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 The ruling, coming as consumer TV-watching habits are increasingly
migrating to the Internet, is the first to first to view a streaming
service like a cable provider and could have major implications for
broadcasters if it is upheld by higher courts.
Broadcasters have been aggressively litigating against such
services, contending they violate their copyrights and threaten
their ability to generate advertising and control subscription fees.
U.S. District Judge George Wu in Los Angeles said in his ruling that
FilmOn X is entitled to a compulsory license under the Copyright Act
to retransmit the broadcasters' programs if it meets the law's
requirements.
Acknowledging the major commercial consequences of his decision, Wu
said he would allow an immediate appeal to the 9th U.S. Circuit
Court of Appeals.
He also left in place an injunction against FilmOn X's operations
that the broadcasters had won in 2012, so FilmOn will still not able
to stream their content pending the appeal.
"The broadcasters have been trying to keep their foot on the throat
of innovation," said FilmOn X's lawyer, Ryan Baker, in an interview.
"The court’s decision today is a win for technology and for the
American public."
In a statement, Fox Networks said the opinion "contravenes all legal
precedent" and vowed to appeal.
The dispute stems from two lawsuits that Fox, Walt Disney Co's ABC
network, CBS Corp, Comcast Corp's NBCUniversal and several others
filed against FilmOn X in 2012.
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The networks successfully shut down Aereo, a more prominent
competitor to FilmOn X, when the U.S. Supreme Court in June, 2014
said that company violated the broadcasters' copyrights in
retransmitting their programs to subscribers' devices via the
Internet.
Aereo then tried to argue in a Manhattan federal court it should be
seen as analogous to cable, eligible for a compulsory license. The
judge in that case disagreed. The company, backed by Barry Diller's
IAC/InterActiveCorp, has since gone bankrupt.
Both Aereo and FilmOn X, founded by Internet entrepreneur Alki
David, use similar technology that allows viewers to watch network
television captured via remote antennas and sent over the Internet.
The case is Fox Television Stations, Inc v. FilmOn X, LLC, in the
U.S. District Court for the Central District of California, No.
12-cv-6921.
(Reporting by Andrew Chung; Editing by Cynthia Osterman)
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