    • it is sufficiently supported by the text, structure, and basic purposes of the Copyright Act;
    • it is a plausible attempt to maintain the balance Congress struck between the public's interest in improved access to broadcast television and the property rights of copyright holders; and
    • the Copyright Office has consistently maintained this interpretation—and Congress has been aware of and effectively acquiesced to this position—for many years.