2nd Circuit: Streaming Video Website is Not Cable Service; Infringes Copyright

Is streaming Internet video a “cable service” under U.S. copyright law?  ABC, CBS, Fox, NBC and other broadcasters recently asked a U.S. Court of Appeals to address that question after a streaming video service started rebroadcasting their signals over the Internet in 2010.  The service, offered by ivi, Inc., allowed subscribers to view live network television over the Internet for a subscription fee of $4.99 per month.

The broadcasters’ question was is significant because U.S. copyright law gives copyright holders the exclusive right to publicly display their broadcast signals.  This exclusive right generally includes the right to control retransmission, but Section 111(c) of the Copyright Act provides an exception for cable systems who pay royalties at government-regulated rates.   In such situations, broadcasters are required to license their content to the cable systems so long as the cable system pays the regulated rates.

This week, U.S. Court of Appeals for the Second Circuit addressed the question and answered “no.”  In WPIX, Inc. v ivi, Inc. (2d Cir. Aug. 27, 2012), the Court held that ivi was not entitled to a compulsory license because it was not a “cable system.”  The court based its decision on the legislative intent of the cable systems exception, which was to address difficulties that certain geographic areas and households had in receiving broadcast signals:

Congress did not, however, intend § 111’s compulsory license to extend to Internet retransmissions.  . . .  Internet retransmission services are not seeking to address issues of reception and remote access to over-the-air  television signals.  They provide not a local but a nationwide (arguably international) service.

Finding that Copyright law required ivi to obtain the broadcasters’ consent before retransmitting content over the Internet, the Court upheld a preliminary injunction against ivi’s retransmission service.

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