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Internet TV Service Stokes Surprise Legal Lifeline

21 Jul, 2015 By: Erik Gruenwedel

Sometimes all it takes is an understanding judge.

U.S. District Court (Los Angeles) Judge George Wu’s surprise July 16 ruling in favor of classifying FilmOn X similar to a local cable TV service has the fledgling streaming service eyeing ultimate victory against the established pay-TV ecosystem.

Specifically, the ruling found that under Section 11 of the Copyright Act, FilmOn could be entitled to a compulsory copyright license, which would let it transmit network broadcast television while paying non-negotiable rates.

“Courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and re-transmitters in the wake of technological innovation,” Wu wrote in his decision.

The Electronic Frontier Foundation, in a July 20 blog post, said the ruling rejected the “Internet-phobic position” taken by broadcasters and the U.S. Copyright Office, a position that privileges established broadcast players, while locking out newer competitors.

FilmOn’s ultimate victory could be a tall order as plaintiff Fox Networks, along with NBC, ABC and CBS, successively litigated Aereo TV, an online service that — like FilmOn — streamed live local TV broadcasts to subscribers via micro digital antennae to portable devices.

In that case, the United States Supreme Court last June eventually ruled that Aereo violated copyright law by retransmitting over-the-air content without authorization.

Fox, which filed suit against FilmOn in 2012, said Wu’s ruling “only found that FilmOn could potentially qualify for a compulsory license, and we do not believe that is a possibility.”

While Wu left open an appeal to the tech-friendly Ninth Circuit, FilmOn founder and CEO Alki David July 21 said the decision embraced technology,  innovation and efficiency — while offering additional revenue opportunities to copyright holders.

“FilmOn X's court victory is a victory for everyone,” David said in a statement. “I am confident that the Ninth Circuit will act to protect the interests of the public, just as the district court did [last week].”


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