Fox Television Stations, Inc. v. Aereokiller, LLC
851 F.3d 1002 (2017)
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Rule of Law:
An internet-based service that retransmits broadcast television signals is not a "cable system" under § 111 of the Copyright Act and is therefore not eligible for a compulsory license. This conclusion is reached by deferring to the Copyright Office's long-standing interpretation that the statutory definition of "cable system" is limited to localized transmission systems.
Facts:
- FilmOn operated a service that used an array of antennas to capture copyrighted over-the-air broadcast programming.
- The captured programs were owned by copyright holders, including a group of broadcast stations collectively referred to as Fox.
- FilmOn retransmitted this programming over the internet to its subscribers in real-time.
- Subscribers paid a fee to FilmOn to access this service.
- FilmOn performed these retransmissions without obtaining the consent or authorization of the copyright holders, Fox.
Procedural Posture:
- A group of broadcast stations and copyright holders ("Fox") sued FilmOn X ("FilmOn") in a federal district court for copyright infringement.
- FilmOn asserted as a defense that it qualified as a "cable system" entitled to a compulsory license under § 111 of the Copyright Act.
- The district court (court of first instance) granted partial summary judgment to FilmOn, ruling that it did qualify as a "cable system."
- The district court certified its ruling for an immediate interlocutory appeal.
- Fox, as the appellant, petitioned the U.S. Court of Appeals for the Ninth Circuit for permission to appeal, which was granted, with FilmOn as the appellee.
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Issue:
Does an internet-based service that captures and retransmits over-the-air broadcast programming to paying subscribers qualify as a "cable system" eligible for a compulsory license under § 111 of the Copyright Act?
Opinions:
Majority - O'Scannlain, J.
No, an internet-based retransmission service does not qualify as a "cable system" under § 111 of the Copyright Act. The court found the statutory language defining "cable system" and its use of the phrase "other communications channels" to be ambiguous, as plausible arguments existed for both broad and narrow interpretations. Given this ambiguity, the court applied Skidmore deference to the Copyright Office's interpretation. The court found the Office's long-standing position—that a "cable system" must be an "inherently localized transmission media of limited availability"—to be persuasive because it was consistent, thoroughly reasoned, aligned with the statute's location-specific language (e.g., "contiguous communities"), and Congress had implicitly acquiesced to this interpretation over many years by not amending the statute to include internet services.
Analysis:
This decision reinforces a significant barrier for internet-based television retransmission services seeking to operate under the favorable terms of the cable compulsory license. By deferring to the Copyright Office's narrow, geographically-limited interpretation of "cable system," the court prevented a major disruption to the copyright licensing market for broadcast television. This ruling solidifies the legal distinction between localized systems like traditional cable and global platforms like the internet, compelling new media companies to negotiate for licenses directly with copyright holders rather than relying on a government-mandated compulsory license originally designed for a fledgling 1970s industry.
