FilmOn Ruling on Compulsory License Seen Leading to Circuit Split

A judge’s ruling that streaming TV service FilmOn is eligible for a compulsory copyright license could potentially lead to a circuit split and an eventual cert petition to the Supreme Court, attorneys told us Friday.

U.S. District Judge George Wu’s ruling Thursday in Los Angeles (see 1507170024) marks the first time a court ruled that Internet video services should be eligible for the same kind of compulsory license as cable systems, said Fletcher Heald copyright attorney Kevin Goldberg. That makes Wu’s ruling “potentially big,” Goldberg said. The 2nd U.S. Circuit Court of Appeals ruled previously that streaming video services aren’t eligible for such licenses, and Wu has already authorized an appeal of his own ruling to the 9th Circuit. If the 9th Circuit affirms Wu’s ruling, a circuit split and thus a potential Supreme Court case would be in play, Goldberg said.

Wu’s ruling is a “huge victory for FilmOn, for technology, and the American public,” said Baker Marquart attorney Ryan Baker, who represents FilmOn in the case. This “paves the way” for the courts to rule in a way that will favor streaming video and FilmOn’s business model, Baker said. The potential for a circuit split is enhanced by two other active court cases FilmOn has on similar issues, in Illinois and in the D.C. Circuit, Baker said. Like the California case, both involve challenges to FilmOn’s right to retransmit broadcast signals, and FilmOn argued in all three cases that it should receive a compulsory license.

Wu's ruling referenced language in the Supreme Court's Aereo opinion saying Aereo’s streaming service is analogous to a cable system. In a contempt ruling against FilmOn CEO Alki David last year, U.S. District Judge Naomi Buchwald in Manhattan argued that the language in the opinion is “not the same as a judicial finding that Aereo and its technological peers are, in fact, cable companies entitled to retransmission licenses under [Section 111] of the Copyright Act.” Though Wu said the Aereo case doesn’t directly apply to FilmOn’s matter, he said the Supreme Court language is “about as close a statement directly in defendants’ favor as could be made.”

FilmOn and broadcasters have to submit arguments on the final language of Wu’s ruling by July 23, according to court documents. Goldberg said a broadcaster appeal to the Ninth Circuit is likely, as is further appeal by whichever side loses the appeal. A Supreme Court cert petition would be more likely to find success with a circuit split, he said.