ROSEMARY M. COLLYER, District Judge.
Defendants operate FilmOn X, a service that uses the Internet to give consumers the ability to watch live over-the-air television channels through their computers and on their mobile devices. FilmOn X also has a digital video recorder, or DVR, capability, permitting users to pause live programming or record shows for later viewing. FilmOn X assigns an individual user the content stream from one of thousands of minute antennas that it operates in major metropolitan areas, including Washington, D.C. Plaintiffs are a group of copyright holders that includes over-the-air television broadcasters and television programmers who have not licensed any of their content to FilmOn X. Plaintiffs complain that FilmOn X is violating their exclusive right to public performance of their copyrighted works, which include local programs and some of the country's most popular evening television shows. Plaintiffs rely on a recent decision from the U.S. District Court for the Central District of California, Fox Television Systems, Inc. v. BarryDriller Content Systems, PLC (BarryDriller), 915 F.Supp.2d 1138 (C.D.Cal.2012), in which that court concluded that FilmOn X violated the plaintiffs' copyrights under the Copyright Act of 1976 and barred FilmOn X from offering their content in the Ninth Circuit.
FilmOn X responds that it modeled its process after the system approved in a 2008 Second Circuit case, Cartoon Network, LP v. CSC Holdings, Inc. (Cablevision), 536 F.3d 121 (2d Cir.2008). FilmOn X contends that Cablevision held, as a matter of law, that there is no public performance of a copyrighted work if there is a one-to-one relationship between a copy of the copyrighted work and the recipient — i.e., so long as each FilmOn X user has his
The Court has carefully considered the rulings in Cablevision and Aereo II, but it is not bound by them or by the California court's ruling in BarryDriller, although the Court finds BarryDriller to be more persuasive. This Court concludes 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. Because there is no dispute of fact between the parties — indeed, each has won and each has lost in a different forum on these same facts — the Court will grant Plaintiffs' motion for a preliminary injunction and will convert the scheduled preliminary injunction hearing to a status conference.
Plaintiffs
FilmOn X has filed an Answer, see First Am. Answer, Dkt. 14, and a Counterclaim for declaratory judgment that it is not infringing Plaintiffs' copyrights, see First. Am. Counterclaim, Dkt. 15, ¶¶ 44-45, which Plaintiffs have answered, Dkt. 24. Plaintiffs filed their Joint Motion for Preliminary Injunction on August 1, 2013. See Pls. Mot. Prelim. Inj. (Pls. Mot.) [Dkt. 27]. Because the parties agree on all material facts, the preliminary injunction hearing scheduled for September 20, 2013 will be converted to a status conference.
FilmOn X offers free and paid services through which consumers can watch live and recorded television over the Internet, including local channels that are affiliates of ABC, CBS, NBC, and Fox that are also broadcast over-the-air.
First, a brief peek under the figurative hood.
When a FilmOn X user selects a channel to watch through FilmOn X's website or a mobile application, the user's request is sent to FilmOn X's web server. The web server sends a command to the tuner router and server. The tuner router and server identify an available antenna and encoder slot, and then the tuner directs the assigned antenna to tune to the requested channel. Once the antenna begins receiving the signal, data for the requested channel flows from the antenna to the antenna router and then to the video encoder, where it is stored on a computer hard drive in a "unique directory" that is created for the specific user. The data then goes through the distribution endpoint, over the Internet to FilmOn X's website or a mobile application, for the user's consumption. Video data remains on FilmOn X's server in the user's unique directory while the user is actually watching television. When the user "finishes viewing the channel" by pressing stop or pause, closing the user application, or switching channels, a "stop" request is passed from the user to the antenna router, which immediately stops retrieving data from the antenna and frees the antenna for use by another user. The data in the user's unique directory is then deleted. Defs. Opp. at 6-7.
A FilmOn X user accesses the service by using an authorized "client application," which allows access from a desktop or laptop computer via software or the FilmOn X website, filmonx.com, as well as applications or "apps" for mobile devices, such as FilmonTVPlus for Apple's iPhone or LiveTV for Google's Android mobile operating system. The user can then select from a list of available channels within the application. Once the user selects a channel, the technological process described above begins. Defs. Opp. at 5. Below is a screenshot of the FilmOn X website accessed from the Court in Washington, D.C. on August 29, 2013, showing the different local channel viewing options on the left.
Plaintiffs describe additional characteristics of the FilmOn X service that were not detailed by FilmOn X, although FilmOn X has not controverted them in any meaningful way.
Plaintiffs have not consented to FilmOn X's streaming of their programming and have not entered into any licensing agreements with FilmOn X. Pls. Mem. at 1; Pls. Reply [Dkt. 32] at 1.
A district court may grant a preliminary injunction "to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981). An injunction is an equitable remedy, so its issuance falls within the sound discretion of the district court. See Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 88 L.Ed. 754 (1944). To obtain a preliminary injunction, the movant must establish that:
Winter v. NRDC, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008); see also eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) (in patent case, requiring as second factor a showing that "that remedies available at law, such as monetary damages, are inadequate"). The D.C. Circuit has further instructed that "the movant has the burden to show that all four factors ... weigh in favor of the injunction." Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C.Cir.2009); see also Sherley v. Sebelius, 644 F.3d 388, 392-93 (D.C.Cir.2011).
To some extent, this case could just boil down to a binary choice between the reasoning of the Second Circuit in Aereo or the California district court in BarryDriller. Compare Defs. Opp. at 15 ("[P]laintiffs are left with the argument that the Cablevision court got it wrong and the Aereo court could not correct Cablevision's error because of stare decisis ....") with Pls. Reply at 3 ("FilmOn X simply urges this Court to blindly follow Aereo and Cablevision because they exist and have not yet been overturned by the Supreme Court."). It does not. This Court is tasked with making a legal judgment. While it has carefully considered the competing authorities offered by the parties, the Court applies the Copyright Act and case law and finds that Plaintiffs are likely to succeed on their claim that FilmOn X violates Plaintiffs' exclusive public performance rights in their copyrighted works. Because the other preliminary injunction factors also favor Plaintiffs, their motion will be granted.
The Court briefly reviews the cases relied on by the parties before turning to its own analysis of the Transmit Clause.
FilmOn X relies on a trio of cases: Cartoon Network, LP v. CSC Holdings, Inc. (Cablevision), 536 F.3d 121 (2d Cir.2008); American Broadcasting Companies, Inc. v. Aereo, Inc. (Aereo I), 874 F.Supp.2d 373 (S.D.N.Y.2012); and WNET, Thirteen v. Aereo, Inc. (Aereo II), 712 F.3d 676 (2d Cir.2013). Aereo II affirmed and adopted the analysis of Aereo I in toto, and the Court follows the parties' lead in referring
In 2008, the Second Circuit considered the copyright implications of a cable-television operator's "Remote Storage DVR System" (RS-DVR). Cablevision, 536 F.3d at 123. The RS-DVR permitted customers who did not have "a stand-alone DVR," such as a Tivo, "to record cable programming on central hard drives housed and maintained by Cablevision at a `remote' location." Id. at 124. Customers could then "receive playback of those programs through their home television sets, using only a remote control and a standard cable box equipped with the RS-DVR software." Id. The plaintiffs, some of whom are plaintiffs in this case, were copyright holders who, among other claims, asserted that the RS-DVR violated their exclusive public performance rights. Id.
The Second Circuit ruled in Cablevision that the district court had erred in preliminarily enjoining the RS-DVR service. The Second Circuit opined at length about why the RS-DVR did not infringe the plaintiffs' public performance rights under the Transmit Clause of the Copyright Act, 17 U.S.C. § 101, which provides: "To perform or display a work `publicly' means... to transmit or otherwise communicate a performance ... to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times."
Id. at 139.
In 2012, Judge Alison Nathan of the U.S. District Court for the Southern District of New York issued Aereo I, a case
Finding that Aereo's "system creates unique, user-requested copies that are transmitted only to the particular user that created them," giving Aereo "overall factual similarity" to the RS-DVR service in Cablevision, the Aereo I court concluded that Aereo's online streaming created only nonpublic performances. Id. at 385; see also id. at 388 ("The facts on which the Second Circuit relied in holding that the potential audience of the transmissions in Cablevision was limited are the same as those present here, namely the use of unique copies, accessible only to the users who requested them, and transmitted only to those users.").
In considering the other preliminary injunction factors, Judge Nathan found that despite their likely inability to succeed on the merits, the plaintiffs had shown a "substantial," if "not overwhelming," threat of irreparable harm. Id. at 400. She concluded: "Aereo will damage Plaintiffs' ability to negotiate with advertisers by siphoning viewers from traditional distribution channels, in which viewership is measured by Nielsen ratings" and that "Aereo's activities will damage Plaintiffs' ability to negotiate retransmission agreements [with cable or other providers], as these companies will demand concessions from Plaintiffs to make up for this decrease in viewership." Id. at 397-98. The Aereo I court also found that Aereo's service would harm the plaintiffs by competing with the content streamed over plaintiffs' own websites and by endangering plaintiffs' relationships with other online "content providers, advertisers, [and] licensees." Id. at 399. As to the balance of hardships, Judge Nathan found that "the balance of hardships certainly [did] not tip `decidedly' in favor of Plaintiffs," given that Aereo had shown that an injunction against it would likely cause it to go out of business. Id. at 402-03. Finally, Judge Nathan reasoned that "an injunction ... would not disserve the public interest," noting that this factor partially favored both parties because the copyright system is intended both to encourage innovation (like Aereo's service) and to protect innovative content (like the programs copyrighted by the Aereo I plaintiffs). Id. at 404.
In Aereo II, by a two-to-one vote, the Second Circuit affirmed Judge Nathan's denial of a preliminary injunction in Aereo I. Aereo II began with a review of Cablevision, noting that the overall principle of that case was that "the transmit clause directs us to examine who precisely is `capable of receiving' a particular transmission
Id. at 689 (emphasis added; quotation marks and citations to Cablevision omitted).
Applying those four principles, Aereo II focused on the fact that "[w]hen an Aereo customer elects to watch or record a program using either the `Watch' or `Record' features, Aereo's system creates a unique copy of that program on a portion of a hard drive assigned only to that Aereo user." Id. at 690. Based on that fact, Aereo II concluded that "just as in Cablevision, the potential audience of each Aereo transmission is the single user" who is watching a program; therefore, Aereo's service created only private transmissions and did not infringe the plaintiffs' public performance rights. Id. It acknowledged that "[p]erhaps the application of the Transmit Clause should focus less on the technical details of a particular system and more on its functionality," but under Second Circuit precedent, "technical architecture matters." Id. at 694. Aereo II further stated that its decision was confirmed by the 1976 Act's legislative history, and it expressly declined to reconsider or overrule Cablevision. Id. at 695.
In dissent, Judge Denny Chin wrote that Cablevision was wrongly decided and that Aereo was infringing the plaintiffs' public performance rights "by transmitting (or retransmitting) copyrighted programming to the public without authorization." Id. at 696 (Chin, J., dissenting). Judge Chin wrote that the Aereo II decision "conflicts with the text of the Copyright Act, its legislative history, and [Second Circuit] case law." Id. at 697. In essence, Judge Chin's rationale was that "[e]ven assuming Aereo's system limits the potential audience for each transmission, and even assuming each of its subscribers receives a unique recorded copy, Aereo still is transmitting the programming `to the public'" under the Transmit Clause. Id. at 698. Thus, "[b]ecause Aereo is transmitting television signals to paying strangers, all of its transmissions are `to the public,' even if intervening `device[s] or process[es]' limit the potential audience of each separate transmission to a single `member[] of the public.'" Id. at 699 (quoting 17 U.S.C. § 101).
The case in the Central District of California before Judge George Wu, Fox Television Systems, Inc. v. BarryDriller Content System, PLC ("BarryDriller"), pitted many of these same Plaintiffs against these same Defendants.
Judge Wu granted the plaintiffs' motion for a preliminary injunction, finding that all four factors of the preliminary injunction analysis favored the plaintiffs. First, the BarryDriller court found that the plaintiffs were likely to succeed on the merits of their copyright infringement claim. Rejecting the Cablevision analysis as resting on a misinterpretation of the 1976 Act, Judge Wu reasoned that Cablevision erroneously focused on whether an individual copy of the copyrighted work was made for each individual user, and thus whether "the transmission itself is public," as opposed to whether the copyrighted work was being transmitted to the public. BarryDriller, 915 F.Supp.2d at 1144; see also id. at 1146 ("Defendants' unique copy transmission argument based on Cablevision and Aereo is not binding in the Ninth Circuit."). BarryDriller further reasoned that Cablevision had framed its analysis in terms of "which copy of the work the transmission is made from," which BarryDriller found to be "not commanded by the [Copyright Act]" and unsupported by Cablevision's citations to Supreme Court precedent and legislative history. BarryDriller, 915 F.Supp.2d at 1144-45; see also id. ("Following Cablevision, Aereo [I] found no infringement because the defendant's service operated such that the broadcasts captured by the individual user's assigned antenna were never shared with or accessible to any other user.").
BarryDriller, 915 F.Supp.2d at 1146.
Further, BarryDriller found that the other three preliminary injunction factors favored the plaintiffs. It concluded that the plaintiffs would suffer irreparable harm from the same potential injuries Plaintiffs have identified in this case, including possible damage to their revenues, to their goodwill with licensees, and to their abilities to develop their own Internet distribution avenues. Id. at 1147. As to the final two factors, the BarryDriller court concluded that its analysis was "inextricably bound up" in the conclusion that its plaintiffs were likely to succeed on the merits because FilmOn X had "no equitable interest in continuing an infringing activity." Id. at 1148-49 (citing Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330, 1338 (9th Cir.1995)).
BarryDriller declined to enter a nationwide injunction, instead concluding that an injunction applicable in the Ninth Circuit was appropriate. Id. at 1148. Judge Wu reasoned that "principles of comity prevent the entry of an injunction that would apply to the Second Circuit," and extending beyond the Ninth Circuit was inappropriate because "[i]f other circuits do not have law that conflicts with this decision, they might adopt such law when presented with the choice." Id. The court imposed a preliminary injunction bond of $250,000. Id. at 1149.
The parties filed cross-appeals to the Ninth Circuit. See Fox Television v. Aereokiller, Nos. 13-55156, 13-55157, 13-55226, 13-55228. Oral argument was held on August 27, 2013. The Ninth Circuit has not yet issued a ruling.
FilmOn X asks that this Court take judicial notice of the Ninth Circuit court docket because "certain media and consumer advocacy groups have filed amicus briefs in support of FilmOn X in that pending appeal." Request for Judicial Notice [Dkt. 31-4] at 1. Plaintiffs oppose the request. Pls. Objections [Dkt. 32-2]. The Court grants FilmOn X's request only to the extent that the Court takes judicial notice of the fact that such documents have been filed; to the extent that FilmOn X wishes the Court to take judicial notice of the content of the amicus filings or the arguments made therein, the request is
The two elements to a prima facie case of direct copyright infringement are straightforward: a plaintiff must show (1) ownership of the allegedly infringed material and (2) a violation of one of the exclusive rights of copyright holders set forth in 17 U.S.C. § 106. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001). There is no dispute that Plaintiffs own the allegedly infringed material, so only the second element is in contention.
The core of Plaintiffs' argument is that this Court should adopt the reasoning of BarryDriller and Judge Chin's dissenting opinion in Aereo II. E.g., Pls. Mem. at 17 ("The Transmit Clause's "any device or process" language is unambiguous; it cannot be read as exempting FilmOn X or any other broadcast retransmission devices and processes from public performance liability." (citing BarryDriller, 915 F.Supp.2d at 1143-44 & Aereo II, 712 F.3d at 698-99 (Chin, J., dissenting))).
According to Plaintiffs, FilmOn X "falls squarely within the Transmit Clause" because "it retransmits the same broadcast of a television program to multiple subscribers" through "its system of miniature antennas, copies, and the Internet." Pls. Mem. at 13-14; see also Pls. Reply at 6 (arguing that "FilmOn X's own admissions confirm that it is a retransmission service"). Moreover, Plaintiffs assert that, in enacting the 1976 Act, Congress intended that all commercial enterprises who retransmit copyrighted material — whether cable systems, satellite television providers, or otherwise — fall within the scope of the Transmit Clause and must first secure licenses. Plaintiffs urge the Court to disregard FilmOn X's "one antenna per user" architecture because the text of the Copyright Act and its legislative history "underscore[] the fact that Congress intended the Transmit Clause to capture all possible technologies, even those not in existence when the statute was enacted." Pls. Mem. at 15; Pls. Reply at 5; id. at 8 (asserting that the Copyright Act "distinguishes between what consumers can lawfully do on their own with respect to broadcast signals and what businesses can do for large numbers of consumers for a profit").
Plaintiffs suggest that the Second Circuit "misconstrued" the Transmit Clause in Aereo as a result of its decision in Cablevision "[b]y concentrating only upon the potential audience for each transmission" and "improperly replac[ing] the term `performance' in the Transmit Clause with the term `transmission,' thereby effectively rewriting the clause." Pls. Mem. at 20; see also id. at 24 (characterizing Aereo as "the lone exception in a line of cases, both within and outside the United States, where courts have enjoined services from retransmitting live broadcast television programming over the Internet without copyright owner consent"). In addition to the disagreement of the BarryDriller court and Judge Chin, Plaintiffs note that Cablevision has been criticized by several commentators. See id. at 20-22 & n. 8 (collecting secondary sources casting doubt on the Second Circuit's reading of the Transmit Clause), Pls. Reply at 3 (asserting that "leading scholars have criticized the Second Circuit's interpretation of the
In response, FilmOn X argues that the Court should eschew BarryDriller and follow the Second Circuit's direction in Aereo, which "rejected virtually all of the same arguments plaintiffs make here" and "found that a service which is similar to FilmOn X in every relevant way did not permit public performance of copyright work." Defs. Opp. at 1, 10-15. FilmOn X advances the opposing view as to the meaning of the Transmit Clause and Congress's intent in enacting it, asserting that FilmOn X enables only individual private performance of the copyrighted works and does not infringe Plaintiffs' exclusive rights. Id. at 9-10 ("The legislative record shows that Congress understood that its definition of transmission would limit the ability to prevent private transmissions ...."). FilmOn X argues that the Court should approach the question from the perspective of the individual consumer, whose "right ... to use a technology to record over-the-air broadcasts as a matter of personal convenience is a long-standing and fundamental principle of modern copyright jurisprudence." Id. at 21 (analogizing FilmOn X to the facts of Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), holding that Sony was not liable for secondary infringement when consumers used its Betamax video recorder to duplicate copyrighted programs because such duplication was fair use).
The statute in contention is the Copyright Act of 1976 (1976 Act), Pub. L. 94-553, 90 Stat. 2541, codified as amended at 17 U.S.C. § 101 et seq. The 1976 Act was enacted as a complete overhaul of its predecessor, the Copyright Act of 1909, to respond to "significant changes in technology [that] affected the operation of the copyright law." H.R. Rep. 94-1476 (House Report) at 1 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5660. One of those significant changes was the advent of cable television. The House Report made explicit that the 1976 Act was enacted because "[p]ursuant to two Supreme Court decisions (Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), and Teleprompter Corp. v. CBS, Inc., 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974)), under the 1909 copyright law, the cable television industry ha[d] not been paying copyright royalties for its retransmission of over-the-air broadcast signals." House Report, 1976 U.S.C.C.A.N. at 5703. The 1976 Act set forth the beginnings of an extensive licensing scheme for cable providers in § 111.
17 U.S.C. § 106(4) confers on copyright holders the right to public performance; it provides that "the owner of copyright ... has the exclusive right ... [,] in the case of... motion pictures and other audiovisual works, to perform the copyrighted work publicly." (Emphases for defined terms added.) 17 U.S.C. § 101 provides several relevant definitions. First, § 101 states: "To `perform' a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible." (Emphases for defined terms added.) Section 101 further clarifies that "[a] `device,' `machine,' or `process' is one now known or later developed."
Central to the parties' dispute is the definition of "to perform or display a work `publicly,'" which states:
17 U.S.C. § 101 (emphases added). Clause (2) of the definition of "perform or display a work `publicly'" in 17 U.S.C. § 101, cited above, is referred to as the "Transmit Clause." Section 101 also defines "transmit:" "To `transmit' a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent." Id.
The House Report for the 1976 Act clarified:
1976 U.S.C.C.A.N. at 5676-77 (emphases added). The House Report further emphasized the broad reading intended for "device or process," stating that the definition of those terms is meant to include "all kinds of equipment for reproducing or amplifying sounds or visual images, any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented." Id. at 5677.
The House Report elaborated on the Transmit Clause as follows:
Id. at 5678.
In interpreting a statute, the general rule is that a court "must first determine whether the statutory text is plain and unambiguous." See Carcieri v. Salazar, 555 U.S. 379, 387, 129 S.Ct. 1058, 172 L.Ed.2d 791 (2009) (citations omitted). "In expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy." U.S. Nat'l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) (quoting United States v. Heirs of Boisdore, 49 U.S. (8 How.) 113, 122, 12 L.Ed. 1009 (1849)). Courts "should `not resort to legislative history to cloud a statutory text that is clear,'" Consumer Elecs. Ass'n v. FCC, 347 F.3d 291, 300 (D.C.Cir.2003) (quoting Ratzlaf v. United States, 510 U.S. 135, 147-48, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)), but a court "may examine the statute's legislative history in order to `shed new light on congressional intent, notwithstanding statutory language that appears superficially clear.'" Id. (quoting National Rifle Ass'n v. Reno, 216 F.3d 122, 127 (D.C.Cir.2000); other citations omitted). The Supreme Court has made clear that a court should give broadly written statutes a broad interpretation because "the fact that a statute can be applied in situations not expressly anticipated by Congress does not demonstrate ambiguity. It demonstrates breadth." PGA Tour, Inc. v. Martin, 532 U.S. 661, 689, 121 S.Ct. 1879, 149 L.Ed.2d 904 (2001).
The Court finds that the provisions of the 1976 Act that protect Plaintiffs' work are clear: FilmOn X's service violates Plaintiffs' "exclusive right ... to perform the copyrighted work publicly." See 17 U.S.C. § 106(4). 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 as defined by the Transmit Clause: Film On X "transmit[s]... a performance ... of the work... to the public, by means of any device or process." See 17 U.S.C. § 101. "A `device,' `machine,' or `process' is one now known [i.e., in 1976] or later developed;" "[t]o `transmit' a performance or display is to communicate it by any device or process." Id. (emphases added). These two definitions are facially broad and encompass FilmOn X's convoluted process for relaying television signals. The Transmit Clause, which applies whether "members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times," also plainly captures FilmOn X's DVR-like capabilities. Id. FilmOn X transmits (i.e., communicates from mini-antenna through servers over
Even assuming arguendo that the 1976 Act contains any ambiguity, the legislative history confirms Congress's intent that the Transmit Clause and § 106(4) be applied broadly. "Under the definitions of `perform,' `display,' `publicly,' and `transmit' in section 101, the concepts of public performance and public display cover not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public." House Report, 1976 U.S.C.C.A.N. at 5676-77. It is incongruous to suggest that FilmOn X does not "perform" "publicly" by making Plaintiffs' programs available to any person with an Internet-enabled device, as several other courts have concluded in different but analogous circumstances. See Nat'l Cable Television Ass'n, Inc. v. Broad. Music, Inc., 772 F.Supp. 614, 650-51 (D.D.C.1991) ("[T]he term `public performance' was meant to be read broadly" and "it would strain logic to conclude that Congress would have intended the degree of copyright protection to turn on the mere method by which television signals are transmitted to the public." (one set of internal quotation marks and citation omitted)); see also Warner Bros. Entm't Inc. v. WTV Sys., Inc., 824 F.Supp.2d 1003, 1010 (C.D.Cal.2011) (in a case in which the defendants operated an online DVD "rental" service, streaming a single DVD over the internet, defendants transmitted copyrighted works publicly because although "[c]ustomers watching one of Plaintiffs' Copyrighted Works on their computer ... [were] not necessarily watching it in a `public place,'" they were "members of `the public'").
FilmOn X contends that it does not perform publicly because FilmOn X facilitates a one-to-one relationship between a single mini-antenna and a viewer of Plaintiffs' programs via an admittedly complex technological process. First, 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. The television signal is captured by FilmOn X and passes through FilmOn X's single electronic transmission
Second, the aggregation of several new kinds of technology does not avoid the Copyright Act because Congress intended "device or process" in the Transmit Clause to include "all kinds of equipment for reproducing or amplifying sounds or visual images, any sort of transmitting apparatus, any type of electronic retrieval system, and any other techniques and systems not yet in use or even invented." Id. at 5677 (emphasis added); see also id. at 5678 ("The definition of `transmit' — to communicate a performance or display `by any device or process whereby images or sound are received beyond the place from which they are sent' — is broad enough to include all conceivable forms and combinations of wires and wireless communications media, including but by no means limited to radio and television broadcasting as we know them." (emphasis added)). FilmOn X, which is a commercial service retransmitting Plaintiffs' television performances, is in no meaningful way different from cable television companies, whose relationship with broadcasters such as Plaintiffs was the primary motivation for the 1976 Act's enactment. See Cablevision Sys. Dev. Co. v. Motion Picture Ass'n of Am., Inc., 836 F.2d 599, 602-03 (D.C.Cir.1988). It speaks volumes that Congress settled on a compulsory licensing regime for cable companies that wish to carry over-the-air broadcasts. Id. ("Under § 111(c) of the [1976] Act, a cable system may retransmit to its customers any primary transmission made by a broadcast station licensed by the Federal Communications Commission. In exchange for this privilege, however, the cable systems are required to pay a fee, to be distributed to the copyright owners as surrogate for the royalties for which they might have negotiated under a pure market scheme."). Whether FilmOn X should be subject to a similar licensing regime is not before the Court. It suffices to say that nothing about the 1976 Act or its legislative history suggests that Congress intended a commercial entity that rebroadcasts copyrighted material for consumption by the public, such as FilmOn X, to avoid liability for infringement of the copyright holders' exclusive right to public performance.
Plaintiffs have shown "a substantial likelihood of success on the merits" of their
Plaintiffs have also shown that they are likely to suffer irreparable harm if preliminary injunctive relief is not granted. Plaintiffs note that "[e]very court that has considered the question of whether unauthorized Internet streaming of television and other video programming causes irreparable harm to the copyright owners has concluded unequivocally that it does," even the district court in Aereo, which ruled against the plaintiffs in that case. Pls. Mem. at 25 (citing, inter alia, Aereo I, 874 F.Supp.2d at 396-400). Plaintiffs identify several categories of irreparable harm that they will suffer if a preliminary injunction is not issued:
Pls. Mem. at 26-27 (citations, quotations, and modifications omitted). Plaintiffs offer the declaration of Sherry Brennan, Senior Vice President of Distribution Strategy and Development for Fox, to support its assertions of irreparable harm. E.g., Brennan Decl. ¶ 16 ("[B]ased on my 24 years in the industry ... I am certain that FilmOn X's continuing ability to obtain and retransmit the Broadcast Companies' Programs for free will be a factor in [negotiations with retransmission providers like cable companies]. In fact, it is my understanding that cable companies have already referenced FilmOn X-type startups when proposing a reduction of their
FilmOn X responds that Plaintiffs' showing of irreparable harm is insufficiently speculative and "unsupported by any evidence." Defs. Opp. at 21-22 ("[A] plaintiff `must provide proof that the harm has occurred in the past and is likely to occur again, or proof indicating that the harm is certain to occur in the near future.'" (quoting Wisc. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C.Cir.1985))). FilmOn X argues that "[t]here is no specific evidence of imminent harm, aside from pure speculation as to how FilmOn X's service may hypothetically impact plaintiffs' future ad revenue" and that all of the types of harm identified by Plaintiffs, even if actualized, would be non-irreparable economic losses. Id. at 22-23.
Plaintiffs have made a showing that "irreparable injury is likely in the absence of an injunction." Winter, 555 U.S. at 22, 129 S.Ct. 365. Indeed, they have shown more than the "recoverable economic losses" that courts normally find insufficient to rise to the level of irreparable harm. See Davis, 571 F.3d at 1295. While some of the revenue that they stand to lose might be quantifiable, Plaintiffs have identified four categories of harm that would have far-reaching consequences, including: 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, such as their own websites, Hulu.com, and Apple's iTunes; and the loss of control over the distribution and quality of their copyrighted programs. FilmOn X characterizes these harms as "pure speculation." Defs. Opp. at 22. But Plaintiffs have supported each category with evidence that FilmOn X has not controverted, including a sworn declaration from a senior executive at Fox who states that cable companies have already referenced businesses like FilmOn X in seeking to negotiate lower fees. See Brennan Decl. ¶ 16. BarryDriller and Aereo I both accepted that these types of harm constituted irreparable injury. See Aereo I, 874 F.Supp.2d at 397-98 ("Aereo will damage Plaintiffs' ability to negotiate with advertisers by siphoning viewers from traditional distribution channels .... Aereo's activities will damage Plaintiffs' ability to negotiate retransmission agreements [with cable or other providers], as these companies will demand concessions from Plaintiffs to make up for this decrease in viewership."); BarryDriller, 915 F.Supp.2d at 1147 (setting forth similar analysis). This Court agrees. See WTV Sys., Inc., 824 F.Supp.2d at 1013 ("[B]ecause Defendants are exploiting Plaintiffs' Copyrighted Works without paying the normal licensing fees, they deprive Plaintiffs of revenue, and even jeopardize the continued existence of Plaintiffs' licensees' businesses."); see also Purdue Pharma L.P. v. Boehringer Ingelheim GmbH, 237 F.3d 1359, 1368 (Fed.Cir.2001) (likelihood of price erosion and loss of market position are evidence of irreparable harm).
Because Plaintiffs have shown that they will likely suffer irreparable harm if the FilmOn X service is not enjoined, the second factor favors Plaintiffs.
The balance of harms tips in Plaintiffs' favor. As set forth above, there are severe, irreparable harms that Plaintiffs face if FilmOn X is permitted to continue infringing Plaintiffs' copyrights. While FilmOn X points out that its business could be "crippled" by an injunction and that a decision in Plaintiffs' favor will chill technological innovation, Defs. Opp. at 24-25, these concerns are overstated. First, FilmOn X has no cognizable interest in continuing to infringe Plaintiffs' copyrights and thus cannot complain of the harm it will suffer if ordered to cease doing so. See BarryDriller, 915 F.Supp.2d at 1148-49 (finding that the third and fourth factors favored the plaintiffs because FilmOn X had "no equitable interest in continuing an infringing activity"). In addition, FilmOn X concedes that it has "other Content Partners" and has entered into licensing agreements for some over-the-air channels and "about 15" traditional cable channels. David Decl. ¶¶ 16, 28-29 (listing as examples Inspiration Network and Real Channel). Thus, FilmOn X will be free to continue legal retransmission.
In an oft-cited passage, the Third Circuit observed: "It is virtually axiomatic that the public interest can only be served by upholding copyright protections and correspondingly, preventing the misappropriation of skills, creative energies, and resources which are invested in the protected work." Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1255 (3d Cir.1983) (citation omitted); see also Walt Disney Co. v. Powell, 897 F.2d 565, 567 (D.C.Cir.1990) ("When a copyright plaintiff has established a threat of continuing infringement, he is entitled to an injunction." (citation omitted)). With this record, the public interest favors an injunction.
Because all four factors favor Plaintiffs, the Court will grant the motion for a preliminary injunction.
The final issue is the scope of a potential injunction. Plaintiffs argue that, under 17 U.S.C. § 502(b), the Court should enjoin FilmOn X's service throughout the entire United States. Pls. Mem. at 6. FilmOn X responds that BarryDriller's injunction was properly limited to the Ninth Circuit in light of the Second Circuit's decision in Aereo, and this Court should limit any injunction to the D.C. Circuit. Defs. Opp. at 27.
"[D]istrict courts enjoy broad discretion in awarding injunctive relief." Nat'l Min. Ass'n v. U.S. Army Corps of Engineers, 145 F.3d 1399, 1408 (D.C.Cir. 1998) (citation omitted); see also NLRB v. Express Pub. Co., 312 U.S. 426, 435, 61 S.Ct. 693, 85 L.Ed. 930 (1941) ("A federal court has broad power to restrain acts which are of the same type or class as unlawful acts which the court has found to have been committed or whose commission in the future unless enjoined, may fairly be anticipated from the defendant's conduct in the past.... The breadth of the order, like the injunction of a court, must depend upon the circumstances of each case....").
17 U.S.C. §§ 502(a) and (b) provide, in relevant part, that any injunction granted "to prevent or restrain infringement of a copyright" "may be served anywhere in the United States on the person enjoined" and "shall be operative throughout the United States and shall be enforceable, by proceedings in contempt or otherwise, by any United States court having jurisdiction of that person." While § 502(b) commands a nationwide injunction, the D.C. Circuit has recognized that in some cases
Federal Rule of Civil Procedure 65(c) provides that "[t]he court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." "It is well settled that Rule 65(c) gives the Court wide discretion in the matter of requiring security." Nat'l Res. Def. Council, Inc. v. Morton, 337 F.Supp. 167, 168 (D.D.C.1971). "[T]he district court has power not only to set the amount of security but to dispense with any security requirement whatsoever where the restraint will do the defendant no material damage, where there has been no proof of likelihood of harm, and where the applicant for equitable relief has considerable assets and is ... able to respond in damages if defendant does suffer damages by reason of a wrongful injunction." Fed. Prescription Serv., Inc. v. Am. Pharm. Ass'n, 636 F.2d 755, 759 (D.C.Cir.1980) (internal citations, quotation marks, and alterations omitted).
FilmOn X asks the Court to impose a substantial bond because "wrongful enjoinment would deprive FilmOn X of legitimate subscription and advertising revenue at a crucial stage of its growth," would undermine "substantial technology investment as well as some of its partnerships," and could cause FilmOn X to lose key personnel. Defs. Opp. at 24. Plaintiffs' Proposed Preliminary Injunction, Dkt. 27-16, proposes a bond amount of $10,000.
Unlike FilmOn X, the copyright holders here have considerable assets to respond in damages if the injunction is overturned. The Court finds no meaningful distinction between this case and BarryDriller. It will require Plaintiffs to post $250,000 bond.
For the foregoing reasons, the Court will grant Plaintiffs' Motion for a Preliminary Injunction. A memorializing Order accompanies this Opinion.
