TV Streaming Service Hits Roadblock Under U.S. Copyright Law

In a major victory for broadcasters, the Second Circuit Court of Appeals has affirmed a preliminary injunction against ivi, Inc., a company that streams television programming live and over the Internet. The appeals court ruled that its service likely infringes the copyrights of major broadcasters like NBC, ABC, and FOX, which had filed suit to keep the new technology offline.

While ivi’s service is certainly groundbreaking, it came up against a significant roadblock—the U.S. Copyright Act. The appeals court rejected the company’s argument that is a “cable system” under § 111 of the Copyright Act. This provision allows cable systems to publicly perform and retransmit signals of copyrighted television programming to its subscribers under a compulsory license.

The Second Circuit acknowledged that the statutory text of the Copyright Act is unclear as to whether a service that retransmits television programming live and over the Internet constitutes a cable system. However, it ultimately concluded that Congress did not intend for § 111’s compulsory license to extend to Internet transmissions. It pointed specifically to the legislative history, noting that if Congress had intended to extend § 111’s compulsory license to Internet retransmissions, it would have done so expressly.

The appeals court also agreed that ivi’s Internet streaming service would cause irreparable harm to broadcasters. The opinion states:

The absence of a preliminary injunction would encourage current and prospective retransmission rights holders, as well as other Internet services, to follow ivi’s lead in retransmitting plaintiffs’ copyrighted programming without their consent. The strength of plaintiffs’ negotiating platform and business model would decline. The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules –- all would be adversely affected.

This, of course, is not the only copyright infringement case currently pending that involves streaming television online. Aereo is currently fighting broadcasters to keep its new service up and running. Aereo takes broadcast television signals for the New York-area television stations and retransmits them over the Internet to Aereo subscribers using high-tech “rabbit ears” antennas. That case is also headed to the Second Circuit Court of Appeals.

As these cases highlight, it is not uncommon for start-up companies and other businesses launching new technology to encounter IP obstacles along the way. To find out how I can help, contact me for a consultation.

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