Are you one of those people who turns to the internet to watch their favorite television programs? Looks like you’re going to have to find another way to catch up on your television shows. The Second Circuit Court of Appeals recently barred a company that streams live television shows over the internet from continuing to do so. WPIX, Inc. v. IVI, Inc., 11-788-cv (2nd Cir. 2012).
The court determined that allowing the streaming of live television would destabilize the television industry and inflict irreparable damage on the television networks. The court thereby upheld the lower court’s ruling and sustained a preliminary injunction which barred defendant IVI Inc. which is located in Seattle, Washington from retransmitting copyrighted television programs belonging to such household names like ABC, CBS, NBC and Major League Baseball.
According to the court, “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 in retransmitting plaintiffs’ copyrighted programming without their consent.”
In arriving at its decision, the court reviewed the Copyright Act and determined that companies that “live stream” programs are not “cable systems” pursuant to the Act and therefore not entitled to an exemption from using copyrighted material.
IVI got its start two years ago by retransmitting signals from several New York and Seattle stations. Its program proved popular and it quickly grew to include retransmitting the signals of thousands of copyrighted materials in other major cities such as Los Angeles and Chicago. Subscribers paid a low fee of approximately $5 a month to access the content.
When broadcasters objected to IVI’s practice, IVI claimed that it was a “cable system” under the Copyright Act and therefore entitled to a compulsory license under the Act. Under the Act, cable systems are permitted to retransmit signals of copyrighted material if they pay royalties at a rate set by the government. “Cable systems” are systems that receive signals from television broadcast stations and then retransmit these signals. The Second Circuit concluded otherwise, noting that “live streamers” are not systems.
The exception for cable systems under the Act finds its source in a Supreme Court case from over thirty years ago which found that retransmitting programs by cable systems did not constitute a violation of the Act because this did not qualify as a “performance” under the Act. Two years after this Supreme Court decision, Congress enshrined the “cable system” exception in the Act. The reasoning was that the exception would provide television programming to rural areas which did not have access to much programming while simultaneously not discouraging broadcasters from creating new programs.