Appeals Court Defers to Copyright Office on Section 111 License
A federal appeals court deferred to the Copyright Office’s and lower court’s interpretations of the compulsory license that lets cable operators carry broadcast TV programming without clearing all the rights from individual content owners. The Copyright Office has said consistently that the license does not apply to online video distributors. But ivi.tv had asked the 2nd U.S. Circuit Court of Appeals to review a temporary injunction a federal district judge in New York City imposed last year (CD Feb 23/11 p5) that blocked the service after reaching a similar conclusion. Ivi CEO Todd Weaver said in an email that the company is weighing all its options but declined to comment on whether it would appeal the 2nd Circuit’s ruling. “This is not the final chapter to this story,” he said.
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"The principal issue presented is whether ivi, a service that streams copyrighted television programming live and over the Internet, constitutes a cable system under Section 111 of the Copyright Act,” Judge Denny Chin wrote in opinion upholding the injunction against ivi (http://xrl.us/bnnebe). After examining the statute and the legislative history behind the Section 111 license, the court determined it must defer to the Copyright Office’s analysis.
Based on the law’s text, it’s unclear whether an Internet system would qualify as a cable system under the license, Chin wrote. “Among other things, it is certainly unclear whether the Internet itself is a facility, as it is neither a physical nor tangible entity,” Chin wrote. The legislative history provided evidence against ivi’s position, Chin wrote. “Congress has not codified a statutory provision for Internet retransmissions nor has it included the ‘Internet’ as an acceptable communication channel under” section 111, Chin wrote.
"We conclude that Congress did not intend for Section 111’s compulsory license to extend to Internet retransmissions,” Chin wrote. “To the extent there is any doubt as to Congress’s intent, however ... we conclude the position of the Copyright Office eliminates such doubt in its entirety.
"This affirms that Congress never intended to allow Internet providers to retransmit broadcast programming without the consent of copyright owners,” a spokesman for the National Association of Broadcasters said.
Allowing ivi to operate “would drastically change the industry to plaintiff’s detriment,” Chin wrote, explaining another reason for upholding the injunction. “The absence of a preliminary injunction would encourage current and prospective retransmission rights holders, as well as other Internet services, to follow ivi’s lead,” Chin wrote. “Continued live retransmissions of copyrighted television programming over the Internet without consent would thus threaten to destabilize the entire industry.”