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CBS Broadcasting Inc. v. Filmon.Com, Inc.

United States District Court, S.D. New York

July 24, 2014

CBS BROADCASTING INC., et al., Plaintiffs,
v.
FILMON.COM, INC., Defendant.

MEMORANDUM AND ORDER

NAOMI REICE BUCHWALD, District Judge.

On October 1, 2010, plaintiffs - which include CBS Broadcasting Inc., NBC Studios LLC, Fox Television Stations, Inc., and ABC Holding Company Inc. - brought this action against defendant FilmOn.com, Inc., alleging infringement of their copyrights in various programs exhibited over their broadcast television stations. The case was closed by entry of the Consent Order of Judgment and Permanent Injunction dated August 8, 2012 (the "Injunction").

On July 3, 2014, plaintiffs moved this Court by order to show cause to hold FilmOn.com, Inc. and its Chief Executive Officer, Alkiviades David (collectively, "FilmOn") in civil contempt. Plaintiffs assert that FilmOn violated the Injunction by using mini-antenna technology (1) to broadcast the networks' copyrighted content within the Second Circuit in violation of the Supreme Court's decision in American Broadcasting Companies, Inc. v. Aereo, Inc. , 134 S.Ct. 2498 (2014) ("Aereo"); and (2) to transmit this programming to regions outside the Second Circuit through use of defendant's "Teleporter" system. For the reasons herein, we agree with plaintiffs and grant their motion.

BACKGROUND

Nearly four years ago, plaintiffs initiated the aforementioned action, alleging that FilmOn was streaming their broadcast programming without their authorization, thereby infringing their exclusive copyrights in the programming under Sections 106(1)-(5) of the Copyright Act of 1976, 17 U.S.C. § 101 et seq. Compl. ¶¶ 1-5. Plaintiffs sought monetary damages and a permanent injunction against FilmOn's retransmission service. Id . In July 2012, after the completion of discovery, the parties reached an agreement to resolve the action, the full terms and conditions of which were set forth in a settlement agreement dated July 31, 2012 (the "Settlement Agreement"). The Settlement Agreement was conditioned upon this Court's entry of a stipulated consent judgment and permanent injunction prohibiting FilmOn from further infringing plaintiffs' copyrights. Settlement Agreement § 4.1.

Accordingly, on August 8, 2012, we entered the parties' Stipulated Consent Judgment and Permanent Injunction, which permanently enjoined:

[FilmOn, ] its affiliated companies, and all of its officers, directors, agents, servants, and employees, and all natural and corporate persons in active concert or participation or in privity with any of them... from infringing, by any means, directly or indirectly, any of plaintiffs' exclusive rights under Section 106(1)-(5) of the Copyright Act, including but not limited to through the streaming over mobile telephone systems and/or the Internet of any of the broadcast television programming in which any Plaintiff owns a copyright.

Injunction ¶ 1. The Injunction further provided that violation of its provisions would expose FilmOn and all other persons bound by the Injunction to "all applicable penalties, including contempt of Court." Id . ¶ 2. Finally, it provided that "[t]his Court shall retain continuing jurisdiction over the Parties and the action for purposes of enforcing th[e] [Injunction and Settlement Agreement]." Id . ¶ 4.

After the issuance of the Injunction, FilmOn launched a video on demand ("VOD") service, which provided subscribers with access to an archive of previously televised programs for streaming "on demand." On July 2, 2013, plaintiffs moved for an order to show cause why FilmOn should not be found in civil contempt for violating the Injunction based on the VOD service. In a Memorandum and Order dated September 10, 2013, we found that because "FilmOn has offered no evidence whatsoever that they have validly acquired the right to stream plaintiffs' copyrighted programming, " FilmOn was in contempt of the Injunction. CBS Broad. Inc. v. FilmOn.com, Inc., No. 10 Civ. 7532(NRB), 2013 WL 4828592, at *9 (S.D.N.Y. Sept. 10, 2013). Accordingly, we required defendant to (1) remove all broadcast programming identified by plaintiffs, (2) agree not to stream any of plaintiffs' copyrighted programming using the VOD service, and (3) pay a penalty of $10, 000 per day of noncompliance. Judgment, Oct. 3, 2013 (the "Judgment") ¶ 3. We also compelled FilmOn to pay $115, 046.10 in attorneys' fees. Id . ¶ 4.

On June 25, 2014, while the Injunction remained in place, the Supreme Court decided Aereo. Aereo operated a system "made up of servers, transcoders, and thousands of dime-sized antennas housed in a central warehouse." Aereo , 134 S.Ct. at 2503. A key feature of the Aereo system was that each subscriber had one of these dime-sized antennas dedicated to his personal use. Id . An Aereo subscriber could visit the Aereo website, select a program for viewing, and stream it to his device with a delay of only a few seconds. Id . Petitioners in the Aereo action, which included the broadcast networks who are plaintiffs in the instant case, argued that Aereo infringed their right to "perform" their works "publicly, " within the meaning of the Transmit Clause of the Copyright Act. Id. at 2504 (quoting 17 U.S.C. § 106(4)).

The Supreme Court found in favor of the broadcast networks, holding "that Aereo perform[s]' petitioners' copyrighted works publicly, ' as those terms are defined by the Transmit Clause" of the Copyright Act. Id. at 2511. In so finding, the Court relied on "Aereo's overwhelming likeness to the cable companies targeted by the 1976 amendments" to the Copyright Act and noted that the "sole technological difference between Aereo and traditional cable companies [did] not make a critical difference" in the Court's analysis. Id. at 2507. Ultimately, the Supreme Court concluded that "Aereo is not just an equipment supplier" and that its use of the antenna system constituted public performance of the petitioners' protected programming. Id . This decision overruled the Second Circuit's determination in WNET, Thirteen v. Aereo, Inc. , 712 F.3d 676 (2d Cir. 2013), that Aereo's retransmission system did not infringe on the networks' copyrights; therefore, the use of Aereo's technology, which had previously been permissible within the Second Circuit, was henceforth barred. See Aereo , 134 S.Ct. at 2504, 2511. Aereo did not mention, let alone abrogate, WPIX, Inc. v. ivi, Inc. , 691 F.3d 275 (2d Cir. 2012) ("ivi"). That case established the law in the Second Circuit that "Internet retransmission services do not constitute cable systems under § 111" of the Copyright Act.[1] Id. at 284 (emphasis added).

Shortly after the Aereo decision, on July 3, 2014, plaintiffs again applied for an order to show cause why the Court should not hold FilmOn in contempt for violating the Injunction. In this instance, plaintiffs' application was based on defendant's "operation[] of its Teleporter' service and any other device or process by which it publicly performs plaintiffs' copyrighted programming." Order to Show Cause Re Contempt of Inj. ¶ 2 (July 7, 2014). FilmOn's Teleporter service relies on mini-antennas, much like those used by Aereo, to "allow[] users to virtually view broadcast content from a distant location that is not necessarily within the local broadcast geographic area." Def.'s Mem. of Law in Opp'n to Order to Show Cause Re Contempt of Inj. ("Def.'s Opp'n") at 10. Plaintiffs have requested (1) that FilmOn be ordered immediately to cease offering plaintiffs' copyrighted programming to subscribers and (2) that the Court impose coercive penalties for defendant's violation of the Injunction. Mem. of Pls. in Supp. of Order to Show Cause at 5.

Plaintiffs' motion for an order to show cause was fully briefed by July 17, 2014, and we held oral argument on the ...


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