Broadcasters triumph in battle to define internet streaming

The US based television streaming service ivi suffered a major setback this week after the federal appeals court upheld a lower court’s temporary injunction against the controversial company.

The case was brought against  Seattle based ivi by ABC, NBC, Universal, Univision, Fox Television, CBS and several other broadcasters, networks and rights owners, asserting that the startup was infringing their copyrights by live-streaming their programming without permission. Initially, ivi began retransmitting signals from about 30 New York and Seattle stations in 2010, but it quickly expanded, retransmitting signals from Los Angeles and Chicago and offering several thousand copyrighted programs to its subscribers. For about $5 per month, subscribers could access content owned by and distributed through major networks. 

In its ruling, the U.S. Court of Appeals for the Second Circuit said that allowing ivi to resume service could “threaten to destabilize the entire industry” and inflict irreparable damage on the networks.   It also determined that ivi was not legally the same as a cable network, noting in particular that it “retransmits broadcast signals nationwide, rather than to specific local areas". Ivi’s position is that as it was an "Online Video Distributor" that could be considered a cable system, it only required the same compulsory licenses the U.S. Copyright Office grants to cable providers under §111 of the Copyright Act, and that it didn’t need consent to retransmit signals because as an online service it is outside the Federal Communications Commission’s remit.  The company argued that like other cable systems, it merely had to pay a statutory rate of about $100 a year to have access to the content. 

Giving the unanimous judgment of the Court, Judge Denny Chin reviewed ivi's system of capturing and retransmitting programming, with the ability to record, pause, fast-forward, and rewind streams, and its legal arguments. The judge says that based on the statutory text of the copyright provision, it was "not clear" whether a service that retransmits live television programming over the Internet constitutes a cable system and said the growth of "cloud-based systems...highlights the uncertainty". But Judge Chin then noted that "Congress has not codified a statutory provision for Internet retransmissions, nor has it included the 'Internet' as an acceptable communication channel under § 111.7." and that the statutory licensing system was put in place to allow remote rural  communities to obtain a stronger TV signal – and that Congress was not “opening the door to digital streamers”. Put simply, the Second Circuit said that streaming services are not cable systems. 

Upholding the February 2011 decision of Judge Naomi Reice Buchwald in the U.S. District Court for the Southern District of New York, granting a preliminary injunction barring ivi from transmitting copyrighted material belonging to such as ABC, CBS, NBC, Fox Television and Major League Baseball, Judges Chin, Ralph Winter and Christopher Droney said “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” and noted that if ivi’s service were to continue “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. These harms would extend to other copyright holders of television programming. Continued live retransmissions of copyrighted television programming over the Internet without consent would thus threaten to destabilize the entire industry." 

"We are very pleased the Court recognized that ivi's unauthorized streaming of our copyrighted content would substantially diminish the value of television programming," said ABC, NBC, CBS and Fox in a statement. "

1709 Readers will remember that Judge Chin was also the judge in the 'Google Books' settlement - where he rejected in Google's first offering as it gave Google a significant advantage over competitors, and would have rewarded the web giant for wholesale copying of copyrighted  works without permissions.

More at the Hollywood Reporter and The New York Law Journal

WPIX v ivi 11-788-cv