The Second Circuit Court of Appeals has upheld a preliminary
injunction against streaming service ivi, which means it can't retransmit TV
station signals over the Internet. "Continued live retransmissions of
copyrighted television programming over the Internet without consent
would...threaten to destabilize the entire industry," the court said.
The United States District Court for the Southern District
of New York had granted the injunction on the grounds that programmers were
likely to win their challenge on the argument that ivi was not a cable system
entitled to a compulsory license, and that those programmers, which included major
studios, networks and broadcast groups, would suffer irreparable harm.
The federal appeals found no reason to reverse that
decision.
The Second Circuit said that absent a stay, programmers
would be discouraged from creating "some of the world's most recognized
and valuable programming," including "important local news" and
political information. The appeals court saw a domino effect that went beyond
broadcasters.
"The strength of plaintiffs' negotiating platform and
business model would decline," it said. "The quantity and quality of efforts
put into creating television programming, retransmission and advertising
revenues, distribution models and schedules -- all would be adversely
affected," it added, but did not stop there. "These harms would extend to other
copyright holders of television programming."
As to ivi not being a cable service, the court relied on
Copyright Office expertise, deferring to that office's long-standing
interpretation that "Internet retransmission services are not cable
systems."
While it said the statute wasn't clear, the court said it
would have to give the benefit of the doubt to the Copyright Office under the
Chevron doctrine, in which the court will generally give deference to agency
expertise.
"We hold that the district court did not abuse its
discretion in granting a preliminary injunction to plaintiffs, and the judgment
of the district court is affirmed," the Second Circuit concluded.
"This confirms that Congress never intended to allow
Internet providers to retransmit broadcast programming without the consent of
copyright owners," said National Association of Broadcasters spokesman
Dennis Wharton in a statement.
Among those filing for the injunction were NBC, CBS, Fox,
ABC, The CW, PBS, Tribune, Univision and Fischer, as well as the commissioner
of baseball and studios associated with the major nets/owned station groups.
"We are very pleased the Court recognized that ivi's unauthorized streaming of our copyrighted content would substantially diminish the value of television programming," said ABC, NBC, CBS and Fox in a statement.
