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N.Y. District Court Signals FilmOn Likely in Contempt

The U.S. District Court for the Southern District of New York appears poised to grant broadcasters' motion finding online TV station signal streamer FilmOn in contempt for continuing to deliver network TV station signals over the Internet after the Supreme Court found similar service Aereo in violation of copyright.

The company says it has since stopped.

In a hearing Tuesday, Judge Naomi Buchwald, who has already found FilmOn in contempt once, said she was likely to do so again. Her court had enjoined FilmOn from delivering TV station signals, but after the Second Circuit Court of Appeals (in New York) overturned an injunction against Aereo, FilmOn concluded it, too, could deliver signals with remote antennas in areas under the New York court's purview.

Buchwald has plenty of history with the issue. In 2011, she enjoined a similar service, ivi TV from streaming TV stations signals, indicating it, too, would not likely be deemed a cable system under copyright law. That decision was ultimately upheld in a federal appeals court.

CBS and Fox, which sought the contempt finding, also want attorneys fees and a $10,000-per day penalty Buchwald previously threatened to propose for further contempt.

The Supreme Court said that Aereo, like cable operators, provided a public performance subject to copyright, but it did not say it was a cable system. And in response to a request from Aereo, the Copyright Office said it felt confident that the law of the land was still that internet transmissions are not subject to the compulsory license available to cable operators, though it would hold on to the application in case the courts or FCC weighed in otherwise.

FilmOn is arguing that in the wake of the Supreme Court decision, it is a cable system, so that its streaming of TV stations does not violate copyright. "The question of whether or not any of FilmOn's conduct infringed copyright is really the pivotal issue, because that is the term in this court's injunction, We are arguing that we did not infringe because we are entitled to a license," said FilmOn lawyer Ryan Baker. "We are in part a cable system and waiting for summary judgment," FilmOn founder Alki David told B&C/Mulitchannel News of the effort to be treated as a cable system.

FilmOn continued to deliver network TV station signals after the court decision (FilmOn concedes it continued to deliver TV station signals after the Supreme Court ruling), saying that it is a cable system subject to the license. It did stop delivering network signals, or at least says it tried to, after broadcasters charged that was in contempt of the court, and the FilmOn lawyer apologized to the judge for that delay. The judge countered that it appeared only to have been in response to the broadcast filing.

Baker said the company still didn't think it had to stop delivering the signals, but did so voluntarily until the ongoing legal issues were resolved.

Judge Buchwald pointed out that the Supreme Court could not have made Aereo or FilmOn into MVPDs even if it wanted to, since that was not part of the case in front of it. In fact, Aereo had argued it was not a cable system.

"The Supreme Court can't...poof, make you a cable company, because there is an administrative process," said Buchwald. "The Supreme Court's role is limited to reviewing, just like all the courts, from the trial court to the Second Circuit, to the circuit courts, the district courts, the circuit courts and the Supreme Court.  It is not our function in the first instance to declare anyone to be or not to be a cable company. It is based on actions that are taken by administrative agencies. So that whole argument really just doesn't have any legal logic behind it."

But given that FilmOn is arguing it is not in contempt because as a cable system it can deliver those TV station signals, subject to a pending license, Baker said that the company "has every intention to petition the copyright office and the FCC and to do everything that it needs to do to try to negotiate a retransmission agreement with the networks to carry their content in the way that it's supposed to do this."

Bachwald was hardly persuaded. "Until you get a ruling of the Court, when you have an injunction you must follow it. Failure to do so, particularly the second time around, seems to me to be what we call a contempt."