Court Finds Aereo Competitor FilmOn In Contempt For Claiming To Be A Cable Service

Legal Issues

from the thumbing-your-nose-not-such-a-good-idea dept

We had mentioned in passing that wacky Aereo-wannabe FilmOn, run by the eccentric and frequently ridiculous Alki David had declared itself a “cable service” following the Supreme Court’s Aereo ruling — though we pointed out that anything that FilmOn or Alki David says should be taken with a very large dose of salt. Unlike Aereo, who is trying to follow all of the procedures to make sure that it can be classified as a cable service to pay retransmission fees under Section 111, FilmOn just announced that it was a cable service and kept on streaming. And, not surprisingly, one of the courts that had already ruled against FilmOn has found the company in contempt. It probably did not help that the case was before the very same judge who ruled that ivi couldn’t qualify as a cable company.

The judge here… is not happy. Judge Naomi Reice Buchwald totally dismisses the idea that the Supreme Court’s ruling in Aereo (where it says Aereo is a cable company) actually means that any internet company qualifies for Section 111 compulsory retransmission rates. Basically, we’re back to the quantum CATV where it’s a cable system for some parts of the law, but not for others.

FilmOn?s second argument is also unavailing because it hinges on a mischaracterization of the holding in Aereo. Defendant is correct that, throughout the Aereo opinion, the Court likened Aereo to a cable company…. But defendant attaches far too much importance to the Court?s analogizing. A series of statements that Aereo (and, by extension, FilmOn, …) is very similar to a cable system is not the same as a judicial finding that Aereo and its technological peers are, in fact, cable companies entitled to retransmission licenses under § 111 of the Copyright Act. Defendant may argue that the Supreme Court?s language in Aereo implies that FilmOn may be entitled to a license under § 111, but an implication is not a holding.

Once again, it seems that David’s brazen and brash responses to legal setbacks are leading to bad law. It’s been suggested more than a few times that David’s real role here is to be the buffoonish version of Aereo, basically underminding Aereo’s much more sound legal reasoning and arguments at every turn, and that may be true again here. The court slams FilmOn for basically lying to the court in claiming that it didn’t mean to stream its content into NY where the injunction from this court blocked it. However, the court points to FilmOn’s own press release… which “boasts that defendant’s mini-antenna technology continued to make available to FilmOn subscribers across the country the local broadcasts of eighteen major American cities, including New York.”

The court, at the very least, points out that Aereo seems to understand how this process works, and has temporarily shut down its operations, but FilmOn just kept streaming. Furthermore, the court points out that, as Aereo is attempting to do, to make use of Section 111, you need to first get a license from the Copyright Office.

FilmOn does not have, and has never had, a license from the Copyright Office. Indeed, defendant admits that it did not even apply for a cable license until July 10, 2014, after plaintiff submitted this order to show cause — a fact that undermines any claim by defendant that it was truly committed to complying with the letter of the law…. Fundamentally, FilmOn cannot choose to ignore the Injunction merely because it anticipated someday being able to retransmit plaintiffs? content legally.

The court then goes on to point out that the Copyright Office itself has said it doesn’t think the Supreme Court’s ruling has any impact on the ivi ruling and rejected FilmOn’s (and Aereo’s) request to be granted a license.

Not only is hope no defense to the violation of an injunction, but defendant?s faith that the Copyright Office would grant it a cable license was misplaced. On July 23, 2014, the Copyright Office, citing ivi, expressed its view that FilmOn, as an internet retransmission service, ?falls outside the scope of the Section 111 license,? and that the Office did not ?see anything in the Supreme Court?s recent decision in [Aereo] that would alter this conclusion.? … Thus, not only was FilmOn?s expectation of a license irrelevant, but it was erroneous as well. Moreover, even if the Copyright Office had granted a license to FilmOn, this development would not have excused defendant?s decision to preemptively stream content in violation of the Injunction. The Copyright Office?s decision does, however, provide additional support for our conclusion that FilmOn?s use of the mini-antenna technology clearly falls within the ambit of the Injunction, and defendant should be held in contempt for willfully violating its terms.

The judge also calls out David himself for contempt, and in the end orders FilmOn to pay $10,000 per day for nine days. It calculated the nine days from the day Aereo shut down its service until FilmOn also shut down it’s offering. Thus a total of $90,000, but it also says the networks can get attorneys’ fees as well, so that could add up.

There are legitimate legal questions about whether or not the ivi ruling is still valid, and whether or not an internet streaming company can qualify for Section 111 retransmission rates. But the last company that should be in court defending that position is FilmOn.

Filed Under: alki david, cable service, contempt of court, naomi recie buchwald, section 111, supreme court
Companies: aereo, filmon, ivi