Fox Television Stations, Inc. v. Aereokiller, LLC

851 F.3d 1002, 2017 WL 1056095, 2017 U.S. App. LEXIS 4999
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 21, 2017
Docket15-56420
StatusPublished
Cited by3 cases

This text of 851 F.3d 1002 (Fox Television Stations, Inc. v. Aereokiller, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fox Television Stations, Inc. v. Aereokiller, LLC, 851 F.3d 1002, 2017 WL 1056095, 2017 U.S. App. LEXIS 4999 (9th Cir. 2017).

Opinion

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether a service that captures copyrighted works broadcast over the air, and then retransmits them to paying subscribers over the-Internet without the consent of the copyright holders, is a “cable system” eligible for a compulsory license under the Copyright Act.

I

A

The Copyright Act of 1976 gives copyright holders six “exclusive rights,” including the exclusive right “to perform” copyrighted works “publicly.” 17 U.S.C. § 106(4). The Act provides that “[ajnyone who violates any of the exclusive rights of the copyright owner ... is an infringer.” Id. § 501(a). This case concerns an important limitation on the Act’s provision for exclusive rights.

Under § 111 of the Act, a “cable system” is eligible for a so-called compulsory license that allows it to retransmit “a performance. or display of a work” that had originally been broadcast by someone else — even if such material is copyrighted — without having to secure the consent of the copyright holder. Id. § 111(c). So long as the cable system pays a statutory fee to the Copyright Office and complies with certain other regulations, it is protected from infringement liability. Id. § 111(c) — (d). Compulsory licenses are highly coveted, in no small part because, according to the Copyright Office, the royalty payments the Act requires cable companies to pay are “de minimis” when compared to the gross receipts and revenues the cable industry collects, a gap suggesting that the government-set rates fall well below market levels. U.S. Copyright Office, Satellite Home Viewer Extension and Reauthorization Act § 109 Report 43 (2008) (“SHVERA Report”); see also id. at 70.

This lawsuit pits a group of broadcast stations and copyright holders (collectively, “Fox”) against an entity now known as FilmOn X (“FilmOn”). FilmOn operates a service that uses antennas to capture over-the-air broadcast programming, much of it copyrighted, and then uses the Internet to retransmit such programming to paying subscribers, all without the consent or authorization of the copyright holders. The Supreme Court recently held that such a service does “perform” the retransmitted works “publicly,” and hence infringes the copyright holders’ exclusive performance rights. American Broad. Cos. v. Aereo, Inc., - U.S. -, 134 S.Ct. 2498, 2503, 189 L.Ed.2d 476 (2014). Fox sued FilmOn for copyright infringement in 2012; in its most recent defense, FilmOn claims that it is a “cable system” eligible for a compulsory license under § 111.

The relevant provision of the Copyright Act defines “cable system” as follows:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection *1007 (d)(1), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.

17 U.S.C. § 111(f)(3). The parties offer dueling interpretations § 111, each grounded in various aspects of its text, its perceived purposes, and slices of its legislative history.

B

The district court granted partial summary judgment to FilmOn, agreeing with it that it qualified as a “cable system” and was therefore potentially entitled to a compulsory license. The district court based its conclusion on what it took to be the plain meaning of § 111, as well as the Supreme Court’s Aereo decision; which had analogized Internet-based retransmission services to cable companies in the course of deciding that Internet retransmissions count as “performances” under the Act’s Transmit Clause, 17 U.S.C. § 101.

Recognizing that its ruling “involve[s] a controlling question of law as to which there is substantial ground for difference of opinion,” however, the district court authorized an immediate appeal from its decision. We granted Fox’s petition for permission to appeal. 1

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“We review de novo both the district court’s grant of summary judgment and its holdings on questions of statutory interpretation.” Phoenix Mem’l Hosp. v. Sebelius, 622 F.3d 1219, 1224 (9th Cir. 2010). But before turning to the parties’ interpretations of § 111, it is crucial to point out that we do not confront § Ill’s compulsory licensing scheme on a blank slate, because there is an agency interpretation in the background. The Copyright Office — the agency charged with implementing the Copyright Act — has for many years maintained that Internet-based retransmission services are not “cable systems” and hence are not eligible for compulsory licenses under § 111. Thus, when FilmOn attempted to pay the government-prescribed fee for retransmitting copyrighted broadcast programming, the Office refused to accept FilmOn’s filings, citing its position that Internet-based retransmission services are not covered by § 111.

Fox and FilmOn each claim that the plain meaning of § 111 resolves this case in its favor. We will first discuss Fox’s interpretation, then FilmOn’s, and only then — if we conclude that the meaning of § 111 is ambiguous on the question presented — will we consider the views of the Copyright Office.

Ill

Fox maintains that § Ill’s “plain text makes clear that the relevant ‘facility’ corn- *1008 prises the entire retransmission service— both the service’s means of receiving broadcast signals and its means of making secondary transmissions to the paying subscribers.” The Copyright Office has not endorsed this interpretation. Nevertheless, under Fox’s reading, FilmOn would necessarily be excluded from § Ill’s definition of “cable system” because FilmOn retransmits broadcast signals over the Internet, and yet the Internet “is in no sense under [its] ownership or control.” Indeed, FilmOn concedes that it “uses a communications channel beyond its facility” to make secondary transmissions. “That concession,” says Fox, “should decide this case.”

Fox’s theory is not implausible. As Fox points out, and as FilmOn does not dispute, “[a] traditional cable system is a ‘facility’ in this sense: It ...

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Bluebook (online)
851 F.3d 1002, 2017 WL 1056095, 2017 U.S. App. LEXIS 4999, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fox-television-stations-inc-v-aereokiller-llc-ca9-2017.