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Introduction
Copyright is a crucial concept in the world of content creation and distribution, and one that is universally protected in many countries including the United States. One provision of U.S copyright law that filmmakers and broadcasters need to be aware of is 17 U.S. Code § 111(3), which deals with broadcasting. This code prohibits the unauthorized distribution of broadcast content, making it illegal for anyone to air or transmit copyrighted material without the permission of the owner. This law is particularly important for broadcasters, who must ensure that they have proper licensing agreements in place before featuring any copyrighted works on their channels. Understanding the intricacies of copyright law is essential for creators and distributors of content, and can help to ensure that everyone is held accountable for respecting the rights of content owners.
17 U.S.C. 111(3)
17 U.S. Code § 111 - Limitations on exclusive rights: Secondary transmissions of broadcast programming by cable
Definition
(3) Cable system .— A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.
510. Remedies for alteration of programming by cable systems
(a) In any action filed pursuant to section 111(3), the following remedies shall be available:
(1) Where an action is brought by a party identified in subsections (b) or
(c) of section 501, the remedies provided by sections 502 through 505, and the remedy provided by subsection (b) of this section; and
(2) When an action is brought by a party identified in subsection (d) of section 501, the remedies provided by sections 502 and 505, together with any actual damages suffered by such party as a result of the infringement, and the remedy provided by subsection (b) of this section.
(b) In any action filed pursuant to section 111(3), the court may decree that, for a period not to exceed thirty days, the cable system shall be deprived of the benefit of a statutory license for one or more distant signals carried by such cable system.
Case Law - Wpix, Inc. Et Al V. Ivi, Inc. Et Al [1:10-cv-7415]
US District Court for the Southern District of New York.
Facts:
Plaintiffs are leading producers and owners of copyrighted television programming, including:
(1) broadcast television networks (ABC, CBS, CW, FOX, NBC, Telefutura, Telemundo, and Univision),
(2) distributors of non-commercial education programming (PBS, WNET.ORG, and WGBH),
(3) a major professional sports league (Major League Baseball),
(4) top motion picture studios (Walt Disney Studios, 20th Century Fox, and NBC Universal),
and
(5) individual New York and Seattle broadcast television stations owned and operated by the named plaintiffs (WPIX, WNET, WABC, WCBS, WNBC, WNYW, WWOR, WNJU, WXTV, WFUT, KIRO, KOMO, KZJO, KSTW, and KCPQ). Plaintiffs spend millions of dollars each year to create copyrighted programming.
They utilize several avenues to exploit their works for profit, including distribution agreements with licensed websites and cable operators, performance on their own websites, and advertising revenue. ivi is a company that captures over-the-air broadcasts of plaintiffs' programming and simultaneously, without plaintiffs' consent, streams those broadcast signals over the Internet to subscribers who have downloaded the ivi TV player. Declaration of Todd Weaver in Opposition to Motion for Preliminary Injunction (“Weaver Decl.”)
Specifically, ivi captures signals transmitted by FCC-licensed broadcast stations in Seattle, New York, Chicago, and Los Angeles. Weaver Decl. Transcript of Oral Argument (“Transcript”) at 3.2 For $4.99 per month, and an additional $.99 for the ability to pause, rewind, and fast-forward, subscribers located anywhere in the United States can view the programming simultaneously being offered by the networks' affiliates in Seattle, New York, Chicago, and Los Angeles through any Internet-capable device. According to defendants, ivi uses equipment to determine the actual location of the computer operating the ivi TV player, and does not offer plaintiffs' programming to those outside the United States. Weaver Decl. ¶ 9. ivi's service is limited to the simultaneous retransmission over the Internet of plaintiffs' copyrighted programming in real time.
According to defendants, ivi operates through a “closed” system in which the programming is provided exclusively to its paying subscribers. The content is “encrypted and only decrypted and formatted in small increments shortly before viewing by ivi subscribers. Thereafter the content is rendered unusable, removed, and cannot readily be captured or passed along by consumers.” Weaver Decl. ¶ 5. A significant difference between watching programming through ivi rather than on a traditional television is that instead of only being able to access what is currently being offered by the viewer's local stations, ivi's customers can watch whatever is being aired at that moment by the networks' affiliates in New York, Los Angeles, Chicago, or Seattle. Defendants do not obtain plaintiffs' consent to use their programming, unlike traditional cable operators who are obligated to acquire retransmission consent under the Communications Act, 47 U.S.C. § 325. After sending several cease-and-desist letters, plaintiffs brought the instant suit objecting to the unsanctioned public performance of their copyrighted works
Defendants claim that they are entitled to a compulsory license to perform plaintiffs' programming pursuant to Section 111 of the Copyright Act, 17 U.S.C. § 111 (“Section 111”). This statute allows “cable systems” in compliance with the rules and regulations of the FCC to perform plaintiffs' programming as long as they make payments to the Copyright Office as determined by the statute. Section 111(c)(1) of the Copyright Act provides that, subject to certain conditions:
“[S]econdary transmissions to the public by a cable system of a performance or display of a work embodied in a primary transmission made by a broadcast station licensed by the Federal Communications Commission or by an appropriate governmental authority of Canada or Mexico shall be subject to statutory licensing upon compliance with [record keeping and royalty fee requirements] where the carriage of signals comprising the secondary transmission is permissible under the rules, regulations, or authorizations of the Federal Communications Commission.” 17 U.S.C. § 111(c)(1).
The statute later defines “cable system” as: “[A] facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.” 17 U.S.C. § 111(f)(3). Defendants argue3 that ivi fits within the statutory definition of a cable system under the Copyright Act.
Further, while acknowledging that ivi does not comply with the “rules, regulations, or authorizations of the Federal Communications Commission (“FCC”),” they claim that its transmissions are “permissible” under these rules because they occur over the Internet, which the FCC does not regulate. In other words, defendants argue that ivi is a cable system for purposes of the Copyright Act, and thus may take advantage of the compulsory license, but that it is not a cable system for purposes of the Communications Act, and thus it need not comply with the requirements of that Act and the rules of the FCC promulgated thereunder.
To place defendants' argument in a real world context, they assert that for the payment of approximately $100 a year to the Copyright Office (the payment for a Section 111 compulsory license) and without compliance with the strictures of the Communications Act or plaintiffs' consent, that they are entitled to use and profit from the plaintiffs' copyrighted works. For the reasons discussed below, we conclude that ivi is not a cable system under Section 111, and thus do not reach the question of whether they are governed by the Communications Act.
Holding
Here's what the Court had to say in granting the Plaintiff's requested injunction:
A review of the historic context, statutory text, and administrative record compels a finding that ivi is not a cable system under Section 111. Absent defendants' skewed interpretation of the statutory text and administrative record, there is absolutely no basis for holding otherwise. In the thirty-five years since the passage of Section 111, many companies have constructed business models revolving around the use of new technologies and the statutory license. Some new technologies have been found to fall within Section 111. Others have motivated Congress to devise separate licensing schemes to address the unique issues they present. No technology, however, has been allowed to take advantage of Section 111 to retransmit copyrighted programming to a national audience while not complying with the rules and regulations of the FCC and without consent of the copyright holder.
In 1968 and 1974, two Supreme Court decisions held that cable systems were not “performing” broadcast programming when retransmitting its signals, and as a result were not infringing any copyrights under the Copyright Act of 1909, the then governing statute. Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394 (1974) (retransmission of distant television station signals); Fortnightly Corp. v. United Artists Television, 392 U.S. 390 (1968) (retransmission of local television station signals). As a result, cable systems had essentially received authorization to retransmit broadcast television programming without incurring any costs to the copyright owners.
Given these guiding principles, the specific aim of the compulsory license for cable systems, and Congress' reliance on the Communications Act and understanding of the cable industry as a highly localized medium, we cannot conclude that Congress intended to sanction the use of a compulsory license by a company so vastly different from those to which the license originally applied. ivi's architecture bears no resemblance to the cable systems of the 1970s. Its service retransmits broadcast signals nationwide, rather than to specific local areas. Finally, unlike cable systems of the 1970s, ivi refuses to comply with the rules and regulations of the FCC. As the Second Circuit has noted, we must consider the practical impact of our decisions construing Section 111 in a technological world unimaginable to Congress in 1976. An opposite finding in this case would surely “threaten considerable mischief.” See Infinity Broadcasting Corp., 63 F. Supp. 2d at 426.
Furthermore, the Copyright Office has spoken clearly that it would be inappropriate for Congress to expand existing law and provide compulsory licenses for services such as ivi. This is the federal agency charged with enforcing the copyright laws and tasked with acting in the public interest. We have no reason to doubt its considered judgment, and we decline to do so. CONCLUSION For the aforementioned reasons, plaintiffs have demonstrated the need for a preliminary injunction. As it is extraordinarily unlikely that ivi will ultimately be deemed a cable system under Section 111, plaintiffs have demonstrated a likelihood of success on the merits of their copyright claim. They also have demonstrated irreparable harm, that the balance of hardships tip in their favor, and that the public interest will not be disserved by an injunction. Thus, plaintiffs' motion for a preliminary injunction is granted and it is hereby
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