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FilmOn X Appeals Ninth Circuit Panel Decision to Full Court

FilmOn X Thursday sought a full-court re-hearing in the Ninth Circuit Court of Appeals after a three-judge panel of that court last month reversed a lower court decision that FilmOn X was eligible for the same compulsory license to TV programming as cable operators have.

The appeals court panel held that "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 not a 'cable system' eligible for a compulsory license under the Copyright Act."

Broadcasters led by Fox had challenged the lower court ruling after U.S. District Court judge George Wu sided with FilmOn X.

In its petition this week for full-court (en banc) review, which was filed by FilmOn X attorney Ryan Baker of Baker Marquart, the online content distributor argued that the panel was wrong to defer to the "informal and inconsistent policy views of the the Copyright Office," including that a cable system is inherently localized, though the company argues that even under that definition it qualifies and that the panel ignored evidence that FilmOn X restricts transmissions to local communities. "The panel erred in reversing the district court," the petition concludes.

The company argues that the Copyright Office has been inconsistent on the license, granting one to U-verse and FiOS as substantially similar to cable, for example, while denying ones to FilmOn X and others that also use IP technology. It also says Congress meant for the definition of cable to be able to encompass new technologies like FilmOn X.

FilmOn X says the panel's decision threatens internet-based TV, which would otherwise provide a governor on "artificially high cable TV costs," reduces choice for consumers and frustrates the governmental interest in "broad access" to broadcast TV.

Given all that, it says, the case is of "exceptional importance" and justifies en banc hearing (which is not commonly granted).

Elsewhere, FilmOn X is awaiting a decision in the U.S. Court of Appeals for the D.C. Circuit, which it asked to overturn a different district court decision that it was not eligible for the compulsory license.

Oral argument in that case was held March 17.

FilmOn X says it is the online equivalent of a cable system/MVPD and should be eligible for a blanket compulsory copyright license to stream TV content. Fox and the other Big Four TV networks—with the support of the National Association of Broadcasters—have said FilmOn X is not entitled to the license and cannot stream TV content without individually negotiating for the rights.

How the appeals court decisions are ultimately rendered in the Ninth and D.C. circuits could determine whether the Supreme Court gets involved. If the federal circuits split, one supporting the license the other not, the Supreme Court would be more likely to take the case if it is appealed there.

The high court has already ruled in a similar case, ABC v. Aereo, that internet transmissions are public performances and require a copyright-holder's permission, rather than being covered by a blanket license.

The Copyright Office has previously, if tentatively, held that over-the-top services are not subject to the blanket license but said the FCC could change that if it defined them as MVPDs. Then FCC chairman Tom Wheeler proposed doing just that, including citing FilmOn as one of the competitive video services such a move would help foster, but he got pushback, including from some in both parties on the Hill, and that definitional initiative was tabled.

(Photo via Tori Rector's FlickrImage taken on July 21, 2016 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.